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Capitol Checkup: FDA funds depleting; House Dems seek to intervene in ACA suit

U.S. Food and Drug Administration Commissioner Scott Gottlieb said his agency has about one-month's worth of user fees it collects from brand-name biopharmaceutical manufacturers on hand to continue regulatory work on new drug applications during the government shutdown.

The shutdown is now into its third week.

On Jan. 4, President Donald Trump, whose demand for over $5 billion to fund a wall on the U.S.-Mexico border triggered the partial government shutdown, told reporters the closure could go on for years. He said he may declare a national emergency to secure the border wall funds if Democrats in Congress do not give into his demands.

On Jan. 6, Trump said that declaration could come in a matter of days if Republican and Democratic leaders in Congress do not reach an agreement he would accept. The White House officially asked Congress on Jan. 6 for $5.7 billion to build a "steel barrier" on the border.

More than 7,000 of the FDA's employees, or about 41% of the agency, were furloughed on Dec. 22, 2018, after Congress failed to fund 25% of the U.S. government.

Even though the FDA is part of the U.S. Department of Health and Human Services, which was funded for fiscal 2019, the food and drug agency's allocations are funneled through the U.S. Department of Agriculture, which has not yet been funded.

On Jan. 6, House Appropriations Committee Chairwoman Nita Lowey, D-N.Y., unveiled legislation similar to spending bills adopted in December 2018 by the Republican-controlled Senate, which she said would fully re-open the FDA and the other shuttered agencies.

The bills are expected to be considered on the House floor this week. The legislation, however, does not include the $5.7 billion Trump wants for the border wall and he has said he would not sign any such bills.

During the shutdown, the FDA, which approved a record number of new medicines in 2018, was able to retain just over 10,300 employees, or about 59% of the agency, by using carryover funding from fiscal 2018 and user fees paid before the shutdown started.

The shutdown has surpassed the 16 days the government was closed in October 2016, which resulted in a $24 billion loss to the U.S. economy.

The latest shutdown is the third time during Trump's presidency all or part of the government has been closed over the border wall dispute. From the start of the latest shutdown, S&P Global Market Intelligence had repeatedly asked the FDA how long the user fees and carryover funds it had on hand would last.

Gottlieb responded in a series of weekend tweets.

He said among the FDA's medical product user fee programs, the funds that would likely run out first are those that support the reviews of new drugs — fees gathered under the Prescription Drug User Fee Act, or PDUFA.

"We have about one month of funding left," Gottlieb wrote on Twitter on Jan. 5.

He noted the FDA cannot accept new 2019 user fees during the shutdown, "which means we cannot accept new medical product applications, unless it is user-fee-program related but doesn't require the payment of a user fee, which is a very small subset of applications."

PDUFA was initially passed by Congress in 1992 and has been renewed by lawmakers every five years. Congress also has created other user fee programs for medical devices, generic medicines and lower-cost versions of biologic therapies, or biosimilars. The FDA also collects user fees for food and tobacco products and drugs intended for animals.

The commissioner said he would provide a more detailed analysis of the FDA's carryover user fee balances later this week.

Gottlieb noted there are FDA staff involved in food and drug facilities inspections who currently are working without pay.

"This hasn't gone unnoticed," he said in a Jan. 6 tweet.

"We'll support them in any way we can in their execution of these vital public health functions," Gottlieb said, adding that he admired his colleagues dealing with the "challenging times."

FDA chief staying put

Meanwhile, Gottlieb said he was staying put at the FDA, despite rumors that he was preparing to depart the agency, which he has run since May 2017.

"I've heard from friends contacted by an online pharma news pub that's preparing a story speculating that I'm leaving FDA," the commissioner tweeted on Jan. 3. "I want to be very clear — I'm not leaving. We've got a lot important policy we'll advance this year. I look forward to sharing my 2019 strategic roadmap soon."

Robert Califf, who served less than a year as FDA commissioner under the Obama administration, said it was "good news" Gottlieb was staying on.

