Prescription Drug User Fee Act
Encyclopedia
The Prescription Drug User Fee Act (PDUFA) was a law
passed by the United States Congress
in 1992 which allowed the Food and Drug Administration
(FDA) to collect fees from drug manufacturers
to fund the new drug
approval process. The Act provided that the FDA was entitled to collect a substantial application fee from drug manufacturers at the time a New Drug Application (NDA) was submitted, with those funds designated for use only in Center for Drug Evaluation and Research
(CDER) or Center for Biologics Evaluation and Research
(CBER) drug approval activities. In order to continue collecting such fees, the FDA is required to meet certain performance benchmarks, primarily related to the speed of certain activities within the NDA review process.
activist organizations accused the FDA of unnecessarily delaying the approval of medications to fight HIV and opportunistic infection
s, and staged large protests, such as a confrontational October 11, 1988 action at the FDA headquarters which resulted in roughly 180 arrests. In August 1990, Louis Lasagna
, then chairman of a presidential advisory panel on drug approval, estimated that thousands of lives were lost each year due to delays in approval and marketing of drugs for cancer
and AIDS
. Partly in response to these criticisms, the FDA introduced expedited approval of drugs for life-threatening diseases and expanded pre-approval access to drugs for patients with limited treatment options. All of the initial drugs approved for the treatment of HIV/AIDS were approved through accelerated approval mechanisms. For example, a "treatment IND" was issued for the first HIV drug, AZT
, in 1985, and approval was granted 2 years later, in 1987.
AIDS activists, desperate for new treatments, were outraged at the cost of those first drugs and the slow pace of drug development. These activists bombarded the government and drug companies with complaints and public protests. The activists won a major victory in 1989, when Burroughs Wellcome implemented a 20% price cut on AZT, then still the only treatment for HIV. Even after this price concession, the 12-pill-per-day AZT regimen cost patients $6,400 a year. AIDS activists expressed their anger by trashing booths at medical conventions and continuing vocal public protests. Gradually, drug companies established relationships with AIDS activists and the two sides came together to improve clinical trials. By August 1991, relations had warmed up so much that ACT-UP founder Larry Kramer
wrote Bristol-Myers Squibb
chief Richard Gelb a letter of congratulations on the imminent approval of Videx
. AIDS groups fought for the reauthorization of the Orphan Drug Act and the passage of the Prescription Drug User Fee Act in 1992.
(FDA) a revenue source, fees paid pharmaceutical companies seeking the approval of new drugs, to supplement but not replace direct appropriations from Congress. PDUFA was passed in order to shorten the length of time from a manufacturer’s submission of a New Drug Application
or a Biologics License Application to an FDA decision approval or licensure.
Congress created three kinds of user fees via PDUFA and required that they each make up one-third of the total fees collected. These include application review fees paid by the sponsor for each drug or biologic application submitted, establishment fees paid by manufacturers annually for each of its facilities, and product fees paid annually for each product on the market covered by PDUFA. For 1993, the application review fee was about $100,000. The law provided exemptions and waivers for applications from small businesses, drugs aimed at orphan diseases, or unmet public health needs.
In order to avoid listing specific performance goals in statutory language Congress stated in the bill’s “Findings” 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)."
When Congress was debating the legislation that implemented PDUFA II Rep. Billy Tauzin, who later became head of PhRMA and one of those leading the call for a further streamlined review process, told a story of how a family friend had to travel to Mexico to obtain drugs that helped him overcome prostate cancer. "We continue to have problems with the fact that approved medicines in other countries can't get approved here. But what I particularly can't understand at all are situations where you have people suffering terminal illnesses, and they can't get the experimental drugs that might save their lives."
In testimony before Congress, James Swire, an AIDS activist and health educator who became infected with HIV in 1990, said the FDA has dramatically reduced the time needed to approve life-saving drugs using the money from PDUFA. Swire said, "I'm here because people really pushed the review process for AIDS and HIV treatments. There still is not a cure, but because of some of the new drugs, a lot of us have been able to get back to work."
During the period that PDUFA III was in effect the FDA's requirement that drug companies pay user fees for 505(b)(2) applications to switch drugs from requiring a prescription to being sold over-the-counter became a source of controversy. The drug industry claimed that the FDA misinterpreted the section of PDUFA III authorizing user fees when deciding to charge for reviewing 505(b)(2) applications. Specifically, they said Congress only intended user fees to be paid on new indications for a new active ingredient and that switching a drug to over-the-counter status was an exception to the rule requiring user fees.
