Outrage of the Month: Congress Reauthorizes FDA-Corrupting User Fees for Five More Years

Health Letter, December 2022

By Michael Carome, M.D.

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On Sept. 30, 2022, Congress passed legislation that extended for five more years (until September 2027) the Food and Drug Administration’s (FDA’s) reliance on user fees paid by pharmaceutical and medical-device companies — which across all FDA user-fee programs totaled approximately $1.4 billion for review and oversight of prescription drugs and more than $400 million for review and oversight of medical devices in fiscal year 2022.

Drug manufacturers began paying user fees for the FDA’s review of their applications for approval of new prescription drugs after enactment of the Prescription Drug User Fee Act (PDUFA) in 1992. Ten years later, medical device companies started paying user fees for approval or clearance of medical devices after enactment of the Medical Device User Fee Amendments (MDUFA) in 2002.

With strong support from both industry and the FDA, these user fees have been reauthorized by Congress every five years since their initial implementation and have increased steadily. For fiscal year 2023, the user fee paid by brand-name pharmaceutical companies for the initial review of a typical new drug application has been set at $3.2 million. For medical device companies seeking initial review and approval of high-risk devices, the standard application fee will be about $442,000.

PDUFA and MDUFA were intended to expedite the drug and medical-device review processes by providing the FDA with a new funding stream to hire additional medical experts and other staff to review new drug and medical-device marketing applications. In exchange for this industry funding, Congress required that the FDA meet benchmarks for timeliness of review and final decision-making for these applications.

In addition, each five-year reauthorization of PDUFA and MDUFA has provided an opportunity for drug and medical-device companies and their well-paid advocates to lobby Congress for additional legislative provisions that have had nothing to do with the actual user fees but instead weakened the standards for approving new drugs and medical devices. Remarkably, in contrast to all prior reauthorizations, no such provisions were attached to the 2022 PDUFA and MDUFA reauthorization legislation.

Importantly, the introduction of drug and medical-device user fees gradually resulted in a fundamentally dangerous shift in the relationship between the FDA and the regulated pharmaceutical and medical-device industries, such that the agency now views these companies as partners and customers rather than regulated entities.

FDA leaders for several years now have been transparent about the agency’s partnership with industry and its view of companies as the agency’s primary customers. For example, in a 2014 speech to drug company executives, then-FDA Commissioner Margaret Hamburg touted a “new era of partnership” with the biopharmaceutical industry.1 Likewise, 2019 guidance from the FDA’s Center for Devices and Radiological Health strikingly characterizes medical-device companies as “customers” and emphasizes the need to provide these companies with “excellent customer service.”

Partnerships involve close cooperation between two or more entities seeking to advance shared interests and objectives. But the dynamics of a true partnership are incompatible with the relationship that should exist between a regulatory agency and regulated industry. The pharmaceutical and medical-device industries’ primary interest is to maximize profits from selling drugs and devices, which can conflict with what should be the FDA’s primary interest: protecting public health.

Largely because of these user fees, the relationship between the FDA and the pharmaceutical and medical-device industries over the past 20 to 30 years has grown ever cozier — resulting in regulatory capture of the agency by these industries. Reversing this regulatory capture will require Congress to rescind user-fee–based funding of the agency and restore public — not industry — funding of the agency.


References

[1] Weisman R. FDA chief urges ‘new era of partnership.’ April 5, 2014. The Boston Globe. http://www.bostonglobe.com/business/2014/04/04/fda-commissioner-calls-for-new-era-partnership-with-biopharma-industry/8676GZuMw8oEqaXt2HmkmK/story.html. Accessed October 26, 2022.