FDA effectively spends prescription drug user fee collections

After conducting its 2017 review of FDA policies and procedures and financial records related to the FDA’s use of prescription drug user fee collections, the Office of Inspector General (OIG) concluded that, overall, the FDA spent prescription drug user fee collections appropriately. Since the passage of the Prescription Drug User Fee Act (PDUFA) of 1992 (P.L. 102-571), prescription drug user fees have significantly helped in expediting the drug approval process and eliminating backlogs of pending human drug applications. The average approval time for an application prior to the PDUFA was two years (OIG Report, A-05-16-00040, September 2017).

The PDUFA

The PDUFA, which must be reauthorized by Congress every five years, authorizes the FDA to collect user fees from pharmaceutical and biotechnology companies that are seeking FDA approval of certain human drug and biological products to expedite the review of human drug applications. The user fees provide the FDA with resources, including the ability to hire more reviewers and support staff and upgrade information technology systems. According to the OIG, these resources help the FDA meet its goal of timely review of human drug and supplement applications.

Inadequate documentation

The OIG reviewed $796,065,980 in prescription drug user fees reported for October 1, 2014, through September 30, 2015, and determined that the FDA did not have adequate supporting documentation for $6,402 in travel expenses, made a duplicate payment for airfare of $1,213, and overpaid a traveler $587. The OIG attributed the inadequate documentation to oversight by FDA staff rather than a systemic issue. Therefore, the OIG made no recommendations.

FDA user fees reauthorized by House vote

In a bipartisan action, the House of Representatives today passed H.R. 2430, the FDA Reauthorization Act (FDARA) of 2017, by voice vote. FDARA reauthorizes the FDA’s user fee programs for prescription drug, medical device, generic drug, and biosimilar biological products. The current user fee programs are set to expire in September 2017 and account for almost a quarter of the FDA’s funding.

In April 2017, the House Energy and Commerce Committee, along with the Senate Health, Education, Labor and Pensions (HELP) Committee, released a discussion draft of the Food and Drug Administration (FDA) Reauthorization Act of 2017, reauthorizing the FDA’s user fee agreements (see Discussion draft of FDA user fee amendments is on the table, Health Law Daily, April 18, 2017). The draft followed a series of hearings examining the four individual user fee programs – the Generic Drug User Fee Amendments (GDUFA) and the Biosimilar User Fee Act (BsUFA), the Prescription Drug User Fee Act (PDUFA), and the Medical Device User Fee Amendments (MDUFA) (see HELP Committee hears ardent support for next round of user fee agreements, Health Law Daily, April 4, 2017 Committee holds optimistic hearing on medical device fees, Health Law Daily, March 29, 2017; PDUFA VI reauthorization would aid 21st Century Cures Act implementation, Health Law Daily, March 23, 2017; and User fee program reauthorizations necessary for product development, Health Law Daily, March 3, 2017).

FDARA is currently before the Senate (see HELP committee advances FDA user fee agreements to Senate floor, Health Law Daily, May 12, 2017).

HELP Committee hears ardent support for next round of user fee agreements

Four witnesses expressed their support of the continuation of FDA user fee agreements before the Senate Committee on Health, Education, Labor, and Pensions (HELP) on April 4, 2017. These user fee agreements cover prescription drugs, biosimilar drugs, generic drugs, and medical devices (PDUFA, BDUFA, GDUFA, and MDUFA, respectively), requiring manufacturers to pay fees that fund the FDA’s approval processes. According to the witnesses, continuing to impose these fees is vital to ensuring the successful development and approval of future therapies.

Testimony

David Gaugh, a senior vice president of the Association for Accessible Medicines (AAM), emphasized the necessity of the partnership between the pharmaceutical industry and the FDA. Although there has been significant growth in the generic and biosimilar industries, he reminded the committee that the FDA is underfunded and depends on the user fees to speed up the approval process. The AAM also believes that the GDUFA program will incentivize competition by reducing the number of FDA review cycles, removing barriers to drug approval for companies and access to therapies for patients.

Scott Whitaker, president and CEO of the Advanced Medical Technology Association (AvaMed), felt the same way about MDUFA. He believes that the decline in the number of medical technology startups and venture capital investment in recent years is due to the length of time to develop devices, seek approval, and enter them into the stream of commerce. Whitaker noted the MDUFA IV agreement builds upon the provisions in the 21st Century Cures Act (Cures Act) to continually improve the efficiency of the approval process while maintaining strict standards for safety and effectiveness.

Cynthia Bens, vice president at Alliance for Aging Research, and Kay Holcombe, senior vice president at Biotechnology Innovation Organization (BIO), also expressed their support for the programs. Bens lauded Congress for allowing patient organizations to participate in the user fee negotiations, and expressed thanks to the FDA for allowing the Alliance to provide feedback throughout the negotiating process. She highlighted strengthening the FDA’s workforce, increased patient-focused drug and device development methods, and advancing clinical trials as positive outcomes from the user fees. Holcomb also stressed the necessity of integrating patient input into the decision-making process, noting that patients are best able to weigh in on the risks and benefits of treatment. Holcombe believes that the new round of user fee agreements will provide better program sustainability and financial transparency, allowing the FDA to better manage personnel, ramp up approval timelines, and develop innovative clinical trial designs.