Food and Drug Administration: Effect of User Fees on Drug
Approval Times, Withdrawals, and Other Agency Activities
(17-SEP-02, GAO-02-958).
Ten years ago, Congress passed the Prescription Drug User Fee Act
to speed up the review process used to ensure that new drugs and
biological products are safe and effective. GAO found that the
act has provided the Food and Drug Administration (FDA) with the
funding needed to hire more drug reviewers, which has led to
faster availability of new drugs to the United States. Approval
times have shortened both for priority drugs--those that FDA
expects to offer significant therapeutic benefits beyond drugs
already on the market--and standard drugs, which are not thought
to have significant therapeutic benefits beyond available drugs.
Although the act has increased the funds available for FDA's drug
and biological reviews, funds for other activities, such as the
regulation of foods and medical devices, have shrunk as a share
of FDA's overall budget. The 1997 amendments to the act, which
shortened review schedules and set new performance goals to
reduce overall drug development time, have increased reviewer
workload at FDA. GAO found that some drug reviewers may have
forgone training and professional development opportunities to
ensure that the new goals were met. FDA officials said that the
agency continues to experience high turnover rates among these
employees. GAO found that a higher percentage of drugs has been
withdrawn from the market for safety reasons since the act was
enacted but the that the size of the increase in withdrawal rates
differs depending on the period examined. The higher rate of drug
withdrawals suggests that FDA needs to strengthen its postmarket
surveillance efforts. FDA plans to spend $71 million in user fees
during the next 5 years to improve the monitoring of new drugs on
the market and to track any harmful effects of these products.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-02-958
ACCNO: A05090
TITLE: Food and Drug Administration: Effect of User Fees on Drug
Approval Times, Withdrawals, and Other Agency Activities
DATE: 09/17/2002
SUBJECT: Drugs
Pharmaceutical industry
Safety regulation
Safety standards
User fees
FDA Prescription Drug User Fee Program
******************************************************************
** This file contains an ASCII representation of the text of a **
** GAO Product. **
** **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced. Tables are included, but **
** may not resemble those in the printed version. **
** **
** Please see the PDF (Portable Document Format) file, when **
** available, for a complete electronic file of the printed **
** document's contents. **
** **
******************************************************************
GAO-02-958
Report to the Chairman, Committee on Health, Education, Labor, and
Pensions, U. S. Senate
United States General Accounting Office
GAO
September 2002 FOOD AND DRUG ADMINISTRATION
Effect of User Fees on Drug Approval Times, Withdrawals, and Other Agency
Activities
GAO- 02- 958
Page i GAO- 02- 958 PDUFA User Fees Letter 1 Results in Brief 3 Background
4 PDUFA Has Increased Funding and Reduced Drug Approval Time, but Biologic
Approval Time Has Fluctuated 8 Reduced Share of Funds Available for Other
FDA Activities 14 PDUFA Has Contributed to Increased Workload and
Attrition and
Decreased Training for FDA Reviewers 18 Rate of Safety- Related Drug
Withdrawals Has Increased Recently 24 Conclusions 28 Agency Comments and
Our Evaluation 29 Appendix I Drugs Withdrawn for Safety- Related Reasons
from U. S. Market, 1992 Through 2001 31
Appendix II Comments from the Food and Drug Administration 32
Tables
Table 1: FDA Spending Above Amount Required by PDUFA, Fiscal Years 1993-
2001 17 Table 2: Number of Submission and Review Activities Under
PDUFA II, by Fiscal Year 20 Table 3: Average Attrition Rates for Selected
Occupations in FDA, CDC, NIH, and Governmentwide, Fiscal Years 1998- 2000
22 Table 4: FTEs and Dollar Allocations for Risk Management under PDUFA
III 28 Figures
Figure 1: Total Obligations for FDA*s Drug and Biologic Review Processes,
Fiscal Years 1992- 2002 9 Figure 2: Median Approval Times for Standard and
Priority Drug
Applications Based on Calendar Year of Approval, 1993- 2001 10 Figure 3:
Median Approval Times for Biologic Applications Based
on Calendar Year of Approval, 1993- 2001 11 Contents
Page ii GAO- 02- 958 PDUFA User Fees Figure 4: Percentage of Standard New
Drug and Biologic Applications Approved, by Review Cycle, Fiscal Years
1998- 2001 13 Figure 5: Percentage of FDA Funds Obligated for the Drug and
Biologic Review Processes and for Other FDA Activities, Fiscal Years 1992
and 2000 15 Figure 6: Percentage of FTEs for the Drug and Biologic Review
Processes and All Other FDA Activities, Fiscal Years 1992 and 2000 16
Figure 7: Rate of Safety- Related Drug Withdrawals by 4- Year Intervals,
Based on Calendar Year of Approval, 1985- 2000 25 Figure 8: Rate of
Safety- Related Drug Withdrawals Pre- and PostPDUFA, Based on Calendar
Year of Approval, 1985- 2000 26 Abbreviations
BIO Biotechnology Industry Organization BLA biologics license application
CBER Center for Biologics Evaluation and Research CDC Centers for Disease
Control and Prevention CDER Center for Drug Evaluation and Research FDA
Food and Drug Administration FDAMA Food and Drug Administration
Modernization Act of 1997 FTE full- time equivalent HHS Department of
Health and Human Services NDA new drug application NIH National Institutes
of Health NME new molecular entity OPM Office of Personnel Management
PDUFA Prescription Drug User Fee Act PhRMA Pharmaceutical Research and
Manufacturers of America
Page 1 GAO- 02- 958 PDUFA User Fees
September 17, 2002 The Honorable Edward M. Kennedy Chairman Committee on
Health, Education,
Labor, and Pensions United States Senate
Dear Mr. Chairman: Ten years ago, the Congress passed the Prescription
Drug User Fee Act (PDUFA) 1 to provide additional resources for the Food
and Drug Administration (FDA) to speed up the process of reviewing
applications for new drugs and biological products. 2 FDA is responsible
for ensuring that all such products are safe and effective. Under PDUFA,
FDA collects user fees from the pharmaceutical and biotechnology
industries to supplement its annual appropriation for salaries and
expenses. PDUFA requires FDA to use the additional funds for the review of
applications. The original act was set to expire in 1997, but the FDA
Modernization Act of 1997 (FDAMA) extended the PDUFA user fee program for
an additional 5 years. 3 The Prescription Drug User Fee Amendments of 2002
extended PDUFA for 5 more years, effective October 1, 2002. 4 As FDA
endeavors to reduce its review time under the user fee program,
concerns have been raised about the effects the program may be having on
the resources available to other FDA programs, which set and enforce
safety standards for such products as medical devices, blood products,
cosmetics, and all foods except for meat and poultry. Concerns have also
been raised about the effects of the expedited process on FDA staff
involved in the review process. In addition, some consumer and patient
1 P. L. 102- 571, Title I, S:103. 2 Biological products, or biologics, are
derived from living sources (such as humans, animals, and microorganisms)
as opposed to being chemically synthesized. 3 P. L. 105- 115, Title I,
S:103.
4 The Prescription Drug User Fee Amendments of 2002 were included in Title
V of the Public Health Security and Bioterrorism Preparedness and Response
Act of 2002, P. L. 107- 188.
United States General Accounting Office Washington, DC 20548
Page 2 GAO- 02- 958 PDUFA User Fees
groups have noted the removal of several drugs from the market in recent
years and expressed concern that PDUFA*s emphasis on faster review times
may have compromised drug safety.
