On May 9, 2007, the U.S. Senate passed the Food and Drug Administration Revitalization Act, S. 1082, and on July 11 the House of Representatives passed the Food and Drug Administration Amendments Act of 2007, H.R. 2900. These two bills address many of the same prescription drug and medical device issues, most notably the reauthorization of the Prescription Drug User Fee Act (PDUFA), which expires on September 30, and enhanced Food and Drug Administration (FDA) regulatory authority over drug safety. This advisory focuses on the key differences between the bills’ prescription drug related provisions, which the pharmaceutical industry should be aware of as the two bills move to a conference committee. These bills are considered “must-pass” legislation since, without reauthorization, FDA will not be able to collect the user fees upon which the agency and industry rely for expeditious product approval.

Overview

Both S. 1082 and H.R. 2900 combine multiple pieces of prescription drug and medical device legislation, including the reauthorization of and amendments to PDUFA, the Medical Device User Fee and Modernization Act (MDUFMA), the Best Pharmaceuticals for Children Act (BPCA) and the Pediatric Research Equity Act (PREA), as well as new provisions regarding post-market drug safety and pediatric medical devices. A number of other issues are covered by one bill and not the other, including food safety, pet turtles, follow-on biologics and prescription drug importation, which are included in only the Senate bill. A user-fee exemption for orphan drugs, a statement for inclusion in direct-to-consumer (DTC) drug advertisements and a prohibition against foods to which drugs or biological products have been added are addressed only by the House bill.

Each bill first addresses the reauthorization of and amendments to PDUFA, including extension of the program through fiscal year 2012 and new fees for FDA review of DTC advertisements. Both the Senate and House bills provide for expanded FDA regulatory control over drug safety through the creation of the Risk Evaluation and Mitigation Strategies (REMS) program and the Reagan-Udall Foundation, enhanced conflicts of interest policies, clinical trials databases, DTC advertising penalties and other drug safety provisions. Each bill also contains provisions dedicated to pediatric pharmaceuticals and improving pediatric research.

PDUFA Reauthorization and Amendment

Both bills reauthorize through 2012 the prescription drug user-fee program through which FDA collects fees from companies that submit new drug applications (NDAs). For fiscal years 2008 through 2012, the total annual user-fee revenue under both bills is $392.8 million, plus an annual adjustment based on FDA’s 2007 workload and an adjustment for inflation. This figure includes additional fees to be collected under the enhanced post-market drug safety programs described later in each bill. Both bills also set forth special rules for compounded positron emission tomography drugs, such that an applicant for an approved human drug application for such drugs will be subject to a fraction of the annual prescription drug establishment fee. Under the Senate bill, the fraction is one-fifth; under the House bill, it is one-sixth.

Both reauthorization bills also include enhanced FDA-to-Congress reporting requirements, including a performance report of FDA’s progress in achieving the goals identified in letters from the Secretary of Health and Human Services (the Secretary) to the authorizing committees, and an annual fiscal report describing the implementation of authority for advertising fees and FDA’s use of such fees.

DTC Advertising Review Program

Title I of each bill amends PDUFA to require FDA to collect from prescription drug companies a fee for the voluntary advisory review of their DTC television advertisements. Advertisements that are required by statute to be reviewed prior to public dissemination are exempt from the advisory review fee. All persons who are assessed the advisory review fee must also pay a one-time operating reserve fee for the first fiscal year in which an advisory review fee is assessed.

The bills prescribe the same annual timeline. By June 1 of each fiscal year, the Secretary must publish in the Federal Register a notice requesting notification within 30 days of the number of DTC advertisements a company intends to submit for advisory review in the next fiscal year. Such notification constitutes a binding commitment to pay the fee for that number of submissions. By August 1 of each year, the Secretary must set the advisory review fee, derived by dividing the total fee revenue for the fiscal year ($6.25 million for each of fiscal years 2008 through 2012, plus inflation and workload adjustments) by the number of DTC advertisements FDA will review based on the notifications that the agency has received. By October 1, users must pay all fees for the number of advertisements for which they requested advisory review.

FDA may not set the advisory review fee for 2008 at more than $83,000 per submission or, for fiscal years after 2008, at more than 150 percent of the previous year’s fee.

