New bill could free drug user fees from sequestration, improve oversight

Drug user fees are private funds that help extend FDA inspections around the world, improving regulatory oversight and, in turn, strengthening manufacturing practices. But they don't do much of anything for manufacturers when they're tied up by sequestration law. Such is the case with millions of dollars from industry players, but a new congressional bill may be able to free those funds.

With sequestration currently in place to rein in government spending across the board, much of the $1 billion that user fees bring in over 2013 will be frozen, with the FDA unable to tap the funding. But now, those funds are the target of the FDA Safety Over Sequestration Act--or FDA SOS Act--a bipartisan bill that would exempt user fees from the mandatory budget cuts.

Ralph Neas, president and CEO of the Generic Pharmaceutical Association (GPhA), applauded the bill Monday, calling generic drug user fees an industry "landmark achievement" that is presently in danger. "GDUFA authorizes the FDA to use private-industry-funded payments to reduce the backlog of generic drug applications, enhance safety, expedite access and promote transparency for high-quality and affordable generic drugs. All of these outcomes are at risk if user fees are subject to sequestration," he said in a statement.

While some of the money collected through user fees is used to help speed the drug approval process, a portion is also used on inspections, which are growing more and more critical as the global manufacturing network expands. Inspections are especially important in developing countries like China, which in the past has been the source of counterfeit drugs and tainted APIs. India, too, has been home to its fair share of manufacturing woes in 2013, with Ranbaxy Laboratories paying a record-breaking settlement to the Department of Justice after lying to the FDA to cover up shoddy manufacturing practices. But that's not to say inspections aren't needed at home. The FDA is in the process of cracking down on compounding pharmacies, one of which last year spawned a deadly meningitis outbreak.

While the details aren't yet out on how exactly any prospective freed-up funds would be allocated, GPhA and other industry groups like AdvaMed and PhRMA agree that the bill is a step in the right direction. "This vital measure would help the agency effectively carry out its mission," Neas said.

- read the GPhA release
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