To assist the committee in its consideration of PDUFA*s reauthorization,
you asked us to evaluate the prescription drug user fee program. On May
15, 2002, we briefed your staff on the results of our work. This report
provides a more detailed discussion of those results. Specifically, you
asked us to examine (1) how PDUFA has affected the funding and approval
times for FDA*s review of new drug and biologic applications, (2) whether
PDUFA has had an effect on the funding and operation of FDA*s non- PDUFA
activities, (3) whether the workload, attrition, and professional
development of FDA reviewers have changed since the user fee program was
reauthorized in 1997, and (4) how the rate of drug withdrawals from the
market has changed since PDUFA was enacted in 1992 and what actions are
being taken by FDA to monitor adverse drug
effects. To examine these issues, we reviewed and analyzed FDA reports,
data, and other agency documents and interviewed FDA officials from the
Office of the Associate Commissioner for Planning, the Centers for Drug
Evaluation and Research (CDER), and the Center for Biologics Evaluation
and Research (CBER). In this report, we will refer to the original act
passed in 1992 as PDUFA I, the amendments of 1997 as PDUFA II, and the
Prescription Drug User Fee Amendments of 2002 as PDUFA III. Unless
specified, where we discuss PDUFA, we are referring to the period from
1992 through September 2002. We also reviewed and analyzed federal
employment data from the Office of Personnel Management (OPM). We
interviewed representatives from the trade associations that represent
companies that pay user fees, the Pharmaceutical Research and
Manufacturers of America (PhRMA), and the Biotechnology Industry
Organization (BIO), and reviewed and analyzed information that they
provided. In addition, we attended an FDA stakeholders* meeting that
included industry and consumer groups and reviewed documents prepared by
the Consumer Federation of America, Public Citizen, and others. Due to
time constraints, we were unable to independently verify the accuracy of
all data provided. Apart from this exception, our work was conducted from
August 2001 through July 2002 in accordance with generally accepted
government auditing standards.
Page 3 GAO- 02- 958 PDUFA User Fees
PDUFA has been successful in providing FDA with the funding necessary to
hire additional drug reviewers, thereby making new drugs available in the
United States more quickly. Approval times have declined for both priority
drugs, those that FDA expects to provide significant therapeutic benefits
beyond drugs already marketed, and standard drugs, those for which there
are no perceived significant therapeutic benefits beyond those for
available drugs. From 1993 to 2001, the median approval time for new drug
applications for standard drugs dropped from 27 months to 14 months. The
median approval time for new drug applications for priority drugs has
remained stable at 6 months since 1997. However, the approval time for
standard new molecular entities (NME), drugs containing active
ingredients that have never been marketed in the United States in any
form, has increased since 1998 from about 13 months to 20 months. In
contrast, median approval times for new biologic applications have
fluctuated since 1993, ranging from a low of 12 months in 1997 to a high
of about 32 months in 1995. In 2001, the median approval time for biologic
applications was about 22 months. While PDUFA has increased the funds
available for FDA*s drug and biologic review activities, funds for non-
PDUFA activities, such as regulating foods and medical devices, have
constituted a smaller portion of FDA*s total budget. According to FDA
officials, two factors may have contributed to the reduced share of FDA
funds allocated to other activities. First, to satisfy the minimum
allocation of funds required by PDUFA, FDA had to continually increase the
amount of appropriated funds allocated to drug and biologic reviews.
Moreover, FDA*s difficulty in determining the amount spent to meet this
requirement has resulted in the
agency exceeding the spending baseline from 3 to 10 percent in 7 of the 9
years since PDUFA. Second, from fiscal year 1994 through fiscal year 2001,
annual appropriations for the agency did not include the costs of pay
raises for its employees, according to FDA officials. FDA reduced the
resources spent on other activities to fund these pay raises.
PDUFA II has resulted in increased reviewer workload and may be
contributing to decreased training and development and increased attrition
among FDA*s staff responsible for reviewing new drugs and biologics. PDUFA
II affected reviewer workload by shortening review times and establishing
new performance goals to reduce overall drug development times. Also,
FDA*s attrition rates for most of the scientific occupations involved in
its drug review process are higher than those for comparable occupations
in other federal public health agencies and the remainder of the federal
government. Results in Brief
Page 4 GAO- 02- 958 PDUFA User Fees
Our analysis of FDA data found that a higher percentage of drugs has been
withdrawn from the market for safety- related reasons since PDUFA*s
enactment than prior to the law*s enactment, but that the size of the
increase in drug withdrawal rates differs depending on the period
examined. The share of more recently approved drugs (1997 to 2000) that
have been withdrawn has risen to 5.34 percent, from 1.56 percent in the
period immediately after PDUFA*s implementation (1993 to 1996). When
withdrawal rates are compared for the 8- year periods before and after
PDUFA, the increase is from 3.10 to 3.47 percent. Drug withdrawals have
been affected by several factors. For example, some drugs were removed
from the market because doctors and patients did not use them correctly,
while other drugs were found to have rare side effects that were not
detected in clinical trials. The increased rate of drug withdrawals
suggests the need for FDA to strengthen its postmarket surveillance
activities. FDA plans to spend about $71 million in user fees over the
next 5 years to better monitor the safety of new drug products once they
have reached the market and track adverse effects from marketed drugs.
In technical comments on a draft of this report, FDA disagreed with our
analyses and discussion of drug withdrawal rates. FDA officials said that
our analysis of drug withdrawals for the 8- year period preceding PDUFA
versus the first 8 years of PDUFA does not show any real increase, and
that our analysis using the 4- year groupings was significantly affected
by
the small number of withdrawals during each period. While we agree that
the small number of withdrawals in any given year may affect the variation
in the withdrawal rate, we believe that our analyses are appropriate and
both analyses show an increase in the withdrawal rates since PDUFA*s
implementation. Under PDUFA III, FDA will be able to use user fees for
additional drug safety activities that could not be funded by PDUFA I and
II. We incorporated FDA*s other technical comments as appropriate.
Over the past two decades, extensive research and development have led to
new prescription drug therapies and improvements over existing therapies,
and the number of prescription drugs on the market has increased
dramatically. Some of these therapies can at times replace other health
care interventions, 5 and as a result, the importance of prescription
drugs as part of health care has grown. Consequently, Americans are using
5 For example, cholesterol- lowering drugs may obviate the need for
angioplasty, that is, a surgical procedure to remove cholesterol plaque on
the inside wall of a blood vessel. Background
Page 5 GAO- 02- 958 PDUFA User Fees
a greater number of pharmaceuticals than ever before. According to the
National Institute for Health Care Management, pharmacists dispensed 3.1
billion prescriptions in the United States in 2001, up from 1.9 billion in
1992 and 2.4 billion in 1997. 6 In addition to ensuring that new drugs and
biologics are safe and effective 7 and that applications for their
approval are reviewed timely, FDA is also responsible for monitoring drugs
and biologics for continued safety after they are in use. Within FDA, CDER
and CBER are responsible for reviewing applications for new drugs and
biologics, respectively. The centers also are responsible for reviewing
efficacy supplements, manufacturing supplements, labeling supplements, and
investigational new drugs. Efficacy supplements are applications for new
or expanded uses of already approved products, including addition of a new
indication, a change in the dosing regimen such as increase or decrease in
daily
dosage, or a change in the patient population. Manufacturing supplements
to new drug applications are used to notify the centers in advance of
certain drug manufacturing changes. Investigational new drug applications
are submitted for new drugs or new indications for already approved drugs
that are to be used in clinical investigations. The review process for
both centers requires evaluating scientific and
clinical data submitted by manufacturers to determine whether the products
meet the agency*s standards for approval. The first decision a center must
make in its review process is whether to accept a new drug application
(NDA) or biologics license application (BLA). FDA can issue one of several
action letters. If the application is not sufficiently complete to allow a
substantive review, the center issues a *refuse- to- file* letter.
