Industry experts peel back the curtain on user fee negotiations

BALTIMORE – What goes on behind the scenes in user-fee program negotiations? How are user fee agreements hammered out between the US Food and Drug Administration (FDA) and industry representatives? Those were just two questions posed to an expert panel at the RAPS Regulatory Intelligence Conference on 6 June.

The panel was comprised of Philip Desjardins, a partner at Arnold & Porter; Jeffery Francer, vice president and head of global regulatory policy and strategy at Eli Lilly & Company; Stephen Mason, founding partner at AuRIC Strategies, and Lucy Vereshchagina, executive vice president at PhRMA. Alec Gaffey, executive director of regulatory policy and intelligence at AgencyIQ, moderated the discussion.

Gaffney: What are the most critical parts of the use fee process, and what should people understand as they enter a new round of negotiations?

“To understand what we need to look forward to in the next [set of negotiations], it is important to look back and understand user fees and what they do,” Mason explained. “With PDUFA being the first [user fee program] in 1992, it really was to supplement the existing resources to get products approved…. It has expanded over the years. We now have 30 years’ experience. The core function [of user fees] is to say, ‘Let’s meet more and get more predictability in our reviews and provide clarity in our regulatory policy.’ We need to build on that 30-year experience.”

Francer agreed that it is important to look back to determine how to proceed. He added that the user fee program has been a “win-win” since its inception.

“The program has provided incredible resources to FDA to hire reviewers,” He said, adding that the program has “provided much more accountability and transparency to sponsors and at the end of the day, FDA has been able to cut review times by well over half since the program started.”

One recent blip is that recently FDA has not been able to meet some of its PDUFA review goals, and he said that “some of the data are concerning.“

Francer said recent data shows that 52% of standard applications are being reviewed in the first cycle. “The whole goal of the program, by the way, is to get drugs reviewed in one cycle; that does’ always happen, but when drugs are kicked over to another cycle, this means delays for patients.”

Gaffney: When should the industry start bringing new ideas to the bargaining table?

“Timing is an important consideration,” according to Desjardins. “Now is a good time to be having this conversation.” Having worked on both sides of the table, he noted, “I know for a fact that 3-4 years out you should be sketching out what is working and what is not working and to bring these issues to the table. Now is a good time to do this, midway through the review cycle.”

It is also important for all companies to become involved in negotiations and bring their issues to the table. “Your industry associations may be putting together a list of 5 to 30 topics, and you want to make sure your priorities are being considered,” he said.

Gaffney: What do people not understand about the inner workings of the user fee negotiations process?

One public misperception is that user fees exert “some sort of influence” on a particular topic, Mason said. Instead, the negotiations are “a disconnected process where we are just funding and supplementing resources. Individual decisions and individual actions are completely disassociated. At the FDA, people do not know how [programs] are funded and they don’t know how their salaries are paid; they are just doing their jobs.”

Vereshchagina concurred, adding that “people think that you have influence over FDA, or you have influence over policies…you do not negotiate policies or regulatory changes, you are truly negotiating enhancements for the review process, and you initiate those enhancements for tweaks for things that can be put in place to streamline the review process.”

Gaffney: How does FDA approach user fee negotiations?

“The FDA approach is very similar to the industry approach,” Mason said. “Like industry, FDA takes a long time to decide things.” In addition, the agency has working groups to determine their funding needs and decide “what proposals to bring to the table.” He added, "It can take over a year to figure this out, and they don’t always get what they want either.”

Desjardins described the different stages of the user fee meeting process. During the first meeting, both sides discuss funding priorities over the next 6-18 months. Both parties “keep their cards close to the chest during this stage.” The second stage of the conversation is signaling to the other side's priorities for investment. In this stage, “you don’t talk about dollars but scope and scale.”

The last stage is when both sides come together, and “there is a discussion of dollars” and priorities.

Desjardins said, "Industry tends to focus on people that are necessary, and this is where FDA tries to get as strategic as possible.” He added, "FDA has gotten better at making the proposals closer to realistic.” He noted that during the MDUFA III and MDUFA IV negotiations, FDA was discussing fees and “people were literally gasping at the table” as the “dollar figures were a non-starter.”

Things have changed as “FDA realized they had to be more visible going forward. I have seen more reasonable starting points on the CDRH side.”

Yet the MDUFA negotiation process is “getting more contentious. MDUFA fees have doubled every single cycle, that funding is unsustainable,” Desjardins said.

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Industry experts peel back the curtain on user fee negotiations

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