Congress Passes Budget Omnibus without VALID Act

Medmarc

December 28, 2022

The U.S. Senate and House of Representatives have concluded their work on the budget for fiscal year 2023, sending the Consolidated Appropriations Act (CAA) to the White House for President Biden’s signature. The legislation excludes a bill that would give the FDA the statutory authority to regulate lab-developed tests (LDTs), an omission that the Advanced Medical Technology Association (AdvaMed) sees as a missed opportunity.

The vote to affirm the CAA was fairly close at 225 ayes and 201 nays, and the summary of the legislation describes FDA funding as consisting of $3.5 billion in discretionary funds, an amount that exceeds fiscal 2022’s total by $226 million. The agency will receive $3.1 billion in user fees, bringing the total amount of resources to $6.6 billion, with $50 million of that amount dedicated to projects authorized by the 21st Century Cures Act.

Scott Whitaker, President and CEO of AdvaMed, said the exclusion of the Verifying Accurate, Leading-edge IVCT Development (VALID) Act “is disappointing, especially given the strong bipartisan support for both the policy and principles of the proposal.” He stated that the reforms found in the VALID Act would provide a level playing field for lab-developed tests and non-LDT tests, “and set the stage for the next generation of innovation in the diagnostics industry, ensuring all tests are safe, effective, and work as intended.” Whitaker said AdvaMed and other stakeholders will continue to support the VALID Act in the next Congress.

In contrast, the Association for Molecular Pathology (AMP) spoke in support of the exclusion of the VALID Act from the omnibus, taking the position that the bill would have disrupted clinical laboratory services for patients. Mary Steele Williams, executive director of AMP, said the group would continue to work with Congress and other stakeholders in 2023 to “help ensure widespread patient access to high-quality, essential medical procedures.”

The CAA reauthorized two important medical device-related programs at the FDA, including the Humanitarian Device Exemption program through Oct. 1, 2027. The Pediatric Device Consortia program was also renewed. Among the other provisions of the CAA are an additional $195 million to the U.S. Patent and Trademark Office, which the summary states will help protect investment in innovation, and which will bring PTO’s budget authority to $4.25 billion. The International Trade Administration, which works to protect U.S. patents against infringement from outside-U.S. entities, will receive $625 million in fiscal 2023, an increase of $55 million.

The National Institutes of Health will receive a total of $47.5 billion, an increase of $2.5 billion over fiscal year 2022, while the National Cancer Institute will receive $7.3 billion of that amount, an increase of more than $400 million. The budget for the Advanced Research Projects Agency for Health (ARPA-H) will increase by $500 million to $1.5 billion, and the Department of Defense will receive more than $582 million for cancer research and $175 million for research into traumatic brain injury and psychological health.

Among the other items appearing in the CAA is a provision that clarifies that the FDA may issue Certificates to Foreign Governments for medical devices that are manufactured at a site located outside the U.S. if that establishment is registered with the FDA, the device is listed with the agency, and is legally marketed and imported into the U.S.

The CAA allows the FDA to regulate radiopharmaceuticals and medical imaging contrast agents as pharmaceuticals rather than as devices, a feature supported by the Medical Imaging & Technology Alliance. The legislation also forestalls cuts to clinical lab service fees under the Medicare program that would have reduced payment rates by as much as 15% for approximately 800 clinical laboratory services.

Enforcement activities will be more enabled by the CAA, thanks to increases in funding for several agencies. The Federal Trade Commission will receive a $54 million increase for a total of $430 million in fiscal 2023, while the Department of Justice will receive $38.7 billion, a boost of $3.5 billion.

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