FDA's User-Fee Habit

By Cindy Skrzycki
Tuesday, April 3, 2007

For the past 15 years, pharmaceutical companies have poured $2 billion into a program that helps finance the U.S. Food and Drug Administration, allowing the FDA to become one of the world's fastest drug-approval agencies.

That influx of money from the industry is under fire, however, from public-interest groups, academics and former FDA officials. They want to sever, or at least cut back, the financial connection between the agency and drug companies.

The current five-year Prescription Drug User Fee program expires at the end of September. It is up to Congress to reauthorize the program or risk the loss next year of about $400 million in industry funding for the FDA.

The program "served a useful purpose 15 years ago, but now it is part of the drug-safety problem rather than part of the solution," said David Michaels, director of the Project on Scientific Knowledge and Public Policy at the George Washington University School of Public Health and Health Services in the District.

The legislation was passed in 1992 to fix serious problems at the FDA: The United States lagged behind other countries in new drug therapies, especially for diseases such as AIDS, and the drug-review process was beset by chronic understaffing and delays. The FDA said some reviewers didn't even have computers.

The user-fee program has been reauthorized twice since then. As it now works, the industry and FDA negotiate the terms of the agreement, hold a hearing, get public comment and then submit a proposal to Congress for approval.

Industry fees pay for more than half the drug-review program, with funds appropriated by Congress making up the rest. In fiscal 2006, Congress appropriated $219 million for the program, and user fees came in at $304 million.

In a March 14 letter, academics and former FDA officials wrote the heads of the two committees in Congress that will consider reauthorizing the law. They said user fees compromise safety and give the perception "that industry has become the primary client of FDA rather than the American people."

The group supports direct congressional appropriations to fund the agency "to assure FDA's independence and commitment to drug safety."

Industry, congressional insiders and top officials at the FDA said that approach is politically unfeasible and would be harmful to the agency.

Over the years, the Prescription Drug User Fee Act programs "have resulted in significant public health gains by making safe and effective, yet increasingly complex, medications available to patients faster than was previously possible," said FDA Commissioner Andrew C. von Eschenbach in a statement. "User fees have allowed FDA to become more modern and to build on its reputation as the world's leading drug-regulatory agency."

FDA officials declined to be interviewed on the issue.

All sides agree it's a historic opportunity to consider the effects of the program at a time when drug-safety issues are paramount, the long-term consumption of prescription drugs has surged and cutting-edge medications will no doubt continue to emerge.

Scott Lassman, senior assistant general counsel for the Pharmaceutical Research and Manufacturers of America, the industry's lobby group, said drugmakers would be happy to have Congress fully fund the FDA. Yet Lassman added, "That is not going to happen, so we are willing to step up."

Since user fees were put in place, the FDA has more than doubled its drug-review staff, to 2,691 as of fiscal 2006 from 1,227. The result, according to the FDA, is that 1,220 new drugs have hit the market, addressing heart problems, psychiatric disorders, cancer and cardiovascular disease, since 1992.

Drug companies and the FDA recently proposed to Congress that the industry payment for fiscal 2008 be about $393 million.

The money that would be spent would probably be directed to post-market surveillance, improved computer technology and access to medical databases. It would also fund changes in a program that requires manufacturers to report problems with drugs on the market to the FDA.

In return for the additional resources, the FDA must meet performance goals. These stipulate that 90 percent of priority drug applications be decided within six months and those for standard drugs within 10 months. Before the legislation was first approved in 1992, review could take up to 30 months.

The FDA has said it has met or exceeded those goals. The agency's efficiency doesn't impress critics.

Peter Lurie, deputy director of Public Citizen's Health Research Group in Washington, a public-interest organization that promotes medical safety, said the funding arrangement has turned the FDA's relationship with industry into a partnership.

"The agency has developed an addiction to user fees," Lurie said. "They can ask industry for a little more, and industry is willing to fork over more for more control."

Other critics referred to research recently published by Harvard University that showed the agency often needs more time to make a decision about a new drug but wraps up the review to meet its performance goal. That sometimes leads to problems after the drug is on the market, it said.

"The deadlines create real pressure not to come up with questions at the last minute," said Susan Wood, former director of the FDA Office of Women's Health. Wood resigned in 2005 over a delay in approving the over-the-counter emergency contraceptive known as Plan B. She now heads an FDA project at GWU.

Other criticisms center on a spending limitation on post-market surveillance, a provision the FDA and industry have agreed to lift.

The agency said the restriction resulted in a lack of money to monitor drugs such as Merck's Vioxx painkiller, which has been taken off the market.

A 2006 report by the Institute of Medicine of the National Academy of Sciences said the agency should focus on "a culture of safety," where drugs are evaluated during their entire life cycle and the agency has the freedom to spend the money as it sees fit.

The reauthorization legislation, which may be considered early this month by the Senate Committee on Health, Education, Labor and Pensions, will be reviewed along with a measure focusing on post-market safety. It was introduced by Sens. Edward M. Kennedy (D-Mass.) and Michael Enzi (R-Wyo.). Kennedy is chairman of the committee.

Cindy Skrzycki is a regulatory columnist for Bloomberg News. She can be reached atcskrzycki@bloomberg.net.