What does the U.S. shutdown mean for drug, device firms?
Tuesday, January 8, 2019
While partisan squabbling holds hostage the 2019 appropriations for several U.S. departments and agencies, companies that must deal with those agencies are left scratching their heads about what's open and what's not.
It's not an easy question to answer, especially at the FDA, which is supported by tax dollars and user fees. Even though user fees don't come out of the public pot, Congress still has to appropriate them before the FDA has the authority to spend the money. So until the partial shutdown ends, the FDA can accept no drug or device application that requires a user fee.
Since that includes applications for generics and biosimilars, the shutdown – which is heading into its 13th day Thursday – could delay competition for pricey drugs and biologics. Potentially. It all depends on how long the shutdown continues and whether any company had planned on submitting an application during the holiday season and the beginning of the new year.
The shutdown, which affects the 25 percent of the U.S. government not covered by already passed spending bills, also could potentially delay development plans for novel devices and orphan drugs, as the FDA encourages sponsors to meet with agency staff early on before starting such development. Failing to have those talks can lead to costly mistakes or development delays.
With any luck, the shutdown won't continue much longer. When the 116th Congress convenes Thursday, one of the first orders of business in the House will be to reopen all the agencies. To do that, Speaker-designate Nancy Pelosi (D-Calif.) said she plans to call for a vote on a package of six appropriations bills to fully fund all the affected departments and agencies, except for the Department of Homeland Security (DHS). A second vote will be held on a continuing resolution (CR) to continue DHS funding through Feb. 8 to give Congress and President Donald Trump time to come to terms on border security, which is at the heart of the current shutdown. (Other sticking points kept the House and Senate from reconciling the six spending bills earlier.)
The question will be whether the Senate can pass the spending bills and the CR, which must originate in the House, with the required 60-vote majority. Senate Majority Leader Mitch McConnell (R-Ky.) said he won't call for a vote on the bill until Senate Democrats reach a "substantive agreement" with the president on the spending.
"We've pushed the pause button until the president, from whom we'll need a signature, and Senate Democrats, from who we'll need votes, reach an agreement," McConnell said. "No procedural votes. No test votes. Just a meaningful vote on a bipartisan agreement when one is reached. And it's my hope that it's reached sooner rather than later."
At the FDA
So where does that leave the FDA in the meantime? The agency is relying on 1,200 officers of the Public Health Services Commissioned Corps to maintain core functions to handle and respond to public health emergencies. That includes:
• monitoring for and responding to flu outbreaks;
• supporting high-risk medical product recalls;
• pursuing civil and criminal investigations when public health is imminently at risk;
• screening medical products imported to the U.S.;
• conducting surveillance for significant safety concerns with medical devices and other medical products;
• addressing other critical public health issues involving imminent threats to the safety of human life.
FDA Commissioner Scott Gottlieb said the agency also will be able to use carryover user fees to process certain submissions for generics, such as changes being effected and prior approval supplements, amendments, annual reports and applications for positron emission tomography drugs. The agency also can accept drug master files (DMFs) to be referenced in generic applications, but it won't be able to conduct initial completeness assessments on type II active pharmaceutical ingredient (API) DMFs if the user fee hasn't been paid yet.
Some of the things that aren't happening at the FDA include the development of policies, such as the drafting of guidances, finalizing draft guidances, proposing or finalizing rules, and acting on citizen petitions. The agency isn't responding to Freedom of Information Act requests, and updates to its website are sparse. And it isn't hiring and training new staff.
Also, the 30-day review clock for a pending, nonemergency investigational new drug or device application (IND) that's not covered by a user fee program will be suspended during the shutdown. However, new emergency INDs and IND amendments relating to the safety of clinical trial participants will continue to be reviewed during the shutdown, even for products that are not covered by a user fee program.
Last week, Gottlieb acknowledged all the questions the agency was receiving about how the shutdown would affect the FDA's operations. "Given the volume of questions that we want to address, and the evolving nature of some of the information that we'll aim to share, FDA plans to use social media as a primary channel for communicating with the public through this shutdown," he tweeted.
Following through on that, Gottlieb tweeted Wednesday, "We're issuing more guidance today on activities that'll be continuing during the shutdown because of critical public health need." However, no guidance was forthcoming by the close of business.
Other closed doors
Meanwhile, drug- and device makers may find shuttered doors at other agencies they must deal with. Getting information on the status of filings, deadlines and impacts may be impossible, as the affected agencies are not updating their websites or responding to email or telephone questions.
That's the case at the FTC, which is closed for the most part and has canceled all scheduled events. While its Premerger Notification Office is accepting Hart-Scott-Rodino (HSR) filings, it's operating with a limited staff and will not answer questions regarding HSR rules or filing procedures. Also, early termination of waiting periods will not be granted during the shutdown. Other documents can be electronically filed with the FTC, but the commission will take no action until the shutdown ends.
Most of the SEC is closed, as well. Only a small fraction of the agency's staff is available to respond to emergency situations involving market integrity and investor protection and to maintain operation of certain systems, including EDGAR.
The Justice Department also is affected. Its essential law enforcement and national security functions will continue, as will its criminal litigation, but it will curtail or postpone civil litigation to the extent possible. And requests to the Drug Enforcement Administration (DEA) regarding the use of scheduled substances are not on the list of items the DEA will tend to during the shutdown.