FDA User Fees: What Have They Done for You Lately?

Marla Scarola
Note: The views expressed in this article are those of the author and do not necessarily represent those of his/her employer, GxP Lifeline, its editor or MasterControl, Inc.

The U.S. Food and Drug Administration (FDA) user fees have been a fact of life for regulated industry for nearly two decades. Over the past 20 years, the Prescription Drug User Fee Act (PDUFA) has allowed FDA to speed up review times for new drug applications (NDAs) and biologic license applications (BLAs), ultimately decreasing the amount of time it takes drugs and biologics to reach the market.

Under PDUFA V, the user fee for an application requiring "clinical data" is set at $1,958,800, a 6.3 percent increase from PDUFA IV.

PDUFA provides FDA with the authority to collect fees from pharmaceutical and biotechnology companies for the review of certain human drug and biological products. These fees have slowly increased with each iteration of the bill, allowing FDA additional resources to add new goals and objectives to the act.

Under PDUFA, the types of fees FDA has authority to collect are:

  • Application Review Fees: Any application with clinical data (other than bioavailability and bioequivalence studies) are assessed the full fee which, in 2012, is over $1.8 million. Applications that either have no clinical data or supplements that have clinical data (other than bioavailability and bioequivalence studies) are assessed at half of the full fee.
  • Establishment Fees: Submitted annually for each manufacturing facility listed in an NDA or BLA. If a facility is listed in more than one application, the fee is split between the applicants. The fee doesn't have to be paid if the establishment doesn't manufacture the drug product listed in the application in that fiscal year. The establishment fee is currently about $500,000.
  • Product Fees: Submitted annually and are paid for each prescription drug product, including a separate fee for each approved strength of a product. This fee is about $100,000.

These fees allow FDA to enable the introduction of safe and effective products to the market.

PDUFA's History

Prior to the enactment of PDUFA, the average NDA review time was 33 months and the slowest approval on record was an astonishing eight years. To correct this problem, in 1992, PDUFA I was authorized for five years and aimed to:

  • Eliminate the backlog in marketing applications that had been submitted to the agency and were awaiting a final review decision, and
  • Correct lag in new drug approvals in the United States

In order to do this, the application review fee was set at $100,000, resulting in nearly $330 million of user fees in the first five years. This revenue helped to fund the hiring of nearly 700 additional employees, which enabled the agency to decrease application review times from 30 months to 15 months.

In 1998, PDUFA I was reauthorized for another five years as part of the FDA Modernization Act. This version, PDUFA II, added a new goal: to increase communication with the industry. Included in PDUFA II were timelines for responding to requests for formal meetings with sponsors at set times during product development. It also provided time frames for FDA to respond to submissions from sponsors such as Special Protocol Assessments and a sponsor's response to a clinical hold. Under PDUFA II, an application with clinical data cost between about $250,000 and $315,000.

In 2002, Congress once again reauthorized the act to cover the period from 2003 through 2007. Along with enhancing some goals related to review times and communication with the industry, PDUFA III authorized FDA to use funds for drug utilization databases to independently evaluate product use for drugs with important safety concerns, in the first three years post approval. The reason for these types of evaluations was to determine whether the products were being used in a safe manner and to work with sponsors to address any concerns. Under PDUFA III, the fees for an application with clinical data started at around $530,000 and ended up at nearly $900,000.

Until September 30, 2012, FDA operated under PDUFA IV, which was authorized in 2007. Under this version of the act, FDA worked to enhance premarket reviews and expedite drug development. FDA committed to developing guidances, including a number on the design of certain types of clinical trials. There was a lot of focus placed on the postmarket drug safety system and identifying activities to modernize the process of pharmacovigilance. Some of these activities included expanding database acquisition to be used in postmarketing surveillance; looking at methodologies for collecting adverse event information on products through the life cycle; and taking a close look at how well RiskMAPS were working. To be able to accomplish all of this, the fees were once again adjusted for inflation and workload. Specifically, today's fees are over $1.8 million for an application with clinical data.


At the end of June, the House and Senate both passed the FDA User Fee Reauthorization Bill (S 3187), which includes the reauthorization of PDUFA, and on July 9, President Obama signed the bill into law. Major provisions of PDUFA V include:

  • A new generic drug user fee that includes fees for pending and new abbreviated new drug applications (ANDAs); ANDA supplements; drug master files; generic drug and active pharmaceutical ingredient facilities.
  • A biosimiliar user fee, which includes fees for meetings with FDA regarding biosimiliar development; biosimilar product applications and supplements; biosimilar investigational new drug (IND) submissions; biosimilar establishment fees; and an annual fee for biosimilar products.
  • Requirements for reporting drug shortages, and the development of a task force dedicated to preventing future drug shortages.
  • An additional five years of market exclusivity, priority review, and fast-track status for antibiotics to treat serious or life-threatening diseases.

Additional information on the PDUFA V reauthorization is available on FDA's website.

Under PDUFA V, the user fee for an application requiring "clinical data" is set at $1,958,800, a 6.3 percent increase from PDUFA IV.

Benefits of PDUFA

PDUFA has greatly impacted the U.S. drug industry over the past 10 years. Most notably, review times for medications have been reduced, the U.S. has emerged as a leader in the world drug market and communication has increased between FDA and the industry.

PDUFA has helped FDA bring medications to the market faster by reducing review times. The public is now benefitting from faster access to new medicines—we saw 35 new medicines approved in 2011 and 34 of these met their PDUFA target dates. Today, FDA also boasts shorter review times than the European regulatory agencies. Specifically, in the last five years, FDA reviewed priority drugs in six months, while it took more than twice this amount of time in Europe.

User fees have also helped to reverse the drug lag that used to exist in the U.S. Prior to PDUFA, a majority of new medicines were being approved outside the U.S., and we are now seeing the U.S. approving 40-50 percent of new active substances (Scrip NCE Review/Scrip Yearbook/Scrip Magazine, 1982-2005).

Furthermore, FDA's focus on improving communication with the industry in each iteration of PDUFA has paid off. Technical guidances have been published that help clarify the development and approval process and FDA has dedicated substantial time to meeting with sponsors during critical points of development.

Together, all of these improvements under PDUFA have significantly impacted overall product development and the pathway to the market. Simply put, they have increased the amount of input FDA provides during development, therefore increasing your confidence in your chosen development pathway. These factors decrease your submission and review times, therefore shortening overall time to market.

Marla Scarola is a Senior Consultant at The Weinberg Group Inc., a scientific and regulatory consulting firm based in Washington, D.C. Her work involves technical support for issues related to the development, regulation, and litigation of foods, pharmaceuticals and medical devices. She has experience in litigation support in the form of expert witness identification, medical record review and helping to construct scientifically-sound legal strategies. Ms. Scarola has assisted in the development of regulatory strategies, as well as the preparation and quality assurance reviews of regulatory submissions in both the United States and Europe. Additionally, she has conducted onsite audits to evaluate the quality of bioanalytical and clinical data in accordance with FDA criteria. Marla can be reached at marla.scarola@weinberggroup.com.