House passes FDA Reform Act

Issue: July 2012

The U.S. House of Representatives passed its FDA Reform Act by a 387-5 vote.

Perspective from Douglas W. Jackson, MD

The bill re-authorizes and expands a user-fee program for drugs and medical devices. The legislation also is designed to help prevent drug shortages, accelerate federal approval of generic drugs and speed up reviews of breakthrough therapies for life-threatening diseases.

The House approval came 6 days after the Senate approved similar legislation by a 96-1 vote. The House and Senate now must reconcile relatively minor differences between the measures before forwarding the legislation to the White House for President Obama’s approval.

Provisions in the House and Senate versions of the legislation would require drug makers to notify the government about potential drug shortages, including when they plan to discontinue or interrupt production. The federal government would have the ability to alleviate shortages by finding new suppliers, either within the country or overseas.

Drug shortages reached record highs in recent years. The number of drug shortages tripled, from 61 in 2005 to 178 in 2010, according to an FDA report released last fall. An estimated 230 to 270 drugs went into shortage last year. The legislation would give hospitals the ability to redistribute medication within their own networks, an action prohibited under current law.

The legislation would require drug makers and medical device companies to pay $6.4 billion over 5 years to help cover the costs incurred by the FDA during its review of their products.

The measure also would introduce fees for the review of generic drugs and less expensive versions of biotechnology products. The generic drug fees are expected to reduce review times to a third of current levels and improve the availability of generic products for patients, according to sponsors of the legislation.

The Congressional Budget Office (CBO) said the bill would allow for earlier marketing of lower-cost drugs, which would reduce the average price of drugs on the market. The CBO also estimated the legislation would save more than $750 million over 10 years in Medicaid, Medicare and federal subsidies for private insurance.

For more information:

H.R. 5651. Available at http://thomas.loc.gov.

S.3187. Available at http://thomas.loc.gov.

Perspective

Douglas W. Jackson, MD

Any new legislation with additional regulations and taxation needs to be weighed against its benefits. On the positive side, this FDA Reform Act passed both branches with overwhelming bipartisan support and appears that it will not increase our federal debt. It has benefits for patients faced with drug shortages, and speeds and improves availability of generic drugs. The projected estimated savings of $750 over 10 years for government subsidies are always suspect that they will materialize. The $6.4 billion in additional taxation over the next 5 years to pay for the increased FDA costs will increase premiums for people with insurance as it will be passed on to the health care paying consumer. There is a need for further major bipartisan efforts in our overall health care reform. Taking one issue on at a time, no matter how beneficial it is, only complicates our overall financing of health care.

Douglas W. Jackson, MD

Orthopedics Today Chief Medical Editor

Disclosures: Jackson has no relevant financial disclosures.