Thesis:
One of the biggest agencies within the U.S. Department of Health and Human Services is the Food and Drug Administration (FDA). The Office of the Commissioner and four directorates administer the core functions of the agency which are medical products and tobacco, foods and veterinary medicine, global regulatory operations and policy, and operations. While being a huge, big named agency designed to protect and provide public health; there are necessary regulations and guidelines to ensure the purpose of the agency is being met. This paper will explore the needs, stakeholders, expected outcomes, and other regulatory action and implementation of the FDA.
Introduction:
The Food and Drug Administration Safety and Innovation Act (FDASIA) is a regulation which was proposed by The Food and Drug Administration (FDA or Agency) to establish a list of “qualifying pathogens” that are likely to cause serious harm to public health. FDASIA utilizes the agency’s ability to protect and improve public health by giving the authority to collect user fees, promoting innovation, increasing stakeholder involvement, and enhancing the safety of the drug supply chain.
Methicillin-Resistant Staphylococcus aureus (MRSA) is a “staph” germ that does not improve with the first-line antibiotics that typically cure staph infections. When this takes place, the germ is “resistant” to the antibiotic. This class of antibiotics includes penicillin, amoxicillin, oxacillin, methicillin, and others. (MRSA, MedlinePlus) MRSA has commonly been known as a hospital-acquired infection as the staph germs are mainly spread by skin-to-skin contact. Recently, new strains have developed in the public that can cause normally healthy people to have severe infections. Over the past four decades, MRSA has transformed from a maintainable nuisance to a serious public health concern. (Antimicrobial (Drug) Resistance, National Institute of Allergy and Infectious Diseases)
Background:
Congress passed this healthcare law mainly to provide critical funding for the FDA’s drug and device review programs through the core provisions of the law’s eleven titles reauthorizing and expanding on the user-fee schemes. The FDASIA was officially signed into law on July 9th, 2012 by President Obama. The law also includes reauthorization of the Prescription Drug User Fee Act (PDUFA) and the Medical Device User Fee Act (MDUFA), giving the FDA essential resources to sustain an effective review process for human drug and biological products. The Generic Drug User Fee Amendments (GDUFA) and the Biosimilars User Fee Amendments (BsUFA) are the two user-fee schemes created by the law. Beyond user fees, this legislation includes “inter alia”, which is foundations designed to encourage continued drug and device innovation, promote further pediatric clinical research, and bring attention to variety of developing issues in the FDA’s regulatory space. (Funding the FDA, O’Leary)
Infectious diseases are the root cause of premature deaths in the world affecting the lives of nearly 50,000 people each day. (Annals of Clinical Microbiology and Antimicrobial, 2012) The rise of antibiotic resistant bacteria has become a growing concern as the world population is at risk of recurrence of infectious diseases that were once believed to be under control. During the 1880s is when the bacterium Staphyloccoccus aureus, mainly known as staph, was first discovered. During this time period, staph infection commonly caused painful skin and soft tissue conditions.
MRSA, when transmitted, affects two categories of bacteria when classified. The first is Hospital Acquired, (HA-MRSA) which commonly affects people who had surgery or medical devices surgically implanted. The second is Community-Associated (CA)-MRSA, which concerns public health professionals because it can affect anyone. CA-MRSA is usually associated with a specific exposure in crowded settings such as close skin-to-skin contact, sharing of personal items like towels and razors, or anytime personal hygiene is in jeopardy.
Need + Authority:
MRSA has raised concern of the medical research community, clarifying the crucial need to establish better ways to diagnose and treat bacterial infections.
There are two main reasons the bill was swiftly accepted through a closely separated Congress. First, most policymakers understand that user fees have become essential components of the agency's budget because of continued underfunding of the FDA by the federal government. User fees were important behind the creation of legislation because medical-device manufacturers and pharmaceutical manufacturers have paid user fees while submitting applications to the FDA for the evaluation of new products. The idea was to reauthorize those statutorily defined user fees. The development of user fees allows funding for the FDA’s drug and device review programs. Moreover, user fees are essential in the daily operation of the agency as it completes its task in protecting the public health. Second, the FDA and industry presented Congress with their plans to guide the law's development, after agreeing on the important parts of the legislation.
The major need for this FDA act is antibiotic resistant infections lead to greater morbidity and drug manufacturers. There’s also the possibility of misuse or antibiotics and not finishing prescribed antibiotics. One of the most serious health threats is antimicrobial resistance which can come from the foods we eat. It has become common to have infections from resistant bacteria and some pathogens have even become resistant to different kinds of antibiotics. The germs that contaminate food can be resistant because of the use of antibiotics in people. We can prevent many of these infections by using antibiotics carefully and following food safety guidelines.
