Food and Drug Administration: FDA Faces Challenges Meeting Its Growing Medical Product Responsibilities and Should Develop Complete Estimates of Its Resource Needs
Published: 2009-06-19T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Twenty years ago, GAO reported that the Food and Drug Administration (FDA) was concerned that it lacked resources to fulfill its mission, which includes oversight of the safety and effectiveness of medical products--human drugs, biologics, and medical devices--marketed for sale in the United States. Since then, FDA, GAO, and others have raised concerns regarding FDA's ability to meet its oversight responsibilities. GAO was asked to review the resources supporting FDA's medical product oversight responsibilities. GAO examined trends in (1) FDA's funding and staffing resources for its medical product oversight responsibilities from fiscal years 1999 through 2008, and (2) FDA's medical product oversight responsibilities during this same period. GAO analyzed FDA data on the agency's resources and workload, reviewed relevant federal laws, and interviewed FDA officials. GAO also examined more-detailed data on FDA's fiscal year 2004 through 2008 resources and workload in four key areas, representing a range of FDA's oversight responsibilities, both before and after a medical product is marketed in the United States.
section_title: What GAO Found
paragraphs: Funding and staffing resources for FDA's medical product programs increased between fiscal years 1999 and 2008, primarily as a result of increased user fees paid by industry, which are made available through appropriations acts to support the agency's processes for reviewing new medical products. Total funding increased from about $562 million in fiscal year 1999 to about $1.2 billion in fiscal year 2008, with user fee funding accounting for more than half of this increase. A large and growing portion of funding supported activities for which user fees are collected, resulting in a declining share of funding available for other activities. FDA officials said that this has seriously limited the agency's ability to fulfill its oversight responsibilities in some areas, particularly those not funded with user fees. FDA faced challenges fulfilling and managing its growing medical product oversight responsibilities, which agency officials attributed to resource constraints. FDA's statutory responsibilities grew during this period and a growing number of medical products subject to FDA oversight and establishments manufacturing these products for the U.S. market also added to the agency's workload. However, FDA could not provide data showing its workload and accomplishments in some areas, such as its review of reports identifying potential safety issues with specific medical products. Without such information, FDA cannot develop complete and reliable estimates of its resource needs. While FDA officials said that the funding amounts requested for and provided to FDA during the past 2 years will permit the agency to respond to its most urgent needs and priorities, officials also noted that they did not receive enough resources to meet some statutory requirements, such as biennially inspecting certain manufacturing establishments. Furthermore, officials said that the agency faces significant challenges fulfilling its mission to oversee the safety and effectiveness of medical products.

section_title: Letter
paragraphs: Twenty years ago, we reported that the Food and Drug Administration  (FDA), an agency of the Department of Health and Human Services (HHS),  was concerned that it lacked sufficient funding and staffing resources.  FDA reported that its lack of resources prevented it from adequately  fulfilling its mission, which includes overseeing the safety and  effectiveness of medical products—human drugs, biologics, and medical  devices—marketed for sale in the United States. We concluded that,  while the agency was experiencing significant resource challenges, it  lacked a comprehensive and reliable basis to substantiate its estimates of  resource requirements. On several occasions since then, senior FDA  officials have testified before Congress and the agency issued a report  noting that the agency’s funding and staffing resources do not enable it to  meet its growing oversight responsibilities.
Lingering questions regarding the agency’s resources have added to  concerns about FDA’s ability to protect Americans from unsafe and  ineffective medical products. FDA’s Science Board reported in November  2007 that the agency could not fulfill its growing responsibilities because it  did not have sufficient resources. In fiscal years 2007 and 2008, the HHS  Office of Inspector General listed FDA’s oversight of drug and device  safety as one of the department’s top management and performance  challenges in HHS’ annual financial reports. And in January 2009, we  added FDA’s oversight of medical products to our High-Risk Series, which  is intended to raise the priority and visibility of government programs that  are in need of broad-based transformation to address major economy,  efficiency, or effectiveness challenges.
To enhance its ability to meet its mission, particularly to address  challenges related to the globalization of medical product development  and manufacturing, FDA requested an additional appropriation from  Congress in May 2008. This request was designed to supplement resources  for, among other things, FDA’s three medical product programs—the  drugs, biologics, and devices programs. In June 2008, the administration  officially amended its fiscal year 2009 budget request for FDA to include  an additional $100 million for these programs.
Questions have been raised regarding the sufficiency of the resources  available to FDA to fulfill its medical product oversight responsibilities,  including recurring responsibilities required by statute, such as inspecting  certain manufacturing establishments at prescribed intervals. This report  examines (1) trends in FDA’s funding and staffing resources for its  medical product programs from fiscal year 1999 through fiscal year 2008,  and (2) trends in FDA’s medical product oversight responsibilities from  fiscal year 1999 through fiscal year 2008.
To examine trends in FDA’s funding and staffing resources, we reviewed  funding and staffing data as reported in FDA’s congressional budget  justifications for the agency’s medical product programs from fiscal years  1999 through 2008. We compared changes in funding for FDA’s medical  product programs to the 10-year inflation rate as measured by the gross  domestic product (GDP) price index for nondefense goods and services.  We reviewed Office of Management and Budget (OMB) data on HHS and  federal government funding for fiscal years 1999 through 2008 and  compared trends in HHS and federal government funding to trends in FDA  funding over this period. We reported staffing resources by the number of  full-time equivalent (FTE) staff; one FTE represents 40 hours of work per  week conducted by a federal government employee over the course of   1 year. FTEs do not include contractors and therefore provide a partial  measure of staffing resources. We reviewed HHS’ online employee  directory as of March 2009 to obtain an estimate of the number of  contractors working with FDA’s medical product programs. We also  interviewed FDA officials regarding trends in hiring, retention, and  retirement, and the effect of funding and staffing resource trends on the  agency’s ability to meet its medical product oversight responsibilities. To  supplement our analysis of trends in FDA’s resources from fiscal years  1999 through 2008, we obtained and reviewed more-detailed data on how  the agency used its funding and staffing resources for specific activities  within the three medical product programs during a shorter time period,  fiscal years 2004 through 2008. For these areas, we compared changes in  funding levels to the 5-year inflation rate as measured by the GDP price  index.
To examine trends in FDA’s medical product oversight responsibilities  from fiscal year 1999 through fiscal year 2008, we reviewed changes in the  volume of work that FDA was responsible for conducting related to its  oversight of medical products. To determine if FDA’s responsibilities  changed during this time period, we reviewed FDA documents and  Congressional Research Service (CRS) reports identifying laws that  affected FDA’s medical product responsibilities and we also examined  those federal laws. We did not conduct a comprehensive search of all  federal laws. To review trends in the volume of FDA’s work related to its  oversight responsibilities, we analyzed FDA data on the number of medical  product applications and other materials submitted to the agency for  review between fiscal years 1999 and 2008. We also reviewed FDA data on  the cumulative number of medical products approved or cleared for  marketing in the United States and the number of establishments  registered with the agency to produce marketed medical products—a  proxy for the number of establishments subject to FDA oversight and  inspection—in fiscal years 1999 and 2008. We interviewed FDA officials  to obtain detailed information on how changes in the agency’s medical  product oversight responsibilities affected the amount of work it  conducted over this 10-year period.
To supplement our examination of trends in FDA’s medical product  oversight resources and responsibilities, we reviewed FDA’s oversight of  four key areas within its three medical product programs for a shorter  time period—fiscal years 2004 through 2008. We selected these four areas  to represent a broad range of the agency’s medical product oversight  responsibilities, including FDA’s oversight responsibilities both before and  after a product is marketed in the United States, and areas funded with  and without user fees. The four key areas we examined were FDA’s   (1) review of generic drug, new drug, and new biologic applications,   (2) inspections of medical product research activities and manufacturing  establishments, (3) review of adverse event reports, and (4) examination  of advertising and promotional materials. For each key area, we  interviewed FDA officials and analyzed FDA data on the resources it used  to conduct its work during this period.
To further examine trends in FDA’s responsibilities, we examined the  extent to which the agency met selected statutory requirements and  performance goals that set expectations for FDA between fiscal years 2004  and 2008 in two of the four key areas we reviewed—FDA’s review of  generic drug, new drug, and new biologic applications, and inspections of  medical product research activities and manufacturing establishments.  Specifically, we reviewed FDA data on the timeliness of the agency’s  review of generic drug applications compared with a statutory  requirement that the agency review these applications within a certain  time frame. We reviewed published FDA reports and FDA data on the  timeliness of the agency’s review of new drug and new biologic  applications compared with certain performance goals. We also examined  FDA’s estimated inspection frequency for six types of establishments— domestic drug manufacturing, foreign drug manufacturing, domestic blood  banks, domestic human tissue banks, domestic device manufacturing, and  foreign device manufacturing. We selected these six types of  establishments because they included inspections for drugs, biologics, and  devices, and because they also include establishment types with and  without statutory requirements regarding the frequency of inspections. We  provide FDA’s estimated inspection frequency because, as we have noted  in prior reports, FDA does not know how many establishments are subject  to inspection, and therefore the percentage of those that have been  inspected cannot always be calculated with certainty. The results of our  review of these four key areas were used to provide detailed illustrations  that are neither representative of all agency activities nor generalizable to  the agency as a whole.