Once the center has accepted the application, it designates the product as
either *priority,* for products that would provide significant therapeutic
gains compared to any existing products on the market, or *standard,* for
products that would provide no significant therapeutic advantage over
other drugs already on the market. After a thorough assessment of the
6 IMS Health, *National Prescription Audit and NDCHealth*s Source DataBase
and Pharmaceutical Audit Suite,* Prescription Drug Expenditures in 2001:
Another Year of Escalating Costs, (Washington, D. C.: National Institute
for Health Care Management, May 2002). 7 In order to be licensed,
biologics must be safe, pure, and potent. 42 U. S. C. S: 262; 21 C. F. R.
S: 601.2. FDA*s Drug and Biologic
Review Process
Page 6 GAO- 02- 958 PDUFA User Fees
information in the application and any supplemental information requested,
the center decides whether to approve the drug based on the product*s
intended use, effectiveness, and the risks and benefits for the intended
population. All medical products are associated with some level of risk,
and a product is considered safe if its risks are determined to be
reasonable given the magnitude of the benefit expected. For decisions on
drugs, CDER may approve the product for marketing (in an *approval
letter*) or it may indicate (in an *approvable letter*) that it can
approve the drug if the sponsor resolves certain issues. Alternatively, it
may issue a *nonapprovable letter* that specifies the issues that make the
application ineligible for FDA approval. The review process is similar for
biologics; however, CBER issues a *complete response letter* that
specifies all outstanding issues that would need to be addressed by the
sponsor to be considered for FDA approval.
The review process may consist of more than one review cycle. The first
review cycle begins when an NDA or a BLA is initially submitted to FDA,
and it ends when FDA has completely reviewed the application and issued
some form of an action letter. If the application is approved in the first
cycle, the *approval time* is recorded as the length of that cycle. The
next cycle of review, if necessary, begins when the application is
resubmitted to FDA. If the review process takes two or more cycles to
reach approval, the length of the approval time is recorded as the total
of the length of the review cycles plus any subsequent time during which a
sponsor is addressing the issues raised by FDA.
Under PDUFA, companies pay three types of user fees to FDA* application
fees, establishment fees, and product fees. In most cases, a company
seeking to market a new drug or biologic in the United States must pay an
application fee to support the agency*s review process. 8 Generally,
companies also pay an annual establishment fee for each
facility in which their products subject to PDUFA are manufactured and an
annual product fee for marketed drugs for which no generic versions are
available. 8 Certain NDAs or BLAs are exempt from user fees. For example,
applications for certain
drugs used in the treatment of rare diseases are exempt from fees. From
fiscal year 1997 through fiscal year 2001, about 22 percent of applicants,
on average, paid no application fee. PDUFA User Fees and
Performance Goals
Page 7 GAO- 02- 958 PDUFA User Fees
FDA is expected to use funds received under PDUFA to meet certain
performance goals. Under the framework established by PDUFA, FDA works
with various stakeholders, including representatives from consumer,
patient, and health provider groups and the pharmaceutical and
biotechnology industries, to develop performance goals. The Secretary of
Health and Human Services (HHS) then transmits these goals in a letter to
the Congress. 9 Under PDUFA I, the performance goals applied to length of
review time; the performance goals in PDUFA II further shortened the
review time and added new performance goals associated with reviewer
responsibilities for interacting with the manufacturer, or sponsor, during
drug development. For example, PDUFA II required FDA to schedule meetings
and respond to various manufacturer requests within specified time frames.
To collect and spend user fees under PDUFA I, each year FDA had to
spend from its annual appropriation for salaries and expenses at least as
much, adjusted for inflation, on the human drug and biologic review
process as it had spent on for this process in fiscal year 1992. Under
PDUFA II, each year FDA has to spend at least as much, adjusted for
inflation, as it did in fiscal year 1997. The user fees collected under
PDUFA cover only those CDER or CBER
activities that are included in the human drug review process. The fees do
not fund other CDER or CBER activities and do not fund the programs of the
other FDA centers, that is, the Center for Food Safety and Applied
Nutrition, Center for Veterinary Medicine, Center for Devices and
Radiological Health, and National Center for Toxicological Research. FDA
designates the programs of these centers as non- PDUFA programs or other
activities.
9 The legislation refers to these goals identified in a letter to the
Congress from the Secretary of HHS. See, for example, P. L. 107- 188,
Title V, S: 502( 4).
Page 8 GAO- 02- 958 PDUFA User Fees
PDUFA has provided FDA with additional resources that have helped the
agency make new drugs available to the U. S. health system more quickly,
but biologic approval times have varied. FDA has used PDUFA funds to
increase the number of medical and scientific reviewers to assess the
applications for new products by about 77 percent. Since 1993, FDA median
approval times for standard drugs decreased from about 27 months in 1993
to about 14 months in 2001. However, in recent years, median approval
times for standard NMEs have increased. In contrast, median approval times
for biologic applications have fluctuated since 1993, ranging from a low
of 12 months to a high of about 32 months. In all but 2 years since 1993,
approval times for biologics have been longer than for drugs. For example,
in 2001, the median approval time for biologics
was about 22 months, while median approval times for priority and standard
drugs were about 6 months and 14 months, respectively. The fluctuation in
BLA approval time is due, in part, to the small number of submissions each
year.
Since the implementation of the PDUFA program, user fees have grown
steadily and represent an increasing share of FDA*s funds for the review
of new drug and biologic applications. From fiscal year 1993 through
fiscal
year 2001, FDA obligated $825 million from user fees for the drug and
biologic review processes, in addition to $1.3 billion from its annual
appropriation for salaries and expenses (see fig. 1). While user fees
funded 7 percent of drug and biologic review obligations in fiscal year
1993, user fees accounted for nearly 50 percent of the total funds
obligated for the drug and biologic review processes in fiscal year 2001.
In fiscal year 2002, FDA expects to obligate about $170 million in user
fees, or 51 percent of the $332 million that FDA expects to spend on its
drug and biologic review processes. From fiscal year 1993 to fiscal year
2001, user fees allowed FDA to increase the personnel assigned to review
new drug and biologic applications from about 1,300 to about 2,300 full-
time equivalents (FTE), an increase of about 77 percent. PDUFA Has
Increased
Funding and Reduced Drug Approval Time, but Biologic Approval Time Has
Fluctuated
User Fees Have Provided Increased Funding for the Review of Drug and
Biologic Applications, but Recent Revenues Fell Short of Estimates
Page 9 GAO- 02- 958 PDUFA User Fees
Figure 1: Total Obligations for FDA*s Drug and Biologic Review Processes,
Fiscal Years 1992- 2002
Source: FDA.
Despite the growth of user fees, user fee revenues under PDUFA II fell
short of FDA*s estimates, while reviewer workload increased. FDA*s
estimate of how much the agency would receive from user fees fell short
because FDA received fewer submissions than expected. From fiscal year
1998 through fiscal year 2002, FDA collected about $57 million less in
user fees that it initially estimated. At the same time, the workload of
FDA reviewers increased under PDUFA II. As a result, during the last 2
years of PDUFA II, FDA had to spend unobligated user fees that had been
carried over from previous years to maintain its reviewer workforce. Under
PDUFA III, FDA will be better able to ensure the stability of user fee
revenues.
Overall, the median approval time for new drugs has dropped since the
implementation of PDUFA. From 1993 to 2001, the median approval time for
standard new drug applications dropped from about 27 months to Median
Approval Time for
Drugs Has Dropped
0 50
100 150
200 250
300 350
400 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002*
From appropriations From user fees
Estimated
Millions of dollars *
170 120 127 129 140 152 148 152 160 168 163 162 0 9 40
74 85 84 102
123 147 161
Page 10 GAO- 02- 958 PDUFA User Fees
about 14 months (see fig. 2). During the same period, the median approval
time for priority new drugs also dropped, from about 21 months to about 6
months. Since 1995, approval times for priority new drugs have been
relatively constant.
