Food and Drug Administration: Effect of User Fees on Drug Approval Times, Withdrawals, and Other Agency Activities
Published: 2002-09-17T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Ten years ago, Congress passed the Prescription Drug User Fee Act to speed up the review process used to ensure that new drugs and biological products are safe and effective.
section_title: What GAO Found
paragraphs: GAO found that the act has provided the Food and Drug Administration (FDA) with the funding needed to hire more drug reviewers, which has led to faster availability of new drugs to the United States. Approval times have shortened both for priority drugs--those that FDA expects to offer significant therapeutic benefits beyond drugs already on the market--and standard drugs, which are not thought to have significant therapeutic benefits beyond available drugs. Although the act has increased the funds available for FDA's drug and biological reviews, funds for other activities, such as the regulation of foods and medical devices, have shrunk as a share of FDA's overall budget. The 1997 amendments to the act, which shortened review schedules and set new performance goals to reduce overall drug development time, have increased reviewer workload at FDA. GAO found that some drug reviewers may have forgone training and professional development opportunities to ensure that the new goals were met. FDA officials said that the agency continues to experience high turnover rates among these employees. GAO found that a higher percentage of drugs has been withdrawn from the market for safety reasons since the act was enacted but the that the size of the increase in withdrawal rates differs depending on the period examined. The higher rate of drug withdrawals suggests that FDA needs to strengthen its postmarket surveillance efforts. FDA plans to spend $71 million in user fees during the next 5 years to improve the monitoring of new drugs on the market and to track any harmful effects of these products.

section_title: Letter
paragraphs: Ten years ago, the Congress passed the Prescription Drug User Fee Act  (PDUFA) to provide additional resources for the Food and Drug  Administration (FDA) to speed up the process of reviewing applications  for new drugs and biological products. FDA is responsible for ensuring  that all such products are safe and effective. Under PDUFA, FDA collects  user fees from the pharmaceutical and biotechnology industries to  supplement its annual appropriation for salaries and expenses. PDUFA  requires FDA to use the additional funds for the review of applications.  The original act was set to expire in 1997, but the FDA Modernization Act  of 1997 (FDAMA) extended the PDUFA user fee program for an additional  5 years. The Prescription Drug User Fee Amendments of 2002 extended  PDUFA for 5 more years, effective October 1, 2002.
As FDA endeavors to reduce its review time under the user fee program,  concerns have been raised about the effects the program may be having on  the resources available to other FDA programs, which set and enforce  safety standards for such products as medical devices, blood products,  cosmetics, and all foods except for meat and poultry. Concerns have also  been raised about the effects of the expedited process on FDA staff  involved in the review process. In addition, some consumer and patient  groups have noted the removal of several drugs from the market in recent  years and expressed concern that PDUFA’s emphasis on faster review  times may have compromised drug safety.
To assist the committee in its consideration of PDUFA’s reauthorization,  you asked us to evaluate the prescription drug user fee program. On May  15, 2002, we briefed your staff on the results of our work. This report  provides a more detailed discussion of those results. Specifically, you  asked us to examine (1) how PDUFA has affected the funding and  approval times for FDA’s review of new drug and biologic applications, (2)  whether PDUFA has had an effect on the funding and operation of FDA’s  non-PDUFA activities, (3) whether the workload, attrition, and  professional development of FDA reviewers have changed since the user  fee program was reauthorized in 1997, and (4) how the rate of drug  withdrawals from the market has changed since PDUFA was enacted in  1992 and what actions are being taken by FDA to monitor adverse drug  effects.
To examine these issues, we reviewed and analyzed FDA reports, data,  and other agency documents and interviewed FDA officials from the  Office of the Associate Commissioner for Planning, the Centers for Drug  Evaluation and Research (CDER), and the Center for Biologics Evaluation  and Research (CBER). In this report, we will refer to the original act  passed in 1992 as PDUFA I, the amendments of 1997 as PDUFA II, and the  Prescription Drug User Fee Amendments of 2002 as PDUFA III. Unless  specified, where we discuss PDUFA, we are referring to the period from  1992 through September 2002. We also reviewed and analyzed federal  employment data from the Office of Personnel Management (OPM). We  interviewed representatives from the trade associations that represent  companies that pay user fees, the Pharmaceutical Research and  Manufacturers of America (PhRMA), and the Biotechnology Industry  Organization (BIO), and reviewed and analyzed information that they  provided. In addition, we attended an FDA stakeholders’ meeting that  included industry and consumer groups and reviewed documents  prepared by the Consumer Federation of America, Public Citizen, and  others. Due to time constraints, we were unable to independently verify  the accuracy of all data provided. Apart from this exception, our work was  conducted from August 2001 through July 2002 in accordance with  generally accepted government auditing standards.
subsections: section_title: Background
paragraphs: Over the past two decades, extensive research and development have led  to new prescription drug therapies and improvements over existing  therapies, and the number of prescription drugs on the market has  increased dramatically. Some of these therapies can at times replace other  health care interventions, and as a result, the importance of prescription  drugs as part of health care has grown. Consequently, Americans are using  a greater number of pharmaceuticals than ever before. According to the  National Institute for Health Care Management, pharmacists dispensed 3.1  billion prescriptions in the United States in 2001, up from 1.9 billion in  1992 and 2.4 billion in 1997.
