FDA: User fee monies drop

November 1, 1999

Pharmaceutical Representative

Prescription drug user fee revenues will be $59 million lower than originally expected over the five years of the Prescription Drug User Fee Act II, the Food and Drug Administration announced.

Prescription drug user fee revenues will be $59 million lower than originally expected over the five years of the Prescription Drug User Fee Act II, the Food and Drug Administration announced.

User fees - fees paid to the FDA by new drug application sponsors in order to fund staffing and resources in the new drug approval process - have been a key factor in accelerating the approval of new drugs since the Prescription Drug User Fee Act was first passed in 1994.

"Assumptions have been significantly revised, based on a more conservative projection of PDUFA fee revenue," said the FDA in its fiscal year 1999 revision of the PDUFA II five-year plan, which runs from 1998 to 2002. "The estimate of revenue expected over the five years is reduced from $740 million to $681 million."

The FDA blames the reduction on the Food and Drug Administration Modernization Act, which expanded the number of application submissions that were exempt from user fees. "In fiscal year 1998, the number of applications submitted to FDA for review declined for the first time in six years," according to the FDA. "FDAMA amendments exacerbated this decline, causing over 30 more applications to be exempt from fees than would have been exempt previously. Thus, there was a substantial decline in the number of fee-paying applications in fiscal year 1998."

According to FDAMA, orphan drug applications, small business applications and supplemental applications for pediatric indications can be exempt from user fees.

Despite this reduction in fee-paying applications, total workload under PDUFA, which includes items exempt from fees as well as an increasing volume of work not subject to fees – including investigational new drug submissions and manufacturing supplements – increased in fiscal year 1998, according to the FDA.

The reduction in user fees will affect the Center for Drug Evaluation and Research in two ways:


•Â There will be an increase of only 101 full time equivalent employees by the end of the plan's five years (down from 240 in the original plan). Costs for additional staff and operating support to enhance the review process over the five years of the plan has been reduced from $103 million to $80 million.


•Â Information technologies over the five years of the plan have been reduced from $61 million to $54 million.

Goals not affected

The Pharmaceutical Research and Manufacturers of America does not anticipate that these reductions will affect the acceleration of the FDA's review process. "There is still going to be enough money raised to keep the improvement goals going," said Jeff Trewhitt, spokesperson for PhRMA. "Yes, there is going to be a drop in user fee money, but there will be enough public money from Congress to proceed." PR

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