FDA Week InsideHealthPolicy.com’s

InsideHealthPolicy.com’s
FDA Week
an exclusive weekly report on Food and Drug Administration policy, regulation and enforcement
Vol. 20, No. 45 — November 7, 2014
FDA Loses Key Funding Advocate As Pryor Falls In GOP Senate Takeover
Sen. Mark Pryor (D-AR), chair of the appropriations subcommittee with jurisdiction over FDA, lost his re-election
Tuesday (Nov. 4) in a move that could complicate food safety advocates’ efforts to increase funding for implementation
of the food safety law. Pryor’s race was closely watched by FDA funding advocates because the lawmaker has been
receptive to FDA funding issues.
Pryor fell to Republican challenger Rep. Tom Cotton as the GOP went on to secure the Senate majority with 52
seats, with a handful of races still pending. While it is not clear yet who would replace Pryor at the helm of the approcontinued on page 4
To ensure participation in ‘patent dance’...
Amgen Seeks FDA Certification Process For Biosimilar Applications
Amgen, on the heels of a lawsuit targeting key patent processes associated with the first biosimilar application, filed
a citizen petition asking FDA to create a certification process to ensure that companies filing a biosimilar application
commit to following statutorily outlined procedures to share application and manufacturing information. Amgen said a
new administrative mechanism would prevent companies from circumventing disclosure requirements that the company
asserts are mandatory.
continued on page 6
Defending randomization...
FDA, NIH Officials Develop ‘Novel’ Placebo Trial Protocol For Ebola Treatments
FDA officials said they are working with National Institutes of Health officials to create novel designs for placebobased clinical trials to study Ebola treatments, with investigators planning to conduct interim statistical analyses to see if
a therapeutic works and then quickly push successful products through the development process and into the standard of
care. The novel design emerges as the agency has drawn criticism over its continued insistence on placebo-controlled
trials: Patients on placebos would initially receive only supportive care but could be given treatments in subsequent trial
continued on page 9
Federal Legislation Mulled As Fifth State Advances ‘Right To Try’ Initiative
Arizona voters Tuesday (Nov. 4) passed a “Right to Try” ballot measure becoming the fifth state in recent months to
give terminally ill patients the right to try investigational medicines that are in the early stages of clinical trials. This
comes as one lawmaker is poised to introduce federal legislation that would make drug manufacturers’ expanded access
policies more transparent and an FDA-industry meeting is planned to discuss the existing program.
Voters in Arizona passed Proposition 303, which outlines measures similar to other “Right to Try” laws passed in
Colorado, Louisiana, Michigan and Missouri. Arizona is the first state to pass the measure by voter initiative.
continued on page 11
New Patient Advocacy Coalition Criticizes WHO’s Biosimilar Naming Plan
A new coalition of more than 20 patient advocacy groups concerned with safety and access of biosimilars believes
that the World Health Organization’s distinguishable naming plan falls short and that biosimilars should have a completely separate name from the originator product, said a spokesperson for the group. The newly formed coalition
Patients for Biologics Safety & Access (PBSA) wants to make sure adverse events are properly tracked, and patients
and prescribers can make an informed choice about the products they use as biosimilars hit the market, among other
continued on next page
priorities.
The coalition includes the National Organization For Rare Disorders and Immune Deficiency Foundation.
The coalition says that biosimilars should have unique nonproprietary names to eliminate patient confusion, allow prescribers to accurately track the therapeutic agent in a patient’s medical record and quickly trace a product to an adverse event.
A spokesperson for the group said the WHO plan would not be as helpful for patients. FDA has not yet laid out a
domestic plan for biosimilar naming.
“The WHO plan I don’t think will be helpful,” said Lawrence LaMotte, vice president of public policy at the Immune
Deficiency Foundation. “We think [biosimilars] should have unique non-proprietary names. Our patients need to know
what they’re taking. If you’re just calling everything product A, how do you know what you’re taking? That’s a danger to
our patients.”
WHO has laid out a distinguishable naming scheme that attaches a four-letter code to the International Nonproprietary Name to differentiate among biosimilars and biologics. The INN root would not be affected and the scheme would
apply prospectively and retrospectively to biological substances.
PBSA’s approach differs from that of another coalition, Alliance for Safe Biologic Medicines, which is a combination
of patient advocacy groups and industry members. PBSA and the alliance share some members like the American
Autoimmune Related Diseases Association and the National Alliance on Mental Illness. The alliance has suggested that
biosimilars and their reference products should share a common root but have distinct and differentiating suffixes.
LaMotte also said PBSA was formed because patient advocates felt they were not being heard during discussions
over biosimilars, and that companies were speaking on behalf of patients.
“Patients were not being taken seriously...No matter what [companies] say it’s just lip service,” said LaMotte. “We
want to make it a reality for patients who have a voice themselves.”
Another principle that is important to the group is that patients must have access to safe and effective biologic and
biosimilar medicines. LaMotte said so far the group has been discussing with FDA officials what steps the agency plans
to take to ensure the efficacious and safeness of these drugs, as well as make the process transparent.
The group wants to ensure that “FDA approval of biologics and biosimilars are based on the same standards of safety
and efficacy of other FDA approved products,” according to an outline of their principles. “In order to assure that patients
realize the promise of biosimilars, FDA should finalize its standards for their oversight and approval to prove biosimilars
are as safe and effective as the reference innovative biologics.”
The coalition also suggests that the agency’s standards for the review and approval of biosimilars should not be a
“one-size-fits-all” approach; FDA should enforce the provisions of Biologics Price Competition and Innovation Act
(BPCIA) that a biosimilar is “highly similar” to the reference biologic; and FDA should require high standards, including
data and clinical trials in determining whether a biosimilar is interchangeable and can be expected to produce the same
clinical result.
Other guiding principles for the coalition include ensuring prescribers and patients have all information necessary to
make an informed choice about whether to use an innovative biologic or biosimilar, ensuring appropriate tracking of
adverse events for all biologics, and supporting innovation and ensuring incentives remain to bring new therapies to
market for patients. — Erin Durkin
FDA Biologics Center Nets First ‘Breakthrough’ Approval With Vaccine
FDA’s biologics center for the first time approved a product with the new breakthrough designation, approving a
rolling Biologics License Application submission for the first vaccine to prevent meningococcal disease caused by
Neisseria meningitidis serogroup B in people age 10 through 25.
