The Prescription Drug User Fee Act (PDUFA): Background and Issues for PDUFA IV Reauthorization
The Prescription Drug User Fee Act (PDUFA):
History, Reauthorization in 2007,
and Effect on FDA
Updated June 27, 2008
Specialist in Drug Safety and Effectiveness
Domestic Social Policy Division
The Prescription Drug User Fee Act (PDUFA):
History, Reauthorization in 2007, and Effect on FDA
In 1992, Congress passed the Prescription Drug User Fee Act (PDUFA I) to give
the Food and Drug Administration (FDA) a revenue source — fees paid by the
pharmaceutical manufacturers — to supplement, not replace, direct appropriations.
The impetus behind the 1992 law stemmed from the length of time between a
manufacturer’s submission of an FDA New Drug Application (NDA) or Biologics
License Application (BLA) and the agency’s decision on approval or licensure. FDA
had attributed the delay, which affected patients and manufacturers, to constraints on
its ability to hire and support review staff. Congress reauthorized the user fee
program in 1997 (PDUFA II), in 2002 (PDUFA III), and, most recently, in 2007
(PDUFA IV), as Title I of the Food and Drug Administration Amendments Act of
Congress intended PDUFA to diminish the backlog of applications at FDA and
increasingly shorten the time from submission to decision. PDUFA II expanded the
program’s scope to include activities related to the investigational phases of a new
drug’s development, and to increase FDA communications with industry and
consumer groups. PDUFA III again expanded the scope of authorized activities to
include both preclinical development and a three-year postapproval period.
In keeping with the law, FDA has worked with the drug manufacturers to set
PDUFA performance goals, which the Secretary of Health and Human Services
(HHS) has submitted in letters to the chairs of the relevant congressional authorizing
committees. The Secretary also submits annual performance and financial reports.
In crafting PDUFA IV, the most recent reauthorization, the 110th Congress
addressed workload and compensation adjustments; expanded the authorized range
of safety activities to include development of data collection systems and analytic
tools, and enforcement of postapproval study, labeling, and risk evaluation and
mitigation strategy requirements; increased public communication requirements; and
authorized a user fee for the advisory review of prescription drug television ads.
The general view is that PDUFA has succeeded. FDA has added review staff
and reduced its review times. At each reauthorization, however, discussion returns
to certain issues in the context of PDUFA that also reflect broader FDA concerns.
These include budget choices under limited resources, including the relationship
between direct appropriations and user fees; the identification and amelioration of
conflicts of interest when the regulated industry is a major source of industry
funding; and the tension between making new drugs available to the public and
ensuring that those drugs be safe and effective.
Before Prescription Drug User Fees...................................1
The Prescription Drug User Fee Act and Its Reauthorizations...............2
Issues Considered at Each PDUFA Reauthorization.......................7
Effect on Review Time.........................................7
Effect on FDA Resources.......................................9
Appendix. Resource History of FDA and Its Human Drug Program.........14
List of Figures
Figure 1. Human Drugs Program: Budget, by Funding Source and
Figure 2. Human Drugs Program: Full-Time Equivalent Positions,
by Funding Source and Fiscal Year...............................10
Figure 3. Drug Research and Development Timeline, Industry-FDA Interaction,
and PDUFA Scope............................................12
List of Tables
Table 1. Median Approval Times for New Drug Applications (NDAs) and
Biologics Licensing Applications (BLAs)...........................8
Table 2A. FDA Overall: Budget Authority, User Fees, and Total Program
Level, Selected Years..........................................14
Table 2B. Human Drug Program: Budget Authority, User Fees, and Total
Program Level, Selected Years..................................15
The Prescription Drug User Fee Act
(PDUFA): History, Reauthorization in 2007,
and Effect on FDA
In September 2007, Congress reauthorized the Prescription Drug User Fee Act1
(PDUFA). This was the third five-year extension of the original 1992 law. Since
1993, the program has enabled the Food and Drug Administration (FDA) to collect
and use fees from pharmaceutical manufacturers to review marketing applications
concerning prescription drug and biological products. The law intends those fees to
supplement direct appropriations not replace them. This most recent version of the
user fee program, often referred to as PDUFA IV, retains the basic structure and
elements of the original PDUFA. Like PDUFA II and PDUFA III, PDUFA IV
addresses issues that had been either unnecessary or unrecognized in earlier versions
of the law. The current authority expires October 1, 2012.