In February of 2007 the FDA exempted drugs used in the President's Emergency Plan for AIDS Relief
(PEPFAR) from user fees in order to reduce the financial burden of developing new AIDS drugs.
.President Bush signed the reauthorization of PDUFA into law on 27 September 2007.
In 2007, the FDA was expected to collect $259,300,000 in industry user fees.
The Pharmaceutical Research and Manufacturers of America
(PhRMA) strongly supports reauthorization of PDUFA. “PDUFA V can play a critical role in making more life-saving medicines available to patients in a timely manner, strengthening the scientific base of the FDA and providing a steady, reliable stream of resources for Agency scientists,” said Dr. Wheadon, PhRMA's Senior Vice President for Scientific & Regulatory Affairs.
(GAO) report found that PDUFA funds allowed the FDA to increase the number of new drug reviewers by 77 percent in the first eight years of the act, and the median approval time for non-priority new drugs dropped from 27 months to 14 months over the same period.
From 1993 through 1996, the years PDUFA I was in effect, the approval time for new drugs declined significantly while the number of new products increased. The approval time for NDAs in the 8 years before the implementation of PDUFA I was roughly 31.3 months. During this period, the approval time exceeded 30 months in every year except 1990 when it was 27.7 months and 1992 when it was 29.9 months. From 1993 through 1996, the average approval time fell to 20.8 months. During this period, the approval time for new drugs never exceeded 30 months. According to the Pharmaceutical Research and Manufacturers of America
drug review time was cut roughly in half after the passage of PDUFA I.
During the eight years before PDUFA took effect, an average of 24 new drugs were approved each year. The number of approvals ranged from 20 in 1988 to 30 in 1991. During the four years that PDUFA I was in effect, an average of 32 drugs were approved each year, ranging from 22 in 1994 to 53 in 1996. The average number of new drugs approved by the FDA each year increased by one-third.
First drug launches making use of new chemical entities in the United States increased from 44 from 1982 through 1992to 156 in from 1993 through 2003 period. The increase in first drug launches in the United States from 1993 through 2003 is particularly interesting given that the European Union harmonized its regulatory regime for new drugs with those of other major markets in order to reduce barriers for drug approvals during the same period.
There are also establishment fees and product fees.
Law
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...
passed by the United States Congress
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
in 1992 which allowed the Food and Drug Administration
Food and Drug Administration
The Food and Drug Administration is an agency of the United States Department of Health and Human Services, one of the United States federal executive departments...
(FDA) to collect fees from drug manufacturers
Pharmaceutical company
The pharmaceutical industry develops, produces, and markets drugs licensed for use as medications. Pharmaceutical companies are allowed to deal in generic and/or brand medications and medical devices...
to fund the new drug
Medication
A pharmaceutical drug, also referred to as medicine, medication or medicament, can be loosely defined as any chemical substance intended for use in the medical diagnosis, cure, treatment, or prevention of disease.- Classification :...
approval process. The Act provided that the FDA was entitled to collect a substantial application fee from drug manufacturers at the time a New Drug Application (NDA) was submitted, with those funds designated for use only in Center for Drug Evaluation and Research
Center for Drug Evaluation and Research
The Center for Drug Evaluation and Research is a division of the U.S. Food and Drug Administration that monitors most drugs as defined in the Food, Drug, and Cosmetic Act. Some biological products are also legally considered drugs, but they are covered by the Center for Biologics Evaluation and...
(CDER) or Center for Biologics Evaluation and Research
Center for Biologics Evaluation and Research
The Center for Biologics Evaluation and Research is one of six main centers for the U.S. Food and Drug Administration , which is a part of the U.S. Department of Health and Human Services. The current Director of CBER is Dr. Karen Midthun, M.D...
(CBER) drug approval activities. In order to continue collecting such fees, the FDA is required to meet certain performance benchmarks, primarily related to the speed of certain activities within the NDA review process.
History
The move towards imposing user fees to pay for the regulatory review of new medicines was the result of dissatisfaction among consumers, industry, and the FDA. All three groups felt that drug approvals were taking far too long. For some patients, a drug waiting for approval and not yet available for sale could make the difference between life and death. Pharmaceutical companies had to wait to begin to recoup the costs of research and development. The FDA estimated that a delay of one month in a review’s completion cost its sponsor $10 million. The FDA argued that it needed additional staff to end its back-log of drugs awaiting approval for market. The FDA had not received sufficient appropriations from Congress to hire them. For decades the FDA had asked for permission to implement user fees and the pharmaceutical industry generally opposed them, fearing that the funds would not be used to speed drug review. The 1992 law became possible when the FDA and industry agreed on setting target completion times for reviews and that promise these fees would supplement federal appropriations instead of replacing them.AIDS epidemic
The length of the drug approval process fell under severe scrutiny during the early years of the AIDS epidemic. In the late 1980s, ACT-UP and other HIVHIV
Human immunodeficiency virus is a lentivirus that causes acquired immunodeficiency syndrome , a condition in humans in which progressive failure of the immune system allows life-threatening opportunistic infections and cancers to thrive...