The agency’s use of the breakthrough designation — created by the 2012 FDA Safety and Innovation Act — has
been closely watched by industry, although up to now use of the designation has mostly occurred in the drug center.
In the initial years of the program, the biologics center received less than a dozen requests for the designation. But in
fiscal 2014, the center received 26 requests for the designation, granted six requests to use the designation and denied 16,
with the remainder pending a decision. By comparison, the drug center has received nearly 100 per year, including 97
designation requests in fiscal 2014. Since the program’s inception, there have been more than a dozen breakthrough drug
approvals, including some supplemental applications.
Because of the public health importance of the vaccine, agency officials wanted to complete its evaluation as quickly
as possible, according to an agency question-and-answer document. The agency said it evaluated the product in “well
under six months.”
“Having the designation of breakthrough therapy provided the manufacturer more intensive FDA guidance on an
efficient Trumenba development program, thereby facilitating the scientific evaluation during the Investigational New
Drug (IND) application stage, an organizational commitment involving senior managers, and a ‘rolling’ submission of the
Biologics License Application (BLA),” the agency said in the document. “This allows sponsors to submit sections of the
BLA to FDA for review as they are completed, as opposed to waiting to submit the complete BLA at one time.”
Meningococcal disease is caused by bacteria and can affect the bloodstream or the lining of the brain and spinal cord,
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FDA said. Neisseria meningitidis is the leading cause of bacterial meningitis and until Trumenba’s approval approved
vaccines covered four of the five main serogroups of Neisseria meningitidis, FDA said.
Outbreaks on college campuses heightened concern about the disease, Karen Midthun, director of the biologics
center, said in a statement. The product also received accelerated approval. — Alaina Busch McBournie
Exclusivity, Labeling Are Sticking Points In Abuse-Deterrence Talks
Branded and generic drugmakers are at odds on whether generic non-abuse deterrent opioid formulations should be
withdrawn as soon as an abuse-deterrent innovator drug becomes available or whether FDA should delay taking action
until postmarketing studies show the product’s tamper-resistant properties are in fact effective. The two sides also diverge
on proposed development incentives, with innovators pressing for additional exclusivity for new abuse-deterrent products
and generic companies urging FDA to establish a category for abuse-deterrent formulations in the Orange Book and
balance branded exclusivity against patented properties specifically used by generics.
Both sides, however, agreed that abuse-deterrent properties should be prominently featured on labeling — a move that
patient and physician advocates said could spark misconceptions that abuse-deterrence equals decreased risk of addiction.
A branded drug industry working group on Oct. 31 gave FDA a list of recommendations for incentivizing the
development of opioids with chemical properties that make them less prone to abuse and misuse. Among that list was a
call for additional data exclusivity. The proposals came up during an FDA public meeting on abuse-deterrence.
“We believe that FDA should also work with Congress to provide extended data exclusivity for products with
meaningful abuse-deterrent properties in recognition of a significant amount of work and data that needs to be generated
to support labeling,” said Marina Brodsky, Pfizer’s medical director, speaking on behalf of branded drug companies.
She said providing the additional exclusivity would be similar to actions FDA has taken to address other public
health epidemics.
In contrast, the generic working group urged FDA to create a special category for abuse-deterrent formulations in the Orange Book that lists approved generics. Exclusivities for abuse-deterrent formulations should be balanced
against patents listed in that category and the likelihood that there could be increased patent litigation in this space, said
Jason Gross, a pharmaceutical consultant with Aluna Research, on behalf of generic drugmakers.
Although FDA has not yet issued guidance on the development of abuse-deterrent generics, agency officials have
said that FDA does not plan to require generics use the same abuse-deterrent technologies as innovators, throwing into
question how generics will prove they are bioequivalent to innovators.
Draft guidance issued for branded drugs said assessments of an opioid’s abuse deterrence would be based on three
categories of studies, including lab studies testing the formulation against common manipulation mechanisms, pharmacokinetic studies to see if certain foods or alcohol increased the effects of the drug, and clinical trials to determine abuse
potential. Sponsors who follow the guidelines can seek labeling that indicates their product is abuse deterrent. And so far,
FDA has approved abuse-deterrent labeling for three reformulated innovator drugs with requirements for postmarket
studies to assess the effects of their abuse-deterrent features.
Innovator companies at the meeting urged FDA to, over the next two-three years, begin phasing out non-abuse
deterrent opioids for which an abuse-deterrent version is available. Further, abuse-deterrent generics should maintain
meaningful abuse-deterrent properties, Brodsky said. She also called for FDA to provide guidance on demonstrating
superiority and/or non-inferiority in head-to-head human abuse liability studies and how to communicate the data in
labeling.
Brodsky added that innovators also should seek FDA implementation of prominent labeling to clearly identify the
meaningful abuse-deterrent properties used to support a claim.
Gross agreed that a more prominent label would help distinguish abuse-deterrent and non-abuse deterrent products,
mitigate confusion among prescribers and enhance consistency for patients. But he also said non-abuse deterrent drugs
should not be pulled from the market until there is adequate postmarket data showing that abuse-deterrent formulations
are not defeated by abusers. FDA should also publish product-specific bioequivalency guidance for generic abusedeterrent formulations, create an expedited approval pathway for abuse-deterrent generics and consider fee reductions for drugs
applications meant to be filed as ANDAs but that must instead be filed under another development pathway, Gross added.
Robert Rich, medical director of Community Care of Lower Cape Fear that represents private practices, hospitals
and health departments, questioned the labeling proposal. He said many primary care physicians could be confounded by
the terminology “abuse deterrent” and skeptical of new opioid formulations that may not be more beneficial or effective
than those already on the market. It’s not clear that the labeling would be well-received by that community, Rich said.
Erin Krebs, director of women’s health for the Minneapolis VA Health Health Care System, further voiced
concerns about labeling opioids as abuse deterrent when they were resistant to only some kinds of tampering. She
noted that while current abuse-deterrent formulations are resistant to crushing, snorting and injection, they do not address
abuse by oral ingestion — the most common abuse route. — Stephanie Beasley
FDA Week - www.InsideHealthPolicy.com - November 7, 2014
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Senate Flip Could Influence FSMA . . . begins on page one
priations subcommittee, sources have eyed current ranking Republican Sen. Roy Blunt (MO), depending on his preference and other possible committee assignments, and Sen. Jerry Moran (R-KS).