To assess the reliability of FDA data on funding, staffing, and workload,  we discussed the data with the responsible agency officials, reviewed  related documentation, and examined the data for consistency. We  determined that FDA data were sufficiently reliable for their use in this  report.
We conducted this performance audit from April 2008 to June 2009 in  accordance with generally accepted government auditing standards. Those  standards require that we plan and perform the audit to obtain sufficient,  appropriate evidence to provide a reasonable basis for our findings and  conclusions based on our audit objectives. We believe that the evidence  obtained provides a reasonable basis for our findings and conclusions  based on our audit objectives.
subsections: section_title: Background
paragraphs: FDA receives annual appropriations to conduct its medical product  responsibilities; these appropriations include amounts derived from user  fees paid by industry in connection with FDA activities. FDA’s medical  product responsibilities include oversight of the safety and effectiveness  of medical products marketed for sale in the United States, regardless of  whether they are manufactured domestically or overseas. The agency’s  role is far-reaching and its responsibilities include oversight of medical  products both before and after they are marketed in the United States.
subsections: section_title: FDA Funding and Organization
paragraphs: Each year, the request for FDA’s resources is submitted to Congress as  part of the President’s Budget request. FDA develops and submits  supporting information for the request in the budget justification that is  submitted to the subcommittees with jurisdiction over FDA funding as  part of the annual appropriations process. This information reflects how  FDA proposes to meet its mission, goals, and objectives and assists  Congress in understanding whether FDA will require significant changes in  levels of appropriations. Guidance issued by OMB, which assists the  President in overseeing the preparation of the federal budget, directs  agencies to incorporate the cost of fulfilling all statutory requirements and  responsibilities in their submissions to OMB for consideration in  developing the President’s Budget request. We have also issued guidance  on the development of comprehensive and reliable resource estimates,  which includes recognition of the basic elements of such estimates. For  example, these elements include complete and reliable data, such as data  on the agency’s current resources, workload and performance; provisions  for program uncertainties; adjustment for inflation; recognition of any  exclusions; and an independent review of the estimates.
In fiscal year 2008, FDA’s funding totaled $2.2 billion. Of this amount,  about $500 million was derived from user fees collected from industry and  made available until expended. The remaining amounts, about   $1.7 billion, were derived from the General Fund of the Treasury and  available during fiscal year 2008. Both user fee funding and fiscal year  appropriations are made available through the annual appropriations  process. About $1.2 billion—over half of FDA’s total funding—supported  its medical product programs, including about $750 million in fiscal year  appropriations and about $440 million in user fee funding. Over half of  this funding—$681 million—supported the drug program, while   $234 million supported the biologics program and $275 million supported  the devices program.
FDA’s total funding is a small portion of federal government and HHS  funding. In fiscal year 2008, the federal government’s funding totaled  approximately $3 trillion, of which about $722 billion was made available  to fund HHS activities, including those at FDA. These amounts reflect both  discretionary spending and mandatory spending. (See fig. 1.) All of FDA’s  programs involve discretionary spending.
User fees are paid in connection with FDA’s drugs, biologics, and devices  programs’ review of applications for new medical products and  inspections of mammography facilities. The Prescription Drug User Fee  Act of 1992 (PDUFA) was enacted to expedite the review of applications  for new drugs and new biologics. PDUFA authorized FDA to collect user  fees from drug and biologic sponsors, typically manufacturers, to support  the process of reviewing new drug applications (NDA) and biologics  license applications (BLA). Likewise, the Medical Device User Fee and  Modernization Act of 2002 (MDUFMA) authorized FDA to collect user fees  from device sponsors to support the process of reviewing applications for  certain new devices. In both cases, FDA’s authority to collect fees and  use the amounts collected must be provided in appropriations acts. Both  PDUFA and MDUFMA require FDA to apply all user fee funding to support  the agency’s process for reviewing applications for certain new medical  products, and preclude the agency from using this funding for other  agency activities. In fiscal year 2008, agency activities not funded with user  fees included, for example, the agency’s oversight of the safety of human  tissues, review of applications for generic drugs, inspections unrelated to  the agency’s review of new medical products, and some postmarket safety  oversight activities. PDUFA and MDUFMA user fee funding only partially  covers FDA’s costs for reviewing applications for certain new medical  products and associated activities. FDA is also required to use a specified  amount of its fiscal year appropriations to support its review of these  applications.
Within FDA, three centers have primary responsibility for ensuring the  safety and effectiveness of medical products. The Center for Biologics  Evaluation and Research (CBER) is responsible for overseeing biologics;  the Center for Drug Evaluation and Research (CDER) is responsible for  overseeing drugs and some therapeutic biologics; and the Center for  Devices and Radiological Health (CDRH) is responsible for overseeing  devices and for ensuring that radiation-emitting products, such as  microwaves and x-ray machines, meet radiation safety standards. Among  other things, these centers evaluate the safety and effectiveness of new  medical products prior to marketing, monitor the safety and effectiveness  of marketed products, oversee the advertising and promotion of marketed  products, formulate regulations and guidance, conduct research,  communicate information to industry and the public, and set their  respective medical product program’s priorities. In addition to the work of  the three centers, the Office of Regulatory Affairs (ORA) conducts field  activities for all of FDA’s product centers. Field activities include  conducting inspections of domestic and foreign establishments involved in  manufacturing medical products, examining medical products offered for  import, and collecting and analyzing samples. Medical product program  resources include funding for center activities and field activities. Center  activity funding represents funding for the three centers—CDER, CBER,  or CDRH—and field activity funding represents ORA funding for all  medical product programs.
section_title: FDA’s Medical Product Oversight Responsibilities
paragraphs: As part of its oversight responsibilities, FDA reviews applications  submitted by manufacturers for medical products they wish to market in  the United States to ensure that new products are safe and effective,  inspects establishments producing medical products to ensure  manufacturing processes meet quality standards, reviews reports of  adverse events to monitor the safety of marketed medical products, and  examines advertising and other promotional materials to ensure they are  not false and misleading.
subsections: section_title: Oversight of New Medical Products
paragraphs: FDA’s oversight of medical product safety and effectiveness typically  begins when medical product sponsors develop a new product, long  before such products are marketed for sale. For example, FDA requires  sponsors to submit an investigational new drug (IND) application before  beginning clinical trials (studies in humans) of a new drug or new biologic.  The IND application provides FDA with extensive information about the  product, including safety and manufacturing information about the  product, and outlines the sponsor’s plans for clinical trials. FDA assesses  this preliminary information to ensure that the product is reasonably safe  to begin studying in humans. While FDA does not issue a formal approval  to the sponsor regarding an IND application, it can prohibit the start of a  clinical trial by placing it on hold if, for example, the agency determines  that human volunteers would be exposed to an unreasonable and  significant risk of illness or injury.
Sponsors often request guidance and feedback from FDA during the  process of drug and biologic development. Before and during clinical  trials, FDA may meet with sponsors to provide guidance on the design of  the clinical trial. In addition, FDA may issue a written evaluation of  particular aspects of a clinical trial—known as a special protocol  assessment. FDA may also meet with sponsors after the completion of a  successful clinical trial to discuss the information the agency would  expect to see submitted to the agency for marketing approval.
FDA’s approval is required before new drugs and biologics can be  marketed for sale in the United States. To obtain FDA’s approval,  sponsors must submit an application containing data on the safety and  effectiveness of their new medical product as determined through clinical  trials and other research. For example, sponsors must request approval for  a new drug or new biologic by submitting an NDA or BLA. FDA reviews  data included in these applications to determine whether the product is  safe and effective for its intended use. FDA also examines proposed  product labeling to ensure that it clearly states the condition and  population the product is intended to treat. After completing its  assessment of the information in the application and any subsequent  submissions of additional information, known as application  resubmissions, FDA determines whether to approve the product for  marketing. After FDA approves a product, manufacturers requesting  changes to product labeling, manufacturing, dosing, or usage must submit  an application supplement to obtain FDA approval.
In addition to its responsibility for approving new drugs prior to  marketing, FDA approval is also required before generic drugs—drugs that  are copies of already approved new drugs—can be marketed for sale in  the United States. Sponsors of generic drugs may obtain FDA approval by  submitting an abbreviated new drug application (ANDA) to the agency for  review. The ANDA contains data showing, among other things, that the  generic drug is bioequivalent to, or performs in the same manner as, a drug  approved through the NDA process. Similar to its review of NDAs, FDA  reviews information submitted in the application, including proposed  product labeling. To request FDA approval of proposed changes to  product labeling, manufacturing, dosing, or usage after a generic drug is  approved, sponsors must submit an ANDA supplement.
FDA is also responsible for overseeing the safety and effectiveness of  devices. Devices are classified into one of three classes—class I, II, or   III—based on the level of risk posed to the patient or user and the controls  necessary to reasonably ensure safety and effectiveness. Class I devices  are those that pose the lowest risk, and class III devices are those that  pose the highest risk. Some devices are subject to one of two types of  FDA review before they may be marketed for sale in the United States.  Some class II devices are required to obtain FDA clearance through a  premarket notification process, whereby a sponsor must demonstrate to  FDA that the new device is substantially equivalent to a device that FDA  previously approved or cleared for marketing. In contrast, class III devices  are generally required to obtain FDA approval through a more stringent  premarket approval process, whereby a sponsor must provide evidence,  typically including clinical data, to demonstrate with reasonable assurance  that the new device is safe and effective. As with new drugs and biologics,  FDA’s review of these applications includes an assessment of product  labeling and usage.
