FDA in Limbo as User Fee Renewal Stuck on Capitol Hill

While legislative leaders, administration officials, and policy analysts in industry and medical organizations all expect Congress to approve legislation reauthorizing user fees to support FDA oversight of drugs and medical products, a serious delay in this action already has created difficulties in maintaining an effective drug regulatory process. The user fee reauthorization bill approved by the House and pending in the Senate includes multiple measures making significant changes in FDA programs and operations, but the stalemate on Capitol Hill has generated talk of enacting a slimmed-down, fee-only bill to meet the renewal deadline of Oct. 1.

Without reauthorization of new fees for drugs (PDUFA), generic drugs (GDUFA), biosimilars (BsUFA), and medical devices (MDUFA) before the current fee program expires, FDA will lose its authority to collect fees from manufacturers, along with requirements for meeting certain timeframes and for utilizing agreed-on policies for assessing and approving new drugs and medical products.

Most damaging to the agency, FDA is required to send out “pink slip” notices to thousands of staffers who are supported by fee revenues, warning of potential layoffs. Such action already is eroding agency morale and undermining efforts to recruit and hire needed employees. The agency has struggled to maintain and expand its professional workforce in a very competitive market for skilled biopharma experts, and the agency’s funding uncertainty has worsened the situation.

Medical product user fees generate about $2 billion in agency revenues, about 40% of FDA’s non-tobacco budget, points out Steven Grossman, executive director of the Alliance for a Stronger FDA, which follows closely the struggle for adequate FDA resources. While Congressional leaders on both sides of the aisle support FDA programs as important for ensuring the health and safety of Americans, the broader political debate over government funding has created added hurdles for timely reauthorization of new user fee programs. FDA Commissioner Robert Califf has said that the agency has sufficient carryover funds to maintain operations for about five weeks into the new fiscal year that begins Oct. 1, but FDA still will have to issue “pink slips” notifying more than 3,000 staffers of “impending employment actions” without some action on Capitol Hill.

In addition, Congress so far has not approved a broader budget bill to fund the federal government for the coming year and is under pressure to approve temporary funding for federal agencies to prevent a government shutdown Oct. 1. Such a continuing resolution (CR) for fiscal year 2023 is expected to be approved by the House and Senate in the next two weeks and run through Dec. 16, after the upcoming mid-term elections. There is talk of attaching the FDA user fee reauthorization to that CR, along with provisions to continue a number of similarly expiring programs. To what extent the White House and Congress will agree to add-ons to a CR remains to be seen.