subsections: section_title: FDA’s Drug and Biologic Review Process
paragraphs: In addition to ensuring that new drugs and biologics are safe and effective  and that applications for their approval are reviewed timely, FDA is also  responsible for monitoring drugs and biologics for continued safety after  they are in use. Within FDA, CDER and CBER are responsible for  reviewing applications for new drugs and biologics, respectively. The  centers also are responsible for reviewing efficacy supplements,  manufacturing supplements, labeling supplements, and investigational  new drugs. Efficacy supplements are applications for new or expanded  uses of already approved products, including addition of a new indication,  a change in the dosing regimen such as increase or decrease in daily  dosage, or a change in the patient population. Manufacturing supplements  to new drug applications are used to notify the centers in advance of  certain drug manufacturing changes. Investigational new drug applications  are submitted for new drugs or new indications for already approved  drugs that are to be used in clinical investigations.
The review process for both centers requires evaluating scientific and  clinical data submitted by manufacturers to determine whether the  products meet the agency’s standards for approval. The first decision a  center must make in its review process is whether to accept a new drug  application (NDA) or biologics license application (BLA). FDA can issue  one of several action letters. If the application is not sufficiently complete  to allow a substantive review, the center issues a “refuse-to-file” letter.  Once the center has accepted the application, it designates the product as  either “priority,” for products that would provide significant therapeutic  gains compared to any existing products on the market, or “standard,” for  products that would provide no significant therapeutic advantage over  other drugs already on the market. After a thorough assessment of the  information in the application and any supplemental information  requested, the center decides whether to approve the drug based on the  product’s intended use, effectiveness, and the risks and benefits for the  intended population. All medical products are associated with some level  of risk, and a product is considered safe if its risks are determined to be  reasonable given the magnitude of the benefit expected. For decisions on  drugs, CDER may approve the product for marketing (in an “approval  letter”) or it may indicate (in an “approvable letter”) that it can approve  the drug if the sponsor resolves certain issues. Alternatively, it may issue a  “nonapprovable letter” that specifies the issues that make the application  ineligible for FDA approval. The review process is similar for biologics;  however, CBER issues a “complete response letter” that specifies all  outstanding issues that would need to be addressed by the sponsor to be  considered for FDA approval.
The review process may consist of more than one review cycle. The first  review cycle begins when an NDA or a BLA is initially submitted to FDA,  and it ends when FDA has completely reviewed the application and issued  some form of an action letter. If the application is approved in the first  cycle, the “approval time” is recorded as the length of that cycle. The next  cycle of review, if necessary, begins when the application is resubmitted to  FDA. If the review process takes two or more cycles to reach approval, the  length of the approval time is recorded as the total of the length of the  review cycles plus any subsequent time during which a sponsor is  addressing the issues raised by FDA.
section_title: PDUFA User Fees and Performance Goals
paragraphs: Under PDUFA, companies pay three types of user fees to FDA— application fees, establishment fees, and product fees. In most cases, a  company seeking to market a new drug or biologic in the United States  must pay an application fee to support the agency’s review process.  Generally, companies also pay an annual establishment fee for each  facility in which their products subject to PDUFA are manufactured and  an annual product fee for marketed drugs for which no generic versions  are available.
FDA is expected to use funds received under PDUFA to meet certain  performance goals. Under the framework established by PDUFA, FDA  works with various stakeholders, including representatives from  consumer, patient, and health provider groups and the pharmaceutical and  biotechnology industries, to develop performance goals. The Secretary of  Health and Human Services (HHS) then transmits these goals in a letter to  the Congress. Under PDUFA I, the performance goals applied to length of  review time; the performance goals in PDUFA II further shortened the  review time and added new performance goals associated with reviewer  responsibilities for interacting with the manufacturer, or sponsor, during  drug development. For example, PDUFA II required FDA to schedule  meetings and respond to various manufacturer requests within specified  time frames.
To collect and spend user fees under PDUFA I, each year FDA had to  spend from its annual appropriation for salaries and expenses at least as  much, adjusted for inflation, on the human drug and biologic review  process as it had spent on for this process in fiscal year 1992. Under  PDUFA II, each year FDA has to spend at least as much, adjusted for  inflation, as it did in fiscal year 1997.
The user fees collected under PDUFA cover only those CDER or CBER  activities that are included in the human drug review process. The fees do  not fund other CDER or CBER activities and do not fund the programs of  the other FDA centers, that is, the Center for Food Safety and Applied  Nutrition, Center for Veterinary Medicine, Center for Devices and  Radiological Health, and National Center for Toxicological Research. FDA  designates the programs of these centers as non-PDUFA programs or  other activities.
