The FDA Safety and Innovation Act

Abstract

IN THE MIDST OF A RANCOROUS ELECTION YEAR, BIPARTIsan accord in Congress is infrequent. A notable exception is the broad agreement on the US Food and Drug Administration (FDA) Safety and Innovation Act, approved by overwhelming majorities in the House of Representatives and the Senate, and signed into law by President Barack Obama in July 2012. Effective October 1, 2012, the legislation reauthorizes for 5 years the collection of user fees from industry for the reviews of prescription drugs and medical devices and establishes new user fee programs for generic drugs and “biosimilar” biological products. For years, the FDA has been a lightning rod for strong criticism from across the political and ideological spectrums, from members of Congress, industry officials, advocacy groups, the news media, and even its own employees. But the legislation was not a battlefield for settling these scores. The broad support reflects a wide recognition of the importance of the reviews of drugs, medical devices, and other products that represent the foundation of the nation’s regulatory system. Neither patient and consumer groups nor industry believe that the funding of product reviews through user fees is the best approach for the agency. The budget reality, however, is that if the FDA is to have sufficient resources to fulfill its public health and regulatory missions, it will require revenue from user fees indefinitely. Every 5 years, Congress reauthorizes the collection of user fees for drugs and medical devices, and considers additional provisions that might be included in the legislation. The FDA’s budget for fiscal year (FY) 2013, which started on October 1, 2012, is not yet known. Regardless of the final budget, fees from industry will represent a substantial and increasing share of all FDA spending. In FY 2012, Congress appropriated about $2.5 billion for the FDA. In FY 2013, the agency is expected to collect approximately an additional $1.7 billion in fees from industry, not just for the review of drugs and medical devices, but also for the regulation of food, tobacco, and additional products as authorized in other legislation (TABLE). If Congress were to appropriate the same amount for the FDA in FY 2013 as it did in FY 2012, then fees from industry would account for nearly 40% of the agency’s approximately $4.2 billion of spending. Congress first authorized the collection of prescription drug user fees in 1992 and has reauthorized the collection of these fees 4 times. During the last 2 decades, the number of scientific staff at the agency has increased, and the median approval times for drug applications have decreased markedly. Approval times for drugs the FDA views as priority have decreased from an average of 2 years to 1.1 years. Medical device user fees were first authorized in 2002 and have been reauthorized twice since then. Under the 2012 act, medical device user fees will increase and more companies will have to pay them, allowing the FDA to hire additional scientists and decrease review times. In 2011, approximately 4 of every 5 outpatient prescriptions in the United States were filled with generic drugs. The new user fees for generic drugs will provide the agency with the resources to eliminate a backlog of more than 2500 applications for drug approvals. The FDA will also be able to inspect foreign generic drug manufacturing facilities more often, so that they can be held to the same standards and inspection frequencies as domestic facilities. Other provisions of the act will broadly affect the FDA’s work in protecting the safety and quality of the drug supply chain, preventing drug shortages, encouraging the development of innovative antibiotics for serious or lifethreatening infections, and additional areas. The agency will gain authorities to register, regulate, and conduct riskbased inspections of foreign drug manufacturing facilities, where the majority of medications sold in the United States are produced. Authorities over foreign facilities that manufacture medical devices will be similarly strengthened. The FDA will have more authority to require companies to notify it about anticipated drug shortages and will gain the authority to mandate reporting of shortages of biological products. As an incentive for the development of innovative antibiotics, the FDA will be able to grant manufacturers of new qualified infectious disease products an additional 5 years of market exclusivity. By July 2014, the act also requires the FDA to issue longawaited guidance on Internet promotion of FDA-regulated medical products, including the use of social media. The Best Pharmaceuticals for Children Act and the Pediatric Research Equity Act have improved the agency’s ability to meet the medical needs of children. The acts, which had been subject to reauthorization every 5 years, are made permanent.