FDA,FY 2000 Performance Report for the Prescription Drug User Fee Act of 1992, Appendix A: FDA and Stakeholders Public Meeting Executive Summary

Appendix A: FDA and Stakeholders Public Meeting

Executive Summary

On September 15, 2000 FDA held a public meeting to hear the views of interested stakeholders about the user fee program established by the Prescription Drug User Fee Act (PDUFA). The 1997 reauthorization of PDUFA is set to expire at the end of FY 2002, and FDA is now considering what features it should advocate in proposing new or amended provisions to the legislation. PDUFA authorizes FDA to collect fees from companies that produce certain human drug and biological products. The collected fees are intended to supplement FDA's human drug review appropriation, so the Agency can hire more reviewers and support staff, and upgrade its information technology to speed up the application review process for human drugs and biological products, without compromising review quality. In exchange for the fees, FDA agreed to certain human drug review performance goals designed to speed the review process. By law, PDUFA fees can only be used for specific costs related to the review of human drug and biological products, as defined in the PDUFA. No PDUFA user fees are assessed for generic drugs, most over-the-counter drugs, blood products, foods, cosmetics, medical devices or animal drugs.

The purpose of the public meeting was for FDA to hear stakeholders' views on particular features of the current PDUFA program, such as faster drug reviews and negotiated performance goals; their general views on having FDA collect user fees to support a regulatory function; and their opinions on having user fees apply to other FDA oversight activities in addition to the review of human drug products.

The full-day public meeting included presentations by members of four different panels of stakeholders. The panels respectively represented: patient advocacy groups, consumer protection groups, regulated industry groups, and health professional groups and academic researchers.

General Findings

Presentations by members of the different panels of stakeholders at the meeting made clear that there is a wide diversity of views about the PDUFA program, which has been in operation since it was first authorized in late 1992. The meeting was helpful in enabling FDA to hear the range of current opinion and the scope of issues to be addressed, and to provide key stakeholders the opportunity to hear one another's views.

Among the stakeholders who spoke at the public meeting, there were a few areas of general agreement. These views concerned:

FDA's underlying ability to perform

It was generally agreed that with adequate resources, FDA can meet targeted performance goals as agreed under PDUFA. It would be preferable, however, that these funds be provided by Congressional appropriations.
There was general agreement about FDA's need for increased funding for many activities that PDUFA does not currently fund. Most stakeholders considered that FDA does not receive adequate funding for many oversight activities that are not supplemented by PDUFA fees, but are critical to the Agency's mission to promote and protect patient and consumer health.

In addition, there were a number of areas in which the stakeholder panels expressed divergent views about the PDUFA program. These views concerned:

User fees as an appropriate mechanism to fund FDA

The industries currently involved in the PDUFA program expressed strong support for the continuation of user fees, but a number of the representatives from patient and consumer advocacy groups did not support continuation of user fees as an FDA funding mechanism.
The patient and consumer organizations expressed concern about the perception and potential for conflict of interest and inordinate industry influence created by user fees, and were concerned that funding FDA through user fees may undercut Congressional support for additional FDA appropriations, especially for safety programs not funded by user fees.

The setting of performance goals for FDA drug review

Representatives from industry, the American Medical Association, and one patient advocacy group, expressed strong support for the PDUFA performance goals, currently negotiated between FDA and the regulated industry. These groups maintained that setting specific goals is critical to achieving accountability and predictability, and research findings presented by some panelists showed that FDA has exceeded those goals.
The consumer protection groups and other patient advocacy groups were not critical of most of the goals themselves, but were critical of the current approach to setting performance goals, citing the lack of consumer and patient representation in that process. This was viewed as giving priority to industry rather than consumers, with a resulting perceived emphasis on time goals rather than safety goals, and designation of priority status for all "new" drugs, without sufficient regard to their real therapeutic significance (even though this is not the case in reality.)