section_title: PDUFA Has Increased Funding and Reduced Drug Approval Time, but Biologic Approval Time Has Fluctuated
paragraphs: PDUFA has provided FDA with additional resources that have helped the  agency make new drugs available to the U.S. health system more quickly,  but biologic approval times have varied. FDA has used PDUFA funds to  increase the number of medical and scientific reviewers to assess the  applications for new products by about 77 percent. Since 1993, FDA  median approval times for standard drugs decreased from about 27  months in 1993 to about 14 months in 2001. However, in recent years,  median approval times for standard NMEs have increased. In contrast,  median approval times for biologic applications have fluctuated since  1993, ranging from a low of 12 months to a high of about 32 months. In all  but 2 years since 1993, approval times for biologics have been longer than  for drugs. For example, in 2001, the median approval time for biologics  was about 22 months, while median approval times for priority and  standard drugs were about 6 months and 14 months, respectively. The  fluctuation in BLA approval time is due, in part, to the small number of  submissions each year.
subsections: section_title: User Fees Have Provided Increased Funding for the Review of Drug and Biologic Applications, but Recent Revenues Fell Short of Estimates
paragraphs: Since the implementation of the PDUFA program, user fees have grown  steadily and represent an increasing share of FDA’s funds for the review of  new drug and biologic applications. From fiscal year 1993 through fiscal  year 2001, FDA obligated $825 million from user fees for the drug and  biologic review processes, in addition to $1.3 billion from its annual  appropriation for salaries and expenses (see fig. 1). While user fees funded  7 percent of drug and biologic review obligations in fiscal year 1993, user  fees accounted for nearly 50 percent of the total funds obligated for the  drug and biologic review processes in fiscal year 2001. In fiscal year 2002,  FDA expects to obligate about $170 million in user fees, or 51 percent of  the $332 million that FDA expects to spend on its drug and biologic review  processes. From fiscal year 1993 to fiscal year 2001, user fees allowed FDA  to increase the personnel assigned to review new drug and biologic  applications from about 1,300 to about 2,300 full-time equivalents (FTE),  an increase of about 77 percent.
Despite the growth of user fees, user fee revenues under PDUFA II fell  short of FDA’s estimates, while reviewer workload increased. FDA’s  estimate of how much the agency would receive from user fees fell short  because FDA received fewer submissions than expected.  From fiscal year  1998 through fiscal year 2002, FDA collected about $57 million less in user  fees that it initially estimated. At the same time, the workload of FDA  reviewers increased under PDUFA II.  As a result, during the last 2 years of  PDUFA II, FDA had to spend unobligated user fees that had been carried  over from previous years to maintain its reviewer workforce. Under  PDUFA III, FDA will be better able to ensure the stability of user fee  revenues.
section_title: Median Approval Time for Drugs Has Dropped
paragraphs: Overall, the median approval time for new drugs has dropped since the  implementation of PDUFA. From 1993 to 2001, the median approval time  for standard new drug applications dropped from about 27 months to  about 14 months (see fig. 2). During the same period, the median approval  time for priority new drugs also dropped, from about 21 months to about 6  months. Since 1995, approval times for priority new drugs have been  relatively constant.
While, in general, approval times for new drugs have dropped significantly,  the median approval time for standard NMEs, a subset of standard drugs,  has increased in recent years. The approval time for standard NMEs  reached a low of about 13 months in 1998 before rising to about 20 months  in 2000 and 2001. The median approval time for priority NMEs has  remained stable at about 6 months since 1997.
section_title: Median Approval Time for Biologics Has Fluctuated
paragraphs: The median approval time for a biologic application has varied  considerably post-PDUFA, although the small number of biologic  applications approved in any given year may affect the variation in  approval time. The median approval time increased from about 15 months  in 1993 to a high of about 32 months in 1995. After dropping to a low of 12  months in 1997, it rose again and was about 22 months in 2001 (see fig. 3).  In all but 2 years since 1993, approval times for biologics have been longer  than for drugs.
section_title: Several Factors Contributed to Recent Increases in FDA Approval Times for NMEs and Biologics
paragraphs: Although there has been an overall decrease in the approval times for  standard drug applications since the implementation of PDUFA, FDA  approval times for standard NME applications (a subset of standard drugs)  and biologic applications have increased recently. According to FDA,  approval times for these two types of applications went up in 2000 because  many of them had to go through several review cycles before they were  approved. Multiple review cycles have occurred for several reasons. For  example, after its initial review of an application, FDA may ask the  sponsor to provide new information, such as new clinical trials or data  analyses, to address deficiencies in the initial application. Once the  sponsor provides the requested information, FDA undertakes another  review cycle to examine the information. Also, if FDA completes its  assessment late in the review cycle, it can be difficult to resolve issues  with the sponsor before the review decision deadline. In these cases, FDA  may issue an approvable letter that advises the sponsor that the  application will be approved if certain issues are resolved. Issuing an  approvable letter enables FDA to meet its performance goals without  making a final decision on the application. It also results in the application  going through another review cycle.
Both FDA and the pharmaceutical/biotechnology industry have  acknowledged that to allow FDA to meet PDUFA review goals, drug and  biologic applications are going through more review cycles. While the  industry’s goal is to obtain approval of an application, FDA can meet the  PDUFA goal by completing its review and issuing an action letter. Our  analysis of approvals confirms that an increased proportion of  applications are going through several review cycles. A smaller percentage  of drugs was approved in the first review cycle in 2001 than in previous  years (see fig. 4). For example, in 1998, 54 percent of standard new drugs  and biologic applications were approved in the first review cycle. In 2001,  37 percent of standard new drugs and biologic applications were approved  in the first review cycle. In response to industry’s concerns, FDA and the  pharmaceutical/biotechnology industry have agreed that the agency will  notify an applicant of deficiencies identified within a specified time frame  after an application is filed with FDA. While an application may be  sufficiently complete for FDA to do a substantive review, the purpose of  FDA’s communication is to alert a company early to deficiencies in its  application that will prevent FDA approval so that it can start addressing  them.
