Failure to Reauthorize User Fee Programs Would Result in About 3,000 FDA Layoffs

Representatives from the biotechnology, medical device and generic drug industries told members of the Senate Committee on Health, Education, Labor & Pensions on Tuesday that if the five-year user fee programs are not reauthorized, the US Food and Drug Administration (FDA) would likely see more than 3,000 job cuts.

Those layoffs, if Congress and President Donald Trump fail to act before 1 August or Congress’ summer recess, would significantly curtail new medical product approvals for pharmaceutical, biotech and medical device companies and likely delay research.

Senators on both sides of the aisle also criticized Trump’s budget proposal on Tuesday, which would cut billions from the National Institutes of Health (NIH) and replace congressional appropriations at FDA with more user fees.

Sen. Lamar Alexander (R-TN) made clear that the proposed NIH funding cuts would not become reality, while Sen. Elizabeth Warren (D-MA) cautioned that the proposed FDA cuts would cripple an agency that’s necessary for keeping Americans safe and that supplanting appropriations with user fees would put the agency’s ability to enforce the law at the mercy of industry.

Representatives from industry groups BIO, AdvaMed and AAM (formerly the Generic Pharmaceutical Association) reiterated to the committee what FDA officials told the House Energy & Commerce Committee late last month: that a failure to act on the already-agreed-to reauthorizations (GDUFA, MDUFA, PDUFA and BsUFA) would be devastating.

Sen. Richard Burr (R-NC) was the only committee member speaking Tuesday who questioned the current agreements, asking AdvaMed’s representative why the medical device industry is paying more than $300 million more to return to “historical norms.”

AdvaMed president and CEO Scott Whitaker told Burr that industry believes the deal with FDA is sound.

And when Burr asked if industry would be interested in FDA returning user fees if certain performance goals were not met, BIO senior vice president Kay Holcombe was the only industry witness to say that BIO would not be interested in returning funds.

Democrats on the committee also questioned the industry witnesses on drug pricing and transparency. Legislation addressing price gouging or other issues could potentially be attached to the reauthorized agreements.