FDA is required to review certain medical product applications within  specified time frames. For example, FDA is generally required to review  NDAs, BLAs, and ANDAs within 180 days of receipt. PDUFA also  established performance goals to speed up FDA’s process for reviewing  NDAs and certain BLAs. These performance goals can be grouped into  three main categories—those related to the speed at which the agency   (1) reviews applications and supplemental materials, (2) schedules and  holds meetings with sponsors, and (3) issues written guidance as  requested by sponsors. Multiple performance goals exist within each of  these broad categories. For example, one performance goal is that FDA  review and act on 90 percent of certain NDAs and BLAs within 10 months  of their receipt; another is that FDA schedule 90 percent of certain  meetings with sponsors within 30 days of receiving the sponsor’s meeting  request. In addition, MDUFMA also established similar types of  performance goals related to the timeliness of FDA’s process for reviewing  applications for new devices subject to the premarket approval and  premarket notification process.
section_title: Inspections Conducted to Oversee Medical Product Research and Manufacturing
paragraphs: As part of its oversight responsibilities, FDA conducts inspections of  domestic and foreign establishments. Specifically, FDA conducts  inspections of clinical trial sites to ensure the protection of human  subjects and the accuracy and validity of clinical trial data reported to the  agency. FDA also inspects medical product manufacturing establishments  to ensure that manufacturing processes adhere to current good  manufacturing practices requirements and regulations. Inspections of  manufacturing establishments may occur before medical products are  marketed in the United States. To ensure continued adherence to current  good manufacturing practices requirements, FDA may also inspect  establishments after the product is on the market.
FDA is required to inspect certain types of establishments with a  particular frequency; however, requirements governing the frequency of  these inspections differ. For example, FDA is required to conduct  inspections of certain types of establishments every 2 years—including  domestic drug and device manufacturers, as well as domestic blood  banks. However, there are no comparable requirements regarding the  frequency with which FDA should conduct inspections of other types of  domestic establishments, such as domestic human tissue banks, or some  foreign establishments, including those manufacturing drugs and devices  marketed for sale in the United States. FDA does not have the authority to  require foreign establishments to allow the agency to inspect their  facilities. However, FDA has the authority to prevent the importation of  products manufactured at establishments that refuse to allow an FDA  inspection.
section_title: Oversight of Adverse Event Reporting
paragraphs: Because no medical products are absolutely safe—there is always some  risk of an adverse event—FDA continues to assess products’ risks and  benefits after the products are on the market by using multiple strategies.  One such strategy is to collect and analyze adverse event reports related to  the use of medical products and monitor them to identify potential safety  issues associated with the use of a specific medical product. FDA receives  adverse event reports from various sources, including medical product  manufacturers, physicians, and the public. FDA requires medical product  manufacturers and others to submit reports of adverse events associated  with the use of a medical product to FDA at certain frequencies depending  on the seriousness of the adverse event and the amount of time the  product has been on the market. Physicians and the public may  voluntarily submit reports of adverse events to FDA at any time. The  agency’s review of these reports helps to identify, among other things,  unexpected adverse events, product quality problems, and product use  errors related to marketed medical products. These reviews provide  information that may lead FDA to require the product’s sponsor to  conduct a safety study, make changes to product labeling, or recall a  product from the market.
section_title: Oversight of Advertising and Promotional Activities
paragraphs: FDA oversees the advertising and promotion of prescription drugs,  biologics, and some devices to ensure that information disseminated about  medical products is not false or misleading. FDA regulations also require  that product promotions include a balanced disclosure of side effects,  contraindications, and warnings. In addition, advertising and promotions  may not recommend or suggest any use of a product that is not included in  the product’s approved labeling. FDA regulates the content of advertising  and promotions regardless of whether they are directed toward consumers  or medical professionals.
FDA regulations require manufacturers to submit to the agency all final  advertising and promotional materials for drugs and biologics at the time  the materials are first disseminated to the public. In contrast, FDA does  not require manufacturers to submit advertising and promotional materials  for devices at the time of their initial dissemination. Companies may also  voluntarily submit draft advertising and promotional materials to FDA  prior to their public release in order to obtain advisory comments from the  agency. Although FDA is not required to review all materials submitted,  reviewing final and draft advertising and promotional materials is the  agency’s primary mechanism for ensuring that information disseminated  about drug and biologic products is not false or misleading.
To supplement its examination of submitted materials, FDA staff also  monitor the content of disseminated advertising and promotional  materials, for example, by attending medical conferences, reviewing  company Web sites, and following up on complaints received.
section_title: Driven by User Fees, Funding and Staffing for Medical Product Programs Have Increased, Although FDA Is Concerned about Staffing Levels
paragraphs: Funding and staffing for FDA’s medical product programs have increased  mostly as a result of user fee funding, which is primarily directed toward  the agency’s review of new medical products. FDA is required to apply a  certain amount of its fiscal year appropriations to support user fee  activities, and agency officials said that this requirement limits the  resources available for other medical product program activities that are  not supported by user fee funding. In addition to their concerns about the  sufficiency of their resources, FDA officials are concerned about the  agency’s ability to hire and retain staff in certain scientific occupations.
subsections: section_title: Medical Product Program Funding Has Increased, Largely Due to User Fees
paragraphs: Funding for FDA’s medical product programs increased between fiscal  year 1999 and fiscal year 2008, mostly due to increases in user fee funding.  Medical product program funding increased 112 percent overall, from  about $562 million in fiscal year 1999 to about $1.2 billion in fiscal year  2008. (See fig. 2.) This funding increase was greater than the GDP rate of  inflation across this time period—25 percent. Over half of the increase in  medical product program funding was due to growth in user fee funding,  which grew four times as fast as fiscal year appropriations during this   10-year period. Between fiscal years 1999 and 2008, user fee funding  increased 268 percent from about $120 million to about $443 million, while  fiscal year appropriations increased 69 percent from about $441 million to  about $746 million. Over three-quarters of the increase in user fee funding  over this period supported the drugs program, with the remaining portion  supporting the biologics and devices programs. Appendix I provides  additional information on funding and staffing resources for FDA’s  medical product programs.
Between fiscal years 1999 and 2008, total funding for FDA’s medical  product programs—including fiscal year appropriations and user fee  funding—grew 112 percent. This rate of growth was higher than the rates  of growth in total funding for the rest of FDA (86 percent), as well as total  funding for HHS (98 percent) and the federal government (87 percent).  The high rate of growth in total funding for FDA’s medical product  programs was due to large increases in FDA’s user fee funding. Fiscal year  appropriations for FDA’s medical product programs grew at a slower rate  than fiscal year appropriations for other FDA programs between fiscal  years 1999 and 2008, as shown in table 1. Fiscal year appropriations for  FDA’s medical product programs also grew at a slower rate (69 percent)  than discretionary funding for HHS (74 percent) and the federal  government (103 percent).
PDUFA and MDUFMA require the agency to apply all user fee funding, as  well as a specified amount of fiscal year appropriations, to support user  fee activities that are related to the agency’s process for reviewing  applications for new drugs, new biologics, and certain new devices. Taking  this requirement into account, we found that total funding for the medical  product programs’ user fee activities increased eight times faster than  funding for the programs’ other activities between fiscal years 1999 and  2008. Specifically, funding for user fee activities increased 207 percent  over the 10-year period while total funding for the programs’ other  activities increased 25 percent—the same rate as inflation over this period  as measured by the GDP price index.
As funding for user fee activities grew faster between fiscal year 1999 and  2008 than funding for other program activities not funded with user fees, a  declining share of fiscal year appropriations was available to other  program activities. In fiscal year 1999, the medical product programs  allocated 48 percent of their total $562 million funding—including   33 percent of their fiscal year appropriations—to user fee activities. In  fiscal year 2008, these programs allocated 69 percent of their total   $1.2 billion funding—including 51 percent of their fiscal year  appropriations—to user fee activities. In fiscal year 2008, the medical  product programs allocated 31 percent of their total funding to other  program activities not funded by user fees. (See fig. 3.)
Although total funding increased, FDA officials reported that the decline in  the portion of funding available to activities not funded by user fees has  seriously limited the agency’s ability to fulfill its oversight responsibilities  in some areas. FDA officials noted a disproportionate growth in funding  available for the agency’s user fee activities compared with other agency  activities not funded with user fees, such as the agency’s oversight of  transfusion-related blood products, human tissues, device compliance and  enforcement, and radiological health, as well as its work in reviewing  ANDAs, examining drug-related advertising materials, and conducting  inspections of establishments manufacturing approved drugs.
