Senate HELP Committee Unveils Draft FDA User Fee Reauthorization Legislation, With Major Reforms To In Vitro Diagnostics, Cosmetics And Dietary Supplements – Healthcare

On May 17 the Senate Health, Education, Labor and Pensions
(HELP) Committee released a bipartisan legislative discussion draft
of the Food and Drug Administration (FDA) Safety and Landmark
Advancements Act (FDASLA), which includes reauthorization of the
four FDA user fee programs that would expire this year, as well as
other reforms related to regulation of drugs, devices, in vitro
diagnostics, dietary supplements and cosmetics. On May 6, the House
Energy and Commerce Committee unveiled its own user fee
reauthorization legislation and, on May 18, the full Energy and
Commerce Committee voted unanimously to move their bipartisan bill,
the Food and Drug Amendments of 2022, forward for full House
consideration.

The Senate HELP Committee’s release of its much anticipated
discussion draft represents another critical development in the
reauthorization process. The release of this package suggests that
the range of FDA policy reforms in play for this “must
pass” bill may be historically significant. The Senate HELP
Committee has asked for feedback on their discussion draft by May
22, in anticipation of a Committee markup hearing in the weeks that
follow. 

User Fee Agreements: Background and Commitment Letters

The current five-year reauthorization of the user fee programs
for human prescription drugs and biologics, medical devices,
generics and biosimilars is set to expire on September 30, 2022.
Congress will seek to pass a final user fee reauthorization package
sufficiently ahead of this deadline to avoid disruptions in FDA
operations with respect to user fee-funded activities. The
foundation of the broader package is the reauthorization of the
Prescription Drug User Fee Amendments of 2017 (PDUFA), Generic Drug
User Fee Amendments of 2017 (GDUFA), Biosimilar User Fee Amendments
of 2017 (BsUFA) and the Medical Device User Fee Amendments of 2017
(MDUFA). A significant portion of the review activities for these
products is supported through user fees.

The HELP Committee’s discussion draft would reauthorize
FDA’s authority to collect fees under PDUFA, MDUFA, GDUFA and
BsUFA through September 30, 2027, and use the revenue to support
specified activities for the review of brand-name drugs, generic
drugs, biosimilars and medical devices, as outlined in the
commitment letters agreed to between FDA and applicable industry
groups for the Fiscal Year (FY) 2023-2027 period. The draft
legislation would reauthorize all four programs and update the
corresponding user fee revenue amounts beginning in FY 2023.

As previously outlined in our analysis of the user fee reauthorization process, the
submission of commitment letters to Congress for PDUFA VII, GDUFA III, BsUFA III and MDUFA V reflected a multiyear effort consisting
of public meetings and opportunities for public comment, extensive
negotiations and industry discussions. Each of these commitment
letters includes goals and procedures aimed at advancing a modern
and efficient pre-market review of medical products so that
patients can benefit from approved medical products in as timely a
manner as possible consistent with FDA’s mission to protect and
promote public health:

• PDUFA VII includes performance goals related to enhancing
  support for the development of cell and gene therapy products and
  advancing the use of real-world evidence and novel clinical trial
  designs.




• GDUFA III aims to achieve earlier cycle approvals for generics
  and support the review of complex generic products.




• Thirty-five biosimilars have been approved to date, and FDA
  expects additional supplements for these products to be submitted
  during the third iteration of BsUFA. BsUFA III outlines goals to
  expedite the review of certain supplements, including the review of
  safety labeling updates. The agreement also calls on FDA to
  establish a new meeting type for faster responses from the agency;
  advance the development of review processes for biosimilar
  biological-device combination products; and support the development
  and review of interchangeable biosimilars.




• MDUFA V includes new hiring goals for FDA and proposes
  additional staff training in artificial intelligence and machine
  learning. Notably, the fifth iteration of MDUFA also includes a
  total product life cycle (TPLC) advisory program (TAP) pilot,
  beginning in FY 2023 with the enrollment of 15 breakthrough
  devices. The program is intended to spur more rapid development of
  new devices by facilitating early interactions with participants
  and includes corresponding performance goals that reflect the TAP
  pilot’s objective to provide meaningful and fluid feedback to
  sponsors.

The discussion draft also includes several changes intended to
improve the transparency of the user fee reauthorization process.
Notably, the bill enhances reporting requirements for FDA with
respect to PDUFA, MDUFA, GDUFA and BsUFA and requires the agency to
provide regular updates to Congress on reauthorization
negotiations. The legislation also requires FDA to publish the
minutes of all negotiation meetings within 30 days after each
meeting.

Related Legislative Provisions

Every previous reauthorization of these user fee programs has
been accompanied by FDA policy reforms. This reauthorization cycle
appears poised to continue this trend, potentially in a dramatic
fashion. In addition to policy riders related to drugs and devices,
the Senate package includes comprehensive reforms to in vitro
diagnostics (including laboratory developed tests) as well as
cosmetics and dietary supplements.

