FDA Agreement with Drug Companies Would Allow Agency to Use Fees for Post-Market Oversight

The FDA and the pharmaceutical industry have reached a tentative agreement stating that the agency could use the fees paid by drug companies for expediting the drug approval process to monitor drugs once they enter the market, CongressDaily/AM reports. The "landmark deal" -- representing a shift in the drug industry's views on the issue -- comes as Congress is considering renewing the Prescription Drug User Fee Act, which expires this year. The agreement, reached last Friday, could form the basis of legislation that is being drafted by the House Energy and Commerce Committee (Fulton, CongressDaily/AM, 3/6). Under the law, last renewed in 1997, the FDA charges drug makers a fee in exchange for an expedited review process. The law allowed the FDA to reduce the average review time for new drugs to less than one year in 1999, from about two years in 1990. The fees currently account for about 12% of the agency's $1.3 billion budget (California Healthline, 1/28).

The deal, which has not been officially approved by the Bush administration, would represent a "major victory" for the FDA and its efforts to seek additional resources for drug safety monitoring. CongressDaily/AM reports that congressional sources say that under the plan, funding levels for the review program would rise by "several million dollars" and the FDA would have more flexibility over how to allocate the resources. The agency estimates that it will receive $325 million for drug reviews in fiscal year 2002, roughly 50% of which will result from user fees. The agreement would also double the size of the FDA's Office of Drug Safety by funding an additional 100 staffers over the next five years. In return, the FDA would be required to assist drug makers before they submit a formal review application. The agency would not, however, be required to shorten review times beyond existing requirements -- 10 months for regular products and six months for those designated as expedited.

The proposal indicates a shift in position for the pharmaceutical industry. In January, Pharmaceutical Research and Manufacturers of America President Alan Holmer pushed for a "clean extension" of the prescription act and argued against "overall reform" of the program (CongressDaily/AM, 3/6). PhRMA had hoped to win an extension of the act without modifications that would allow the FDA to use review fees for activities outside of application review, including post-market surveillance, stepping up the agency's adverse event review and increasing oversight over direct-to-consumer ads. Russ Bantham of PhRMA said in January that these proposed reforms "were not intended as part of the original law" and could lead to "conflicts of interest" (California Healthline, 1/28). Neither PhRMA nor FDA officials commented on the tentative agreement. The Energy and Commerce Health Subcommittee will hold a hearing today on the law, with FDA and industry witnesses expected to discuss possible changes. The committee plans to mark up a bill in the next six weeks (CongressDaily/AM, 3/6).