This report reviews the history the four PDUFA authorizations as well as the
issues concerning them. It first describes the situation that led to the introduction of
prescription drug user fees. It then describes the initial PDUFA law and the
incremental changes made in each of its reauthorizations. The report closes with a
discussion of the intended and unintended effects of the prescription drug user fee
program on FDA both within the human drug program and agency-wide.
This report presumes some knowledge of the approval process for drugs and
biologics. Readers unfamiliar with those activities might benefit by first reading
CRS Report RL32797, Drug Safety and Effectiveness: Issues and Action Options
After FDA Approval, by Susan Thaul.
Before Prescription Drug User Fees
The 1992 passage of PDUFA had its origin in the dissatisfaction from industry,
consumers, and FDA itself. All three felt it took far too long from the moment a
manufacturer submitted a drug or biologics marketing application to the time FDA’s
reached its decision. In the late 1980s, that process took a median time of 292
months. Patients had to wait for access to the products. For some patients, a drug
1 The Prescription Drug User Fee Amendments of 2007 is Title I of the Food and Drug
Administration Amendments Act of 2007 (FDAAA, P.L. 110-85). For a description of all
2 Food and Drug Administration (FDA), Third Annual Performance Report: Prescription
in review — and therefore not available for sale — could be the difference between
life and death. Manufacturers, in turn, had to wait to begin to recoup the costs of
research and development. At that time, FDA estimated that each one-month delay
in a review’s completion cost a manufacturer $10 million.3
FDA argued that it needed more scientists to review the drug applications that
were coming in and the ones already backlogged in its files. It had not received
sufficient appropriations to hire them. For decades FDA had asked Congress for
permission to implement user fees; the pharmaceutical industry generally opposed
them, believing the funds might go into the Treasury to reduce federal debt rather
than help fund drug review.
The 1992 law became possible when FDA and industry agreed on two steps:
performance goals, setting target completion times for various review processes; and
the promise that these fees would supplement — rather than replace — funding that
Congress appropriated to FDA. Those steps helped persuade industry groups the fees
would reduce review times — and gave FDA the revenue source it had sought for
over 20 years.
The Prescription Drug User Fee Act and
Congress first authorized FDA to collect fees from pharmaceutical companies
in 1992 with the Prescription Drug User Fee Act (PDUFA, P.L. 102-571), which4
amended the Federal Food, Drug, and Cosmetic Act (FFDCA). Its goals were to
speed up FDA’s review of new drug applications for approval and to diminish its
backlog of applications. PDUFA specified the activities on which FDA could spend
the fees; most of the collections were to be used to hire additional reviewers.5
To keep funding predictable and stable, Congress required three kinds of
prescription drug user fees, and specified that they each make up one-third of the
total fees collected:
Drug User Fee Act of 1992, Fiscal Year 1995 Report to Congress, December 1, 1995, at
[ h t t p : / / www.f d a.go v/ ope/ pduf a/ r e por t 95.ht ml ] .
3 Philip J. Hilts, “Plan to Speed Approval of Drugs: Makers Would Pay Fees to U.S.,” New
York Times, August 11, 1992, p. A1.
4 PDUFA is codified at 21 U.S.C. 379g and 379h.
5 Congress subsequently established user fee programs for medical devices and animal
drugs. See CRS Report RL33981, Medical Device User Fee and Modernization Act
(MDUFMA) Reauthorization, by Erin D. Williams, and CRS Report RL34459,
Reauthorization of the Animal Drug User Fee Act (ADUFA), by Sarah A. Lister.
!application review fees: a drug’s sponsor (usually the
manufacturer) would pay a fee for the review of each new or
supplemental drug-approval or biologic-license application it
!establishment fees: a manufacturer would pay an annual fee for
each of its manufacturing establishments; and
!product fees: a manufacturer would pay an annual fee for each of
its products that fit within PDUFA’s definition.
For FY1993, the standard application fee was approximately $100,000. The law
provided exceptions — either exemptions or waivers — for applications from small6
businesses, or for drugs developed for unmet public health needs or orphan diseases.