User fee funding for FDA's other product safety responsibilities

Representatives from the drug industry, some consumer and patient advocacy groups, and the American Medical Association, did not support the extension of user fee funding to other aspects of product safety assurance, in addition to the review of new drug applications. Other aspects of product safety, including FDA surveillance for adverse effects after a drug's approval, were considered a public health function, and therefore not appropriate for user fee funding.
A number of the consumer protection and patient advocacy groups, the American Pharmaceutical Association, and health care payer and provider representatives attending the meeting supported the allocation of user fee funds to other FDA safety functions. The most often-cited areas for coverage by user fees were FDA monitoring of safety after drug approval (i.e., post-market surveillance) and FDA oversight of direct-to-consumer (DTC) advertising.

Aside from the question of how other responsibilities should be funded, some stakeholders also expressed concern about unintended impacts of the PDUFA program on funding for other FDA programs. The technical requirements and funding triggers specified as part of the current user fee program, coupled with only modest increases in FDA appropriations over the past few years, have worked to shift a larger share of total FDA resources to pre-market drug and biologic review, and reduced funds available for many other vital programs. Some considered this phenomenon to be further evidence of the problems with user fees, while others identified this as evidence of the need for more aggressive efforts to obtain increased Congressional appropriations for FDA.

As a follow-up to the public meeting, FDA is now in the process of further reviewing the comments provided by stakeholders, both at the meeting and submitted in writing. The five sections that follow provide an overview of key issues identified in the presentations within each of the five panels in the public meeting. The panels are as follows: FDA, Patient Advocacy Groups, Consumer Protection Groups, Industry Groups, and Health Professional Groups and Academic Researchers. The complete written statements submitted by participants can be obtained through the FDA website.

Panel I - Key Points from Presentations by FDA

The FDA panel included the Commissioner, the Senior Associate Commissioner, the Director of the Center for Drug Evaluation and Research, and the Director of the Center for Biologics Evaluation and Research. Key observations made by the Agency panel included the following.

Program strengths

PDUFA has been successful in achieving the original goals of eliminating backlogs of drug and biologic product marketing applications, decreasing review times of drug and biologic marketing applications, and reducing the total time to drug approval. The program has benefited patients, who have received faster access to new therapies and increased options for treatment. Industry has also benefited from a process that is faster, more predictable, accountable and open, and provides more consistent access to FDA advice and input. Finally, user fees have improved the resources available for reviewers and support staff, for pre-approval inspectors, for computer staff and computer system upgrades.

Challenges

The PDUFA program has also presented challenges. PDUFA covers only a limited part of a drug's "life cycle" by focusing only on marketing application review, without support for drug safety after approval, including surveillance of suspected adverse drug reactions, standard setting and product safety research, drug advertising regulation, or Good Manufacturing Practice surveillance. In addition, the workload and volume of review deadlines can create a "sweatshop" mentality among reviewers, with little time or resources available to continue their own research to keep current with their field of expertise. Review staff turnover has been an ongoing concern.

Finally, PDUFA statutory triggers and fee structure limit FDA's flexibility to allocate its resources to address emerging safety risks quickly. These risks may involve any of a wide range of products and problems not covered by user fees ‚- e.g., food safety, dietary supplements, blood products, vaccine safety, adverse drug reactions, medication errors, medical device recalls, and counterfeit drug products. In particular,

FDA's authority to collect fees is contingent on total FDA appropriations being equal to or greater than the 1997 total adjusted for inflation. Although the total has increased, almost all of the increases have been earmarked for FDA to spend on other specific initiatives.
The authority to collect user fees also requires that FDA annually spend at least as much as its 1997 appropriation for drug review work, adjusted for inflation. This effectively earmarks another large portion of FDA's appropriation for only drug review work.
User fee funding is somewhat unpredictable. The total funds from application fees (The amounts FDA can collect per application are pre-specified in the statute) are driven by the number of applications received, and this determines the amount of fees that can be collected from the other two sources. This is because the statute requires that FDA collect exactly one-third of all user fees from application fees, one-third from marketed product fees and one-third from establishment fees.

Panel II - Key Points from Presentations by Patient Advocacy Groups

The panel of patient advocacy groups included the National Organization for Rare Disorders, the Kidney Cancer Association, the National Health Council and a patient representative. Key points made by members of this panel included the following.