Drug Proposals

The package includes a number of reforms related to FDA
regulation of prescription drugs, biologics, generics, and
biosimilars, including the following.

• Pre-clinical non-animal testing. The
  discussion draft would allow for pre-clinical non-animal testing to
  be used in the evaluation of safety and efficacy of drugs, as well
  as in the demonstration of biosimilarity to a reference biologic
  with respect to toxicity. Current law specifies that
  “animal” testing is permitted in such evaluations. The
  proposed change would also allow for “nonclinical
  test(s),” including in silico or in chemico tests, cell-based
  assays and microphysiological systems. Importantly, the proposal
  explicitly allows for the use of computer models in place of human
  or animal-based testing.




• Regulatory exclusivity for interchangeable
  biosimilars. The Senate proposal also addresses the
  regulatory exclusivity that applies to interchangeable biosimilar
  products. Under the current provisions of the Public Health Service
  Act (“PHS Act”), the first approved interchangeable
  biosimilar is entitled to “first interchangeable
  exclusivity,” which lasts for 12 months or more depending on
  the calculation under the PHS Act. During that time, other
  interchangeable biosimilars (to the same reference drug) cannot be
  given final approval by FDA. The Senate bill purports to clarify
  FDA’s authority in two ways: First, FDA is explicitly given the
  authority to issue a tentative approval to an interchangeable
  biosimilar while the exclusivity period for a first-approved
  interchangeable biosimilar is still pending. Second,
  interchangeable exclusivity will be shared where more than one
  interchangeable biosimilar is “approved” by FDA on the
  same day.

Of note, this Senate discussion draft does not address several
proposals that were included in the bill advanced by the House
Energy and Commerce Committee. The House bill includes provisions
that limit orphan drug exclusivity to the specific indication or
use approved by FDA; require FDA to specify conditions of
post-approval studies for drugs that obtain accelerated approval;
permit use of real world evidence to support such post-approval
studies; and codify an expansion of FDA’s prior guidance on
manufacturer communications with payors, formulary committees and
similar entities.

Diagnostics Reform

The FDASLA discussion draft includes the long awaited update of
legislative reform to regulation of in vitro diagnostics (IVDs) and
in vitro clinical tests (IVCTs). The Verifying Accurate
Leading-edge IVCT Development Act of 2022 (the “VALID
Act”) was previously introduced in both the House and Senate
on March 5, 2020, and again on June 24, 2021, by U.S. Reps. Diana
DeGette (D-CO) and Larry Bucshon (R-IN) and U.S. Sens. Michael
Bennet (D-CO) and Richard Burr (R-NC). The VALID Act seeks to
modernize regulatory oversight of IVDs, including laboratory
developed tests (LDTs), by creating a single, diagnostics-specific,
regulatory framework under the authority of the FDA aimed at
promoting innovation and improving patient and public health. The
2022 version of the VALID Act represents years of collaboration
between the sponsors and key stakeholders and has undergone many
revisions in the past several months as committee staff have
updated the bill to reflect feedback from a variety of sectors,
including IVD manufacturers, clinical laboratories, patient groups
and hospital systems.

The new version of the VALID Act has several significant
changes.

• Extension of transition period. One of these
  is the extension of the transition period and implementation period
  from three years to five years: the new framework would take effect
  on October 1, 2027. This will provide industry and regulators alike
  with much needed lead time as the rules and guidance contemplated
  in the VALID Act are drafted and published.




• Risk categorization and definitions. This
  iteration of the VALID Act refines and clarifies many of the
  definitions and standards, and adopts a three-tiered risk
  categorization (low, moderate and high), unlike the earlier
  version.




• Technology Certification Program. The new
  version also broadens eligibility for the Technology Certification
  Program (“Tech Cert”). As drafted, the Tech Cert
  provisions extend eligibility under the program to most kinds of
  tests and allow for the possibility that a Tech Cert Order could
  cover more than one technology (which had not previously been
  contemplated). The drafters have also streamlined some of the
  application requirements, and clarified what types of test
  modifications would require a new submission.

Finally, it is worth noting that the user fee provisions from
the previous version have been replaced with user fee process
provisions, such that FDA and industry would negotiate user fees
for IVCTs just as they do for other medical products.

The updated version addresses a wide variety of issues raised by
stakeholders. However, the text also identifies numerous areas (via
brackets) on which the HELP Committee is still deliberating.

Dietary Supplements

The HELP Committee’s inclusion of dietary supplement reforms
is a significant development for many members of Congress who have
called for action in this area. Indeed, the last major
congressional reform related to dietary supplements regulation was
the passage of the Dietary Supplement Health and Education Act of
1994 (DSHEA). The Committee’s dietary supplement provisions aim
to improve FDA oversight of dietary supplements by requiring
dietary supplement manufacturers to list their products with
FDA.

