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Why Is Biopharma Paying 75% Of The FDA’s Drug Division Budget?


https://www.forbes.com/sites/johnlamattina/2022/09/22/why-is-biopharma-paying-75-of-the-fdas-drug-division-budget/?sh=387407b87480

It’s an issue that surfaces every five years when Congress debates renewal of the Prescription Drug User Fee Act (PDUFA). The first incarnation of PDUFA occurred in 1992, at a time when drugs were getting approved far more quickly in Europe than in the U.S. by as many as 3 -4 years. Americans were outraged by this. Why should Europeans get access to important new medicines especially when many originated in the U.S.? In response, Congress held hearings to understand the problem. The FDA testified that they were grossly understaffed and needed more money to hire additional experts to evaluate the benefits and risks of potential new medicines. So, how did Congress come up with these needed funds? It decreed that drug companies must pay a “user fee” each time they filed a New Drug Application (NDA). These funds would then be used to support the FDA’s drug division. User fees, which were $200,000 in 1992, have now risen to as high as $3.1 million.

This is an interesting situation. To market a drug, a company needs FDA approval, and now said company has to pay for the privilege of an FDA review – which can result in an outright rejection. But user fees had the desired impact. By hiring 600 new reviewers, the backlog of NDAs awaiting approval in 1992 was addressed. As a result, the biggest year of NDA approvals to that point occurred in 1996 with 56 drug approvals. As a concession to agreeing to user fees, the pharmaceutical industry was promised that the FDA would reduce review times for NDAs to 12 months for those that were considered “standard” applications and to six months for priority applications that involved significant advances over existing treatments. This was a welcome change for the industry but also for patients who were awaiting access to new medicines.

Since then, the PDUFA Act has been renewed every five years and the latest iteration, PDUFA VII, is now being debated by Congress. However, drug industry critics are far from enamored by this act as evidenced by a recent article in the N.Y. Times. One issue is that user fees make up 75% of the FDA’s Drug Division and it is claimed that this makes the FDA beholden to drug companies. Another concern voiced by critics is that as a result of PDUFA, the FDA is “decreasing regulatory standards, shortening approval times and increasing industry involvement in FDA decision making” and that these practices are harming patients.

First of all, despite user fees, the FDA not only continues to reject NDAs, it also will send them back to sponsors when it feels that more studies are needed for approval. Most biopharma executives will tell you that the FDA isn’t beholden to anyone. But more important has been the value brought to patients that the interactions between the FDA and the industry bring. This was never more critical than when Covid-19 hit. FDA/industry cooperation was crucial in bringing vaccines, antibodies, antivirals and other therapeutants to Americans in record time. These actions saved millions of lives and prevented millions of hospitalizations. These interactions need to be encouraged, not challenged.

Critics argue that by rushing to approval on the basis of less clinical evidence being required increases the chances that “you’re going to miss something” - something that could harm patients. However, the counter argument to this is that if you or a loved one have a severe disease, one that could be treated or cured by a medicine in late stage development, you want access to that drug as soon as possible. Patient advocacy groups often criticize the FDA for being too slow to approve life-saving medications. This dilemma has nothing to do with user fees. Instead, it demonstrates the challenge the FDA faces in trying to protect Americans both in curing diseases and approving safe medications in a timely manner.