Trump’s US FDA User Fee Cycle: ‘An Underappreciated Threat’

An unprecedented dynamic could unfold in about six months when the US Food and Drug Administration publicly opens the next prescription drug user fee renewal cycle, due to a White House hostile to the revenue stream that helped modernize the agency and drastically cut approval times.

Trump formally announced his intent to nominate Robert F. Kennedy Jr. to lead the US Health and Human Services Department on 14 November. Kennedy has called for reform to the user fee program, arguing it gives large pharmaceutical companies too much influence and hinders small companies from gaining product approvals.

Stakeholders across various ideological and political spectrums share Kennedy’s concerns, but those feelings often are tempered by the realization that Congress likely would not replace lost user fee dollars with taxpayer funding. A Republican Congress, which will be in power in January, is almost certainly less likely to do so.

Without the money the FDA would lose thousands of employees, making current approval timelines and other workstreams impossible to maintain.

President Trump has proposed reshaping the user fee program before. In 2017, he cut the FDA’s taxpayer funding by nearly one-third in his budget proposal, which was offset with new user fees. Trump wanted user fees to cover the full cost of product reviews.

Then FDA Commissioner Scott Gottlieb distanced himself from the proposal, which Congress never enacted.

Unlike the upcoming user fee reauthorization process, PDUFA VI was largely negotiated by the FDA and industry in 2015 and 2016, prior to Trump taking office.

“If they had the time do something it would have been potentially completely disruptive,” a former FDA official said of the first Trump team’s interest in user fee reform.

Another former senior FDA official told the Pink Sheet that at that time the new administration acknowledged a deal had been struck. The PDUFA VI agreement also was not high on the White House priority list, but the former official expected it could be higher on the list this time.

And for PDUFA VIII, Trump’s team will be in control during the entire process. An initial public meeting is expected in July 2025. Industry negotiations with the FDA likely will occur between September 2025 and February 2026. Congress would receive the agreement in early 2027 to begin the legislative process. The PDUFA program will expire at end of September 2027. (See chart below.)

It ‘Would Be A Disaster and Shut The Agency Down’

Gutting the FDA’s user fees would significantly disrupt the agency’s drug work. In fiscal year 2023, the FDA’s human drugs program received about twice as much user fee money as taxpayer dollars even though that year more than half of the overall agency budget was funded with budget authority.

“Appropriators will never replace,” user fees with the same amount of budget authority needed and it “would be a disaster and shut the agency down,” the first former official warned. “I would like to think that we have mature adults with their hands on the wheel that are going to say this is not going to happen.”

But the former official also acknowledged that the current risks to user fees are “a very real threat” and one that is “currently underappreciated.”

One concern is that the industry has lost key Republican champions in Congress that would help shepherd the bill. Former Sens. Orrin Hatch and Lamar Alexander were crucial in other user fee cycles.

Must Pass Lever For RFK’s Policy Reform

Another risk is that the user fee legislation is a “must-pass” vehicle that Trump and his team could use to enact their vision of FDA reform.

The administration could interfere with the terms of the user fee agreement, also known as the commitment letter, which outlines the FDA goals and activities funded with fee revenue. Typically, career FDA staff negotiate the agreement given its technical and time-consuming nature with more minimal involvement from the agency’s political staff.

The Trump administration could take a more active approach and constrain how the funds could be used. Republicans have shown some interest in exercising more authority over user fee commitment letters and may push to take that process away from FDA, experts said.

Conservatives in Congress also have pushed for skinnier user fee agreements that limit the money for anything beyond application reviews. Guidance development or other policy or scientific projects that industry and the FDA want could be cut.

The administration also could intervene through the legislative vehicle that codifies the user fee agreement into law. By the time the legislation arrives, Trump’s team will have been in office a few years and by then may understand the FDA reforms that are possible.

If internal changes cannot be accomplished, they could try placing the changes in the user fee legislation, experts said. The impact of those reforms could be dramatic.

Others speculated that Trump’s first two years in office could impact the user fee reauthorization in ways that are hard to predict.

If lots of FDA staff depart due to concerns about working under Kennedy’s vision for the agency, drug approvals could slow, which could impact the user fee renewal process.

The midterm elections also could shift the makeup of Congress, which may alter FDA and industry positioning for the user fee reauthorization.

Some are holding out hope that the status quo will prevail.

“I do expect more people will talk about user fees and how to eliminate or lower them in the new administration,” said Nancy Myers, president of Catalyst Healthcare Consulting and a founding member of the Alliance for a Stronger FDA. “However, once they look at the implications of ending the programs or dramatically reducing user fees, I expect that pulling that trigger will be very difficult, unless the goal is to cripple the agency.”

“FDA is too important an agency to starve,” she said.

The agency’s constituencies, which include scientists, patient groups, consumers and academics, as well as industry, will need to be ready to challenge any threats to the agency’s mission, Myers said.

“It is going to be critically important for stakeholders who benefit from a strong and functional FDA to remain vigilant and hold any new leadership accountable,” she said.

“When the histories of FDA are written, we will likely see that user fee negotiations, like PDUFA, MDUFA, GDUFA, and other UFAs, have done more than just raising critical revenues for FDA,” Myers said. “Since 1992, PDUFA has helped pave the way for US innovation by creating a multi-year process that encourages FDA, industry and engaged stakeholders to plan ahead, anticipate needs, and prioritize program reforms. It has considered and targeted resources in a thoughtful way to advance US innovation.”

Wayne Pines, president of health care at APCO Worldwide, who worked at the FDA prior to President Reagan, and has remained in the FDA space ever since, believes the drug industry will continue to exert significant influence over Congress and ensure the user fee process and a strong regulatory agency survives.

Trump’s interest in strong American businesses also may help protect the agency, Pines told the Pink Sheet.

“A strong FDA protects the economics of the medical products industries and the food industries,” Pines said. “If there are questions about the safety and effectiveness of American drugs, that has international repercussions, and I don’t know anybody who is interested in that.”