A Legal Challenge of the Prescription Drug User Fee Act.

I. PDUFA AND ITS CONTROVERSY 85 II. FDA'S OVERREACH 87 A. Value to the Recipient 87 B. Cost to the Government 88 III. WHAT THE FDA CAN LEARN FROM AIRLINES, ENVIRONMENTALISTS, AND PATENTS 89 A. The FAA's Overzealous Overflight 89 B. The New York DEC's Budget Shortfall 90 C. Not All User Fees Are Created Equal 92 IV. CONCLUSION 93 I. PDUFA AND ITS CONTROVERSY From the 1970s through the early 1990s, the Food and Drug Administration (FDA) was heavily criticized for its slow approval process, which the agency in turn blamed on its lack of resources. (1) As a compromise, the Prescription Drug User Fee Act (PDUFA) was passed in 1992 to permit the FDA to charge drug manufacturers a user fee for reviewing new drug applications in order to supplement its Congressional appropriation. (2) Drug manufacturers pay this user fee to have their drug approvals reviewed an expedited schedule. (3) Initially, PDUFA allowed the fees to be used only "to defray increases in the costs of... the review of human drug applications." (4) Over time, this restraint of using PDUFA fees only as a "supplement" has eroded. By 2015, user fees accounted for 42% of the total FDA budget (5) and 64% of the FDA drug approval process budget. (6) For comparison, in 1997, PDUFA user fees only accounted for 8.5% of the total FDA budget. (7) This trend has raised questions about conflicts of interest as well as the drug approval process's quality. Because PDUFA requires the FDA to respond to drug applications within 10 months, critics have noted the negative impacts this compressed timeframe could have on drug safety. (8) For every 10 month of reduced review time, there is a correlated 18% increase in serious adverse reactions, 11% increase in hospitalizations, and 7% increase in deaths related to an approved drug. (9) Even without gloomy empirical data, critics argue that this funding mechanism "systematically slants important policy choices," such as under-allocation of monies for post-approval safety surveillance, which drug manufacturers prefer not to be burdened with. (10) Finally, PDUFA opponents argue that its legislative history is replete with re-authorizations, extensions, and erosions of FDA independence, including explicitly allowing industry members to be on FDA advisory committees, which all point to thorough agency capture. (11) However, PDUFA proponents also present compelling counterarguments. Recent empirical studies show that there has been "[n]o significant effect of PDUFA... on the rate of withdrawals of new-drug approvals" when comparing drug safety data before and after the Act's passage. (12) Furthermore, proponents argue that "nearly all of the decrease in approval times [after the PDUFA passage] would have been achieved ... if the FDA received these funds as direct appropriations rather than relying on industry user fees," (13) which makes PDUFA an economically efficient piece of legislation for having the drug industry internalize its own costs of safety. Furthermore, analytically, FDA bias for specific instances of drug approvals seems unlikely, as the "FDA's decisions on drug applications are functionally independent... [since] funds from the particular company are not paid directly to any individual reviewer or division within the agency." (14) In other words, PDUFA is not a quid pro quo; rather, it is a pay-to-play. Thus, there are strong analytical and empirical arguments supporting both sides of this debate. Surprisingly, however, there is little legal analysis on PDUFA. In fact, the statute 21 U.S.C. [section] 379h on the FDA authority to assess user fees has hardly ever been litigated. Only three cases have been reported, and none of them challenge the legality or discretion of the FDA to charge these user fees, or even question the possible conflicts of interest PDUFA may pose. …