Figure 2: Median Approval Times for Standard and Priority Drug
Applications Based on Calendar Year of Approval, 1993- 2001
Source: FDA.
While, in general, approval times for new drugs have dropped
significantly, the median approval time for standard NMEs, a subset of
standard drugs, has increased in recent years. The approval time for
standard NMEs reached a low of about 13 months in 1998 before rising to
about 20 months in 2000 and 2001. The median approval time for priority
NMEs has remained stable at about 6 months since 1997.
Page 11 GAO- 02- 958 PDUFA User Fees
The median approval time for a biologic application has varied
considerably post- PDUFA, although the small number of biologic
applications approved in any given year may affect the variation in
approval time. The median approval time increased from about 15 months in
1993 to a high of about 32 months in 1995. After dropping to a low of 12
months in 1997, it rose again and was about 22 months in 2001 (see fig.
3). In all but 2 years since 1993, approval times for biologics have been
longer than for drugs.
Figure 3: Median Approval Times for Biologic Applications Based on
Calendar Year of Approval, 1993- 2001
Source: FDA.
Although there has been an overall decrease in the approval times for
standard drug applications since the implementation of PDUFA, FDA approval
times for standard NME applications (a subset of standard drugs) and
biologic applications have increased recently. According to FDA, approval
times for these two types of applications went up in 2000 because many of
them had to go through several review cycles before they were
approved. Multiple review cycles have occurred for several reasons. For
example, after its initial review of an application, FDA may ask the
sponsor to provide new information, such as new clinical trials or data
analyses, to address deficiencies in the initial application. Once the
sponsor provides the requested information, FDA undertakes another Median
Approval Time for
Biologics Has Fluctuated Several Factors Contributed to Recent Increases
in FDA Approval Times for NMEs and Biologics
Page 12 GAO- 02- 958 PDUFA User Fees
review cycle to examine the information. Also, if FDA completes its
assessment late in the review cycle, it can be difficult to resolve issues
with the sponsor before the review decision deadline. In these cases, FDA
may issue an approvable letter that advises the sponsor that the
application will be approved if certain issues are resolved. Issuing an
approvable letter enables FDA to meet its performance goals without making
a final decision on the application. It also results in the application
going through another review cycle.
Both FDA and the pharmaceutical/ biotechnology industry have acknowledged
that to allow FDA to meet PDUFA review goals, drug and biologic
applications are going through more review cycles. While the industry*s
goal is to obtain approval of an application, FDA can meet the PDUFA goal
by completing its review and issuing an action letter. Our analysis of
approvals confirms that an increased proportion of applications are going
through several review cycles. A smaller percentage of drugs was approved
in the first review cycle in 2001 than in previous
years (see fig. 4). For example, in 1998, 54 percent of standard new drugs
and biologic applications were approved in the first review cycle. In
2001, 37 percent of standard new drugs and biologic applications were
approved in the first review cycle. In response to industry*s concerns,
FDA and the pharmaceutical/ biotechnology industry have agreed that the
agency will notify an applicant of deficiencies identified within a
specified time frame after an application is filed with FDA. While an
application may be sufficiently complete for FDA to do a substantive
review, the purpose of FDA*s communication is to alert a company early to
deficiencies in its
application that will prevent FDA approval so that it can start addressing
them.
Page 13 GAO- 02- 958 PDUFA User Fees
Figure 4: Percentage of Standard New Drug and Biologic Applications
Approved, by Review Cycle, Fiscal Years 1998- 2001
Source: GAO analysis of FDA data.
Additional factors may affect approval times for biologic products. A CBER
official stated that the complexity of cutting- edge technology involved
in developing and manufacturing biologics, such as gene therapy and
bioengineering, may increase approval time. In addition, an FDA official
told us that some biotechnology companies have had difficulties
demonstrating their ability to consistently manufacture products
comparable to those used in their human studies, while others have filed
applications with significant clinical and safety issues that had to be
resolved. According to a CBER official, the center plans to issue more
refuse- to- file letters in such situations at the start of the review
cycle to obtain better- quality applications. CBER officials believe that
initiating a review of an application that is substantially incomplete,
for example, because it omits critical data, or one that raises
significant issues is
Page 14 GAO- 02- 958 PDUFA User Fees
inherently inefficient and extends review time. A refuse- to- file letter
alerts a company to corrective actions that need to be taken so that the
FDA review of an application proceeds more promptly and efficiently.
As part of its performance goals established for PDUFA III, FDA agreed to
select and hire an outside consultant in fiscal year 2003 to conduct a
comprehensive review and analysis of the drug and biologic review process
and make recommendations for improvements. User fees will pay for this
review and analysis. FDA anticipates delivery of a report of the
consultant*s findings and recommendations in fiscal year 2005. The agency
would then consider these recommendations in planning any changes to
enhance its performance.
While PDUFA has increased the funds available for FDA*s drug and biologic
review activities, funds for FDA*s other activities have constituted a
smaller portion of FDA*s total budget since implementation of PDUFA.
According to FDA officials, two factors may have contributed to the
reduced share of FDA funds allocated to other activities. First, PDUFA
requires that each year FDA spend increasing amounts from its annual
appropriation on the drug and biologic review process in order to collect
and spend user fee revenues. According to agency officials, FDA had
difficulty determining the amount spent until the end of the year. As a
result, FDA spent more than was required. Second, FDA officials said that
during fiscal years 1994 through 2001, the agency did not receive
sufficient increases in its annual appropriation for salaries and expenses
to cover
annual pay increases for all employees. To ensure that the agency could
meet the spending baseline for the drug review program and fund the pay
raises, FDA officials reduced available resources for other activities,
such as reviewing over- the- counter and generic products and inspecting
medical product manufacturing facilities. Reduced Share of
Funds Available for Other FDA Activities
Page 15 GAO- 02- 958 PDUFA User Fees
Since the enactment of PDUFA, the share of FDA funding and the resources
available for other activities have decreased. While spending on FDA*s
other activities rose from about $606 million in fiscal year 1992 to about
$782 million in fiscal year 2000, the percentage of FDA funds spent on
other activities declined from about 83 percent of FDA*s budget in fiscal
year 1992 to about 71 percent in fiscal year 2000 (see fig. 5).
Figure 5: Percentage of FDA Funds Obligated for the Drug and Biologic
Review Processes and for Other FDA Activities, Fiscal Years 1992 and 2000
Note: Total FDA obligations were $725,897,020 in 1992 and $1,097, 067,544
in 2000 and exclude rental payments to the General Services Administration
and building and facilities expenditures. Source: FDA.
During the same period, FDA resources allocated to other activities
declined from 7,736 FTEs in fiscal year 1992 to 6,571 FTEs in fiscal year
2000, or a decline from about 86 percent of FDA*s FTE resources in fiscal
year 1992 to about 74 percent in fiscal year 2000 (see fig. 6). During the
same period, the number of FTEs allocated to drug and biologic review
activities rose from 1,277 FTEs in fiscal year 1992 to 2,346 FTEs in
fiscal year 2000* an increase from 14 to 26 percent of FDA*s total FTEs.
Share of Funding and
Resources for Other Activities Have Decreased
Page 16 GAO- 02- 958 PDUFA User Fees
Figure 6: Percentage of FTEs for the Drug and Biologic Review Processes
and All Other FDA Activities, Fiscal Years 1992 and 2000
Note: Total FTEs for FDA were 9,013 in 1992 and 8,917 in 2000. Source:
FDA.
