Regulatory Focus™ > News Articles > PhRMA: 'Butterfly Effect' of Poor Legislative Policy Affecting Regulations, Patients

PhRMA: 'Butterfly Effect' of Poor Legislative Policy Affecting Regulations, Patients

Posted 08 October 2013 | By Alexander Gaffney, RAC

The US Pharmaceutical industry's standard-bearer, the Pharmaceutical Research and Manufacturers of America (PhRMA), is publicly expressing deep concern about the "significant impact" of budget cuts and furloughs on the ability of the US Food and Drug Administration (FDA) to do its job.

In an opinion piece authored this week in Politico, PhRMA President John Castellani wrote that, "We in the biopharmaceutical sector are deeply concerned about the significant impact of sequestration on the FDA's ability to fulfill its critical public health mission and to advance the goals of PDUFA V," more formally known as the Prescription Drug User Fee Act, the most recent iteration of which was passed into law in summer 2012.

Sequestered Fees

While legislators voted to expand FDA's industry-generated funding, they voted just a few months later to implement a series of budget cuts across government, slashing FDA's budget. Caught up in those cuts were the same user fees-an act that makes no logical sense, argued Castellani.

"Prescription drug user fees cannot, by law, be used for any purpose other than to support FDA's human drug review program, so their sequestration does not decrease the nation's deficit," he wrote. At present, those fees are essentially sitting in a government holding account, unable to be used by FDA to meet its user fee goals, but unable to be spent by the US government to pay down the deficit. And neither can the industry get a refund on those fees.

However, efforts have been in the works to return that funding to FDA. In the House and Senate, H.R. 2725 and S. 1413 would respectively release the sequestered user fees back to FDA for use by the agency. Castellani said PhRMA is in the process of working with "lawmakers of both parties through the ongoing appropriations process towards the release of sequestered FY2013 prescription drug user fees."

"The sequestration of PDUFA user fees only serves to exacerbate the severe budgetary constraints of a historically underfunded agency to the detriment of patients, regulatory science and public health," Castellani opined.

Shutdown and Butterflies

But sequestration is currently the least of FDA's worries, Castellani noted. "In addition, FDA now also faces the challenges of trying to continue critical drug safety and review activities during a government-wide shutdown, forcing the furlough of 45% of their workforce and no ability to access FY14 user fees."

This has resulted in the agency refusing to accept any new drug filings as of 1 October 2013, and some legal analysts have said the refusal of new applications could have troubling implications for not only new drugs, but also new generic drugs seeking first-to-file 180-day exclusivity provisions as well.

For Castellani, though, the entire episode is indicative of a broader set of difficulties; one best represented by Edward Lorenz's theory of the "Butterfly Effect." The economic theory-since popularized in other media, such as film-is meant to portray the vast unintended consequences of a single, seemingly unrelated action. Castellani said the disruption of a "predictable, transparent and science-based regulatory environment" could serve to diminish incentives for the pharmaceutical industry to innovate.

These structures-maintained in the US by FDA-are "critical to the development and review of medicines," he said. And without the ability of FDA to review new medicines, invest in new regulatory capacities (using PDUFA funding) or operate with its full staff, the flapping wings of legislators could ultimately serve to harm patients the most, he concluded.

"While 'care' and 'innovation' are favorite buzzwords in DC, rarely are they discussed alongside the regulatory or policy-based transitions needed to affect real and positive change. It's time to rethink how we encourage a resilient, robust and innovative health care system, and consider how regulatory and IP policies impact our ability to deliver medical results in the next generation of medicine."

Op-Ed in Politico

Tags: PhRMA

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