Should the FDA’s Drug User Fees on Drug Manufacturers be Reauthorized? (H.R. 2430)

What is H.R. 2430?

(Updated October 5, 2018)

This bill was enacted on August 18, 2017

This bill would reauthorize the Food and Drug Administration’s (FDA) authority to collect user fees from the makers of prescription brand drugs, medical devices, generic drugs and biosimilars, and several other FDA programs through 2022. Under current law, user fee agreements — which provide a substantial amount of the FDA’s funding — are set to expire on September 30, 2017.

This section of the bill would reauthorize the FDA’s authority to collect and credit fees related to drugs. It would be able to collect fees at a higher level and restructure the fees to reduce administrative burdens. The fee structure would being divided evenly divided between facility fees, application fees, and product fees to being 20 percent application fees and 80 percent program fees for approved products. The base fee amount would rise from over $718 million to more than $878 million.

The existing reauthorization process would be maintained by this bill, under which the Dept. of Health and Human Services (HHS) would provide recommendations to Congress by January 15, 2022 after holding public hearings. The FDA would be authorized to collect fees until October 1, 2022 and would need to submit performance and financial reports to Congress on January 31, 2023.

This section would reauthorize the FDA’s authority to collect and credit fees relating to medical devices. It would allow for new authority to collect fees for de novo classification requests. The target base fee amounts would be updated, with FY2017 set at over $130 million, FY2018 increased to about $183 million, and more than $213 million in FY2022. The FDA would be authorized to collect fees until October 1, 2022 and would need to submit performance and financial reports to Congress on January 31, 2023.

This section would reauthorize the FDA’s authority to collect and credit fees relating to generic drugs. Fees for prior approval supplements would be eliminated, and a generic drug applicant program fee would be established that requires manufacturers with more approved applications to pay a greater share of the fee. One-third of the total revenue would come from generic drug application fees, 20 percent will come from generic drug facility fees, seven percent will come from active pharmaceutical ingredient facility fees, and 35 percent will come from the new generic drug applicant program fee.

The base fee amount would rise from $299 million in FY2017 to $493 million in FY2018. The FDA would be authorized to collect fees until October 1, 2022 and would need to submit performance and financial reports to Congress on January 31, 2023.

This section would reauthorize the FDA to collect and credit fees for biosimilar products. A fee structure would established that has an initial fee during clinical trials, an annual development for new biosimilars, and a program fee for sponsors of approved biosimilars. The base fee amount would increase from $20 million to $45 million. The FDA would be authorized to collect fees until October 1, 2022 and would need to submit performance and financial reports to Congress on January 31, 2023.

Argument in favor

This bipartisan reauthorization bill will ensure the FDA has the resources it needs through continued access to user fees assessed on manufacturers of drugs, medical devices, and biosimilar products.

Argument opposed

The FDA doesn’t need the funding it generates by its user fee programs that collects fees from manufacturers of drugs, medical devices, and biosimilar products.

Impact

Manufacturers of drugs, medical devices, and biosimilar products; and the FDA.

Cost of H.R. 2430

The CBO estimates that enacting this bill would reduce the aggregate deficit by $72 million over the 2018-2027 period.

Additional Info

In-Depth: Sponsoring Rep. Greg Walden (R-OR) introduced this bill to reauthorize the FDA’s critical drug user fee programs:

“This bipartisan work has produced a big win for patients. FDARA will help bring lower-cost generic drug alternatives and biosimilars to market faster — increasing competition and lowering drug costs — and it will streamline the process for reviewing and approving new treatments and cures for patients, ultimately delivering new and innovative therapies, drugs, and devices to patients more quickly.”

Lead cosponsor Rep. Frank Pallone (D-NJ) added:

“The swift reauthorization of these user fee agreements is critical to making sure FDA has the resources and personnel it needs to ensure timely review and approval of safe and effective medical treatments. These carefully negotiated agreements encourage innovation, improve our regulatory review process, and provide certainty to both patients and industry. I look forward to working with my colleagues to move this legislation through Congress and to the President's desk.”

This passed the House Energy and Commerce Committee on a 54-0 vote, and has the support of three bipartisan cosponsors — two Democrats and one Republican. The bill passed the House on a voice vote.

Media:

• House Energy and Commerce Committee Press Release
  
• Senate HELP Committee Press Release
  
• Republican Policy Committee
  
• CBO Cost Estimate
  
• FDA Law Blog