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Back To Vidyya User Fees For Faster Drug Reviews:

Are They Helping Or Hurting The Public Health?

A decade ago, the Food and Drug Administration was an obstacle to the delivery of novel drugs to patients because its drug review activities were under-funded and the staff couldn't review products in a timely way. The review of New Drug Applications, the so-called NDAs that companies file on all new pharmaceuticals they want to market, took unacceptably long to process--about two-and-a-half years.

Today, FDA staff review applications for new drug products in a year and as quickly as six months or less for priority drugs. The review staff increased by some 600. Better information and management systems were put in place to ensure uniformity in the quality and sophistication of the analytical reviews across the divisions that handle the different types of pharmaceuticals and biologics.

The difference: user fees.

In 1992, Congress, with the support of the administration, industry, and patient groups, passed a law that gave FDA the authority to collect user fees from manufacturers seeking marketing approval. Any time a company wants to submit a new drug or biologic to the agency so the product can go on the market, the company must pay a fee to support the review process. In addition, companies pay annual fees for each manufacturing establishment and for each prescription drug product marketed. Previously, taxpayers alone paid for product reviews through budgets provided by Congress. In the new program, industry provides the cash in exchange for FDA agreement to meet drug-review performance goals, which emphasize timeliness.

graph illustrating FDA funding for drug review versus other activities[d]

Companies supported the legislation because they wanted more predictable and faster reviews. While FDA's review standards remained unchanged, companies could get their products on the market faster if they met FDA's benchmarks. Patients supported it because they would get access to needed new medications faster. Congress supported the experiment because it could be undertaken without costing additional appropriations. And FDA's review divisions finally received the help they needed to do their job efficiently and effectively.

The user fee program worked so well that Congress renewed it in 1997 for another five years. Now, with expiration on the horizon, FDA wants to publicly evaluate a program that, after eight years, has reached a certain maturity but also has generated controversy. On Sept. 15, 2000, the agency will begin a public discussion to consider the changes that may be needed in any renewal of the Prescription Drug User Fee Act. The act, frequently referred to as PDUFA (pronounced pah DEW fah), created the user fee program. (For the specifics about the public meeting and other opportunities to comment, see "The PDUFA Public Meeting.")

"We want to understand from all of our constituents what they think about user fees," says FDA Commissioner Jane E. Henney, M.D.

Most observers expect the discussion to be lively. While the agency believes that the program enjoys support by many constituencies, FDA's leaders recognize that the program has raised sensitive questions and believe that, as constructed, it has some shortfalls. Views on the value and appropriateness of industry funding of the agency's review function vary widely, from strong industry support to complete rejection by some critics.

"By and large, our experience with PDUFA has been quite positive," says Alan Goldhammer, Ph.D., associate vice president of science and regulatory affairs at Pharmaceutical Research and Manufacturers of America (PhRMA) in Washington, D.C. PhRMA is a trade organization representing the nation's major pharmaceutical companies. "The time to approval in the review process has been coming down markedly since we instituted the program in 1992," he says. "At that time, it was like 30 months, incredibly long. Now, it is down on average to about 11 months to get a new drug through the process."

Some consumer groups, however, have been less dazzled by PDUFA's success in speeding up drug reviews. "It's a terrible system," says Sidney Wolfe, M.D., director of Public Citizen's Health Research Group in Washington, D.C. "The review of new drugs turns out to be too important to leave to user fees." He compares the industry's financial support for FDA's review system to charging criminals user fees to pay for the police department.

Not surprisingly, FDA's leadership falls somewhere in between. "Everyone is impressed with the speed of new drug reviews," Commissioner Henney says, "but the truth is, the program is barely surviving because of the way it was designed. We don't have the resources to do the things we believe are essential, such as adverse event reporting, because they were not part of the process" supported by PDUFA funds.

While everyone agrees PDUFA has fulfilled the initial intent of improving the timeliness of drug and biologic reviews, nearly everyone has complaints or concerns about some aspect of the program. For its part, the agency needs to preserve the level of resources provided by user fees. Yet FDA believes it's time to add critical activities, such as adverse event reporting and discussions with companies before applications are filed, to the functions supported by user fees. The growing debate means the public will have plenty to consider and discuss during the public meeting.

