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Executive Summary

FDA has established a steering committee to oversee the new user fee program and "all aspects" of its implementation, Mary Jo Veverka, senior advisor for management and systems within the Office of the Commissioner, told a Dec. 8 session of the Food & Drug Law Institute's annual meeting in Washington, D.C. "We've formed a very senior level user fee steering committee to oversee all aspects of the implementation," Veverka said. "Its primary role" is to coordinate "the many interrelated activities required for implementation." The committee also will "serve as the primary decision making body, particularly in matters of policy," she said. For example, it currently is developing "a consistent definition of the review processes covered by the user fee program," and it will "make sure that all performance tracking is done consistently, and they will also coordinate management initiatives to improve the review processes. Veverka reported that the committee oversees seven working groups to address the following areas: review management fee management waiver guidelines staff recruitment information systems interagency experience (or "lessons learned") and user fee "rollout" to other FDA premarket review programs. As formation of the rollout group indicates, the agency is considering extending the user fee program beyond prescription drugs, biologics and OTC switches. Veverka told a Dec. 9 "meet the trade press" session of the FDLI meeting that FDA is "very interested in entering into discussions with industry in a very similar fashion to the discussions we had leading to the current statute." She said the generic drug industry and the medical device industry are potential participants in the user fee program. "The device industry was not supportive of user fees" during the 102nd Congress, she noted, "but we anticipate that we will re-enter ...discussions with them." During the Dec. 8 session, Veverka was asked why generic drug sponsors are not obligated to pay user fees under current law. She noted that FDA had "three working sessions" with the generic drug associations "and a handful of companies," but time to include them ran out "rather late in the [negotiating] process" as the last session of Congress drew to a close. Veverka also pointed out that the Office of Generic Drugs has accomplished a dramatic improvement in ANDA review times. Furthermore, she said, the generic industry did not consider it cost effective to pay for additional resources for even faster approval times because speedier marketing of second and third versions of generic products "collapses" prices. Nonetheless, she said, the industry "left an open door" to resume discussions about generic drug user fees. Asked how FDA will handle drug/device combinations, Veverka said FDA is analyzing a comprehensive list of "prior applications to make sure they have been coded properly in the first place"; then "FDA will make the determination of what specifically will be subject to fees." Washington lawyer Bruce Kuhlik (Covington & Burling) suggested that FDA's efforts to extend the user fee program to other industries will be difficult. Although "we can also expect FDA and Congress to turn their attention to other industries subject to FDA regulation and to set their sights on user fees in those areas as well," Kuhlik said, "two important things [should] be kept in mind." Other industries "are regulated differently and have different economics," he said. "For example, foods and other products that are not subject to extensive premarket approval do not present the same justification for user fees." Also, extension of the user fee program to other areas will depend on its success in prescription drugs, Kuhlik continued. "Even in areas where fees might be justified, industry and Congress will be looking closely at the prescription drug experience to see whether the commitments are being met and to judge whether they can be met in other areas as well." Veverka explained that "the review management working group is coordinating activities between" the Center for Drug Evaluation and Research (CDER) and the Center for Biologic Evaluation and Research (CBER). She noted that "the centers can learn from each other, and they can collaborate on many fronts; this program also requires greater consistency between the centers." CDER Deputy Director Bruce Burlington, MD, and CBER Associate Director Mike Beatrice will chair the working group. One example of the coordination effort is the establishment of "a joint [CDER/CBER] oncology review division next month, coincident with the move to the Woodmont Building," Veverka said (see related story, p. 14). "This division will draw from a pool of oncology reviewers for drugs, biologics and combination products," she explained. "CDER and CBER are surveying future workload trends to examine opportunities to expand these joint reviews and for other intercenter collaborative programs." Veverka said "the fee management working group is responsible for developing the revenue and cost management system." The group is "working closely" not only with CDER and CBER, but also with "the field organization to determine exactly which products, establishments and applications will be subject to fees," she noted. "For example, establishments within a five-mile radius are only subject to one fee. The field inspectors will need to determine which specific establishments fall within the five-mile radius defined in the statute." Drug and biologic manufacturers "will be hearing from the agency's financial management organization at some point over the next several months, first, to reconcile what is subject to fees and, then, for invoicing," the FDAer said. Because the total amount of user fee revenues in any given year is capped, FDA has no incentive to apply user fees to an increasing volume of applications. The more applications for which fees are charged in any year decreases the amount of individual fees. Veverka noted that FDA will not review applications submitted by companies that are in arrears in user fee payments. The fee waiver group is developing guidelines for identifying applications for which user fees are not charged. "We must develop our public health policy relative to fees and understand the economic implications of the fees" and waivers, Veverka said. She told the Dec. 9 FDLI session that if FDA becomes "overly generous" and permits waivers for too many applications, higher fees will be paid for correspondingly fewer applications. "It's a very delicate balancing act" between making the program "administratively simple" yet "equitable" to applicants that pay the fees, Veverka said. An example of the type of issue FDA is considering involves structuring fees so that they do not deter companies from submitting data to support approval of indications that currently are off label. "Over the last year we've encouraged sponsors to submit the needed labeling supplements to document indications which are currently prescribed off label," Veverka told the Dec. 8 session. "We do not want to [discourage] this initiative as a result of user fees." The staff recruitment working group is "identifying [FDA's] space needs and locations to place new hires," Veverka said. The group is considering "options for procuring the needed space, matched to the timing of our recruitment needs." The recruitment group has asked CDER and CBER to identify "their future staff needs by therapeutic area and by discipline." The group intends to "better match our hiring to expected future workloads." For example, she noted that "applications for Cardio- Renal appear to be on the decline whereas CNS is increasing." Pursuant to this effort, Veverka noted, the Pharmaceutical Manufacturers Association and the Industrial Biotechnology Association "will be asking their members to provide the agency with a projection of applications by therapeutic class and by application by year." She said the request is expected to "go out shortly." Veverka predicted that the "input from sponsors will be extremely valuable in predicting [FDA's] future skill needs" and meeting performance goals. Maintaining that fees may encourage industry to "bundle" applications, Veverka noted that FDA has "no ground rules for defining what constitutes a separate application." She said "many applications often bundle more than one strength, dosage form and indication," and sponsors may try to collaborate on applications to share fee costs. Bundling "never mattered to us before," Veverka noted. But now, "bundling could reduce a sponsor's fees, but also lower the quality of the submission or change the magnitude of the workload measurably," she said. "However, it could change the fee levels for all companies because as the number of individual applications declines, the fees go up for us to collect our revenue." Furthermore, bundling "could impact the agency's ability to meet its performance goals." FDA will "continue to accept early, partial submissions," Veverka reported. "These so-called 'rolling' submissions are common practice in several divisions and in [CBER]. We do not wish to discourage the opportunity to interact with sponsors early in the submission process. Rather, we're defining what constitutes a complete submission for purposes of collecting that initial fee and starting the review clock." FDA expects to begin the user fee program by May, Veverka said. She told the Dec. 9 session that the agency has completed drafting of a supplemental appropriations proposal, which must be enacted by Congress before the user fee program can begin. "The draft ready to go," she said. "It's just waiting for the commissioner's signature to go out of the agency." FDA has found, "in researching supplemental appropriations [bills throughout] the government going back over the last five years," that the earliest date by which Congress can enact such legislation is "April 1, the latest May 25," she said. Consequently, FDA is "targeting that window for our ability to actually begin to collect fees." She noted that fees charged after that date are retroactive to all applications submitted as of Sept. 1, 1992.

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