One of the potential market failure implications that I feel made this problem open to be addressed through regulation is positive externality, which refers to an “economic condition in which the value of the good or service to society is greater than the value to the individual purchase.” (Does the FDA Regulatory Process Destroy Business Value, Sifer) This in return results in; both the equilibrium price and the quantity produced are too low. The FDA verifying new biopharmaceutical products and services to be safe and effective is beneficial for the U.S population as a whole. FDA regulatory services have increased in quantity to benefit society. As a result, there are reduced review times, higher amount of new drug qualifications, and improvements to the quality of the FDA’s regulatory services.
To further explain this point, let’s discuss the biopharmaceutical industry’s consumption of the FDA’s services. In 2008, the FDA realized there was a 20% increase for new biological drug applications, emphasizing a rising usage of this service by the biopharmaceutical industry over the five year average. Three years later, however, the FDA documented that the number of new applications had fell to the second lowest level in 10 years. The biopharmaceutical industry continues to cite long lead times to gain FDA approval, in spite of short-term reductions in market-driven consumption.
The second market failure that takes place in FDA regulation is the use of monopoly as the sole service provider. Monopoly refers to a single entity is the only producer of a good/service and can therefore control prices. The FDA has minimal competition to lower the price of its service or even a peer competitor to challenge the FDA’s performance or compare quality against. Lack of competition and comparison leads the FDA to improve efficiency and reduce costs.
The combination of the two identified market failures signal that the market for the FDA’s services has not fixed at either an optimal price point or quantity supplied. This leads to lost market transactions for FDA services that should otherwise be occurring or lost social benefit derived from an increased supply of the FDA’s services. *
Alternatives:
Before The Food and Drug Administration Safety and Innovation Act was created, in 1992 there was increased frustration with the processing and quality of FDA review drug applications from the pharmaceutical industries. As a result, the Prescription Drug User Fee Act was created after it became evident that Congress was not ready to help improve the agency’s review capacity by unwilling to deliver an adequate amount of funding through the appropriations process. This law had four elements including the user-fee schemes for devices, generics, and biosimliars. After the passing of the PDUFA, it became evident that user fees accelerate the drug approval process.
According to the article in the NY Times “White House Issues New Regulations for Dangerous Biological Research” President Obama’s administration administered new guidelines to “strengthen the oversight of federally funded biological research that could produce bioweapons.” Dr. Francis S. Collins said the rules would “preserve the benefits of life-science research while minimizing the risk of misuse” Under this policy, institutions must be informed of the work completed by scientists. Afterwards, the institutions must organize a review board to evaluate the risks and inform the federal agency. This policy, however, does not go into effect for another year.
Agency:

APA, RFA, E.O.’s 12866 & 13132:
Federalism has no effect on states. The FDA act does not interfere with state policies. The requirements of the Administrative Procedures Act include federal agencies creating regulations to implement laws made by congress. Furthermore, the APA has rules which govern the regulatory process undertaken by federal agencies. Executive Order 12866 enhances planning and coordination with respect to new and existing regulations. The effect of the proposed rule under Executive Order 12866, Executive Order 13563, and the Regulatory Flexibility Act have all been reviewed by the FDA.
Executive Orders 12866 and 13563 help to ensure to capitalize net benefits (not limiting to potential economic, environmental, public health and safety, and other advantages.) (federalregister.gov) when making regulatory approaches and require agencies to consider all costs and benefits of regulatory alternatives. This proposed rule in particular is not a substantial regulatory action as defined by Executive Order 12866 by the Agency.
Relating to the Regulatory Flexibility Act, the Agency verified there will not be any burdens or a substantial economic impact on small entities from the final rule. If small entities were to have a major economic impact, the Regulatory Flexibility Act requires agencies to analyze regulatory alternatives that would decrease the economic effect of the rule on small entities.
