UFA Creep: Time to Apply the Brake?

FDA’s user fee programs continue to proliferate. The new resources are great, but FDA and its stakeholders need to think carefully before going even further down this road.

The FDA is on a roll. It successfully negotiated with the various stakeholder industries to reach agreements on several user fee agreements (UFAs): PDUFA V, MDUFA III, GDUFA 1 and BSUFA 1 -- and ADUFA is up for reauthorization next year.

That is a whole lot of UFAs. (And the acronyms, in case you can’t keep track, apply to Prescription Drugs, Medical Devices, Generic Drugs, Biosimilars and Animal Drugs.)

Now that these many UFAs are authorized or reauthorized by being incorporated into the FDA Safety and Innovation Act signed into law by the President, it is clear this User Fee experiment that started 20 years ago has bolstered and stabilized a very important agency that regulates 25 cents on the consumer dollar. PDUFA V is poised to add approximately $700 million to the CDER budget in the first year alone (with higher amounts in the remaining four years of the cycle). To put this in perspective, it is just over the Mega Millions jackpot record amount announced in March 2012 ($650 million).

Nancy Bradish Myers, JD, is a Washington-based attorney with expertise in health care law and regulation, policy development, government relations and political analysis for investors. She is the President of Catalyst Healthcare Consulting, Inc., a niche regulatory consulting firm.

She has served in senior advisory roles in FDA’s Office of the Commissioner as well as trade associations and other health care stakeholder groups. She is an expert on FDA user fees and served as an author and co-editor of the book PDUFA and the Expansion of FDA User Fees: Lessons from Negotiators, published by the Food and Drug Law Institute in 2011.

She is also a past President and founding member of the Alliance for a Stronger FDA, a non-profit group established to work with the Administration and Congress to increase FDA federally appropriated funds.

There’s no doubt that user fees have resulted in significant improvements for the agency. They have funded expansions of FDA’s capacity for reviewing new product applications and interacting with sponsors, as well as important work in the areas of post market drug safety, guidance generation and consultation with patient and consumer groups. This has helped new technologies get through the regulatory review process.

It has also served Congress well. The user fee reauthorization bill was the only significant health care legislation to pass this year—and it was bi-partisan!

The sunset clause has forced a methodical five-year review of an Agency that constituents and Members of Congress alike enjoy tinkering with, tweaking and at times even overhauling. It also delivers significant private resources to the agency, thus allowing appropriated dollars to be focused on other parts of the agency’s mission.

However, as someone who has watched FDA policy develop in this town, I am starting to wonder: when are enough additional services for additional fees enough? What is the outer limit of user fees? Will stakeholders allow FDA and various industry players to continue expanding the number and scope of user fee programs to all available facets of the FDA mission? Did anyone notice that in Sec 908 of the new law, Congress --not knowing how to fund it-- just requires the agency to negotiated another user fee to support the Rare Pediatric Disease Priority Review Vouchers? Are we really ready for PDPRV-UFA?

When do we as the American public let Congress know that we realize it takes more resources to run a gold standard agency and not let it become just a global follower? In retrospect, could we have invested our fistful of hopeful jackpot dollars last March more effectively into funding the core mission activities of FDA?

Avoiding Tough Choices

Clearly, it’s a time of tight federal budgets: Members of Congress are looking for ways to slice funding wherever possible, so I recognize these thoughts may fall of deaf ears. Deficits are deficits and if the status quo is not acceptable, politicians will feel obliged to subtract.

But as the American public, we are paying the user fee price indirectly; it is baked into the prices we pay for our medicines and medical technology. As the fees grow and expand, they become one more financial hurdle to getting products to market.

When about 65% of a Center’s review budget is paid for by user fees (a conservative number), as is the case with FDA’s Center for Drug Evaluation and Research, does this signal that the Center is either stepping way outside its mission by providing too may “additional services,” or that its core mission is not being adequately funded through Congressional appropriations?

Having worked for the Agency and as a close follower of its priorities, I would argue that Congress needs to step up its appropriations efforts while the agency carefully reviews its priorities.

I fear the perpetual user fee renegotiations have begun to serve as a crutch for the agency to avoid making tough choices and reallocating resources when necessary. Adding staff does not mean more efficient management or better outcomes, though it may lighten some key employees’ workloads. Mission creep does not necessarily serve the public well; keeping it at bay requires strong management, frequent re-evaluation and at times saying “no” to good ideas.

Negotiators should look internally: At FDA, couldn’t you find efficiencies and re-program resources to address agreed upon activities that both regulator and regulated agree are problematic?

Industry: Looking at your pipelines, are you sure you should be agreeing to bigger and bigger upfront costs for review? Is the bang worth the growing buck?

For the public and patients: Do you really want FDA to keep having to negotiate user fees to do mission-critical, high priority initiatives because the Congress does not see this Agency as one that needs more resources to fulfill its basic mission?

The fact that patients, consumers and even Members of Congress have demanded a seat at the user fee negotiating table indicates that user fees are no longer seen as additional industry funding for specific new services. They are now seen as a growing slush fund that others can try to tap into in order to further their objectives.

I believe user fees have served a very important function and will continue to do so. But before FDA agrees to add more UFAs to the growing list –- as may be on the horizon for food as well as cosmetics – I believe the agency needs to sit down with its internal teams, its stakeholders and policy makers and map out its future.

Is continually expanding and broadening this program the best approach in the long run to adequately fund a critically important regulatory agency that has the mission to “protect and promote the public health?”

My right foot is twitching and I wonder if FDA’s should be too. It may be time to gently let up on the gas and start applying the UFA brake.