Proposed FDA user fees, specifically aimed at making thewheels of the drug review process spin more smoothly, clearedtheir first hurdle in Congress on Tuesday.

A House subcommittee's unanimous vote started what someobservers see as a legislative sprint for a bill that could put theFDA drug application fees in place as soon as Oct. 1.

The bill, proposed by U.S. Reps. John Dingell, D-Mich., andHenry Waxman, D-Calif., calls for an initial $100,000 fee on anew drug approval (NDA) application in 1993, gradually risingto $233,000 by 1997. Drugs, vaccines and biologics would becharged similarly. It also calls for annual product licensing fees,starting at $6,000 and escalating to $14,000 by 1997, and a feefor certifying manufacturing facilities, starting at $60,000 andgoing to $138,000. No such fees are now charged.

"We know of absolutely no opposition to the bill," said LisaRaines, vice president of governmental affairs for theIndustrial Biotechnology Association (IBA). However, the bill'ssupporters caution that it could get hung up in the U.S. Senatebecause of unrelated issues involving the FDA.

The bill's backers are confident that President Bush would signthe bill and that it could become law as soon as Oct. 1, the startof the federal government's 1993 fiscal year and the first dateon which the FDA could collect user fees.

Drug industry associations last month swung their supportbehind the fee proposal that the IBA had long opposed intheory as "a tax on innovation." The industry was won over bythe vision of a better-equipped and faster-moving FDA thatmight shorten by months the time needed to review a newdrug approval filing.

The fees are expected to raise an additional $327 million overfive years to be used exclusively to improve the FDA's drug-review operations, not to replace any current FDA funding. Thebill specifies that the fees can't be collected in years when theFDA's budget, adjusted for inflation, is cut.

Still an issue within the industry is the desire by some to makeallowances for small, thinly financed biotechnology companieswithin the fee structure. Yet, the three major industryassociations -- the IBA, the Association of BiotechnologyCompanies (ABC) and the Pharmaceutical ManufacturersAssociation (PMA), all of Washington, D.C. -- are downplayingtheir differences and talking up their support of the Dingell-Waxman bill.

"Any fees will be difficult for a struggling young biotechnologyfirm to manage," said Thomas G. Wiggans, the chief operatingofficer of CytoTherapeutics Inc. of Providence, R.I., andpresident of the ABC, whose membership roster has the largestnumber of small companies. "While we support the aims of thislegislation, we again urge that efforts be made to defray ordelay fees for small companies."

The bill now proposes a 50 percent reduction in the NDA feefor companies with fewer than 500 employees and noapproved drugs. Such a company would pay $50,000 instead of$100,000 in 1993 with an NDA filing.

"I think it's a good start," said William E. Small, executivedirector of the ABC. "At this point we'll need to go back to thesepeople (Congress) and say, 'Let's get some relief.' " That reliefcould take the form of eliminating all fees on a company's firstproduct or an orphan-designated drug, he said. It might alsogrant a one-year deferral of the NDA fee for a first product,giving a company time to generate sales before paying the fee,he said. The bill might provide bigger fee cuts, such as a 75percent discount on the NDA fee for a company with between100 and 199 employees and an 88 percent fee cut for thosewith fewer than 100 employees.

The ABC also would like to defer or charge lower fees to smallcompanies for one-time facility licensing fees, Small said. TheABC does agree with the proposed annual product licensingfees.

The IBA said it is sympathetic to the ABC's position, but wouldfind it difficult to support a change to the bill. "We asked forthe 50 percent reduction because we felt that was the best wecould get," Raines said. "I'm not saying it wouldn't be animprovement, but we're not in a position to withdraw oursupport for the bill."

The PMA, whose membership includes most of the major drugcompanies, has been cool to making allowances for smallcompanies.

-- Ray Potter Senior Editor

(c) 1997 American Health Consultants. All rights reserved.

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