For Pharmaceuticals:

PDUFA IV: Pros and Cons of the Proposed FDA User Fee Increase

By Lane Hirning

FDA Proposes PDUFA User Fee Increase to Boost Drug Safety

How much is drug safety worth? Most people would agree that it is priceless. But for the pharmaceutical industry, the price tag is about $392.8 million in annual user fees. This is the projected amount that the FDA will collect if Congress approves the agency’s proposal to implement a 22 percent increase in the annual user fee from the Prescription Drug User Fee Act (PDUFA) program. The FDA made this and other proposals to Congress in connection with the next reauthorization of PDUFA, scheduled for October.

“The proposed recommendations would support significant improvements in FDA’s ability to monitor and respond to emerging drug safety issues, as well as continuing FDA’s commitment to scientific improvements and streamlining the drug approval process,” said Mike Leavitt, secretary of the U.S. Department of Health and Human Services in a public statement on Jan. 11.

The FDA user fee program, which began in November 1992, generates additional funds for conducting human drug reviews. Congress reauthorized the program in 1997 and in 2002. Hence, the law is commonly known as PDUFA I, II, and III.

With the help of PDUFA collections, the FDA has dramatically reduced the review time — from years to months — for drugs and biological medications. For example, the agency now completes the review of 90 percent of all priority original new drug applications (NDAs) and biologic license applications (BLAs) within six months. Ninety percent of standard NDAs and BLAs are reviewed within 10 months; 90 percent of resubmitted NDAs and BLAs are reviewed within two to six months.

Pros and Cons

Just like anything else in life, PDUFA IV has pros and cons. Let’s discuss some of them.

  • Drug Safety. There’s no doubt that the consumer will benefit from the FDA’s proposal, which would allow the agency to hire an additional 82 employees to perform post-market drug safety work. The FDA has also proposed eliminating a statutory provision under which PDUFA fees may be used to assess safety issues only during the first three years after a product’s approval. This means the FDA would be able to more closely monitor drug products for a longer period of time. For consumers worldwide, this is great news. For pharmaceutical companies, the longer and more intense post-market scrutiny may sting, but this is still good news because ultimately, safe drugs are successful drugs.
  • TV Ads. The FDA wants to create a separate new user fee program for companies seeking FDA advisory reviews of their direct-to-consumer television advertisements. Since nobody wants to watch TV commercials that present exaggerated or false claims, this could only be good news for the consumer. For drug companies, the new fee may be a bitter pill to swallow at first, but this move should help reduce the number of Warning Letters from inaccurate claims. So, it’s still good news for drug companies.

  • Electronic Environment. A part of the FDA’s proposal is to improve its information technology activities for human drug review by moving toward an all-electronic environment. This would mean more efficient reviews. But only if pharmaceutical companies follow the FDA’s lead and automate their processes and submissions. So, in the short term, this could mean additional expense for pharmaceutical companies. In the long term, it would mean speedier reviews and shorter time to market.
The proposed FDA user fee increase is likely to be an issue for small companies and orphan-drug developers. But considering that pharmaceutical companies now pay about $900,000 per NDA, the proposed increase is perhaps a drop in the bucket for many companies. Bottom line: consumers and drug companies alike want to see faster delivery of high-quality medications to more patients.

About the Author

Lane Hirning, a product manager at MasterControl Inc., is a pharmacologist with extensive IT experience in the pharmaceutical industry.

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FDA Links

  • FDA Proposes PDUFA User Fee Increase

  • Prescription Drug User Fees

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