Who Supports FDA User Fees?

When you go to the Department of Motor Vehicles and pay your fee to register your car, are you allowed to negotiate with the DMV as to how the agency will use your fee? Of course not. So why is the drug industry allowed to negotiate with the FDA about how the agency will use the money it collects in fees paid for new drug applications?

We’ve written several posts already about the Prescription Drug User Fee Act (PDUFA), through which the FDA collects money from drug makers in exchange for faster reviews of their new products. (Go here for a list of past PDUFA posts, or check out the new white paper on PDUFA here.) We and many other members of the medical and public health have raised concerns about impact of PDUFA on drug safety; Christopher Moraff summarized them neatly in a recent American Prospect article:

User fees are not uncommon in federal agencies, but critics of PDUFA say that what distinguishes it is an unprecedented level of collaboration between the FDA and the pharmaceutical industry. Through protracted fee negotiations, the industry has a say in everything from how the money will be spent to setting up timetables for a drug’s approval — the equivalent, according to one former chief editor of The New England Journal of Medicine, of “putting the fox in the chicken coop.”

So, who does support the user fee system? None of the usual suspects, it turns out.

Here are the groups who’ve recently come out in favor of fully funding the FDA through Congressional appropriations rather than user fees from drug companies:

Former FDA Commissioners: At a public discussion held last February at George Washington University, four former FDA Commissioners – Frank E. Young, MD, PhD (Commissioner 1984 – 89), David A. Kessler, MD (Commissioner 1990 -97), Jane E. Henney, MD (Commissioner 1999 – 2001) and Donald Kennedy, PhD (Commissioner 1977 – 79) – all stated that they’d rather see FDA funded through appropriations rather than user fees.

A group of 22 experts on drug safety and regulation: Last month, a group of 22 experts on drug safety and regulation – including four members of an Institute of Medicine Panel that recommended major changes at the FDA and six former top staff of FDA or the Department of Health and Human Services – issued an open letter to lawmakers in which we urged them to carefully re-assess the system in which drugs are developed, tested, approved and followed post-approval. As part of this, we urged lawmakers to replace the current user fee model with increased direct appropriations for the FDA.

Free market advocates: In an op-ed in today’s Wall Street Journal (sub only), Richard A. Epstein of the Hoover Institution states, “It would be better if Congress instead increased its direct appropriation to an FDA that it saddles with ever more obligations.

Drug manufacturers: In one of her recent Bloomberg/Washington Post columns, Cindy Skrzycki reported, “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.”

No one seems to disagree with the proposition that the FDA, and the country, would be better off without PDUFA. Need more convincing? Dr. Jerry Avorn, one of the signers of the letter I describe above, penned an editorial in the New England Journal of Medicine earlier this month, describing some of the reasons why major change to PDUFA is needed:

There were problems with the user-fee approach from the beginning. The original legislation required that no portion of companies’ fees (about half a million dollars per drug reviewed) could be spent to evaluate drug side effects after approval — the time when many important safety concerns become apparent. The new law mandated strict deadlines for approval decisions. To comply, the FDA reassigned staff scientists to work on new drug applications, pulling the scientists from other regulatory activities. Several were taken from the Office of Drug Safety, which conducts adverse-effects surveillance — a move that helped to shrink and demoralize that unit.

User fees now account for more than 40% of the budget of the FDA division that reviews new drug applications (see bar graph). Colleagues at the FDA have told me of a worrisome side effect of PDUFA: the growing sense that the organization is accountable to the industry it regulates. One FDA scientist who was often criticized for being too concerned about drug-risk data was told by his supervisor to remember that the agency’s client was the pharmaceutical industry. “That’s odd,” he replied. “I thought our clients were the people of the United States.” Other agency staffers report pressure to rush through the drug-approval process, although the FDA’s regulatory review times are already among the shortest in the world. Evidence is accumulating that this emphasis on speed may lead to problematic decision making. Data analyzed by Daniel Carpenter, a professor of government at Harvard University, suggest that drugs approved just before PDUFA deadlines are far more likely than those approved at other points in the review cycle to cause safety problems after they are in widespread use.

Most federal regulatory agencies do not derive such a large proportion of their operating budgets from the industries they oversee. Nor is it typical for such relationships to be negotiated so cozily between the government and the trade group representing the industry. Yet the current FDA proposal for PDUFA renewal was developed in concert with the Pharmaceutical and Research Manufacturers of America. No similar influence has been exerted by any other group.

Over the past few months, former FDA Commissioners, public health advocates, free market advocates, and drug manufacturers have all weighed in against continued reliance on user fees. So, who continues to support them? No one. As far as I can tell, inertia and the difficulty of coming up with $400 million in this year’s budget are the primary reason for PDUFA’s survival.

Understanding that it’s hard to come up with the additional appropriations right away, we propose in our letter to lawmakers that Congress extend the current version of PDUFA for one more year and spend that time figuring out how to fully fund the FDA through taxpayer dollars. Our nation’s health is worth the expense.

David Michaels heads the Project on Scientific Knowledge and Public Policy (SKAPP) and is Professor and Associate Chairman in the Department of Environmental and Occupational Health, the George Washington University School of Public Health and Health Services.