New User Fee Program Aims to Spur Drug Development

August 1, 2002
Jill Wechsler

Jill Wechsler is ACT's Washington Editor

Applied Clinical Trials

Applied Clinical Trials, Applied Clinical Trials-08-01-2002,

PDUFA III boosts manufacturer fees to expand postapproval surveillance and support new FDA review initiatives.

The revised user fee program (PDUFA III) signed into law in June by President Bush emphasizes the need to spur clinical testing and development of new drugs and biotech therapies. Sponsors will pay higher fees for filing New Drug Applications but may obtain more assistance from Food and Drug Administration staffers on designing study protocols and drug development programs, particularly for innovative and high-risk therapies. The program also provides the agency with more flexibility in how it can use fee revenues and backs several new initiatives to streamline drug development and approval.

Continuing success
Congress approved the Prescription Drug User Fee Act (PDUFA) reauthorization in May as part of a broader antibioterrorism bill that enhances the ability of public health agencies to respond to bioterrorist threats. The user fee measure benefited from strong industry and FDA support for this 10-year-old program that has accelerated the drug approval process. Total approval time for new drug applications (NDAs) has decreased from about 23 months pre-PDUFA to less than 12 months. And priority applications now are processed in six months. FDA officials also believe that their efforts to communicate to industry what data to submit has increased overall approval rates from 60% of submissions to about 80% today.

FDA has achieved these gains by collecting substantial fees from manufacturers. Total user fees generated about $135 million in fiscal year 2001 and are expected to total $162 million this year. Combined with government appropriations, the program will provide FDA with about $325 million in total resources for drug review activities this year compared to about $120 million in 1992. These added resources have allowed FDA to increase its review staff for drugs and biologics by more than 900 staff-years through the end of this year.

However, FDA officials found in recent years that the added revenues failed to support the large workload increase generated by the program for FDAs Centers for Drug Evaluation and Research (CDER) and Biologics Evaluation and Research (CBER). The situation was aggravated by a decline in anticipated user fee revenues caused by a decrease in submissions along with an increase in waivers and exemptions. Because FDA must spend enough appropriated funds to match user fee revenues, years of flat annual budgets forced CDER and CBER to siphon off funds from other programs to cover application review activities. Consequently, FDAs real resources for many programs not covered by PDUFA, such as postmarket drug surveillance, had contracted since 1992. FDA staffers struggled to meet deadlines for reviewing investigational new drug applications (INDs) and supplements and for scheduling and participating in an increasing number of meetings with sponsors to discuss study protocols.

Seeking changes
To remedy these problems, FDA officials began lobbying for PDUFA revisions more than a year ago. The aim was to increase fees and to gain more flexibility as to how the agency used the fees. Patient advocates and health professionals backed the agencys plan to expand postapproval safety activities, including the review of drug advertising. FDA and manufacturers subsequently negotiated a proposal that Congress found acceptable and approved as part of the bioterrorism bill.

PDUFA III not only increases user fees paid by industry, but also makes revisions to put the program on a sound financial footing. The updated program sets specific revenue targets which FDA can adjust upward based on inflation and changes in total application review workload. User fees are slated to total $223 million in fiscal year 2003, compared to $162 million this year, and should rise to $260 million in 2007. These totals will come from application fees, product fees, and establishment fees ($74 million for each group next year), which are calculated annually. The fee for filing a full NDA is $313,000 this year and is expected to hit $500,000 in the near future. Small companies filing their first NDA or biologics license application (BLA) can obtain a waiver, but sponsors now pay fees for filing pediatric supplements, which previously had an exemption.

Streamlining reviewsIn return, PDUFA III tackles several thorny issues related to how FDA reviews applications, although it makes very few changes in basic performance goals in this area. The agency will continue to review and act on 90% of standard NDAs and BLAs in 10 months, and priority applications in 6 months. Efficacy supplements have similar time frames, although there are new goals to reduce review times for some resubmitted supplements.

