Washington Editor

WASHINGTON - Rumor has it that user fees are on the rise.

Ongoing discussions between drug industry representatives and FDA officials are moving forward to finalize the fourth version of the Prescription Drug User Fee Act, and according to a recent report in the The Wall Street Journal, fees that drug companies pay the agency to help fund its reviews are going to climb. That's not surprising - user fees increased the other two times the law was reauthorized - but the growing percentage of the FDA budget constituted by such fees is notable. Already, user fees account for more than half of human drug reviews, about 53 percent, and that's likely to go up.

But what the drug industry will get in return is a bit of a mystery.

Nevertheless, with no corresponding up-tick in congressionally appropriated dollars for the FDA, user fees would become more of a crutch to offset a lack of funding for programs beyond the scope of drug reviews. That hasn't sat well with the drug industry, and officials from the Biotechnology Industry Organization have made their feelings known on this matter. As BIO President and CEO Jim Greenwood told members of the Massachusetts Biotechnology Council earlier this summer, the FDA "is drowning" under the weight of added responsibilities and budget woes, "and it sees PDUFA as its life-line."

The current iteration of the law expires in a year, and details on the new version are likely to emerge later in 2006 in order for legislators to take up its reauthorization in earnest. It first passed in 1992.

ACT Claim Riles Senators

The recent stem cell work announced by Advanced Cell Technology Inc. has drawn the ire of some on Capitol Hill, namely Sens. Arlen Specter (R-Pa.) and Tom Harkin (D-Iowa), who said hype around the company's technique to generate human embryonic stem cells while preserving the donor embryo could prove detrimental to efforts to secure more federal funding for the research.

Their criticism came at a hearing of the Labor, Health & Human Services, and Education Appropriations Subcommittee last week, which followed up on Advanced Cell Technology's success in deriving stem cells from human blastomeres with a single-cell biopsy technique that is used in in vitro fertilization clinics to assess the genetic health of pre-implantation embryos. That finding was published last month in Nature, but negativity soon surfaced after it became clear that none of the embryos discussed in the paper survived. The senators expressed concern that publicity around this latest research could impair efforts to revive H.R. 810, the bill to expand federal support for embryonic stem cells that President Bush vetoed earlier this summer. (See BioWorld Today, July 20, 2006, and Aug. 24, 2006.)

In more positive news, the Alameda, Calif.-based company closed two financings last week that generated about $13 million in cash to fund more work on its latest embryonic stem cell technique, as well as three therapeutic programs for degenerative eye disease, heart and vascular disease and the regeneration of skin damaged by wounds, burns and in surgical procedures. The company closed $8.75 million earlier this month when existing investors exercised additional rights under a debenture financing, and raised $4.3 million by re-pricing existing warrants.

CMS Administrator Exiting

Mark McClellan, the head of the Centers for Medicare & Medicaid Services, officially resigned, effective next month. Its leader for the past two and a half years, during which he oversaw the implementation of the Part D drug benefit, he is reportedly seeking work with a think tank to further focus on health care-related matters. Speculation on a successor has centered on deputy administrator Leslie Norwalk, according to several reports.

Guidance On Approving Diagnostics

The FDA issued a draft guidance indicating that it will require regulatory approval of certain diagnostic tests, In Vitro Diagnostic Multivariate Index Assays, which use algorithms to interpret large amounts of gene and protein data on individual patients. The agency, which classifies the tests based on their intended use and the level of control necessary to assure their safety and effectiveness, said most fall under moderate-risk (Class II) or high-risk (Class III) categories.