The Biosimilar User Fee Act (“BsUFA”) was originally enacted in 2012, and the current legislative authority is set to expire at the end of September 2017. Under BsUFA, the U.S. Food and Drug Administration (“FDA”) is authorized to collect fees directly from biosimilar drug product applicants, and the fees are dedicated to expediting the approval of biosimilar applications. As part of the authorization process, the FDA also agreed to certain “performance goals” and procedures, including timelines for acting on original applications, resubmissions, and supplements. A complete list of the performance goal and procedures for each year from 2013 to 2017 can be found here.

A reauthorization of the BsUFA agreement (“BsUFA II”) has been negotiated with input from government, industry, and interested members of the public. The FDA held two public meetings regarding reauthorization, one in December 2015, and a second on October 20, 2016. Materials from each of those meetings are available from the FDA’s website here.

A bill reauthorizing all of the FDA user fee programs, including the Prescription Drug User Fee Amendments (“PDUFA VI”), the Medical Device User Fee Amendments (“MDUFA IV”), the Generic Drug User Fee Amendments (“GDUFA II”), and the Biosimilar User Fee Amendments (“BsUFA II”), S.934 – FDA Reauthorization Act of 2017, was introduced in the Senate and passed by the Committee on Health, Education, Labor & Pensions (“HELP Committee”) on May 11, 2017. The House version, H.R.2430 – FDA Reauthorization Act of 2017, was unanimously (54-0) passed on June 8, 2017, by the House Energy and Commerce Committee. Each version will need to move to the House and Senate floors where further changes may be made. Differences between the House and Senate versions must also be resolved before the bill is sent to the President for signature. In total, the bill would add about $400 million in new user fees for the first year, which pales in comparison with the $1 billion in increased fees requested in President Trump’s budget blueprint.

This article highlights the important changes and takeaways from the current version of the BsUFA II portion of the bill. The changes in BsUFA II are important for biosimilar applicants because changes have been made to user fees and application timelines. The latest proposals allow the FDA to adjust the user fees from $45 million to up to $54 million in fiscal year 2018. Another modification that will occur within the next few years is the removal of the supplemental fee and establishment of fees for sponsors and independent users, although not at more than a 25% increase. The application review timeline has been extended by two months, which should reduce need for review date extensions. It is expected that biosimilar regulation should receive more funding for providing education and guidance to the prescribing community, patient community, and other stakeholders.

History Leading up to Recent Congressional Votes

Over the last 15 months, the HELP Committee had 15 bipartisan briefings, some of which were with the Energy and Commerce Committee as well, to hear from FDA and industry about the reauthorization. FDA posted meeting minutes after every negotiation, and held public meetings before discussions began to hear feedback on the draft recommendations last fall. This committee held two bipartisan hearings earlier this year on the FDA medical device and drug user fees, and released a discussion draft on April 14, 2017, that provided two weeks for public comment.

During an October 20, 2016, public meeting to discuss BsUFA II, proposed changes to the fee structures included:

  • Enhanced predictability of BsUFA funding (cannot increase by more than 25% fee amount until 2021);
  • Establish independent user fee structure;
  • Improve FDA’s ability to manage program resources and engage in long term planning;
  • Simplify administration of program;
  • Remove supplemental and establishment fees; and
  • Retain initial, annual and reactivation biosimilar biological product development (BDP) fees

On May 11, 2017, the HELP Committee voted 21-2 for the user fee reauthorization bill before it was advanced to the full Senate. Relatively few amendments and provisions were made to the bill prior to this vote in an attempt to ease approval. Policy amendments made by the HELP committee included:

  • A requirement for FDA to develop bioequivalence guidance specific to complex generic drugs;
  • Policies providing risk based inspections of medical device facilities, changes to the regulation of contrast agents for use with imaging systems and OTC sales of certain hearing aids to consumers;
  • A bill to promote early planning of pediatric studies; and
  • Changes to the Orphan Drug Act.

Two important provisions made by voice during the May 11 vote included requiring the FDA to “hold public meetings and develop guidance with the goal of increasing patient access to experimental drugs” and “expedite review of certain generic drug applications.” Senator Bernie Sanders (I-VT) proposed an amendment involving importation of drugs from Canada that was rejected to avoid complicating the bill’s passage.

