November 15, 2005

Drug industry representatives have expressed reservations about the FDA's proposed plan to raise user fees to pay for certain activities that are not directly related to product application review.

During a recent public hearing to discuss the reauthorization of the Prescription Drug User Fee Act (PDUFA), which is set to expire in September 2007, FDA officials said they are considering raising user fees to pay for expenses beyond those typically covered by PDUFA.

For example, the FDA has faced a "huge increase" in the number of meetings it takes with industry, advocacy groups and stakeholders, which has put increased pressure on agency staff to accomplish more with limited funding, said Steven Galson, director of the agency's Center for Drug Evaluation and Research. The stakeholder meetings represent a "huge unsponsored area of growth" that has increased by 50 percent since 1997, Galson added. Raising user fees could help address this added burden without taking resources away from product reviews, he said.

But industry officials are skeptical about the agency's call for fee increases to cover non-application-related meetings, arguing that the move may represent an unauthorized tax.
User fees are only supposed to cover expenses that directly relate to industry applications, and efforts to charge for other meetings not directly involving applications would exceed the FDA's authority under PDUFA, PhRMA officials Bruce Burlington and Alan Goldhammer told FDAnews. Fees that do not directly relate to product reviews and benefit drug companies would be a de facto tax, the officials said.

The trade group will be meeting with the FDA to discuss the issue and will provide the agency with PhRMA's estimates about the time and money involved in having these additional meetings. The group wants the FDA to account for its own estimates about the cost and utility of these meetings, including what benefit they provide to drug applicants.

According to Burlington, the drug industry already "pays a lot of money for drug reviews" and wants evidence proving that additional fees are warranted. PhRMA is "asking for accountability and that only makes sense," he added.