User Fees, Drug Safety

Published on: 
Pharmaceutical Technology, Pharmaceutical Technology-02-02-2006, Volume 30, Issue 2

FDA is proposing revisions to the drug user fee program while it weighs changes for drug safety initiatives and expanded vaccine production.

The US Food and Drug Administration is setting the stage for a broad debate over how much the agency should rely on industry payments for support, and how much control FDA should have over how user-fee revenues are spent. FDA officials would like to allot more fee revenues to drug-safety surveillance, an area that continues to draw attention from Congress as well as the media. Another challenge for the agency is to encourage and regulate new vaccines and drugs to protect against pandemic disease and bioterrorism. All these initiatives will stress FDA's tight budget for the coming year, which relies increasingly on user fees to support its expanding responsibilities.

Jill Wechsler

Debate begins

FDA opened the debate about reauthorizing the Prescription Drug User Fee Act (PDUFA 4) at a public meeting this past November. FDA Acting Commissioner Andrew von Eschenbach termed PDUFA reauthorization critical to FDA's ability to bring new medical discoveries to patients. FDA Deputy Director Janet Woodcock described how user fees support a broad range of FDA activities from early discovery through postmarket surveillance. The added resources from user fees over the past decade have improved the new drug application (NDA) approval process, noted Steven Galson, director of the Center for Drug Evaluation and Research (CDER). Most NDAs need only one review cycle to gain approval, he pointed out, and the scientific expertise of CDER's staff has improved noticeably. An FDA white paper explains the agency's case for more appropriated funding and user fee collection to support its more-complex and costly drug review process (white paper available at

Similar discussions have begun involving reauthorization of user fees for medical device manufacturers, which also expire in 2007. Officials at FDA's Center for Devices and Radiological Health want to use some fees collected under the Medical Device User Fee and Modernization Act of 2002 for postmarket surveillance, a proposal gaining momentum following recent safety crises involving pacemakers and defibrillators.

Although some consumer advocates and their Congressional allies criticize user fees for extending industry control over the drug approval process, FDA officials, pharmaceutical manufacturers, and patient-disease groups applaud the program's success in ending drug lag and speeding new therapies to market. At the same time, FDA officials seek more flexibility that will allow it to use more of the $250 million user-fee revenues to expand postapproval drug safety surveillance, boost scrutiny of direct-to-consumer advertising, and support collaborative research activities under its Critical Path initiative.

FDA cites a growing workload to justify fee revisions. Although NDAs and biologics license applications (BLAs) remain fairly flat, manufacturing and efficacy supplements continue to rise, and chemistry and manufacturing controls supplements have doubled from 1247 in 1993 to 2481 in 2004. In addition, FDA struggled this past year to prepare for more than 2000 industry-requested meetings and to assess nearly 350 special research protocols under tight deadlines, including requests for FDA to evaluate new carcinogenicity and stability-testing methods.

No Christmas trees


Manufacturers basically want to renew PDUFA but hold the line on fee increases and the use of fee revenues for activities unrelated to drug development and market approval. It now costs sponsors nearly $800,000 to file an NDA or BLA, an amount spurring proposals for more waivers and reduced fees for small companies and orphan drug developers.

Industry's broader goal is to prevent a PDUFA reauthorization bill from becoming a "Christmas tree" loaded with legislation peripheral to the drug approval process. Measures to spur development of follow-on biologics, to establish new drug safety oversight arrangements, to mandate completion of postapproval studies, and to boost oversight of direct- to-consumer advertising are just some of the popular proposals circulating on Capitol Hill.

Manufacturers have no problem, though, with linking PDUFA legislation to a bill reauthorizing incentives for studying drugs in pediatric populations, which also is up for renewal in 2007. The six-month patent extensions on drugs that add pediatric information to labels have been a boon for pharmaceutical companies, while also generating important prescribing information for physicians and patients. Generics makers object that the patent extensions only boost drug costs for everyone. But, doctors applaud the new pediatric formulations and useful prescribing information generated by the program.

