President Donald Trump’s proposal to increase FDA user fees is already drawing some reaction from an industry that wants to cooperate, but is blanching at a proposal that would dramatically increase its fees.
According to a blueprint released by the administration, the president’s budget calls for a boosting of FDA user fees to $2 billion in 2018, up from about $1 billion this year. The reasoning? “In a constrained budget environment, industries that benefit from FDA’s approval can and should pay for their share,” the document says.
The idea is already getting some pushback from the generics industry. In a statement, the newly rebranded Association for Accessible Medicines (AAM) said it’d be “concerned by any proposal to raise user fees dramatically beyond what was agreed to in the recently concluded user fee negotiations.”
There’s reason for AAM to be worried. Generics makers have lower profit margins than their branded counterparts, so an increase in costs could dent their profitability. Plus, makers of generics file for drug approvals at a high rate and could bear a bigger proportion of the costs. Teva, for instance, has 330 product applications pending at the FDA, according to its recent 20-F.
Also chiming in on the issue was the Alliance for a Stronger FDA. The group said the budget proposal is “neither wise nor realistic.” It isn’t “wise,” the alliance figures, because the FDA largely needs to be supported by the public. It’s not “realistic” because industry and the agency just wrapped up user fee negotiations, the group said.
“User fees have always been intended to supplement the agency’s appropriation, never to replace it,” according to an alliance statement.
At the same time, the drug industry might get something from the president’s proposal. Accompanying the user-fee increases would be a “package of administrative actions designed to achieve regulatory efficiency and speed the development of safe and effective medical products,” according to the administration’s blueprint.
Since taking office, Trump has backed some proposals pharma favors and endorsed others the industry dislikes. On several occasions, he’s pledged to reduce regulations and overhaul the corporate tax code, two ideas that have made him popular in pharma boardrooms.
But he’s also come out in favor of Medicare price negotiations, an idea resisted by the industry for years.
Trump has said he’s working to bring prices down through increased “competition” in the drug industry. That can be seen through his pick to lead the FDA, Scott Gottlieb, an industry favorite who is expected to undergo a push to speed drug approvals while maintaining a focus on safety and efficacy.