When I started the Pharma & Biopharma Outsourcing Association (PBOA) three years ago, I only had a vague idea of how much Congressional lobbying it would involve. I thought PBOA could be effective by working solely with FDA, but as it turns out, it’s critical to have a presence on Capitol Hill, so that we can help the House and Senate better understand the role CMO/CDMOs play in the healthcare ecosystem. All the work we did in the negotiations to reauthorize the Generic Drug User Fee Amendments (GDUFA II) would be for naught without Congress and the White House passing that legislation and signing it into law, and that makes it important that our industry has representation and a seat at the table.
Of course, the question everyone in the industry has asked me since November is, “How will the new administration affect our sector?” My response has been, “I don’t know. And anyone who tells you they do know is full of it.”
Certainly, there are a lot of potential actions and reactions from the administration and Congress that could trickle down to the CMO/CDMO sector. A ban on immigration and strict limits on H1B visas could curtail hiring by both in-house pharma and CMOs. A Border Adjustment Tax and/or punitive tariffs could wreak havoc on CDMO and customer business models. Repeal/replacement/repair of the Affordable Care Act could throw pharma into tumult. (I’ll note that without ACA’s individual marketplace, I likely couldn’t have made the jump to launch the PBOA.) Depending on the administration’s choice of FDA Commissioner, a lowering of regulatory standards at FDA—either in terms of drug applications or inspections—could be dangerous and lure bad actors into the market.
The future of the FDA may be the biggest wildcard in the outlook for CDMOs and their customers. The administration’s executive order on regulations may have severe repercussions that can impact CDMOs. At present, it’s unclear whether FDA can issue significant new guidance without violating that executive order. But FDA is deeply involved in its Quality Metrics initiative, in which the agency plans to get certain data from drug marketers and their supply chain. Will the agency be able to progress from draft guidance to final version and implement Quality Metrics without having to “get rid of two existing regulations” first?
Similarly, under the Drug Supply Chain Security Act (DSCSA), manufacturers must begin serializing all drug products at the saleable unit and case level for the U.S. market starting in Nov. 2017. However, serialization solution providers contend that FDA still needs to issue some significant guidance to finalize the requirements for serialization. If FDA’s authority is delayed, will the serialization deadline be delayed, either officially or informally? How will that affect CDMOs that have made investments in capital and time to reach compliance?
Nearer and dearer to my heart because of all those train rides up and down the Northeast Corridor during GDUFA II negotiations, will the federal hiring freeze keep FDA from staffing up to the levels it needs in order to meet its user fee commitments? Both Senate and House members have sent letters to the White House asking for clarification on the hiring freeze’s impact on the FDA, noting that User Fees specify certain hiring levels, to be paid for by industry funds. Having spent almost a year working with FDA on issues of ANDA review and facility inspection timelines, it’s clear to me that delays cascade; a one-week delay doesn’t simply lead to extending timelines a week on the other end. FDA operates an extremely complex, interdependent system, and political disruptions can be costly for everyone.
So, no, I don’t have any firm answers when I’m asked how the new administration will impact the CDMO sector, but I’ll be doing my best to represent our member companies and make sure our lawmakers understand the ramifications of their actions on the companies that help bring safe, cost-effective medicines to the public.
President, Pharma & Biopharma Outsourcing Association
Gil Roth is the President of the Pharma & Biopharma Outsourcing Association (www.pharma-bio.org). He can be reached at firstname.lastname@example.org.