activist organizations accused the FDA of unnecessarily delaying the approval of medications to fight HIV and opportunistic infection
Opportunistic infection
An opportunistic infection is an infection caused by pathogens, particularly opportunistic pathogens—those that take advantage of certain situations—such as bacterial, viral, fungal or protozoan infections that usually do not cause disease in a healthy host, one with a healthy immune system...
s, and staged large protests, such as a confrontational October 11, 1988 action at the FDA headquarters which resulted in roughly 180 arrests. In August 1990, Louis Lasagna
Louis Lasagna
Louis Lasagna was an American physician and professor of medicine, known for his revision of the Hippocratic Oath.-Early life and education:...
, then chairman of a presidential advisory panel on drug approval, estimated that thousands of lives were lost each year due to delays in approval and marketing of drugs for cancer
Cancer
Cancer , known medically as a malignant neoplasm, is a large group of different diseases, all involving unregulated cell growth. In cancer, cells divide and grow uncontrollably, forming malignant tumors, and invade nearby parts of the body. The cancer may also spread to more distant parts of the...
and AIDS
AIDS
Acquired immune deficiency syndrome or acquired immunodeficiency syndrome is a disease of the human immune system caused by the human immunodeficiency virus...
. Partly in response to these criticisms, the FDA introduced expedited approval of drugs for life-threatening diseases and expanded pre-approval access to drugs for patients with limited treatment options. All of the initial drugs approved for the treatment of HIV/AIDS were approved through accelerated approval mechanisms. For example, a "treatment IND" was issued for the first HIV drug, AZT
Zidovudine
Zidovudine or azidothymidine is a nucleoside analog reverse-transcriptase inhibitor , a type of antiretroviral drug used for the treatment of HIV/AIDS. It is an analog of thymidine....
, in 1985, and approval was granted 2 years later, in 1987.
AIDS activists, desperate for new treatments, were outraged at the cost of those first drugs and the slow pace of drug development. These activists bombarded the government and drug companies with complaints and public protests. The activists won a major victory in 1989, when Burroughs Wellcome implemented a 20% price cut on AZT, then still the only treatment for HIV. Even after this price concession, the 12-pill-per-day AZT regimen cost patients $6,400 a year. AIDS activists expressed their anger by trashing booths at medical conventions and continuing vocal public protests. Gradually, drug companies established relationships with AIDS activists and the two sides came together to improve clinical trials. By August 1991, relations had warmed up so much that ACT-UP founder Larry Kramer
Larry Kramer
Larry Kramer is an American playwright, author, public health advocate, and LGBT rights activist. He began his career rewriting scripts while working for Columbia Pictures, which led him to London where he worked with United Artists. There he wrote the screenplay for Women in Love in 1969, earning...
wrote Bristol-Myers Squibb
Bristol-Myers Squibb
Bristol-Myers Squibb , often referred to as BMS, is a pharmaceutical company, headquartered in New York City. The company was formed in 1989, following the merger of its predecessors Bristol-Myers and the Squibb Corporation...
chief Richard Gelb a letter of congratulations on the imminent approval of Videx
Didanosine
Didanosine is sold under the trade names Videx and Videx EC. It is a reverse transcriptase inhibitor, effective against HIV and used in combination with other antiretroviral drug therapy as part of highly active antiretroviral therapy .-History:The related pro-drug of didanosine,...
. AIDS groups fought for the reauthorization of the Orphan Drug Act and the passage of the Prescription Drug User Fee Act in 1992.
PDUFA I
The Prescription Drug User Fee Act (PDUFA) was first enacted in 1992. PDUFA gives the Food and Drug AdministrationFood and Drug Administration
The Food and Drug Administration is an agency of the United States Department of Health and Human Services, one of the United States federal executive departments...
(FDA) a revenue source, fees paid pharmaceutical companies seeking the approval of new drugs, to supplement but not replace direct appropriations from Congress. PDUFA was passed in order to shorten the length of time from a manufacturer’s submission of a New Drug Application
New drug application
The New Drug Application is the vehicle in the United States through which drug sponsors formally propose that the Food and Drug Administration approve a new pharmaceutical for sale and marketing...
or a Biologics License Application to an FDA decision approval or licensure.
