FDA User Fee To Double In New US Budget

The official budget was published today revealing, among many cuts to several government agencies, that life science companies will be facing higher fees for dealing with the Food and Drug Administration (FDA) in order to bring their products to the market. “In a constrained budget environment, industries that benefit from FDA’s approval can and should pay for their share,” read the document.
The proposed increase in user fees is projected to go over $2 billion in 2018. Set to counter the fees going up, the document promises unspecified “administrative actions” set to “achieve regulatory efficiency and speed the development of safe and effective medical products.” The money from fees in the fiscal year of 2017 for the FDA totaled just over $4.5 billion.

“Industries that benefit from FDA’s approval can and should pay for their share”

Trump has been promising an overhaul of the agency, including an unspecified method to speed up the current drug approval process, which he has continuously condemned.
If cleared by the Senate, Trump’s pick for head of the FDA, Dr. Scott Gottlieb will be leading the sixth installment of Prescription Drug User Fee Act (PDUFA) later this year.
The PDUFA allows the FDA to charge companies producing human drugs and biological products. This act must be passed every five years, its fifth installment since its inception in 1992, is active until September.

Cuts to Health and Human Services

The National Institutes of Health would be facing major defunding all around with a 15.1 billion cut from last year’s budget, an 18 percent decrease. NIH would also see its spending reduced to $25.9 billion. The document suggests a “major reorganization” of the institutes and centers.

Also included in the section for the Department of Health and Human Services, is the elimination of the Fogarty International Center, which served to host US and international researchers while also providing them with training.
In a statement congresswoman and member of the subcommittee overseeing the FDA Rosa DeLauro D-Conn, said Trump’s budget cut to NIH will “turn back the clock on lifesaving biomedical research that has the power to save lives.”
Trump will provide an updated final version of his budget in May, however, the American Congress would still have to approve all the cuts across government agencies.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.