State biotech firms hope Congress will act

WASHINGTON — — A proposal to speed the approval of new prescription drugs has patient advocates and biotech firms — including many based in Maryland — hoping that Congress will deliver a rare dose of bipartisanship this year.

Lawmakers are proposing a 6 percent increase in the fees that pharmaceutical firms pay the Food and Drug Administration to offset the cost of approving new drugs. If the measure is not signed into law by the end of September, the FDA would lose the ability to charge any fees and be forced to lay off 2,000 workers, significantly slowing review times.


Though the effort has broad bipartisan support — as well as the backing of companies that pay the fees — leaders of Maryland's biotech industry are anxiously monitoring the bill, the first major health care measure with a shot to move through Congress since President Barack Obama's 2010 health insurance overhaul.

Supporters want to ensure that the legislation isn't jeopardized by Washington's partisan political environment, which has stymied other previously uncontroversial measures.


"Having this passed in a productive and smooth manner is absolutely critical," said Peter Greenleaf, president of Gaithersburg-based MedImmune, which employs 2,700 people in Maryland. "Any delays ... would significantly hamper drugs getting reviewed and approved."

The House Energy and Commerce Committee is expected to start work on its version of the bill Tuesday.

The fate of the legislation is particularly important for companies such as MedImmune, the biologics arm of British pharmaceutical giant AstraZeneca. By 2014, Greenleaf said, the company expects to have more than a dozen drugs in critical phase-two trials, which are used to test the effectiveness of new compounds.

Because of its potential to either speed or slow the approval of drugs, the measure also is a top priority for patient groups. The advocacy arm of the American Cancer Society, for instance, has pushed lawmakers to move quickly on the bill. "New medicines and treatments can often make the difference between life and death for cancer patients," the group said in a letter to Congress this year.

Life sciences account for 71,618 jobs in Maryland, about half of which are in the private sector, according to the Department of Business and Economic Development. In part because the state is home to the FDA, which is based in Silver Spring, and the National Institutes of Health, located in Bethesda, Maryland has the fifth-highest concentration of life sciences companies in the nation.

And that is why the effort to reauthorize the fees — and keep drugs moving quickly through the approval pipeline — is so important to the state, said Sen. Barbara A. Mikulski, a key architect of the Senate version of the legislation.

"It really helps create jobs," the Maryland Democrat and member of the Senate health committee said of the legislation. "Our biotech industry is booming."

If the measure is approved, the FDA expects to hire 1,200 more workers, most of them in Maryland, to review prescription drugs, medical devices and generic drugs. Alternatively, if it is not passed, most of the layoffs would occur in Maryland.


Congress created the fees in 1992 when U.S. drug approval times began to lag behind those in other nations. Companies agreed to pay so the FDA could hire more scientists, doctors, engineers and statisticians to reduce the time needed for a new drug to work its way through the review pipeline.

For the most part, the effort has been a success. The average time the FDA needed to review a drug in 1992 was about two years. That was cut nearly in half by 2009. The fees are now central to financing the agency's mission. Nearly two-thirds of the $932 million the FDA spent reviewing drugs in 2010 came from the fees, not federal taxes.

But Congress must reauthorize the fees every five years or forgo the revenue. The proposed reauthorization for 2012 would increase drug fees by 6 percent, bringing in a total of $693 million next year. The proposal would double the fees for approving medical devices and create a similar fee structure for generic drugs.

In exchange, drug makers hope a more streamlined process would shave a few more months off review times.

The legislation also would require pharmaceutical companies to keep better track of where the ingredients for their drugs come from and would give the FDA more resources to inspect manufacturing plants overseas, including in China and India. The agency would begin inspecting foreign manufacturing plants every two years, compared with an average of once every nine years today.

Several biotech leaders in Maryland said they welcome the reauthorization because it gives the industry the chance to tweak the review program.


Ginette Serrero, CEO of a small Columbia-based company called A&G Pharmaceutical, said reviews can get bogged down by turnover at the FDA. When a new reviewer or statistician begins work on an existing application, she said, it can slow the process as that person gets up to speed.

The higher fees, Serrero said, would enable the FDA to hire more reviewers and train them better, which she hopes would lead to "an environment that is stable" and more efficient.

"The longer you wait [for approval] the more it costs the company," she said. "That is particularly true for a small company. Any delay can cause a huge cash flow issue."

In one indication of how important the issue is for the industry, pharmaceutical companies have stepped up the amount they are spending to lobby Congress, even as spending by other health care sectors has declined. Drug makers spent $69.6 million to influence lawmakers in the first quarter of this year, up 6 percent over the same period in 2011, according to the Center for Responsive Politics.

The Senate health committee passed the legislation on a voice vote late last month, a signal of bipartisan support. The only "no" vote came from Sen. Bernard Sanders, a Vermont independent who has previously objected to the fee legislation because it does not allow patients to buy drugs at a lower price from Canada.

Wyoming Sen. Michael B. Enzi, the top Republican on the health committee, has noted that there's been "good cooperation" on the issue, despite rancorous debates on other health care legislation.


"We need to enact user fee legislation in a timely manner," he said. "Patients, jobs and innovation depend on it."

The prognosis for the legislation is less clear in the Republican-controlled House of Representatives, where work on a similar measure recently was delayed. Several officials close to the negotiations said they believe the delay was needed to work out technical issues, not substantive ones.

The proposal faces opposition from some consumer groups over how medical devices are tested. For instance, manufacturers may receive an expedited review of a new product if it is similar to one already on the market — even if the original device was recalled. Lisa McGiffert, director of the Safe Patient Project, wants lawmakers to change that and give the FDA more latitude to scrutinize fast-track reviews.

"This is an industry that's going to explode in the next five years," McGiffert said of medical device manufacturers. "It's increasing in volume and increasing in complexity."

But the main concern for supporters is that the politics of a divided Congress could curb the bill's momentum, forcing another messy, last-minute political showdown this fall. It is the first time the drug fees have faced reauthorization in a presidential election year.

"The implications for this are quite positive for the state of Maryland," said Judy Britz, executive director of the Maryland Biotechnology Center, a state economic development agency. "But if the legislation were to run into any snags ... the implications would be really dire."