In September 2007, Congress reauthorized the Prescription Drug User Fee Act (PDUFA). This was the third five-year extension of the original 1992 law. Since 1993, the program has enabled the Food and Drug Administration (FDA) to collect and use fees from pharmaceutical manufacturers to review marketing applications concerning prescription drug and biological products. The law intends those fees to supplement direct appropriations not replace them. This most recent version of the user fee program, often referred to as PDUFA IV, retains the basic structure and elements of the original PDUFA. Like PDUFA II and PDUFA III, PDUFA IV addresses issues that had been either unnecessary or unrecognized in earlier versions of the law. The current authority expires October 1, 2012. This report reviews the history the four PDUFA authorizations as well as the issues concerning them. It first describes the situation that led to the introduction of prescription drug user fees. It then describes the initial PDUFA law and the incremental changes made in each of its reauthorizations. The report closes with a discussion of the intended and unintended effects of the prescription drug user fee program on FDA both within the human drug program and agency-wide. This report presumes some knowledge of the approval process for drugs and biologics. Readers unfamiliar with those activities might benefit by first reading CRS Report RL32797, Drug Safety and Effectiveness: Issues and Action Options After FDA Approval , by [author name scrubbed]. The 1992 passage of PDUFA had its origin in the dissatisfaction from industry, consumers, and FDA itself. All three felt it took far too long from the moment a manufacturer submitted a drug or biologics marketing application to the time FDA's reached its decision. In the late 1980s, that process took a median time of 29 months. Patients had to wait for access to the products. For some patients, a drug in review—and therefore not available for sale—could be the difference between life and death. Manufacturers, in turn, had to wait to begin to recoup the costs of research and development. At that time, FDA estimated that each one-month delay in a review's completion cost a manufacturer $10 million. FDA argued that it needed more scientists to review the drug applications that were coming in and the ones already backlogged in its files. It had not received sufficient appropriations to hire them. For decades FDA had asked Congress for permission to implement user fees; the pharmaceutical industry generally opposed them, believing the funds might go into the Treasury to reduce federal debt rather than help fund drug review. The 1992 law became possible when FDA and industry agreed on two steps: performance goals, setting target completion times for various review processes; and the promise that these fees would supplement—rather than replace—funding that Congress appropriated to FDA. Those steps helped persuade industry groups the fees would reduce review times—and gave FDA the revenue source it had sought for over 20 years. Congress first authorized FDA to collect fees from pharmaceutical companies in 1992 with the Prescription Drug User Fee Act (PDUFA, P.L. 102-571 ), which amended the Federal Food, Drug, and Cosmetic Act (FFDCA). Its goals were to speed up FDA's review of new drug applications for approval and to diminish its backlog of applications. PDUFA specified the activities on which FDA could spend the fees; most of the collections were to be used to hire additional reviewers. To keep funding predictable and stable, Congress required three kinds of prescription drug user fees, and specified that they each make up one-third of the total fees collected: application review fees: a drug's sponsor (usually the manufacturer) would pay a fee for the review of each new or supplemental drug-approval or biologic-license application it submitted; establishment fees: a manufacturer would pay an annual fee for each of its manufacturing establishments; and product fees: a manufacturer would pay an annual fee for each of its products that fit within PDUFA's definition. For FY1993, the standard application fee was approximately $100,000. The law provided exceptions—either exemptions or waivers—for applications from small businesses, or for drugs developed for unmet public health needs or orphan diseases. PDUFA I authorized fee revenue limits for each of FY1993 through FY1997, allowing also for adjustments based on inflation. The fees collected in each fiscal year were to be in an amount equal to the amount specified in appropriations acts for such fiscal year. In accordance with the agreement that brought about its passage, PDUFA I explicitly stated that the funds were to supplement, not supplant, congressional appropriations. The law included complex formulas, known as "triggers," to enforce that goal. FDA may collect and use fees only if the direct appropriations for the activities involved in the review of human drug applications and for FDA activities overall remain funded at a level at least equal to the