News Feature | March 17, 2017

President Trump's 2018 Budget Plan Doubles User Fees

By Jof Enriquez
Follow me on Twitter @jofenriq

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The Trump administration has released its budget proposal for fiscal year 2018 that will more than double the user fees collected from drug and device companies for U.S. regulatory review of medical products.

Because regulated industries including the drug and medtech sectors "can and should pay for their share," the budget blueprint "recalibrates Food and Drug Administration (FDA) medical product user fees to over $2 billion in 2018, approximately $1 billion over the 2017 annualized CR [continuing resolution] level, and replaces the need for new budget authority to cover pre-market review costs."

According to Regulatory Focus, if the plan includes only medical device, biosimilar, and prescription, generic, and animal drug user fees, then that $2 billion figure is reduced to about $1.4 billion, and the Trump administration presumably will re-negotiate the user fee programs, which expire in September, forcing companies to pay an additional $600 million.

FDA and medical device industry representatives in August 2016 reached an agreement in principle on proposed recommendations for the fourth reauthorization of a medical device user fee program (MDUFA IV). Under the tentative agreement, the FDA would be authorized to collect $999.5 million in user fees, plus adjustments for inflation, over five years, starting in October 2017.

Trump's budget blueprint states that, in exchange for proposed user fee hikes, medical device and pharmaceutical firms shall receive "a package of administrative actions designed to achieve regulatory efficiency and speed the development of safe and effective medical products," although the document does not specify which measures to streamline regulation will be implemented.

Critics have encouraged FDA to improve its cumbersome regulatory process, and President Donald Trump told Congress earlier this year that he aimed to speed up the approval of drugs, according to Reuters.

The proposed budget also slashes National Institutes of Health (NIH) spending relative to the 2017 annualized CR level by $5.8 billion to $25.9 billion" or about 18 percent less from 2017 levels." NIH is the lead agency that operates centers and institutes that conduct biomedical research. Its global health research arm, the Fogarty International Center, will be eliminated as part of a major reorganization.

Trump's 2018 budget also "requests $69.0 billion for HHS [Health and Human Services], a $15.1 billion or 17.9 percent decrease from the 2017 annualized CR level. This funding level excludes certain mandatory spending changes but includes additional funds for program integrity and implementing the 21st Century CURES Act."

Overall, the budget bolsters funding for the military by $54 billion, as Trump has promised, while cutting the same amount from other departments, notes Bloomberg. While the administration can set budgetary priorities, the U.S. Congress will set and approve the actual annual budget.