CBO Estimates User Fee Reauthorization Would Require $740 Million

The Congressional Budget Office officially scored the Senate package to reauthorize the FDA’s user fee agreements with the medical device and pharmaceutical industries, saying it would add $740 million to the agency’s spending budget and a negligible amount to the country’s deficit over its five-year life.

CBO estimated implementing the bill would increase user fee collections by about $1.7 billion in fiscal 2018, compared to the current generation of the agency’s user fees.

The bill, S. 934, would have industry put up about $9 billion in total user fees before fiscal 2022 — about $1 billion from medical device companies under MDUFA, with the lion’s share of $8 billion coming from the pharmaceutical industry through PDUFA, GDUFA and BsUFA — according to the CBO cost estimate.

The next iteration of MDUFA would require the FDA to set up electronic submission of 510(k) clearance and premarket approval bids, change how the agency evaluates and approves those applications and tracks device safety.

CBO estimated that those provisions would require more than 200 additional full-time equivalent employees at an average total cost per FTE of $300,000 annually, totally $60 million a year, plus another $7 million for IT and other expenses. In all, the provisions would raise the FDA’s costs by $243 million, including:

• $152 million to revise device inspection standards;
• $32 million to update agency procedures on receiving and evaluating clinical data;
• $20 million to increase communications with devicemakers on export certificates;
• $20 million for pilot programs on collecting and evaluating postmarket data;
• $11 million for a risk-based inspection schedule and to reauthorize accredited inspections; and
• $8 million for new regulations creating a path for over-the-counter hearing aids.

The fees paid by companies for the review of their products and facilities would offset most of the bill’s increase in net discretionary spending, and direct spending would go up by $13 million under the proposed bill.

Meanwhile, revenues would be lowered by $2 million by fiscal 2022, while raising the total deficit by only about $15 million by fiscal 2027, the CBO estimated.

In addition to reauthorizing the user fee agreements, the bill also would require the FDA to implement some pricey changes to existing programs, reauthorize FDA and NIH grants, and require GAO reports to Congress not previously covered by user fees.

The CBO’s estimate is based on the version approved by the Senate Health, Education, Labor and Pensions Committee in May, not on the proposed fiscal 2018 budget from the Trump administration, which calls for massive across-the-board hikes in user fees to make up for cuts in taxpayer-funded budget authority. — Gayle S. Putrich