Pryor’s departure aside, Tony Corbo, the senior lobbyist for the food campaign at Food & Water Watch, said implementation of the Food Safety Modernization Act could be hindered with a new Republican-controlled Senate.
“If [the Senate] is totally controlled by Republicans, it would delay implementation of FSMA,” said Corbo prior to
Tuesday’s results, adding that a Republican-led Senate could make it challenging for FDA to get more appropriations to
fully implement the food safety rules once they are finalized.
However, Sean McBride, founder and principal of DSM Strategic Communications & Consulting, said Congress is
likely to incrementally increase FDA’s funding for FSMA over several years, rather than provide an immediate large
increase or authorize user fees.
“Industry really wants a strong FDA to be a partner in ensuring our food supply is safe,” said McBride, who previously served as executive vice president of communications at the Grocery Manufacturers Association. McBride also said
the new Congress would ensure that concerns industry had over implementation of the food safety law are heard.
Corbo also said he would be concerned with the loss of Pryor’s position as subcommittee chairman, because the
senator has been receptive to FDA funding-related issues in general. Corbo also pointed out that the National Center for
Toxicological Research is located in Arkansas.
Steven Grossman, deputy executive director of Alliance for Stronger FDA, noted that the appropriations subcommittee slot is important for the agency and the new chairperson will be key to future funding debates. “FDA’s mission and
responsibilities could be understood or misunderstood by the Chair,” he said, prior to the election. “That difference could
have significant impact on what resources and what direction the agency receives from Congress.”
Other stakeholders predicted a Republican-controlled Senate would be sensitive to resource-related issues and would
want to make sure funding is being effectively used.
The changing makeup of the Senate health committee will also play a role in how FDA resources are allocated.
Sen. Lamar Alexander (R-TN), expected to take over the top committee slot, is expected to take up issues relating to 21st
Century Cures, oversight of drug compounding and concerns that FDA resources are used in an effective way, said John
Manthei, a partner at Latham & Watkins.
The 21st Century Cures initiative — a bipartisan initiative spearheaded by House Energy and Commerce Committee
leadership — could more easily clear the Senate with the GOP in the majority, he said. “The likelihood that the scope of
those reforms get enacted only gets better with a Republican-controlled House and Senate,” he said prior to Tuesday’s
election.
Nick Manetto, who designs and directs health care public policy advocacy campaigns at FaegreBD Consulting, noted
there has been bipartisan support for the Cures initiative. But, even with a Republican majority, the Senate likely would
still need bipartisan engagement to secure passage.
Sen. Tom Harkin’s (D-IA) retirement also leaves a vacancy for the ranking member position on the Senate
health committee. Stakeholders view Sen. Patty Murray (D-WA) as a possibility for the position. Also, health committee
member Sen. Kay Hagan (D-NC) fell to her Republican opponent, but committee member Pat Roberts (R-KS) held onto a
close race. — Erin Durkin
Food Firms Praise Defeat Of State GMO Labeling Bills, See Ally In GOP Senate
Initiatives in Colorado and Oregon to require labeling of food with genetically modified organisms (GMOs)
failed Tuesday, and food industry sources opposed to the state measures express hope the GOP’s takeover of the
Senate will boost the chances of a bill that would give FDA sole authority to require mandatory labeling of such
products.
Colorado and Oregon join a host of states that have weighed in on the GMO labeling debate, Vermont being the only
state so far to enact such a law. The Vermont state law is facing a legal challenge from the Grocery Manufacturers
Association and other industry groups that allege the law exceeds the state’s authority under the United States Constitution and clashes with FDA policy.
An industry consultant said that the food industry has spent a lot of money to push back against these state
initiatives, and is setting its sights on a bill introduced by Reps. Mike Pompeo (R-KS) and G.K. Butterfield (D-NC)
earlier this year that would give FDA sole authority to require mandatory labeling of genetically modified ingredients if they are ever found to be unsafe or materially different from foods produced without genetically modified
ingredients.
“The bill would get through the House with the help of the Republican leadership...The question mark about the
Senate gets partially erased,” said Sean McBride, founder and principal of DSM Strategic Communications & Consulting,
and prior executive vice president of communications at the Grocery Manufacturers Association, referring to the GOP’s
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takeover of the chamber.
But he added that getting Democrats to vote for the bill is still important because doing so would send a message to
the president that this is a bipartisan effort, rather than “something akin to the Affordable Care Act that is [passed]
completely on a partisan vote.”
A food industry group, the Coalition for Safe Affordable Food, also supports the proposed House bill, and applauded
the failure of the states’ initiatives.
“The voters in Colorado and Oregon were right to reject the scare tactics of extremist groups intent on ignoring the
science about GMOs,” said a coalition spokesperson in a released statement. “Passage of these initiatives would have
resulted in increased grocery bills for consumers along with incomplete, inaccurate and misleading information.”
Members of the coalition include American Frozen Food Institute, Biotechnology Industry Organization, Council for
Responsible Nutrition, Grocery Manufacturers Association and Snack Food Association.
McBride said that the incoming Republican Senate could also help the food industry mitigate FDA regulatory actions
that are unfavorable to industry by attaching spending bill riders to stop FDA action.
One such agriculture and food industry champion, he said, is Sen. Pat Roberts (R-KS), who managed to retain
his seat Tuesday by more than 10 points above his Independent opponent, consequently also keeping his position on the
Senate health committee. He also serves as a senior member of the Senate Committee on Agriculture, Nutrition and
Forestry.
FDA will likely be caught in the cross hairs of different food initiatives this coming year, said John Manthei, a
partner at Latham & Watkins, who noted that GMO food labeling was a big interest item on Capitol Hill in 2015.
He suggested that food measures could piggy back on the House Energy and Commerce Committee’s 21st Century
Cures bill, which is expected to move forward next year. “That will create opportunities for amendments to be considered,” said Manthei.
Tuesday’s midterm elections, in addition to giving Republicans control of the Senate, boosted the GOP’s majority in
the House and increased the number of GOP governors. — Erin Durkin
OIG Plans To Monitor Early Experiences With Drug Tracing System
The HHS Office of Inspector General plans to evaluate supply chain stakeholders’ early experiences with trading
drug transaction information as required at the beginning of next year. The HHS investigative arm will also probe FDA
inspections of high-risk food facilities, drug sponsor compliance with clinical trial reporting requirements, FDA oversight
of postmarketing studies of approved drugs and inspections of generic drug manufacturers, according to OIG’s work plan
for fiscal 2015.