Additional factors may affect approval times for biologic products. A  CBER official stated that the complexity of cutting-edge technology  involved in developing and manufacturing biologics, such as gene therapy  and bioengineering, may increase approval time. In addition, an FDA  official told us that some biotechnology companies have had difficulties  demonstrating their ability to consistently manufacture products  comparable to those used in their human studies, while others have filed  applications with significant clinical and safety issues that had to be  resolved. According to a CBER official, the center plans to issue more  refuse-to-file letters in such situations at the start of the review cycle to  obtain better-quality applications. CBER officials believe that initiating a  review of an application that is substantially incomplete, for example,  because it omits critical data, or one that raises significant issues is  inherently inefficient and extends review time. A refuse-to-file letter alerts  a company to corrective actions that need to be taken so that the FDA  review of an application proceeds more promptly and efficiently.
As part of its performance goals established for PDUFA III, FDA agreed to  select and hire an outside consultant in fiscal year 2003 to conduct a  comprehensive review and analysis of the drug and biologic review  process and make recommendations for improvements. User fees will pay  for this review and analysis. FDA anticipates delivery of a report of the  consultant’s findings and recommendations in fiscal year 2005. The agency  would then consider these recommendations in planning any changes to  enhance its performance.
section_title: Reduced Share of Funds Available for Other FDA Activities
paragraphs: While PDUFA has increased the funds available for FDA’s drug and  biologic review activities, funds for FDA’s other activities have constituted  a smaller portion of FDA’s total budget since implementation of PDUFA.  According to FDA officials, two factors may have contributed to the  reduced share of FDA funds allocated to other activities. First, PDUFA  requires that each year FDA spend increasing amounts from its annual  appropriation on the drug and biologic review process in order to collect  and spend user fee revenues. According to agency officials, FDA had  difficulty determining the amount spent until the end of the year. As a  result, FDA spent more than was required. Second, FDA officials said that  during fiscal years 1994 through 2001, the agency did not receive sufficient  increases in its annual appropriation for salaries and expenses to cover  annual pay increases for all employees. To ensure that the agency could  meet the spending baseline for the drug review program and fund the pay  raises, FDA officials reduced available resources for other activities, such  as reviewing over-the-counter and generic products and inspecting  medical product manufacturing facilities.
subsections: section_title: Share of Funding and Resources for Other Activities Have Decreased
paragraphs: Since the enactment of PDUFA, the share of FDA funding and the  resources available for other activities have decreased. While spending on  FDA’s other activities rose from about $606 million in fiscal year 1992 to  about $782 million in fiscal year 2000, the percentage of FDA funds spent  on other activities declined from about 83 percent of FDA’s budget in  fiscal year 1992 to about 71 percent in fiscal year 2000 (see fig. 5).
During the same period, FDA resources allocated to other activities  declined from 7,736 FTEs in fiscal year 1992 to 6,571 FTEs in fiscal year  2000, or a decline from about 86 percent of FDA’s FTE resources in fiscal  year 1992 to about 74 percent in fiscal year 2000 (see fig. 6). During the  same period, the number of FTEs allocated to drug and biologic review  activities rose from 1,277 FTEs in fiscal year 1992 to 2,346 FTEs in fiscal  year 2000—an increase from 14 to 26 percent of FDA’s total FTEs.
section_title: Spending for Drug and Biologic Reviews for PDUFA Activities Reduced Funds for Other Activities
paragraphs: According to agency officials, the requirement that FDA must annually  increase by an inflation factor the amount it spends on the drug and  biologic review processes from its appropriation for salaries and expenses  reduces the funds available for other FDA programs. Under PDUFA, if  FDA’s spending from its appropriation on drug and biologic review  activities falls below the statutory minimum, it cannot collect and spend  user fees to review drug and biologic applications. FDA would then have  to initiate a reduction-in-force because the agency would not have  sufficient funds to pay the salaries of the reviewers. FDA officials stated  that it is difficult to determine exactly how much the agency has spent  from its appropriation until the end of the fiscal year when a final  accounting is completed. Therefore, the agency spends more on drug and  biologic review activities than the statutory minimum to ensure that it  spends enough to continue the user fee program. In 7 of the 9 years since  PDUFA was enacted, FDA has exceeded the spending baseline by from 3  to 10 percent (see table 1). In 1996 and 1997, the overspending was higher,  23 and 18 percent, respectively. According to an FDA official, the higher  overspending occurred in those years because the agency was particularly  focused on meeting the goals established by PDUFA I and spent additional  funds to ensure that it met PDUFA’s performance goals.
