PDUFA: The most important health policy you haven’t heard of
Right now, there’s a big health policy battle brewing on the Hill. It’s not about Obamacare. It has nothing to do with repeal — and everything to do with PDUFA, a very important law with a very funny name.
Try and get past the quirky acronym, which sounds more like a children’s cartoon character than a crucial piece of health policy. Because PDUFA is actually quite serious. It stands for the Prescription Drug User Fee Act. It generates the vast majority of the federal government’s budget for reviewing new medications. And so it plays a huge role in determining how safe our health-care system is, and how quickly we get access to new drugs.
Here’s the quick backstory on PDUFA: It dates back to the early 1990s, when pharmaceuticals were getting frustrated with the long waits for drug approvals. It took about two years, and the FDA said it was largely a matter of resources: They just didn’t have enough staff to move faster.
Enter, PDUFA: a 1993 law that assessed drug makers a “user fee.” Pharmaceutical companies that use FDA’s review services, those that wanted to see the process expedited, would help foot the bill. And with that, PDUFA was born.
Over the past two decades, the new funding stream from pharmaceuticals has reduced FDA drug review times by nearly half. The agency added about 200 new staff members. A 2002 Government Accountability Office report found that user fees increased new drug reviewers by 77 percent in the first eight years of the act. The average approval time dropped from 27 months to 14 months over the same period.
Drug companies’ user fees have, meanwhile, have become a crucial source of FDA funding: They made up 62 percent of the country’s $931 million drug review budget in 2011. Pharmaceuticals still aren’t thrilled with waiting a year to get products on the shelf in the United States — review times in Europe, for example, tend to be much shorter — but there’s little argument that the process has sped up with the introduction of user fees.
This brings us up to the current debate over PDUFA: In order for those funds to keep flowing to the Food and Drug Administration, Congress has to reauthorize the law by September. So today, the House Energy and Commerce Committee heard hours of testimony on what fees, exactly, they should assess.
The FDA has spent two years now holding various hearings and stakeholder input groups on what they should do. And still, there’s a lot to debate: The FDA has a proposal, for example, to assess a new user fee on generic drug makers, who — as lower-profit companies — traditionally have been exempt. Pharmaceuticals, meanwhile, want to see specific modernizations made to the drug review process. They want to make sure they’re getting bang for their user fee buck. Speed is at the top of their wish list.
But here’s the funny thing: Among all the players on PDUFA, there’s pretty widespread agreement that this is a fee that pharmaceuticals should be paying. It’s a law that nearly everyone, from Republicans to Democrats to industry, thinks is working. PhRMA’s David Wheadon describes it as a “great success for patients.”
The question, now, is whether Congress can keep the law working. PDUFA doesn’t make many headlines. But it’s the one piece of must-pass health policy legislation in 2012. Legislators have about five months, and a lot of details to sort out.