CBO finds Senate's FDA user fee bill will reduce the federal deficit by about $1.4B

2022-07-21

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As debate rages on Capitol Hill over whether to add riders, and which riders to add, to the must-pass FDA user fee legislation, the Congressional Budget Office on Thursday made clear that the Senate version will reduce the federal deficit by about $1.4 billion over the next 10 years. Congress has until the end of September to reauthorize the user fees, which the FDA collects for its review of prescription drugs, generics, biosimilars and medical devices. While there are still major gaps between the Senate and House versions, and health committee ranking member Richard Burr (R-NC) recently introduced a blank version of the bill with no riders, many expect the user fee bills will still get done on time. “I generally still think that a user fee deal will get done before the end of September given that there is broad, bipartisan support for user fees,” Chad Landmon, partner at the law firm Axinn, Veltrop & Harkrider, told Endpoints News via email, adding: In unveiling its deficit-reducing score, CBO points to five key sections of the bill, known as S.4348 or the FDASLA Act of 2022, that will have the biggest impact. First, the non-partisan organization pointed to Section 509, which would authorize the FDA to approve a generic drug application (ANDA) even if the label differs from that of the brand name product when the brand-name label changes within 90 days of the date on which the generic application would otherwise have been eligible for approval. The sponsor of the generic would still be required to update that drug’s label within 60 days of approval, but based on conversations with stakeholders, “CBO expects that the provision would accelerate the availability of lower-priced generic drugs because manufacturers would bring them to market earlier than under current law,” thereby reducing the average prices for those drugs that are paid for by federal health programs. In another move to accelerate the availability of lower-priced drugs, section 511 of FDASLA would allow the FDA to deny a citizen petition if it determines that the petition was submitted with the primary purpose of delaying the approval of an application or if it doesn’t raise valid scientific or regulatory issues. These types of petitions are frequently submitted and used as a delaying tactic when generic drugs are readied for launch. The bill also would require a petition to be submitted within 60 days after the petitioner knew, or reasonably should have known, the information that forms the basis of the petition, thereby pushing companies away from filing these petitions at the last minute. “CBO expects that the new timely-submission requirement and related changes to the dismissal procedures involving civil actions would further enhance the FDA’s ability to expeditiously deny petitions that otherwise would have delayed the marketing approval of generic or biosimilar applications,” the CBO said. Section 512 of the Senate bill, highlighted by CBO, would also accelerate the availability of lower-priced generic drugs, thereby saving the government money, as it would authorize the FDA to disclose qualitative and quantitative information on the inactive ingredients of the brand-name drug in response to a request in a controlled correspondence from a generic drug manufacturer. Another controversial section, section 515, would allow the FDA to approve a subsequent ANDA, under certain conditions, if the first applicant that is eligible for 180 days of generic market exclusivity has not yet begun marketing. While the CBO expects that the provision would accelerate the availability of lower-priced generic drugs because manufacturers would bring them to market earlier than under current law, generic drug experts think this section might do the reverse. Kurt Karst, regulatory counsel at Hyman, Phelps & McNamara, previously told Endpoints that this provision could create new litigation. “This new provision creates an exception to 180-day exclusivity to allow a subsequent applicant to, in a sense, leapfrog into first applicant status almost, and be able to get approved. Notwithstanding a first applicant’s exclusivity subject to a series of five events. Some of them are subject to quite a bit of discretion and anytime the D word comes up, that oftentimes means the L word, right? The lawsuit,” he said during a recent Endpoints panel discussion on the user fee bill. And CBO pointed to Section 605 of the bill, which would reauthorize through 2027 a provision that may slightly increase the deficit over 10 years and allows sponsors of drugs developed from a particular type of molecule called an enantiomer to gain five years of data exclusivity under certain circumstances. Under current law, the CBO says, the “maximum period of data exclusivity would revert to 3 years in 2023. (Data exclusivity begins when a drug is approved by the FDA. During that time, the agency does not accept applications for marketing approval for generic versions of the drug.) Based on historical data, CBO expects that extending market exclusivity for prescription drugs developed from enantiomers would, in some cases, delay the entry of lower-priced generic versions of those drugs.”