WASHINGTON _ Biotechnology and other drug manufacturerswill pay slightly more to the FDA to cover the cost of reviewing theirproduct applications this year.

The revised user fee will increase to $204,000 in fiscal 1996, a 2.54percent hike to match increases in the Consumer Price Index (CPI)and raises granted FDA employees. The increase is retroactive toOct. 1, 1995.

The fee hike did not create much of a reaction among biotechmanufacturers who now consider user fees a cost of doing business.In fact, several biotech executives declined comment.

One manufacturer whose product recently won FDA approval wasbullish about the effect of user fees on product approvals. U.S.BioScience, of West Conshohocken, Penn., which submitted itsproduct application for Ethyol before the user fee program wasinstituted, still benefited from the expedited reviews, said BarbaraScheffler, senior vice president for project management. "Webenefited from an upgraded computer system and more medicalreviewers that expedited our product review."

Scheffler added that the user fee program could be made moreequitable for smaller manufacturers by indexing the total fee tocompany revenues or profits.

User fees were instituted in 1992 after Congress passed thePrescription Drug User Fee Act of 1992 which enables the agency toupgrade information systems and hire additional medical reviewers inthe Centers for Drug Evaluation and Research and the Center forBiologics Evaluation and Research.

User fees, which will total nearly $80 million in fiscal 1996, areassessed on manufacturers in three ways: drug and biologicsapplications and supplements, annual establishment fees; and annualproduct fees. Each category accounts for one-third of the totalrevenues to be collected.

Based on estimates from drug manufacturers, the FDA predicts that131 applications that require clinical data will each be subject to the$204,000 user fee. Applications that do not require clinical data willbe assessed a $102,000 user fee. In addition, the annual establishmentfees are set at $135,300.

The FDA said in fiscal 1995 it assessed fees on 87 applications thatinvolved clinical data, 36 applications that did not require clinicaldata and 62 supplements which were submitted with clinical data.

Small drug manufacturers with fewer than 500 employees andwithout a another prescription drug product on the market arecharged one-half of the application fee which will be due one yearafter submission.

Drug user fees recently were touted by FDA Commissioner DavidKessler in his state of the agency report to the Food and Drug LawInstitute (see BioWorld Today, Dec. 13, 1995, p. 1) as the primeimpetus behind the reduction in drug approval times. While FDAconsumed nearly three years to approve a drug in 1987, by 1992 _the year user fees were instituted _ approval times had decreased to19 months _ a 42 percent improvement, Kessler said. Review timeshave dropped steadily in each succeeding year, he stated. n

-- Michele L. Robinson Washington Editor

(c) 1997 American Health Consultants. All rights reserved.