PDUFA I authorized fee revenue limits for each of FY1993 through FY1997,
allowing also for adjustments based on inflation. The fees collected in each fiscal
year were to be in an amount equal to the amount specified in appropriations acts for
such fiscal year.
In accordance with the agreement that brought about its passage, PDUFA I
explicitly stated that the funds were to supplement, not supplant, congressional
appropriations. The law included complex formulas, known as “triggers,” to enforce
that goal. FDA may collect and use fees only if the direct appropriations for the
activities involved in the review of human drug applications and for FDA activities
overall remain funded at a level at least equal to the pre-PDUFA budget, adjusted for
inflation as specified in the statute.
PDUFA’s basic goal was, each year, to reduce the time from the sponsor’s
submission of an application to FDA’s decision regarding approval. Rather than
listing specific performance goals in statutory language, Congress stated in the bill’s
“Findings” (Section 101) that:
(3) the fees authorized by this title will be dedicated toward expediting the
review of human drug applications as set forth in the goals identified in the
letters of September 14, 1992, and September 21, 1992, from the Commissioner
of Food and Drugs to the Chairman of the Energy and Commerce Committee of
the House of Representatives and the Chairman of the Labor and Human
Resources Committee of the Senate, as set forth at 138 Cong. Rec. H9099-H9100
(daily ed. September 22, 1992).
This direction was not codified in the FFDCA; instead, Congress, with that “finding,”
incorporated the performance goals listed in FDA Commissioner David Kessler’s
September 1992 letters to the committee chairs.7 The predominant goal was that, by
6 The Orphan Drug Act (P.L. 97-414) established incentives to encourage manufacturers to
develop drugs for certain conditions, as designated by FDA, for which there otherwise are
insufficient financial incentives for manufacturers to develop treatments.
7 James L. Zelenay, Jr., “The Prescription Drug User Fee Act: Is a Faster Food and Drug
Administration Always a Better Food and Drug Administration?” Food and Drug Law
Journal, vol. 60, no. 2, 2005, pp. 261-338.
of priority applications within six months of application submission.8
PDUFA restricted FDA’s use of collected fees to activities related to the
“process for the review of human drug applications.” In its FY2004 report to
Congress, FDA listed such activities. They include investigational new drug (IND),
new drug application (NDA), biologics license application (BLA), product license
application (PLA), and establishment license application (ELA) reviews; regulation
and policy development activities related to the review of human drug applications;
development of product standards; meetings between FDA and application sponsor;
pre-approval review of labeling and pre-launch review of advertising; review-related
facility inspections; assay development and validation; and monitoring review-related
Congress reauthorized PDUFA in 1997 as Title I of the Food and Drug
Administration Modernization Act (FDAMA, P.L. 105-115). The reauthorization,
referred to as PDUFA II:
!stated that the fees were to be used to expedite the drug development
and application review process as laid out in performance goals
identified in letters sent by the Secretary of the Department of Health
and Human Services (HHS) to the two authorizing committees;
!mandated tighter performance goals, more transparency in the drug
review process, and better communication with drug makers and
patient advocacy groups; and
!allowed FDA to use PDUFA revenue to consult with manufacturers
before they submitted an application. Previously FDA could use the
fees only to review a manufacturer’s application. Now FDA could
meet with a manufacturer from the moment it began testing a new
drug in humans. (See Figure 3.)
Congress passed its second five-year reauthorization as Title V of the Public
Health Security and Bioterrorism Preparedness and Response Act of 2002 (P.L.
8 FDA policy states: “A ‘priority’ designation is intended to direct overall attention and
resources to the evaluation of applications for products that have the potential for providing
significant preventative or diagnostic therapeutic advance as compared to ‘standard’
applications” (FDA, “Review Management: Priority Review Policy,” Manual of Policies
and Procedures, MAPP 6020.3, Center for Drug Evaluation and Research, April 22, 1996,
at [http://www.fda.gov/cder/mapp/6020-3.pdf], hereinafter “CDER MAPP 6020.3”).
9 FDA, “Allowable and Excluded Costs for the Process for the Review of Human Drug
Applications,” Appendix C to FY 2004 PDUFA Financial Report, March 2005, at
[ h t t p : / / www.f d a.go v/ oc/ pduf a/ f i nr epor t 2004/ appendi xC.ht ml ] .