To supplement our analysis of trends in FDA resources from fiscal years  1999 through 2008, we analyzed how FDA’s medical product programs  allocated funding to center and field activities from fiscal years 2004  through 2008. We found that each of the medical product programs  allocated most of their annual funding to activities conducted by the  centers (CDER, CBER, and CDRH). The programs also provided some  funding for field activities conducted by ORA. We found that funding for  the medical product programs’ center activities grew three times as fast as  funding for the programs’ field activities. We also noted that funding for  field activities increased at about the same rate as the GDP inflation rate.  (See app. II for additional information on trends in center and field funding  and staffing resources for the medical product programs.)
section_title: Medical Product Program Staffing Resources Have Increased, but FDA Is Concerned about Hiring and Attrition
paragraphs: Staffing resources for FDA’s medical product programs increased between  fiscal year 1999 and fiscal year 2008. The number of FTEs supporting  FDA’s medical product programs increased 14 percent from 4,925 FTEs in  fiscal year 1999 to 5,626 FTEs in fiscal year 2008. This increase was due  solely to a growth in the number of FTEs funded by user fees—the number  of FTEs funded by fiscal year appropriations declined. Specifically, the  number of medical product program FTEs funded by user fees increased  113 percent—from 856 FTEs in fiscal year 1999 to 1,825 FTEs in fiscal year  2008—while FTEs funded by fiscal year appropriations declined 7 percent,  or from 4,069 FTEs in fiscal year 1999 to 3,802 FTEs in fiscal year 2008.  FDA officials told us that they had to actively reduce the number of staff  by offering buyouts to employees to leave the agency between fiscal years  2004 and 2006 because the agency did not receive enough fiscal year  appropriations in these years to maintain staffing levels. According to FDA  officials, FTE costs—salary and benefit costs—grew at a faster rate than  fiscal year appropriations during this period. Figure 4 displays the number  of FTEs from fiscal year appropriations and user fees for each year, fiscal  years 1999 through 2008.
While our analysis of FDA data shows that the number of medical product  program FTEs increased between fiscal year 1999 and 2008, FTEs do not  include contractors and therefore provide a partial measure of total  staffing resources. FDA could not provide data showing the total number  of contractors it used or the total amount of funding it spent on  contractors to support its medical product programs over this period. As a  result, we could not fully assess the medical product programs’ staffing  resources. FDA officials estimated that the agency used an increasing  number of contractors to fulfill its medical product responsibilities  between fiscal years 1999 and 2008. However, agency officials were  unable to provide us with data to corroborate this estimate.
According to FDA officials, the decline in the number of FTEs funded by  FDA’s fiscal year appropriations limited the agency’s ability to fulfill its  medical product oversight responsibilities. FDA officials noted that they  do not have enough staff to adequately perform duties that do not receive  user fee funding, such as the agency’s review of ANDAs, oversight of  product advertising and promotion, and inspections of establishments  manufacturing marketed products. As a result, FDA officials noted that the  agency’s work in these areas is increasingly backlogged.
In addition to their concerns about the adequacy of the agency’s fiscal year  appropriations, FDA officials are also concerned about the agency’s ability  to hire staff, particularly those in certain scientific occupations. For  example, FDA officials noted that the agency is facing challenges hiring  biologists, chemists, computer programmers, consumer safety officers,  engineers, epidemiologists, mathematical statisticians, medical officers,  and pharmacologists, among other occupations. FDA officials noted that  the lack of sufficient numbers of staff and extended vacancies in specific  occupations resulted in higher workloads and longer hours for current  staff, as well as postponed or reduced work in some areas.
FDA officials also noted concerns about the agency’s ability to retain staff,  particularly those in certain scientific occupations. FDA officials said that  a high percentage of staff from the medical product centers and ORA leave  their positions—including those who move within FDA, leave the agency,  and retire. Specifically, FDA data show that between 2000 and 2007, the  average annual percent of staff who left their positions at CDER, CBER,  and CDRH ranged from 11 to 13 percent, and at ORA headquarters and  regional offices ranged from 6 to 23 percent. However, a portion of these  staff stayed within FDA and HHS. FDA officials told us that the loss of any  staff from their centers presents challenges as it takes time for the centers  to hire and train new staff. For example, FDA officials noted that it takes  about 2 years to effectively train new staff who review applications for  new medical products.
section_title: FDA Faced Challenges Fulfilling and Managing Its Growing Medical Product Oversight Responsibilities, Citing Resource Constraints
paragraphs: New laws and a growing workload increased FDA’s medical product  oversight responsibilities. FDA did not fulfill its oversight responsibilities  between fiscal years 2004 and 2008 in some areas, which agency officials  attributed to resource constraints.
subsections: section_title: FDA’s Medical Product Oversight Responsibilities Expanded Due to the Enactment of New Laws
paragraphs: Laws enacted since 1999 added new requirements that expanded FDA’s  medical product oversight responsibilities. On the basis of our review, we  found 11 laws that specifically added to FDA’s medical product oversight  responsibilities. These 11 laws were enacted between 2002 and 2007.  (See fig. 5.)
These 11 laws added many additional requirements and authorities to  FDA, increasing the agency’s oversight responsibilities ranging from  premarket review of medical products to the agency’s oversight of the  safety of marketed medical products. These additional oversight  responsibilities included an expansion in FDA’s authority to regulate  devices, an increase in the amount of information that the agency needs to  review before deciding whether to approve new drugs and biologics, and  greater authority to monitor the safety of approved products. To  implement these new requirements and authorities, FDA, for example,  needed to issue new guidance for industry and new operating procedures  for staff, and established new committees that the agency needed to  consult with to fulfill its oversight responsibilities.
One of the many new oversight responsibilities that FDA was charged with  was added by MDUFMA. In 2002, MDUFMA instituted a regulatory  oversight function for reprocessed single-use devices. MDUFMA required  manufacturers of certain devices to submit additional information to the  agency validating that reprocessed single-use devices are substantially  equivalent to current or previously marketed single-use devices. The law  also created a new application for the approval of reprocessed high-risk  devices. As a result of these new authorities, FDA created new guidance  documents and conducted presentations with industry and healthcare  professionals related to the agency’s oversight of these products.  According to agency officials, the implementation of this expanded  authority resulted in a significant increase in FDA’s workload, particularly  in 2002 when FDA officials estimated that about 17 FTEs were dedicated  to implementing this authority and developing guidance documents.
Another law, the Pediatric Research Equity Act of 2003 (PREA), increased  the amount of information that FDA must review to approve a new drug or  new biologic. FDA became responsible for reviewing more materials to  assess the products’ safety and effectiveness for children, including  appropriate information to include on product labeling. Specifically, PREA  required sponsors to submit a pediatric assessment containing additional  information about the pediatric use of a drug or biologic at the time they  submit an application or supplement. As a result of the reviews of these  required pediatric assessments, FDA issued 86 PREA-related labeling  changes for drugs and biologics between December 2003 and December  2008.
A more recent example of a law increasing FDA’s medical product  responsibilities is the Food and Drug Administration Amendments Act of  2007 (FDAAA). FDAAA increased FDA’s postmarket oversight  responsibilities for medical products by giving FDA authority to require  sponsors to conduct studies or clinical trials for approved drugs in cases  where FDA has identified new safety concerns. To require such a study,  FDA officials said that they document their rationale in a legally  enforceable contract with a sponsor. These contracts may outline specific  elements of the study design. FDA officials stated that the process of  developing such contracts results in additional work for the agency. From  the enactment of FDAAA in September 2007 through January 2009, FDA  required drug sponsors to conduct 45 postmarket studies for NDAs and  biologics sponsors to conduct 15 postmarket studies for BLAs, for drugs  and biologics approved before and after the implementation of FDAAA.
section_title: FDA Faced a Growing Workload
paragraphs: FDA also faced a growing workload and was responsible for overseeing  increasing numbers of marketed products and establishments. FDA’s  medical product workload grew between fiscal years 1999 and 2008 in part  due to the receipt of an increasing number of applications and application  supplements. The number of drug, biologic, and device application  materials submitted to FDA grew 30 percent over this period, from 23,079  in fiscal year 1999 to 30,060 in fiscal year 2008. In particular, the number of  application supplements grew 48 percent (from 13,694 application  supplements in fiscal year 1999 to 20,329 application supplements in fiscal  year 2008). The number of medical product applications also increased  during this time period by 8 percent, or from 8,313 applications to 8,943  applications. At the same time, the number of applications resubmitted for  medical product approval decreased 26 percent from 1,072 to 788 (see   fig. 6).
In addition to receiving an increasing number of applications and  application supplements, FDA’s workload also grew due to an increase in  other demands placed on the agency. For example, FDA received 797,889  more reports of adverse events related to medical products in fiscal year  2008 than in fiscal year 1999, an increase of 228 percent. FDA also received  40,193 more drug- and biologic-related advertising and promotional  materials to examine (an increase of 115 percent), and 885 more meeting  requests from sponsors regarding drug and biologic products in  development during this time period (an increase of 56 percent).
The complexity of products subject to FDA oversight has also grown, thus  increasing the agency’s workload. FDA officials, as well as FDA’s Science  Board, reported that rapid advances in science and technology, including  the fields of genomics and nanotechnology, have increased the complexity  of the medical products submitted to FDA for premarket approval. FDA  officials told us that the agency seeks and provides training for its  reviewers so they can more effectively review the safety and effectiveness  of these increasingly complex products. However, agency officials said  that this training results in less time available for staff to perform their  routine duties. In addition, FDA officials also increasingly seek the advice  of scientific experts from outside the agency, including advisory  committee members, to assist in the review of applications for new drugs  and new biologics. Similarly, seeking the advice of experts requires  additional staff time to obtain and weigh these perspectives.