Senator Lamar Alexander (R-TN), Chairman of the HELP Committee, has warned that if the user fee agreements are not reauthorized by “late July, the FDA will be forced to begin sending layoff notices to more than 5,000 employees to notify them that they may lose their job in 60 days.”

Extension of Target Action Date by 60 Days to Allow for Additional Communications

BsUFA II is aimed at expediting biosimilar development by allowing for additional communications between FDA review teams and biosimilar applicants. BsUFA II encourages communication during pre-submission meetings, mid-cycle communications, and late-cycle meetings. Also, when manufacturing facilities must be inspected late in the review process, this can adversely impact FDA’s ability to complete application review within the performance goal timeframes. One major change implemented by BsUFA II to allow time for additional communications and inspection of manufacturing facilities is an extension of the application review timeframe.

Under BsUFA, by 2017, the FDA’s goal was to review and act on 90% of original biosimilar biologic applications within 10 months of receipt. Under BsUFA II, the FDA’s performance goal for acting on a new biosimilar application has been modified to require review and action on 90% of applications within 10 months of the 60-day filing date (the date when an applicant is notified if the application has been accepted by FDA for review). This change will extend the first action dates by 60 days for all applications submitted on or after October 1, 2017, making the earliest possible approval date for such applications approximately one year after submission.

New Model For Application Review

The New Review Model, also known as “the Program,” applies to New Molecular Entity, New Drug Applications and original Biologics License Applications. It is intended to promote the efficiency and effectiveness of the first cycle review process and minimize the number of review cycles necessary for approval.

In an October 20, 2016, presentation, Leah Christl, Associate Director for FDA Therapeutic Biologics, explained that the new user fee program planned to allow for additional communication between FDA review teams and biosimilar applicants, while also adding 60 days to the review timeframe to accommodate for additional interactions. Also, Christl explained that the new user fee program was intended to enhance staff capacity, develop new guidance and regulations to clarify scientific criteria for biosimilar developers, deliver more timely information to the public to improve the overall understanding of biosimilarity and interchangeability, and deliver more information concerning the date of first licensure and each reference product’s exclusivity expiration date.

According to Janet Woodcock’s testimony to the Committee on Energy and Commerce on March 2, 2017, the BsUFA II commitment letter establishes an application review model similar to “the Program” initiated for new drugs under the Prescription Drug User Fee Act that intended to promote the efficiency and effectiveness of the first cycle review process and minimize the number of review cycles necessary for approval.

The parameters of the Program will include the following:

  1. re-submission meeting;
  2. original application submission;
  3. Day 74 Letter;
  4. review performance goals (10 month user fee clock starts at 60-day filing date);
  5. mid-cycle communication;
  6. late-cycle and advisory committee meetings;
  7. inspections; and
  8. assessment of the Program.

The additional two-month review clock time (10 month plus 60 days, as noted above) is intended to provide FDA more time to complete additional late cycle activities added as part of the new review model (e.g., late-cycle meeting), and to address other late cycle review work, such as application deficiencies, Advisory Committee advice, and inspection issues to improve the efficiency of the first review cycle. The new program also allows for inspections of facilities late in the application process, which often impacted FDA’s timeline under BsUFA.

Changes to Initial Advisory Committee Meeting and BPD Type 2 Meeting Date Schedule

In fiscal year 2015, BsUFA only met for 50% of the Initial Advisory meetings within the 90 day goal, 67% of the Type 1 meetings within the 30 day goal, 49% of the Type 2 meetings within the 75 day goal, and 0% of the Type 4 meetings within the 60 day goal.

Under the BsUFA II commitment letter, Biosimilar Initial Advisory meetings will occur within 75 calendar days, instead of 90 days as agreed to in BsUFA, from receipt of the meeting request and meeting package. This type of meeting will be limited to a general discussion on whether a proposed product could be developed as a biosimilar, and will provide high-level overarching advice on the expected content of the development program.

To provide necessary time for FDA discussions and developing comprehensive responses, BPD Type 2 Meetings will occur within 90 calendar days, instead of 75 days as in BsUFA, from receipt of the meeting request and meeting package. There will be phased-in performance goals for meeting these deadlines of 80% in fiscal years 2018 and 2019, and 90% in fiscal years 2020 through 2022. In addition, the Agency will send preliminary responses to the sponsor’s questions contained in the background package no later than five calendar days before the face-to-face, videoconference, or teleconference meeting date for BPD Type 2 and Type 3 meetings.