!allowed FDA to adjust annual revenue targets based on changes in
!required the agency to meet with interested public and private
stakeholders when considering the reauthorization of this program
before its expiration;10
!allowed the collection, development, and review of postmarket
safety information for up to three years on drugs approved after
October 1, 2002, which allowed the agency to double the number of
staff monitoring side effects of drugs already on the market;
!allowed biotechnology companies to request that FDA select an
independent consultant (for which the manufacturer would pay) to
participate in FDA’s review of research activities;
!authorized two pilot programs for the continuous (“rolling”) review
of new drug applications for products designated for the fast track
program because they would address serious or life-threatening
conditions for which other treatments were not available;11
!encouraged companies to include risk management plans in their
!allowed the use of fees to develop databases documenting drugs’
!allowed the use of fees for risk management oversight in the “peri-
approval” period (i.e., two to three years post-approval);
!provided for “first cycle,” preliminary reviews;
!required the HHS Secretary to note on FDA’s website if a sponsor
did not meet an agreed-upon deadline to complete a postmarket
study, and to note if the Secretary considers the reasons given for
study incompleteness to be unsatisfactory;
!required any sponsor who failed to complete timely studies to notify
health practitioners both of this failure and of unanswered questions
related to the clinical benefit and safety of the product; and
!added specificity to the availability and crediting of fees provision,
stating that fees authorized be collected and available for obligation
only to the extent and in the amount provided in advance in
appropriations Acts; and that such fees are authorized to remain
available until expended.
PDUFA allowed FDA to use fee revenue for activities that were part of the
“process for the review of human drug applications.” Both PDUFA II and PDUFA
III expanded the scope of that definition beyond the review of a submitted NDA/BLA
to include both earlier phases (preclinical development, clinical development) and
later phases (post-approval safety surveillance and risk management).12
10 H.Rept. 107-481, Public Health Security and Bioterrorism Preparedness and Response
Act of 2002, conference report to accompany H.R. 3448, May 21, 2002.
11 See CRS Report RS22814, FDA Fast Track and Priority Review Programs, by Susan
12 FDA, “Prescription Drug User Fee Act (PDUFA): Adding Resources and Improving
Performance in FDA Review of New Drug Applications,” white paper, November 10, 2005,
The Prescription Drug User Fee Amendments of 2007 (PDUFA IV) formed
Title I of the FDA Amendments Act of 2007 (P.L. 110-85). This September 2007
reauthorization of PDUFA kept the basic approach to prescription drug user fees that
Congress first enacted in 1992.13 The PDUFA provisions in FDAAA made some
technical changes to the law’s earlier versions and introduced some new elements.14
For example, PDUFA IV:
!added a “reverse trigger” to the law, turning around the concept of
“triggers” that the earlier PDUFA laws included to safeguard the
pre-PDUFA level of appropriations. If appropriations for both FDA
as a whole and for the agency’s review of human drug applications
exceed the amounts appropriated for those activities for FY2008,
then authorized user fee revenue will be decreased by an amount up
to $65 million of the increase in appropriations;
!added fee revenues for drug safety totaling $225 million over the
!removed the calendar and time limitations on postapproval activities.
FDA may, therefore, use PDUFA funding for authorized activities
throughout the life of a product, rather than the three-year
postapproval period that PDUFA III had allowed;
!expanded the list of postmarket safety activities for which the fees
could be used to include developing and using adverse-event
data-collection systems, including information technology systems;
developing and using improved analytical tools to assess potential
safety problems, including access to external data bases;
implementing and enforcing new FFDCA requirements relating to
postapproval studies, clinical trials, labeling changes, and risk
evaluation and mitigation strategies; and managing adverse event
!authorized the assessment and collection of fees relating to advisory
review of prescription-drug television advertising. Manufacturer
requests for pre-dissemination review of advertisements would be
voluntary, and FDA responses would be advisory. Only
manufacturers that request such reviews would be assessed the new
at [http://www.fda.gov/cder/pdufa/], hereinafter “FDA, PDUFA White Paper.”
13 CRS Report RL34465, FDA Amendments Act of 2007 (P.L. 110-85), by Erin D. Williams
and Susan Thaul, includes details about PDUFA IV and the other titles in FDAAA.