One concern addressed by PDUFA III is FDAs tendency to issue more approvable letters to sponsors to meet user fee action deadlines, but to then take months and go through multiple review cycles before final approval. The legislation aims to resolve this problem by calling for:

  • Fast notification to the sponsor of any substantive deficiencies identified in the initial filing.
  • Additional guidance on CDER and CBER filing review processes, including communication with the sponsor about easily correctable deficiencies, needed planning for advisory committee meetings, and procedures for negotiating final product labeling.
  • Replacing the approvable action letter with a complete response letter, which informs the sponsor in detail about what deficiencies remain and what actions are necessary for FDA to approve the application.
  • Clarifying procedures for a sponsor to file a major amendment to resolve deficiencies or to resubmit an original application.
  • Further evaluation of FDA first-cycle reviews to see if these changes improve the process. The agency will use a portion of a $7 million new initiatives fund to identify best practices that facilitate the review process. FDA also will conduct a broader analysis of CDER and CBER review processes to identify the need for system redesign or process reengineering. The fund also could be used to support access to external experts and to advance information management tools.

Accelerating drug development
In addition to reducing delays in application approvals, the user fee reauthorization contains several initiatives to facilitate drug testing and development. The bill continues to encourage meetings between FDA and sponsors to discuss protocols and study plans. It spells out how companies should request formal meetings and procedures for documenting meeting discussions and agreements.

Several new provisions aim to avoid disputes over protocol designs and application reviews and to assist sponsors in developing study plans that meet regulatory requirements:

  • Formal program to resolve major disputes over procedures or scientific matters that may arise during product development or FDA review. This sets time frames for FDA to address appeals and for sponsors to provide additional data when requested.
  • Procedures for sponsors to request FDA evaluation of whether a protocol for a critical therapy will meet FDA scientific and regulatory requirements. This allows sponsors to submit questions about specific study issues (such as dose range or clinical endpoints) and gain assurance that FDA will adhere to the resulting agreement on design, execution, and analysis of an important clinical study.
  • Additional assistance for sponsors developing biotech therapies. A manufacturer may request that FDA hire an independent consultant to review a clinical trial protocol for pivotal studies involving important new treatments.
  • Pilot tests to see whether even more interaction between the agency and sponsor will spur development of fast-track drugs and biologics. A second pilot will test a rolling review process. FDA will accept certain reviewable units of an application prior to submission of a complete NDA or BLA. FDA will develop guidances for implementing these tests and will hire an outside expert to evaluate their impact on drug development and review.

Assessing product risk
The most notable innovation in PDUFA III is its authorization for FDA to use fee revenues to expand postmarketing surveillance of new products during the peri-approval period following approval of a new drug. This period will be two years for most products and up to three years for products considered to be higher riskthose that require a black box or bolded warning, a medication guide, or restricted distribution. The agency also will expand its ability to use outside health information databases to independently evaluate the use of new drugs with important safety concerns.

This initiative will encourage sponsors to develop risk management plans as part of drug development and to discuss with FDA relevant safety information and the need for additional postapproval safety studies before filing an NDA. A risk management proposal will assess limitations on safety information gained from clinical trials and present risk management tools to address known and potential risks. This includes identifying those risks that should be targeted in postapproval surveillance and examined in Phase 3 studies. FDA also gains the authority to publicize the failure of any company to complete agreed-on postmarketing studies.

A final provision in PDUFA III calls for FDA to centralize information systems that track and fund the PDUFA program. This is part of an IT infrastructure consolidation initiative for all of HHS. It will establish a centralized process for all electronic submissions involving drugs and biologics, including the Common Technical Document developed by the International Conference on Harmonisation.

Additional fine-tuning
Although Congress basically accepted and codified the PDUFA III agreement crafted by FDA and industry, legislators included several of their own provisions. One addition requires the agency to consult consumer and patient advocacy groups, health care professionals, and academics in the next round of user fee negotiations, which will begin in about four years. FDA has to publish the resulting PDUFA revision to address complaints that this years agreement was developed behind closed doors.

The legislation also authorizes specific additional funding for CDERs Office of Drug Safety and its Office of Generic Drugs to expand their activities. And it boosts support for the Division of Drug Marketing, Advertising and Communications (DDMAC) to enhance its review of drug marketing materials.

However, some controversial measures were dropped from the final bill. A provision to provide an antitrust waiver for manufacturers that collaborate on bioterrorism counter measures was omitted, as was an effort to codify FDAs mandatory pediatric rule, which had become controversial in recent months. There also was a move to establish user fees for medical device makers, but that effort collapsed at the last moment.

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