In addition to facing a growing workload, the total number of medical  products and establishments FDA oversees also increased between fiscal  years 1999 and 2008. FDA is responsible for monitoring the safety of  marketed medical products, and as the number of these products and  manufacturing establishments has grown, so have the agency’s oversight  responsibilities. The number of medical products approved or cleared for  marketing has grown 55 percent, or by 41,203 medical products, during  this time period. In addition, the total number of establishments registered  to produce medical products marketed for sale in the United States—a  proxy for the number of establishments subject to FDA oversight and  inspection—grew over this time period, due to increases in the number of  foreign establishments. However, from fiscal years 1999 to 2008, FDA saw  a decrease—2 percent or 311 establishments—in the number of domestic  establishments registered to produce medical products. Over the same  time period, the number of foreign establishments registered to produce  medical products increased by 23 percent or 1,921 establishments. See  table 2 for trends in domestic and foreign establishments registered to  produce medical products.
section_title: FDA Officials Cited Resource Constraints as Hindering the Agency’s Ability to Fulfill Its Oversight Responsibilities in Some Areas between Fiscal Years 2004 and 2008
paragraphs: FDA officials told us that resource constraints hindered the agency’s  ability to fulfill all of its medical product oversight responsibilities  between fiscal years 2004 and 2008, but the agency also lacked information  to manage some of these oversight responsibilities and estimate current  and future resource needs. For the two key areas we reviewed where  statutory requirements and performance goals set expectations for the  agency’s work during this period—review of applications for generic  drugs, new drugs, and new biologics, and medical product inspections— FDA did not meet all of its medical product oversight responsibilities. In  the other two key areas we reviewed—examination of advertising and  promotional materials and review of adverse event reports—we found that  while FDA faced an increasing workload, it could not always provide data  on the work it performed to fulfill these responsibilities.
FDA did not meet all of its medical product oversight responsibilities  where requirements and performance goals set expectations for the  agency’s work from fiscal years 2004 through 2008. For example, FDA did  not meet the requirement to complete its first review of ANDAs within   180 days of receipt during this period. We found that the percent of  ANDAs that FDA reviewed within this 180 day requirement declined from  87 percent in fiscal year 2004 to 32 percent in fiscal year 2008. FDA  received an increasing number of ANDAs during this time period, and  agency officials explained that they were unable to review all applications  submitted within the 180 day requirement because they did not have  sufficient resources to conduct these reviews. As a result, an increasing  number of ANDAs were pending review, creating a backlog.
While FDA met most of its PDUFA performance goals related to the speed  at which it reviewed NDAs and BLAs and related application supplements,  the agency did not meet most PDUFA performance goals related to the  speed at which it scheduled and held meetings with sponsors and  responded to sponsor requests for information between fiscal years 2004  and 2008. FDA officials explained that they were unable to meet all of  these performance goals due to inadequate resources. FDA officials  explained that they placed a higher priority on reviewing applications and  therefore had fewer resources to schedule and hold meetings or respond  to sponsors’ requests for information.
FDA also did not meet all of its inspection requirements and requested  additional funding to begin conducting more inspections. FDA did not  conduct inspections every 2 years as required for two of three types of  establishments we reviewed. FDA officials estimated that the agency, on  average, conducts inspections of domestic drug manufacturers every   3 years, domestic device manufacturers every 3 or 5 years, and domestic  blood banks every 2 years. FDA officials estimated that the agency  conducts inspections less frequently for other types of establishments that  do not have required time frames for the frequency of inspections— domestic human tissue banks, foreign drug manufacturers, and foreign  device manufacturers. (See table 3.) In fiscal year 2008, FDA requested and  received additional funding to strengthen field operations and conduct  more domestic and foreign inspections of medical product establishments.
FDA faced an increasing workload in the other two areas we reviewed— review of adverse event reports and examination of advertising and  promotional materials. Agency officials said they lacked sufficient  resources in these areas. Similar to what we reported in 1989, we found  that FDA lacks information to manage these responsibilities and estimate  current and future resource needs. Although adverse event monitoring is a  key mechanism for FDA to identify postmarket safety risks related to the  use of marketed medical products, agency officials told us that they  receive substantially more drug-, biologic-, and device-related adverse  event reports than staff can review. Between fiscal years 2004 and 2008,  FDA received an increasing number of adverse event reports for medical  products, from 635,035 reports in fiscal year 2004 to 1,147,442 reports in  fiscal year 2008. However, FDA officials could not provide data showing  how many adverse event reports staff review. FDA officials told us that  they place the highest priority on reviewing reports of serious adverse  events, such as those involving death or severe injury, and unexpected  adverse events—those not noted on approved product labeling. Yet, FDA  officials were unable to provide data to corroborate their reviews of these  reports of serious and unexpected events. In addition, while FDA receives  relatively few promotional materials for biologics and devices, the agency  receives substantially more drug-related promotional materials than staff  can review, according to agency officials. Between fiscal years 2004 and  2008, FDA received a steadily increasing number of final promotional  materials—from 45,394 in fiscal year 2004 to 70,509 in fiscal year 2008.  Again, FDA could not provide data showing how many drug-related  advertising and promotional materials staff review. Although FDA officials  told us that they place a high priority on reviewing materials that have the  greatest potential to affect public health, they were unable to provide data  to corroborate their reviews of these materials. FDA officials have told us  that collecting data on the work staff performed would be time-consuming  and detract from resources needed to devote to conducting these  reviews.
While FDA officials noted the agency’s inability to fulfill all of its  responsibilities due to resource constraints, FDA does not have the data to  develop a complete and reliable estimate of the resources it needs to  conduct all of its responsibilities. Specifically, we found that FDA lacked  information about its current resources, workload, and performance in  some areas, such as with the review of adverse event reports and  promotional materials. This basic management information is critical to  the development of a complete and reliable resource estimate. FDA  officials also told us that the funding amounts requested for FDA and  provided by Congress during the past 2 years will permit the agency to  respond to its most urgent needs and priorities, although officials also  noted that they did not receive enough resources to meet some statutory  requirements. For example, agency officials noted that they were unable to  inspect certain manufacturing establishments at prescribed intervals due  to resource constraints. Furthermore, FDA officials also noted that the  agency continues to face significant challenges fulfilling its mission.
For more information on the trends in FDA’s workload and resources for  the four key areas that we reviewed, see appendix III for FDA’s review of  generic drug, new drug, and new biologic applications, appendix IV for  inspections of medical product research activities and manufacturing  establishments, appendix V for the review of adverse event reports, and  appendix VI for the examination of advertising and promotional materials.
section_title: Conclusions
paragraphs: The growth in the complexity and number of new medical products and  the establishments manufacturing them, increasing globalization, and  added statutory requirements and responsibilities have translated into  mounting and competing demands for FDA’s resources. Concerns  regarding the adequacy of these resources are not new, but as demands on  the agency have soared in recent years, these concerns have intensified.  Earlier this year, we included FDA’s oversight of medical products in our  High-Risk Series. Our current examination of FDA’s resources confirms  that the agency’s ability to protect Americans from unsafe and ineffective  medical products is compromised. The structure of the agency’s funding— its reliance on user fees to fund certain activities, particularly those related  to the review of new products—is a driving force behind which  responsibilities FDA does and does not fulfill. The approval of new  products has increasingly become the beneficiary of the agency’s budget,  without parallel increases in funding for activities designed to ensure the  continuing safety of products, once they are on the market. The enactment  of FDAAA in 2007 gave FDA the ability to apply user fee funding to more  postmarket activities for some types of medical products, providing the  agency more flexibility in its use of funding.
FDA reports that it cannot do all that is asked of it and our analysis of the  agency’s activities confirms this. However, as FDA officials told us, the  agency’s requests for resources do not reflect all the resources it needs to  fulfill its mission, including meeting its statutory requirements. FDA could  not provide data showing its workload and accomplishments in some  areas. Furthermore, it lacks other basic management information, such as  the size of its contractor workforce. Without this information, FDA does  not have data to reliably estimate its resource needs—a problem we  reported 20 years ago and which served as the basis of our  recommendation that FDA collect such data. Since then we have made  similar recommendations that the agency improve its management and  tracking of its resources and workload. FDA has disagreed with these  recommendations, claiming that it lacks the resources to devote to this  data collection and that it would detract from its oversight responsibilities.  We acknowledge that FDA is facing significant challenges in fulfilling its  responsibilities, but continue to believe that developing such information  is an essential component of ultimately enhancing the agency’s ability to  adequately fulfill its mission. Without such basic data needed for managing  its programs, FDA cannot develop sound and justifiable budget requests  that reflect all the work that is vital to fulfilling its mission, including  meeting its performance goals and its statutory requirements. It is also  difficult for others to independently verify the extent to which FDA  receives sufficient resources and whether the agency is appropriately  utilizing and prioritizing the resources it receives.
section_title: Recommendations for Executive Action
paragraphs: We recommend that the Commissioner of FDA establish a comprehensive  and reliable basis to substantiate the agency’s estimates of its current and  future resource needs in a manner consistent with the principles  contained in our cost estimating and assessment guide. To do so, we  recommend that the Commissioner of FDA take the following four actions:  1.  Conduct a comprehensive assessment of the agency’s staffing  resources, including its contractor workforce.  2.  Gather data on the work the agency conducts to fulfill its  responsibilities.  3.  Assess the extent to which the agency is meeting its responsibilities.  4.  Develop an evidence-based estimate of the resources needed to fulfill  all of its responsibilities.
section_title: Agency Comments
paragraphs: We provided a draft of this report to HHS for review. HHS provided  comments from FDA. In its comments, FDA agreed with our four  recommendations and described the steps it would take to implement  them. FDA’s comments are reprinted in appendix VII. FDA also provided  technical comments, which we incorporated as appropriate.
