FDA Releases 5-Year Financial Plan for Biosimilar User Fee Act

Last week, the FDA released its 5-year financial plans for its User Fee Acts, including the Biosimilar User Fee Act (BsUFA), which authorizes the agency to collect fees from applicants for the review of proposed biosimilar products. The financial plan, which is revised each year, outlines the financial position of the BsUFA program over the next 5-year authorization period, and explains how the agency will allocate resources to build its biosimilars review program.

During the first authorization period for BsUFA, the regulatory pathway for biosimilars was relatively new, so much of the FDA’s work on was aimed toward providing development-stage advice to biosimilar product sponsors under its Biosimilar Biological Product Development Program (BDP). FDA says that it received fewer submissions of biosimilars during this period than it had anticipated; it collected more BPD fees than it had planned, but fewer application, establishment, or product fees. This produced a higher carry-over balance at the end of the period than the FDA had projected. However, many of the programs initiated under the first BsUFA period are expected to convert into submissions during the current BsUFA period—which the FDA refers to as BsUFA II—resulting in an increase in the agency’s workload.

During 2018, FDA estimates that it will collect approximately $40 million in user fees, and that it will carry over more than $48 million from the prior year. Its total BsUFA obligations (including administrative costs and agency-wide services) for the year are expected to total approximately $45.5 million.

In the years ahead, FDA plans to adjust the allocation of each type of fee it collects to the total target revenue it expects; this approach should help minimize the variations in the fee amount each year, and will help the agency to comply with the fee rate caps established by Congress. (Fee amounts for future year may not be set at more than 25% above the amounts set in 2018 under current law.)

FDA says that its workload will continue to be near or above its 2017 workload, at least in the early years of this BsUFA reauthorization period. While the agency reports having received only 4 applications for biosimilars prior to 2017, in 2017 alone, it received 12 original applications, and that trend is expected to continue. As FDA ramps up to meet this demand, it plans to hire 15 new staffers for Center for Drug Evaluation and Research.

Planning for the agency’s financial future is a challenge for FDA, however, given the fact that “It is difficult to predict the amount of non-user fee appropriations that will be approved by Congress which creates financial planning challenges for the program since non-user fee fund levels are often uncertain for much of the fiscal year.” The plan document adds that “This is due to prolonged Continuing Resolutions, versus early in the fiscal year enactment of annual appropriations bills.”