The Drug Quality and Security Act mandates that an interoperable drug tracing system be created during the course
of 10 years. Trading partners in the drug supply chain must exchange drug transaction information and histories in a
single paper or electronic document starting Jan. 1, although dispensers have until July 1 to meet the requirement.
“Together, this information forms the foundation of drug traceability and the security of the drug supply chain...We
will interview trading partners about how they have successfully exchanged this information and what, if any, obstacles
they have faced.” OIG expects to issue this assessment during fiscal 2015.
Other reports expected during fiscal 2015:
Drug sponsor compliance with clinical trial reporting requirements: OIG plans to evaluate the extent to which
clinical trials are in compliance with requirements that certain studies be registered and the results reported in
ClinicalTrials.gov.
FDA oversight of postmarket studies: OIG plans to evaluate the extent to which FDA requires postmarket studies
and clinical trials for new drug applications, and how the agency monitors and enforces these postmarketing requirements.
Generic drug manufacturer inspections: OIG plans to study the scope of FDA inspections of generic drug firms,
the results of inspections, and enforcement actions taken. The agency generally inspects these facilities before approvals
and routinely thereafter. The Generic Drug User Fee Amendments includes new goals and funding for facility inspections.
FDA inspections of high-risk food facilities: The Food Safety Modernization Act mandated that FDA more
frequently inspect domestic food facilities based on risk and provided criteria for designating a facility as high risk. OIG
plans to assess FDA’s designation and inspection of high-risk facilities.
Drug compounding oversight: Medicare oversees the safety of drugs compounded at Medicare-participating
hospitals through an accreditation and certification process. OIG plans to evaluate whether Medicare’s oversight of acutecare hospitals addresses recommended practices for drug compounding oversight. — Alaina Busch McBournie
FDA Week - www.InsideHealthPolicy.com - November 7, 2014
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Biosimilar Application Certification Sought . . . begins on page one
Amgen, which also develops biosimilars, Thursday (Oct. 29) filed a citizen petition asking the agency to require
biosimilar applications include a certification that the sponsor will provide the reference product sponsor with a copy of
the application and information describing manufacturing processes. This information exchange is the crux of a lawsuit
Amgen filed the week prior against Sandoz, which seeks to copy Amgen’s Neupogen with its application for biosimilar
filgrastim.
“As recent events demonstrate, this Congressionally-mandated scheme is at risk of being fundamentally undermined
unless FDA acts to ensure that biosimilar applicants make the requisite disclosures,” according to the citizen petition,
which was filed by the law firm Sidley Austin. “Specifically, at least one biosimilar applicant has chosen to disregard its
obligations under subsection (l)(2)A), and has done so by relying on the belief that the disclosure mandated by subsection
(l)(2)(A) is optional.”
Within 20 days of receiving notice that FDA has accepted a biosimilar application for review, the applicant must
share a copy of the application, including manufacturing processes, with reference product sponsor. This sets off a series
of information exchanges to determine which patents, if any, the two companies would litigate or license, with the
exchange happening concurrent to FDA’s review.
Amgen filed a lawsuit in the U.S. District Court for the Northern District of California on Oct. 24 alleging that
Sandoz sidestepped this required process, by proposing an alternative exchange where the originator would have access
to the biosimilar application, but not the manufacturing information. Amgen contends that all the information is required,
and points out in the citizen petition that reference product sponsors have no other way of knowing whether any patented
manufacturing processes are being infringed upon. However, Sandoz, as the first company to engage in the pathway,
asserts that the two companies have different interpretations of Biologics Price Competition and Innovation Act provisions.
The Amgen citizen petition asserts that Congress considered and rejected optional exchange procedures, therefore
showing this information exchange is required and necessary to ensure the biosimilar pathway operates as intended.
“A certification requirement for biosimilar applications can be implemented without an appreciable burden on FDA,”
according to the citizen petition. “Enforcement of the certification requirement can be achieved through existing practices
and procedures.”
Amgen also asserts that FDA has the authority to require this certification. The company says FDA has authority to
establish regulations governing the approval of biologics. Further, applications must be submitted on prescribed forms
and cannot be considered filed until FDA receives the pertinent information and data, Amgen adds.
“The reference to ‘pertinent information’ is broad and means that FDA may refuse to file an application based on
‘administrative incompleteness,’” Amgen says in the petition. FDA could adopt a procedural policy requiring biosimilar
applications include a statement that the company will share information with the reference product sponsor within 20
days, the company says. The requirement could be implemented several ways such as a modification to Form FDA 356h,
Amgen says.
Industry sources said FDA would likely reject the request. One source noted there was nothing in the BPCIA that
provides a basis for requiring the certification and, with debate around the law, FDA has shied away from getting involved in patent decisions. “They’re not patent attorneys,” the source noted.
FDA recently unveiled the “Purple Book,” which lists biologics, determinations of biosimilarity and interchangeability, and exclusivity determinations, but not patent information. — Alaina Busch McBournie
Piecemeal Approach To ACA Could Put Both Parties In Difficult Positions
Weighing heavy on the minds of lobbyists is whether the incoming GOP-led Senate will insist on repealing the
Affordable Care Act in its entirety or hold votes on measures with bipartisan support, including repealing the device tax
and employer mandate. The piecemeal approach stands a better chance of working, lobbyists say, and could benefit both
parties, but it also could put lawmakers in both parties in awkward positions: Republicans could be attacked from the far
right for improving the law, and Democrats might find themselves having to actually vote for piecemeal repeal bills that
they signed onto but didn’t intend to actually pass.
Senate Republicans are expected to hold a vote on full-repeal of the Affordable Care Act, but that vote is viewed as
for show because Democrats and the president most certainly will not go along with it. It’s what Senate Republicans do
afterward that interests lobbyists.
A spokesperson for Sen. Mitch McConnell (R-KY) said prior to Tuesday’s elections that the expected majority leader
supports both full repeal and piecemeal measures, especially those with bipartisan support. Were McConnell to hold votes
on smaller, bipartisan measures, such as the medical device tax repeal, employer mandate repeal or the insurance tax
repeal, that would not equal giving up on full repeal. On numerous occasions, McConnell said the law must be repealed
“root and branch.” When he said last week on Fox News that a stand-alone repeal bill would need 60 votes and would
likely be vetoed, some thought he was softening his position against law. However, the McConnell spokesperson said
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FDA Week - www.InsideHealthPolicy.com - November 7, 2014
those people are mistaken.