According to agency officials, the requirement that FDA must annually
increase by an inflation factor the amount it spends on the drug and
biologic review processes from its appropriation for salaries and expenses
reduces the funds available for other FDA programs. Under PDUFA, if
FDA*s spending from its appropriation on drug and biologic review
activities falls below the statutory minimum, it cannot collect and spend
user fees to review drug and biologic applications. FDA would then have to
initiate a reduction- in- force because the agency would not have
sufficient funds to pay the salaries of the reviewers. FDA officials
stated that it is difficult to determine exactly how much the agency has
spent from its appropriation until the end of the fiscal year when a final
accounting is completed. Therefore, the agency spends more on drug and
biologic review activities than the statutory minimum to ensure that it
spends enough to continue the user fee program. In 7 of the 9 years since
PDUFA was enacted, FDA has exceeded the spending baseline by from 3 to 10
percent (see table 1). In 1996 and 1997, the overspending was higher, 23
and 18 percent, respectively. According to an FDA official, the higher
overspending occurred in those years because the agency was particularly
focused on meeting the goals established by PDUFA I and spent additional
funds to ensure that it met PDUFA*s performance goals. Spending for Drug
and
Biologic Reviews for PDUFA Activities Reduced Funds for Other Activities
Page 17 GAO- 02- 958 PDUFA User Fees
Table 1: FDA Spending Above Amount Required by PDUFA, Fiscal Years 1993-
2001 Difference Fiscal year Minimum spending required by PDUFA Actual
spending from
appropriations Amount Percentage
1993 $120,057,253 $126,515,577 $6,458,324 5 1994 123,380,438 129,337,138
5,956,700 5 1995 126,958,144 139,830,318 12,872,174 10 1996 124,302,476
152,289,387 27,986,911 23 1997 125,872,166 147,959,689 22,087,523 18 1998
147,959,689 151,836,635 3,876,946 3 1999 150,083,954 159,669,575 9,585,621
6 2000 153,508,177 167,646,122 14,137,945 9 2001 158,213,295 162,691,657
4,478,362 3
Source: FDA.
To the extent that FDA spends more than the minimum amount of its
appropriation on drug and biologic review activities under PDUFA, it has
less to spend on other activities. As part of PDUFA III, the Congress
revised the minimum spending requirement to lessen the potential for the
agency to spend more than necessary from its appropriation each year on
drug and biologic review activities. Specifically, FDA will be allowed to
spend up to 5 percent less than the amount required by law provided that
user fee collections in a subsequent year are reduced by the amount in
excess of 3 percent that was underspent. 10 According to FDA officials,
the agency reduced staffing levels in other
centers to cover the costs of unfunded pay raises. From fiscal years 1994
through 2001, FDA paid about $250 million to cover mandatory federal pay
raises for which it did not receive increases in its appropriations. FDA
officials told us that this situation reduced the agency*s ability to
support activities not funded by PDUFA. FDA reduced the staffing levels
for nonPDUFA activities each year, leaving the agency fewer resources to
perform its other responsibilities. For example, in its budget
justification for fiscal year 2002, FDA reported that inspection of
medical device
10 Under PDUFA III, if FDA underspends by 3 percent or less, there is no
penalty. However, if FDA underspends by more than 3 percent but not more
than 5 percent, the agency will be required to reduce user fee collections
in a subsequent year by the amount in excess of 3
percent that was underspent. Unfunded Employee Costs Have Reduced FDA*s
Flexibility to Fund Other Activities
Page 18 GAO- 02- 958 PDUFA User Fees
manufacturers has decreased and the agency does not routinely inspect the
manufacturers of lower- risk products. Although total FDA staffing in
fiscal year 2001 was about the same as in fiscal year 1992, about 1,000
more FTEs were allotted to drug and biologic review activities in fiscal
year 2001 and about 1,000 fewer FTEs were allotted to other FDA programs
that ensure food safety, approve new medical devices such as heart valves
and pacemakers, and monitor devices once on the market.
Although FDA received a number of funding increases during this period,
FDA officials told us that in general those funds could not be used for
across- the- board pay increases because almost all funding increases
received since 1992 were earmarked for designated programs. FDA officials
said that some of the funding increases were for programs related to
tobacco, food safety, Internet drug sales, orphan product grants, and
dietary supplements. According to FDA, $45.2 million was available to
cover pay increases for the agency*s employees in its fiscal year 2002
appropriation. In addition, the President*s budget for fiscal year 2003
includes $28.6 million for pay increases.
FDA officials told us that the performance goals added by PDUFA II,
combined with PDUFA II*s shortened review timelines, have contributed to a
heavy workload for FDA*s reviewers, which has resulted in high turnover
and reviewers forgoing training and professional development activities.
Our review of FDA data and a recent report by KPMG Consulting found that
FDA*s workload under PDUFA has increased. 11 Moreover, our analysis of FDA
and OPM data found that FDA*s attrition
rates for many of the occupations that are involved in its drug review
process are higher than those for other federal public health agencies and
the federal government as a whole. In addition, KPMG*s report found that
FDA reviewers were not receiving the amount of training FDA considers
necessary. According to FDA officials, the agency needs significant and
sustained increases in funding to hire, train, and retain its review staff
in
order to continue meeting PDUFA performance goals, provide quality
scientific and regulatory advice to the industry, and avoid further
deterioration in retention rates.
11 KPMG Consulting, Reanalysis of 1993 Standard Costs for the Process for
the Review of Human Drug Applications As Required Under the Prescription
Drug User Fee Act
(McLean, Va.: March 2002). PDUFA Has
Contributed to Increased Workload and Attrition and Decreased Training for
FDA Reviewers
Page 19 GAO- 02- 958 PDUFA User Fees
PDUFA II affected reviewer workload by shortening review times and adding
new performance goals to reduce overall drug development time* the time
needed to take a drug from clinical testing to submission of a new drug or
biologic application. As part of the performance goals established for
PDUFA II and transmitted to the Congress, 12 FDA agreed, for example, to
complete review of 90 percent of standard new drug applications and
efficacy supplements filed in fiscal year 2002 within 10 months* a
decrease from the 12- month goal set in PDUFA I for fiscal year 1997. In
addition, FDA agreed to complete review of 90 percent of manufacturing
supplements within 4 months* a decrease from the 6- month goal in PDUFA I.
13 PDUFA II also established a new set of performance goals intended to
improve FDA*s responsiveness to and communication with drug sponsors
during the early years of drug development. Specifically, FDA agreed to
review a sponsor*s request for a formal meeting and provide written
notification to the sponsor of its decision within 14 days; schedule
major meetings at critical milestones during drug development
within 60 days of request, and all other meetings within 75 days of
request; prepare meeting minutes within 30 calendar days of a meeting;
respond to a sponsor*s request for evaluation of special protocol designs
within 45 days; respond to a sponsor*s complete response to a clinical
hold within 30 days;
and respond to a sponsor*s appeal of a decision within 30 days.
In general, the number of FDA review activities increased in fiscal years
1999 through 2001 because of the performance goals added under PDUFA II
(see table 2). Specifically, the increases occurred in the activities
related to the requirement that FDA work with drug sponsors in the early
phases of drug development. Meeting requests, meetings, and meeting
minutes constituted a growing portion of FDA review activities.
12 P. L. 105- 115, Title 1, S: 101( 4) refers to the PDUFA II performance
goals transmitted in a letter to the Congress from the Secretary of HHS.
13 FDA agreed to review in 4 months only those manufacturing supplements
that require agency approval before manufacturers can make changes. PDUFA
II Resulted in
Increased Reviewer Workload
Page 20 GAO- 02- 958 PDUFA User Fees
Table 2: Number of Submission and Review Activities Under PDUFA II, by
Fiscal Year
Note: N/ A means not available. Responses to clinical holds was the only
new review activity that FDA tracked beginning in fiscal year 1998. FDA
did not measure the number of the other submissions before the enactment
of PDUFA II.
Source: FDA.
