The Food and Drug Administration (FDA) is a federal agency which, until 1992, was funded exclusively by the U.S. government. In the late 1980s, the average amount of time it took to move a drug or biologic marketing application through FDA was 29 months. The review process was criticized as being slow and unpredictable. Frustrations mounted with consumers, industry, and the FDA itself—leading the agency to petition congress for the power to require user fees. FDA’s goal was to hire additional reviewers to eliminate the backlog and more quickly review incoming submissions.

At first, industry was wary of the proposed fees. But in 1992, the Prescription Drug User Fee Act (PDUFA) was enacted after FDA and industry agreed that FDA would have target completion times, and that user fees would supplement—not replace—congressional funding.

The success of PDUFA resulted in user fee requirements for products beyond prescription drugs and biologics. User fee programs now exist for medical devices, generic drugs, biosimilars, and animal drugs. All funds raised support a more efficient review process, as well as allow FDA to recover costs and initiate new programs. User fees have improved the predictability, consistency and transparency of the FDA’s review processes.

User fee programs are regularly reviewed by the U.S. government, and in mid-April 2017, House and Senate committees published a draft bill that would reauthorize the FDA to collect user fees for their various programs. User fees are slated to rise beginning in FY18, with the bill detailing the sequential user fee increases FDA can charge over the next five years to review new products and perform essential tasks. The bill would authorize a total increase in user fees of about $400 million in the first year. While this increase is large, it is significantly less that the $1 billion increase in fees suggested by the President in his initial budget blueprint.

While many of the 2017 user fees were slightly lower than previous years, fees are likely to increase across the board as part of the current reauthorization bill. For example, medical device user fees were at their lowest point in 2017 as a part of the 2012 Medical Device User Fee Amendments (MDUFA II). However, the current bill authorizes FDA to increase the medical device user fees collected from the 2017 amount of $130.2 million, to $183 million in 2018. That number is scheduled to steadily increase to $213.7 million by 2022.

Funds raised by the increase in user fees are scheduled to support several new programs, including a plan “to audit and certify laboratories who conduct device conformance testing to a recognized standard, and also to withdraw the certification if necessary.” The bill also outlines a medical device application that's been around for a while, but up until now has been free: de novos. The FDA would be authorized to charge fees to review a “de novo classification request”, a category specifically created for low-to-moderate-risk devices that are the first of their kind.

Last week before the official vote, the Senate health committee updated the legislation to include a "pediatric drugs and devices" section. This is great news for kids who need medical devices! The bill requires that within one year of enactment, FDA will hold a public meeting to guide device manufacturers in the development, clearance/approval, and labeling of medical devices for children.

If you want to learn more about user fees, I wrote a chapter about them for the Fundamentals of US Regulatory Affairs book published by RAPS.

Further Reading:

Senate, House Draft Reauthorization Bill to Increase Drug, Medical Device User Fees

FDA User Fee Programs

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