While President Donald Trump's signature on the FDA Reauthorization Act (FDARA) Friday put to rest any lingering fears about potential layoffs at the FDA come Oct. 1, it also paved the way for the next congressional showdown – one that could still shutter parts of the FDA and other federal agencies.

When U.S. lawmakers return from their August recess in two weeks, they will be in a race against the clock to either agree to appropriations bills or a continuing resolution to keep the government running when the calendar flips to fiscal 2018. The House has only 12 sessions scheduled in which to accomplish that herculean task before Oct. 1. Otherwise, large parts of the government would be forced to shut down until an agreement is reached on discretionary funding for the fiscal year.

Added to the calendar pressure is the fact that any spending bill or continuing resolution that ignores the funding caps set in place by the 2011 Budget Control Act (BCA) could trigger across-the-government sequestration. Under revisions to the BCA, total discretionary spending for 2018 is capped at about $1.065 trillion, with nearly $550 billion of that going for defense, according to the Congressional Budget Office. In previous years, Congress voted to lift the BCA caps, but no such agreement has been reached yet for fiscal 2018.

The president's proposed 2018 budget calls for $639 billion in discretionary spending for defense and slashes nondefense budgets to make up the difference. Both the House and Senate seem to be on board with increased defense spending, but there is considerable disagreement about the cuts needed to offset that bump. Lawmakers did agree to reject Trump's proposal to primarily fund the FDA with user fees. That plan, outlined earlier this year, was too much too late, as it would have required the lengthy user fee negotiations to start anew even as the Oct. 1 deadline was pressing in. (See BioWorld Today, May 24, 2017.)

Having FDARA in place could enable the user fee-funded programs at the FDA to continue functioning even if there's a delay in 2018 appropriations. The outcome of two years of FDA negotiations with industry and discussions with stakeholders, FDARA sets the user fees through fiscal 2022 and allows the agency to continue to collect them. And even if a sequester occurred, the user fees could be exempted from the automatic cuts.

The agreements

Applauding the enactment of the agreement, the directors of the FDA's drug, device and biologics centers said, "This is a compelling example of what can be achieved when FDA, industry, patients, Congress and other stakeholders work together toward the same goal. FDARA builds upon the goals outlined in previous user fee agreements and in the 21st Century Cures Act and will help us continue the essential work we are doing in many of our priority areas."

The bill the president signed into law includes the sixth rendition of the prescription drug user fees, the fourth iteration of the medical device user fees and the second versions of both the generic drug and biosimilar user fee agreements. Janet Woodcock, director of the Center for Drug Evaluation and Research (CDER), summed up the highlights of the drug user fee agreements in a staff email:

PDUFA VI: A major change is the fee structure. Previously, establishment fees, product fees and various application fees each contributed one-third of the user fee revenue stream. The new agreement restructures that stream by eliminating the establishment fee, as well as fees for supplemental applications. Other application fees will contribute 20 percent of the funding, with the rest coming from approved product fees.

In exchange, the FDA committed to continuing improvements in its review processes and procedures, enhancing regulatory science, further incorporating patient input in drug development and decision-making, facilitating the use of innovative clinical trial designs and advancing postmarketing drug safety evaluation.

GDUFA II: The reauthorization features shorter review goals for generic drugs where there is "inadequate generic competition." It also calls for earlier and enhanced communication between the FDA and industry to support the development of "competitive generic therapies," which can include drug-device combinations and other complex products. Like PDUFA, the generic drug fee agreement changes the fee structure to keep pace with the agency's workload, while addressing some challenges facing small businesses.

BsUFA II: The agreement directs the FDA to adopt an application review model for biosimilars like that used for PDUFA reviews. It also establishes an independent fee structure based on the biosimilar program costs and, like PDUFA VI, eliminates the user fees for establishments and supplements. As part of the agreement, the FDA committed to ensuring better scientific coordination and consistency in biosimilar reviews, enhancing its capacity to develop guidance on specific issues, and expanding its biosimilar review staff capacity and training.

"FDARA includes more provisions of relevance to CDER that we will be analyzing further," Woodcock told the staff. "These touch on issues related to cancer drugs and biological products for pediatric cancers, orphan drug exclusivities, expanded access, streamlining performance reporting, and others. Additional provisions provide key clarifications that will improve our ability to fulfill our mission."

Some of the highlights for MDUFA IV include allowing the FDA the flexibility to inspect medical device facilities based on risk and establishing a flexible, more efficient path to market for certain medical device accessories. The risk-based inspections will let the device center focus its resources where they're most needed, while providing greater predictability and transparency to the inspection process.

Because FDARA was a "clean" bill that stuck closely to the commitments hammered out between the FDA and industry with no controversial riders added, it had a smooth passage through Congress. The House passed it by a voice vote July 12, and the Senate, in its last major action before recessing, passed it 94-1. Passage isn't likely to be as smooth for the spending bills, which are typically driven by policy and political agendas.