Specifically, manufacturers, packers or distributors of a
dietary supplement whose name appears on the label of the
supplement (i.e., the responsible person) would be required to
provide FDA with detailed information about their products,
including any health, structure or function claims, and a dietary
supplement product listing number for the product provided by the
Secretary, which would be a part of a publically available
electronic database of all dietary supplement product listings. For
dietary supplements currently on the market, the bill would require
a listing be submitted no later than 18 months after the enactment
of the legislation. For new supplements (offered after January 1,
2024), a listing would be required at the time the product is
introduced.

The draft legislation would also render misbranded dietary
supplements for which a responsible person has failed to comply
with the listing requirements, prohibit the marketing of dietary
supplements that fail to meet the definition of a “dietary
supplement,” prohibit the introduction or delivery of dietary
supplements by debarred persons, instruct FDA to publish final
guidance related to new dietary ingredient notifications no later
than 18 months after enactment, and direct resources to inspections
of facilities, suppliers, and dietary supplement types that present
a high risk to public health as identified by FDA.

Cosmetics Regulation

Existing FDA authorities to regulate cosmetic products and their
ingredients have changed little since passage of the Food, Drug,
and Cosmetic Act of 1938, and are much more limited than the
agency’s authorities related to other FDA-regulated products.
The HELP Committee’s discussion would reduce this disparity
through the “Modernization of Cosmetics Regulation Act of
2022” (“Cosmetics Act”), which would significantly
broaden and modernize FDA’s regulatory oversight of cosmetics.
The Cosmetics Act would establish a regulatory framework for
cosmetics similar to that of other FDA-regulated products,
including requirements related to registration and listing, safety
substantiation, good manufacturing practices, and recalls. As part
of this framework, the Cosmetics Act would impose numerous
obligations on “responsible persons,” a term that
includes manufacturers, packers or distributors of a cosmetic
product whose name appears on the label of cosmetic products with a
few limited exemptions (e.g., small businesses). Provisions of the
Cosmetics Act include:

• Registration and listing. Owners or operators
  of manufacturing facilities for cosmetic products must register
  each facility, and responsible persons must submit a product
  listing for each cosmetic product within specific timeframes.




• Safety substantiation. Responsible persons
  must ensure that there is “adequate substantiation of
  safety” for cosmetic products. The discussion draft defines
  “adequate substantiation of safety” as “tests or
  studies, research, analyses, or other evidence or information that
  is considered, among experts qualified by scientific training and
  experience to evaluate the safety of cosmetic products and their
  ingredients, sufficient to support a reasonable certainty that a
  cosmetic product is safe.” Under the draft, in determining
  whether a product is “safe,” FDA may consider the
  cumulative or other relevant exposure to the cosmetic product or
  any ingredient in the product. The proposed legislation defines
  “safe” to mean a cosmetic product, including any
  ingredient thereof, that “is not injurious to users under the
  conditions of use prescribed in the labeling thereof, or under such
  conditions of use as are customary or usual.”




• Serious adverse events. The discussion draft
  requires responsible persons to make reports of serious adverse
  events and any “new and material medical information”
  related to the serious adverse event report within certain
  timeframes. A responsible person must maintain records related to
  each report of an adverse event for six years and permit access to
  such records during an inspection.




• Good manufacturing practices. FDA must
  establish good manufacturing practice (GMP) regulations and be
  allowed to inspect records necessary to demonstrate compliance with
  such regulations.




• Preemption. The discussion draft provides that
  this Act preempts state law requirements for cosmetics related to
  registration and product listing, GMPs, recordkeeping, recalls,
  adverse event reporting or safety substantiation. It also clarifies
  that the Modernization of Cosmetics Regulation Act of 2022 does not
  preempt state law, except those that are expressly preempted.




• Effective date. The Cosmetics Act would become
  effective one year after enactment.

The discussion draft also outlines labeling requirements,
authorizes FDA to access and copy certain records, allows FDA to
suspend a facility’s registration, permits the Commissioner of
Food and Drugs to order a mandatory recall of a cosmetic product in
certain situations and establishes misbranding provisions
applicable to cosmetics.

Next Steps

Legislation to reauthorize FDA’s user fee programs is
expected to continue advancing in Congress in the weeks ahead,
including with further action by the Senate HELP Committee as they
look to mark up their user fee reauthorization package. There is no
shortage of focus on FDA-related topics in Congress. The FDA user
fee reauthorization policy riders being considered by the House and
Senate are not the only FDA issues Congress is working
on—earlier this year the Senate HELP Committee advanced their
bipartisan PREVENT Pandemics Act, which included FDA
policy reforms, and may be folded into any final user fee
reauthorization bill.

While the exact timing in the House and Senate remains fluid,
the “UFA clock” is steadily ticking, and any final bill
will need to make its way through both the full House and Senate on
its way to the President’s desk. One thing that is certain is
that the stage is set for a summer focused on moving “must
pass” legislation and Congress is advancing policy riders as
part of their reauthorization process this year. The full contours
of these reforms will become even more clear as the legislative
process plays out in the months ahead. In the interim, this process
will be closely watched given its significance for patients,
consumers, the agency, industry and public health.

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