An Independent Review

A major concern focuses on the perceived impact of industry money, and there are some who express apprehension about the arrangement. In its report from the Government Performance Project in March 2000, the Maxwell School of Public Administration at Syracuse University concluded that the "emphasis on speed of industry-funded drug reviews raises concerns."

Some critics have publicly worried that making the agency dependent on company funding diminishes the agency's independence and objectivity. In short, they think FDA is in the industry's pocket. Wolfe's group, for example, argued before Congress that funding FDA's drug reviews with industry money has "lowered U.S. drug safety standards, arguably once considered the world's best, to pre-1938 levels [before] the Food, Drug and Cosmetic Act was passed."

FDA does not believe that review criteria have been compromised, but understands that this is a perception problem, one it hopes to confront at the September meeting.

No matter what the perception about the funding source, the agency believes it has made the drug and biologics review process more efficient without lowering drug review standards. But that claim, too, has been controversial. In the 10 months between September 1997 and June 1998, FDA directed the withdrawal of five approved pharmaceuticals from the market because of unexpected, severe adverse events. The withdrawn drugs included a diet drug combination, a calcium channel blocker for treating hypertension and chronic stable angina, a non-steroidal anti-inflammatory drug, and a once-widely used antihistamine. Some of these were approved before user fees.

Agency critics point to this spate of drug withdrawals as evidence that the accelerated reviews under the user fee program have led to sloppy analyses and increased risk to the public. To determine whether the agency was "maintaining adequate quality control over its premarketing review decisions," Henney established a task force in 1999 to investigate the concern. By comparing a General Accounting Office study of drugs approved before 1990 with new pharmaceuticals approved under the user fee system between 1994 and 1997, the task force concluded "that there has been no increase in the rate of drug withdrawals in the United States" since the user fee program began.

As much as anything, the need to remove some drugs from the market after they go into widespread use reflects the limitations of the clinical studies on which drug approvals are based. Typically, new pharmaceuticals are tested in less than 5,000 human volunteers during development. That provides enough information to identify fairly common side effects, but does not turn up the rare, but sometimes severe, adverse effects seen only when millions of people use the drug. The agency relies on its post-market surveillance system to identify these uncommon side effects. When a problem is discovered, FDA can take a wide range of actions to protect the public health, from notifying health-care professionals about the problem or changing the instructions on how the drug should be used, to, in very serious cases, removing it from the market.

A Balanced Budget

Congress created FDA's user fee program to help solve the agency's chronic resource shortages. In the 1992 version of the act, neither Congress nor the industry envisioned user fees becoming the principal source of funding for the FDA drug-review program. In fiscal year 2000, for the first time, that may change: user fees and appropriated dollars are approaching equilibrium, and that concerns Commissioner Henney. (See "Growth of User Fees to Support Drug Review.")

"There is a feeling that the public will not tolerate having the drug review program more than 50 percent user fee-funded," Henney says. "Others say that the fact that industry funds any of it is bad."

Part of the problem has been overall congressional appropriations: they haven't kept pace. "FDA is not receiving appropriated dollars to balance PDUFA dollars," says Robert Byrd, FDA's deputy commissioner for management and systems. "Congress has increased agency funding amounts, but only for specific initiatives. FDA has lost roughly $200 million over the past six years because of having to absorb inflation and pay raises that have not been funded." Because funding failed to keep up, the agency has actually lost people because it was forced to reduce some of its staffing to cut costs.

"We share a concern with FDA about the current balance between the user fee portion and the appropriated portion of the review process," PhRMA's Goldhammer says. As industry funding approaches half of the review budget, "it has led to a perceptual issue that industry is paying for the review process and that the American public, through its tax moneys, is not. We would hope that can be dealt with in some way because we don't want there to be the perception that this is an industry-driven program."

Wolfe's solution to the perception problem is simple: Eliminate user fees. "If industry really wants FDA to have an adequate budget," he says, "it should lobby hard for a greatly expanded FDA budget through the normal congressional appropriations process."

Balancing revenue streams between public and private sources, however, does not cause everyone heartburn. In some other countries, all drug regulation costs are funded by industry. And in the United States, regulatory agencies as diverse as the Nuclear Regulatory Commission, the U.S. Patent and Trademark Office, and the Securities and Exchange Commission receive all, or nearly all, of their funding from regulated industries.

