FDA wants to hike pharma drug fees

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Pharmaceutical marketers are taking exception to a Food and Drug Administration proposal to dramatically hike the fees they pay to get drugs approved. The rise is aimed at offsetting an expected increase in costs to pre-review direct-to-consumer ads.

The FDA, expecting to be inundated with ads when the new Pharmaceutical Research and Manufacturers of America guidelines kick in Jan. 1, started the negotiation process this month for the Prescription Drug User Fee Act IV, also known as PDUFA. The next PDUFA period begins September 2007. Pharma companies pay these fees to the FDA every time they put a proposed drug through the regulatory process. In turn, the FDA guarantees a drug maker what is known as a "date certain"-approval or denial of the drug by a pre-determined date.

According to the Department of Health and Human Services, the fee rates are as high as $767,400 for an application for clinical trial. In 2004, PDUFA brought in $259 million for the FDA, or almost half the agency's budget for drug approvals.

With a guideline in the PhRMA code of conduct stipulating that companies pre-submit DTC ads for review, the already-understaffed FDA in a white paper entitled "Prescription Drug User Fee Act: Adding Resources and Improving Performance in FDA Review of New Drug Applications" said: "Current FDA resourcing for this work would probably result in delayed reviews if all companies were to submit their ads. Such delays would likely affect companies' ability to meet their marketing timelines, and discourage them from submitting materials for prior FDA review."

FDA officials could not be reached for comment, but former FDA Associate Commissioner Peter Pitts said, "Basically, the FDA is saying that if the industry is going to start sending us more ads, we're going to need to add more staff, and need more money to hire more staff. If member companies comply with the PhRMA guidelines-and I have no reason to believe they won't-ads submitted to FDA for review could triple."

Bad precedent

But the industry isn't quite ready to capitulate.

"Congress should fully fund the FDA, including its enforcement functions," said John Kamp, director of the Washington-based Coalition for Healthcare Communication. "Congress fully funds the [Department of Justice], the [Federal Trade Commission] and other enforcement agencies, so why not FDA? [Raising user fees] would create a bad precedent."

Calls to several pharma companies either were not returned or were referred to PhRMA. At an initial meeting with the FDA last week, Bruce Burlington, a Wyeth executive representing PhRMA, called raising fees "a de facto tax" and said the trade group wants more information to make sure it receives commensurate services for the fees it pays.

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