Andy Slavitt, who led the Centers for Medicare and Medicaid for the last year two years of the Obama administration, responded to Gottlieb's tweet with a simple "Good."

Trump criticizes drugmakers on prices

In the meantime, Gottlieb's boss at the White House criticized drugmakers after the companies had increased their prices on hundreds of products.

"Drugmakers and companies are not living up to their commitments on pricing. Not being fair to the consumer, or to our country," Trump tweeted on Jan. 5.

Trump had repeatedly promised Americans last year to expect a substantial drop in drug prices — vows that were not upheld.

Some companies agreed last summer to freeze prices, but before the year was over, the drugmakers signaled increases were slated for January.

HHS Secretary Alex Azar, however, insisted price increases were "smaller and fewer" in 2019.

He said the administration remained focused on implementing its May 2018 blueprint to lower prices.

International pricing opposition mounts

The Trump administration's idea of testing an international pricing index model for injectable medicines for seniors and disabled Americans covered by Medicare, however, has been widely criticized.

CMS received about 4,000 public comments on the idea, which right now remains only an advance notice of proposed rulemaking — a bureaucratic mechanism used to gauge public opinion ahead of making a formal proposal.

The drug industry has called it an attempt to impose "foreign price controls from countries with socialist healthcare systems that deny their citizens access and discourage innovation."

Many of the public comments submitted to CMS shared that sentiment.

"We believe that the model as written could actually make it harder for cancer patients, especially those living in rural areas, to find the right provider to treat their cancer with the right drug," the American Cancer Society's Cancer Action Network wrote. "We cannot sacrifice this patient access for program savings that may or may not materialize, based on price-setting processes that no American citizen can control."

In his departing message on retiring after 42 years in the Senate, Orrin Hatch of Utah, who led the chamber's Finance Committee and was a strong proponent of the drug industry, urged his colleagues to object to the international pricing index model.

Democrats take aim at drug prices

Democrats have made lowering drug prices a key plank in their so-called For The People agenda.

"Americans overwhelmingly support lowering prescription drug prices, yet the pharmaceutical industry and its army of lobbyists have thus far successfully managed to stifle any real reform," Rep. Jerry Nadler, D-N.Y., chairman of the House Judiciary Committee, said during a Jan. 4 press conference in unveiling the For the People Act, H.R. 1.

The influence of money and special interests in Washington is "a cancer in our democracy that must be removed," Nadler said.

Sen. Elizabeth Warren, D-Mass., last week also had a few sharp words about Bristol-Myers Squibb Co.'s $74 billion bid to buy Celgene Corp.

"Giant drug companies only care about one thing: raking in profits on the backs of patients," she said in a Jan. 3 tweet. "Mergers that mean more money for drug company CEOs while patients pay the price are not a solution to skyrocketing drug costs."

Democrats seek to intervene in ACA case

House Democrats also have made defending the Affordable Care Act a key focus in the new Congress, starting off by filing a motion seeking to intervene in a lawsuit brought against the law by Republican state attorneys general and governors from 20 states.

On his first day on Capitol Hill, Rep. Colin Allred, D-Texas, introduced a resolution, slated for a House floor debate and a vote on Jan. 9, affirming the chamber's counsel's authorization to intervene in the case.

On Dec. 14, 2018, Judge Reed O'Connor of the U.S. District Court for the Northern District of Texas ruled that when congressional Republicans zeroed out the ACA's tax penalty for the individual mandate last year under tax reform, it rendered the remainder of the 2010 healthcare law unconstitutional.

Rather than intervening in the case, House Democrats should instead pass legislation to stop the lawsuit and force the Republican-controlled Senate's hand, University of Michigan law professor Nicholas Bagley said on Twitter.

Bagley noted a coalition of 17 Democratic attorneys general already have intervened and are appealing the decision to the U.S. Court of Appeals for the Fifth Circuit in New Orleans.

Nadler and Rep. Frank Pallone, D.-N.J., chairman of the House Energy and Commerce Committee, both have said they plan to hold hearings on why the Trump administration sided with the plaintiffs in the Texas lawsuit.