To the extent that FDA spends more than the minimum amount of its  appropriation on drug and biologic review activities under PDUFA, it has  less to spend on other activities. As part of PDUFA III, the Congress  revised the minimum spending requirement to lessen the potential for the  agency to spend more than necessary from its appropriation each year on  drug and biologic review activities. Specifically, FDA will be allowed to  spend up to 5 percent less than the amount required by law provided that  user fee collections in a subsequent year are reduced by the amount in  excess of 3 percent that was underspent.
section_title: Unfunded Employee Costs Have Reduced FDA’s Flexibility to Fund Other Activities
paragraphs: According to FDA officials, the agency reduced staffing levels in other  centers to cover the costs of unfunded pay raises. From fiscal years 1994  through 2001, FDA paid about $250 million to cover mandatory federal pay  raises for which it did not receive increases in its appropriations. FDA  officials told us that this situation reduced the agency’s ability to support  activities not funded by PDUFA. FDA reduced the staffing levels for non- PDUFA activities each year, leaving the agency fewer resources to  perform its other responsibilities. For example, in its budget justification  for fiscal year 2002, FDA reported that inspection of medical device  manufacturers has decreased and the agency does not routinely inspect  the manufacturers of lower-risk products. Although total FDA staffing in  fiscal year 2001 was about the same as in fiscal year 1992, about 1,000  more FTEs were allotted to drug and biologic review activities in fiscal  year 2001 and about 1,000 fewer FTEs were allotted to other FDA  programs that ensure food safety, approve new medical devices such as  heart valves and pacemakers, and monitor devices once on the market.
Although FDA received a number of funding increases during this period,  FDA officials told us that in general those funds could not be used for  across-the-board pay increases because almost all funding increases  received since 1992 were earmarked for designated programs. FDA  officials said that some of the funding increases were for programs related  to tobacco, food safety, Internet drug sales, orphan product grants, and  dietary supplements. According to FDA, $45.2 million was available to  cover pay increases for the agency’s employees in its fiscal year 2002  appropriation. In addition, the President’s budget for fiscal year 2003  includes $28.6 million for pay increases.
section_title: PDUFA Has Contributed to Increased Workload and Attrition and Decreased Training for FDA Reviewers
paragraphs: FDA officials told us that the performance goals added by PDUFA II,  combined with PDUFA II’s shortened review timelines, have contributed  to a heavy workload for FDA’s reviewers, which has resulted in high  turnover and reviewers forgoing training and professional development  activities. Our review of FDA data and a recent report by KPMG  Consulting found that FDA’s workload under PDUFA has increased.  Moreover, our analysis of FDA and OPM data found that FDA’s attrition  rates for many of the occupations that are involved in its drug review  process are higher than those for other federal public health agencies and  the federal government as a whole. In addition, KPMG’s report found that  FDA reviewers were not receiving the amount of training FDA considers  necessary. According to FDA officials, the agency needs significant and  sustained increases in funding to hire, train, and retain its review staff in  order to continue meeting PDUFA performance goals, provide quality  scientific and regulatory advice to the industry, and avoid further  deterioration in retention rates.
subsections: section_title: PDUFA II Resulted in Increased Reviewer Workload
paragraphs: PDUFA II affected reviewer workload by shortening review times and  adding new performance goals to reduce overall drug development time— the time needed to take a drug from clinical testing to submission of a new  drug or biologic application. As part of the performance goals established  for PDUFA II and transmitted to the Congress, FDA agreed, for example,  to complete review of 90 percent of standard new drug applications and  efficacy supplements filed in fiscal year 2002 within 10 months—a  decrease from the 12-month goal set in PDUFA I for fiscal year 1997. In  addition, FDA agreed to complete review of 90 percent of manufacturing  supplements within 4 months—a decrease from the 6-month goal in  PDUFA I. PDUFA II also established a new set of performance goals  intended to improve FDA’s responsiveness to and communication with  drug sponsors during the early years of drug development. Specifically,  FDA agreed to  review a sponsor’s request for a formal meeting and provide written  notification to the sponsor of its decision within 14 days;    schedule major meetings at critical milestones during drug development  within 60 days of request, and all other meetings within 75 days of request;    prepare meeting minutes within 30 calendar days of a meeting;  respond to a sponsor’s request for evaluation of special protocol designs  within 45 days;  respond to a sponsor’s complete response to a clinical hold within 30 days;  and  respond to a sponsor’s appeal of a decision within 30 days.
In general, the number of FDA review activities increased in fiscal years  1999 through 2001 because of the performance goals added under PDUFA  II (see table 2). Specifically, the increases occurred in the activities related  to the requirement that FDA work with drug sponsors in the early phases  of drug development. Meeting requests, meetings, and meeting minutes  constituted a growing portion of FDA review activities.
According to FDA reviewers, the typical meeting between FDA and a  sponsor during clinical testing involves 17 reviewers from six disciplines  that are typically involved in reviews of new drug and biologic  applications—medical officer, chemist, microbiologist, clinical  pharmacologist, statistician, and pharmacologist/toxicologist. FDA  reviewers estimate that the time requirements for a comprehensive  meeting involving all FDA review disciplines assigned to an application  can range from about 125 to 545 hours per meeting. For example,  reviewers estimated that the total FDA staff time spent reviewing the  briefing document submitted by the sponsor as well as reviewing other  pertinent documents and consulting with other review team members and  consultants ranges from 50 to 290 hours. Reviewers estimated that from  about 25 to 90 FDA staff hours are spent interacting with the sponsor in  final preparation for the meeting, including requesting additional  information from the sponsor and reviewing information submitted,  developing the meeting agenda, preparing presentations, and attending the  actual meeting with the sponsor, which generally lasts 90 minutes to 2  hours.
