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CLSA Wire

The Hill: Opinion: Stop sequestering patient care

By Todd E. Gillenwater, Op-Ed to The Hill
April 29, 2015

The U.S. life sciences sector is a leader in job creation and healthcare innovation. In California alone, more than 2,600 biomedical companies and nonprofit research institutes have developed hundreds of new treatments and tests for cancer, heart disease, diabetes, Alzheimer’s and countless other conditions. In the process, they employ more than 270,000 people.

Right now, California companies have more than 1,200 therapies in the works. However, to reach patients, these drugs and devices must go through the Food and Drug Administration’s (FDA’s) stringent review process. While this system takes time, it’s critical to ensure the safety and effectiveness of new therapies.

Over the years, Congress, the FDA, patient groups and industry have collaborated to improve Agency regulatory processes. The goal has been to create consistent, predictable and transparent mechanisms that bring patients desperately-needed new technologies without jeopardizing safety.

One of the great milestones in this long-term collaboration was the 2012 Food and Drug Administration Safety and Innovation Act (FDASIA). Among other provisions, biomedical companies agreed to pay higher user fees to help the FDA improve its performance. The bill passed with overwhelming bipartisan support.

FDASIA has been a success, helping the FDA approval processes get back on track. For example, FDASIA expanded the agency’s ability to fast-track treatments for the most serious diseases. This led to the Breakthrough Therapy Designation, which helps the Agency accelerate the approval process for drugs that may benefit patients with life-threatening conditions.

Regulatory improvements, like the Breakthrough Therapy Designation, can only happen in a well-funded FDA. The agency needs people to do the work necessary to accelerate approvals. That’s why life sciences companies readily agreed to increase user fees – streamlined yet rigorous review processes are a win for the industry, the FDA, the economy and, most importantly, patients.

Unfortunately, recent fiscal battles have jeopardized FDASIA’s success. In 2013, a decision by bureaucrats at the Office of Management and Budget (OMB) meant that the budget sequester both reduced FDA congressionally-appropriated funding and limited the agency’s access to user fees. This created a strange situation, in which industry continued to pay fees but the FDA could not access all of them.

This scenario was concerning on many levels. User fee dollars are not the same as tax dollars. User fees provide revenue for specific purposes; for example FDASIA user fees can be used by FDA to hire additional reviewers and support staff and upgrade its information technology systems to maximize the efficiency of the application review process. Without these resources, FDA was hindered in implementing FDASIA.

To make the situation even more frustrating, these user fees can only be used for their stated purpose; these sequestered dollars couldn’t be used to reduce the budget deficit. They simply gathered dust at the Treasury Department while patients waited.

But there’s an even more insidious, far-reaching consequence to sequestering user fees. Investors rely on consistent review processes to help them assess risk. Hobbling the FDA can only reduce investor confidence. And without their support, many new therapies might not even make it to FDA for review.

In early 2014, Congress passed a bipartisan budget that reversed the sequester. User fees that had been set aside during FY2013 were restored. The system improvements designed into FDASIA could be fully implemented.

However, restoring FDA funding did not address the long-term issue: sequestering industry user fees. There is the very real possibility that sequestration could be triggered again in FY2016. And again, user fees could be diverted away from the FDA, delaying approvals and harming patients.

For these reasons, we call on Congress to quickly pass H.R. 1078, the FDA Safety Over Sequestration (S.O.S.) Act. This bipartisan bill, sponsored by Reps. Anna Eshoo (D-Calif.) and Leonard Lance (R-N.J), exempts FDA user fees from sequestration. By eliminating the threat posed by sequestration, the bill ensures that safe, effective treatments get to patients as quickly as possible. The FDA S.O.S. Act is not just a legislative imperative, it’s common sense.

Gillenwater is Executive Vice President for Advocacy & External Relations at California Life Sciences Association (CLSA), a nonprofit public policy organization representing leading academic institutions and biotechnology, medical device, diagnostics and pharmaceutical firms.

View at The Hill