Several of the panelists considered the current PDUFA program to benefit industry primarily, and not patients, particularly with the current approach to priority assignments for new drug applications. It was recommended that FDA give first priority to speedy reviews for new drugs for currently untreatable and serious chronic diseases (which FDA already does), and lower priority to lifestyle drugs and me-too drugs. In addition, FDA should include consumer and patient representatives in establishing priorities. Most members of this panel also considered the current PDUFA performance goals were overly time-focused and did not give FDA sufficient latitude with review deadlines to assure quality.

While recognizing that PDUFA user fees were originally intended to supplement resources for drug approvals, some on the panel cited the chronic underfunding of other areas, e.g. post-market safety surveillance, as a rationale for extending user fee coverage to these areas. This extension would be in keeping with FDA's role as a consumer protection agency, not a new drug review agency. But several panelists cited the mechanism of user fees as problematic, because with increased user fees, Congress might shift financial responsibility for public safety to the private sector-- having the regulated pay for activities of the regulator. Most of the panelists viewed this as creating an inherent conflict of interest.

One panelist stated that FDA provides a lot of unfunded assistance to industry, that goes along with the requirements of PDUFA that do get funded. This was described as including FDA development of regulatory guidance and other standards documents, cited as leveling the industry playing field; FDA advice on whether a product in development is showing promise-- which he credited with saving industry millions of dollars in misdirected research; FDA time spent providing guidance through the clinical phase that is not compensated in the NDA review, making FDA a partner in the research and development without a share of financial returns; and the liability protection that FDA oversight provides to industry.

All members of the panel expressed concern about the lack of adequate funding for FDA review of, and follow-up on, adverse events after approval. One panel member observed that NIH is at the front end of the pipeline, and given large appropriations to do research to find new advances in medicine, but FDA is at the other end of that pipeline, making sure that the products developed are safe for patients, with no corresponding increase in its appropriations.

One of the members of this panel considered that PDUFA has been a success for patients and industry, offering a model for what can be done when government and industry work together. This panelist considered that clear goals have worked well in PDUFA II, and the goals have been an important factor in improving performance. The only downside to PDUFA has been the lack of overall appropriations from Congress on an annual basis, but the panelist maintained that policymakers need to fix this through appropriations, not PDUFA fees which are only meant to supplement FDA's appropriation. According to this panelist, PDUFA fees are were not meant to cover activities beyond pre-market review, such as post-market surveillance.

Panel III - Key Points from Presentations by Consumer Protection Groups

The panel of consumer protection groups included the National Women's Health Network, Public Citizen, the National Consumer League and the Center for Medical Consumers. Members of this panel were generally concerned about the potential conflict of interest that could be created by user fees and "industry-set" performance goals. Most thought that consumers and patients needed a larger role in setting goals. All expressed concerns about providing adequate funding for FDA safety oversight. Key points made by members of this panel included the following.

One panelist considered that PDUFA has blurred the lines defining conflict of interest, and that FDA should get more funding without strings attached. To achieve this, it was recommended that FDA be fully funded through Congressional appropriations. Another panelist also expressed concern that PDUFA creates a perception and problem of conflict of interest, and that having statutory responsibilities funded by private user fees inherently creates the risk of a conflict. In addition, this panelist viewed PDUFA as providing a lever that allows industry to periodically renegotiate the whole scheme of consumer protection in the Federal Food, Drug, and Cosmetic Act.

One of the panelists, who opposed PDUFA reauthorization, observed that the user fees-- authorized in FDAMA -‚ provide funding only for new drug review, yet FDAMA also gave FDA other unfunded mandates. These and other areas of FDA responsibility were considered to be chronically underfunded by Congress. These underfunded areas were identified as including post-market safety surveillance, oversight of direct-to-consumer (DTC) advertising and FDA inspections of imported products. Other panel members expressed similar concerns about the growing inadequacy of funds available for non-PDUFA programs, e.g., food inspections. One panelist considered the lack of resources to put FDA at risk of losing the confidence of Americans.

Members of this panel thought that PDUFA performance goals should be set by consumers rather than by industry. Current review timelines were considered to be enforced by industry, putting FDA funding at risk. This was described as creating "PDUFA compression," in which industry has learned to game the review system, withholding data from FDA until the last minute and not allowing sufficient time for careful review. This panelist remarked that the public needed to put the drug review clock in the hands of an independent FDA.