“He didn’t give a history lesson to explain what reconciliation means,” McConnell spokesperson Don Stewart said,
referring to the budget reconciliation process that requires only 51 votes. Budget reconciliation would likely have to wait
until at least April, but much of the health law, including all the taxes and the employer and individual mandates, could be
axed using that approach.
Others say far-right conservatives will dictate Senate Republicans’ approach to Obamacare. If think tanks such as
Heritage Foundation and such Tea Party darlings as Sen. Ted Cruz (R-TX) attack piecemeal bills as surrendering by
improving the law, moderate Republicans may not want to vote for them.
Conversely, repealing parts of the law could put Democrats on the defense, too, lobbyists said. Many Democrats signed onto bills repealing sections of the law. Repealing the 2.3 percent excise tax on medical devices is a prime
example — Democrats with concentrations of device companies in their states have said they favor repealing the tax.
However, lobbyists say some of those Democrats likely didn’t expect those bills to actually pass. The Senate voted for a
device-repeal budget amendment in March, but that measure merely expressed support for repealing the tax. Lobbyists
say Democrats might find themselves in a difficult position if Republicans hold a vote on those individual repeal measures because they’ll be faced with the likelihood of Congress passing them.
Lobbyists say it wouldn’t be that difficult for enough Democrats to squirm out of voting for those stand-alone
measures to stay within the 60-vote filibuster threshold — the GOP Senate takeover is not filibuster-proof. Also, it would
be easier for the president to veto tax measures unfamiliar to the public than it would be to veto measures that are
unpopular with large segments of the public, such as the individual mandate, and most of the bipartisan support has been
for those repeal proposals that don’t resonate with the general public.
Avalere CEO Dan Mendelson said both parties would be wise to improve the law by agreeing to repeal a
package of modest calibrations that improves the law and helps businesses. He listed repealing the device tax and the
employer mandate as proposals with bipartisan support that could be combined with measures that Democrats like to
forge a compromise. Except for Democrats from states with a lot of device makers, repealing the device tax hasn’t fit into
the goals of most Democrats, but he believes Democrats would be open to repealing the tax if it were part of a package
not intended to undermine the law.
The president delayed the employer mandate twice, and former White House press secretary Robert Gibbs said the
mandate is not needed. Mendelson said repealing it would be a double-edged sword. It would cost money because some
companies would tell employees to seek insurance on the exchanges, where some would get government subsidies.
However, it also would improve the risk pools for exchange insurance. Next year the employer mandate starts phasing in
for businesses with more than 100 full-time equivalent employees. Many companies protest the mandate’s cost and
administrative burden. Legislation to include lower-premium copper-tier plans on exchanges could be included to attract
younger, healthier enrollees.
Loren Adler, a research director at the Committee for a Responsible Federal Budget, said most of the repeal measures
with bipartisan support add to the deficit. The nonpartisan budget think tank does not take a position on those
Obamacare-repeal measures, other than that Congress should pay for them. Adler notes that rules in the Senate prohibit
budget reconciliation from adding to the deficit but Congress could change that rule.
Leavitt Partners also discusses the potential to use budget reconciliation as a means of pushing through certain
reforms, yet the firm notes that the mechanism is subject to the so-called Byrd rule, which requires that legislation be
germane, not add to the deficit and either decrease spending or increase revenues.
Leavitt Partners’ primer spells out ways the GOP could push its priorities, including in the upcoming debt
ceiling debate (current debt ceiling authority is set to expire on March 15), the appropriations process and the budget
process. The GOP also could use committee hearing to shine light on problems with the ACA, the Leavitt primer says.
The primer suggests the device tax and employer mandate would most likely be dealt with either during the debt
ceiling fight or potentially by eliminating IRS enforcement funding during appropriations. Similarly, Leavitt says that the
individual mandate could be stripped or weakened during the debt ceiling fight or also by defunding the IRS.
ACA measures that the group says could move through reconciliation include lowering premiums subsidies.
Additionally, changes to the ACA’s Medicaid expansion, such as reducing the 90 percent match or allowing states to
expand the program to residents with incomes up to 100 percent of the federal poverty level, could come into play in
either reconciliation or the debt ceiling discussions.
Leavitt says changing the definition of a full-time work week from 30 hours to 40 hours, which has already passed
the House and has some Democratic support, replacing the Sustainable Growth Rate or altering Medicaid also could play
into the debt ceiling fight. Although the issue has been quiet for some time, Levitt’s paper suggests it is possible that
efforts to scale back the health law’s Essential Health Benefits could return during the debt ceiling debate — although the
proposal would be politically unpopular for consumer advocates. — John Wilkerson, Amy Lotven
FDA Week - www.InsideHealthPolicy.com - November 7, 2014
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Facing Pressure CMS Pulls Back Draft Guide On Part D Price Concessions
CMS backed away Thursday (Nov. 6) from draft guidance issued at the end of September laying out how Part D
sponsors starting in 2016 should report price concessions negotiated with pharmacies — a little-noticed technical
guidance that was praised by pharmacies but lambasted by pharmaceutical benefit managers as a dramatic Part D shift
that violated the “non-interference clause” of the Social Security Act. In a Nov. 6 memo to Part D sponsors the agency
says it will look further into the issue with an eye toward developing new guidance for 2017 and future years.
CMS says it decided to hold off issuing a final version of the document after the PBM lobby and other critics
complained the draft guidance would have a chilling effect on price concessions and came as many Part D sponsors are in
the process of finalizing their 2016 contracts with pharmacists.
“After consideration of these comments and to provide time to fully assess the various payment arrangements that
Part D sponsors have with pharmacies, we have determined that, for 2016, we are not finalizing any guidance proposed in
our September 29th memorandum. For contract year 2016, therefore, Part D sponsors will evaluate what can be reasonably determined at the point of sale and include those amounts in the negotiated price. Amounts that cannot be reasonably
determined at the point-of-sale will be reported as Direct and Indirect Remuneration,” CMS says in the Nov. 6 memo.
