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FDA Expects New Bill To Rake $6 Billion

January 1, 1970 · FLEMING | NOLEN | JEZ, L.L.P.

On Tuesday, the senate passed a bill that enables the FDA to assess fees on foreign drug manufacturers and renew fee agreements with domestic makers. The measure is expected to rake $6 Billion over the next five years. While domestic drug companies have long paid fees to the FDA, drug manufacturers have increasingly moved abroad to bypass strict, regular, and usually costly domestic inspection requirements. Under the new guidelines, the FDA will target both domestic and foreign manufactures, and focus inspections on drug suppliers with hazardous records.

Under old standards, the FDA was required to inspect domestic drug companies every two years, and usually didn’t inspect foreign drug companies for nine years. The new measure – the Food and Drug Administration Safety and Innovation Act – easily passed the senate with 92 votes. The house earlier ratified the bill and President Obama is anticipated to sign as well.

The FDA expects the additional funding to help it prevent disasters such as the 2008 importation of contaminated blood thinner. At that time, hundreds of individuals fell sick when the Chinese imported drug was found to have key ingredients substituted in order to reduce costs. Margaret Hamburg, Commissioner of the U. S. Food and Drug Administration, explains the importance of the new funding: “[the] FDA receives thousands of applications for potentially promising medical products every year. Reviewing these often scientifically-complex submissions is the responsibility of a large team of doctors, chemists, bioengineers, statisticians and other experts who must determine whether a proposed new product is safe and effective for patients, and do so within a certain time period. It takes steady and reliable funding to maintain and support a staff of trained reviewers capable of accomplishing this vital task.” The legislation is also expected to reduce waiting time for review and approval of new drugs.