A Closer Look at FDA Policies Included in the Consolidated Appropriations Act

The recently enacted Consolidated Appropriations Act (H.R. 7148) includes several Food and Drug Administration (FDA) policies that were repeatedly considered in the House and Senate but were stalled for years before finally passing on Feb. 3. These include provisions to promote research into pediatric cancer and rare diseases previously wrapped up in H.R. 1262, the Mikaela Naylon Give Kids a Chance Act, including updates to the Pediatric Research Equity Act (PREA) and the Research to Accelerate Cures and Equity (RACE) for Children Act. The law also extends FDA’s authority to grant rare pediatric disease priority review vouchers through Sept. 30, 2029, and specifies that orphan exclusivity protects an orphan drug’s use or indication. In addition to these policies, the bill establishes a new FDA office to be located in an Abraham Accord country and includes a policy aimed at facilitating the approval of some generic drugs.

A more detailed summary of these provisions follows.

Pediatric Cancer Study Requirements

The Consolidated Appropriations Act updates the Federal Food, Drug, and Cosmetic Act (FFDCA) to promote pediatric research into “combination” cancer treatments. Previously, under the RACE for Children Act, the FDA could require, as part of the drug application process, companies to study a single new adult cancer drug in children if the drug targets molecular pathways relevant to pediatric cancers. In this update, FDA can now also mandate that applicants conduct an investigation of a combination of the new drug with either (1) a generic drug or biosimilar that is part of the standard of care for treating a pediatric cancer or (2) a previously approved adult cancer drug whose application is also held by the drug’s sponsor. Such a study can also include drug combinations when each component active ingredient has been previously approved. The FDA may also require the submission of completed preclinical studies in initial pediatric study plans. Along with these updated authorities, the FDA must now determine whether pediatric assessments under PREA or a molecularly targeted pediatric cancer investigation under the RACE for Children Act are required before a drug’s initial pediatric study plan is required to be submitted to the FDA. The law also clarifies that the FDA may only require either a PREA assessment or a molecularly targeted pediatric cancer investigation under the RACE for Children Act, but not both. These amendments will apply to drug applications submitted after three years from the date of enactment.

PREA Enforcement Authority

The new law also provides greater authority to FDA to enforce pediatric study requirements under PREA. PREA, originally enacted in 2003, requires drug applicants to submit assessments of safety and effectiveness of a drug in all relevant pediatric subpopulations. Under the new law, FDA may deem a drug to be misbranded when mandated assessments and studies of the drug are not pursued with due diligence, provided FDA determines a lack of due diligence after issuing a noncompliance letter to the drug sponsor, provides the sponsor 45 days to respond to the noncompliance letter and reviews the written response. Along with this change, Congress is also requiring FDA to submit a report on penalties, settlements or civil monetary penalties for failure to comply with requirements under PREA.

Pediatric Rare Disease Priority Review Voucher

The new law extends the rare pediatric disease priority review voucher program found in section 529 of the FFDCA through Sept. 30, 2029. This program expired on Dec. 20, 2024. The reauthorization further requires the additional user fee required to be paid under the voucher program to be paid “upon submission” of the application for which the priority review voucher is used. It also requires a study by the GAO on the effectiveness of the rare pediatric disease priority review voucher program, due not later than five years after enactment.

Orphan Drug Exclusivity

Section 6605 of the Consolidated Appropriations Act is intended to overturn the decision in Catalyst Pharms., Inc. v. Becerra,14 F.4th 1299 (11th Cir. 2021). Under that decision, the 11th Circuit held that orphan drug exclusivity applies to the entire rare disease or condition for which a drug was orphan designated, even if the drug was only approved for a limited use for or indication, such as a limited subpopulation with that disease. This section restores the FDA’s interpretation of orphan drug exclusivity, applying exclusivity only to the use or indication for which an orphan designated drug is approved. The amendment is retroactive and applies to all drugs designated and approved before or after enactment.

Abraham Accords Office: The new law also establishes a new “Abraham Accords Office” at the FDA, to be located in one of the Abraham Accords countries, to provide technical assistance to regulatory partners in Abraham Accords countries and to facilitate interactions between the FDA and interested parties in those countries.

Generic Drug Application Transparency

Section 6703 of the Consolidated Appropriations Act, “Increasing Transparency in Generic Drug Applications,” is intended to speed the approval of some generic drugs. This provision requires the FDA, for certain drugs, to inform a generic drug applicant if its generic drug is quantitively and qualitatively the same (also known as “Q1/Q2”) as the brand drug. The FDA requires certain generic drugs (parenteral (e.g., injectable), ophthalmic (for the eye), and otic (for the ear)) to be Q1/Q2 the same as the brand drug. A drug is Q1/Q2 the same if, qualitatively (or Q1), it has the same inactive ingredients as the brand drug and, quantitatively (or Q2), in concentrations that are within 5% of the concentrations of the brand drug. Under the new policy, if the FDA determines that a drug is not Q1/Q2 the same, it must disclose the ingredient(s) causing it to not be the same, and the amount of quantitative deviation, if any. Prior to enactment, the FDA’s policy was that it could not communicate this specific information to an applicant, which some generic manufacturers said required a “guessing game,” adding months or years onto the generic drug approval process.

Next Steps

With these long-stalled policies behind them, we expect Congress will continue to monitor activities at the FDA and the negotiation of medical product user fees, which must be reauthorized in 2027. We will continue to monitor developments on Capitol Hill and at the FDA.

---

THIS DOCUMENT IS INTENDED TO PROVIDE YOU WITH GENERAL INFORMATION REGARDING FDA PROVISIONS IN APPROPRIATIONS LEGISLATION. THE CONTENTS OF THIS DOCUMENT ARE NOT INTENDED TO PROVIDE SPECIFIC LEGAL ADVICE. IF YOU HAVE ANY QUESTIONS ABOUT THE CONTENTS OF THIS DOCUMENT OR IF YOU NEED LEGAL ADVICE AS TO AN ISSUE, PLEASE CONTACT THE ATTORNEYS LISTED OR YOUR REGULAR BROWNSTEIN HYATT FARBER SCHRECK, LLP ATTORNEY. THIS COMMUNICATION MAY BE CONSIDERED ADVERTISING IN SOME JURISDICTIONS.