14 For descriptions and discussion of the FDA proposal for PDUFA IV and the House and
Senate consideration of PDUFA reauthorization within the context of other FDA issues, seeth
CRS Report RL34089, FDA Legislation in the 110 Congress: A Guide to S. 1082 and H.R.
FDA Legislation in the 110 Congress: A Side-by-Side Comparison of S. 1082 and H.R.
2900, by Erin D. Williams, Susan Thaul, Sarah A. Lister, Donna V. Porter, and C. Stephen
fees, which would include an advisory review fee and an operating
!codified in the FFDCA certain core elements, such as annual
reporting requirements, of the prescription drug user fee program
that, although included in PDUFA I, II, and III, were never placed
into the FFDCA; and
!set forth new requirements intended to increase the Secretary’s
communication to the public regarding, for example, negotiations
between the agency and industry.
The PDUFA IV amendments took effect on October 1, 2007. Authority to
assess, collect, and use drug fees will cease to be effective October 1, 2012. The
reporting requirements will cease to be effective January 31, 2013.
at Each PDUFA Reauthorization
PDUFA has attracted both criticism and praise from industry, FDA staff,
consumers, and Members of Congress. The issues they raised played out in the
legislative debate leading up to PDUFA IV, as they had at each earlier
reauthorization. Although specific to PDUFA, these issues persist because they
reflect broader questions about budget choices under limited resources, the
identification and amelioration of conflicts of interest, and the tension between
making new drugs available to the public and ensuring that those drugs be safe and
effective. The next section of this report uses data covering the period leading up to
PDUFA IV to illustrate those key issues likely to resurface, particularly as Congress
plans for PDUFA V, scheduled for 2012.
Effect on Review Time
Based on its stated goals, PDUFA has been generally viewed as a success. FDA
has added review staff and now completes it reviews of NDA/BLA applications more
quickly and runs less of a backlog. Median time from an NDA or BLA submission
to FDA’s approval decision was 29 months in 1987; for the first two years of PDUFA
I, it fell to 17 months. In later years, FDA presented separate calculations for
standard applications and priority applications.15 Table 1 shows median approval
times for 1993 through 2006. In calendar year 2006, the median review times were
FDA attributes shorter approval times to PDUFA-funded staff increases.
PDUFA also funds FDA activities with sponsors before their official NDA or BLA
submissions, resulting in increasingly more complete applications that require fewer
15 Beginning in 1997, the goals distinguish between standard and priority applications,
assessed by a medical group team leader when FDA receives an application (FDA, CDER
MAPP 6020.3, April 22, 1996).
Table 1. Median Approval Times for New Drug Applications
(NDAs) and Biologics Licensing Applications (BLAs)
Priority ReviewStandard Review
Median totalMedian total
CalendarNo.approval timeNo.approval time
year approved ( m o nt hs) approved ( m o nt hs)
1993 19 20.5 51 26.9
1994 16 14.0 45 21.0
1996 29 7.8 102 17.8
1997 20 6.4 101 15.0
2002 11 19.1 67 15.3
Source: FDA, “CDER Approval Times for Priority and Standard NDAs and BLAs, Calendar Years
1993-2006, updated through 12/31/2006,” at [http://www.fda.gov/cder/rdmt/NDAapps93-06.htm].
Note: In its FY2002 performance report to Congress, FDA commented on the spike in approval times,
as seen in the 2002 data, citing an “imbalance between resources and workload [that] resulted in
significant stress to the program.”
As a result of PDUFA, industry faces shorter and more predictable review times.
It has treated the per-application fee — about $100,000 FY1993 and over $1 million
FY200816 — as an acceptable cost relative to the estimated $10 million monthly cost
of delay in the years immediately before PDUFA was enacted. Meanwhile, PDUFA
has enabled consumers to have quicker access to new drugs.
Such quicker access, however, has raised concerns. First, critics ask whether
PDUFA’s emphasis on speed results in inadequate review. Second, they ask whether
the increase in industry funding might lead to undue industry influence. They are
concerned that PDUFA, in the name of speed, might lead FDA to sacrifice safety and
effect i v eness.
16 The FY2008 fee for an application requiring clinical data is $1,178,000 (FDA,
“Prescription Drug User Fee Rates for Fiscal Year 2008,” Federal Register, vol. 72, no. 197,
October 12, 2007, pp. 58103-58106).