In its comments, FDA acknowledged that we identified some important  issues regarding the challenges the agency faces in meeting its medical  product responsibilities. It highlighted the President’s requested increase  in the agency’s medical product program funding for fiscal year 2010,  which it said would support a life-cycle approach to safety, provide for  increased inspections, and support the implementation of requirements  included in FDAAA. Specifically, regarding our recommendations, FDA  said that a comprehensive assessment of its staffing resources would  provide useful information and that it will expand its current staffing  assessment process to include its contractor workforce. The agency also  said it will conduct a complete inventory of all regulatory work products  by FDA center and that it would identify and implement measures to  determine how effectively the agency is meeting its responsibilities.  Finally, FDA said that it plans to link these measures to its budget and  funding allocation. FDA said that this approach will inform the agency  about how well it is allocating its resources and help identify what  additional resources it needs to fulfill its responsibilities. We believe that  the agency’s completion of the activities described, as well as other  necessary and related actions to implement our recommendations, should  assist FDA in developing a comprehensive and reliable basis for  substantiating the agency’s resource needs and help it better manage its  medical product programs.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the Commissioner of FDA  and appropriate congressional committees. The report also will be  available at no charge on the GAO Web site at http://www.gao.gov.
If you or your staff have any questions about this report, please contact me  at (202) 512-7114 or crossem@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. GAO staff who made major contributions to this report are  listed in appendix VIII.
section_title: Appendix I: Funding and Staffing Resources for FDA Medical Product Programs, Fiscal Years 1999 through 2008
paragraphs: Funding resources for the Food and Drug Administration’s (FDA) medical  product programs increased 112 percent between fiscal years 1999 and  2008. Of the medical product programs    drugs program funding increased 145 percent, from $278.3 million in fiscal  year 1999 to $680.9 million in fiscal year 2008;   biologics program funding increased 88 percent, from $124.4 million in  fiscal year 1999 to $233.5 million in fiscal year 2008; and    devices program funding increased 73 percent, from $159.0 million in  fiscal year 1999 to $275.3 million in fiscal year 2008.
Table 4 displays funding resources for FDA programs for fiscal years 1999  through 2008.
Staffing resources supporting FDA’s medical product programs—as  measured by the number of full-time equivalent (FTE) staff—varied from  year to year, and increased 14 percent between fiscal year 1999 and fiscal  year 2008. Specifically,    drugs program FTEs increased 22 percent from 2,456 FTEs in fiscal year  1999 to 2,996 FTEs in fiscal year 2008;   biologics program FTEs increased 8 percent from 989 FTEs in fiscal year  1999 to 1,066 in fiscal year 2008; and    devices program FTEs increased 6 percent from 1,480 FTEs in fiscal year  1999 to 1,564 FTEs in fiscal year 2008.
Table 5 displays staffing resources for FDA programs from fiscal years  1999 through 2008.
section_title: Appendix II: Trends in Center and Field Resources for the Drugs, Biologics, and Devices Programs
paragraphs: Between fiscal years 2004 and 2008, the drugs, biologics, and devices  programs allocated most of their funding and staffing to center activities,  leaving a smaller share of resources for field activities. Funding for center  activities grew faster than funding for field activities, which increased at  nearly the same rate as inflation, as measured by the gross domestic  product (GDP) price index. During the same period, staffing resources for  center activities increased while staffing resources for field activities  decreased.
subsections: section_title: Trends in Funding Resources for Center and Field Activities
paragraphs: Funding for center activities grew more than three times as fast as funding  for field activities between fiscal years 2004 and 2008. Specifically, center  funding for all medical product programs combined grew from   $675 million to $995 million over this period, an increase of 47 percent,  while field funding for all medical programs increased from $173 million to  $195 million, an increase of 13 percent. (See fig. 7.) While increases in total  center funding outpaced the GDP inflation rate of 12 percent during this  period, the rate of increase in total field funding remained close to the  GDP inflation rate.
Drugs program funding for center activities conducted by the Center for  Drug Evaluation and Research (CDER) increased 57 percent from about  $373 million in fiscal year 2004 to about $588 million in fiscal year 2008,  while funding for field activities conducted by the Office of Regulatory  Affairs (ORA) rose 8 percent from about $86 million to about $93 million  over this period. The increase in field funding for this program was less  than the rate of GDP inflation (12 percent) over this period.
Biologics program funding for center activities conducted by the Center  for Biologics Evaluation and Research (CBER) increased 45 percent from  about $140 million in fiscal year 2004 to about $202 million in fiscal year  2008, while funding for biologics field activities conducted by ORA  increased 15 percent over this period, from about $27 million to about   $31 million.
Devices program funding for center activities conducted by the Center for  Devices and Radiological Health (CDRH) increased 26 percent from about  $162 million in fiscal year 2004 to about $205 million in fiscal years 2008,  while funding for field activities conducted by ORA increased 18 percent,  from about $60 million to about $70 million.
Over two-thirds of each of the medical product centers’ funding supported  their user fee activities in fiscal year 2008. Specifically, CDER, CBER   and CDRH each allocated about 78 percent of their centers’ total  funding—including an average of 61 percent of the centers’ total fiscal  year appropriations—to user fee activities in fiscal year 2008, leaving   22 percent of funding to support the centers’ other activities. In contrast,  23 percent of the medical product programs’ total field funding supported  user fee activities, with 77 percent of field funding supporting other  activities not funded with user fees. Table 6 displays how the medical  product programs allocated funding resources to specific center and field  activities.
section_title: Trends in Center and Field Staffing Resources
paragraphs: The number of full-time equivalent (FTE) staff supporting center activities  grew 8 percent from 4,048 FTEs in fiscal year 2004 to 4,384 in fiscal year  2008, while the number of FTEs supporting field activities conducted by  ORA decreased 15 percent from 1,454 FTEs in fiscal year 2004 to 1,243  FTEs in fiscal year 2008. (See fig. 8.) Because counts of FTEs do not  include contractors, these data do not fully represent FDA’s staffing  resources for these activities.
Drugs program staffing resources for CDER activities grew 9 percent from  2,190 FTEs in fiscal year 2004 to 2,396 FTEs in fiscal year 2008, while  staffing resources for drugs field activities declined 21 percent from 759  FTEs in fiscal year 2004 to 600 FTEs in fiscal year 2008.
Biologics program staffing resources for CBER activities grew 8 percent  from 797 FTEs to 858 FTEs, while FTEs supporting biologics field  activities declined 13 percent from 241 FTEs to 209 FTEs.
Devices program staffing resources for CDRH activities grew 7 percent  from 1,061 FTEs to 1,130 FTEs, while staffing resources for devices field  activities declined 4 percent from 454 FTEs to 434 FTEs.
Table 7 shows how FDA’s medical product programs allocated FTE  resources to various center and field activities.
section_title: Appendix III: Trends in FDA’s Review of Generic Drug, New Drug and New Biologic Applications
paragraphs: The Food and Drug Administration (FDA) faced an increasing workload  related to the process for reviewing generic drug, new drug, and new  biologic applications between fiscal year 2004 and fiscal year 2008. For  example, FDA received 47 percent more applications for generic drugs in  fiscal year 2008 than in fiscal year 2004. Even though FDA funding for the  review of these applications grew 53 percent over this time period, agency  officials said that resource constraints precluded them from reviewing all  applications submitted, resulting in a growing number of applications  pending review.
subsections: section_title: Trends in Reviewing Generic Drug, New Drug, and New Biologic Applications
paragraphs: FDA reviewed an increasing number of abbreviated new drug applications  (ANDA) for generic drugs between fiscal years 2004 and 2008. However,  FDA received a greater number of applications each year than it was able  to review. The number of original ANDAs received for review increased by  47 percent—from 563 in fiscal year 2004 to 830 in fiscal year 2008. During  this time period, FDA reviewed an increasing number of ANDAs each year.  In fiscal year 2004, FDA reviewed 1,357 ANDAs and in fiscal year 2008 the  agency reviewed 1,933 ANDAs—an increase of 42 percent. While the  number of ANDAs the agency reviewed each year increased, FDA was not  able to review them all. As a result, the number of applications pending  review increased 123 percent over the period. (See table 8.) FDA officials  told us that they were unable to review all ANDAs because they did not  have enough resources to conduct these reviews.
Between fiscal year 2004 and fiscal year 2008, FDA conducted an  increased amount of work related to the review of new drug and new  biologic applications. In particular, FDA was increasingly involved in the  process of new drug and new biologic development, which typically  occurs years before sponsors submit a new drug application (NDA) or  biologics license application (BLA) to FDA for approval. FDA reported  that sponsors’ early consultation with the agency generally results in  improvements in the safety and effectiveness of the clinical trials. In  addition, FDA indicated that the agency’s increased involvement generally  improves the quality of information submitted in an application for  marketing approval and increases the likelihood that the resulting  application will gain faster approval.
The number of active investigational new drugs (IND)—representing new  drugs and new biologics in development—grew from 12,523 in fiscal year  2004 to 15,020 in fiscal year 2008. To guide the development of these new  products, FDA issued an increasing number of written guidance  documents to sponsors between fiscal year 2004 and fiscal year 2008. For  example, FDA issued 135 responses to clinical holds in fiscal year 2004  and 213 such responses in fiscal year 2008. In addition, while the number  of meetings FDA conducted with sponsors regarding new drug  development varied from year to year, between fiscal year 2004 and fiscal  year 2008 FDA scheduled over 10,000 meetings with sponsors, with  between 1,900 and 2,300 such meetings each year. (See table 9.) FDA  officials stated that drafting written responses and preparing for and  documenting the results of meetings with sponsors requires a substantial  amount of staff time. In particular, FDA noted that each meeting typically  requires the involvement of at least 15 FDA staff and can require between  120 to 540 hours of staff time.