The Pharmaceutical Care Management Association immediately praised CMS’ decision to put the draft
guidance on ice. “This would have disrupted millions of seniors in low premium, preferred pharmacy plans and contradicted CMS’ promise to Congress to forgo controversial regulatory changes to Medicare Part D,” PCMA said in a
statement to Inside Health Policy.
The draft guidance on “Direct and Indirect Remuneration (DIR) and Pharmacy Price Concessions,” released Sept 29,
explained CMS’ interpretation of the revised definition of “negotiated prices” that was part of “Contract Year 2015 Policy
and Technical Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs” final rule that
was released in May.
Currently negotiated prices are reported as part of Part D sponsors’ prescription drug event (PDE) data, which
include drug discounts at the point-of-sale. Price concessions, such as incentive fees, are reported after the fact as DIR.
The revised definition in the final rule says reported negotiated prices, starting in 2016, “(a)re inclusive of all price
concessions from network pharmacies except those contingent price concessions that cannot reasonably be determined at
the point-of-sale.”
In the draft guidance, CMS stated that price concessions that “can reasonably be approximated at the point of sale”
based on Part D sponsors’ recent experience fit the definition of a price concession that can reasonably be determined at
the point of sale. CMS said it believed price concessions that included enhanced payment rates based on generic utilization, pharmacy market share and pharmacy network size could “be reasonably determined at the point of sale.” CMS said
the difference between the approximation reported as part of the negotiated price and the amount determined in the final
reconciliation of the price would then be reported as DIR.
“We believe that most pharmacy price concessions can reasonably be determined at point of sale and, therefore,
should be reported through the negotiated prices,” the CMS draft guidance stated.
But CMS signaled Thursday that the debate is not over. The agency said it would move forward in developing
guidance on the issue for 2017 and beyond after evaluating which types of pharmacy concessions and incentive payments
“can and cannot be reasonably determined at the point of sale.” The agency asked stakeholders to submit comments on
specific examples of what concessions and incentives can and cannot be reasonably reported at the point of sale. Comments are due to CMS by Jan. 31, 2015.
Pharmacist organizations like the National Community Pharmacists Association and the National Association of
Chain Drug stores had supported CMS’ draft guidance, saying it would increase transparency and standardize the
reporting of price concessions.
But critics like PCMA had alleged the draft guidance not only violated the “non-interference clause” of the SSA but
would also lead to price increases for beneficiaries because pharmacies would back away from pushing generic drugs
over brand-name products.
PCMA had complained that the draft guidance would not increase transparency because the reported approximations
of price concessions would be based on pure speculation. The organization also worried that the guidance would hurt
efforts to control drug costs because sponsors would be wary of reporting-price concessions if they didn’t think they
could make reasonable approximations of the cost on their DIRs, and that sponsors would be called on the carpet for
reported approximations that ended up being wrong. Plus, “if the concession is reported as DIR, CMS could take the
position that the concession should have been reported on the PDE instead, relying on the fact that all price concessions
can be approximate,” PCMA said in its comments on the draft guidance.
The issuance of the draft guidance in late September reopened a Part D price negotiation debate that some
thought had been silenced when CMS scrapped key pieces of a Part D rule earlier in the year. The agency backed away
from opening up preferred pharmacy networks to “any willing pharmacy” and other controversial changes in the May
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FDA Week - www.InsideHealthPolicy.com - November 7, 2014
final rule after lawmakers and many stakeholders expressed serious concerns that provisions in the rule would violate the
“non-interference clause.” CMS said in the final rule that the issue needed further study.
When CMS quietly issued the draft guidance in late September, PCMA President and CEO Mark Merritt told IHP
the document marked a major shift in Part D policy. “Although this sounds like it’s just a small technical issue, the reality
of it is it has the potential to be more disruptive to Part D than anything that’s out there right now,” Merritt said at the
time. — Todd Allen Wilson
Ebola Trial Protocol Developed . . . begins on page one
phases if the controlled trials discern that patient improvements are linked to the therapeutic.
During an appearance at the American Society of Tropical Medicine and Hygiene Annual meeting Wednesday (Nov.
5), FDA officials detailed the clinical trial protocols they view as novel, as the agency faces criticism from some over its
stance that trials must be randomized.
FDA has committed to being flexible with companies developing Ebola treatments and is working with government
and international counterparts, agency officials indicated. The agency could see a funding bump for those efforts as the
White House Wednesday unveiled a $6.18 billion dollar fiscal 2015 emergency appropriations request to support Ebola
efforts.
FDA is slated to get $25 million under the proposal for development, review and surveillance activities, while
Biomedical Advanced Research and Development Authority, National Institutes of Health and Centers for Disease
Control and Prevention allocations would separately support clinical trials and procurement (see related story).
FDA officials said they want to quickly get answers about the efficacy of Ebola treatments so they could be
incorporated into the standard of care.
“We’ve been working a lot with our colleagues at (NIH’s National Institute of Allergy and Infectious Diseases) and
they have developed a protocol that uses innovative statistical methods that allows for interim analyses to allow a winner
to be declared very early for those things that demonstrate efficacy,” said Ed Cox, director of the Office of Antimicrobial
Products in FDA’s drug center. “And really this type of trial design is novel for us. It’s something different than what
we’ve done before, but it’s appropriate given what we’re facing here with Ebola virus disease”
Cox said there is no timeline for the completion of the novel protocol, but FDA and NIAID are working to
finish it as quickly as possible.
He said once a therapy is found to be effective, it could be incorporated into a second trial phase to make it available
for all patients, depending on available supplies.
FDA has received some heat for wanting trials to be randomized and controlled, meaning some participants would
receive a placebo. But Cox defended the agency’s stance, saying patients would receive supportive care, such as food,
blood and electrolyte replacement, which could also be effective. Comparing patients receiving supportive care in
addition to an investigational therapeutic with patients only receiving supportive care will show whether the therapeutic is
effective and not causing harm.
“It’s very important to be able to understand what these products are doing,” Cox said. “If we can quickly figure out
which products are helping patients, it’ll be possible then to move toward scaling those products up and making them
available to more patients.”
But this view has been contested.
In a Lancet article published last month, a group of American, European and African experts laid out ethical
and practical arguments against randomized, controlled trials. When conventional care offers little benefit and
mortality is high, comparing a patient receiving a drug with conventional care to a patient receiving only conventional
care is not ethical, they said.