Many overlapping factors influence drug safety, most unrelated to the source of
funding. Some safety problems cannot be identified before public marketing.17 In
its consideration of PDUFA and in other plans for FDA, the Congress has discussed
whether FDA has the authority and resources to identify and then act on problems
during both the premarket and postmarket periods. It addressed these issues in
FDAAA, both in the PDUFA title and a broader drug safety title.
Effect on FDA Resources
The key to the shortening of review times is the influx of funds that PDUFA
allows. This section first describes the extent of the collected fees and then discusses
that revenue in the context of the budget for both the human drug program and FDA
overall. What began as a program to fund new drug review has budget, management,
and policy implications beyond that.
Figure 1 and Figure 2 illustrate the resource (funding and personnel) history
of the FDA Human Drugs program from FY1989 through FY2007.18 (Table 2A and
Table 2B in the Appendix provide detailed actual and inflation-adjusted budget
figures, along with full-time equivalent positions, by funding source for selected
fiscal years.) Beginning in FY1994, user fees have made up an increasing proportion
of FDA’s budget for human drug activities. While total funding has increased over
the period, this has been entirely due to the increase in user fees. Congressional
appropriations have remained essentially flat in real (i.e., inflation-adjusted) terms.
Indicating full-time equivalent (FTE) positions by funding source shows that the
overall increase in personnel comes solely from the user fees first collected in
FY1993 and that the overall increase in FTEs obscures a 19% decrease in FTEs
funded by congressional appropriations from FY1992 to FY2007.
The PDUFA triggers (described above), in particular, and the relative
contributions of appropriations and user fees to FDA’s budget for human drugs have
implications for budget planning both within the human drugs activity area and in
agency-level decisions across all activities.
17 See CRS Report RL32797, Drug Safety and Effectiveness: Issues and Action Options
After FDA Approval, by Susan Thaul.
18 For a discussion of FDA-wide budget history, see CRS Report RL34334, The Food and
Drug Administration: Budget and Statutory History, FY1980-FY2007, by Judith A. Johnson
(coordinator), Donna V. Porter, Susan Thaul, and Erin D. Williams.
Figure 1. Human Drugs Program: Budget,
by Funding Source and Fiscal Year
1989 1991 1993 1995 1997 1999 2001 2003 2005 2007
Budget authority, adjustedFees, adjusted
Figure 2. Human Drugs Program: Full-Time Equivalent
Positions, by Funding Source and Fiscal Year
1989 1991 1993 1995 1997 1999 2001 2003 2005 20 07
Sources: FDA Justification of Estimates for Appropriations Committees documents, FY1991 through
FY2009. Data have been adjusted to constant FY2000 dollars for inflation using “Total Non-Defense”
deflators from Office of Management and Budget, Historical Tables, Budget of the United States,
Fiscal Year 2008, “Table 10.1, Gross Domestic Product and Deflators Used in the Historical Tables:
1940-2012,” pp. 192-193.
Note: Total Program Level = Budget Authority + Fees.
Balance between pre- and postapproval activities. Because PDUFA initially
allowed FDA to use the fees on only pre-approval activities (the review of
manufacturer applications to market drugs and biologics) and still directs a majority
of fees to those tasks, it is widely asserted that PDUFA is responsible for what some
observers view as an inappropriate budget imbalance between FDA’s premarket drug
review and its postmarket safety activities. They point out how PDUFA
requirements — the trigger requirements that congressional appropriations for FDA’s
review activities be maintained at least at 1992 levels — and congressional budget
trends — increasing FDA responsibilities at relatively flat funding levels — result
in a squeezing out of non-PDUFA related programs. Faced with losing fee revenue
if PDUFA-authorized activities decrease, FDA must prioritize its use of appropriated
dollars to those activities. Critics say that non-PDUFA activities, such as the review
of generic drug applications, therefore suffer.