Although FDA was increasingly involved in the process of new drug and  new biologic development between fiscal year 2004 and fiscal year 2008,  the agency’s review of NDAs and BLAs decreased slightly over the time  period, following trends in the number of applications the agency  received. As shown in table 9, the total number of original and resubmitted  NDAs and BLAs FDA received decreased from 214 applications in fiscal  year 2004 to 197 applications in fiscal year 2008. FDA also reviewed a  decreasing number of NDAs and BLAs—in fiscal year 2004 FDA reviewed  206 original and resubmitted NDAs and BLAs and in fiscal year 2008 FDA  reviewed 161 such applications. FDA also reviewed between about 3,700  and 4,000 efficacy, labeling, and manufacturing NDA and BLA supplements  each year during this period.
FDA has many performance goals related to its process for reviewing new  drug applications. According to FDA officials, the agency places a higher  priority on the speed with which it reviews applications for new drugs and  biologics, compared to the speed with which the agency responds to  sponsor requests for information and scheduling and holding meetings  with sponsors. As a result of this prioritization, FDA focused its resources  on its review of applications—and we found FDA generally met its  performance goals in this area. However, agency officials noted that the  agency did not have sufficient resources to meet performance goals  related to responding to sponsor requests for information and scheduling  and holding meetings.
section_title: Trends in Resources for Reviewing Generic Drug, New Drug, and New Biologic Applications
paragraphs: Between fiscal year 2004 and fiscal year 2008, funding for FDA’s review of  ANDAs—which is provided solely through FDA’s fiscal year  appropriations—increased 53 percent from about $53 million in fiscal year  2004 to about $82 million in fiscal year 2008. Over the same period, funding  resources for FDA’s process for reviewing NDAs and BLAs, an activity that  receives both user fee funding and fiscal year appropriations, increased   58 percent. Specifically, funding increased from $437 million in fiscal year  2004 to $691 million in fiscal year 2008.
During the same period, the number of full-time equivalent (FTE) staff  supporting the agency’s review of ANDAs decreased 12 percent from 427  FTEs in fiscal year 2004 to 376 FTEs in fiscal year 2008. In contrast, the  number of FTEs supporting the agency’s review of new drug and new  biologic applications increased from 2,561 FTEs in fiscal year 2004 to 2,780  FTEs in fiscal year 2008. This increase in FTEs was solely due to an  increase in the number of FTEs funded by user fees. Because counts of  FTEs do not include contractors, these data do not fully represent FDA’s  staffing resources for these activities.
section_title: Appendix IV: Trends in FDA Inspections Conducted to Oversee Medical Product Research and Manufacturing
paragraphs: Between fiscal years 2004 and 2008, the number of medical product  inspections the Food and Drug Administration (FDA) conducted  decreased 17 percent—primarily due to a 19 percent decrease in the  number of domestic inspections. Although the total number of inspections  decreased, funding for inspections grew 16 percent overall, and the rate of  funding increases for drugs and biologics inspections did not keep pace  with inflation, as measured by the gross domestic product (GDP) price  index. The agency conducted an increasing number of foreign inspections,  which on average cost more than twice as much as each domestic  inspection, and may explain why increased inspection funding supported a  fewer number of total inspections.
subsections: section_title: Trends in Conducting Inspections
paragraphs: The total number of inspections FDA conducted for its medical product  programs decreased from 7,589 inspections in fiscal year 2004 to 6,306  inspections in fiscal year 2008, a decline of 1,283 inspections or 17 percent.  The total number of inspections conducted for each program decreased  over the time period. (See fig. 9.)
Between fiscal years 2004 and 2008, FDA decreased the number of  domestic medical product program inspections conducted each year. FDA  conducted 6,849 domestic inspections in fiscal year 2004 and 5,543  domestic inspections in fiscal year 2008—a decline of 19 percent or 1,306  inspections over the 5-year time period. FDA reduced the number of  domestic inspections it conducted for each of the medical product  programs between fiscal years 2004 and 2008.
For the drugs program, FDA conducted 2,241 domestic inspections in  fiscal year 2004 and 1,772 such inspections in fiscal year 2008—a decrease  of 469 inspections or 21 percent.
For the biologics program, FDA conducted 2,009 domestic inspections in  fiscal year 2004 and 1,678 domestic inspections in fiscal year 2008, a  decrease of 331 inspections or 16 percent.
For the devices program, FDA conducted 2,599 domestic inspections in  fiscal year 2004 and 2,093 domestic inspections in fiscal year 2008, a  decline of 506 inspections or 19 percent.
FDA conducted fewer domestic medical product inspections overall,  although the agency increased the number of certain types of domestic  inspections. For example, within the biologics program, FDA increased  the number of domestic inspections of human cellular, tissue, and gene  therapy products, and vaccines and allergenic products between fiscal  years 2004 and 2008. In addition, FDA increased the number of domestic  postmarket assurance device inspections it conducted over the 5 year  period. (See table 10.)
While the number of domestic inspections declined for medical product  programs overall between fiscal year 2004 and fiscal year 2008, FDA  increased the number of foreign inspections it conducted for the drugs and  biologics programs. The total number of foreign inspections fluctuated  from year to year, and in fiscal year 2008, FDA conducted a total of 763  foreign inspections—23 more than it did in 2004.
For the drugs program, FDA conducted 374 foreign inspections in fiscal  year 2004 and 452 such inspections in fiscal year 2008—an increase of 78  inspections.
For the biologics program, FDA conducted 17 foreign inspections in fiscal  year 2004 and 50 such inspections in fiscal year 2008—an increase of 33  inspections.
For the devices program, FDA conducted 349 foreign inspections in fiscal  year 2004 and 261 such inspections in fiscal year 2008—a decrease of 88  inspections.
Despite increases in the total number of foreign inspections conducted  over this time period, they constituted a small share—12 percent—of the  total number of medical product program inspections in fiscal year 2008.  In addition, FDA is only able to reach a small share of the total number of  foreign establishments producing medical products for the U.S. market. In  fiscal year 2008, FDA conducted inspections at 749 foreign establishments,  which represented about 7 percent of the 10,158 total foreign medical  product establishments registered with the agency that year.
section_title: Trends in Inspection Resources
paragraphs: FDA conducted 17 percent fewer medical product inspections in fiscal  year 2008 than it did in fiscal year 2004, although Office of Regulatory  Affairs (ORA) funding for these inspections increased 16 percent during  this period—from about $101 million to about $117 million. While the total  number of medical product inspections FDA conducted decreased, the  agency conducted more foreign inspections over this time period. FDA  estimates that, on average, the cost of a foreign inspection is more than  twice the cost of a domestic inspection. The agency’s increase in foreign  inspections may explain why increased inspection funding supported  fewer total inspections.
Although funding for inspections was greater in fiscal year 2008 than in  fiscal year 2004, it did not increase in each of these 5 years for each  medical product program. Funding for the drugs and biologics program  inspections remained relatively constant between fiscal years 2004 and  2005, decreased in fiscal year 2006, and increased in fiscal years 2007 and  2008. In fiscal year 2008, funding for drugs program inspections was   1 percent greater than it was in fiscal year 2004, and funding for biologics  program inspections was 8 percent greater than it was in fiscal year 2004.  These rates of increase in funding were substantially lower than the GDP  rate of inflation between fiscal years 2004 and 2008 of 12 percent. For the  devices program, funding remained relatively constant between fiscal  years 2004 and 2005, increased in fiscal years 2006 and 2007, and remained  relatively constant between fiscal years 2007 and 2008. Over this period,  funding for devices program inspections increased 46 percent. (See   fig. 10.)
Although ORA funding for inspection activities increased between fiscal  year 2004 and fiscal year 2008, the number of ORA full-time equivalent  (FTE) staff devoted to medical product inspections declined 19 percent  during this time period, from 844 FTEs in fiscal year 2004 to 684 FTEs in  fiscal year 2008. Each of the medical product programs experienced a  decline in FTEs conducting inspections during this time period. Compared  to fiscal year 2004 FTE levels, in fiscal year 2008 there were 114 fewer  FTEs devoted to drug inspections (a decline of 27 percent), 38 fewer FTEs  devoted to biologics inspections (a decline of 19 percent), and 8 fewer  FTEs devoted to device inspections (a decline of 4 percent). Most of the  decreases in FTEs occurred between fiscal year 2004 and fiscal year 2006.  (See fig. 11.) Although contractors do not perform establishment  inspections, they may conduct activities that facilitate these inspections.  Because counts of FTEs do not include contractors, these data do not fully  represent FDA’s staffing resources for these activities.
section_title: Appendix V: Trends in FDA’s Review of Adverse Event Reports
paragraphs: From fiscal years 2004 to 2008, the Food and Drug Administration (FDA)  received an increasing number of adverse event reports for marketed  medical products—substantially more reports than staff could review,  according to FDA officials. While the total number of adverse event  reports FDA received increased 81 percent over this time period, funding  increased 154 percent and staffing resources increased 100 percent.  Although FDA officials told us they received more adverse event reports  than staff could review, the agency could not provide data showing the  number of adverse event reports staff reviewed during this time period.
subsections: section_title: Trends in Reviewing Adverse Event Reports
paragraphs: From fiscal years 2004 to 2008, FDA received an increasing number of  adverse event reports for marketed medical products. During this time  period the number of drug-related adverse event reports FDA received  increased 23 percent, from 426,016 reports in fiscal year 2004 to 522,871  reports in fiscal year 2008. An even bigger increase occurred in the receipt  of biologic adverse event reports, which increased 86 percent, from 19,569  reports in fiscal year 2004 to 36,410 reports in fiscal year 2008. FDA saw  the highest growth—210 percent—in device-related adverse event reports,  with 189,450 reports received in fiscal year 2004 and 588,161 reports  received in fiscal year 2008. As the number of adverse event reports for  drugs, biologics, and devices grew between fiscal years 2004 and 2008, the  number of reports that FDA considers to be serious increased 72 percent.