pre-PDUFA budget, adjusted for inflation as specified in the statute. PDUFA's basic goal was, each year, to reduce the time from the sponsor's submission of an application to FDA's decision regarding approval. Rather than listing specific performance goals in statutory language, Congress stated in the bill's "Findings" (Section 101) that: (3) the fees authorized by this title will be dedicated toward expediting the review of human drug applications as set forth in the goals identified in the letters of September 14, 1992, and September 21, 1992, from the Commissioner of Food and Drugs to the Chairman of the Energy and Commerce Committee of the House of Representatives and the Chairman of the Labor and Human Resources Committee of the Senate, as set forth at 138 Cong. Rec. H9099-H9100 (daily ed. September 22, 1992). This direction was not codified in the FFDCA; instead, Congress, with that "finding," incorporated the performance goals listed in FDA Commissioner David Kessler's September 1992 letters to the committee chairs. The predominant goal was that, by 1997, FDA would review 90% of standard applications within 12 months and 90% of priority applications within six months of application submission. PDUFA restricted FDA's use of collected fees to activities related to the "process for the review of human drug applications." In its FY2004 report to Congress, FDA listed such activities. They include investigational new drug (IND), new drug application (NDA), biologics license application (BLA), product license application (PLA), and establishment license application (ELA) reviews; regulation and policy development activities related to the review of human drug applications; development of product standards; meetings between FDA and application sponsor; pre-approval review of labeling and pre-launch review of advertising; review-related facility inspections; assay development and validation; and monitoring review-related research. Congress reauthorized PDUFA in 1997 as Title I of the Food and Drug Administration Modernization Act (FDAMA, P.L. 105-115 ). The reauthorization, referred to as PDUFA II: stated that the fees were to be used to expedite the drug development and application review process as laid out in performance goals identified in letters sent by the Secretary of the Department of Health and Human Services (HHS) to the two authorizing committees; mandated tighter performance goals, more transparency in the drug review process, and better communication with drug makers and patient advocacy groups; and allowed FDA to use PDUFA revenue to consult with manufacturers before they submitted an application. Previously FDA could use the fees only to review a manufacturer's application. Now FDA could meet with a manufacturer from the moment it began testing a new drug in humans. (See Figure 3 .) Congress passed its second five-year reauthorization as Title V of the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 ( P.L. 107-188 ). PDUFA III: allowed FDA to adjust annual revenue targets based on changes in workload; required the agency to meet with interested public and private stakeholders when considering the reauthorization of this program before its expiration; allowed the collection, development, and review of postmarket safety information for up to three years on drugs approved after October 1, 2002, which allowed the agency to double the number of staff monitoring side effects of drugs already on the market; allowed biotechnology companies to request that FDA select an independent consultant (for which the manufacturer would pay) to participate in FDA's review of research activities; authorized two pilot programs for the continuous ("rolling") review of new drug applications for products designated for the fast track program because they would address serious or life-threatening conditions for which other treatments were not available; encouraged companies to include risk management plans in their pre-NDA/BLA meetings; allowed the use of fees to develop databases documenting drugs' use; allowed the use of fees for risk management oversight in the "peri-approval" period (i.e., two to three years post-approval); provided for "first cycle," preliminary reviews; required the HHS Secretary to note on FDA's website if a sponsor did not meet an agreed-upon deadline to complete a postmarket study, and to note if the Secretary considers the reasons given for study incompleteness to be unsatisfactory; required any sponsor who failed to complete timely studies to notify health practitioners both of this failure and of unanswered questions related to the clinical benefit and safety of the product; and added specificity to the availability and crediting of fees provision, stating that fees authorized be collected and available for obligation only to the extent and in the amount provided in advance in appropriations Acts; and that such fees are authorized to remain available until expended. PDUFA allowed FDA to use fee revenue for activities that were part of the "process for the review of human drug applications."