Health Industry Joins Democrats in Push for FDA Funding

Major sectors of the health care industry agree with the Democrats on Capitol Hill that the Food and Drug Administration needs more funding.

That issue is one of the major barriers to a Senate floor vote on a medical bill designed to speed the development of drugs and cures. Democrats want to mandate more money for the FDA in the Senate’s medical bill, while Republicans say more mandatory funding isn’t necessary or appropriate.

The industry’s rationale is more narrowly focused than Democrats on the Hill. Health care professionals say additional FDA funding is critical to reducing the backlog of generic drug applications, which in turn will reduce prescription drug prices.

The Democrats’ argument is broader. “We’ve given a lot in this package to allow medical innovation to move forward,” lead negotiator Sen. Patty Murray (D-Wash.) told Morning Consult. “The real answer to that is having the resources to make sure we have the ability to have those medical innovations.”

The industry sees big savings just in speeding generics to market, which a bigger FDA budget would allow. Additional funding has “definitely got to be part of the equation, part of the solution,” said Rick Pollack, president and CEO of the American Hospital Association, when speaking with reporters on Monday. “There’s a backlog of drugs that need approval, particularly those that are going to become generic drugs, and the more the FDA has the capacity to move those approvals through, the more can go to market, the more competition there is, the more less-costly alternatives are out there for patients.”

Debra Whitman, chief public policy officer at AARP, noted that the 21st Century Cures bill that passed the House last summer doesn’t have the FDA funding necessary to keep the agency on track. That bill is championed by House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and Rep. Diana DeGette (D-Colo.).

“They can’t have unfunded mandates and not have the funding in order to support them,” she said. “Even as we look at 21st Century Cures, it’s going to require more funding in order to keep the agency active.” 

Pollack and Whitman were two of several speakers at a drug pricing forum held by the Campaign for Sustainable Drug Pricing on Monday. The coalition of more than 80 health industry groups released a set of policy proposals aimed at lowering drug prices at the event.

The Senate Health, Education, Labor and Pensions Committee has been working on passing its own medical bill for several months. It held three committee markups, passing 19 bills with 50 different provisions intended to make up a Cures-like package.

None of the Senate’s bills thus far would give additional funding to the National Institutes of Health, which is widely demanded by Democrats, or the FDA. In contrast, the 21st Century Cures bill would give the NIH nearly $9 billion more over five years and the FDA an additional $550 million over the same period.

HELP Committee Chairman Lamar Alexander (R-Tenn.) and ranking member Murray are negotiating more of the Senate bill’s terms before the package moves to the floor. Both would like to secure additional NIH funding, but they disagree on whether or not the FDA should receive additional dollars.

“Mandatory funding is part of the deal,” Murray said, when asked whether Democrats would demand additional money for FDA.

Alexander is just as resolute in his opposition to more mandatory FDA money. “I haven’t recommended that,” he told Morning Consult.

Murray, Alexander and industry lobbyists agree something must be done to help the FDA clear out its generic backlog, which is currently at some 3,500 applications. They also all agree that bringing new, innovative cures to market faster is important.

The difference is Alexander and other Republicans don’t necessarily think more money is the answer.  “The FDA gets about half its money from appropriations and about half from the industry, and they’re in negotiation with the industry for more funding for next year,” Alexander said.

The medical innovation package currently making its way through the Senate does not explicitly deal with prescription drug prices. But throughout the debate, it has become clear that there is a strong link between drug prices and innovation. Dealing with one topic inevitably affects the other.

This is particularly true when it comes to the FDA. One of the arguments for why drug prices are so high is that there isn’t enough competition on the market. Where there is competition, it isn’t actually lowering prices. Logically, one of the ways to fix that is to get more drugs to market to increase competition and reduce prices.

The FDA gets funding from industry user fees under a law passed in 2012. The user fee expires in 2017, and members already are considering what happens after that. “To best restrain the growth of drug prices, we must encourage investment in life-saving therapies, avoid unnecessary regulatory burdens that slow down development and drive up costs, and ensure the marketplace remains competitive,” Alexander said at a recent hearing on the issue.

Some Republicans aren’t convinced that more money is really the problem at the FDA. “The FDA has an unbelievable source of revenue called user fees that they have extracted from PhRMA, BIO, the generics, the device guys. Every time we turn around, they have more money,” said Sen. Richard Burr (R-N.C.), a prominent negotiator on the medical bill. “They say that they’re going to hit these metrics, they’re going to improve the process. The process doesn’t get better, and then they say we don’t have enough money. I don’t think the problem is money. I think it’s culture.”

Burr also believes FDA leadership is a problem, and he hopes the Senate’s recent confirmation of Robert Califf as the new head of the agency will help change that.

In addition to FDA issues, Alexander and Murray’s negotiations also deal with how to pay for a medical package writ large. Senate Majority Leader Mitch McConnell (R-Ky.) has signaled the bill will come to the floor quickly once they know the answer.

But for now, the parties are at a standstill as to whether that deal should include FDA funding.

“I don’t see the need right now to do mandatory funding for the FDA. If the FDA needs increased funding, let the appropriators take it through the appropriations process in the normal way,” Burr said. “But to hold [medical] innovation hostage for a mandatory FDA funding mechanism, that’s not the way the Congress operates.”