Congress created three kinds of user fees via PDUFA and required that they each make up one-third of the total fees collected. These include application review fees paid by the sponsor for each drug or biologic application submitted, establishment fees paid by manufacturers annually for each of its facilities, and product fees paid annually for each product on the market covered by PDUFA. For 1993, the application review fee was about $100,000. The law provided exemptions and waivers for applications from small businesses, drugs aimed at orphan diseases, or unmet public health needs.
In order to avoid listing specific performance goals in statutory language Congress stated in the bill’s “Findings” 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
United States House Committee on Energy and Commerce
The Committee on Energy and Commerce is one of the oldest standing committees of the United States House of Representatives. Established in 1795, it has operated continuously—with various name changes and jurisdictional changes—for more than 200 years...
and the Chairman of the Labor and Human Resources Committee of the Senate
United States Senate Committee on Health, Education, Labor, and Pensions
The United States Senate Committee on Health, Education, Labor, and Pensions generally considers matters relating to health, education, labor, and pensions...
, as set forth at 138 Cong. Rec. H9099-H9100 (daily ed. September 22, 1992)."
PDUFA II
In its 1997 reauthorization of PDUFA, Congress enacted stricter performance goals, required increased transparency in the drug review process, and tried to facilitate better communication between drug makers and patient advocacy groups. Congress expanded the scope of the legislation to include the investigational phases of a new drug’s development. PDUFA II was passed as Title I of the Food and Drug Administration Modernization Act.When Congress was debating the legislation that implemented PDUFA II Rep. Billy Tauzin, who later became head of PhRMA and one of those leading the call for a further streamlined review process, told a story of how a family friend had to travel to Mexico to obtain drugs that helped him overcome prostate cancer. "We continue to have problems with the fact that approved medicines in other countries can't get approved here. But what I particularly can't understand at all are situations where you have people suffering terminal illnesses, and they can't get the experimental drugs that might save their lives."
In testimony before Congress, James Swire, an AIDS activist and health educator who became infected with HIV in 1990, said the FDA has dramatically reduced the time needed to approve life-saving drugs using the money from PDUFA. Swire said, "I'm here because people really pushed the review process for AIDS and HIV treatments. There still is not a cure, but because of some of the new drugs, a lot of us have been able to get back to work."
PDUFA III
PDUFA III, part of the Public Health and Bioterrorism Preparedness Act, made appropriations for increased postmarket monitoring of new products and allowed the FDA to hire additional personnel to speed the reviews of new drugs. Another 2002 statute extended user fee policies to cover the approval process for medical devices.During the period that PDUFA III was in effect the FDA's requirement that drug companies pay user fees for 505(b)(2) applications to switch drugs from requiring a prescription to being sold over-the-counter became a source of controversy. The drug industry claimed that the FDA misinterpreted the section of PDUFA III authorizing user fees when deciding to charge for reviewing 505(b)(2) applications. Specifically, they said Congress only intended user fees to be paid on new indications for a new active ingredient and that switching a drug to over-the-counter status was an exception to the rule requiring user fees.
In February of 2007 the FDA exempted drugs used in the President's Emergency Plan for AIDS Relief
President's Emergency Plan For AIDS Relief
The President's Emergency Plan For AIDS Relief was a commitment of $15 billion over five years from United States President George W. Bush to fight the global HIV/AIDS pandemic...
(PEPFAR) from user fees in order to reduce the financial burden of developing new AIDS drugs.
PDUFA IV
The FDA requested and received fee increases to cover increased reviewer workload and expanded post-marketing safety initiatives, as well as the authority to apply user fees to the monitoring of direct-to-consumer drug advertisingAdvertising
Advertising is a form of communication used to persuade an audience to take some action with respect to products, ideas, or services. Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering, although political and ideological advertising is also common...
.President Bush signed the reauthorization of PDUFA into law on 27 September 2007.
In 2007, the FDA was expected to collect $259,300,000 in industry user fees.
PDUFA V
The reauthorization process for PDUFA V began with a public hearing in April 2010. PDUFA must be reauthorized in 2012.The Pharmaceutical Research and Manufacturers of America
Pharmaceutical Research and Manufacturers of America
Pharmaceutical Research and Manufacturers of America , founded in 1958, is a trade group representing the pharmaceutical research and biopharmaceutical companies in the United States. PhRMA's stated mission is advocacy for public policies that encourage the discovery of new medicines for patients...
