The Prescription Drug User Fee Act: Good, Bad, or a Lot of Both?

In this issue, Julie B. Sibbesen, PharmD; and Jeanette Rich, PharmD, provide a concise review of the new drug and biological review and approval process, focusing on the role of the Prescription Drug User Fee Act (PDUFA) and the impact it has had on shortening review times and increasing numbers of applications reviewed since the original version was enacted in 1992. However, their concise review does not focus on the mixed history of PDUFA and the controversies surrounding the program.

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The original PDUFA legislation was a result of many legitimate concerns related to unfortunate delays in the approval of potentially life-altering therapies in the early days of the HIV/AIDS epidemic and the need to modernize and update the drug review and approval process. In simple terms, implementing user fees paid by the industry in exchange for predictable review and decision timelines provided a revenue stream to fund the necessary resources to expedite the review process. The original legislation required renegotiation of the agreement every 5 years, with the most recent version (PDUFA VII) being enacted in 2022. This year, negotiations are slated to begin for PDUFA VIII and must be finalized for approval by 2027.

There is no doubt that the enactment of PDUFA has had many positive effects over the past 33 years. The time from finalizing the application to approval for new drugs has been reduced by more than half, bringing potentially lifesaving or life-altering therapies to market more quickly. It has also led to a steady increase in new applications and new approvals, with a several-fold increase in the rate of new drugs coming to market compared with pre-PDUFA approval rates. PDUFA negotiations have also created an accelerated review process for drugs considered eligible for priority review because of their breakthrough status.¹

PDUFA fees have become an increasingly important part of the FDA budget and now represent more than 65% of the Human Drugs Program budget, the largest subunit of the FDA. This has raised many concerns about conflicts of interest and comments that the FDA has essentially become a client of the pharmaceutical industry. Notably, the pharmaceutical industry also has a significant say in the negotiations concerning what is included in each version of the PDUFA legislation, raising criticisms that the industry has undue sway and influence over the agency responsible for regulating it. Some of the criticisms of PDUFA fees and how the FDA can use these fees include the following^2,3:

• The focus is heavily on reviewing premarketing data to facilitate drug approval, and a very small proportion of funds can be allocated to post-marketing safety surveillance. That is, the industry has negotiated limitations on the FDA’s ability to monitor the safety of drugs following entry into clinical use.
• Over time, PDUFA legislation has broadened the scope of influence over FDA policy, including changes to evidentiary standards for drug approval, shortened review and approval times, industry involvement in FDA decision-making, rule changes concerning industry information dissemination to providers, and effects on market entry of generic drugs.
• PDUFA puts the FDA on the clock to meet deadlines for drug approval decisions, which has raised concerns about rushed decisions on controversial drugs with potential safety concerns.
• Recent PDUFA negotiations have increased the role of patient-centric or advocacy influence on drug approval decisions, which some scientists fear is a retreat from rigorous evidentiary standards related to safety and effectiveness and introduces more nonscientific opinions into the process.
• There are concerns that PDUFA’s evolving changes with successive versions have made the FDA “too cozy” with the pharmaceutical industry.
• The 5-year cycle of renegotiation and enactment of legislation often creates a time crunch that limits adequate scrutiny and debate of what has been agreed upon by the FDA and the industry, giving the impression that the outcomes are generally favorable to the pharmaceutical industry.

The reality is that PDUFA is likely here to stay, given the high degree of dependency that the entire FDA budget has on this fee structure. Although this pay-to-play approach raises many ethical questions among its critics, the general consensus is that the good has outweighed the bad over the past 30-plus years and that the US has gone from lagging behind other areas of the world to being a leader in advancing cutting-edge therapeutics for rare and complex diseases.

Of course, with a new administration being responsible for negotiating PDUFA VIII and a secretary of the US Department of Health and Human Services being an outspoken critic of the FDA, it may be difficult to predict the future. If the FDA is affected by staff cuts and potential shifts in priorities based on the current administration’s policy perspective, it may be very challenging for the agency to meet its obligations under PDUFA, and the quality of the review process may suffer. Ronald Piervincenzi, PhD, CEO of US Pharmacopeia, recently summarized in a social media post the potential risks of drastic reductions in staffing or funding at the FDA, including⁴:

• delayed drug approvals,
• a decrease in overseas inspections potentially affecting the safety of the supply chain,
• lessened ability to respond during times of public health crises,
• compromised ability to regulate and ensure the quality of compounded drug products,
• decreased ability to mitigate drug shortages, and
• reduced competitiveness of the US pharmaceutical industry.

Over the past 33 years, PDUFA has played a large role in changing the drug and biologic review and approval process, with some good and some bad aspects, depending on your perspective. Keeping an eye on how PDUFA VIII negotiations affect changes in this process will be important. Perhaps more importantly, understanding global changes at the FDA—including whether PDUFA survives at all—warrants our close attention.

REFERENCES

1. Prescription Drug User Fee Act FY 2023. FDA. Accessed February 19, 2025. https://www.fda.gov/media/177976/download

2. Mitchell AP, Trivedi NU, Bach PB. The Prescription Drug User Fee Act: much more than user fees. Med Care. 2022;60(4):287-293. doi:10.1097/MLR.0000000000001692

3. Carroll J. PDUFA faces rough reauthorization. Biotechnol Healthc. 2007;4(3):9-10.

4. Piervincenzi R. A strong FDA keeps America safe, healthy, and competitive. February 12, 2025. Accessed February 19, 2025. https://www.linkedin.com/pulse/strong-fda-keeps-america-safe-healthy-competitive-ronald-piervincenzi-wifuf/