In part to address this concern, the Congress has, with each PDUFA
reauthorization extended the scope of covered activities. The top and middle sections
of Figure 3 illustrate the five stages of drug development, beginning with basic
research and continuing through preclinical development (which could be research
in the laboratory or with animals), clinical research (the Phase 1, Phase 2, and Phase
3 trials that involve people), and FDA review; and the related industry-FDA
interactions.19 The bottom third displays the span of industry R&D activities over
which the laws allowed PDUFA fees to cover FDA activities. The law authorized
FDA to use PDUFA I fees to fund only those activities from NDA submission
through the review decision; PDUFA II allowed FDA to use the funds for meetings
with manufacturers during the clinical development stages, going, therefore, from the
investigational new drug (IND) submission through review; and PDUFA III extended
the time range at both ends, to include the pre-clinical development period and up to
three years after marketing begins. PDUFA IV removes the three-year limit on
postapproval activities. FDA may, therefore, use PDUFA funding for authorized
activities throughout the life of a product.
19 FDA, PDUFA White Paper, 2005, Figure 3.1.
Figure 3. Drug Research and Development Timeline,
Industry-FDA Interaction, and PDUFA Scope
Source: Adapted by CRS from FDA, PDUFA White Paper, 2005, Figure 3.1.
IND = Investigational New Drug
Industry influence. Some critics think that, through its provision of fees, the
industry has too much influence over FDA actions. They believe that, by structuring
industry participation into the setting of performance goals, the law creates conflicts
of interest. This is compounded because, they say, the process of setting performance
goals is not transparent.
Until an amendment in PDUFA IV that requires consumer participation as well,
the law directed FDA and manufacturers to meet, in preparation for each PDUFA
reauthorization, to discuss workload and revenue needed. FDA then submitted a
letter to the authorizing committees that presents performance goals for the following
five years. The performance goals regarding review activities were structured to
include a length of time (in months) and the percent of applications that would be
completed in that time.20 The industry participation in goal negotiation and the focus
on review time created what some see as actual or the appearance of industry
20 In FY1994, for example, FDA’s performance goal had been to review and act on 55% of
new applications within 12 months; over the years, the goals reflected an increasing
percentage of applications and a decreasing number of months in which to make a decision
on those applications (FDA, “App. A. PDUFA Performance Goals, FY1993-FY1997,” Third
Annual Performance Report: PDUFA of 1992, FY1995 Report to Congress, December
1995; “PDUFA Reauthorization Performance Goals and Procedures,” November 1997 letter
enclosure; and “PDUFA Reauthorization Performance Goals and Procedures,”June 2002
PDUFA III goals and procedures letter enclosure; all at [http://www.fda.gov/cder/
influence on the management of FDA resources. At the least, those speculations
could threaten confidence in FDA reviews. At the worst are the concerns of some
that the fee system contributes to quick and suboptimal reviews. FDA staff reports
of pressure to meet performance goal deadlines suggest to some that safety and
effectiveness data are being inadequately evaluated.21
Interaction with congressional appropriations decisions. As previously
noted, user fees are an increasing part of FDA’s budget. In FY2008, user fees
contribute 24.2% of FDA budget. Looking only at the agency’s Human Drug
Program (basically that is the Center for Drug Evaluation and Research and related
activities of the Office of Regulatory Affairs), as in Figure 1 (and Tables 2A and 2B
in the Appendix) for FY2008, user fees contribute 48.4% of the drug program’s
budget. Not shown on the figure: the FY2008 enacted budget for the human drug
program shows user fees contributing 58% of the pre-market activities total and
FDA relies on fee revenue for maintaining its expert science base via staff
retention. Critics say that FDA is becoming too dependent on industry fees to carry
out its normal review activities. A related concern is that the large percentage of
FDA’s budget being covered by user fees may undercut congressional support for
increases in direct appropriations to the agency.
Leaving aside some critics’ distrust of the pharmaceutical industry’s motives,
other political and health analysts believe that drug application review is a regulatory
responsibility that the federal government should shoulder completely. They believe
that rather than rely on user fees, Congress should appropriate the full amount
necessary to support FDA is its mission to protect the public’s health.23
21 See, for example: Union of Concerned Scientists, “FDA Scientists Pressured to Exclude,
Alter Findings; Scientists Fear Retaliation for Voicing Safety Concerns: Public Health and
Safety Will Suffer without Leadership from FDA and Congress,” press release, July 20,
Andrew C. Von Eschenbach. M.D. Confirmation Questions [from Senator Grassley] for the
Record,” FDA Week, vol. 12, no. 48, December 1, 2006; and “House Energy and Commerce
Subcommittee on Oversight and Investigations Holds Hearing on Drug Safety,”
Congressional Transcripts, February 13, 2007, at [http://www.cq.com/news.do].
