PDUFA IV Five-Year Financial Plan - 2009 Update: Background
The Prescription Drug User Fee Act of 1992 provided FDA with increasing levels of resources for the review of human drug applications. Fees that FDA collected from drug and biologic firms from 1993 through 1997 were used to reduce the evaluation time for certain human drug applications without compromising review quality. Letters from the Secretary of Health and Human Services to Congressional Committee Chairmen detailed goals for the program. By 1997, fees provided FDA with an additional $87.5 million a year for the drug evaluation process.
FDA primarily spent these new resources to hire additional personnel to review human drug applications and to update the information technology (IT) infrastructure supporting the human drug review process. FDA staff dedicated to these reviews in the Center for Drug Evaluation and Research (CDER), the Center for Biologics Evaluation and Research (CBER), the Office of Regulatory Affairs (ORA), and the Office of the Commissioner (OC) increased 56 percent during this period--from 1,277 staff-years in 1992 before PDUFA was enacted to 1,990 staff-years by 1997.
FDA's success in making the drug approval process more predictable, accountable, and scientifically sound, while making safe and effective drugs available to the public more quickly, was recognized in late 1997 when FDA received the prestigious Innovations in American Government Award, jointly sponsored by the Ford Foundation and the Harvard University's John F. Kennedy School of Government.
As a result of this success, PDUFA was reauthorized and extended through September 30, 2002 (PDUFA II). This extension authorized FDA to collect and spend fee revenue to accomplish increasingly challenging goals over this five-year span. These new goals were set forth in letters from the Secretary of Health and Human Services to Congressional Committee Chairmen on November 12, 1997. By 2002, PDUFA fees permitted FDA to spend an additional $161.8 million a year for the drug evaluation process.
FDA continued to spend these new resources primarily to hire additional personnel to review human drug applications and to update the IT infrastructure supporting the human drug review process. FDA staff dedicated to these reviews in the CDER, CBER, ORA, and OC increased over 85 percent during the 10 years since PDUFA was enacted--from 1,277 staff years in 1992 before PDUFA was enacted to 2,365 staff years by 2002.
Because of the continued success of this program, PDUFA was reauthorized for another five years. This reauthorization covered FY 2003 through FY 2007, and is known as PDUFA III.
PDUFA III attempted to correct some of the flaws in PDUFA II to provide for more stable fee revenues over the next five years. It was expected to provide sufficient resources for FDA to continue to be able to meet the challenging PDUFA III goals and undertake pilot programs and new initiatives. Fee revenues were expected to be sufficient to sustain the 1,464 staff years supported by fees, in addition to the 1,277 supported from appropriations-for a total of 2741 staff years dedicated to the process for the review of human drug applications by FY 2007. These staff-year numbers were expected to further increase as workload adjustments were made under the provisions of PDUFA III. PDUFA III also permitted fee revenues to be used for some post-approval risk management activities for the first time.
In actuality, the financial stability expected in PDUFA III did not materialize for several reasons. The rate of growth in FDA's appropriated resources over this period did not keep up with the increases in costs of pay and benefits per paid staff year and increases in facility related costs. As a result, by FY 2007 the number of staff years dedicated to the process for the review of human drug applications which were funded by appropriations decreased from 1277 to1222 and the number of staff years funded from fees totaled 1516, for a total of 2738, about 400 more than at the end of PDUFA II, but still about 100 less than expectations when PDUFA III was initially enacted, and with no net increases resulting from workload adjustments.
PDUFA was again reauthorized for another five years on September 27, 2007 (Public Law 110-85). This reauthorization covers fiscal years 2008 through 2012, and is known as PDUFA IV. PDUFA IV contains several provisions aimed at correcting financial shortfalls that occurred in PDUFA III. These include a substantial initial increase in fee revenues at the outset to make up for the fact that total drug review resources in PDUFA III did not keep up with actual FDA cost increases, an annual fee revenue adjustment linked to actual FDA cost increases per paid staff year over the most recent 5 years, and a revised fee revenue adjustment for workload increases. With these increases in revenue, and appropriations that keep up with FDA's actual cost increases, it is expected that FDA will be able to continue to meet the PDUFA III goals that are incorporated into PDUFA IV, as well as the enhanced goals agreed to for PDUFA IV.
The goals for PDUFA IV are challenging, diverse, and resource intensive. Many of the goals require the development of guidance documents and databases to track performance. The development of infrastructure and tools necessary to enhance electronic application receipt and review is also required. The following table provides an overview and comparison of the major goals by the end of PDUFA I, PDUFA II, PDUFA III, and PDUFA IV. Some of the goals are phased in gradually over time; for phased-in goals, only the goal for the final year of PDUFA IV, FY 2012, is reflected in this summary table. For more detail on the actual goals and FDA's performance, see FDA's latest Performance Report on the Internet at www.fda.gov/AboutFDA/ReportsManualsForms/Reports/UserFeeReports/PerformanceReports/default.htm. In addition to the summarized goals described below, over the five-year PDUFA IV period, FDA is also committed to the development and publication of 7 guidance documents, ongoing scientific collaboration, and improvements in performance management over the 5 years of PDUFA IV.
Summary Comparison of Goals at the End of PDUFA I, II, III, and IV
|Goal||PDUFA I||PDUFA II||PDUFA III||PDUFA IV|
|Complete review of priority original new drug and biologic applications and efficacy supplements||90% in 6 months|
|Complete review of standard original new drug and biologic applications and efficacy supplements||90% in 12 months||90% in 10 months|
|Complete review of manufacturing supplements||90% in 6 months||90% in 4 months if prior approval needed, otherwise 90% within 6 months|
|Complete review of resubmitted new drug and biologic applications||90% in 6 months||90% of class 1 in 2 months and 90% of class 2 in 6 months|
|Complete review of resubmitted efficacy supplements||No Goal||90% in 6 months||90% of class 1 in 2 months and 90% of class 2 in 6 months|
|Discipline review letters for pre-submitted "Reviewable Units" of new drug and biologic applications||No Goal||90% in 6 months*||No Goal|
|Report of substantive deficiencies (or lack thereof)||No Goal||90% within 14 days of filing date*||In new PDUFA IV First Cycle Review Goal|
|Respond to industry requests for meetings||No Goal||90% within 14 days||90% within 14 days (Type A) or 21 days (Type B or C)|
|Meet with industry within set times||No Goal||90% within: 30 days (Type A); 60 days (Type B);|
or 75 days (Type C)
|Provide industry with meeting minutes||No Goal||90% within 30 days|
|Communicate results of review of complete industry responses to FDA clinical holds||No Goal||90% within 30 days|
|Resolve major disputes appealed by industry||No Goal||90% within 30 days|
|Complete review of special protocols||No Goal||90% within 45 days|
|First Cycle Review-communicate substantive review issues and notification of review timeline||No Goal||90% of substantive review issues & planned review timeline within 14 calendar days after the 60 day filing date*|
|Electronic application receipt and review||No Goal||In place by the end of FY 2002||Enhanced by the end of FY 2007||Automated review environment by end of FY 2012|
*Items noted with an asterisk are phased in gradually over time. Only the goal for the final year is shown here.