The pre-market focus of PDUFA was also considered shortsighted. One panel member remarked that while Congress and industry have focused PDUFA on drug review, adverse drug reactions among patients are on the increase, driven by increases in drug utilization, increases in the use of dietary supplements in combination with drugs, and the growth of the self-care movement in our country. These safety issues also need to be addressed.

To further align performance goals with the best interests of patients and consumers, members of this panel also recommended development of a review prioritization system that gives highest priority to drugs for treatment of serious conditions and rare disorders with no treatment available (which already exists). One of the panelists also recommended that if PDUFA were reauthorized it should be amended to remove the potential for conflict of interest, including disassociating any fees from performance goals, and consulting with consumers when setting performance goals.

Panel IV - Key Points from Presentations by Industry Groups

The panel of industry groups included representatives of manufacturers of brand-name, generic and biological products, including the Biotechnology Industry Organization, Procter and Gamble Pharmaceuticals (for the Pharmaceutical Research and Manufacturers of America), Teva Pharmaceuticals USA (for the Generic Pharmaceutical Association), and the National Association of Pharmaceutical Manufacturers.

Brand Drug and Biotech Industries

All of the panelists considered the current PDUFA program to be a success. As one panelist described it, PDUFA has realized all of its goals: new medicines have been developed more quickly and predictably, and an FDA information infrastructure is now in place to support review. This panelist considered that without PDUFA, patients would have had to wait longer for new medicines, and that FDA's system for new drug approval is much better than the European counterparts.

While pointing to the improved speed of the drug review process, industry panelists considered that FDA's review process is as stringent as ever, and that industry's relationship with FDA is not a partnership. One of the panelists asserted that while US citizens may be skeptical about government in general, they trust FDA and European regulatory agencies do not enjoy this level of public trust.

Most of the members of this panel thought user fees should only be applied to new product reviews. According to one of the panelists, PDUFA was intended to enhance only one aspect of FDA work -- new product reviews -- and in exchange for performance goals. The fees were intended to provide supplemental funding for review, not for approvals. User fees are appropriate for industry product review because that is not a public health function that should be supported by tax revenues.

Nonetheless, the industry panel members generally were concerned that FDA work has been hampered by flat funding which has made true operating budgets shrink, just as new medical technologies and product areas are beginning to mature. Some of the panelists considered it is critical that Congress fully fund all other aspects of FDA work, and that FDA needed assurance of adequate resources in order to attract and retain the brightest talent.

Panelists from the industries already participating in PDUFA had suggestions for improvements to be included in reauthorization. These included: further requirements for more predictable and timely reviews, FDA written agreements to protocol specifications, further action on FDA guidelines for health economic information and continuation of the extension of the pediatric exclusivity provided in FDAMA.

Generic Drug Industry

Panelists representing the generic drug industry considered PDUFA to be a success for brand-name and biologics manufacturers. One of these panelists recommended that FDA propose a generic drug user fee program, as a way to address the current delays in generic review cited by the panelist. Under the proposed program, collected user fees would be in addition to, not a replacement for, appropriated funds. The collected user fees for generic drugs should only be used for hiring review staff and supporting review information systems for generic products. The proposal would also feature a 6-month review process and performance goals to enforce time frames.

The other panelist from the generic drug industry agreed that ANDA reviews have been delayed, and questioned whether the lack of FDA resources for these reviews could be attributed to a PDUFA diversion of center resources from non-PDUFA programs. But he also raised the question of whether a generic drug user fee program would result in faster time to market for generic drugs. According to this panelist, provisions in Hatch-Waxman that protect brand exclusivity, other patent extensions granted by Congress, and the FDAMA pediatric exclusivity provision have had more of a role in the delay in a generic drug's time to market.

Panel V - Key Points from Presentations by Health Professional Groups and Academic Researchers

The panel of health professional groups and academic researchers included representatives of the American Medical Association, the American Pharmaceutical Association, Tufts Center for the Study of Drug Development and the Centre for Medicines Research International. Key points made by members of this panel are summarized below.

