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FY 1998 PDUFA Financial Report: Management Challenges for FY 1999

Table of Contents

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

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. In FY 1999, FDA will be challenged to sustain these improvements, meet increasingly difficult performance goals, and position the agency to meet future goals.

One of the changes to PDUFA included in FDAMA amendments was the incorporation of a workload adjuster. Its purpose was to assure that fee revenues would increase proportionally when workload increases, providing additional revenues to help the agency respond. Likewise, when workload decreased, revenues were to decrease. FDAMA made the number of fee-paying applications the surrogate for PDUFA workload. With the benefit of hindsight, we now realize that a single factor (the number of fee-paying applications) is not the best surrogate for PDUFA workload, which is really an aggregate of many complex components.

In FY 1998, the number of applications submitted to FDA for review declined for the first time in 6 years, as noted in the FY 1998 PDUFA Performance Report released in December. FDAMA amendments exacerbated this decline, causing over 30 more of these applications to be exempt from fees than would have been exempt previously. More details on these increased exemptions can be found in Appendix B. Total PDUFA workload, however, which includes this increasing volume of items exempt from fees as well as an increasing volume of work not subject to fees (investigational new drug submissions and manufacturing supplements) increased in FY 1998. As a result the new workload adjuster does not reflect real changes in PDUFA workload. A major challenge for FY 1999 will be addressing longer-term actions that may be necessary to remedy problems with the workload adjuster.

In FY 1999 FDA will continue working toward the goal of receiving applications electronically by the end of FY 2002. This represents a major change in how FDA does business and 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 1999 FDA will continue to be challenged by the need to hire, equip, and train qualified reviewers. FDA's skilled, experienced reviewers are in demand and have excellent employment opportunities. The Agency experienced attrition of about 10 per cent of its review staff in FY 1998. Recruiting and training new staff is a constant challenge.

Finally, the Agency is challenged 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