FDA User-Fee Legislation Sets Stage for Change

Import controls and risk strategies aim to promote quality and spur new drug development.
Aug 02, 2012
Volume 36, Issue 8

Jill Wechsler
There was much celebrating on Capitol Hill in late June, as leading legislators reached across party lines to approve the Food and Drug Administration Safety and Innovation Act (FDASIA) in record speed. The bill (S. 3187) enables FDA to collect approximately $6 billion in fees over the next five years from pharmaceutical and medical device companies. These fees are crucial to maintaining an efficient prescription drug regulatory system.

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At the same time, the Supreme Court upheld the constitutionality of the Affordable Care Act. The decision ended speculation that FDA might lose authority to establish a pathway for developing new biosimilars [see Roundup].

Now the hard work begins to implement new policies and prepare the multiple guidance documents and reports required by FDASIA. As with most 300-page bills, the FDA legislation has something for everyone: patient advocates gained added incentives for developing crucial medicines; providers applauded policies to curb drug shortages; and manufacturers may benefit from speedier approvals and stiffer penalties for counterfeiters.

The basic user-fee program for drugs and biologics hashed out by manufacturers and FDA officials over the previous 18 months remained intact during the legislative process. Generic-drug makers agreed to pay almost $300 million annually to accelerate approvals, clear up an immense application backlog, and support timely inspections of foreign manufacturers. In addition, firms developing new biosimilars agreed to provide upfront fees to cover some of FDA's cost in providing guidance to sponsors, a program expected to raise $128 million over five years.

Supply chain security

As the analysts and lawyers continue to pore over the fine print in FDASIA, some questioned whether policymakers should have taken more time to resolve some contentious issues, such as how to establish a national track-and-trace system for prescription drugs. Policymakers were stalemated by industry's support for tracking based on lot number, instead of individual vials and bottles, as FDA preferred. Manufacturers thus face multiple state tracking requirements, starting with a California law that goes into effect in 2015.

Still, the final law contains a wealth of provisions designed to help FDA detect and block adulterated and illegal medical products. All drug manufacturers and foreign suppliers have to register with FDA, using a unique facility identifier. Importers face a number of specific registration requirements, including electronic information submission. FDA can block the import of products from manufacturers that deny access to inspectors or fail to submit requested records. FDA has also been given authority to detain adulterated products at the border instead of having to send them back to the shipper, and in some situations to destroy violative imports.

Manufacturers are required to notify FDA if a drug may be stolen or counterfeited, and intentional adulteration for economic gain carries stiff penalties, including jail time. The consequences are even more serious for anyone who intentionally traffics in counterfeit drugs.

An important change overrides the established, but long unworkable two-year plant inspection requirement and permits FDA to inspect drug-manufacturing facilities on a schedule that reflects risk factors. Another innovative provision specifies that meeting cGMPs requires manufacturers to implement quality management systems and assure the quality of raw materials. FDA may share trade secret information with trusted regulatory counterparts and gains leeway to consider inspection information from such regulators in evaluating the risk level of an establishment. The bill also specifies that US law governing drugs and medical products may be applied to extraterritorial violations, such as economically motivated adulteration of products like heparin.

To curb shortages of critical drugs and biologics, the law extends reporting requirements for manufacturers anticipating short supply situations. FDA gains clear leeway to expedite establishment inspections and application reviews to help mitigate or prevent a shortage, along with requirements to issue an annual report on drug shortages and to maintain a drug-shortage list that will help patients and providers keep informed of supply problems. The Drug Enforcement Administration has to provide timely approvals or denials of requests to increase quotas of controlled substances when needed to address a drug shortage. And a new Health and Human Services (HHS) task force will examine ways to enhance the federal response to shortages and create a strategic plan to address these problems.

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