Processing Magazine

Drug companies seek lower FDA review fees

September 5, 2006

Drug industry representatives are urging the government to increase the Food and Drug Administration''s budget for reviewing drugs, in an effort to shrink the amount companies pay to have new products reviewed by the agency, the Associated Press reports. According to the Biotechnology Industry Organization, a lobbying group for biotech companies, the industry is paying a disproportionate share of what it costs regulators to ensure the safety and efficacy of new drugs. The FDA has argued that the higher fees help pay for faster reviews of drug application. When user fees first went into effect in the early 1990s, the industry contributed 7 percent of the funding for drug review. Since then, the percentage has risen to 53 percent as the number and complexity of products submitted to FDA has increased. For example, the fee charged by the FDA to review one drug that has already gone through clinical trials is $896,200 for fiscal year 2007. If the trend continues, according to industry estimates, drug companies will pay about 66 percent of FDA''s drug review costs by 2011. Industry groups and the FDA are in the midst of closed-door talks to decide what fees will be charged for the next five years. The newly negotiated fees go into effect in the autumn of 2007, after an agreement has been reached. Drug user fees originated as a means for the FDA to supplement its review budget by collecting money from the companies that submit products for approval. In return, the agency guaranteed the firms would receive a decision on product applications within 12 months after submission. That was quicker than had been the case before. The agreement was formalized in the Prescription Drug User Fee Act of 1992, which has been renewed by Congress every five years since then.