Washington Editor

WASHINGTON - The FDA's user fees continue to climb, but that's not bringing any complaints. After all, the fees are working, as evidenced by ever shorter product review times in recent years.

First approved in 1992, and since reauthorized twice, the Prescription Drug User Fee Act (PDUFA) was made law to require industry payment into the review process in exchange for the agency's agreement to meet drug-review performance goals. But might some of those drug companies have an interest in putting a ceiling on the recent double-digit jumps for new drug application costs?

A number of people who provided background on the subject to BioWorld Today said they have heard no grumblings.

For the coming government fiscal year, the FDA is requiring $767,400 in fees for a drug or biological product submission requiring clinical data, equal to a 14.2 percent increase over the current charge of $672,000. That existing cost equals a 17.2 percent increase over last year's $573,500 charge, which was a more modest 7.5 percent hike from 2003's $533,400 fee. The increases are based on several factors related to the number of applications and resulting FDA workload, as well as inflation, and it's all recalculated annually to establish the coming year's cost changes.

Executives at a small drug company said those costs are felt across their business, but they noted that while the fees certainly aren't inconsequential, they are simply worked into their product development programs. Also, while recalling that FDA review times once took up to several years, one pharmaceutical industry insider said PDUFA has been a good step forward.

Others suggested that because the payments help fund a larger staff at the FDA and has resulted in quicker reviews, the law is doing its intended job. Without money, the agency can't properly do its job.

However, medical device makers have secured a cap on their application fees, which are charged under the newer Medical Device User Fee and Modernization Act (MDUFMA). The bill was signed into law in 2002, and after several years of marked user fee increases, Congress this summer passed a stabilizing measure to limit increases to 8.5 percent for the next two fiscal years for premarket applications - submissions for products that pioneer a new therapy. If left unchecked, the increases would have climbed at least 20 percent each of the next two years.

Also in contrast to PDUFA, MDUFMA provides for graduated fees whereby larger companies pay more. And under the new cost-stabilizing bill, the small business definition has been expanded from companies with $30 million in gross revenues to $100 million.

But pharmaceutical companies have not lobbied for a ceiling on user fees. There is a cost concession inherent in both PDUFA and MDUFMA, though, as the FDA waives fees for first-time applicants, providing a break to companies that have not yet had products on the market.

The third generation of the drug user fee act, PDUFA III, was signed in June 2002 and reauthorized the collection of user fees through Sept. 30, 2007. In negotiations for that version, a representative from a large drug company said industry participants were more than willing to endorse higher costs to put the FDA on sound footing, but added that it's too early to tell whether companies will continue to support such fees.

That could be something to watch as wheels begin turning on a fourth version of the bill. Negotiations for PDUFA IV could begin later this year and into next year, to ensure its readiness in the early to mid-2007 time frame, well before PDUFA III sunsets.

In the meantime, as of Oct. 1, the FDA will increase charges for submissions in addition to new drug application fees. It will cost $383,700 for an application not requiring clinical data or a supplement requiring clinical data, $264,000 for establishment fees and $42,130 for product fees.

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