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Senate Approves Bill To Reauthorize, Modify FDA User-Fee Programs

On Thursday, the Senate voted 96-1 to approve legislation (S 3187) that would reauthorize and modify FDA's prescription drug and medical device user-fee programs, the New York Times reports.

Sen. Bernie Sanders (I-Vt.) cast the dissenting vote because he said the measure would do "far too little" to make medications more affordable.

Legislation Details

The legislation would up FDA's dependence on user fees, requiring drugmakers and medical device companies to pay $6.4 billion over five years. It reauthorizes user fees for brand-name drugs and medical devices, and creates fees to review generic drugs and less-costly biotechnology products, known as biosimilars.

The legislation also would require drugmakers to notify the federal government of impending drug shortages. It also would call for federal officials to take steps to "help mitigate or prevent" such shortages, such as finding alternate supply in the U.S. or abroad.

The bill also establishes performance goals for FDA, including deadlines for how long it takes new products to reach the market. The deadlines were negotiated between the agency, drugmakers and medical device companies.

Further, the bill also would:

  • Create faster procedures to review "breakthrough drug therapies" for life-threatening diseases;
  • Offer incentives to develop antibiotics to counter drug-resistant germs;
  • Require more frequent inspections of foreign drugmakers that import products to the U.S.;
  • Increase penalties for the sale of counterfeit treatments;
  • Require drugmakers to track products from the factory to the pharmacy;
  • Mandate that FDA perform additional studies ahead of regulating health-related mobile device software (Pear, New York Times, 5/24).
  • Require FDA to hold more meetings with medical device makers to keep them abreast of happenings in the approval process; and
  • Allow FDA to block foreign products from entering the U.S. if the maker did not allow the agency to fully inspect the facility at which the product was manufactured (Burton/Boles, Wall Street Journal, 5/24).

CBO Findings

The Congressional Budget Office said the Senate bill -- sponsored by Sens. Mike Enzi (R-Wyo.) and Tom Harkin (D-Iowa) -- would reduce the federal budget deficit by $363 million over a decade (Ethridge, CQ Today, 5/24).

CBO found the bill "would lead to earlier marketing of lower-priced drugs," which could reduce spending by more than $750 million over 10 years (New York Times, 5/24). Those savings would come from making lower-priced drugs available earlier, which means federal health programs, including Medicare and Medicaid, would pay less for drugs. In addition, lower spending on prescription drugs could reduce health insurance premiums, thus reducing federal subsidies for coverage purchased through an exchange, according to the CBO report (CBO report, 5/22).

CBO said under the bill, FDA would collect $4.1 billion in user fees for brand-name drugs, $1.6 billion for generics, $609 million for medical devices and $128 million for less-costly versions of biotechnology products (New York Times, 5/24). Those fees would pay for about 60% of FDA's drug-review costs from 2013 to 2017, according to the Journal (Wall Street Journal, 5/24).

Prospects for Movement in House

The Senate bill could either be taken up by the House or reconciled with a House-version of the bill (HR 5651) (Strauss [1], "Floor Action Blog," The Hill, 5/24). Although there still are differences between the two bills, they mostly are similar. As a result, a final compromise bill is expected to reach President Obama's desk by the July 4 recess, according to the Journal (Wall Street Journal, 5/24).

However, a proposal by Sens. Michael Bennet (D-Colo.) and Richard Burr (R-N.C.) to establish a system to track medications as they are transported between wholesalers and pharmacies could hold up the compromise, according to National Journal (McCarthy, National Journal, 5/24).

Amendments Rejected

Ahead of the final vote on the user-fee bill, the Senate voted on more than a dozen amendments, all were rejected, Politico reports (Norman, Politico, 5/24).

The Senate voted 43-54 to reject a proposal by Sens. Sherrod Brown (D-Ohio) and John McCain (R-Ariz.) that would allow the U.S. to import lower-cost prescription drugs from Canada. Critics of the proposal said it would be a safety risk because it would let Canadian Internet pharmacies sell drugs that have not necessarily gone through any of the approval processes applied to medications in the U.S. (Strauss [2], "Floor Action Blog," The Hill, 5/24).

Another amendment, by Sen. Jeff Bingaman (D-N.M.), that aimed to speed up access to generic drugs also was defeated, 28-67. Critics of the proposal said it included language that is too broad (Strauss [3], "Floor Action Blog," The Hill, 5/24).

The Senate voted 46-50 to reject an amendment from Sen. Lisa Murkowski (R-Alaska) that would have prevented FDA from approving genetically engineered fish, unless the National Oceanic and Atmospheric Administration approved doing so (National Journal, 5/24).

An amendment by Sanders that would have stripped exclusive marketing rights from drugmakers if they are found guilty of fraud was defeated, 9-88 (Politico, 5/24).

CBO Finds House Bill Would Add $247M To Federal Deficit

The House version of the legislation -- which the chamber is expected to debate after the Memorial Day recess -- would add an estimated $247 million to the budget deficit over a decade, according to a CBO report released Thursday, CQ Today reports. CBO said the Senate and House bills would reduce the deficit by similar amounts between 2013 and 2017, at $71 million and $72 million, respectively. However, after 2018, direct spending would begin to increase under the House bill because "the effects of provisions that would delay the entry of lower-priced drugs exceeds the effects of provisions that would lead to earlier entry of lower-priced drugs," CBO found.

A spokesperson for the House Energy and Commerce Committee said the panel will submit a bipartisan substitute amendment on Friday to make sure the bill is fully funded. The substitute amendment would seek greater savings from a section of the bill that CBO found would reduce spending by $168 million over 10 years (CQ Today, 5/24).

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