According to FDA reviewers, the typical meeting between FDA and a sponsor
during clinical testing involves 17 reviewers from six disciplines that
are typically involved in reviews of new drug and biologic applications*
medical officer, chemist, microbiologist, clinical pharmacologist,
statistician, and pharmacologist/ toxicologist. FDA
reviewers estimate that the time requirements for a comprehensive meeting
involving all FDA review disciplines assigned to an application can range
from about 125 to 545 hours per meeting. 14 For example, reviewers
estimated that the total FDA staff time spent reviewing the briefing
document submitted by the sponsor as well as reviewing other pertinent
documents and consulting with other review team members and consultants
ranges from 50 to 290 hours. Reviewers estimated that from about 25 to 90
FDA staff hours are spent interacting with the sponsor in
final preparation for the meeting, including requesting additional
information from the sponsor and reviewing information submitted,
14 FDA officials told us a range is the best way to capture the burden of
meetings because each meeting request and new drug or biologic application
is different in the complexity of the issues and the adequacy of the
information submitted by the sponsor.
Fiscal year Activity 1998 1999 2000 2001 Ongoing submission activities
Review of NDA/ BLA 121 127 134 101 Review of efficacy supplements 136 145
187 168 Review of manufacturing supplements 1,834 1,936 2,025 2,069 Review
of investigational new drug applications 746 638 738 699
New review activities added under PDUFA II in FY 1999
Respond to meeting requests from industry N/ A 1,544 1,183 1,471 Schedule
meetings N/ A 1,468 1,121 1,361 Prepare meeting minutes N/ A 1,335 1,009
1,222 Respond to clinical holds 42 124 133 159 Respond to protocol designs
N/ A 69 128 121 Respond to sponsors* appeals of decisions in major dispute
resolution N/ A 7 13 11
Page 21 GAO- 02- 958 PDUFA User Fees
developing the meeting agenda, preparing presentations, and attending the
actual meeting with the sponsor, which generally lasts 90 minutes to 2
hours.
FDA*s workload was further affected by an increase in the number of
applications that did not require payment of user fees, due to PDUFA II*s
new exemptions and waiver provisions. Under PDUFA II, FDA could exempt or
waive fees for (1) drug sponsors that were small businesses submitting
their first applications, (2) drug sponsors submitting supplements for
drugs used to treat pediatric illnesses, and (3) drug sponsors submitting
applications or supplements for drugs used to treat rare diseases (called
orphan drugs). FDA officials told us that the percentage of applications
where user fees were exempted or waived was significant, ranging from a
low of 19 percent in fiscal year 1999 to a high of 32 percent in fiscal
year 2001.
The KPMG report on FDA*s drug review costs found that the new performance
goals established for PDUFA II have also had a significant impact on
reviewer workload. According to the report, the majority of reviewers
interviewed reported that the new performance goals for meetings with drug
sponsors were burdensome. They said that competing priorities made it
difficult to complete all tasks, such as accommodating meeting requests,
participating in advisory committee meetings, and answering sponsor
questions.
Our analysis of FDA*s attrition rates for drug reviewers during the 3-
year period following the enactment of PDUFA II found that they were
higher than the rates for comparable occupations at other public health
agencies and in the federal government as a whole. FDA officials told us
that the agency continues to experience high turnover for reviewers
because of the high demand for regulatory review personnel in the
pharmaceutical industry and the higher salaries that experienced FDA
reviewers can obtain in the private sector. Attrition of FDA reviewers has
been an ongoing concern for the pharmaceutical and biotechnology
industries as well. An independent survey of pharmaceutical and
biotechnology FDA*s Reviewer Attrition
Level Is Higher than That of Comparable Occupations in Other Federal
Agencies
Page 22 GAO- 02- 958 PDUFA User Fees
companies found a high level of concern about FDA*s turnover in review
staff and an increase in concern over a 4- year period. 15 We compared
FDA*s attrition rate for the six medical and scientific
disciplines that constitute the majority of the agency*s drug review staff
with the attrition rates for these disciplines at the Centers for Disease
Control and Prevention (CDC) and the National Institutes of Health (NIH)
(see table 3). Like FDA, CDC and NIH are public health agencies that
employ a highly educated, highly skilled workforce. As the table shows,
with the exception of chemists, FDA*s attrition rates for employees in its
drug review process are higher than the comparable attrition rates for
CDC, NIH, and similar disciplines governmentwide.
Table 3: Average Attrition Rates for Selected Occupations in FDA, CDC,
NIH, and Governmentwide, Fiscal Years 1998- 2000 Average attrition rate
(percentage) for 1998- 2000
Occupation GS FDA CDC NIH Governmentwide
Biologist 401 9.5 3.9 6.8 5. 2 Microbiologist 403 9.3 4.3 4.8 4. 6
Pharmacologist 405 9.6 0. 0 3.7 7. 4 Medical officer 602 10.5 5. 5 4.7 9.
0 Chemist 1320 5.8 4. 2 5.4 6. 1 Mathematical statistician 1529 14.1 3. 9
3.7 7. 3
Sources: FDA and OPM.
FDA officials reported that to retain experienced staff with certain
skills, they have increased the pay for approximately 250 CDER and CBER
reviewers. Specifically, FDA conducted studies of staff turnover and found
that toxicologists, pharmacologists, pharmacokinetists, and mathematical
statisticians were leaving FDA to work in private industry and academia
for higher salaries. Under OPM regulations, FDA is authorized to pay
retention allowance of up to 10 percent of an employee*s basic pay to a
group or category of employees in such circumstances. Employees with at
least 2 years of drug review experience in these 4 occupations were
15 PricewaterhouseCoopers and University of California at San Diego*s
Technology and Entrepreneurship Program (UCSD CONNECT), Improving
America*s Health III: A Survey of the Working Relationship Between the
Life Sciences Industry and the FDA, 2000 Update (San Diego, Calif.:
December 2000). www. pwcglobaltech. com (downloaded on April 23, 2002).
Page 23 GAO- 02- 958 PDUFA User Fees
eligible for retention allowances. In addition, 5 medical officers and 1
microbiologist were among review staff that received retention allowances.
FDA is also considering offering retention allowances to all of its
medical officers.
We found that FDA reviewers, particularly those in CBER, did not
participate in training and professional development activities to the
extent recommended by the agency in fiscal years 2000 and 2001. FDA
officials told us that reviewers are forgoing training and professional
development activities to ensure that the agency meets PDUFA goals. FDA
defines training and professional development activities as time spent
attending related training and conferences, whether as a presenter or an
attendee; learning the review process for drug applications and labeling
under a
mentor; preparing educational material, publications, and manuscripts or
classroom or seminar- type instruction; and mentoring a new reviewer.
FDA reviewers are encouraged to spend about 10 percent of their time in
training, professional development, and mentoring activities. According to
FDA, other science- based agencies, such as NIH, expect scientists to
spend about 20 percent of their time on training and professional
development. Using KPMG*s estimate that each full- time FDA reviewer
worked 200 days per year, FDA*s 10 percent recommended level of training
means that each reviewer would be encouraged to spend 20 days per year in
training and professional development activities. Our analysis of FDA data
found that reviewers in CDER spent, on average, about 19 days in training
and professional development activities in fiscal years 2000 and 2001.
However, we found that reviewers in CBER spent, on average, about 12 days
in training and professional development activities in fiscal years 2000
and 2001.
FDA spending for PDUFA- related training and other professional
development activities has fluctuated greatly over the past 3 years.
Expenditures for PDUFA- related training and other professional
development activities in CDER rose from $285,000 in fiscal year 1998 to
$796,000 in fiscal year 1999, then dropped to $564,000 in fiscal year
2000.