“This is precisely the problem with Ebola: current conventional care does not much affect clinical outcomes and
mortality is as high as 70%. When conventional care means such a high probability of death, it is problematic to insist on
randomising patients to it when the intervention arm holds out at least the possibility of benefit,” according to the article.
“Ethical arguments are not the same for all levels of risk.”
Healthcare systems and the broader social order are breaking down in west Africa, making it difficult to conduct
randomized trials, the experts said. Those types of studies could also undermine the trust of Ebola treatment centers.
The experts offer an alternative to randomization — trying different treatments in parallel at different sites
with observational studies documenting mortality under the standard of care.
“This approach could effectively triage treatments into those with great benefits that should be rolled out immediately, those with no effect that should be discarded quickly, and those with promise needing follow-up in randomised
trials,” according to the article. “These trials can be designed adaptively, meaning that patient enrollment can be altered
as efficacy data emerge, minimising the numbers of individuals who get ineffective treatments and increasing the numbers
getting those that show benefits.” — Alaina Busch McBournie
FDA Week - www.InsideHealthPolicy.com - November 7, 2014
9
As part of $6.2 billion emergency funding request...
White House Proposes Millions For Ebola Treatment Clinical Trials
The White House Tuesday (Nov. 5) unveiled a multi-billion dollar fiscal 2015 emergency appropriations request to support
Ebola efforts, such as the development and procurement of vaccines and treatments, to combat the ongoing outbreak — with the
request including $157 million for the Biomedical Advanced Research and Development Authority, $238 million for the
National Institutes of Health, $1.83 billion for the Centers for Disease Control and Prevention, and $25 million for FDA.
Sen. Barbara Mikulski (D-MD) said the committee would evaluate the request and convene a hearing on Nov. 12
with participation from agencies involved in stemming the outbreak.
In total, the administration requested $6.18 billion across several departments “to fortify domestic public health
systems, contain and mitigate the epidemic in Africa; speed the research, development, and procurement of vaccines and
therapeutics; and strengthen global health security.” Of that, $4.64 billion would go toward the immediate response to the
outbreak and $1.54 billion would go toward a contingency fund to “meet unforeseen changes in the epidemic.” HHS
would receive $2.43 billion, according to the proposal.
The administration’s request would provide $333 million for the Public Health and Social Services Emergency Fund,
with $157 million of those funds going toward BARDA for manufacturing vaccines and synthetic therapeutics for clinical
trials, and $10 million for Ebola virus modeling and genetic sequencing.
CDC’s $1.83 billion would fund a slew of activities, including procuring personal protective equipment for the
Strategic National Stockpile, supporting more than 50 Ebola treatment centers in the United States and conducting
clinical trials in affected countries to evaluate candidate vaccines. NIH’s $238 million would go toward clinical trials on
investigational vaccines and therapies.
Within the Department of Defense, the Defense Advanced Research Projects Agency (DARPA) would receive $112
million to support technology development, such as using antibodies from survivors to provide temporary immunity until
a vaccine is available. DARPA would also develop new technologies to “shorten the vaccine development timeline from
years to months.”
The proposed $25 million in FDA funding would be for the “development, review, regulation, and post-market surveillance
of vaccine and therapies,” according to the administration’s request. The money would fund additional staff for these activities.
Mikulski said she will use three principles to evaluate the funding request. She wants to target resources toward West
Africa to “fight this disease at the epicenter,” protect U.S. points of entry and support scientific advances.
“That means not only tasking our critical public health and safety agencies to work together to prevent the
spread of Ebola, but to also develop vaccines and treatments,” she said in a statement. “Our state and local health
departments, our disease detectives at the CDC, scientists at the National Institutes of Health and nurses, doctors and
other health care workers are leaning into this fight. We must support them and invest in their work.”
Last week Reps. Anna Eshoo (D-CA) and Mike Rogers (R-MI), who have backed legislation bolstering medical
countermeasure development, asked for more BARDA funding, arguing that the agency must be well resourced because it
has the infrastructure to get a drug or vaccine prepared for use in the ongoing outbreak. The 2013 Pandemic and AllHazard’s Preparedness Reauthorization Act authorized $2.8 billion for BARDA’s Project BioShield from fiscal 2014 to
2018, but the program has received $255 million — 9 percent of the five-year authorized level, the lawmakers said in
asking appropriators to ensure that the program is fully funded.
Research!America President and CEO Mary Woolley called on lawmakers to respond to the funding request in a
bipartisan manner.
“Americans expect our nation’s leaders to present a unified front against national threats, allocating the funding needed to
protect our nation,” she said in a statement. “We also expect common sense, which means treating an emergency as an emergency and refraining from haphazardly cutting funding for other priorities in order to ‘pay for’ protecting the American public.
Sustained investments in research are necessary to enhance our capability to fend off and prevent other major health challenges
that could disrupt medical progress and create economic instability.” — Alaina Busch McBournie
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FDA Week - www.InsideHealthPolicy.com - November 7, 2014
Ebola Contingency Fund Could Ramp Up Production Of Treatments
A contingency fund within the White House’s multi-billion dollar emergency appropriations request to support Ebola
efforts could be tapped into to scale up production of an Ebola treatment should one quickly be proven safe and effective,
the head of the White House Office of Management and Budget said Thursday (Nov. 6).
OMB Director Shaun Donovan said the contingency fund — $1.54 billion within the administration’s broader $6.18
billion request — was created to provide flexibility. Specifically, the contingency funds would give $751 million for HHS
and $792 million for the state department, according to the request.
If a vaccine is proven safe and effective, money in the contingency fund could be used to increase production of the
treatment, Donovan said during a press call.
HHS Secretary Sylvia Burwell said the reason more money was put toward the on-the-ground aid in west Africa and
other domestic efforts — as compared to the funds allocated toward the development of vaccines, therapeutics and
diagnostics — is because those treatments are on a longer timeline.
“What’s extremely important is to make sure there is a response on the ground today,” she said.
The request, which was unveiled this week cuts across several departments, with HHS slated to receive $2.43
billion. A portion of that allocation would go toward clinical trials and product procurement. The overall proposal
includes $157 million for the Biomedical Advanced Research and Development Authority, $238 million for the
National Institutes of Health, $1.83 billion for the Centers for Disease Control and Prevention, and $25 million for
FDA (see related story).