Each bill also directs the Secretary to establish an operating reserve in 2008 of $6.25 million to continue the program’s salaries and other expenses in the event the advisory review fees for a given fiscal year do not generate sufficient revenue for that year. If the first fiscal year yields less than $11.25 million in advisory review and operating reserve fees, the program will be terminated and all fees will be refunded. The same shall occur in later fiscal years if as of November 1 the operating reserves, annual fee revenues and unobligated fee revenues from prior fiscal years total less than $9 million.

DTC Advertising Penalties

Both bills provide for civil monetary penalties for disseminating a DTC advertisement for a prescription drug that is false or misleading. Under the Senate bill, such penalties would not exceed $150,000 for the first violation in any three-year period, and would not exceed $300,000 for each subsequent violation after being penalized in the preceding three-year period. The House bill would impose higher fines: $250,000 and $500,000, respectively.

The House would also give the Secretary the authority to require the submission of any television advertisement for a drug not later than 45 days before its dissemination and to make recommendations on changes if they are necessary to protect consumers, consistent with the product’s prescribing information and, if appropriate and if information exists, on statements to address the efficacy of the drug for a specific population – elderly, children and racially and ethnically diverse populations.

Post-Market Drug Safety Programs

Both bills provide for a system of routine active surveillance of FDA-approved prescription drugs and post-market studies and clinical trials for cases in which reports and other safety signal detection are not sufficient to resolve whether there is an elevated risk of a serious adverse event associated with the use of a drug. The surveillance system would collect and analyze adverse event data from public (e.g., Medicare) and private (e.g., pharmaceutical and insurance companies) sources, to include, under the Senate bill, at least 100 million patients by 2012.

The bills establish a system whereby drug manufacturers and FDA cooperatively create Risk Evaluation and Mitigation Strategies to address the health risks that drugs may pose. Under the Senate bill, sponsors may voluntarily submit a proposed REMS with an NDA, or the Secretary may require a REMS proposal when the agency determines one is necessary to assess a signal of a serious risk or to mitigate a known risk. The REMS must contain, at a minimum, FDA-approved labeling for health providers and a timetable for submission of assessments of the strategy. For drugs containing one or more active ingredients not previously approved by FDA, the REMS would be reviewed at 18 months and three years after the drug’s initial approval and then as specified in the strategy in subsequent years. The assessment timetable of other drugs would be determined by the Secretary. Additional elements of a REMS may include tools to assess, communicate and manage risks, such as post-approval clinical trials, communication plans for health providers and medication guides or package insert for patients.

Under the House’s REMS proposal, a new drug may not be approved unless the applicant has submitted a statement describing whether the person believes that a REMS should be required and whether a post-market study or clinical trial should be required, taking into account such factors as the estimated size of the population likely to use the drug involved, the seriousness of the disease or condition to be treated and the expected benefit. The Secretary would take the same factors into consideration to determine whether a REMS is necessary with an NDA to ensure that the drug’s benefits outweigh its risks. The House REMS program would require annual review of the REMS for the first three years, a review in the seventh year post-approval and subsequent review at the frequency specified in the REMS.

To enforce the REMS provisions, both bills deem a drug misbranded if it is subject to an approved REMS and the responsible party fails to make a labeling change required by the strategy or to comply with the strategy’s advertising requirements. In addition, monetary penalties would apply for the knowing failure to comply with requirements of an approved REMS. Under both proposals, the fine would be not less than $15,000 (no minimum in the House bill) and not more than $250,000 per violation, not to exceed $1,000,000 per proceeding. For ongoing violations, the Senate penalty would be $250,000 for the first 30 days of noncompliance, to double every 30 days, not to exceed $2 million. In the House bill such penalties would be not more than $10 million per violation, not to exceed $50 million in a single proceeding.

Funding of the new drug safety programs would be authorized at $25 million for each of fiscal years 2008–2012 under the House bill and $30 million per year under the Senate bill.

