FDA would like to ensure a more "predictable" revenue stream under the third Prescription Drug User Fee Act.

The user fee program "needs to get...on sound fiscal" footing, Center for Drug Evaluation & Research Director Janet Woodcock, MD, told a Food & Drug Law Institute meeting in Washington, D.C. June 5.

"The unpredictability of the submission rates is a problem," Center for Biologics Evaluation & Research Deputy Director for Operations Mark Elengold stated. FDA and industry are in the early stages of negotiating a framework for reauthorization of the user fee program, which expires in 2002.

In 1999, FDA conducted a regression analysis to adjust fees after an unexpected decline in fee-paying applications submitted in fiscal 1998. Even with the adjustment, the agency had to reduce its expected rates of hiring to reflect lower revenues (¹ Also see "User Fee Revision Reduces Expected CDER Staffing Increases By 60%" - Pink Sheet, 30 August, 1999.).

While the regression analysis helped smooth out the revenues, "I think we need to look for a more permanent mechanism in PDUFA III," Elengold said.

The Pharmaceutical Research & Manufacturers of America staff identified the user fee structure as an item for board attention in 1999. The association indicated displeasure with the agency's use of a regression analysis to maximize fee revenues.

By framing the argument in terms of "predictability" of fee revenues, FDA may be subtly appealing to a sense of fair play. The cardinal virtue of the user fee program from industry's point of view has been the reliability of review times, allowing more precise planning of product launch schedules.

Elengold identified several other adjustments to the program that FDA will seek: (1) changes in procedures and tracking for meetings between FDA and industry; (2) fee increases to reflect IND management; and (3) post-marketing surveillance fees.

Performance goals in PDUFA II related to timing of, and responses to, FDA/industry meetings have posed problems for "both sides," Elengold maintained. "Some of the provisions have moved from project management to project micromanagement," he said.

The tracking requirements related to meetings also have proven burdensome to FDA, Elengold said. "All the reports, the data we collect, it is expensive for us."

When FDA revised its user fee forecast in 1999, the agency noted that the drop in fee-paying applications particularly was difficult because its total workload (including INDs and non-fee paying applications) was increasing.

FDA sought user fee funding for post-marketing surveillance in 1997. For the PDUFA III negotiations, the agency may frame the argument in terms of ensuring appropriate regulation for the entire life cycle of a product (² Also see "User Fees Should Recognize Complete Product Life Cycle - FDA's Feigal" - Pink Sheet, 12 June, 2000.).

There is no need for faster review deadlines beyond the current goals of six months for "priority" applications and 10 for standard reviews, Woodcock said.

"In general, we don't feel that review time for pharmaceuticals is the problem anymore," she added. "We think the review times we are achieving now are reasonable and should not be faster."

Any changes to the user fee system also will need to address a "fundamental issue" about the nature of FDA, Woodcock said. Adding new fees to the current program without adjusting baseline appropriations levels would mean that FDA "would be going over 50% of the process of reviewing human drugs by user fee money rather than appropriated federal dollars."

A common theme from the FDA officials at the FDLI meeting was the challenge of meeting new or expanding missions with limited resources.

Woodcock noted the pediatric research incentives established under the FDA Modernization Act will cause "a really massive increase in our workload" without adding any resources.

"Right now, we've mainly been involved in giving people advice on how to do their trials and written requests and so forth, but on the back end of this is going to be when all that trial data comes in we're going to have to start reviewing it and putting all those pediatric indications on the label," she noted. "That's really going to require more work." CDER is "going to have to hire more pediatricians and more pediatric experts," she noted.

Another area of increasing importance to CDER is risk management. "I think we've all been obsessed over the past 20 years with figuring out whether [drugs] work," Woodcock observed. "Been there, done that."

"I think the challenge in the next couple decades is to figure how these products and how this environment can be made as safe as possible, something other industries really are several logs of quality better at than ours." Woodcock specifically cited the airline and nuclear power industries as better at managing risk.

"I think we in CDER have to recognize that we've done a fairly dismal job in communicating the risks of pharmaceuticals to both the medical practitioner...as well as consumers," Woodcock continued. However, "I think the pharmaceutical industry and the medical device industry also have taken part in this."

"What we haven't really formally finished taking on...is the really fundamental question...what else can be done to manage the risk of pharmaceuticals?" FDA will seek to establish formal risk management programs for new products where appropriate, she added.

Office of Regulatory Affairs Regional Operations Director Deborah Ralston said ORA's "biggest issue" is full-time employees. The agency has a limited number of inspectors, but "more and more things are being added to our plate every day."

Center for Devices & Radiologic Health Director David Feigal, MD, suggested resource constraints also will affect how FDA addresses issues related to the quality of clinical research.

Noting there are 50,000 clinical researchers in the U.S., Feigal suggested that, if resources can be made available, FDA could use sampling techniques to "provide a report card" on the quality of clinical research.

Woodcock suggested the biggest challenge facing FDA will be to find the resources to handle the influx of new products over the next several years.

"I really expect to see the fruit of the investment in science that's occurred in the past 30 years to continue paying off with many innovative and novel therapies," she said. "I expect to see the federal government be more involved in paying for these therapies." The question for CDER is "how do we best regulate in the context of our resources?"

FDA Wants More "Predictable" Revenue Stream Under PDUFA III

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