FDA’s workload was further affected by an increase in the number of  applications that did not require payment of user fees, due to PDUFA II’s  new exemptions and waiver provisions. Under PDUFA II, FDA could  exempt or waive fees for (1) drug sponsors that were small businesses  submitting their first applications, (2) drug sponsors submitting  supplements for drugs used to treat pediatric illnesses, and (3) drug  sponsors submitting applications or supplements for drugs used to treat  rare diseases (called orphan drugs). FDA officials told us that the  percentage of applications where user fees were exempted or waived was  significant, ranging from a low of 19 percent in fiscal year 1999 to a high of  32 percent in fiscal year 2001.
The KPMG report on FDA’s drug review costs found that the new  performance goals established for PDUFA II have also had a significant  impact on reviewer workload. According to the report, the majority of  reviewers interviewed reported that the new performance goals for  meetings with drug sponsors were burdensome. They said that competing  priorities made it difficult to complete all tasks, such as accommodating  meeting requests, participating in advisory committee meetings, and  answering sponsor questions.
section_title: FDA’s Reviewer Attrition Level Is Higher than That of Comparable Occupations in Other Federal Agencies
paragraphs: Our analysis of FDA’s attrition rates for drug reviewers during the 3-year  period following the enactment of PDUFA II found that they were higher  than the rates for comparable occupations at other public health agencies  and in the federal government as a whole. FDA officials told us that the  agency continues to experience high turnover for reviewers because of the  high demand for regulatory review personnel in the pharmaceutical  industry and the higher salaries that experienced FDA reviewers can  obtain in the private sector. Attrition of FDA reviewers has been an  ongoing concern for the pharmaceutical and biotechnology industries as  well. An independent survey of pharmaceutical and biotechnology  companies found a high level of concern about FDA’s turnover in review  staff and an increase in concern over a 4-year period.
We compared FDA’s attrition rate for the six medical and scientific  disciplines that constitute the majority of the agency’s drug review staff  with the attrition rates for these disciplines at the Centers for Disease  Control and Prevention (CDC) and the National Institutes of Health (NIH)  (see table 3). Like FDA, CDC and NIH are public health agencies that  employ a highly educated, highly skilled workforce. As the table shows,  with the exception of chemists, FDA’s attrition rates for employees in its  drug review process are higher than the comparable attrition rates for  CDC, NIH, and similar disciplines governmentwide.
FDA officials reported that to retain experienced staff with certain skills,  they have increased the pay for approximately 250 CDER and CBER  reviewers. Specifically, FDA conducted studies of staff turnover and found  that toxicologists, pharmacologists, pharmacokinetists, and mathematical  statisticians were leaving FDA to work in private industry and academia  for higher salaries. Under OPM regulations, FDA is authorized to pay  retention allowance of up to 10 percent of an employee’s basic pay to a  group or category of employees in such circumstances. Employees with at  least 2 years of drug review experience in these 4 occupations were  eligible for retention allowances. In addition, 5 medical officers and 1  microbiologist were among review staff that received retention  allowances. FDA is also considering offering retention allowances to all of  its medical officers.
section_title: FDA Says Reviewers Forgo Training and Professional Development to Ensure PDUFA Goals Are Met
paragraphs: We found that FDA reviewers, particularly those in CBER, did not  participate in training and professional development activities to the  extent recommended by the agency in fiscal years 2000 and 2001. FDA  officials told us that reviewers are forgoing training and professional  development activities to ensure that the agency meets PDUFA goals. FDA  defines training and professional development activities as time spent    attending related training and conferences, whether as a presenter or an  attendee;  learning the review process for drug applications and labeling under a  mentor;    preparing educational material, publications, and manuscripts or  classroom or seminar-type instruction; and    mentoring a new reviewer.
FDA reviewers are encouraged to spend about 10 percent of their time in  training, professional development, and mentoring activities. According to  FDA, other science-based agencies, such as NIH, expect scientists to  spend about 20 percent of their time on training and professional  development. Using KPMG’s estimate that each full-time FDA reviewer  worked 200 days per year, FDA’s 10 percent recommended level of  training means that each reviewer would be encouraged to spend 20 days  per year in training and professional development activities. Our analysis  of FDA data found that reviewers in CDER spent, on average, about 19  days in training and professional development activities in fiscal years  2000 and 2001. However, we found that reviewers in CBER spent, on  average, about 12 days in training and professional development activities  in fiscal years 2000 and 2001.
FDA spending for PDUFA-related training and other professional  development activities has fluctuated greatly over the past 3 years.  Expenditures for PDUFA-related training and other professional  development activities in CDER rose from $285,000 in fiscal year 1998 to  $796,000 in fiscal year 1999, then dropped to $564,000 in fiscal year 2000.  CBER’s expenditures increased from $198,882 in fiscal year 1998 to  $206,655 in fiscal year 1999, then dropped to $147,914 in fiscal year 2000, a  26 percent decline from the 1998 level.
