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Biopharma Fees to Shoulder FDA 2013 Budget Increase

By Mari Serebrov
Washington Editor

WASHINGTON – If the FDA gets its way, it will see a 17 percent increase in its 2013 budget, but nearly all of that will be footed by the biopharma and food industry through new and increased user fees.

Besides covering 98 percent of the increase, industry will shoulder 45 percent of the agency's overall budget of $4.5 billion.

"There is a common good here, and I think it's not inappropriate that industry share" this cost, FDA Commissioner Margaret Hamburg said during a Health and Human Services (HHS) media briefing Monday.

In addition to increases in existing user fees, the budget includes funding from several new user fees – $299 million in generic drug fees, $20 million in biosimilar fees, $15 million in re-inspection fees and $6 million in international courier fees.

The funding will help offset an additional $10 million in the FDA's budget to beef up drug and food inspections in China and enhance collaboration with Chinese regulators. The budget also calls for an additional $3.5 million to improve development timelines and success rates for medical countermeasures (MCMs). The funding will help the agency expand its technical assistance to developers, focusing on the highest priority MCMs.

Biopharma also will bear the brunt of budget savings in some other parts of the HHS budget. In an effort to cut $302.8 billion from Medicare spending over the next decade, President Barack Obama wants to align Part D prescription drug rebates for low-income beneficiaries with those paid under Medicaid and strengthen the independent payment advisory board (IPAB).

Established by Congress in the Affordable Care Act, IPAB has since come under congressional fire as it circumvents congressional and judicial authority in making mandatory Medicare cuts. (See BioWorld Today, April 28, 2011, July 14, 2011, and Sept. 20, 2011.)

Another part of the Medicare savings plan is a five-year reduction in the current 12-year data exclusivity for innovator biologics and authorization for the Federal Trade Commission to prohibit pay-for-delay settlements for generic drugs and biosimilars.

The National Institutes of Health, which got a small budget increase this fiscal year, would get no new funding under the president's plan, but new grant management policies would be implemented to increase the number of new research grants awarded, with resources focused on first-time grantees.

The president's budget is not playing well with the industry. The Pharmaceutical Research and Manufacturers of America's president and CEO, John Castellani, took Obama to task over the budget, saying in a press release: "Despite President Obama's many pronouncements to support innovation, advance biomedical research, promote job creation and control health care costs for seniors, his 2013 budget proposal flies in the face of these important goals."

FDA Scrambles to Ward Off Drug Shortage

The FDA is searching near and far as it tries to alleviate a severe drug shortage that could mean the difference between life and death for children with leukemia.

Amid reports that supplies of preservative-free methotrexate could be gone within two weeks, the agency is working with all the approved manufacturers of the injectable drug to get the companies in a position to meet the increased demand for high-dose vials caused by the extended shutdown of Ben Venue Laboratories Inc.'s Bedford, Ohio, plant last November.

The FDA also is exploring overseas sources in search of a temporary supplier, agency spokeswoman Karen Mahoney told BioWorld Today. The agency has had to look overseas for a temporary solution to a severe shortage eight times in the past year, she added.

Preservative-free methotrexate in 40-ml vials is used in spinal injections for children with acute lymphoplastic leukemia (ALL); there are no alternative treatments, Mahoney said. The shortage occurred when Ben Venue, a division of Boehringer Ingelheim GmbH, of Ingelheim, Germany, decided to shut down its Ohio facility for an extended period in November 2011 due to manufacturing problems.

Three other companies are approved to supply the high-dose preservative-free methotrexate in the U.S. Mylan Inc. is allocating its available supplies and is working to release additional batches. Sandoz Inc. expects to have new batches to release within the next two weeks, Mahoney said, and Hospira Inc. should have new batches available sometime next month.

Lower strengths used for rheumatoid arthritis remain available from Mylan and APP Pharmaceuticals Inc. Mahoney said APP's product has preservatives, which could cause paralysis in patients with ALL.

The methotrexate shortage is one of the most severe shortages caused by Ben Venue's voluntary suspension of manufacturing operations at its Ohio plant, among the largest sterile injectable facilities in the world. But the shutdown also has led to a severe shortage of Johnson & Johnson's cancer drug Doxil, as well as shortages of several other cancer drugs. (See BioWorld Today, Dec. 14, 2011, and Jan. 20, 2012.)

The suspension followed an internal document review that suggested routine preventive maintenance and requalification of certain manufacturing equipment were overdue at the Ohio plant. Those issues also were noted in inspection findings by the FDA, European Medicines Agency and other global regulatory agencies.

Ben Venue's Ohio facility is comprised of aseptic filling, lyophilization and cytotoxic manufacturing in four factories. Due to the distinct technologies and manufacturing processes in each of the factories, the company is addressing the issues in each factory separately.

Ben Venue hopes to restore some manufacturing this quarter. But it noted that several of the sterile injectable drugs currently in short supply are manufactured in its North facility, which requires major reconstruction that may take up to nine months to complete.

ApotheCure, CEO Face Criminal Charges

The Department of Justice has charged ApotheCure Inc., of Dallas, and its CEO Gary Osborn with two misdemeanors stemming from two lots of colchicine injectable solution that resulted in three deaths in 2007 from colchicine toxicity. The lots allegedly contained vials of compounded colchicine that were super-potent, containing 640 percent of the level of colchicine declared on the label. Other vials were subpotent, with less than 62 percent of the declared levels on the labels.