Health Professionals

The panelists representing health professionals shared the opinion that PDUFA has been successful in speeding the review of new drug applications, however their overall assessments of PDUFA's impact differed. One of the panelists recommended that PDUFA be reauthorized in FY2002, with user fees tied to performance goals negotiated with industry. He further recommended that user fees be used to cover [only] new drug reviews, and that Congress should fully fund all other FDA activities.

The other health professional panelist considered that PDUFA/FDAMA has had both positive and negative effects. While PDUFA has resulted in faster reviews--which can be done safely-- FDA review and approval of new products does not guarantee that these products are risk-free. Health professionals and the public can't assume that new products will never be withdrawn. At the same time, physicians are increasingly time-pressured and many are not reading the literature on new products, nor reading the black box information and, often, are not safely prescribing and monitoring the use of new products, as required in the labeling. This panelist cited the need for additional funding for FDA post-market surveillance, describing the current reporting as insufficient and FDA's current system as insufficient and underfunded. He also suggested that pharmacists need to participate in the "phase 4" process of monitoring a drug after approval.

Coupled with faster approvals, one of the health care panelists cited increased drug promotion and related drug utilization as cause for concern. The panelist was concerned that direct-to-consumer (DTC) advertising was creating an attitude of casualness toward prescription drug use, causing decreased vigilance and fostering a growing lack of respect for the fact that medicines are risky. He cited the need to assure that information for consumers is complete, comprehensible and understandable. The panelist thought that increased FDA oversight was needed.

Given these safety challenges--that have increased with faster drug approvals-- this panelist thought that PDUFA fees should be extended to fund post-market surveillance and added oversight of DTC advertising. At the same time, the panelist urged a balance between user fees and appropriations--industry should share the costs, but there should be a cap on the percentage of total costs that will be covered by user fees.

Academic Researchers

The panelists who were academic researchers studying drug review processes both presented findings from their respective studies of PDUFA program performance. One of the panelists presented the results of an analysis of FDA drug review times for FY 1993 through FY 1998, showing that FDA has steadily reduced the amount of time required for NDA review, for both time to first action and total review time. His analysis found that reductions have been achieved for both standard and priority reviews, in keeping with respective goals. Examination of product withdrawals over the same period showed that the rate of withdrawals had not increased over this time.

The other academic research panelist presented findings from a study comparing the performance of FDA with other regulatory authorities in several other developed countries. He considered that PDUFA has helped to make the U.S. number one in the introduction of new drugs onto the market, e.g., when compared to other markets in Europe and Asia, by contributing to one of the three basic drivers: 1) a strong and efficient FDA, 2) freedom of pricing in the US, and 3) having the largest world market for drugs. FDA was found to have provisions for virtually every aspect of review transparency considered in an international survey of regulatory authorities. The panelist concluded by stating that compared to regulatory authorities in other developed countries, FDA has appropriate systems to assure quality in review, greater staff resources for review than anywhere else, and performance goals that work to make FDA a leader in time-for-review. Based on this, other countries might consider FDA the benchmark for performance.

Comments from the Floor--Consumers and Health Care Organizations

In addition to the comments from invited speakers, FDA heard from other stakeholders who attended the public meeting. These included representatives of Blue Cross/ Blue Shield of America, the Consumer Federation and the United Auto Workers. These speakers were generally concerned about the need for more FDA oversight of DTC advertising and post-market safety surveillance. One of these speakers recommended that FDA require that drug companies track the use and post-market safety of fast-track drugs, citing an increase in adverse drug reactions since PDUFA. It was recommended that FDA also develop criteria for the kind of information that should be provided for consumers in DTC advertisements. Although all of these commenters supported increased FDA funding for these activities, some preferred funding through Congressional appropriations, rather than through user fees. Those who preferred appropriations did not want to increase FDA dependence on user fees, citing a potential for draining resources from other activities, and concerns about the dominant role they consider that industry has played in the past in setting FDA's performance goals in exchange for user fees.

Next Steps

FDA has been gratified by the response to its request for stakeholder input on the PDUFA program. The Agency has received important feedback and suggestions for improvement that will be invaluable in helping identify issues and priorities in future discussions and negotiations.