Trump wants to double device user fees for manufacturers


President Trump wants the medical device and pharmaceutical industries to pay the full cost to push devices and drugs through the FDA.

His budget proposal released on May 23, 2017, will basically double medical product user fees to finance the full cost of FDA pre-market review and replace the need for new appropriated budget authority. Currently, medical product user fees cover an average of 60% of FDA premarket review costs. That would push user fees to over $2.4 billion for 2018, up $1.2 billion from 2017.

“Industries that directly benefit from FDA’s medical product premarket approval and administrative actions can and should pay more to support FDA’s continued capacity,” stated the proposal.

More Money for FDA

Overall, the budget would cut the agency’s congressional funding from $2.74 billion to $1.89 billion. But when adding in the extra fees collected from industry, the agency’s entire budget would increase by over $400 million.

Scott Whitaker, president & CEO of AdvaMed, told via email that the group is seeking further details on the proposal from the White House “before we can assess its impact on the agency’s appropriations or user fee funds.”

Maybe AdvaMed is keeping its power dry, because according to a Washington Post story, hiking industry fees isn’t likely to go anywhere on Capitol Hill. Republican Senator Lamar Alexander of Tennessee, the chairman of the health committee, has said he does not want to reopen negotiations with the industry over fees that it pays to support FDA activities. According to Politico, Alexander said that the request “can be considered the next time the FDA negotiates the user fee agreements with the manufacturers of drugs and devices, but it is way too late to have an impact on this year’s agreements.”

The proposal to cut congressional appropriations for the FDA comes just months before the reauthorization bill which sets user fees negotiated with industry must be passed and signed into law. Reauthorizing user fees between the industries and the FDA is a process that takes years of negotiation.

To soften impact of shifting of FDA funding from taxpayers to users, the budget includes a package of administrative actions that will “promote regulatory efficiency and speed the development of safe and effective medical products.”

These actions include:

  • Encouraging the use of 21st Century Cures Act tools for drug evaluation, review, and approval;
  • Simplifying administrative requirements to reduce drug and device manufacturers’ reporting burden;
  • Clarifying treatment of value-based purchasing arrangements; and
  • Improving predictability for payers and enhancing dissemination of evidence by fostering the exchange of scientifically sound information between manufacturers and payers’ pre-approval to reduce uncertainty and improve payer ability to more accurately set premiums.

Science Cuts

Trump proposed slashing other science related agencies in the budget.

The National Cancer Institute would be cut by $1 billion. The National Heart, Lung and Blood Institute would see a $575 million cut, and the National Institute of Allergy and Infectious Diseases would see a reduction of $838 million. Trump would cut the overall National Institutes of Health budget from $31.8 billion to $26 billion. The National Science Foundation, which dispenses grants to a variety of scientific research projects, would be trimmed $776 million, an 11% cut.

“Does it mean that we are anti-science? Absolutely not,” said Management and Budget Director Mick Mulvaney. “We are simply trying to get things back in order to where we can look at the folks who pay the taxes and say, ‘Look, yeah, we want to do some climate science. But we’re not going to do some of the crazy stuff the previous administration did.’”

Crazy stuff, indeed.