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Michael A. Friedman, M.D - National Health Council

Michael A. Friedman, M.D.

Lead Deputy Commissioner

Food and Drug Administration

Remarks at National Health Council

"Renewing the Prescription Drug Users Fee Act of 1992"

Washington, D.C.

April 25, 1997

Good morning.

You have just heard some of the history of why the Prescription Drug User Fee Act of 1992 or PDUFA was needed. Let me tell you a little about how the Food and Drug Administration used the additional resources provided by PDUFA to dramatically improve its drug-review performance. This could be a dry, statistical discussion. I'll try to keep it clearly informative, and I'll use slides so you can see the progress for yourself. Afterwards, we'll have some time for questions.

Before I wade into the numbers, however, I want to remind you that FDA has a complex set of missions. Our job is not just to get drugs onto the market as fast as possible, though the public health benefits from the speedy approval of new drugs. We must not sacrifice accurate scientific knowledge for the sake of speed. We must ensure that new pharmaceuticals are nested in a framework of knowledge. It does little good to quickly get a new product into the hands of a physician for a sick patient if it there is insufficient or inaccurate information about how to properly use it.

Knowing when a new drug is safe and effective however, is rarely easy to do. It requires careful consideration of the scientific data collected through a range of studies. These clinical results need to be carefully considered. The statistical analysis needs to be verified. This all takes a certain amount of time.

There are dozens of points in the development of a product where misperceptions or misinformation are possible. As the lead public health agency involved in the review and approval of new medical treatments, it is FDA's job to make sure those points are addressed before the products - drugs, biologics or medical devices - are given to patients.

So that is the twin burden carried by FDA: we have to be fast, but not hasty, and we have to be careful, but not ponderous. What's more, we have gotten faster in the last several years without compromising the care that we give to the review of each new drug.

Now, let me talk about how PDUFA helped us become more efficient. After the act was passed in 1992, the agency began to expand its professional staff. Management changes , excellent staff and infrastructure improvements resulted. But how fast is fast enough? What's the benchmark? In the negotiations between FDA, Congress and the industry when the act was first passed, a clear set of goals were established. This can get a little complicated because of the way FDA classifies new drug applications, or NDAs, and because there are also things called produce license agreements, or PLAs, establishment license agreements, ELAs, and a variety of other applications that we have to review. I'm going to group NDAs, PLAs, and ELAs and just call them drug applications.

The major PDUFA goal is for the agency to review and rule on an application in 12 months unless the company makes significant changes to the application in the last three months of the review cycle. When such modifications are made, FDA gets an additional three months to review the application. Prior to 1992, FDA missed review deadlines, but with PDUFA, the agency agreed to review a certain percentage of applications on time, and the goal for on-time performance has been more demanding each subsequent year.

The results have been spectacular.

For fiscal year 1995, the last year for which we have complete data, FDA reviewed 98 percent of the new drug applications it received on time. We didn't make 100 percent because one of our reviewers misread a date on a computer print out and we missed one deadline by three days. But that is an amazing review performance.

We hit about the same review performance mark for the applications received the year before, in fiscal year 1994. Performance. And while we were hitting 95 percent plus, Congress was only requiring FDA to approve 70 percent of the drug applications on-time for FY 1995 and only 55 percent of the applications on-time for FY 1994. Our current 95 percent performance more than doubles the pre-PDUFA on-time level of around 40 percent.

Original New Drug Applications
Calendar Year 1995

Actions 269
Approvals 131

Percent increase in approvals 87%
Not only is FDA reviewing applications at a record rate, but calendar year 1996 was a record breaking in many other ways. The agency took action on 269 original applications, a 25 percent increase over the year before. Of all the original applications last year, we approved 131, an 87 percent increase in the yearly approval rates compared to when PDUFA began.

NMEs Approved in FY 96

In addition, of the 131 NDAs approved last year, 53 were new molecular entities or NMEs. In essence, a new molecular entity is an active ingredient that has never been marketed in this country. Usually, NMEs are the important new drugs that have been recently developed and are thought to offer significant improvements in current therapies. These are the new drugs that fight cancer, such as hycamtin for the treatment of metastatic carcinoma of the ovary, camptosar for colorectal cancer, and gemzar for pancreatic cancer. And these are the new drugs to fight AIDS, such as the protease inhibitors crixivan, norvir and viramune. And these are the new drugs for a wide variety of other diseases, from accolate, the first new class of drugs for asthma to aricept, the second treatment for Alzheimer's disease, to copaxone for treating relapsing remitting multiple sclerosis.

