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Executive Summary

REP. WAXMAN WILLING TO CONSIDER FDA USER FEES as an add-on to existing progam funding in the agency's fiscal 1991 budget. Previously a foe of user fees, Rep. Waxman (D-Calif.) indicated he may be softening his opposition in a Feb. 6 speech to an investment conference in New York City. As chairman of the House Energy & Commerce/Health Subcommittee, Waxman has jurisdiction over the legislation necessary to authorize user fees. The conference focused on the generic drug industry and was sponsored by the Swergold, Chefitz division of Furman Selz Mager Dietz and Birney. The chairman of the Energy & Commerce Committee, Rep. Dingell (D-Mich.) has also indicated he may be shifting in favor of user fees. Dingell's interest has focused on increasing resources in the FDA generic drug review program. On the Senate side, Labor & Human Resources Chairman Kennedy (D-Mass.) and ranking minority member Hatch (Utah), continue to oppose user fees. Waxman said he would be a strong advocate of increased funds for FDA in fiscal 1991 "I'm going to be going to the Budget Committee when they start holding hearings on this whole health area," Waxman declared, "and strongly urge them to add money to FDA." Referring to user fees, he said: "We're also looking at a possible supplement to FDA funding through user fees if that can be structured in a way where we know the funds will be used to add to what FDA's doing and not simply to replace appropriated funds." In its recent fiscal 1991 budget recommendation for the agency, the Bush Administration proposed $685 mil. for the agency of which about 23% ( $157 mil.) would come from user fee revenues. The issue of user fees "is a tricky question," Waxman said. "It's tricky because we don't want inequities to result from user fees. But I think that shouldn't keep us from exploring the idea as a way to make sure that FDA has continued financial support to do its job." During last year's budget debates, Waxman was less receptive to user fees, stressing the problems with them. At a 1989 hearing before the House Budget Committee's Task Force on Human Resources, Waxman said that user fees "should never be employed to reduce the deficit [because] they are an unreliable source of funds for an agency that cannot just delay doing its job until next year" ("The Pink Sheet" March 13, 1989, p. 14). For the fiscal 1990 budget, the Administration proposed $570 mil. in total funding for FDA, including $100 mil. in product review charges. In his Feb. 6 speech, Waxman commented on user fees as a barrier to small companies. "We would not want user fees to be a barrier to get consideration of a drug," he said. However, he did not appear to view the barrier arguments as completely convincing. "On the other hand, we've heard from a lot of companies who have said they are willing to pay in order to make sure they can get their drug processed and not have the long delays that now occur at FDA. It's a question of balancing interests, and this is an area we're going to look at." Waxman was asked to comment on two issues as they relate specifically to the Waxman/Hatch ANDA law -- the FDA generic drug scandal and a recent citizen's petition by Schering-Plough asking FDA for blanket rejections of non-absorbed ANDAs. Waxman attributed part of the generic drug approval irregularities to a "lax enforcement climate" at the agency and not due to a flaw in the drug price competition act. "I'm convinced that the underlying problem is not the 1984 law," he stated. "To my knowledge, no one has identified any fundamental problem with the standard requiring generic companies to demonstrate that they can make a good copy of the brandname product...instead, the problem was old fashioned fraud." One of the problems that many critics have cited in the Waxman/Hatch ANDA language is that the burden of proof was shifted by legislation from applicants (to show that a product is suitable for approval) to FDA (to show that it is not suitable). While drafting the ANDA legislation in 1984, Waxman's staff added the language that required ANDA applications to be approved "unless" FDA found specific problems with the application. That is the inverse of FDA's authority regarding other drug applications. On the Schering petition, Waxman commented that "in our view" of the legislation "we did not distinguish between drugs for any particular purpose." The Schering petition asks the agency to decline approval for non-absorbed ANDAs "because the statutory requirement of bioequivalence cannot be satisfied for these products" ("The Pink Sheet" Dec. 11, T&G-12).

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