CBER*s expenditures increased from $198,882 in fiscal year 1998 to
$206,655 in fiscal year 1999, then dropped to $147,914 in fiscal year
2000, a 26 percent decline from the 1998 level. FDA Says Reviewers Forgo
Training and Professional Development to Ensure PDUFA Goals Are Met
Page 24 GAO- 02- 958 PDUFA User Fees
FDA reviewers, as well as representatives from pharmaceutical and
biotechnology companies, are concerned about reviewers* lack of time for
training and professional development. The KPMG report found that
reviewers perceived insufficient training to be a major problem. The
reviewers interviewed reported that while they wanted to ensure that they
were at the cutting edge of medical technology and were able to
effectively
use workplace tools such as information systems, they believed they had
insufficient time to complete training. In addition, an independent survey
of pharmaceutical and biotechnology companies found a high level of
concern in the industry related to a perceived lack of technical expertise
among FDA reviewers. According to the survey, 27 percent of the
respondents indicated that reviewer lack of expertise impeded the approval
process. That figure increased from a 19 percent rate in the 1997 survey
and 17 percent in 1995. 16 Some consumer and patient groups have raised
concerns that drug
withdrawal rates have increased under PDUFA. Our analysis of FDA data
found that the percentage of recently approved drugs that have been
withdrawn from the market has risen, but that the size of the increase in
drug withdrawal rates differs depending on the period examined. Moreover,
several factors may affect drug withdrawals. Some drugs were removed from
the market because doctors and patients did not use them correctly, while
others produced rare side effects that were not detected in
clinical trials. The availability of new, safer treatments also led to
some withdrawals. For drugs approved under PDUFA III, FDA may use user
fees to support its drug safety efforts.
Our analysis of FDA data found that a higher percentage of drugs has been
withdrawn from the market for safety- related reasons since PDUFA*s
enactment than prior to the law*s enactment. Some consumer and patient
groups have expressed concern that PDUFA*s emphasis on faster review
times has increased the rate of withdrawals and compromised drug safety by
placing FDA reviewers under pressure to approve drugs rapidly to meet
performance goals. We identified each drug that was withdrawn from the
market from 1985 through 2000, and grouped the withdrawals based on the
year in which the drug was approved. We then calculated the drug
16 UCSD CONNECT, Improving America*s Health III: A Survey of the Working
Relationship Between the Life Sciences Industry and the FDA, 2000 Update.
Rate of Safety- Related Drug Withdrawals Has Increased Recently
Size of the Increase in Drug Withdrawal Rates Differs Depending on the
Period Examined
Page 25 GAO- 02- 958 PDUFA User Fees
withdrawal rate* the number of withdrawn drugs as a percentage of those
approved each year. We calculated drug withdrawal rates in 4- year
intervals over 16 years. As shown in figure 7, the withdrawal rate
declined from 1.96 percent for 1989 through 1992 (the 4 years preceding
PDUFA) to
1.56 percent for 1993 through 1996 (under PDUFA I), then rose to 5.34
percent for 1997 through 2000 (under PDUFA II). However, the small number
of withdrawals in any given year may affect the variation in the
withdrawal rate.
Figure 7: Rate of Safety- Related Drug Withdrawals by 4- Year Intervals,
Based on Calendar Year of Approval, 1985- 2000
Note: These drugs are classified as NMEs. Source: GAO analysis of FDA
data.
We also calculated the withdrawal rate with reference to whether the drug
was approved in the 8- year period before or the 8- year period after
PDUFA was enacted. Grouping the withdrawals in these two periods showed
that the withdrawal rate increased slightly after PDUFA (see fig. 8).
During the period 1985 through 1992 (pre- PDUFA), FDA approved 193 NMEs.
Six of these, or 3.10 percent, were withdrawn for safety- related reasons.
During the period 1993 through 2000 (post- PDUFA), FDA approved 259 NMEs,
and 9 of these, or 3.47 percent, were withdrawn for safety- related
reasons.
Page 26 GAO- 02- 958 PDUFA User Fees
Figure 8: Rate of Safety- Related Drug Withdrawals Pre- and Post- PDUFA,
Based on Calendar Year of Approval, 1985- 2000
Note: These drugs are classified as NMEs. Source: GAO analysis of FDA
data.
Several factors may affect drug withdrawals. According to FDA officials,
premarketing clinical trials in a few thousands patients (typically with
relatively uncomplicated health conditions) do not detect all of a drug*s
adverse effects, especially relatively rare ones. In addition, they stated
that the rise in the number of newly approved drugs entering the market
and the higher consumption of medicines by the population increase the
probability of misprescribing, adverse effects, and subsequent drug
withdrawals. According to FDA officials, safety problems not detected in
clinical trials are more likely to be found first among U. S. patients
because they are increasingly first to have access to new drugs. The
United States Drug Withdrawals May Be
Affected by Several Factors
Page 27 GAO- 02- 958 PDUFA User Fees
was the first market for 49 percent of new drugs approved in the United
States from 1996 through 1998, according to a study. 17 An examination of
drug withdrawals, by itself, may not provide a complete
picture of drug safety. First, a drug withdrawal does not reflect a
judgment concerning the absolute safety of a drug but reflects a judgment
about the risks and rewards of a drug in the context of alternative
treatments. For instance, despite the documented deaths from liver failure
among patients taking Rezulin, the drug was not withdrawn from the market
until FDA approved new, safer medications with similar benefits. In
contrast, Raxar was withdrawn from the market on the basis of relatively
few adverse event reports because alternative treatments were readily
available. Second, drug withdrawals may occur because health professionals
and patients use the drugs incorrectly, not because the drugs are
inherently dangerous when used as approved. For example, the health risks
associated with Seldane occurred when the drug was taken in combination
with medications that were contraindicated on Seldane*s label. Third, the
off- label use of drugs also can be problematic because such use may not
have been shown to be safe and effective. For example, while Pondimin
(fenfluramine) was approved for short- term use as an appetite
suppressant, it was increasingly prescribed and used in combination with
the appetite suppressant phentermine as a part of a long- term weight loss
and management program. The off- label use of this combination, known as
*fen- phen,* posed serious health risks. 18 (See app. I for a list of
drugs withdrawn from the U. S. market for safety- related reasons from
1992 through 2001.)
PDUFA III authorizes FDA to use user fees for additional drug safety
activities that could not be funded by PDUFA I and II user fees. FDA
informed the Congress in its performance goal letter for PDUFA III that it
will develop guidance documents to assist the industry in addressing good
risk assessment, risk management, and postmarketing surveillance
practices. As part of joint recommendations to the Congress for the
reauthorization of PDUFA, PhRMA and BIO agreed with FDA that the agency
should use user fees to fund a new risk management system for
17 K. I. Kaitin and E. M. Healy, *The New Drug Approvals Of 1996, 1997,
and 1998: Drug Development Trends In The User Fee Era,* Drug Information
Journal, vol. 34, no. 1 (2000), pp. 1- 14. 18 The use of phentermine alone
has not been associated with valvular heart disease. PDUFA III User Fees
Will
Be Used to Support Additional FDA Drug Safety Efforts
Page 28 GAO- 02- 958 PDUFA User Fees
newly approved drugs. Under the voluntary program, drug sponsors may
develop, and FDA will review, risk management plans for products while the
agency reviews the sponsor*s NDA or BLA. By adding FDA*s postmarket safety
team to the drug review process before a new drug or biologic is approved,
FDA officials believe that they will obtain better information on the
risks associated with the product much earlier in the process and the
sponsor will gain helpful feedback on how best to monitor, assess, and
control the product*s risks.
