Future Regulatory Improvements (FDA)
The Prescription Drug User Fee Act allows the FDA to collect fees from drug manufacturers to fund the new drug approval process. The new drug approval process is costly for both drug companies and for the FDA. The latter is funded primarily through the federal government, so this law allowed the FDA to be more self-funded. Theoretically, this would also allow it to charge fees that reflected the costs associated with conducting new drug approvals. The legislation also contained a provision that requires the FDA to conduct its approvals at a certain speed. Essentially, the bill came about because there was the risk that the FDA was going to be very slow in approving new drugs, because it was short on money. The FDA in particular was concerned at the pace Congress was providing it with more funding, during the Reagan years. This was resulting in significant cost to the industry, and this bill was seen as a compromise, allowing drug companies to basically pay for the service that they wanted. The fees would be lower than the cost of delays.
The PDUFA was intended to speed up the process of new drug approvals. Industry knew that it would cost them more,...
A study in 2004 noted that the PDUFA was signed into law at a point when the timeframe for new drug approvals was already trending downward. The law resulted in an acceleration of this downward trend. "There was an observed decline of about 42%, from 24.2 months to 14.2 months, following the implementation of PDUFA," and "two-thirds of this decline can be attributed to PDUFA" (Berndt, et al., 2004). As a result of this success, the PDUFA was extended in 2002.
The success of PDUFA makes it difficult to improve upon. It could come with lower fees, and it could come with more success in reducing the time for new drug approvals, but performance improvements are not necessarily aspects of the law, just how the law has worked out in practice. The Heritage Foundation, a libertarian think tank, is not surprisingly a critic of PDUFA. They argue that with PDUFA, "the review process has become increasingly unpredictable, uncertain and inefficient." They dismiss PDUFA as "overarching and unnecessary regulations" (Kronquist, 2011). They note that after the 2002 reauthorization, review times have started to increase…
