PDUFA Reauthorization: Almost There

Much to the applause of drug makers and those who invest in them, the Prescription Drug User Fee Act (PDUFA) reauthorization looks like it could come out of a Congressional conference committee as early as this week. That should give lawmakers plenty of time to pass the legislation before the old PDUFA expires at the end of this month.

Congressional staffers have confirmed that the bill that comes out of conference committee won't contain any regulations to approve follow-on biologics. That's good news for pretty much all of the drug and medical device makers, as the additional regulations would have resulted in a lengthy delay.

I'm sure generic drug makers such as Dr. Reddy's Laboratories (NYSE: RDY  ) would have loved to have the approval stuck onto must-pass legislation, but their battle with biotech companies including Genentech (NYSE: DNA  ) and Amgen (Nasdaq: AMGN  ) isn't over -- someday it will have its own day on the congressional floor.

The delay in reauthorizing the PDUFA is already having an effect on the agency. On Friday, FDA Commissioner Andrew von Eschenbach sent a memo to the staff stating that 2,000 of them could get layoff notices if Congress doesn't act soon. As I've said before, it's not just the deflating of morale from layoffs that could hurt the FDA -- staffers might take the notices seriously and find other jobs. A smaller workforce at the FDA could cause serious delays for drug companies.

As an investor, you have to wonder about the recent delays in decision-making by the FDA -- witness the paper cut it gave ZymoGenetics' (Nasdaq: ZGEN  ) Thrombin, as well as Adolor (Nasdaq: ADLR  ) and partner GlaxoSmithKline's (NYSE: GSK  ) delayed permission to restart their clinical trials.

If you're an investor in drug or medical device companies, now might be a good time to send a note to your senators and representatives, encouraging them to get the FDA funded as soon as possible.