22 FDA, Table “FDA Funding by Functional Activity, FY2008 Enacted,” in “FY2009
Congressional Justification,” Office of Management, Budget Formulation and Presentation,
February 5, 2008, at [http://www.fda.gov/oc/oms/ofm/budget/2009/Exhibits/FY08FAT.
23 Note: FDA is not the only federal agency with program elements funded in part by fees
that their regulated industries pay. Examples of others include Meat and Poultry Inspection
(USDA); Commodity Grading and Certification Services (USDA); the Farm Credit
Administration (USDA); Pesticide Registration Improvement Act of 2003 (EPA); Federal
Communications Commission Regulatory Fees; and Securities and Exchange Commission
Transaction Fees. Other user fee programs within FDA are the Medical Device Use Fee
Amendments (MDUFA); the Animal Drug User Fee Act (ADUFA); the Mammography
Quality Standards Act (MQSA); and export and color certification fees. FDA has proposed
new user fee programs to help fund reinspections and generic drug reviews.
Appendix. Resource History of FDA and Its Human Drug Program
Table 2A. FDA Overall: Budget Authority, User Fees,
and Total Program Level, Selected Years
(dollars in millions)
Budget authorityaAll user feesbTotalFees as % of Total
(dollars) (dollars) (dollars)
iki/CRS-RL339141989 542 710 7,228 10 13 170 552 723 7,398 2% 2%
g/w1992 762 893 8,792 16 19 302 778 912 9,094 2% 3%
leak1995 869 948 8,811 79 86 453 948 1,034 9,264 8% 5%
://wiki1998 932 968 8,083 118 123 821 1,050 1,091 8,904 11% 9%
http2001 1,099 1,075 7,805 179 175 1,184 1,278 1,250 8,989 14% 13%
d 1,720 1,409 7,844 549 450 2,131 2,270 1,860 9,975 24% 21%
e 1,771 1,415 8,075 628 502 2,426 2,400 1,917 10,501 26% 23%
Table 2B. Human Drug Program: Budget Authority, User Fees,
and Total Program Level, Selected Years
(dollars in millions)
Budget authorityaPDUFA user feesTotalFees as % of Total
(dollars) (dollars) (dollars)
iki/CRS-RL339141995 218 238 2,278 48 53 295 266 290 2,573 18% 11%
s.or1998 200 207 1,959 63 66 470 263 273 2,429 24% 19%
leak2001 219 214 1,824 104 102 711 322 315 2,535 32% 28%
://wiki2004 292 268 1,977 167 154 972 460 422 2,949 36% 33%
http2007 315 265 1,772 228 192 1,143 544 457 2,915 42% 39%
d 353 289 1,816 327 268 1,348 680 557 3,164 48% 43%
e 358 286 1,855 381 304 1,545 739 590 3,456 52% 45%
for Tables 2A and 2B: FDA Justification of Estimates for Appropriations Committees, FY1991-FY2009.
cludes only direct appropriations; does not include the user fee amount that the appropriations bills also set.
cludes fees obtained under the Mammography Quality Standards Act (MQSA), and fees collected for export certification, color certification, and Freedom of Information Act
(FOIA) requests; advances and reimbursements; and fees pursuant to the Prescription Drug User Fee Act beginning in FY1993, the Medical Device User Fee and Modernization
Act (MDUFMA) beginning in FY2005, and the Animal Drug User Fee Act (ADUFA) beginning in FY2005.
ollars have been adjusted for inflation to constant FY2000 dollars using “Total Non-Defense” deflators from Office of Management and Budget, Historical Tables, Budget of the
United States, Fiscal Year 2008, “Table 10.1, Gross Domestic Product and Deflators Used in the Historical Tables: 1940-2012,” pp. 192-193.
he dollar values shown for FY2008 come from the enacted appropriation; in each year’s budget justification documents, FDA presents an updated actual figure.
he dollar and FTE values shown for FY2009 are from the President’s request, which includes $27 million in authorized fees for the advisory review of direct-to-consumer television
advertisements for prescription drugs