Congress Drafts Bill to Extend the User Fee Programs

April 18, 2017

On Friday, April 14th, a draft bill was released, aimed at reauthorizing the user fee programs for branded and generic drugs, medical devices, and biosimilar products. Committees from the House of Representatives and the Senate joined forces to develop the legislation, entitled "FDA Reauthorization Act of 2017." If passed, the bill would renew and extend the user fee programs through 2022.

Increasing Fees

According to a recent article from RAPS, in 2016, 70% of the drug review budget was funded by user fees. Furthermore, user fees accounted for "36% of the medical device review budget, 75% of the generic drug review budget and 29% of the biosimilar review budget."

Under the recently drafted bill, "prescription drugs would see increases in the base user fee amount from $718.7 million in FY2017 to $878.6 million in FY2018." In addition, the following user fees would also see substantial upsurges:

Altogether, "the bill would add about $400 million in new user fees for the first year, which compares with a $1 billion increase in fees President Donald Trump requested in his budget blueprint," states RAPS.  However, the article also points out that this bill does not include animal drug and animal generic drug user fees.

Bill Specifics

As part of the reauthorization of the user fee program, the bill also includes a number of other parameters, which are broken down and listed by type of product. Some of these include:

Prescription Drugs

The bill would rearrange the fee structure, splitting the fees into two categories, with 20% accounting for the application fee, and the remaining 80% going toward program fees for approved products.  The supplemental application fees and facility fees currently in place would no longer exist.

Medical Devices

RAPS states that, under the bill "FDA would establish a pilot to sunset in 2022 that would see the agency beginning 'to audit and certify laboratories who conduct device conformance testing to a recognized standard, and also to withdraw the certification if necessary.'" This bill would then require the FDA to evaluate the use of this pilot program in at least five types of medical devices.

Generic Drugs

According to the draft bill, the fee for generic drug applications will vary based on how many applications the FDA has approved for the applicant or sponsor in question. Specifically, “a manufacturer with 20 or more approved applications pays the full fee; a manufacturer with six approved applications pays 40% of the full fee; and a manufacturer with five or fewer approved applications pays 10%.”

Biosimilar Products

If passed, the bill will establish the first ever independent fee structure for biosimilar products. These fees will include:

  • Initial Biosimilar Development Fee – will apply to sponsors during the first year after beginning clinical trials
  • Annual Biosimilar Development Fee – will apply to sponsors developing a new biosimilar product after the first year of clinical trials
  • Biosimilar Program Fee – will apply to sponsors of approved biosimilars
  • Application Fee – will apply to sponsors submitting new biosimilar applications

Orphan Drugs & Other Exemptions

This bill will continue to allow FDA to issue grants for orphan drug development through 2022. Additionally, the bill will continue to allow FDA to grant pediatric humanitarian device exemptions and enforce rules regarding the development of medical devices for rare pediatric conditions.

For additional information, view the full draft of the FDA Reauthorization Act of 2017.

Are you developing an FDA-regulated drug or device? We can help you obtain FDA-approval for your product.  To learn more about our services and how we can help you, contact us today.

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