FDA User Fees Under Assault

Former New England Journal of Medicine editor Marcia Angell has a column in the Boston Globe this morning where she lays out the arguments for scrapping industry users fees at the Food and Drug Administration. User fees now account for nearly half of the agency's revenue (at least that part of the agency that reviews new drugs). The 1992 Prescription Drug User Fee Act is up for renewal this year, as it is every five years, and the new Congress has the chance to change the way it operates.

User fees are not necessarily a bad thing. While it would be better if the government funded the agency out of general revenue, a use-based fee on the industries that are the FDA's major responsibility is one way to raise revenue for the government. The key is prohibiting industry from having any say over how the agency uses the money. Indeed, the user fee principle could be extended to food and cosmetic companies, slaughter houses and device-manufacturing plants, which also come under the FDA's purview. If Congress pleads poverty and says it can't get rid of the user fees, it needs to eliminate all industry controls over how it spends the money.

That's not the case now. PDUFA required the agency to meet a set of performance goals, which largely had to do with reviewing new drug applications more rapidly. For the first ten years of the law's existence, the FDA was specifically prohibited from using the money to monitor the safety of drugs once they were on the market. Even now, safety issues get a tiny fraction of the money that pours into the FDA from industry.

If Congress doesn't want to get rid of user fees and substitute general revenue, it should double the existing user fees for new drugs, biologics and devices. But at the same time, it should repeal all the existing performance goals, and take the extra $300 million to $400 million and dedicate the money to improving the government drug safety system along the lines suggested by last fall's Institute of Medicine report.