FDA reviewers, as well as representatives from pharmaceutical and  biotechnology companies, are concerned about reviewers’ lack of time for  training and professional development. The KPMG report found that  reviewers perceived insufficient training to be a major problem. The  reviewers interviewed reported that while they wanted to ensure that they  were at the cutting edge of medical technology and were able to effectively  use workplace tools such as information systems, they believed they had  insufficient time to complete training. In addition, an independent survey  of pharmaceutical and biotechnology companies found a high level of  concern in the industry related to a perceived lack of technical expertise  among FDA reviewers. According to the survey, 27 percent of the  respondents indicated that reviewer lack of expertise impeded the  approval process. That figure increased from a 19 percent rate in the 1997  survey and 17 percent in 1995.
section_title: Rate of Safety-Related Drug Withdrawals Has Increased Recently
paragraphs: Some consumer and patient groups have raised concerns that drug  withdrawal rates have increased under PDUFA. Our analysis of FDA data  found that the percentage of recently approved drugs that have been  withdrawn from the market has risen, but that the size of the increase in  drug withdrawal rates differs depending on the period examined.  Moreover, several factors may affect drug withdrawals. Some drugs were  removed from the market because doctors and patients did not use them  correctly, while others produced rare side effects that were not detected in  clinical trials. The availability of new, safer treatments also led to some  withdrawals. For drugs approved under PDUFA III, FDA may use user fees  to support its drug safety efforts.
subsections: section_title: Size of the Increase in Drug Withdrawal Rates Differs Depending on the Period Examined
paragraphs: Our analysis of FDA data found that a higher percentage of drugs has been  withdrawn from the market for safety-related reasons since PDUFA’s  enactment than prior to the law’s enactment. Some consumer and patient  groups have expressed concern that PDUFA’s emphasis on faster review  times has increased the rate of withdrawals and compromised drug safety  by placing FDA reviewers under pressure to approve drugs rapidly to meet  performance goals. We identified each drug that was withdrawn from the  market from 1985 through 2000, and grouped the withdrawals based on  the year in which the drug was approved. We then calculated the drug  withdrawal rate—the number of withdrawn drugs as a percentage of those  approved each year. We calculated drug withdrawal rates in 4-year  intervals over 16 years. As shown in figure 7, the withdrawal rate declined  from 1.96 percent for 1989 through 1992 (the 4 years preceding PDUFA) to  1.56 percent for 1993 through 1996 (under PDUFA I), then rose to 5.34  percent for 1997 through 2000 (under PDUFA II). However, the small  number of withdrawals in any given year may affect the variation in the  withdrawal rate.
We also calculated the withdrawal rate with reference to whether the drug  was approved in the 8-year period before or the 8-year period after PDUFA  was enacted. Grouping the withdrawals in these two periods showed that  the withdrawal rate increased slightly after PDUFA (see fig. 8). During the  period 1985 through 1992 (pre-PDUFA), FDA approved 193 NMEs. Six of  these, or 3.10 percent, were withdrawn for safety-related reasons. During  the period 1993 through 2000 (post-PDUFA), FDA approved 259 NMEs,  and 9 of these, or 3.47 percent, were withdrawn for safety-related reasons.
section_title: Drug Withdrawals May Be Affected by Several Factors
paragraphs: Several factors may affect drug withdrawals. According to FDA officials,  premarketing clinical trials in a few thousands patients (typically with  relatively uncomplicated health conditions) do not detect all of a drug’s  adverse effects, especially relatively rare ones. In addition, they stated that  the rise in the number of newly approved drugs entering the market and  the higher consumption of medicines by the population increase the  probability of misprescribing, adverse effects, and subsequent drug  withdrawals. According to FDA officials, safety problems not detected in  clinical trials are more likely to be found first among U.S. patients because  they are increasingly first to have access to new drugs. The United States  was the first market for 49 percent of new drugs approved in the United  States from 1996 through 1998, according to a study.
An examination of drug withdrawals, by itself, may not provide a complete  picture of drug safety. First, a drug withdrawal does not reflect a judgment  concerning the absolute safety of a drug but reflects a judgment about the  risks and rewards of a drug in the context of alternative treatments. For  instance, despite the documented deaths from liver failure among patients  taking Rezulin, the drug was not withdrawn from the market until FDA  approved new, safer medications with similar benefits. In contrast, Raxar  was withdrawn from the market on the basis of relatively few adverse  event reports because alternative treatments were readily available.  Second, drug withdrawals may occur because health professionals and  patients use the drugs incorrectly, not because the drugs are inherently  dangerous when used as approved. For example, the health risks  associated with Seldane occurred when the drug was taken in  combination with medications that were contraindicated on Seldane’s  label. Third, the off-label use of drugs also can be problematic because  such use may not have been shown to be safe and effective. For example,  while Pondimin (fenfluramine) was approved for short-term use as an  appetite suppressant, it was increasingly prescribed and used in  combination with the appetite suppressant phentermine as a part of a  long-term weight loss and management program. The off-label use of this  combination, known as “fen-phen,” posed serious health risks. (See app. I  for a list of drugs withdrawn from the U.S. market for safety-related  reasons from 1992 through 2001.)
