Massive Government Spending Bill Tackles Key FDA and Research Issues

The year-end, must-pass government funding package includes multiple provisions important to FDA operations and authority, as well as for clinical research sponsors and pharmaceutical manufacturers. The $1.7 billion Consolidated Appropriations Act for 2023 will reshape Medicaid coverage and bolster pandemic preparedness and biomedical research, among dozens of measures involving drug development and regulation, as the legislators added hundreds of provisions sought by specific states and industries, but also left some key measures on the cutting-room floor.

FDA gains a notable funding increase, as well as multiple new policies and programs. The spending package provides the agency with a $6.6 billion total budget, a 6.5%, or $226 million, increase. That total includes $3.5 billion in appropriated funds plus $3 billion from authorized user fees paid by industry. A summary report from Senate and House Appropriations Committees specifies that the added funds should be used to help end the opioid crisis, expand foreign drug inspections, fund orphan product development, advance medical device cyber security, and expand agency data modernization, inspections, and other programs. FDA regulation of human drugs will have $760 million in funds, while the budget for biologics is $272 million, as seen in a chart from the Alliance for a Stronger FDA.

A leading provision overhauls FDA regulation of cosmetics to enhance product safety. To help states tackle the opioid crisis, the legislation aims to improve access to FDA-approved non-opioid therapies. Generic-drug makers gained provisions that prevent certain actions by brands designed to delay competition from generics and biosimilars. And to enhance diversity in clinical trials, the legislation instructs sponsors to submit “diversity action plans” for late-stage trials. FDA will issue more guidance on that process, hold public workshops on diversity issues, and report annually on progress in this area.

Probably the most high-profile FDA measure reforms the agency’s accelerated approval process. A key provision clarifies that agency reviewers may require that post-approval studies begin prior to product approval, but it does not require FDA to do so. The measure also speeds up the process for withdrawing drugs that fail to confirm anticipated benefits, while stopping short of mandating such action. Sponsors must provide updates on confirmatory trial status to the agency every six months, and a new FDA accelerated approval oversight council will weigh in on policies.

Missing from the massive bill, however, is a controversial provision that would have confirmed FDA authority to regulate diagnostic tests developed in clinical labs, including those at hospitals and academic medical centers. Although medical device makers and federal regulators backed the change as a way to clarify FDA authority in this area, the proposed VALID Act (Verifying Accurate Leading-edge IVCT Development) continued to raise objections from the labs and clinics.

Broader health changes

The massive spending measure provides significant added funding for veterans’ health care, while also saving billions by ending Medicaid expansion policies adopted during the pandemic. The lawmakers extend telehealth waivers for two years, continuing to support telehealth practices useful to a number of FDA programs.

The Biden administration’s Advanced Research Projects Agency for Health gains $1.5 billion funding and will reside in the National Institutes of Health. Various provisions clarify its governance, reporting requirements, leadership, and collaborations with FDA.

The legislation further aims to enhance biosecurity programs to better prepare the nation’s capacity to combat future viral epidemics and biological threats. There is increased funding for the Biomedical Advanced Research and Development Authority and to expand the Strategic National Stockpile. Added provisions support domestic production of certain antibiotics, further study on incentives for domestic production of generic drugs, and programs to enable rapid development and testing of drugs. A new White House Office of Pandemic Preparedness will oversee these efforts.

And vaccine makers and regulators will be following closely a measure setting the stage for an end to government subsidies for vaccines and medical products approved under emergency use authorization policies adopted during the COVID-19 pandemic.

A summary of the Consolidated Appropriations Act, 2023 is available at House.gov, and the full measure at Senate.gov.

About the author

Jill Wechsler is Washington reporter for BioPharm International and Pharmaceutical Technology.