Before talking about more fees, Abbott Senior Vice-President Bruce Burlington, representing Pharmaceutical Research and Manufacturers of America (PhRMA, Washington DC, at the November meeting, urged further analysis of whether current user-fee revenues are wisely spent. Burlington noted that an FDA study of first-cycle application reviews and a fresh look at the effect of risk management plans would be informative. Industry supports further development of FDA computer information systems, as well as a suggestion from the Biotechnology Industry Organization (BIO, Washington DC, to improve drug safety through better evaluation of product trade names.

A common goal for FDA and industry is to link any increases in user fees to a rise in federal appropriations for the agency. This past year, pharmaceutical and biotech companies paid ~$250 million in fees for applications, products, and facilities, exceeding by nearly $50 million the portion of appropriated funds devoted to drug-review activities. This situation undermines the complex trigger arrangement established in 1992 to ensure that user fees would be additive to FDA appropriations and not merely replace public funding, a deal backed by all parties. Although the numbers-crunchers have provided FDA with enough appropriated funds to trigger user-fee collections each year, the continued squeeze on FDA's budget challenges the program's basic principle.

One source of added revenue could come from user fees on generic drugs. This long-discussed proposal resurfaced in recent months, as prospects have dimmed for budget increases earmarked for FDA's Office of Generic Drugs. Generics makers say they're willing to discuss the idea, but application fees for abbreviated NDAs (ANDAs) are tricky because of often lengthy delays between when FDA approves an ANDA and when the product comes to market.

Supporting safety

One FDA request is to make additional user-fee revenues available to support drug safety initiatives. The aim is to improve FDA's drug safety surveillance system and risk management activities that have been under intense scrutiny by Congress and the public for the past two years.

A relatively small portion of fee revenues was allotted for postapproval surveillance under PDUFA 3, but drug safety and risk management have become more prominent challenges for the agency. In the past decade, FDA has experienced a huge growth in the number of adverse event reports it receives, a trend that reflects rising prescription drug use overall. Galson pointed out that CDER staff actually devotes 50% of its time to drug safety activities, a figure that includes the assessment of safety studies in NDAs and scrutiny of manufacturing product quality by reviewers and plant inspectors.

Under PDUFA 3, FDA can allocate user fee revenues for drug safety monitoring during the first two years a new drug is on the market (three years for potentially dangerous mediations)—and not safety issues related to products approved five or 10 years ago. More flexibility would provide resources for FDA to implement some of its recently proposed initiatives to expand surveillance, improve its ability to communicate safety concerns to the public, and better organize its internal postmarketing oversight operation.

Manufacturers and healthcare professionals have raised concerns about some of FDA's new safety initiatives, however, and these objections may be addressed as part of the PDUFA 3 negotiations. At a two-day meeting in December about FDA methods for communicating drug risk information, manufacturers, pharmacists, and other parties complained about the proliferation of risk communication tools that include FDA press releases, talk papers, public health advisories, MedWatch safety updates, and patient safety news reports in addition to labeling changes. FDA recently added patient information sheets and healthcare professional information sheets to the arsenal.

Manufacturers are particularly upset by FDA's plan to post emerging drug safety information on a new Drug Watch Web site. Industry representatives described the plan to make early adverse event signals publicly available as likely to confuse both consumers and physicians about whether a drug is unsafe and no longer should be prescribed. In response, agency officials plan to go back and rethink the proposal, according to Galson of CDER, who recently termed the Drug Watch proposal "one of the most challenging policy issues" before the agency.

Manufacturers propose a delay in posting new safety signals until FDA and the sponsor agree that the problem is related to a specific drug and what the appropriate response might be. Releasing safety information before it is fully evaluated, commented attorney John Kamp, could undermine FDA's "golden reputation" for issuing reliable, science-based assessments on a drug's safety and efficacy.

In addition to confusing consumers and exposing manufacturers to additional liability charges, FDA's Drug Watch proposal calls for the agency to issue patient information sheets for all approved drugs, even those without emerging safety issues; FDA also would develop professional information sheets on all new molecular entities. Pharmacists and physicians, as well as manufacturers, are cool to this idea. At the FDA meeting, Joe Cranston of the American Medical Association (Chicago, Il, termed patient information sheets redundant and confusing for doctors, and advised FDA to consult more with medical specialty societies on developing useful communications tools on drug risk. Nicholas Ratto of First DataBank (San Bruno, CA, said that FDA patient information tools duplicate private sector consumer medical information that is easier for patients to understand.

