The pharmaceutical and biopharmaceutical industries have long been supportive of the user fee schemes used to fund the US Food and Drug Administration (FDA). Originally passed under the Prescription Drug User Fee Act (PDUFA) in 1992 in response to the delay in approvals in drugs in the US compared to in the EU, the basic fee structure-with some added changes and conditions-has been reauthorized another four times, most recently with the passage of the Food and Drug Administration Safety and Innovation Act (FDASIA) of 2012.
But one of the stipulations of the law is that in return for the pharmaceutical industry paying money to fund the hiring of FDA review staff (under the theory that with more staff, drug products can be reviewed more efficiently and quickly), the agency has to inform the industry of how it's spending that money in annual reports. And with the release of the most recent report, some in industry are quietly fuming that FDA isn't giving companies the details they need to conduct appropriate oversight.
The most recent PDUFA report was released in August 2013, and contains details about FDA's PDUFA-funded operations under Fiscal Year (FY) 2012. The 27-page report generally contains top-level summaries of spending and results.
For example, FDA notes that it collected $699.8 million in prescription drug user fees, spending a total of $636.9 million in fees and carrying forward a balance of $178.5 million for use in the future. The money spent supported 3,854 full-time staff (or equivalents), including their salaries and operational expenses.
The report also notes something else: "PDUFA IV requires FDA to submit two reports to Congress each fiscal year, to be sent within 120 days of the end of the fiscal year."
FDA's 2012 fiscal year ended on 30 September 2012, though, meaning that the report was due by the end of January 2013. So why was the report only published on 6 August 2013? The delay was first publicly noted by the Pharmaceutical Research and Manufacturers of America's (PhRMA) Sascha Haverfield, VP of scientific and regulatory affairs, in a blog post on the association's website.
"FDA should be more transparent about how it spends the user fees it collects," he wrote. "For many years, the law has required that FDA issue its PDUFA annual financial reports 120 days after the end of the fiscal year. The FY2011 PDUFA Financial Report, however, was issued in March 2013. The FY2012 report has yet to be released -even though we are weeks away from the start of FY2014."
At the time, the report had not been released, but in a curious bit of timing, the agency went on to release the report just hours after Haverfield's post went online.
In a response to Regulatory Focus, FDA Deputy Director of Media Affairs Erica Jefferson said that while "FDA strives to publish the PDUFA financial report in accordance with the statutory deadlines […] certain situations out of FDA's control may arise that can delay the report for several months." The agency has recently been dealing with the effects of budget sequestration, which has affected its internal resources.
Lack of Specificity
But delays notwithstanding, members of industry have also spoken out to Focus in both public and in private about the report's lack of specificity, which they contend is harming their ability to conduct effective oversight of the program.
In an email to Focus, Haverfield elaborated on his remarks, noting that while PDUFA has been beneficial to industry and patients alike, "timely financial reporting and accountability are critical" to the program's success.
PhRMA's main problem, Haverfield contained, is the lack of "detailed information" in the report.
"PDUFA financial reports should provide detailed information on the costs of reviewing NDAs, BLAs and supplements, as well as summary measures of review efficiency," Haverfield wrote. "For example, the FY 2012 PDUFA financial report indicates that about 65% of total obligations to support the user fee program go to personnel compensation and benefits and another 26 percent go to contract services.
"Thus these two categories account for over 90 percent of all obligations. Contract services is an opaque and very diverse class of expenditures. It likely includes work ranging from security of facilities and groundskeeping to IT spending.
"The PDUFA financial report does not provide further detail about either account, even though the amounts are large, $417 million and $171 million respectively," Haverfield concluded.
Even large spending categories, such as the PDUFA spending at FDA's Center for Drug Evaluation and Research (CDER), aren't broken out, making it difficult to see what spending went toward, and where.
FDA's Jefferson said the "detail provided in the report has been relatively the same since the early 1990s."
But other experts consulted by Focus who wished to remain off-the-record mirrored PhRMA's concerns, saying even if the report's details hadn't changed, the lack of detail prevented them from raising issues with FDA about the growth of spending in certain areas, most notably including contracts and other projects noted by FDA in its report.
For example, FDA's report notes that administrative costs grew substantially during 2012-from $68.2 to $79.1 million-due to "several one-time initiatives." Those initiatives, however, were not listed.
And even when some initiatives were specifically listed, some experts expressed their confusion as to their relevancy to PDUFA specifically. For example, FDA notes a 2004 initiative to create "One-HHS" by consolidating administrative functions. The report does not explain that program's relevancy to the 2012 PDUFA costs.
In other instances, FDA explains measures taken to increase data security at the agency, including a Personal Identity Verification (PIV) program. That program, however, was required under the Federal Information Security Management Act (FISMA) of 2002. "I have no clue why this section is in this report," said one expert who wished to remain anonymous.
Jefferson said the agency's opinion was "that the security projects mentioned in the report are extremely relevant to the program and are worth mentioning in the financial report," but declined to elaborate further, noting that many FDA staff who could comment on the report were on vacation this week.
Call for Transparency … Reversed
None of this, however, is to say that industry doesn't support PDUFA-it does, and strongly so. Industry groups like PhRMA and the Biotechnology Industry Association (BIO) have publicly called for Congress to release more user fees to the agency, and both supported the most recent passage of FDASIA.
Their gripes, however, seem to focus on how FDA is choosing to convey its performance metrics to the industry. "It is important that FDA serve as a good steward of industry user fees," said BIO spokeswoman Tracy Cooley, who added that BIO was still in the process of analyzing the report.
"However, PDUFA financial reports are too general to be informative" right now, added Haverfield.
Both PhRMA and BIO have also in recent weeks announced the launch of a tracking database, the PDUFA Tracking Database, intended to keep track of PDUFA's other main metric: Approval decisions.
So if there's one takeaway for FDA, it may well be that as it asks industry to consent to additional transparency efforts, it may see many of those same calls for transparency reflected right back toward it.
FDA PDUFA Report