section_title: PDUFA III User Fees Will Be Used to Support Additional FDA Drug Safety Efforts
paragraphs: PDUFA III authorizes FDA to use user fees for additional drug safety  activities that could not be funded by PDUFA I and II user fees. FDA  informed the Congress in its performance goal letter for PDUFA III that it  will develop guidance documents to assist the industry in addressing good  risk assessment, risk management, and postmarketing surveillance  practices. As part of joint recommendations to the Congress for the  reauthorization of PDUFA, PhRMA and BIO agreed with FDA that the  agency should use user fees to fund a new risk management system for  newly approved drugs. Under the voluntary program, drug sponsors may  develop, and FDA will review, risk management plans for products while  the agency reviews the sponsor’s NDA or BLA. By adding FDA’s  postmarket safety team to the drug review process before a new drug or  biologic is approved, FDA officials believe that they will obtain better  information on the risks associated with the product much earlier in the  process and the sponsor will gain helpful feedback on how best to  monitor, assess, and control the product’s risks.
Funding from user fees will be used to implement risk management plans  for the first 2 years after a product is approved. For products that require  risk management beyond standard labeling, FDA may use user fees for  postmarket surveillance activities for 3 years. FDA officials believe that  more rigorous safety monitoring of newly approved drugs during the first  few years after they are on the market could help to detect unanticipated  adverse effects earlier. Historically, the vast majority of adverse effects  have been identified in the first 2 to 3 years after a new drug is marketed.  FDA anticipates that user fees for risk management will total  approximately $71 million over 5 years, and will permit the agency to add  100 new employees to monitor drug safety and track adverse effects from  drugs already on the market (see table 4).
section_title: Conclusions
paragraphs: The implementation of PDUFA has been successful in bringing new drugs  and biologics to the U.S. market more rapidly than before. However,  maintaining adequate funding for approving new drugs and biologics has  had the unintended effect of reducing the share of funding and staffing for  other activities. Fewer resources for non-PDUFA programs may affect  FDA’s ability to ensure that the other products the agency regulates, such  as food and medical devices, comply with FDA safety standards. In  addition, PDUFA has increased reviewer workloads and may be a factor in  relatively high attrition rates among FDA’s review staff.
Rapid FDA approval of new drugs means that the United States has  become the first nation to approve many new medicines. Because drugs  and biologics are not risk-free, adverse events are to be expected once the  products are in the marketplace. As more new drugs and biologics are  brought to market, increased attention to postmarket risk management  will be even more important. The recent increase in the rate of drug  withdrawals also suggests the need for FDA to strengthen its postmarket  surveillance activities. Under PDUFA III, FDA will now be able to use user  fees for additional drug safety activities, something that was not permitted  under PDUFA I and II. By having more resources to review risk  management plans developed by drug sponsors and conduct postmarket  surveillance, FDA will be able to obtain better information on the risks  associated with newly marketed drugs more quickly.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided FDA with a draft of this report for comment and FDA  provided technical comments. In their technical comments, FDA disagreed  with our analyses and discussion related to drug withdrawal rates.  Specifically, FDA officials said that our analysis of drug withdrawal data  comparing the 8-year period pre-PDUFA with the first 8 years after PDUFA  does not show any real increase, and that our analysis using the 4-year  groupings was significantly affected by the small number of withdrawals  during each period. While we agree that the small number of withdrawals  in any given year may affect the variation in the withdrawal rate, we  believe our analyses are appropriate and both the 8-year and 4-year  analyses show an increase in withdrawal rates since PDUFA’s  implementation. We incorporated additional technical comments where  appropriate. (FDA’s comments are included in app. II).
As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 7 days after its  issue date. At that time, we will send copies to the Secretary of HHS, the  Deputy Commissioner of FDA, the Director of the Office of Management  and Budget, appropriate congressional committees, and other interested  parties. We will also make copies available to others on request. In  addition, the report will be available at no charge on the GAO Web site at  http://www.gao.gov.
Major contributors to this report were John Hansen, Gloria Taylor, Claude  Hayeck, and Roseanne Price. If you or your staff have any questions about  this report or would like additional information, please call me at (202)  512-7119 or John Hansen at (202) 512-7105.
section_title: Appendix I: Drugs Withdrawn for Safety- Related Reasons from U.S. Market, 1992 Through 2001
paragraphs: Omniflox (temafloxacin  hydrochloride)  Manoplax (flosequinan)  Pondimin (fenfluramine  hydrochloride)  Redux(dexfenfluramine  hydrochloride)  Seldane (terfenadine)  Posicor (mibefradil  dihydrochloride)  Duract (bromfenac sodium)  Hismanal (astemizole)  Raxar (grepafloxacin  hydrochloride)  Rezulin (troglitazone)  Propulsid (cisapride)  Lotronex (alosetron  hydrochloride)  Raplon (rapacuronium bromide)  Baycol (cerivastatin sodium)
13.8  Bronchospasm  12.0  Rhabdomyolysis (severe damage to  skeletal muscle)
section_title: Appendix II: Comments from the Food and Drug Administration