The Prescription Drug User Fee Act (PDUFA): Background and Issues for PDUFA IV Reauthorization

Publication Date: March 2007

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Health

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Abstract:

The Prescription Drug User Fee Act (PDUFA), first enacted in 1992 and reauthorized twice (referred to as PDUFA II and PDUFA III), gives the Food and Drug Administration (FDA) a revenue source -- fees paid by the pharmaceutical manufacturers -- to supplement, not replace, direct appropriations.

The impetus behind the 1992 law was the length of time from a manufacturer's submission of a New Drug Application (NDA) or a Biologics License Application (BLA) to FDA and the agency's issuing its decision on approval or licensure, which FDA attributed to constrained review-staff time. This delay affected patients and the drug manufacturers.

PDUFA I goals were to diminish the backlog of applications at FDA and to increasingly shorten the time from submission to decision. PDUFA II expanded the goals to include activities related to the investigational phases of a new drug's development; it also added the goal of increasing FDA communications with industry and consumer groups. PDUFA III authorized activities both at earlier (preclinical development) and at later (up to three years after drug approval) stages of drug research and development. FDA set these performance goals in conjunction with the drug manufacturers, and the Secretary of Health and Human Services (HHS) submitted them in letters to the chairs of the relevant congressional authorizing committees. The Secretary also submits annual PDUFA performance and financial reports.

Based on its stated goals, PDUFA has generally been viewed as a success. FDA has added review staff and reduced its review times. It has also standardized the information required for applications and developed computer tools to use electronically submitted data.

Criticism of PDUFA fits into three categories. First, the fees have not fully covered FDA's increased costs, despite the provisions that Congress implemented. Second, because PDUFA has directed a majority of the collected fees toward premarket review of applications, some people see PDUFA as responsible for what they view as the agency's increasing focus on premarket activities in contrast to the relatively slower increase in postmarket surveillance and safety studies and enforcement. They point to the fees' funding 20% of the salaries and expenses in FDA overall and 30% within the human drug program (with a yet higher proportion among the premarket drug review staff). Finally, some critics think that, through its provision of fees, the industry has too much influence over FDA actions.

In January 2007, FDA released its proposal for PDUFA IV. The goals, developed through consultation with Congress, industry, and healthcare consumers and professionals, focus on securing FDA's sound financial footing, and enhancing both premarket review and the postmarket safety system.