Drug firms back user fee proposal

September 16, 1992

A proposal that would impose fees on pharmaceutical manufacturersis undergoing a final revision after tentative endorsement bydrug industry representatives. The bill, drafted by House Energyand Commerce Committee chair John Dingell (D-MI) and Rep.

A proposal that would impose fees on pharmaceutical manufacturersis undergoing a final revision after tentative endorsement bydrug industry representatives. The bill, drafted by House Energyand Commerce Committee chair John Dingell (D-MI) and Rep. HenryWaxman (D-CA), is given good chances for passage before Congressadjourns in October.

Under the proposal, companies would pay a new drug applicationfee of $150,000, an annual fee of $50,000 and a $5000 fee foreach approved drug on the market. The fees will fund 600 additionalFood and Drug Administration staff positions needed to reviewnew drug applications. The funds will supplement but not replacebudget appropriations to the agency.

The bill would be phased in over five years, beginning in 1993.The FDA estimates that it will eventually raise $75 million annuallythrough user fees.

Faster reviews of new drugs is a key reason for drug companysupport of the bill. About $10 million is lost by pharmaceuticalcompanies for every month a new drug is kept from the open market,according to FDA estimates.

Because of staunch opposition to user fees from device manufacturers,the bill will apply only to drug companies, said Laura Fenwick,a spokesperson for the Health Industry Manufacturers Associationin Washington, DC.

"The latest on this bill is that it will include feesonly from drug companies, as Congress believes it will take toolong to iron out an agreement with device manufacturers,"she said.

HIMA has opposed previous user fee proposals because they constitutea tax on innovation, according to Tom Long, senior legislativecounsel (SCAN 6/3/92). But in an Energy and Commerce Committeehearing on the bill held August 10, Waxman said device manufacturersmay regret their opposition.

Funds gathered through user fees would speed reviews and approvalsand make devices more readily available, Waxman said. At the hearing,he warned that Congress may later extend fees to medical devices.FDA Commissioner David Kessler added that he would support futureproposals to collect fees from device manufacturers.

BRIEFLY NOTED:

  • Advanced NMR Systems has received Food and Drug Administrationapproval to market its Instascan echo-planar MRI upgrade. TheFDA's decision, announced last month, allows Advanced NMR to expandits marketing efforts beyond research sites, where sales havebeen below expectations (SCAN 7/15/92).

The upgrade retrofits high-field GE scanners to perform fastMRI. The Wilmington, MA, vendor has shipped four systems to date,two of them beta systems. The upgrade costs $500,000.

Advanced NMR restructured operations two months ago in movesdesigned to cut cash outflows. The firm's president, Paul Bullinger,resigned, and nearly 30 employees were laid off. The vendor alsocreated a new subsidiary, MAM-MRI Image Technology, to pursuedevelopment of a dedicated MRI breast scanner.

  • Imaging center firm and MRI manufacturer Health Imagesof Atlanta introduced an MRI breast imaging coil last month forlimited use in its multicenter research effort in MR breast imaging.The firm expects to release the coil for use by third partiesthis month.

"MRI of the breast represents a significant developmentfor Health Images," said Robert D. Carl, president and CEO."Much of our future earnings growth depends on the successfulintroduction of new clinical applications for MRI."

  • Kodak reported last month that it will use its newly introducedPhoto CD technology in medical imaging archiving applications.The imaging vendor will maintain compatibility with ACR-NEMA formatsin developing this storage medium for medical applications, Kodaksaid.

Both patient and image information will be placed in ACR-NEMAfiles on Photo CD Medical disks. Photo CD images can be viewedon a TV monitor or input into a computer. The medical productwill be integrated into Kodak's Ektascan Imagelink system, developedin cooperation with Vortech Data.