Congress: House bill seeks to shield user fees from sequester with FDA S.O.S bill

medical funding

Lawmakers on Capitol Hill have floated a proposal to protect user fees paid by medical device and drug companies to the FDA from federal budget cuts forced by sequestration.

In March, the federal watchdog agency lost $210 million, or about 5.1% of its $4.1 billion 2013 budget, as a result of sequestration, a bargain between the White House and Congress. Included in those cuts were the user fees medical device and pharmaceutical companies pay in order to ensure timely reviews of new devices and drugs.

The bill, dubbed the "FDA Safety over Sequestration (SOS) Act," was introduced by Reps. Leonard Lance (R-N.J.), Doris Matsui (D-Calif.) and Mike Rogers (R-Mich.).

AdvaMed, the chief lobbying group for the medical device industry, praised the bill, saying it would "restore the agreement negotiated by industry, the agency, and the Congress and ensure that FDA will be able to use all the funds paid by industry for the improvement of the review process."

"Since the sequester took effect March 1, medical device and diagnostics companies have been paying the full amount of user fees to FDA as negotiated under last year’s FDA Safety and Innovation Act (FDASIA); however, because of sequestration, in FY 2013 alone $2.9 million in medical device user fees will not be available to the agency," AdvaMed president and CEO Steven Ubl said in a prepared release. "User fees paid by industry to FDA are fundamentally different from appropriated funding. The fees negotiated under FDASIA represent an agreement between industry, FDA and Congress. Under that agreement, industry agrees to supplement FDA’s appropriated budget with user fees, and the agency agrees to performance commitments designed to increase the efficiency and predictability of the review process. User fees are not taxpayer dollars."

In March, FDA commissioner Dr. Margaret Hamburg said she was concerned that the federal budget freeze had left the agency "stranded in fiscal 2012" and would harm the tenuous accord forged between the FDA and the medical device industry.

In June 2012, Congress passed the MDUFMA reauthorization, which doubled medical device user fees from $295 million over 5 years to $595 million. That deal came after several months of tense negotiations with the medtech industry.

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