Median Times of Approval for NMEs
Median Time
to Approval
Calendar Year Number (months)
1996 53 14.3
1995 28 18.2
1994 22 17.5
1993 25 23.0
1992 26 22.6
1991 30 22.1
1990 23 24.3
1989 23 29.3
1988 20 27.2
1987 21 29.9
1986 20 32.9
Historically, the number of NMEs approved in a given year has been an important industry marker. Last year, 1996, was a very, very good year. Not only was there a record number of NMEs approved, a 112 percent improvement over the numbers approved at the beginning of PDUFA, but they were approved in record times, a median total approval time of 14.3 months for calendar year 1996. The AIDS drug crixivan was reviewed in only 1.4 months, or just over six weeks. Twice the number in half the time.

In addition to drug approvals, PDUFA includes a number of other review activities at FDA. For example, when a company wants to add a new indication or a new group of patients to be treated with an already approved drug, that's called an efficacy supplement. In fiscal year 1995, PDUFA required the agency to review 70 percent of them on time. The agency reviewed 93 percent on time. This is a substantial improvement over fiscal year 1993's 42 percent on-time rate and even fiscal year 1994's 77 percent rate. A record number of 118 were approved.

When companies want to make a significant change in the way an approved drug is made, or decide they want to make it in a new facility, they submit a manufacturing supplement. Under PDUFA, FDA has six months to review these supplements and the PDUFA goal for fiscal year 1995 requires FDA to review 70 percent of them on-time. The agency received 1,519 manufacturing supplements in fiscal year 95, and it reviewed 89 percent of them on-time. This is a significant improvement over fiscal year 93's performance of 51 percent, and even fiscal year 94's performance of 69 percent.

Similarly, we are doing well on resubmissions.
These are responses provided by a pharmaceutical company to questions or deficiencies raised by FDA in an approvable or not approvable letter on an original application. Like the manufacturing supplements I just talked about, FDA has agreed, under PDUFA, to review and act on resubmissions in six months.

Of the total 71 resubmissions in fiscal year 1995, FDA has reviewed 96 percent of them on time. The goal is 70 percent. Again, we substantially exceeded expectations.

I want you to remember that these performance improvements under PDUFA only apply to two of FDA's five centers, the Center for Drug Evaluation and Research and the Center for Biologics Evaluation and Research -- CDER and CBER. PDUFA does not provide resources to the Center for Devices and Radiologic Health, CDRH, nor the Center for Food Safety and Nutrition or the Center for Veterinary Medicine, CFSAN and CVM. These other centers also have been making substantial improvements in the way they review and approve products for market, but they have done it more slowly and without the additional resources generated under PDUFA.

It's also important to point out that these improvements did not come from dollars alone. These improvements have been dramatic and they have been coming for some time. They didn't result from a single change at FDA, but from many incremental ones that took place over many years. They came from a change in the culture within the agency that has added modern, efficient management techniques to its long-standing, solid scientific base.

And it has been done without jeopardizing the public health or safety. I know this is a lot of information, so I'll stop here and we can answer questions.

Part 2 after Q & A Break:

Reauthorization Status with Congress and Administration; Discussions and Consensus with Industry

Let me turn now to the future, to the reauthorization of the Prescription Drug Users Fee Act. As most of you know, the act, and the current PDUFA program, expire at the end of this fiscal year, Sept. 30, 1997. Unless Congress reauthorizes the act, FDA will lose the resources it needs to continue this highly successful program. That would include losing about 600 FTE's we added in the last few years, as well as dismantling portions of the drug review program.

We earnestly hope that Congress and the Administration will act in time, but if they do not, and the program closes, then we will lose valuable services of the staff added over the last three years. To recreate that critical mass of professional reviewers would not be easy and would take years. The disruption to the well-running review process that we now have in place would be disastrous. And much of the significant progress we have made in speeding up pharmaceutical reviews would be reversed. That's the worse case scenario. Moreover, we could not make further improvements in the drug development process.

Let me give you a sense of where things stand. Starting last fall and into this year, FDA and the industry have held serious discussions about the future of PDUFA. The discussions have led to a general consensus between FDA and the industry on the approaches to goals, expectations and methods of funding.

I will give you some of the details in a minute, but first I want to remind you that these were not negotiations and they did not lead to an agreement. Only Congress can reauthorize PDUFA, so the negotiations will be between Congress, the Administration and industry.

