WASHINGTON The FDA and the drug industry have submitted a proposal to Congress that increases fees for drug applications in exchange for quicker and more proficient product reviews from the agency.
Technically, the proposal is known as a “draft goals letter,” required by Congress before it votes on a second renewal of the Prescription Drug User Fee Act. Approved in 1992 and reauthorized in 1997, PDUFA allows the FDA to charge biotechnology and pharmaceutical companies a fee (about $300,000 last year) for drug applications, as well as annual fees for the manufacture and sale of products.
PDUFA II expires in September, and without reauthorization by a vote of Congress, the FDA would be forced to lay off hundreds of reviewers who have been hired with money generated through the fees.
Designed with the assistance of the Washington-based Biotechnology Industry Organization, the letter calls for an increase in user fees from about $300,000 in 2001 to $400,000 next year, and eventually to $500,000. User fees generated about $160 million for the FDA last year, and under the new proposal, the amount would reach $223 million in 2003, and up to $260 million in 2007.
“Ambitious performance standards were set in PDUFA II, only they were not met for a number of reasons,” Carl Feldbaum, BIO’s president, told BioWorld Today. “We are going back and addressing those reasons, which include under-funding and insufficient attention to early and frequent communications between the [filing] company and the FDA.”
It’s no secret that it takes the FDA longer to review a biologic than a pharmaceutical. In a talk paper touting the agency’s speed in safely reviewing drugs, the agency called biologics more “complex.”
To help smooth some of those problems, the FDA has agreed to develop a “good review practices” guidance that stresses early and ongoing communication with the sponsor. The industry said better communications should save companies months and years that add up when the FDA takes two, three or four review period cycles to approve a drug particularly a biologic.
In her testimony before the House Energy and Commerce Subcommittee on Health last week, Mary Pendergast, executive vice president of government affairs for Elan Corp. plc., who spoke on behalf of BIO, said there is a “striking” difference between the Center for Biologic Evaluation and Research (CBER) and the Center for Drug Evaluation and Research (CDER) in their ability to move a product through the system. CBER frequently takes three or more cycles while CDER does it in one cycle.
The recommendations address that issue in another way, by giving sponsors the option of requesting an independent consultant to assist in designing pivotal Phase III trials.
Under the proposal, a portion of the user fees would be available for programs to improve the drug review process.
Levin-McCain Stock-Option Bill Harmful To Biotech
Opposition is growing rapidly to legislation introduced by Sens. John McCain (R-Ariz.) and Carl Levin (D-Mich.) that would allow corporate tax benefits from stock-option compensation expenses only when the expenses are included in a corporation’s financial statements.
“We are unalterably opposed to this approach,” Feldbaum said. “It would have the effect of raising taxes on companies that issue employee stock options and it would limit the ability of companies to recruit and retain the best scientists and business people.”
BIO has joined 21 other trade associations in opposing the legislation (S.1940), saying it would discourage broad-based, rank-and-file access to stock options; lead to investor confusion and less accurate financial statements; and raise taxes on companies issuing employee stock options.
“This affects the biotech industry more than most, in that stock options are a general compensation feature of most biotech companies from the most junior employee to the most senior,” Feldbaum said. “And I think Senators Levin and McCain really object to the abuses at the top in an Enron-type situation. This should not apply to the biotech sector.”
In a letter to members of Congress addressing the issue, the trade organizations said, “Proponents of the legislation erroneously claim Enron’s accounting for its employee stock options significantly contributed to its collapse. The stock options granted to Enron’s employees were fully and clearly disclosed in its financial statements and had little if anything to do with its downfall.”
I3C Holds Meeting, Elects Board Members
The Interoperable Informatics Infrastructure Consortium (I3C), an organization developing common protocols and interoperable technologies for data exchange and knowledge management for life sciences, held its first meeting last week.
Members elected Tim Clark, vice president of informatics for Cambridge, Mass.-based Millennium Pharmaceuticals Inc., as chairman, and Jill Mesirov, chief information officer and director of bioinformatics and computational biology at the Cambridge-based Whitehead Institute Center for Genome Research, the vice chairman. Other board members are Morrie Ruffin, vice president of business development at BIO; Jeff Augen, director of business strategy for life sciences at IBM; and Sia Zadeh, group marketing manager of life sciences at Santa Clara, Calif.-based Sun Microsystems.
The group was founded a year ago by BIO, the Whitehead Institute, Millennium Pharmaceuticals, IBM and Sun.
Additional information about I3C can be found by visiting the website at www.I3C.org.