The FDA/industry PDUFA III agreement includes funding to expand FDA's Office of Drug Safety by 100 full-time equivalent staff positions over five years.

"The recommendations that we've arrived at would actually double the size of the review staff within drug safety at the agency," Center for Drug Evaluation & Research Director Janet Woodcock, MD, told the House Energy & Commerce/Health Subcommittee at a March 6 hearing.

The Pharmaceutical Research & Manufacturers of America, Biotechnology Industry Organization and FDA reached a tentative agreement on agency performance goals March 1. FDA briefed the committee on the agreement March 5.

The groups are finalizing a letter to Congress outlining the proposed performance goals for the reauthorization of the Prescription Drug User Fee Act.

The post-marketing safety fees would be paid as part of new drug applications, and could not be used for general surveillance activities for previously approved products. The agreement is understood to specify that fees would be available only for surveillance during the first two years a product is on the market.

Acting Commissioner Lester Crawford, PhD, described the new fees as applying to the "peri-approval" process. "It helps us...to think in terms of premarket activity and also to think of the approval and review activities, and then the peri-approval."

There was a time "when the agency, quite frankly, approved drugs, allowed them on the market, and then unless we had adverse event reports, we didn't do very much," Crawford said.

The extension of fees into the post-marketing arena achieves one of FDA's long-standing goals. The agency argued unsuccessfully during the 1997 user fee/FDA reform debate that it needed enhanced funding for post-marketing surveillance activities.

PhRMA resisted post-marketing fees five years ago, arguing general appropriations should fund activities beyond the scope of the original user fee deal.

During the March 6 hearing, Eli Lilly VP-Clinical Research & Regulatory Affairs Timothy Franson, MD, reported that "additional user fees will be allocated for the risk management program, and this will complement the extensive programs that FDA and PhRMA member companies have in place to monitor postmarket safety of new drugs."

The structure of the user fee deal grew out of discussions between FDA and PhRMA on risk management options. The agency is planning a public meeting in May to discuss proposals from the "toolkit" group.

Tying post-marketing fees directly to risk management plans for individual applications will allow PhRMA and FDA to maintain the position that the user fee program is not a "tax" and so does not require input from additional Congressional Committees.

By defining the 1992 PDUFA law as a "fee for service" and not a "tax," Congress "avoided a difficult jurisdictional decision as to whether referral to the House Ways & Means and the Senate Finance Committees would be required," Franson noted. "PhRMA would urge the subcommittee to preserve the current language in the statute to ensure that PDUFA continues to meet the above-mentioned process definition."

By extension, PhRMA was prepared to argue that devoting fees to general post-marketing surveillance activities would convert PDUFA into a "tax" bill.

FDA's post-marketing safety user fee proposal requested funding for the tool-kit effort, as well as for enhanced information technology for the drug safety program and for completion of guidances on regulatory procedures (¹ Also see "PDUFA III Or Hatch/Waxman II?: Payors Urge Fix For Generic “Loopholes”" - Pink Sheet, 28 January, 2002., p. 12). FDA apparently will receive funds for each of those efforts under the agreement.

Rep. Henry Waxman (D-Calif.) called the postmarketing fees a "good start," but observed the only performance goals in the PDUFA agreement will relate to pre-market review. "What will stop the agency from taking resources from the post-market safety program to help these performance goals for faster approvals," he asked.

"We have viewed it as an obligation to use the money as it's been intended," Woodcock replied. "And I don't think we intend to divert or change the money around."

Waxman also noted the disparity in the number of FDAers focused on pre- versus post-market review.

The existing user fee law funds more than 1,000 FTEs in pre-market activities. PhRMA said that the PDUFA III agreement will add many more new reviewers on the pre-market side than it will on the post-market side.

The new agreement calls for a "dramatic" increase in fees, PhRMA stated, although not at the 60% level proposed in the Bush Administration's FY 2003 budget for FDA (² Also see "FDA Budget Includes 61% PDUFA Increase; Agency Wants Proposal By May" - Pink Sheet, 11 February, 2002., p. 8).

Although the agreement does not fundamentally change the pre-market review goals, it does include new features such as a provision to allow sponsors to request outside consultants (see ³ Also see "FDA Protocol Reviews Would Include Outside Consultants Under PDUFA III" - Pink Sheet, 11 March, 2002.).

The industry's concession on post-marketing safety fees may help in the broader objective of achieving rapid enactment of a "clean" bill, i.e., one without provisions on generic drugs or DTC advertising.

Democrats including Waxman and subcommittee ranking member Sherrod Brown (D-Ohio) indicated interest in addressing other aspects of FDA in the PDUFA III reauthorization process.

However, Energy & Commerce Committee ranking minority member John Dingell (D-Mich.) appears to agree with the Republican leadership that the user fee bill should not be a vehicle for other provisions.

Dingell is understood to favor addressing generic drug issues in particular as part of a separate omnibus health bill later in the 2002 session. Another Michigan Democrat, Bart Stupak, however, warned that PDUFA "is the only vehicle we'll probably see this year."

"I believe it is essential that the committee produce a clean reauthorization this year," Energy & Commerce Chairman Billy Tauzin (R- La.) said. "My message to all is that this is not the vehicle for consideration of those matters. We cannot allow reauthorization of PDUFA to be turned into a Christmas tree." The legislation "should move rapidly," Dingell agreed.

Subcommittee Chairman Michael Bilirakis (R-Fla.) said a delay in reauthorization would "mean that the FDA would be forced to eliminate a large portion of its workforce." The agency stated it would have to begin layoffs in August if the user fee bill is not reauthorized.

During the 1997 debate, FDA had "carryover" funding from unexpended user fees that it used to continue operations until the bill was signed in November. The agency will not have such funds this year.

PDUFA III Deal Includes Risk Management Fees In “Peri-Approval” Phase

More from Archive

More from Pink Sheet