Although FDA officials told us that they place the highest priority in  reviewing serious adverse event reports, agency officials reported that  they receive substantially more adverse event reports than staff can  review. However, FDA could not provide data showing how many adverse  event reports staff have reviewed. According to agency officials, the drug,  biologic, and device adverse event reporting systems used by FDA do not  allow the agency to accurately determine if an individual adverse event  report has been reviewed by staff.
section_title: Trends in Resources for Reviewing Adverse Event Reports
paragraphs: FDA’s financial and staffing resources for the review of adverse event  reports associated with the use of marketed medical products have grown  from fiscal years 2004 to 2008. Overall, funding for adverse event reviews  has increased 154 percent during this time period from about $31 million  in fiscal year 2004 to about $78 million in fiscal year 2008. FDA  experienced the greatest growth in financial resources for the review of  drug-related adverse event reports with a 215 percent increase or from  about $19 million in fiscal year 2004 to about $60 million in fiscal year  2008. Meanwhile, FDA saw the lowest increase in funding—53 percent— for the review of device-related adverse event reports, or from about $10  million in fiscal year 2004 to about $15 million in fiscal year 2008. Funding  for adverse event reviews—in total, and for each program—grew at a rate  faster than inflation over this time period as measured by the gross  domestic product (GDP) price index. See figure 12 for trends in FDA  funding for the review of adverse events related to drugs, biologics, and  devices.
Similar to the increase in funding for reviews related to drugs, biologics,  and devices, the number of full-time equivalent (FTE) staff supporting the  review of adverse event reports also increased from fiscal years 2004  through 2008. The largest growth in FTEs—248 percent or from 31 FTEs in  fiscal year 2004 to 108 FTEs in fiscal year 2008—was for the review of  drug-related adverse event reports. Over the same period, the number of  FTEs for the review of adverse event reports related to biologics grew   17 percent, from 12 FTEs to 14 FTEs, while the number of FTEs for the  review of device-related adverse event reports grew 9 percent, from about  40 FTEs to about 43 FTEs. Because counts of FTEs do not include  contractors, these data do not fully represent FDA’s staffing resources for  these activities.
With the enactment of the Food and Drug Administration Amendments Act  of 2007 (FDAAA), FDA was able to apply user fees collected through the  Prescription Drug User Fee Act of 1992 (PDUFA), as amended, to support  more postmarket safety activities for drugs, such as the review of adverse  event reports. FDA attributes about two-thirds of the increase in funding  and FTEs between fiscal years 2007 and 2008—142 percent and 40 percent  respectively—for the review of drug-related adverse events to user fee  funds.
section_title: Appendix VI: Trends in FDA’s Examination of Advertising and Promotional Materials
paragraphs: The Food and Drug Administration (FDA) faced an increasing workload  related to its examination of advertising and promotional materials  between fiscal years 2004 and 2008, particularly for drug-related  promotions. Such promotions constitute the majority of advertising and  promotional materials submitted. While the total number of final drug- related promotional materials FDA received increased 55 percent over the  period, agency funding for the examination of these materials increased  167 percent and staff resources increased 26 percent. Although FDA  officials noted that the agency did not have sufficient resources to  examine all drug-related promotional materials submitted for review, FDA  also could not provide information on the number of such materials staff  reviewed.
subsections: section_title: Trends in Examining Advertising and Promotional Materials
paragraphs: During fiscal years 2004 through 2008, FDA received an increasing number  of advertising and promotional materials for examination from  manufacturers; however, the agency did not track all of the drug- and  device-related materials that it received or reviewed during this period.  According to FDA officials, the agency was unable to examine all materials  promoting drugs, although we found it did examine nearly all such  materials for biologics. FDA officials also told us that they review all  device-related promotional materials that are submitted.
Drugs. FDA received an increasing number of advertising and promotional  materials for examination between fiscal year 2004 and fiscal year 2008,  but agency officials told us that staff were unable to review all materials  submitted. FDA received an increasing number of voluntary draft  submissions each year, with 429 submissions in fiscal year 2004 and 634  submissions in fiscal year 2008. In addition to receiving these voluntary  draft submissions, FDA received a substantially greater and increasing  number of final materials that manufacturers were required to submit.  FDA received 45,394 final materials in fiscal year 2004 and 70,509 final  materials in fiscal year 2008—an increase of 55 percent over the time  period. FDA officials told us that the agency was unable to examine all of  the promotional materials for drugs it received between fiscal year 2004  and fiscal year 2008 because it lacked the resources to do so. However,  FDA could not provide data on the number of draft or final materials staff  examined during this time.
Biologics. We found that FDA received and examined an increasing  number of draft and final advertising and promotional materials for  biologics products between fiscal year 2006—the first year of available  data—and fiscal year 2008. Specifically, our review of FDA data showed  that the agency examined all 2,929 draft and final promotional materials  submitted in fiscal year 2006, all 3,256 materials submitted in fiscal year  2007, and all but 17 of 4,480 materials submitted in fiscal year 2008. Most— over 90 percent—of the total number of materials submitted in each of  these years were final promotional materials.
Devices. An FDA official told us that the agency received very few  promotional materials for devices between fiscal year 2004 and fiscal year  2008—device manufacturers are not required to submit these materials.  The official also explained that although all materials received are  examined, FDA could not provide data on the number of advertising and  promotional materials submitted or examined during this period.
section_title: Trends in Resources for Examining Advertising and Promotional Materials
paragraphs: Funding for FDA’s oversight of drug advertising and promotion increased  167 percent from about $4 million in fiscal year 2004 to about $10 million  in fiscal year 2008. Funding for FDA’s oversight of biologics advertising  and promotion also increased from $546,000 in fiscal year 2004 to $925,000  in fiscal year 2008. In contrast, funding for the agency’s oversight of  devices advertising and promotion decreased from $590,000 in fiscal year  2004 to $452,000 in fiscal year 2008.
The number of full-time equivalent (FTE) staff supporting FDA’s oversight  of drug promotions grew 26 percent from 35 FTEs in fiscal year 2004 to 44  FTEs in fiscal year 2008. Over this period, the number of FTEs supporting  the agency’s oversight of biologics promotions increased from 4 FTEs to 6  FTEs, while the number of FTEs supporting the agency’s review of devices  promotions decreased from 5 FTEs to 4 FTEs. Because counts of FTEs do  not include contractors, these data do not fully represent FDA’s staffing  resources for these activities.
section_title: Appendix VII: Comments from the Department of Health and Human Services
section_title: Appendix VIII: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Geri Redican-Bigott, Assistant  Director; Kye Briesath; Cathy Hamann; Rebecca Hendrickson; Richard  Lipinski; Emily Loriso; Kevin Milne; Lisa Motley; and Patricia Roy made  key contributions to this report.
section_title: Related GAO Products
paragraphs: Information Technology: FDA Needs to Establish Key Plans and  Processes for Guiding Systems Modernization Efforts. GAO-09-523.   June 2, 2009.
High-Risk Series: An Update. GAO-09-271. Washington, D.C.: January  2009.
Food Safety: Improvements Needed in FDA Oversight of Fresh Produce.  GAO-08-1047. Washington, D.C.: September 26, 2008.
Drug Safety: Better Data Management and More Inspections Are Needed  to Strengthen FDA’s Foreign Drug Inspection Program. GAO-08-970.  Washington, D.C.: September 22, 2008.
Food Labeling: FDA Needs to Better Leverage Resources, Improve  Oversight, and Effectively Use Available Data to Help Consumers Select  Healthy Foods. GAO-08-597. Washington, D.C.: September 9, 2008.
Prescription Drugs: FDA’s Oversight of the Promotion of Drugs for Off- Label Uses. GAO-08-835. Washington, D.C.: July 28, 2008.
Medical Devices: FDA Faces Challenges in Conducting Inspections of  Foreign Manufacturing Establishments. GAO-08-780T. Washington, D.C.:  May 14, 2008.
New Drug Development: Science, Business, Regulatory, and Intellectual  Property Issues Cited as Hampering Drug Development Efforts.   GAO-07-49. Washington, D.C.: November 17, 2006.
Food and Drug Administration: Effect of User Fees on Drug Approval  Times, Withdrawals, and Other Agency Activities. GAO-02-958.  Washington, D.C.: September 17, 2002.
FDA Resources: Comprehensive Assessment of Staffing, Facilities, and  Equipment Needed. GAO/HRD-89-142. Washington, D.C.: September 15,  1989.