"We are not the only government agency that relies on user fees," says FDA Senior Associate Commissioner Linda Suydam, D.P.A. "But the question is, does that in any way jeopardize FDA's integrity and independence? We have no evidence of this, but we are using the public meeting to make sure it doesn't. We want everyone to engage in the public debate."

For FDA, another problem is the sense of "haves and have-nots" within the agency. The review programs supported by user fees have more resources, while other parts of FDA, divisions with important public health missions, often go without.

"User fees distort the distribution of labor at the FDA in that it piles up a large amount of funds for reviewing new drug applications," Wolfe says, "but does not provide funds for other essential public health functions like reviewing drug advertising, except at the beginning, or adequate funds for the increased load in post-market surveillance."

FDA's budgetary statistics show that as user fees flowed into the agency, appropriations to support other activities have remained unchanged or have declined. As a result, the percentage of FDA activities and resources devoted to drug reviews has increased from 17 percent before Congress passed PDUFA to 28 percent in fiscal year 1999. Meanwhile, funding for other programs, from color additives in foods to post-market surveillance to manufacturer and import inspections, has drifted downward.

Balancing Benefits and Costs

Even in user fee-funded operations, the additional resources have come at a cost. Industry insisted on performance goals and standards that resulted in increased pressure to meet deadlines, increased tracking and reporting requirements and a sense of micro-manage- ment. For the Center for Drug Evaluation and Research and the Center for Biologics Evaluation and Research, the agency's primary review centers for drugs and biological products, PDUFA has been a Faustian bargain.

On one hand, says CDER director Janet Woodcock, M.D., the user fee program provides enough staff to meet the performance deadlines and more scrutiny during drug development, but the intense schedules "create a sweatshop environment that's causing high staffing turnover." Highly trained scientists and experts want to do more with their careers than crank out reviews, so many leave within three years, preventing the agency from building an institutional memory of previous reviews.

Staff turnover can be disruptive for the industry as well. "When your technical reviewer changes," Suydam says, "it throws the process into a tizzy."

In addition to the current impacts of the user fee program on FDA's activities, Suydam worries about the future. Several recent studies by the University of California at San Diego, Anderson Consulting and PriceWaterhouseCoopers have tried to look into the future and predict how the drug development process will evolve and how FDA will need to respond.

The studies predict that the pharmaceutical industry will quadruple the annual output of new drugs while reducing development time to market by one-third. They also project a 65 percent increase by 2008 in the number of so-called new molecular entities (NMEs) moving into early clinical development. NMEs are chemically unique drugs that are completely different than any other drug on the market. These compounds require additional scrutiny since there are no similar drugs to which they can be compared.

Once an NME is approved, companies will create "fast-followers" with related compounds that try to target different patient segments. For example, a fast-follower might have a similar therapeutic effect but reduced side effects.

Computer technologies will improve the predictive modeling of new drugs, and computer simulations will optimize clinical trial design and increase the amount of clinical information collected. Finally, information technologies will streamline electronic submissions to the agency.

To handle these changes, FDA "regulators will assume an expanded role as knowledge integrators exerting increased influence on every phase of new product development," according to the studies. To make this work, FDA reviewers will need to spend more time advising companies about protocol design and making themselves available for an ongoing dialogue throughout the drug development process.

In addition, the studies concluded, "regulators face major challenges in staying current with scientific advances, managing ever-increasing information and communicating more effectively." FDA's staff will need "new strategies to seamlessly manage growing information on a product over its life cycle."

FDA's management sees serious challenges ahead, especially if budgetary resources remain inadequate. "What these studies have envisioned for FDA," Suydam says, "is nowhere near anything we can do now."

Whether user fees will play a part in addressing these future problems remains unclear.

The PDUFA Public Meeting

FDA's public discussion of the Prescription Drug User Fee Act will take place at 9 a.m. on Sept. 15, 2000.

U. S. Department of Labor Auditorium
200 Constitution Ave. N.W. (3rd and C Street entrance), Washington, D.C.

Written comments may be submitted to the Dockets Management Branch (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rockville, MD 20852.

Look for more information on how to comment, how to request time to speak at the public meeting, and other aspects of PDUFA and the public meeting on FDA's Website at

Or call 301-827-3409, fax 301-594-6777.

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Editor: Susan K. Boyer, RN
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