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Federal Affairs

Uncertainty Over ACA Repeal and Spending Bill Votes
At the time of this article, the path forward for Congress to pass both an omnibus spending package to fund the government for the remainder of FY 2017 and a bill to repeal and replace the Affordable Care Act (ACA) remains unclear.

Current funding for the federal government expires at the end of the week, on April 28. Failure to pass a $1.1 trillion measure by the looming deadline would result in a government shutdown, an outcome that both Congressional leaders and the White House want to avoid. While the threat of a shutdown has eased with the Administration backing away from its demand that the bill includes $1.5 billion to build a wall on the U.S. border with Mexico, ACA cost-sharing reduction (CSR) remains a major sticking point hindering the negotiations. The payments made to insurers to help them offer affordable coverage on the individual market currently come from mandatory funding but a lawsuit brought by House Republicans against the Obama Administration could result in the payments stopping next month, resulting in premium increases for individuals. Democrats want the $7 billion in annual subsidies to be funded in the bill. Congress could pass a short-term continuing resolution (CR), which extends current funding levels, if it fails to complete a full spending bill by week end. 

Also this week, the Administration has been pushing for taking another stab at passing legislation to repeal and replace the ACA, ahead of President Trump’s 100th day in office on Saturday. The Republican proposal, the American Health Care Act (AHCA), was removed from the House floor last month amidst concerns that the measure didn’t have enough votes to pass. Renewed enthusiasm stems from an amendment authored by Republican Representative Tom MacArthur of New Jersey that would give states the authority to apply for waivers from some of the ACA’s requirements, including covering essential health benefits and people with pre-existing conditions, under certain conditions. The bill and related amendments were added Wednesday night to a list of bills that might be considered by the House this week. While the conservative Freedom Caucus has endorsed the new text, a number of moderate Republicans remain opposed and it is unclear if the measure has the votes to pass. If the bill passes in the House, it still faces uncertainty in the Senate because the changes may not meet the Senate reconciliation rules and therefore need Democratic support.

FDA Commissioner Nomination Approved by Senate Committee 
On March 10th, President Trump announced Scott Gottlieb as his choice to head the Food and Drug Administration (FDA). Gottlieb is one of the last cabinet members to be named by the Administration. The announcement was welcomed by industry and applauded by Biocom. Gottlieb brings a tremendous amount of expertise through his experience as a physician, health policy analyst, FDA official, clinical assistant professor, and industry consultant. At FDA, he served as the senior advisor to the FDA Commissioner, the Director of Medical Policy and Development, and Deputy Commissioner for Medical and Scientific Affairs. After his time at FDA, Gottlieb helped launch at least 12 companies through his roles at the investment bank, T.R. Winston & Co., and venture firm, New Enterprise Associates. He has advocated for a less stringent regulatory environment to speed up the drug approval process, a goal publicly endorsed by President Trump. 

On April 5th, the Senate Health, Education, Labor and Pensions (HELP) Committee held a confirmation hearing where Gottlieb addressed important issues such as the growing opioids crisis and rising drug prices. He described the opioids epidemic as a “public health emergency” and pledged to make it a top priority. When asked about FDA’s process for approving new drugs, Gottlieb struck a balance between recognizing the importance of the “gold standard” of FDA review and modernizing and streamlining the regulatory process, where appropriate. Responding to concerns related to his ties to the health care industry, Gottlieb promised he would recuse himself from decisions involving biopharmaceutical companies he has worked with and plans to resign from 13 positions and divest from 30 financial interests. Gottlieb expressed that he “wants to earn and keep the public’s trust” and will be “an impartial and passionate advocate for public health.” The committee approved Gottlieb's nomination by a 14-9 vote on April 27th. The original vote was scheduled on April 26th and delayed to give Senators more time to review Gottlieb's responses to questions sent following his nomination hearing earlier this month. The full Senate is expected to vote on his nomination in May.

Senate and House Health Committees Release FDA User Fees Reauthorization Draft
On April 14, the Senate Health, Education, Labor, and Pensions (HELP) Committee and House Energy & Commerce Committee released a discussion draft of bipartisan legislation to reauthorize the Food and Drug Administration (FDA) user fee programs for prescription brand drugs, medical devices, generic drugs, and biosimilars from 2018 to 2022. Current funding authority expires on September 30, 2017 and failure to reauthorize the agreements will force the agency to send layoff notices to more than 5,000 employees and delay the reviews of new products. The draft reflects the recommendations sent by FDA to Congress in January, which were based on over a year of negotiations with industry. Click here for the text of the discussion draft, here for a section-by-section summary, and here for a one-pager. 

In Fiscal Year 2016, the user fees accounted for 70 percent of the brand drug review budget, 36 percent of the medical device review budget, 75 percent of the generic drug review budget, and 29 percent of the biosimilar review budget. Under the draft, prescription drugs would see increases in the base user fee amount from $718.7 million in FY2017 to $878.6 million in FY2018. Device user fees would increase from the FY2017 base of $130.2 million to $183 million in FY2018 and $213.7 million in FY2022. Generic drug user fees would increase from $299 million in FY2017 to $493.6 million in FY2018, while biosimilars would see increases from $20 million to $45 million. In total, the bill would add about $400 million in new user fees for the first year.

The Prescription Drug User Fee Amendments (PDUFA VI) enhances patient-focused drug development, supports biomarker development and qualification, dedicates staff to assist in the development and review of rare disease drugs, sets clear timelines and improves guidance for drug and device combination products, and evaluates ways to modernize the clinical trial process. The Medical Device User Fee Amendments (MDUFA IV) enhances the patient voice in the device development process, supports the collection of real world evidence on the safety and effectiveness of devices, and improves the review process for  “de novo” devices—low- to moderate-risk devices that are the first of their kind. The Generic Drug User Fee Amendments (GDUFA II) improves the fee structure to support small businesses, provides goal dates for all outstanding generic applications, and establishes priority review timelines. The Biosimilar User Fee Amendments (BsUFA II) continues to build the biosimilars program and supports guidance for product developers. 

FDA Announces Workshop on How to Successfully Engage with FDA’s Drug Center
The Food and Drug Administration has announced a workshop to advise the public on how to successfully engage with the FDA’s Center for Drug Evaluation and Research. The “Roadmap for Engaging with FDA’s Center for Drug Evaluation” will take place on May 12, 2017, from 9 am – 3 pm EDT, at FDA’s White Oak Campus. The registration deadline is May 5, 2017, 6 pm, EDT. For more information and to register for the workshop click here.

Upcoming Public Policy Events
First Bay Area Facilities/EH&S Committee Meeting
May 23, 2017
12:00 PM