FDA's discussions with industry, however, helped produce the agency's recommendations to the Administration. And since the recommendations represent a consensus, we hope that many of them will be accepted.

The proposed changes in PDUFA fall into two major categories: The first category primarily concerns the performance goals and the financial provisions. The second category mostly concerns technical changes which I am not going to spend time on.

New PDUFA, what people have been calling PDUFA II, will include a number of changes and performance commitments designed to speed up the overall development of new pharmaceuticals. For example, there is a new set of goals that would apply to meetings between FDA and the industry. When a company asks for a formal meeting, the agency has agreed to criteria that sets deadlines for deciding when and where the meeting will take place, how long it has to notify the company of the meeting, and even sets a deadline for producing meeting minutes.

On the drug review performance side over the next five years, there could be some modest reductions in review times for standard therapies, from 12 months to 10 months. Priority drugs already are going to be reviewed and acted on in six months. There will be an identical reduction in the time it takes the agency to review an efficacy supplements, those requests to use the drug for a new disease or give it to a new population of patients, like children.

There could be a gradual increase in the percentage of manufacturing supplements being reviewed in four months instead six months over the next five years.


And, lastly, there could be a gradual improvement in the percentage and the speed with which FDA reviews resubmitted applications.

These improvements would be gradual and will never be as dramatic as the improvements that came during the first part of PUDFA, but they ensure that the agency stays on track with its rapid reviews and makes ever possible improvement to speed safe pharmaceuticals to sick patients.

Because new molecular entities tend to be seen as an important bench mark, they will be reported separately, even though they will be treated the same as any standard or priority application. All therapies produced from original biological products will be considered to be new molecular entities.

There has been additional attention, and goals set, for the special problem of resolving major disputes over agency decisions on drug applications. This always has been a difficult area, but the discussions with industry seem to have led to a reasonable consensus of what FDA will do and by when.

In addition to all of these performance goals, FDA is increasingly talking with drug makers before they ever submit an application. These talks are intended to help the companies design and conduct the necessary types of clinical studies that will meet the scientific and regulatory requirements for a new drug approval. This helps the companies avoid wasting time in the drug development process and gets important new therapies to patients as quickly as possible.

Another improvement that we think will speed up drug approvals is the development of a paperless, electronic-submission system which will allow companies to send computer files directly to FDA. That system is expected to take some five years to set up and test. That means the agency will need long-term funding commitments from Congress and the industry before that process is likely to start. All of these issues are important but none will be possible without adequate funding. FDA and the industry reached a consensus on how much it would cost to expand the program as I have just outlined.

In the budget request for fiscal year 1998, the Administration requested $264 million for activities related to the review and approval of human drugs and biologics. This, unfortunately, represents a reduction of some $28 million, or 9.6 percent, compared to last year's budget. The budget request also authorizes FDA to collect $91 million in PDUFA fees, a 3 percent increase over last year. That leaves a short fall which the Administration is currently proposing to make up through additional uses fees, which the industry will resist. If the additional user fees are provided, then the drug approval program budget will go up a modest amount.

The overall budget remains a major consideration for FDA. While the total budget has stayed about the same, over the last four years, the agency has suffered a planned loss of 10 percent of its staff and about $100 million in salary and expenses. This flat budget actually represents a decline in spending power because of raises in salary and inflation.

And that leads me to the issue I want to close with. While PDUFA is today's topic, and it is an extremely important effort at FDA, it is not the only program at this agency. In addition to approving new pharmaceuticals as rapidly as possible, FDA is also responsible for the safety and quality of the nation's food supply - not a simple issue as seen in the recent problems of hepatitis A contamination in strawberries or last year's questions about mad cow disease. The agency is also responsible for ensuring the safety and effectiveness of medical devices, generic drugs, the nation's blood supply and medical products made from biological sources, as well as veterinary therapeutics.

Each of these programs is important to the American public. It is important for PDUFA to be renewed and to go forward, but it is also important that FDA continue with all of its other programs, even in the face of declining budgets. The public expects it and demands it.

That means if Congress does not reauthorize PDUFA in a timely way, FDA will do everything it can to maintain the improvements in the drug review system, but it can not cut back in its other areas of responsibility or shift additional resources into PDUFA. Given the real decline in available resources, we will make the best use of what we are given. But unless we get the enough resources, we will have to keep the other promises we made as well as support drug review as best we can with the money available.

Thank you.