White House Doubles Down on Call to Fund FDA Entirely With Industry Fees

Regulatory NewsRegulatory News | 13 July 2017 |  By 

Following the House of Represenatatives' passage of the bill to reauthorize US Food and Drug Administration (FDA) user fees on Wednesday, the White House doubled down on its earlier call to amend the agreements so that FDA is entirely funded by medical products industries.

"The Administration urges the Congress to provide for 100 percent user fee funding within the reauthorized programs," the White House said in a statement. "In an era of renewed fiscal restraint, industries that benefit directly from FDA's work should pay for it."

In May, President Donald Trump released his budget proposal, which was the first time the Administration called to eliminate all appropriations for FDA and fund the agency entirely with industry fees.

Wednesday’s statement also says the Trump Administration is "concerned with certain other provisions in the bill, such as those providing additional market exclusivity to manufacturers, which could make exclusivity unpredictable and decrease competition."

Section 703 of the bill is currently the only one that addresses market exclusivity, but it "provides a period of 180-day market exclusivity to certain generic drug manufacturers that enter the market where there is currently no blocking patents or exclusivities, incentivizing generic drug manufacturers to compete with off-patent drugs."

In short: that section aims to increase competition and lower costs by incentivizing the development of new generic drugs for which brand name reference products have a monopoly.

The Administration’s previous comments to derail the user fee agreements were not well received by members of Congress on either side of the aisle.

At both House and Senate committee hearings on the bill there was bipartisan agreement that FDA should not be entirely funded by industry fees and that the agreements forged over the last two years between industry and FDA should be what is included in the reauthorization.

But some on the Senate side are still pushing for add-ons in the eleventh hour.

Brittni Palke, press secretary for Sen. Ron Johnson (R-WI), confirmed to Focus on Thursday that the senator "plans to hold up the FDA bill unless it contains Right to Try legislation," which is also supported by President Trump.

Section-by-Section Analysis of House Bill

Also on Wednesday, the House released its full report on the FDA Reauthorization Act of 2017, offering a breakdown of what each section of the bill would do. Here’s a recap of some of the section summaries with significant changes from years past, categorized by the type of medical product.


Section 202 adds the term "de novo classification request" to enable new user fees to be collected by FDA to specifically review de novo medical device classification requests.

Section 205 establishes a pilot program, to sunset in 2022, to provide FDA with the authority to audit and certify laboratories that conduct device conformance testing to a recognized standard, and also to withdraw the certification if necessary. FDA is required to evaluate the use of this scheme in at least five device types, or device parts that are found in multiple devices, and the agency is also required to obtain public input on the pilot's development.

Section 206 reauthorizes and provides flexibility to better target which device types are most appropriate for third-party review. The section also requires a public guidance development process to identify the factors to determine which devices are eligible.

Section 207 requires all device submissions to be in electronic format by 1 October 2021, though that date can be extended to as late as 1 April 2023.

Section 601 requires FDA to inspect medical device establishments using a risk-based inspection schedule.

Section 603 establishes standards to improve predictability for scheduled (not for-cause) inspections for medical device facilities.

Section 604 clarifies the process for the issuance of foreign export certificates for devices and establishes a pathway by which manufacturers denied a certificate can present information and work with FDA to correct outstanding issues.

Section 613 requires FDA to promulgate regulations to establish a category of over-the-counter hearing aids. "In doing so, FDA should consult with relevant stakeholders, including hearing aid manufacturers, licensed hearing professionals, patients, and others, during the rulemaking process," the summary says.

Section 614 requires FDA to issue a report on how the agency intends to ensure the quality, safety and effectiveness of devices that have been serviced, as well as whether FDA’s current authority is sufficient to oversee and regulate servicing or whether additional authority is necessary.

Section 615 creates a new voluntary pilot program for device manufacturers who wish to meet FDA reporting or postmarket study requirements using active surveillance.

Section 616 clarifies a process by which FDA classifies medical device accessories based on the intended use of the accessory.

Section 801 allows FDA to approve an imaging device "with the use of a contrast agent as long as the contrast agent is used at the same dose, in the same patient population, with the same type of imaging technology, and does not pose any additional safety risk."

Section 802 clarifies that a contrast agent for which an application has been approved may be approved for a new indication or condition following the authorization of a premarket submission for an applicable medical imaging device for that use.


Section 303 updates the generic drug user fee structure to provide more predictability for FDA and flexibility for small businesses. The section removes the fees for prior approval supplements and establishes a generic drug applicant program fee.

Section 701 requires FDA to expedite the review and development of generic drugs if there is not more than one approved version of the drug actively being marketed.

Section 702 improves communication between FDA and generic drug application sponsors about the categorical status of their applications.

Section 703 provides a period of 180-day market exclusivity to certain generic drug manufacturers that enter the market where there is currently no blocking patents or exclusivities, incentivizing generic drug manufacturers to compete with off-patent drugs.

Section 705 directs the Government Accountability Office (GAO) to issue a report on the rate of generic drug applications that are approved on the first review cycle and related issues.


Section 403 establishes an independent fee structure for biosimilars for the first time based on an "Initial Biosimilar Development Fee," an "Annual Biosimilar Development Fee," a "Biosimilar Program Fee" for sponsors of approved biosimilars and an application fee.

Prescription Drugs, Priority Review Vouchers and Other Provisions

Section 504 "raises the penalties for knowingly making, selling or dispensing, or holding for sale or dispensing, a counterfeit drug to conform with the penalties for illegally diverting drugs."

Section 505 "expresses a Sense of Congress that the Secretary of HHS should commit to engaging with Congress on administrative actions and legislative changes to lower the cost of prescription drugs."

Section 605 allows FDA to recognize auditors used by foreign governments to improve international harmonization of inspection standards and increase FDA access to audit data.

Section 704 clarifies the qualifying criteria for companies receiving a neglected tropical diseases priority review voucher to ensure the PRV is awarded to sponsors that conduct new clinical investigations necessary for FDA approval.

Section 902 reauthorizes the critical path public-private partnership for an additional five years at current law authorization levels.


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