Legislative Update: As end of year omnibus approaches, a look at what is on the table

Life Sciences | By LAURA DIANGELO, MPH

Nov. 29, 2022

The 117th Congress is running against and end-of-year deadline to pass legislation, including a full government funding measure, before the start of the 118th Congress. Lawmakers are looking to put new policies on the table for consideration, as well as revising past unfinished priorities.

Congress is expected to pass at least one major package by the end of the year.

  • Must-pass legislation by the end of the year: As AgencyIQ has previously discussed, the federal government is currently operating under a continuing resolution (CR), or a temporary measure to fund the government. However, that CR will expire December 16th, and Congress needs to pass new legislation to continue federal operations. Currently it remains unclear whether Congress will seek a full federal appropriations measure or whether a new short-term CR will be needed (or how long such a measure could last). This must-pass omnibus offers an opportunity for policy riders to be attached, including some potential FDA-related priorities.
  • Quick reminder: The 117th Congress officially concludes at the end of the year, with the new members elected during the midterms sworn in to the 118th Congress in January 2023. Legislatively, this means that all bills that were introduced, marked up or passed through single Chambers (i.e., that did not become law) end with the 117th Congress, and would need to be re-introduced next year under the 118th Congress if lawmakers want to continue their consideration. In effect, legislative progress on specific bills is lost between sessions of Congress – and that Members are running out of time to introduce measures for posterity.
  • The CR included a “skinny” reauthorization of the FDA’s user fee programs. In addition to providing short term funding for the full federal government, the legislation also reauthorized four of the FDA’s user fee programs – PDUFA, MDUFA, GDUFA and BSUFA – for five-year terms. This means that while the administrative branch will run out of money in December, the FDA’s authority to collect user fees from industry is in full effect through FY2027. Specifically, the CR includes the user fee program reauthorizations for prescription drugs (PDUFA), medical devices (MDUFA), generic drugs (GDUFA), and biosimilar products (BsUFA) for the next five years. The text of the reauthorization sections was nearly identical to text that had originally been proposed in the previously offered full user fee program reauthorization bills in the House (Food and Drug Amendments of 20222 and Senate (the FDA Safety and Landmark Innovation Act). In addition, the CR includes a variety of extensions of programs (known as the “health extenders”) related to FDA and CMS programs – albeit only until December 2022. [Read AgencyIQ’s full analysis of the CR here.]
  • What made this reauthorization especially unusual was what it didn’t include: Any other reforms or policy provisions. For the first time in decades, Congressional efforts to attach FDA-specific reforms and enhancements to the legislation were defeated, albeit temporarily. While both the House and Senate were debating extensive and significant policy packages to reauthorize FDA user fees and implement new programs, authorities and research endeavors earlier this year, those provisions were ultimately stripped out of the reauthorization. Traditionally, the reauthorization of user fees is an opportunity to pass significant reforms, as was the case with the 2017 reauthorization (the FDA Reauthorization Act, or FDARA), the 2012 reauthorization (the FDA Safety and Innovation Act, or FDASIA), or the 2007 reauthorization (the FDA Amendments Act, or FDAAA).
  • While debated reforms didn’t pass with the user fee legislation, they are not gone for good. Congress will still need to reconvene to pass additional funding measures before December 2022, which may serve as a legislative vehicle for the provisions of the user fee packages that were not included in the CR to be reconsidered, or for new policy riders to be incorporated. These include the broad overhauls to the regulatory systems for diagnostic products (the VALID Act), cosmetics and dietary supplements, as well as provisions related to research program diversity and potential changes to the Accelerated Approval pathway for certain drug products. So far, no final decisions have been made about the contents (or duration) of an omnibus, but the policies that were originally considered in either the House or the Senate’s user fee legislation (FDA 2022 or FDASLA, respectively) are likely options for consideration.
  • AgencyIQ is tracking other legislation that could potentially be added to any eventual legislative vehicle focused on the FDA. While it’s not yet clear what will be included in the omnibus (i.e., all of government) funding measure in December, AgencyIQ has noticed a slate of new FDA-related standalone policies introduced in recent weeks, which lawmakers may consider putting forth for consideration for the end-of-year measure. [ See AgencyIQ’s last legislative roundup from October 2022 here.]