The FDA hopes that changing their schedule and charging additional fees (discussed below in the “Fee Increases” section) will allow their staff time and resources to clarify scientific criteria for biosimilar developers by strengthening their guidance and regulations. Changing the timeline for meetings could also improve quality of information about product licensing and expiration date. Allowing more time for applications would also give the public a better understanding of the biosimilar.

Publication of Guidance Document

In the BsUFA II commitment letter issued on September 16, 2016, FDA committed to publishing a revised draft guidance on Formal Meetings Between the FDA and Biosimilar Biological Product Sponsors or Applicants no later than September 30, 2018, and to updating the draft guidance on Best Practices for Communication Between IND Sponsors and FDA During Drug Development by December 31, 2018. Additionally, the FDA’s commitment letter on BsUFA II indicated that FDA would publish draft or final guidance documents addressing the following topics:

  • Considerations in Demonstrating Interchangeability with a Reference Product, as we discussed in this prior article;
  • Clinical Pharmacology Data to Support a Demonstration of Biosimilarity to a Reference Product;
  • Nonproprietary Naming of Biological Products;
  • Statistical Approaches to Evaluate Analytical Similarity;
  • Processes and Further Considerations Related to Post-Approval Manufacturing Changes for Biosimilar Biological Products; and
  • Labeling for Biosimilar Biological Products.

Although the proposed dates for publication have not yet occurred, the first three guidance documents listed above were published by FDA ahead of schedule. In December 2016, FDA published its final guidance on Clinical Pharmacology Data to Support a Demonstration of Biosimilarity to a Reference Product. Then, on January 12, 2017, FDA published its final guidance on Nonproprietary Naming of Biological Products, as discussed here. Finally, on January 17, 2017, FDA published draft Considerations in Demonstrating Interchangeability with a Reference Product, as we discussed in this prior article. The comment period for this draft guidance was extended by FDA and closed on May 19, 2017.

Fee Increases

The BsUFA II user fee revenue amounts and fee amounts have been adjusted significantly from those of BsUFA . At the time BsUFA was enacted, the biosimilar program was in its infancy and there was little data available on which to base the fees. With BsUFA II, the agency and the industry have the benefit of several years of real-world experience.

The fees collected under BsUFA II remain dedicated to “expediting the process for the review of biosimilar biological product application.” BsUFA II requires fees be set to generate a total of $45 million in user fee revenue for FY 2018, which is a 125% increase from the $20 million base user fee revenue for FY 2017. The FDA can adjust this amount when setting the user fee amounts to reflect an updated assessment of the BsUFA workload, but the adjustment cannot increase user fee revenue by more than $9 million.

The bill newly establishes an independent fee structure for biosimilars based on the following types of fees:

  • “Application Fee” for new biosimilar applications;
  • “Initial Biosimilar Development Fee,” for the first year once a sponsor begins clinical trials;
  • “Annual Biosimilar Development Fee,” for subsequent years a sponsor is developing a new biosimilar; and
  • “Biosimilar Program Fee,” for sponsors of approved biosimilars.

The Trump Administration’s budget proposes an 18% ($15.1 billion) cut to the U.S. Department of Health and Human Services. To compensate, the budget proposes to increase user fees from $508 million to $1.3 billion in 2018. Biosimilar fees would increase from $22 million in 2017 to $87 million in 2018 (+$65 million); medical device fees would increase from $126 million in 2017 to $439 million in 2018 (+$313 million); and generic drug fees would increase from $323 million in 2017 to $616 million in 2018 (+$293 million).

Under BsUFA, biosimilar application fees requiring clinical data decreased from $2,374,200 in 2016 to $2,038,100 in 2017; both initial biosimilar development fees and annual biosimilar development fees decreased from $237,420 in 2016 to $203,810 in 2017; and biosimilar product fees decreased from $114,450 in 2016 to $97,750 in 2017.

BsUFA II removes the supplemental fee and establishment fee for sponsors, establishes an independent user fee structure, and modifies the product fee with a new provision that sponsors shall not be assessed more than five BsUFA program fees for a fiscal year per application.