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FY 2000 PDUFA Financial Report: Management Challenges for FY 2001

Table of Contents

Previous Section: Total Costs of the Process for the Review of Human Drug Applications

Since 1990 FDA has cut in half the time it takes to evaluate new drugs, while still maintaining its traditional rigorous standards for drug safety and effectiveness. This improvement, coupled with other attractive features of the US market, has led to an increase in the number of new drugs launched first in the US before they are available in other countries, making new therapies available first to Americans. This is a dramatic shift from the previous 20 years in which most new drugs were available in America years after they were available in other countries. Without the funds derived from PDUFA fees, the substantial progress FDA has achieved in improving and expediting the review of human drug applications would not have been possible.

But without further legislative action PDUFA, and the fees it provides, will expire at the end of FY 2002. One of the major challenges the agency faces in FY 2001 is the development of a responsible legislative proposal for the continuation of PDUFA. A first step in this process occurred on September 15, 2000, when the agency hosted a public meeting to hear the views of stakeholders on the strengths and weaknesses of the current legislation and what changes they would recommend.

It was clear from the comments heard at that meeting that views on changes to PDUFA are varied, but most stakeholders want the process for developing this legislative proposal to be both public and inclusive, allowing all of our stakeholders an opportunity to observe and have their views considered. In FY 2001 FDA will be challenged to derive and implement a responsive new process for developing this legislative proposal.

In FY 2001, FDA will also be challenged both to sustain the review improvements achieved to date and to meet increasingly difficult PDUFA performance goals-while resources for most other programs continue to be eroded by inflation. Assuring that enough appropriated funds are spent on the process for the review of human drug applications to meet requirements of PDUFA, and at the same time spending our resources in a way that best protects the health and safety of the American people, is becoming increasingly difficult. Each year, PDUFA triggers require the amount that FDA must spend on the drug review process to be increased by an inflation factor. Yet since FY 1995 FDA has not received increased appropriations to cover the costs of the across-the-board pay increases that must be given to all employees. The cumulative cost of this erosion over the past 10 years is over $200 million. In assuring the continuation of PDUFA funds beyond FY 2002, FDA needs to reverse, or at least halt, the erosion of its core programs caused now by the PDUFA triggers, and compounded by the absorption of mandatory pay increases over many years.

Our workforce and real resources for most programs other than prescription drug review have contracted each year since 1994, while we struggle to assure that increasing amounts are spent on the drug review process in order to meet the PDUFA trigger. Several consecutive years of operating in this way make it difficult to continue to further reduce staffing levels in FDA programs other than prescription drug review. We are increasingly concerned that spending enough budget authority on the drug review process to meet the PDUFA triggers makes FDA less able to manage the resources available in a way that best protects the public health and merits public confidence. Examples of areas we have not been able to fund adequately include responding to reports of adverse events related to the use of prescription drugs.

In FY 2001 FDA will continue working toward the goal of receiving applications electronically by the end of FY 2002. This major change in how FDA does business should provide significant savings to industry. Setting standards and sequencing the development and implementation of the necessary infrastructure to achieve this goal demands careful planning, vigilance with respect to newly emerging technologies, and constant monitoring.

Additionally, in FY 2001 FDA will continue to be challenged by the need both to retain and to hire and train qualified reviewers. FDA's experienced reviewers are in demand and have excellent employment opportunities available to them. The Agency continued to experience review staff attrition of about 10 per cent in FY 2000. FDA implemented a number of initiatives to reduce this attrition, including both retention bonuses for reviewer mathematicians and statisticians and efforts to facilitate review work from alternative work sites. In FY 2000 the agency also conducted focus groups with review scientists to elicit their views on factors impacting on their decisions to continue to work for FDA. In response to the information from these focus groups, in FY 2001 FDA will continue to assess and implement innovations to facilitate retention of skilled reviewers. Retaining review staff and recruiting and training new review staff is a constant challenge.

Finally, the Agency continues to struggle to anticipate and fully understand the new technologies that are fundamental to many new therapies. Understanding these new technologies (especially biotechnologies) is essential to expeditious review of many new products. Since support of PDUFA related research from fee revenues is being phased out, the Agency is increasingly dependent on appropriated funds to sustain its scientific knowledge base in emerging areas such as gene and cell therapy.

Next Section: Appendix A: Conditions for Assessment and Use of Fees