Funding from user fees will be used to implement risk management plans for
the first 2 years after a product is approved. For products that require
risk management beyond standard labeling, FDA may use user fees for
postmarket surveillance activities for 3 years. FDA officials believe that
more rigorous safety monitoring of newly approved drugs during the first
few years after they are on the market could help to detect unanticipated
adverse effects earlier. Historically, the vast majority of adverse
effects
have been identified in the first 2 to 3 years after a new drug is
marketed. FDA anticipates that user fees for risk management will total
approximately $71 million over 5 years, and will permit the agency to add
100 new employees to monitor drug safety and track adverse effects from
drugs already on the market (see table 4).
Table 4: FTEs and Dollar Allocations for Risk Management under PDUFA III
Fiscal year Proposed FTE allocation Allocation amount
(dollars in millions)
2003 19 $8.3 2004 16 11.1 2005 24 15.1 2006 32 17.6 2007 9 18.8
Total 100 $70.9
Source: FDA.
The implementation of PDUFA has been successful in bringing new drugs and
biologics to the U. S. market more rapidly than before. However,
maintaining adequate funding for approving new drugs and biologics has had
the unintended effect of reducing the share of funding and staffing for
other activities. Fewer resources for non- PDUFA programs may affect FDA*s
ability to ensure that the other products the agency regulates, such as
food and medical devices, comply with FDA safety standards. In Conclusions
Page 29 GAO- 02- 958 PDUFA User Fees
addition, PDUFA has increased reviewer workloads and may be a factor in
relatively high attrition rates among FDA*s review staff. Rapid FDA
approval of new drugs means that the United States has become the first
nation to approve many new medicines. Because drugs and biologics are not
risk- free, adverse events are to be expected once the products are in the
marketplace. As more new drugs and biologics are brought to market,
increased attention to postmarket risk management will be even more
important. The recent increase in the rate of drug withdrawals also
suggests the need for FDA to strengthen its postmarket surveillance
activities. Under PDUFA III, FDA will now be able to use user fees for
additional drug safety activities, something that was not permitted under
PDUFA I and II. By having more resources to review risk management plans
developed by drug sponsors and conduct postmarket surveillance, FDA will
be able to obtain better information on the risks associated with newly
marketed drugs more quickly.
We provided FDA with a draft of this report for comment and FDA provided
technical comments. In their technical comments, FDA disagreed with our
analyses and discussion related to drug withdrawal rates. Specifically,
FDA officials said that our analysis of drug withdrawal data comparing the
8- year period pre- PDUFA with the first 8 years after PDUFA does not show
any real increase, and that our analysis using the 4- year groupings was
significantly affected by the small number of withdrawals during each
period. While we agree that the small number of withdrawals in any given
year may affect the variation in the withdrawal rate, we believe our
analyses are appropriate and both the 8- year and 4- year analyses show an
increase in withdrawal rates since PDUFA*s implementation. We incorporated
additional technical comments where appropriate. (FDA*s comments are
included in app. II).
As agreed with your office, unless you publicly announce the contents of
this report earlier, we plan no further distribution until 7 days after
its issue date. At that time, we will send copies to the Secretary of HHS,
the Deputy Commissioner of FDA, the Director of the Office of Management
and Budget, appropriate congressional committees, and other interested
parties. We will also make copies available to others on request. In
addition, the report will be available at no charge on the GAO Web site at
http:// www. gao. gov. Agency Comments
and Our Evaluation
Page 30 GAO- 02- 958 PDUFA User Fees
Major contributors to this report were John Hansen, Gloria Taylor, Claude
Hayeck, and Roseanne Price. If you or your staff have any questions about
this report or would like additional information, please call me at (202)
512- 7119 or John Hansen at (202) 512- 7105.
Sincerely yours, Janet Heinrich Director, Health Care* Public Health
Issues
Appendix I: Drugs Withdrawn for SafetyRelated Reasons from U. S. Market,
1992 Through 2001 Page 31 GAO- 02- 958 PDUFA User Fees
Year withdrawn Drug name Year approved Total approval time
(months) Health risks that led to withdrawal
1992 Omniflox (temafloxacin hydrochloride) 1992 26.0 Hypoglycemia,
Hemolytic anemia,
and kidney failure 1993 Manoplax (flosequinan) 1992 27.0 Increased
mortality 1997 Pondimin (fenfluramine hydrochloride) 1973 75.5 Valvular
heart disease
1997 Redux a (dexfenfluramine hydrochloride) 1996 35.2 Valvular heart
disease 1998 Seldane (terfenadine) 1985 26.2 Fatal arrhythmias 1998
Posicor (mibefradil
dihydrochloride) 1997 15.3 Fatal arrhythmias 1998 Duract (bromfenac
sodium) 1997 27.7 Liver toxicity 1999 Hismanal (astemizole) 1988 46.1
Fatal arrhythmias 1999 Raxar (grepafloxacin
hydrochloride) 1997 11.9 Torsade de Pointes arrhythmias 2000 Rezulin
(troglitazone) 1997 6.0 Liver toxicity 2000 Propulsid (cisapride) 1993
23.0 Fatal arrhythmias 2000 Lotronex b (alosetron
hydrochloride) 2000 7.4 Ischemic colitis and severe constipation leading
to surgery 2001 Raplon (rapacuronium bromide) 1999 13.8 Bronchospasm 2001
Baycol (cerivastatin sodium) 1997 12.0 Rhabdomyolysis (severe damage to
skeletal muscle) Note: These drugs are classified as NMEs. a While Redux
is not an NME, it is included since the combination of Pondimin and Redux,
known as
*fen- phen* was an off- label use, which resulted in both drugs being
withdrawn from the market. b In June 2002, Lotronex was approved for use
in a limited population.
Source: FDA.
Appendix I: Drugs Withdrawn for SafetyRelated Reasons from U. S. Market,
1992 Through 2001
Appendix II: Comments from the Food and Drug Administration Page 32 GAO-
02- 958 PDUFA User Fees
Appendix II: Comments from the Food and Drug Administration
(290078)
The General Accounting Office, the investigative arm of Congress, exists
to support Congress in meeting its constitutional responsibilities and to
help improve the performance and accountability of the federal government
for the American people. GAO examines the use of public funds; evaluates
federal programs and policies; and provides analyses, recommendations, and
other assistance to help Congress make informed oversight, policy, and
funding decisions. GAO*s commitment to good government is reflected in its
core values of accountability, integrity, and reliability.
The fastest and easiest way to obtain copies of GAO documents at no cost
is through the Internet. GAO*s Web site (www. gao. gov) contains abstracts
and fulltext files of current reports and testimony and an expanding
archive of older products. The Web site features a search engine to help
you locate documents using key words and phrases. You can print these
documents in their entirety, including charts and other graphics.
Each day, GAO issues a list of newly released reports, testimony, and
correspondence. GAO posts this list, known as *Today*s Reports,* on its
Web site daily. The list contains links to the full- text document files.
To have GAO e- mail
this list to you every afternoon, go to www. gao. gov and select
*Subscribe to daily E- mail alert for newly released products* under the
GAO Reports heading.
The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent of
Documents. GAO also accepts VISA and Mastercard. Orders for 100 or more
copies mailed to a single address are discounted 25 percent. Orders should
be sent to: U. S. General Accounting Office 441 G Street NW, Room LM
Washington, D. C. 20548 To order by Phone: Voice: (202) 512- 6000
TDD: (202) 512- 2537 Fax: (202) 512- 6061
Contact: Web site: www. gao. gov/ fraudnet/ fraudnet. htm E- mail:
fraudnet@ gao. gov Automated answering system: (800) 424- 5454 or (202)
512- 7470 Jeff Nelligan, managing director, NelliganJ@ gao. gov (202) 512-
4800
U. S. General Accounting Office, 441 G Street NW, Room 7149 Washington, D.
C. 20548 GAO*s Mission Obtaining Copies of
GAO Reports and Testimony
Order by Mail or Phone To Report Fraud, Waste, and Abuse in Federal
Programs Public Affairs
*** End of document. ***