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P E R S P E C T I V E : 
F D A  R E V I E W
W E B  E X C L U S I V E   

30 January 2004  
  

Explaining Reductions In FDA Drug Review Times: 
PDUFA Matters

There was little reduction in FDA review times until after the introduction
of prescription drug user fees.

By Mary K. Olson

ABSTRACT:

Yale professor Mary Olson responds to the paper titled “Approval Times for New Drugs: Does the Source of Funding for FDA Staff Matter?” by Daniel Carpenter and colleagues (Health Affairs Web Exclusive, 17 December 2003). According to her analysis, the Prescription Drug User Fee Act (PDUFA) of 1992, which introduced user fees for new-drug review, had a greater impact on reducing drug approval times than the analysis of Carpenter and colleagues found. Olson’s analysis examined review times aggregated by year of approval, instead of the year that the drug application was submitted. She found that even after increased agency resources over time were controlled for, the user fee reform led to a substantial reduction in drug review times. She also found that there was little reduction in drug review times until after user fees were introduced.


Daniel Carpenter and colleagues argue that the amount of funding, not the funding source (a reference to the Prescription Drug User Fee Act, or PDUFA), is the more important influence explaining faster Food and Drug Administration (FDA) drug reviews.¹ My own analysis provides a different assessment of the effects of agency resources and PDUFA on drug review times.² This assessment leads to different conclusions and policy implications about the role of PDUFA in reducing drug review times.

My work finds that there was little reduction in FDA review times until after the introduction of prescription drug user fees. Results from an analysis of 1971–1998 drug approvals show that even after increased agency resources are controlled for, the user fee reform was associated with a 34 percent reduction in drug approval times. This evidence suggests that agency resources alone cannot explain the observed reduction in drug review times. Instead, results suggest that other reform-related factors facilitated the change. Exhibit 1 shows that increases in the agency’s staff are associated with longer review times for new molecular entities (NMEs) prior to the reform. Only after the introduction of user fees is there a substantial reduction in these drug review times. Additional results from a duration analysis show that there were significant increases in the speed of review for novel drugs in the reform era and for drugs in certain classes that have historically experienced longer delays.

The study by Carpenter and colleagues underestimates the effects of PDUFA on drug review times. By focusing on the year in which a drug is submitted to the agency (which reflects the firm’s decision), this study ignores important institutional influences in the year in which FDA approval (the key regulatory decision) is granted. In addition, their use of submission-year averaging, instead of approval-year averaging, makes it difficult to separate out the effects of the user fee reform on the drugs submitted prior to the reform but approved in the user fee era. For example, some of the drugs included in the submission-year averages in 1989–1992 were approved in the user fee era and may have been affected by the reform provisions to eliminate the backlog of unapproved drugs. Hence, reform-related pressures, not staffing levels prior to the reform, might explain the decline in the submission-year averages during this period.

The results have major policy implications. Carpenter and colleagues suggest that politicians can eliminate the user fee reform but maintain staffing levels and expect to achieve similar FDA outcomes. My research suggests that such actions would be misguided. The user fee reform has played a critical role in reducing regulatory delays and altering regulators’ behavior. The reform and the political pressures surrounding it have strengthened agency incentives for caring about the speed of new drug review. These pressures include the agency’s desire to obtain renewal of the user fee program (in 1997 and 2002), meet user fee performance goals, and secure future fee revenues and increased monitoring of agency performance. These factors have increased FDA accountability in a way that traditional budget appropriations and other political interventions have been unable to do over time.

NOTES

1. D. Carpenter et al., “Approval Times for New Drugs: Does the Source of Funding for FDA Staff Matter?” Health Affairs, 17 December 2003,
content.healthaffairs.org/cgi/content/abstract/hlthaff.w3.618 (21 January 2004).
2. M.K. Olson, “Managing Delegation in the FDA: Reducing Delay in New-Drug Review,” Journal of Health Politics, Policy and Law (forthcoming); and M.K. Olson, “Examining the Determinants of New Drug Review: Considering Alternative Approaches,” Journal of Health Politics, Policy and Law (forthcoming).

Mary Olson is an associate professor of public health at Yale University in New Haven, Connecticut.

Please click here to read a related perspective by Daniel Carpenter.

DOI: 10.1377/hlthaff.W4.S1
©2004 Project HOPE–The People-to-People Health Foundation, Inc.