PDUFA IV User Fees End With a Bang, Not a Whimper! Application Fee Increases by a Whopping 19.4% (or Almost $300K)

By Kurt R. Karst –     

Each year around this time, some of us at our firm participate in a version of The Price Is Right Showcase Showdown in which folks “bid” on what they think the PDUFA application user fee rate will be set at for the next Fiscal Year (“FY”).  (There’s always that one person who goes a dollar over the previous highest bid.)  Bids are placed based, in part, on previous FY application user fee rate increases and other historical information.  For example, for FY 2011, FDA set the full application fee at $1,542,000, a 9.7% (or $136,500) increase over the FY 2010 fee of $1,405,500.  This year, nobody anticipated that FDA would increase the application fee as high as it did – by a dollar amount higher than any and previous increase in the history of PDUFA, and at a rate higher than any fifth year of a PDUFA cycle. 

In a Federal Register notice scheduled for publication on August 1st, FDA will announce the Prescription Drug User Fee Act (“PDUFA”) user fee rates for Fiscal Year (“FY”) 2012.  (In separate notices, FDA will announce the FY 2012 user fee rates for animal drugs, animal generic drugs, medical devices, and fees under the Food Safety Modernization Act domestic for foreign facility reinspections, recall, and importer reinspection.)  The FY 2012 PDUFA application user fee rates is set at $1,841,500 for an application requiring “clinical data,” and one-half of a full application fee ($920,750) for an application not requiring “clinical data” and a supplement requiring “clinical data.”  (The term “clinical data” for PDUFA user fee purposes is explained in an FDA guidance document available here.)  Annual establishment and product fees have been set at $520,100 and $98,970, respectively.  The FY 2012 fees go into effect on October 1, 2011.

The first table below shows the percent increase since the previous FY for each of the five FYs under PDUFA IV (for each fee type), and should be used with the table from our previous post, which tracks PDUFA user fees rates since the inception of PDUFA.  The next three tables show the historical trend for each PDUFA user fee.

 
  
 
When it was enacted in 1992, PDUFA was hailed by some as an unprecedented accord among FDA, the pharmaceutical industry, and Congress.  In exchange for the promise of a speedier drug review system, the industry agreed to pay user fees.  Over the years, the cost to the industry for FDA’s promise of improved performance has increased considerably (as shown in the above tables). 

So, is industry getting what it is paying for?  Some, would say no.  At a recent Senate hearing on PDUFA V, Senator Richard Burr (R-NC) criticized FDA for delays in approval decisions.  According to FDA Commissioner Hamburg, who testified at the Senate hearing, except for FY 2008-09, “FDA has maintained strong performance in meeting the PDUFA application review goals.”  Dr. Hamburg’s testimony included the following table on application review performance metrics.