Despite, or perhaps because of, this multiplication of warnings and advisories, it's hard to find risk information about a specific drug on FDA's Web site. Consumers don't know that most drug safety information appears on the CDER Web page. In another year or so, the Daily Med Web site from the National Library of Medicine (Bethesda, MD, should contain all current drug labels and could provide a central portal to additional risk information. The current FDA Web site is frustrating even experts who use it regularly.

Protection against pandemics

Even though FDA is struggling with its expanding workload and drug safety concerns, it faces additional assignments that require even more resources. One prominent challenge is to ensure access to vaccines and treatments to protect the nation against looming epidemics and bioterrorism threats. The Bush administration unveiled a $7.1-billion Pandemic Influenza Plan this past November that includes a $2.8-billion crash program to revitalize vaccine manufacturing in the United States. The aim is to support a shift from egg-based flu vaccine production to advanced cell-culture approaches able to produce a new flu vaccine in six months. Another $1.5 billion would buy 40 million vaccine doses by 2009, plus $1 billion to stockpile enough antivirals such as Roche's (Basel, Switzerland, "Tamiflu" (oseltamivir) and GlaxoSmith-Kline's (Middlesex, UK, "Relenza" (zanamivir) to treat 25% of the population.

Congress approved a down-payment on the program in December by adding $3.8 billion for pandemic preparedness to the $453-billion 2006 defense appropriation bill. Although that amount is approximately half of what the administration asked for, it provides initial support for efforts to expand domestic vaccine production and to build up stockpiles. The legislation also provides $20 million to support FDA research and oversight of vaccine production, a relatively paltry amount that primarily will be spent on resource-intensive inspections of vaccine manufacturing facilities in the United States and abroad. The 2004 flu vaccine crisis required FDA officials to spend weeks monitoring vaccine quality and inspecting manufacturing sites, while also engineering accelerated approval for new sources of supply. A huge ramp-up of stockpiles will tax FDA's ability to monitor drug stability, although growing demand for flu treatments will require close scrutiny for counterfeit products.

The most controversial provision in the defense funding bill—and one of critical importance for industry—provides liability protection for manufacturers of pandemic countermeasures. The legislation protects companies from liability suits, but applies only to vaccines and drugs administered during a public health emergency and for a specified disease. Democrats attacked the provision as excessively broad because its protections extend to gross negligence and reckless misconduct, but BIO termed the bill balanced and important for rebuilding the nation's vaccine infrastructure. At the same time, the legislation fails to provide additional patent incentives for new product development. Strong opposition from generics makers blocked adoption of a controversial wild card exclusivity provision that would have allowed manufacturers to gain a patent extension on a commercial product in exchange for producing a low-profit countermeasure.

Meanwhile, FDA is working to assemble the extensive resources needed for evaluating new production strategies and investigational vaccine lots, as well as assess new antivirals, diagnostic tests, and devices needed to combat a public health emergency. These efforts will be managed by an FDA Rapid Response Team, which will coordinate agency pandemic preparedness activities with industry, the Centers for Disease Control and Prevention (Atlanta, GA,, and the National Institutes of Health. The aim is to detect and deal with production roadblocks to ensure an adequate supply of antivirals and vaccines in case of a disease outbreak. Among other things, the team has authority to allow other firms to manufacture a patented product under emergency use authorization.

Although every bird that catches avian flu has been making headlines, many scientists are skeptical that a pandemic will emerge in the United States in the near future. Policy makers are recalling the 1976 swine flu debacle, when the government wasted billions developing vaccines for a flu pandemic that never materialized. If the current plan succeeds in modernizing and expanding the US vaccine production infrastructure, that may be money well spent. But manufacturers will share the blame if they benefit from government grants but never have to respond to a real emergency.

Jill Wechsler is Pharmaceutical Technology's Washington editor, 7715 Rocton Ave., Chevy Chase, MD 20815, tel. 301.656.4634,