Bloomberg Law
Free Newsletter Sign Up
Bloomberg Law
Advanced Search Go
Free Newsletter Sign Up

Fast Drug Approvals to Get Lawmaker Focus in FDA Fee Plan Review (1)

Feb. 3, 2022, 10:35 AMUpdated: Feb. 3, 2022, 2:52 PM

Lawmakers will likely focus on FDA staffing woes and speedy drug approvals as they kick off the first of a series of hearings on must-pass legislation to renew the fees that help fund the agency.

A Thursday hearing of the House Commerce Committee’s health panel begins the congressional review process for the next round of user fee agreements between the FDA and the prescription drug, generic drug, and biosimilar industries. Congress must pass laws adopting the new deals for fiscal years 2023 through 2027, before the current agreements expire Sept. 30.

The user fee deals, which also contain agency commitments to the industry, come as the Food and Drug Administration seeks to rebuild public trust after its quick Covid-19 vaccine authorizations and controversial Alzheimer’s drug approval fueled questions on the agency’s independence and credibility.

Drugmaker fees play an integral role in speeding up application reviews, boosting medical product innovation, and offering new treatment options to Americans, policy analysts and trade groups say. Concerns have arisen, however, over whether the FDA relies too heavily on funds from the industries it is responsible for regulating. User fees make up roughly 45% of the FDA’s total budget.

User fees may “hide some of the federal government’s budget and shift the burden to other parties,” said Jonathan Darrow, an assistant professor of medicine at Harvard Medical School. “This creates a lack of transparency, making it difficult to follow who is actually paying for the functioning of the FDA.”

Lawmakers are likely to use Thursday’s hearing to garner support for provisions they would like to work into the user fee deals. Congress, for example, could add “its own regulatory priorities that could affect the accelerated approval program in light of the controversy surrounding Biogen Inc.‘s Aduhelm approval,” Bloomberg Intelligence Analyst Duane Wright said in a recent analysis.

Congress is still waiting on the FDA to send along its reauthorization commitment letter for the medical device industry, despite a mandatory deadline of Jan. 15. The FDA and industry groups involved in the process say negotiations are ongoing, which health committee leaders said could threaten the timeline for Congress to review and approve it.

What Are User Fees?

The Prescription Drug User Fee Act was first enacted in 1992, and Congress has since passed additional legislation allowing the FDA to collect user fees from makers of medical devices, generic drugs, and biosimilars—products close enough to a biologic that they can be used to treat a patient in the same ways.

Prior to PDUFA’s enactment, the FDA “lacked sufficient staff to perform timely reviews or develop procedures and standards to ensure a consistent and predictable premarket review process,” the agency said in prepared testimony for the hearing.

These deals have allowed the agency to speed up the review process, which “requires FDA to undertake a lot scientific work in evaluating clinical trial data, statistical work, pharmacology, frequent inspections,” according to Howard Sklamberg, a former deputy commissioner at the FDA.

The generic and biosimilar user fees have led to substantial increases in the number of FDA-approved alternatives to expensive brand-name products—resulting in a total of more than $2 trillion in patient savings, according to an analysis from the Association for Accessible Medicines.

The FDA’s latest commitments include integrating real-world evidence into new drug applications and bringing more cutting-edge regenerative medicines to market.

Over the next five years, the FDA hopes to increase the number of staff members at the Center for Biologics Evaluation and Research to review more applications for cell and gene therapies, which work by transferring genetic material into the cell of a patient to provide long-lasting and potentially curative effects.

“With the different cell and gene therapies,” the CBER “is going to get more money for budget and staffing to be able to handle their workload,” said Mary Olson, an associate professor of economics at Tulane University who specializes in FDA regulation.

The agency also plans to use the next round of user fees to advance the development of more interchangeable biosimilars—products that may be substituted for the brand-name biologic.

‘Vehicle’ for Other Measures

User fee reauthorizations are considered must-pass legislation because the FDA relies on funding from the industry, policy analysts say. That means lawmakers may try to tack on other measures.

“If user fees are not reauthorized or extended, then FDA would not have any money to review applications, which no one would want,” Sklamberg said. Because of this, he added, the user fee bills sometimes “become a vehicle for some other FDA-related legislation.”

When the Generic Drug User Fee Act was first signed into law in 2012, Congress added provisions to help better regulate pharmaceutical supply chains. One measure gave the FDA the authority to request records from manufacturers in lieu of conducting product inspections—a provision which has been especially important during the pandemic as Covid-19 limited the agency’s ability to carry out in-person reviews.

This time around, senators may try to work overlapping proposals on biomedical innovation and pandemic preparedness into the user fee agreements.

Alyssa Llamas, a director at the consulting firm Wynne Health Group, said this week that some parts of a broad pandemic preparedness bill released Jan. 25 by Sens. Patty Murray (D-Wash.) and Richard Burr (R-N.C.) could make their way into the agreements, including a proposal to modernize clinical trials through digital health.

Conflicts of Interest

Lawmakers and policy analysts have expressed concern over the extent to which the industry user fees could influence FDA actions.

Burr said during a December hearing for President Joe Biden‘s FDA nominee, Robert Califf, that he found it “alarming” that nearly half of the FDA’s budget is based on industry funds.

Transparency concerns came to a head after the FDA granted accelerated approval to Biogen’s Alzheimer’s drug Aduhelm in June 2021, even though two clinical trials offered mixed signals about the drug’s efficacy. A committee of outside scientific advisers to the agency had said the drug shouldn’t have been approved. Three panelists have since resigned.

The “speedy review targets” set by the agency have also fueled some concerns that in trying to meet their performance goals, the FDA “might sacrifice drug safety,” Olson said. Efforts to speed up the development of new drugs have also “created more opportunities for interactions between the FDA staff and the pharmaceutical firms,” she added.

But Sklamberg said he “never saw a problem” while working at the FDA in terms of the “user fees creating an objectivity issue.”

“The idea that the agency’s objectivity is compromised really ignores the fact that this work is done by humans who take a lot of pride in their work and have a lot of expertise,” he said. “The individual people who review applications in their specific disciplines are experts in those fields” and “they don’t have in their head where their salaries are being paid from.”

Medical Device Delay

Health committee leaders say an FDA delay in sending its medical device user fee commitment letter could threaten Congress’ timely review, though analysts say this is only likely to be temporary.

The legislation passed by Congress is separate from the FDA’s commitment letter, Darrow said. So as “long as the legislation is passed, I would expect the previous commitment letter would control until the new one is finalized,” he said.

Lawmakers also know a lapse in funding could be especially detrimental to the functioning of the FDA, Sklamberg said.

“Since the user fee program started back in 1992, there have been various combinations of who controlled Congress, of who was president, of whether it was the same party or not,” he said. “This has been something that’s never been held up by gridlock.”

Scott Whitaker, president and CEO of the device maker group the Advanced Medical Technology Association, said in an emailed statement that the “team at FDA is working hard alongside us to find consensus on several outstanding issues—and I’m optimistic that we will reach a resolution soon.”

(Updated with comment from the medical device industry group in the 31st paragraph.)

To contact the reporter on this story: Celine Castronuovo at

To contact the editors responsible for this story: Alexis Kramer at; Karl Hardy at