This year marks the 20th anniversary of the Prescription Drug User Fee Act (PDUFA).[1] In response to a sluggish drug approval process and inadequate congressional funding of the FDA’s research and development arms, Congress passed the PDUFA to create an additional revenue stream. The thought: if the FDA could generate more money and dedicate that money to speedier drug approval, everyone wins. Thus, the Act authorizes the FDA to collect substantial fees from applicants for New Drug Applications and Biologics License Applications, as well as renewal fees, among others. Under the statute, these fees must be dedicated to drug research.
The PDUFA sunsets every 5 years, requiring reevaluation and re-authorization to keep the program running. Having reached the 20-year mark, we are due for passage of the fifth PDUFA, to be called (unimaginatively) PDUFA V.
To date, Congress has judiciously re-upped the PDUFA with little issue. In part, this is because the PDUFA seems to be accomplishing its goals. At the end of the second five-year period, the GAO found that the PDUFA helped reduce the median drug approval time from 27 months to 14 months. In 2011, PDUFA revenues accounted for about a quarter of the FDA’s overall budget (65% of the drug approval budget).[2]
The approval process for PDUFA V seems poised to keep par for the course. Big Pharma wants it. The FDA wants it. To be sure, the PDUFA deserves the reauthorization it’s going to get: it’s a great deal for virtually everyone involved.
But it seems like a waste of an opportunity if Congress doesn’t use the reauthorization process to make it even better. For the first two five-year periods, PDUFA funds could only be allocated to pre-market research. Congress took the opportunity in the PDUFA III authorization round to allow limited funding to post-market supervision.[3]
The authorization process for PDUFA V could be equally productive. One promising framework for reform could be Senator Kay Hagan’s Transforming the Regulatory Environment to Accelerate Access to Treatments (TREAT) Act. The proposed legislation would offer a fast-track approval process for drugs targeting rare diseases without a current cure, an avenue currently lacking.[4] The PDUFA V authorization process would be an ideal forum for discussion and, hopefully, adoption of these and other improvements on the FDA drug approval system.
[1] Pub. L. No. 102-571, 21 USC § 379, 106 Stat. 4491 (1992).
[2] Gail Dutton, 2011 Budget Outlook: Trim, Cut, Then Slash, Genetic Engineering and Biotechnology News (Feb. 7, 2011), available at http://www.genengnews.com/analysis-and-insight/2011-budget-outlook-trim-cut-then-slash/77899360/
[3] See Efthimios Parasidis, Patients over Politics: Addressing Legislative Failure in the Regulation of Medical Products, 2011 Wis. L. Rev. 929, 944 (2011).
[4] For a survey of this and other shortcomings in the FDA approval process, see Avik Roy, How Big Pharma Undermined Medical Innovation for Financial Gain, Forbes (Feb. 15, 2012), available at http://www.forbes.com/sites/aroy/2012/02/15/how-big-pharma-undermined-medical-innovation-for-financial-gain/