(PhRMA) strongly supports reauthorization of PDUFA. “PDUFA V can play a critical role in making more life-saving medicines available to patients in a timely manner, strengthening the scientific base of the FDA and providing a steady, reliable stream of resources for Agency scientists,” said Dr. Wheadon, PhRMA's Senior Vice President for Scientific & Regulatory Affairs.
Increased staffing
A 2002 U.S. Government Accountability OfficeGovernment Accountability Office
The Government Accountability Office is the audit, evaluation, and investigative arm of the United States Congress. It is located in the legislative branch of the United States government.-History:...
(GAO) report found that PDUFA funds allowed the FDA to increase the number of new drug reviewers by 77 percent in the first eight years of the act, and the median approval time for non-priority new drugs dropped from 27 months to 14 months over the same period.
Review times
A major PDUFA goal is for the FDA to review and provide a ruling on applications within one year unless significant changes are made to the application during the last three months of the review cycle. In a 1997 speech given prior to leaving the FDA David Kessler said, "So far we have reviewed 95% of the 1995 group on time. We won't reach 100%, however, because we did make a mistake: we misread a deadline on a computer printout and we missed one deadline by three days." The PDUFA goal for the 1995 group called for a 70% on-time record. The 95% on-time rate more than doubled the pre-PDUFA on-time level of about 40%. Kessler said the FDA achieved similar positive results with other PDUFA goals, including in its review time for efficacy supplements (requests to add a new indication or a new group of patients to an already approved drug), submissions for manufacturing supplements (for making significant changes in the way a drug is made or using a new manufacturing facility) and resubmissions (responses provided to questions or alleged deficiencies raised by the FDA).From 1993 through 1996, the years PDUFA I was in effect, the approval time for new drugs declined significantly while the number of new products increased. The approval time for NDAs in the 8 years before the implementation of PDUFA I was roughly 31.3 months. During this period, the approval time exceeded 30 months in every year except 1990 when it was 27.7 months and 1992 when it was 29.9 months. From 1993 through 1996, the average approval time fell to 20.8 months. During this period, the approval time for new drugs never exceeded 30 months. According to the Pharmaceutical Research and Manufacturers of America
Pharmaceutical Research and Manufacturers of America
Pharmaceutical Research and Manufacturers of America , founded in 1958, is a trade group representing the pharmaceutical research and biopharmaceutical companies in the United States. PhRMA's stated mission is advocacy for public policies that encourage the discovery of new medicines for patients...
drug review time was cut roughly in half after the passage of PDUFA I.
Drug launches
Faster drug approval times and other PDUFA-related changes have led to pharmaceutical companies targeting more drugs for first launch in the United States thus increasing patient access to new medicines. Faster drug review from 1990 to 2001 were found to increase the probability of a drug being launched first in the United States by 14%. Other changes made under PDUFA such as the increased probability of approval and shortened development periods increased the probability of a drug being first launched in the United States by 31 percent at the end of PDUFA I and 27 percent at the end of PDUFA II.During the eight years before PDUFA took effect, an average of 24 new drugs were approved each year. The number of approvals ranged from 20 in 1988 to 30 in 1991. During the four years that PDUFA I was in effect, an average of 32 drugs were approved each year, ranging from 22 in 1994 to 53 in 1996. The average number of new drugs approved by the FDA each year increased by one-third.
First drug launches making use of new chemical entities in the United States increased from 44 from 1982 through 1992to 156 in from 1993 through 2003 period. The increase in first drug launches in the United States from 1993 through 2003 is particularly interesting given that the European Union harmonized its regulatory regime for new drugs with those of other major markets in order to reduce barriers for drug approvals during the same period.
Regulator-industry communication
David Kessler described improved communication between the FDA and the drug industry on what date should be included in NDAs as an important benefit of PDUFA. He said, "For example, in fiscal year 1993, 34 of the new applications that came into the FDA were sent back to the company because they were poorly prepared or missing critical information. In fiscal year 1996 six applications were refused for these reasons - a more than fivefold improvement."PDUFA dates
PDUFA dates are deadlines for the FDA to approve new drugs. The FDA is normally given 10 months to review new drugs. If a drug is selected for priority review then 6 months is allotted. These times begin from the date a NDA is submitted.Scale of fees
FDA calculates the fees for the following year based on the expected work (applications etc) and the amount it wants to raise from the fees. For 2008 the application fees are :- $1,178,000 per full application requiring clinical data,
- $589,000 per application not requiring clinical data or per supplement requiring clinical data.
There are also establishment fees and product fees.