Donovan said the administration has been working closely with lawmakers on both sides of the aisle, and the
most likely possibility is the request would be part of an omnibus funding bill.
Currently, the Ebola effort is funded by a continuing resolution that provided $58 million to HHS to accelerate
countermeasure development and product research, and $30 million to support the CDC response in Africa. The resolution expires on Dec. 11.
Donovan said it is urgent that Congress act by the December date, or else risk setbacks in stemming the outbreak.
“If it is not passed, we could start seeing funding gaps that could set us behind in the effort,” he said. — Erin Durkin
Arizona Passes ‘Right To Try’ . . . begins on page one
The week before, Rep. Michael McCaul (R-TX) released a white paper detailing legislative ideas that would make
drug manufacturers’ expanded access policies more transparent. The paper says states’ frustration with the program is
understandable, but the laws are not the right approach.
“While well intended, these laws take a fragmented and piecemeal approach to a problem that deserves
comprehensive federal attention,” according to the white paper. “‘Right to Try’ represents an understandable dissatisfaction with the expanded access program in general; so too does the growing phenomenon of patients using social media
to shame companies into providing them access to unapproved drugs. Taken together, these trends should compel
lawmakers in Congress to reform the federal expanded access program.”
The white paper is intended to start a conversation that could lead to a bill, said a congressional aide familiar with
the issue. The document was submitted to the House Energy and Commerce Committee’s 21st Century Cures initiative,
the aide said.
Congress should incentivize companies to provide patients with greater clarity and certainty about how they handle
expanded access requests, according to the paper. Patients often have difficulty identifying who to turn to in the company
when making a request, the document says.
“Congress should also seek more information about the expanded access program to guide possible future efforts to
reform and improve the existing program,” according to the document.
The lawmaker made four requests:
Require drug sponsors applying for Accelerated Approval, Breakthrough, Fast Track and Priority Review
designations to develop and make public their expanded access policy for such treatments.
Ensure that patients know why their request for expanded access is denied.
Require requests for expanded access to be tracked and reported to the FDA.
Establish a stakeholder task force to make recommendations to further improve the expanded access program.
The paper is under review by Pharmaceutical Research and Manufacturers of America and the National Organization
for Rare Diseases, which oppose “Right to Try” state laws.
Industry, patient groups and FDA officials also plan to meet next month. They will discuss how to optimize the
existing expanded access process for investigational drugs while ensuring timely patient access to safe and effective
approved new medicines, a PhRMA spokesperson said.
Other attendees of the closed meeting include ALS Association, American Autoimmune Related Diseases Associa-
FDA Week - www.InsideHealthPolicy.com - November 7, 2014
11
tion, Cancer Support Community, Center for Information and Study on Clinical Research, and Leukemia and Lymphoma
Society.
“The invitation-only workshop will feature panel discussions and audience engagement on topics such as the importance of clinical trials in the development and review of investigational medicines, special considerations for pediatric
patients, and opportunities to optimize the expanded access process,” said PhRMA’s spokesperson, adding that the key
takeaways from the meeting will be made public.
McCaul’s efforts follow a letter from Republican Sens. Tom Coburn (OK), Richard Burr (NC) and Lamar
Alexander (TN) questioning FDA about the effectiveness of the compassionate use program, and asking how the
agency has worked with drug manufacturers. Coburn’s office this week said it has yet to receive an official response
from the agency. — Erin Durkin
FDA GDUFA List: Nearly 100 Facilities Have Not Paid Required Fees
Nearly 100 facilities have not paid required generic drug user fees for fiscal 2015, meaning FDA cannot review
any applications associated with these facilities, according to a list initially published Oct. 27 that has since been
updated. The longer facilities are on the list, the more likely they are to attract an FDA warning letter, the agency
said, although noting that there are other factors that lead to issuance of warning letters, which have increased this
year.
An FDA official said the number of facilities not paying fees is consistent with last year, and FDA has compiled a
separate list to inform companies if a facility has outstanding fees but does not appear on the annual arrears list. The
fiscal 2015 arrears list was published on Oct. 27 with 132 facilities initially on the list, which has since been narrowed
down to 98, according to numbers published Wednesday (Nov. 5).
Facility fees make up the bulk — 70 percent — of money collected under the generic drug user fee program,
which is in its third year. In fiscal 2015 domestic and foreign finished dosage form facilities must pay $247,717 and
$262,717 respectively. Domestic and foreign active pharmaceutical ingredient facilities must pay $41,926 and
$56,926 respectively.
The fees are due on Oct. 1 each year but facilities have a 20-day grade period, said Donal Parks, director of the
Office of User Fee Collections at FDA. If FDA does not receive a payment, the facility is placed on an arrears list,
meaning the agency cannot review applications referencing the facilities and approved products manufactured there
would be considered misbranded — a problem especially for companies importing drugs, Parks said, speaking at
the Generic Pharmaceutical Association Fall Technical Conference. The arrears list gets updated daily, sometimes
multiple times a day, after it is first published until it gets whittled down to a core group of facilities that do not pay,
he said.
Further, FDA has targeted some facilities not paying the fees with warning letters. In 2014, FDA issued eight GDUFA
warning letters to facilities that had not paid fees. Further, the agency issued three warning letters to facilities that did not
identify themselves with the agency — as required by the user fee program because fees are determined based on the
number of facilities — or pay the associated facility fee.
Facilities are removed from the list when they pay the fees, the agency said. The list identifies the fiscal years in
which the facility has not paid, and the longer a facility is on the list the more likely it will receive a warning letter, the
agency said.
“The agency issues warning letters on a case-by-case basis, and considers the time a facility is on the GDUFA facility
arrears list along with several other factors before issuing warning letters,” the agency told FDA Week.
There are two ways a facility could be removed from the arrears list: by paying the fee or having applications that no
longer reference the facility. If the facility is taken off the list because of the latter, the outstanding fee must be paid
before an application could again reference the facility. Parks said the agency started populating a second list to clarify
which companies were not on the arrears list but still owe previously incurred fees. There were 22 facilities on that list,
according to the most recent numbers.
“The statute is very clear that those obligations once incurred remain with you... So you will wind up owing a fee but
people don’t know it,” Parks said. So companies should check the second list, in addition to the arrears list, when making
sure the facilities they’re referencing have paid their fees, he said. — Alaina Busch McBournie
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FDA Week - www.InsideHealthPolicy.com - November 7, 2014