On July 9, 2012, President Obama signed into law the Food and Drug Administration Safety and Innovation Act ("FDASIA"), Pub. L. No. 112-144, 126 Stat. 993 (2012). This law is the culmination of a lengthy dialogue between industry, patient advocacy groups, and government authorities. FDASIA contains significant updates to the FDA regulatory process concerning drugs, biologics, and diagnostics, and it could have considerable short- and long-term effects on the regulated industry. (See table below for a breakdown of FDASIA; the text of the law can be found at http://1.usa.gov/MaLyxu.)

The heart of FDASIA lies within the reauthorization and introduction of user fees. Titles I through IV of FDASIA address user fees for the review of prescription drugs, medical devices, generic drugs, and biosimilars, respectively. These user fees are paid for by industry and help supplement the costs and increase the transparency of the FDA review process. Under FDASIA, these user fees are set to expire in 2017. As part of their discussions regarding user fees, industry and the FDA also negotiated performance goals that the FDA should meet. While the performance goals are not mandatory, FDASIA references them and requires the FDA to report on its progress toward meeting these goals.

FDASIA also affects market exclusivity in a number of areas. Market exclusivity protects the sponsor of an approved new drug application ("NDA") or biologics licensing application ("BLA") from new competition by either delaying approval or submission of applications from generics and other market competitors, sometimes even where the sponsor has no applicable patent rights. FDASIA measures relating to exclusivity include: six months of market exclusivity for conducting pediatric studies; five years of additional market exclusivity for qualifying antibiotics and antifungal drugs; and allowing enantiomers of a previously approved racemic mix to be eligible for the five-year new chemical entity ("NCE") exclusivity.

Further, FDASIA includes several incentives outside of market exclusivity to spur the development of innovative new drugs. The priority review voucher program has been expanded to include rare pediatric diseases, such that a sponsor receiving approval for a novel drug for an orphan pediatric indication is entitled to priority (six-month) review for any subsequent NDA or BLA. Nondilutive funding programs have also been established to support orphan drug development and to advance the FDA's Critical Path Initiative.

Finally, but importantly, FDASIA contains several provisions to help streamline and accelerate the approval process of new and innovative medicines. The law includes measures such as expediting the review of "breakthrough therapies," expanding the use of biomarkers and surrogate endpoints during clinical trials, allowing for consultations with FDA officials early in the drug development process, and updating the regulatory approval process for medical devices. Many of these provisions are the result of extensive conversation with industry experts and were focused on policies and procedures that would reduce the burden of regulatory approval without sacrificing patient safety.

The impact of FDASIA will of course lie with its implementation. Historically, the FDA has come under criticism regarding both the speed and cost of regulatory review and approval of drugs, as well as regarding delays in the issuance of industry guidelines. Looking forward, FDASIA could modernize the regulatory review process and provide greater transparency for industry stakeholders, while providing both the financial and legal support for FDA to properly execute on its mission. If implemented correctly, this law could help significantly reduce the uncertainty and cost associated with bringing a new drug to market.

Click here to view table Summary of FDASIA Provisions and Effects