A series of new bills have been introduced in the last few weeks. A recap below:

  • H.R. 9297, the Pre-Approval Information Exchange Act, is sponsored by Reps. Guthrie (R-KY), Eshoo (D-CA), Griffith (R-VA), Peters (D-CA), Burgess (R-TX) and Matsui (D-CA). Notably, this list of bi-partisan cosponsors represents leadership from the House Energy and Commerce (E&C) health subcommittee, a core committee with oversight of FDA regulatory issues, and a different version (but identically titled) bill was previously considered in that committee. This legislation would amend the statutory language regarding “healthcare economic information” (HCEI), or information that sponsors can provide to payors before a product is approved. Under the bill, Congress would clarify that no investigational product would be considered misbranded based on the provision of product information “to a payor, formulary committee, or other similar entity with knowledge and expertise in the area of health care economic analysis carrying out its responsibilities for the selection of drugs or devices for coverage or reimbursement.” The bill lists the types of information that could be provided, and how it should be presented (e.g., a “clear statement” that the product is not approved, cleared or granted, progress on studies and what stage research and applications are in, and study designs and limitations). The bill would also direct the Government Accountability Office (GAOI) to study how these information are provided and used. As noted above, similar proposals have been under consideration throughout 2022, and are part of a broader push to try to help bridge the gap between FDA and payer decisions.
  • H.R. 9329, the Small Business Establishment Registration Waiver Act, from Reps. Buschon (R-IN) and Yarmuth (D-KY). This bill would allow certain “small business” medical device firms to receive a waiver from FDA’s registration fees (section 379j (a)(3)(B)). The bill would define “small businesses” as device firms with less than $1 million “of gross receipts or sales in its most recent Federal income tax return for the taxable year.” The current (FY2023) establishment registration fee is $6,493, and there are no existing options for waivers or reductions for small businesses, unlike the fees for the different application types which do allow for reductions (e.g., a 510(k) application fee is $19,870, but the small business fee is $4,967).
  • S. 6, the Biosimilar Red Tape Elimination Act, from Sen. Lee (R-UT). This bill would allow certain biosimilar products to be designated as interchangeable with the originator biologic without the need for a “switching study.” Currently, in order to receive an interchangeable designation, a biosimilar product sponsor must conduct studies that assess the risks of alternating or switching between an originator biologic and the candidate product – known as “switching studies” – under the statutory requirements in the PHS Act. However, this bill would amend section 351(k) of the Public Health Service (PHS) Act, which outlines requirements for biosimilar products, to remove this requirement by adding a new section stating that: “The Secretary may not require, for a determination of interchangeability… that a biological product undergo studies that assess the risks of alternating or switching between use of the biological product and the reference product.”
  • H.R. 9321, the Independent Drug Value Assessment Act, from Reps. Speier (D-CA), Nadler (D-NY) and Porter (D-CA). This bill would direct HHS to contract with third-parties to conduct “independent value assessments” for drugs approved by FDA, including new drugs and biologics, new indications of approved drugs going forward, and retroactive assessments “for no fewer than 25” previously approved products (prioritizing the products representing the highest expenditures in the Medicare program and that have received a breakthrough or fast track designation or accelerated approval). The bill would define these value assessments as economic analyses of the benefits of these drugs based on the “average patient and for various subgroups of patients,” both as standalone drugs and in comparison with other options. The “value” would be defined as the economic analysis of the patient benefit (e.g., quality and duration of life, earning capacity, benefits to family members, employers and caregivers). The assessments would also need to include “an estimate of a price, price range, or a proposed value-based payment arrangement” that would be “commensurate” with the identified “value” of the drug.
  • Honorary mention: H.R. 8454, the Medical Marijuana and Cannabidiol Research Expansion Act, which has now been passed by the House and Senate – and will now be transmitted to the President for his signature. As AgencyIQ has previously discussed, this bill would clear a path for industry and academia to access and research marijuana and its derivatives without violating the Controlled Substances Act (CSA). Specifically, it would build a pathway for researchers to register with the Justice Department, which would allow them to conduct scientific research on cannabis products legally, under certain circumstances. The bill would also create a system to allow drug manufacturers to legally produce products approved by the FDA that contain cannabidiol (CBD) or marijuana for commercial sale. Currently, the federal regulation of marijuana products is largely the responsibility of the Drug Enforcement Agency (DEA) under the Controlled Substances Act (CSA), which categorizes marijuana as a schedule I (highest risk) drug. For life sciences and medical researchers, this has historically created barriers to accessing and using cannabis products to conduct studies, given the risk of violating federal prohibitions on the sale, procurement and possession of cannabis.

To contact the author of this item, please email Laura DiAngelo.
To contact the editor of this item, please email Alexander Gaffney

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