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CBO: Minor PDUFA Differences Add up to Hundreds of Millions

By Mari Serebrov
Washington Editor

WASHINGTON – While the differences between the House and Senate PDUFA bills are seemingly minor, they could add up to hundreds of millions of dollars.

Because of provisions in the House FDA Reform Act, H.R. 5651, that would delay drug competition in some areas, the Congressional Budget Office (CBO) estimated the bill could increase federal spending by $244 million over the next decade.

In comparison, the CBO projected that the bill passed by the Senate last week would generate $363 million in savings over the same time period. (See BioWorld Today, May 16, 2012, and May 25, 2012.)

H.R. 5651, which could come to the House floor this week, would slightly reduce the average price of drugs over the five-year life of PDUFA V, generating $72 million savings in direct government spending from 2013 to 2017, the CBO said.

But the bill also calls for new exclusivities for new anti-microbial and innovative single enantiomer drugs that would delay the entry of some generic and biosimilar drugs. As those exclusivities kick in, the average price of drugs would begin to increase in 2018, according to the CBO.

While the Senate bill calls for five-year exclusivity for new antibiotics, it would limit the incentive to antibiotics that target serious or life-threatening diseases. The House version is much more expansive.

The CBO noted that the House bill would require the FDA to modify some of its procedures relating to the oversight of prescription drugs and devices. Changes that would not be supported by new and increased user fees would cost $720 million over the next five years.

The CBO scored the Senate user-fee package before several amendments were added that could affect the cost of the bill. In passing the FDA Safety and Innovation Act last week, the Senate-approved amendments that would:

require the FDA to review the way it communicates risks and benefits, with a particular focus on under-represented subpopulations;

require the FDA to submit a report to Congress on its small business activities;

offer whistle-blower protection to FDA employees and other members of the Public Health Services;

require FDA rulemaking on clinical trial registration;

reclassify all drugs containing hydrocodone as Schedule II controlled substances;

require the FDA to comply with deadlines for implementing new sunscreen labeling standards;

protect confidential information obtained from foreign regulators relating to drug inspections;

require the attorney general to establish national interoperability standards to facilitate drug monitoring;

require an independent assessment of the FDA's drug and biologic review process;

classify certain synthetic agents as Schedule I controlled substances.

Bill Would Extend Tax Credit

Hoping to bring the Therapeutic Discovery Project (TDP) tax credit back for an encore performance, Sen. Robert Menendez (D-N.J.) last week introduced S. 3232 to extend the biotech credit two more years.

"In 2010, the TDP injected $1 billion of much-needed capital into small biotechnology businesses," Menendez said, with nearly 3,000 companies receiving the funds. (See BioWorld Today, Nov. 1, 2010, and Nov. 4, 2010.)

The credit and grant program, authorized by the Affordable Care Act, was limited to companies with fewer than 250 employees that had invested in developing promising new therapies to treat or prevent costly and chronic diseases.

S. 3232 aims to make the program more competitive by requiring the administration to take into consideration those projects with the greatest potential to create and sustain high-quality, high-paying jobs in the U.S., and advance U.S. competitiveness in the biological and medical sciences.

The Biotechnology Industry Organization (BIO) welcomed the bill; renewing the tax credit has been one of its top priorities. "As evidence of the program's popularity suggests, Congress should extend it for two more years and beyond in order to support American innovation and speed the development of life-saving cures," BIO President and CEO Jim Greenwood said. (See BioWorld Today, Jan. 24, 2012.)

The Senate bill is not the first attempt to renew the TDP program. Rep. Susan Davis (D-Calif.) introduced H.R. 1988 a year ago to extend the program through fiscal 2017. Her bill – which has 20 co-sponsors, 19 of whom are Democrats – has been sitting in three House committees since being introduced. Other support came from President Barack Obama when he proposed making the tax credit permanent in his 2012 budget. (See BioWorld Today, Feb. 16, 2011, and May 27, 2011.)

BIO has acknowledged that extending the TDP program with no cost offset could be challenging when Congress is focused on cutting the deficit.

PCORI to Offer $120M in Grants

The Patient-Centered Outcomes Research Institute (PCORI) is looking to invest $120 million this year in comparative clinical-effectiveness research projects that will help patients and caretakers make better-informed health care decisions.

The nonprofit organization last week released four funding announcements, involving up to $96 million. The grants will be awarded to research projects that address:

critical decisions in prevention, diagnosis and treatment options that patients, caregivers and clinicians face with too little information;

decisions that face health care systems, as well as the patients and caregivers who rely on them and the clinicians who work within them;

the communication and dissemination process among patients, caregivers and clinicians;

strategies to eliminate disparities in health care.

Another $24 million will be available later this year when a fifth funding announcement is issued on accelerating patient-centered and methodological research.

The grants will be awarded on a competitive basis to research teams that engage patients, caregivers and practicing clinicians throughout the process, from generating the research questions to conducting research and using the results to understand and address patient needs.

Applicants must register through PCORI's online system, which will open Friday.