Reconciling the House and Senate User fee bills

With yesterday's vote (387-5) in the House of Representatives and last week's vote in the Senate (96-1), both chambers of Congress have now approved, with sweeping bipartisan support, their respective bills to reauthorize legislation for the FDA's various (new and old) user fee programs, i.e., drugs, biologics, biosmilars, generics, and medical devices).

But the Senate bill, "The Food and Drug Administration and Safety and Innovation Act," and the House bill, "The Food and Drug Administration Reform Act of 2012," are not identical, and so the versions will have to be reconciled (not to be confused with reconciliation) through a conference committee. The final legislation will then be passed by both chambers before it is presented to President Obama for his signature.

Here's a quick primer on just a few of the most interesting differences to keep an eye on:

Incentives for anti-infective drugs. The Senate and House bills differ somewhat on which drugs will qualify for exclusivity incentives contained in the Generating Antibiotic Incentives Now (GAIN) Act. The Senate bill limits its exclusivity provisions to new qualified infectious disease products that treat "serious or life threatening" infections, while the House bill applies extended exclusivity to all qualifying pathogens.

This may be a distinction without a difference, since the products in question will likely be targeted at hospital acquired infections (which are very serious) and not community acquired infections, where there are already many good generic antibiotics and little incentive for companies to try and compete with them.

Both the House and the Senate bills extend exclusivity for qualified products by 5 years, in addition to any other exclusivity provisions for which the products might otherwise qualify (for instance, FDA approval of NMEs gives companies 5 years of exclusivity under current law; under GAIN, they'd now have 10). While the exclusivity provisions are certainly welcome, they will mostly benefit small and medium sized companies (a good thing), or products that are "in-licensed" at larger companies that have less than 10 years of patent life remaining before FDA approval.

But for most patented antibiotics (which typically have 10+ years of patent life remaining), the exclusivity provisions won't do much to change the fundamental economics of antibiotic drug development (which are currently pretty miserable). In March, the Infectious Disease Society of America made this exact point in testimony to Congress:

The GAIN Act takes an important step in the right direction by providing a type of pull incentive--increased data exclusivity for new antibiotics. However, this incentive, while helpful, alone will not sufficiently raise the net present value (NPV) of antibiotics sufficiently to permit them to compete fairly against other drugs for companies' R&D investment resources.

Since products used in the hospital setting for drug resistant pathogens are usually products of last resort, it may take several years for them to become profitable - perhaps not until the tail end of their effective patent life.

In other words, there is still plenty of room for Congress (and the FDA) to improve incentives for large companies to devote more resources to antibiotic drug development. This could be accomplished in two ways: offer longer patent protection for qualified products, or substantially shorten the cost/time required to bring new products to market. For a terrific overview of where the FDA is on these issues, see David Shlaes' excellent blog, The Perfect Storm.

Medical device regulation. Under current law, the Secretary of HHS cannot change a medical device's risk classification except through regulation, which would then change requirements for performance standards and/or premarket approval. The House bill leaves current law unchanged. The Senate bill would allow the Secretary (or the FDA, if so delegated) to change device classification by administrative order, a much more streamlined process.

FDA regulation of lab-developed tests. The House bill would prohibit the FDA from issuing any draft or final guidance on regulating LDTs without first notifying the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions. (Historically, the FDA hasn't exercised enforcement authority on LDTs - although it does regulate, for example, reagents used in such tests.) There is no such provision in the Senate bill.

External review of the drug development process. The Senate, but not the House bill, would require an external review of the FDA's pre-market drug review process by an independent private sector consulting firm, along with input from FDA and regulated industry.

Track and Trace. The Senate bill contains a provision for electronically identifying and tracking pharmaceutical products throughout the pharmaceutical supply chain (called RxTec). The House bill doesn't have this provision. Ideally, if we're going to create a system for identifying counterfeit drugs and biologics and preventing them from entering the U.S. drug supply chain, there should be one federal system, as opposed to fifty potentially conflicting state systems that would add significant compliance costs to manufacturers, wholesalers, distributors, and pharmacies.

There's plenty of other provisions worth commenting on, but let's save that for another day. For those who are interested, the Congressional Research Service has released a helpful 74 page long side-by-side comparison of the bills with each other and current law.

Congress is endeavoring to reconcile both bills by the first week of July, giving President Obama plenty of time to review the bill and sign it before the FDA's current user fee authorization expires on September 30th.

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