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Industry funding of the FDA: effects of PDUFA on approval times and withdrawal rates

Nature Reviews Drug Discovery volume 4, pages 545–554 (2005)Cite this article

Key Points

  • The time for FDA review represents a significant component of the overall time of drug development.

  • In 1992, the US Congress, in an attempt to reduce the time and cost of drug development, enacted the first in a series of Prescription Drug User Fee Acts (PDUFAs). PDUFA I authorized the FDA to collect fees from sponsors submitting a new drug application (NDA) or biologics license application (BLA), and enabled the FDA to hire additional review staff to facilitate more rapid review.

  • According to the PDUFA legislation, in exchange for collection of user fees, the FDA is legally obliged to “review and act on” NDA/BLA submissions, but not necessarily approve them more rapidly.

  • Congress renewed the 1992 PDUFA legislation under the Food and Drug Modernization Act of 1997 (PDUFA II) and again under the Bioterrorism Preparedness and Response Act of 2002 (PDUFA III).

  • Detractors of PDUFA suggest that payment of user fees by the industry undermines the regulatory abilities of the FDA and has created a federal agency that is beholden to the very companies it is mandated to regulate. Proponents of PDUFA maintain that the FDA's decisions on drug applications are independent of the source of the revenue, because user fees from the sponsoring organization are not paid directly to any individual reviewer or division within the agency.

  • In an attempt to assess the impact of PDUFAs, in this article, we review data on drug approvals and drug approval times over the past 25 years. We also consider drug withdrawals during this period, which are often used as a proxy to assess the FDA's safety record.

  • We document that implementation of PDUFA led to substantial incremental reductions in approval times beyond what would have been observed without these acts (6–7% annual declines during PDUFA I and ∼3–4% during PDUFA II).

  • A preliminary examination of the trends in the number of new molecular entity (NME) withdrawals also indicates that the proportion of approvals ultimately leading to safety withdrawals prior to PDUFA and during PDUFA I and II were not statistically different (ranging between 2% and 3%, depending on the method of analysis).

Abstract

The development of new therapies is a crucial component of efforts to improve healthcare. Because drug development and FDA regulatory review have historically been lengthy and costly processes, the US Congress passed a series of legislative acts, beginning in 1992, known collectively as the Prescription Drug User Fee Acts (PDUFA), which sought to expedite the FDA drug-review process. Here, we review data on drug approvals and drug-approval times, both as a whole and by therapeutic class, which demonstrate that implementation of the PDUFAs led to substantial incremental reductions in approval times beyond what would have been observed in the absence of these legislative acts. In addition, our preliminary examination of the trends in the number of new molecular entity withdrawals, frequently used as a proxy to assess the FDA's safety record, suggests that the proportion of approvals ultimately leading to safety withdrawals prior to PDUFA and during PDUFA I and II were not statistically different.

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Figure 1: Mean approval times for NMEs.
Figure 2: Mean NME approval times across therapeutic classes.
Figure 3: 'Survival' curves for NMEs.
Figure 4: Impact of PDUFAs on drug approval times.
Figure 5: Kaplan–Meier survival curve analysis of drug withdrawals.
Figure 6: Impact of PDUFAs on the annual number of drug approvals.
Figure 7: Average NME approval times by therapeutic class with predicted average delays.

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Acknowledgements

We thank E. Hass of the FDA and R. Gross, Massachusetts Institute of Technology, for their very significant assistance throughout this project, and J. DiMasi, Tufts Center for the Study of Drug Development, for references and insights. Insightful and useful comments were also provided by the anonymous referees. The work reported here constituted a portion of the S.M. theses of A. Gottschalk (2004) and M. Strobeck (2004) for graduation from the Harvard–MIT Division of Health Sciences and Technology. When this work was undertaken, T. Philipson was on leave from the University of Chicago to the US Food and Drug Administration as Senior Economic Advisor to the Commissioner. Research support to Berndt, Gottschalk and Strobeck from general funds at the Harvard–MIT Division of Health Sciences and Technology is gratefully acknowledged, as is data support from the FDA.

Author information

Authors and Affiliations

  1. Massachusetts Institute of Technology, Sloan School of Management, 50 Memorial Drive, E52-452, Cambridge, Massachusetts, 02142, USA

    Ernst R. Berndt

  2. Biogen Idec, 14 Cambridge Center, Cambridge, 02142, Massachusetts, USA

    Adrian H. B. Gottschalk

  3. Irving B. Harris Graduate School of Public Policy Studies, University of Chicago, 1155 East 60th Street, Chicago, 60637, Illinois, USA

    Tomas J. Philipson

  4. Westfield Capital Management, One Financial Center, 23rd Floor, Boston, 02111-2621, Massachusetts, USA

    Matthew W. Strobeck

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  1. Ernst R. Berndt
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Corresponding author

Correspondence to Ernst R. Berndt.

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Competing interests

A.H.B.G. is employed by Biogen Idec. E.R.B. and T.J.P. have consulted for various biotechnology and pharmaceutical companies.

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FURTHER INFORMATION

MedCalc Statistical Software

Glossary

BIOLOGICAL AGENTS

Biologicals include vaccines, monoclonal antibodies and other protein products that are often manufactured using biotechnology methods.

NEW MOLECULAR ENTITY

A medication containing an active substance that has never before been approved for marketing in any form in the United States.

PRIORITY APPLICATION

The FDA designates New Drug Applications as either Standard or Priority. Currently, a Standard designation sets the target date for completing all aspects of a review and the FDA taking an action on the application (approve or not approve) at 10 months after the date it was filed. Currently, a Priority designation sets the target date for the FDA at 6 months. A Priority designation is intended for those products that address unmet medical needs.

FISCAL YEAR

The government fiscal year begins on 1 October and ends on 30 September of the following year.

SURVIVAL CURVE

A curve measuring the percentage of subjects in a cohort that survive from one time period to the next, technically known as Kaplan–Meier survival functions. Survival functions take into account censoring — data points that are unobservable.

ORPHAN DRUG ACT

Signed into law in the US on January 4, 1983, the intent of the Orphan Drug Act is to stimulate the research, development and approval of products that treat rare diseases affecting fewer than 200,000 Americans.

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Berndt, E., Gottschalk, A., Philipson, T. et al. Industry funding of the FDA: effects of PDUFA on approval times and withdrawal rates. Nat Rev Drug Discov 4, 545–554 (2005). https://doi.org/10.1038/nrd1774

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