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This article was originally published in The Tan Sheet

Executive Summary

NDMA HAS "SERIOUS PROBLEMS" WITH FDA USER FEE APPROACH IN CLINTON's economic plan, Nonprescription Drug Manufacturers Association President James Cope told the association's annual meeting in Naples, Fla. on March 5. Cope noted that the recent budget proposal from the new administration would "significantly increase the size" of the user fees. According to explanatory documents accompanying the Feb. 17 economic plan, the Clinton Administration anticipates receiving three times as much money from FDA application fees in the years 1994-1997 than the original legislative agreement estimates. A shift in the use of the funds is also objectionable to NDMA, Cope noted. Pointing out that the 1992 legislative agreement called for the user fees to be applied to improved resources for FDA product review, Cope said that the Clinton Administration proposal treats user fees as helping to "underwrite the national debt." Implying that NDMA will fight any attempt to bring more FDA-regulated products under the user fee system, Cope said: "Friends, we never agreed to that [use of user fee monies for debt reduction] and we have very serious problems with it." NDMA is not alone in its objection to increasing the range of products covered by user fees and reapplying the funds outside of FDA. A number of congressional staffers who worked on the original plan indicated that that part of the Clinton proposal may be hard to sell on Capitol Hill. Staffers to key Democrats in the FDA area point out that Sen. Ted Kennedy (D-Mass.), Rep. John Dingell (D- Mich.) and Rep. Henry Waxman (D-Calif.) fought user fees when they included budget-balancing proposals during the Reagan and Bush Administrations. The key Democrats came around to support FDA user fees only when they became convinced that the funds would be earmarked as additive funding for the agency's drug review operations. However, as long as Clinton's economic plan holds together as a coherent legislative package and the new administration feels increased pressure for cuts in government expenditures, the change in the user fee proposal will remain a major issue to FDA- regulated industries. The review of the user fee issue makes the Feb. 26 reappointment of FDA Commissioner Kessler particularly important. A new commissioner might not have felt the same commitment to the 1992 legislation as Kessler. Until his reappointment, Kessler was not in a position to try to explain forcefully the nature of the 1992 agreement to the new administration budget planners. Secure in his reappointment, Kessler may now be able to argue for the 1992 plan. Indicating that there may be some second-guessing among nonprescription drug manufacturers about NDMA's partial support for user fees in 1992, Cope explained that the association's board asked to have user fees added for switch applications to commit FDA to rapid action on those applications. "The board decided that industry wanted to pay user fees to FDA for a very important reason," Cope said: "To obligate FDA to speed up switch petitions." NDMA's board felt that "if our new products did not come with resources to help fund FDA that our switch petitions would be lost in the crunch." Cope noted that original NDA applications for OTC marketed products are also covered under the user fee program. NDMA is continuing to predict a significant increase in the number of OTC switch proposals in upcoming years. The association says that FDA is "today aware of 20 switch products." An NDMA internal survey has identified "over 70 potential switch candidates that companies project will be submitted to FDA over the next four to five years." Some of these products may represent new categories. For example, last year Burroughs Wellcome and Hoechst switched one dosage of Zovirax (acyclovir) to nonprescription status.

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