Reagan-Udall Foundation

Both bills establish the Reagan-Udall Foundation of the FDA whose goal is to advance the mission of the Food and Drug Administration to modernize medical, veterinary, food, food ingredient and cosmetic product development; accelerate innovation; and enhance product safety. Under each bill, the non-profit foundation would “identify unmet needs in the development, manufacture and evaluation of the safety and effectiveness, including post approval, of devices, including diagnostics, biologics and drugs, and the safety of food, food ingredients and cosmetics,” establish goals to address the unmet needs and award grants and contracts to scientists and entities to meet those needs.

Conflicts of Interest

Under the current system, FDA advisory panels that recommend whether or not new drugs should be approved often include members with financial ties to the company whose drug is under consideration. Both bills would require panel members to disclose during the appointment process their financial interests for the Secretary’s consideration. Under the House bill, FDA could grant one waiver per panel meeting to a member with a conflict.

In addition, “guest experts” with a financial interest in the matter under consideration would be permitted to present information to the panel but not vote. Please note that the Senate bill does not limit the number of waivers and does not include a “guest expert” provision. Both bills refuse waivers for committee members whose own scientific work is involved.

Clinical Trials Databases

Both bills provide for expanded availability of information about clinical trials and their results. Under the Senate bill, the Secretary would expand the ClinicalTrials.gov database by requiring researchers to submit for all clinical trials (Phase II and later), within 21 days of enrolling the trial’s first patient, clinical trial information that conforms to the data set of the World Health Organization’s International Clinical Trials Registry Platform and the location of the clinical trial. The database would be publicly searchable by such criteria as the disease or condition, the treatment being studied and the location, phase and age group of the study.

Results information would be added after the product is approved and would include information from the National Institutes of Health and FDA assessments and peer-reviewed scientific publications about the trial. The Senate bill also provides for a negotiated rulemaking process involving representatives from agencies, advocacy groups and industry to determine when and how to add results information not otherwise captured.

The House bill provides for the creation of the same clinical trials databases but does not specify enhancement of ClinicalTrials.gov. However, the clinical trials registry database called for is nearly identical to that proposed by the Senate. The House bill would require the clinical trial information within 14 days of the first patient enrollment. The House bill is more specific than the Senate bill about the information to be contained in the results database, including a technical and a non-technical summary of the trial and results and the percentage of subjects who ceased participation and their reasons for doing so. The House bill does not contain a negotiated rulemaking provision. Both bills provide for civil monetary penalties for the failure to submit the required clinical trials information or the submission of false or misleading information. The Senate bill would fine the offender not more than $10,000 for the first violation and not more than $20,000 for each subsequent violation; under the House bill, the fine for an individual would be $15,000 for all violations adjudicated in a single proceeding, and for any other person not more than $10,000 per day until the violation is corrected.

Pediatric Research and Pharmaceuticals

Both bills reauthorize through 2012 the BPCA and improve its provisions to make it more effective for ensuring that drugs are safe for pediatric populations. Both bills authorize the Secretary to request that the producer of a new drug conduct pediatric studies of the drug.

If the producer complies, provides reports and carries out labeling changes requested by the Secretary, the Secretary may grant six months of additional market exclusivity. Under the Senate bill, “blockbuster” drugs, whose annual gross sales exceed $1 billion, receive three months’ additional exclusivity, rather than six.

With respect to improving pediatric drug research generally, both bills permit the Secretary to require the sponsor of a drug application to submit an assessment of the drug’s effect in pediatric populations. The Secretary may grant a waiver of pediatric assessments if the necessary studies are impossible to conduct or highly impracticable, there is pre-existing evidence that the product would be ineffective or unsafe in pediatric populations or the product does not represent a meaningful therapeutic benefit and will not be used in a substantial number of pediatric patients. Both bills establish an internal FDA committee to review all pediatric plans, deferrals and waivers.

Additional Prescription Drug Provisions

The House bill requires all DTC ads to carry a 1-800 number and Internet address where consumers are encouraged to report adverse drug reactions to the FDA. The House bill also contains provisions allowing consumer and patient members to be involved in the next round of talks between the industry and the FDA on how user fees should be collected and spent to approve new drugs.

Both bills contain authorizations for the development of orphan antibiotic drugs: $30 million for each of years 2008–2012 under the House bill and $35 million per year under the Senate bill.