To accommodate Executive order 13132, the proposed rule has been analyzed by the FDA to meet the requirements. Finalized proposed rules will not have policies that will extensively affect States directly, the relationship between the States and the National Government, or the distribution of power and responsibilities between the many levels of government. As defined by the Executive Order, the proposed rule does not include policies with federalism implications which were determined by the Agency. Stakeholders: One of the priorities of the FDA is stakeholder engagement, mainly because the agency wants to make certain that there are several opportunities for interested parties to deliver their response on FDA decision-making. Patient input has also become a known importance to the entire drug development enterprise along with FDA review and decision making. One of the stakeholder engagement efforts include a five-year Patient Focused Drug Development program originated by the FDA. The program was designed to learn about the effects and impact of patient’s diseases on their daily lives. To collect input from different stakeholders and experts to provide the FDA with a suitable agenda relating to health information technology, the FDA collaborated with Office of the National Coordinator for Heath IT (ONC) and the Federal Communications Commission (FCC) and has set up a public-private working group under ONC’s Health IT committee. The feedback from this working group will be used by the FDA to develop the Health IT Report.” Cost: The Generic Drug User Fee Amendments of 2012 (GDUFA) was enacted under the FDASIA, to ensure that the generic drug industry will provide funding to the FDA to guarantee generic drugs will be high quality, safe, effective, and accessible to Americans. Completing the FDA review process in a timely manner will allow the GDUFA to provide Americans with accelerating the availability of low-cost and high class generic drugs. Moreover, providing greater predictability and timeliness of the review process of generic drugs, limiting review times will benefit the industry by saving time and money. The cost of GDUFA fees on the generic drug industry are estimated to be about less than ten cents for the average generic prescription. As a whole, the yearly fee for GDUFA represents approximately one half of 1 percent of generic drug sales. Bringing products to the marker earlier than expected can happen by this relatively small cost to the industry negating faster review times. “Antibiotic resistance is found all over the world and has become a very serious problem in the treatment of disease. The 1995 US Office of Technology Assessment report attributed a cost of $1.3 billion (1992 dollars) per year for antibiotic-resistant infections due to six species of bacteria in US hospitals. While the real magnitude of the problem is unknown, the monetary cost of treating antibiotic resistant infections worldwide is estimated to be many billions of dollars per year. Some experts predict that, as resistance to antibiotics is increasing at a faster pace than it can be controlled, the future will resemble the pre-antibiotic era. Others are more optimistic that research and careful drug management can reverse the trend if global efforts are focused on recognizing and controlling it.” Impact: Without the FDA, many of us would have to research products and what ingredients they contain. The biggest impact of the FDA has been to make the safety of food, drugs, cosmetics, and other products regulated by the agency. (The FDA: What Will the Next 100 Years Bring, Silverthorne) There is a major impact of the FDA on business of health care. According to the article “Does the FDA Regulatory Process Destroy Business Value?,” Sifer writes that the FDA provides a needed public service by coordinating an increasingly elaborate regulatory approval process for licensing of safe and effective biopharmaceuticals. This regulatory process fills consumer assurance in approved marketed products. It also provides the potential for major pricing power by the drug property owners and return on investment via substantial revenue generation from approved drugs. The argument made by members of the public biopharmaceutical industry members and advocates is that the FDA regulatory process hurts business value by the increased capital costs and the long time frame to complete the process. There has been criticism that the FDA approval process is not advantageous investment and the discovery of new biopharmaceutical products further jeopardizes national security.” Effectiveness According to the U.S Department of Health and Human Services, the FDA has made substantial progress in implementing FDASIA and is following up with important due dates and deadlines. The HSS devised a 3 year implementation plan which is updated monthly to help keep the public informed. User fee programs assisted with providing patients access to safe and effective new products in a timely fashion and stable streamlined premarket programs for industry over the years. The FDA has come a long way if you consider the fact that there were no federal regulations to protect the public from dangerous drugs until the turn of the 20th century. Now it is mandatory for drugs to complete a rigorous evaluation of quality, safety and effectiveness before they can be sold on the market. The drug review process has smoothly taken off through the FDA’s Center for Drug Evaluation and Research (CDER) since July 2005. The biggest progress has been through evidence-based medicine. Steven Galson, the director of CDER, says “drugs undergo a complete evaluation of their metabolism, their interactions with other drugs, and potential differences in safety and effectiveness for people of different genders, ages, and races.” (fda.gov)

1) http://www.fda.gov/RegulatoryInformation/Legislation/FederalFoodDrugandCosmeticActFDCAct/SignificantAmendmentstotheFDCAct/FDASIA/ 2) https://www.federalregister.gov/articles/2013/06/12/2013-13865/establishing-a-list-of-qualifying-pathogens-under-the-food-and-drug-administration-safety-and 3) http://www.fda.gov/RegulatoryInformation/Legislation/FederalFoodDrugandCosmeticActFDCAct/SignificantAmendmentstotheFDCAct/FDASIA/ucm310992.htm 4) https://www.federalregister.gov/articles/2014/03/25/2014-06364/medical-device-classification-procedures 5) http://blogs.fda.gov/fdavoice/index.php/tag/fdasia/ 6) http://www.nlm.nih.gov/medlineplus/ency/article/007261.htm 7) http://www.niaid.nih.gov/topics/antimicrobialResistance/Examples/mrsa/Pages/history.aspx