Drugmakers Ready to Pay More to Wait Less

The Food and Drug Administration has reached a tentative agreement with the pharmaceutical and biotech industries that would provide the agency with more money for reviews and safety monitoring of new drugs.

The industry and the FDA have been negotiating over the reauthorization of the Prescription Drug User Fee Act since early this year. PDUFA was first enacted in 1992 to help the FDA speed up the drug review process. The current version of the law, amended in 1997, expires at the end of September. The law requires drug companies to pay application fees used to offset the cost of the drug review process. These user fees currently run as much as $300,000 per application.

While PDUFA generally has cut drug review times almost in half since 1992, approval times have begun to creep back up in the last three years. Why? It depends on whom you ask. FDA critics say the agency has been too obsessed with safety, to the point where drug reviews are dragging on far too long, or even worse, good drugs are being kept off the market.

Looking for Approval Approval times for new drugs have fallen considerably since PDUFA was first established in 1992

Source: Food and Drug Administration

But FDA supporters say regulators are overwhelmed and understaffed, and that recent well-publicized drug recalls bolster the need for even more attention to safety.

The tentative agreement hammered out between the FDA and industry is a compromise that provides the agency with a hike in industry-paid drug application fees while committing the extra funds to programs that will make the agency more efficient, according to participants involved in the negotiations. Congress uses the agreement as a template to reauthorize PDUFA for another five years.

Under the proposal, user fees would rise to $223 million next year, from about $135 million this year. User fee collections would rise gradually and top out at $259 million after five years.

At the FDA's request, the agency would be allowed to use some of this money to hire additional drug safety monitors. The goal is to flag unsafe drugs during the review process and reduce the number of drugs that are pulled off the market because of safety problems.

But under proposals submitted by the Biotechnology Industry Organization, the FDA also will take steps to improve the efficiency of its Center for Biologics Research and Evaluation, the FDA arm that handles most biotech-derived drugs. The FDA will boost CBER funding, some of which will be used to hire outside, independent experts who can help the agency's staff offer better guidance to companies on drug trial design.

A BIO spokeswoman declined to comment on the PDUFA agreement until its terms were officially presented to Congress, but in a recent interview with TheStreet.com, BIO President Carl Feldbaum laid out the trade group's position.

"We're not averse to paying more [in PDUFA user fees], but we want to find out what we're paying for, and what the performance standards will be," he said.

A final agreement between the FDA and the industry should be completed soon.

Drugs approved in 2001 spent an average of 19 months in the FDA process, down from 19.9 months in 2000. But in 1998, the average time period for drug review was 13.4 months, according to FDA records.