Burr on FDA User Fee Agreements: Innovation is Key, When FDA Does Not Live Up to Commitments, Patients Suffer

Senate HELP Committee examines FDA user fee agreements with industry leaders

April 5, 2022

Today, the Senate Committee on Health, Education, Labor and Pensions (HELP) held a hearing titled, “FDA User Fee Agreements: Advancing Medical Product Regulation and Innovation for the Benefit of Patients.” This is the Committee’s first hearing to examine the commitment letters submitted by the Food and Drug Administration (FDA) and industry leaders earlier this year for the reauthorization of the prescription drug, generic drug, biosimilar, and medical device user fee agreements.

Ranking Member Burr’s full prepared opening statement:

“Chair Murray, thank you for holding this important hearing today.

“To the witnesses, welcome. I am looking forward to our discussion.

“Every five years, this committee is charged with evaluating FDA’s user fee programs and the agency’s performance in meeting its existing commitments.

“At their core, these programs are about bringing new hope to Americans. The faster, more predictable, and more accountable the programs are, the more patients stand to benefit from life-saving, innovative drugs and devices. 

“When FDA does not live up to its commitments, patients are the ones who suffer.

“I have served in Congress since 1995, so I have been here for all but the very first user fee process.

“Each time, I have gradually added provisions to improve FDA’s accountability to the commitments it makes.

“Every five years, industry agrees to provide more funding under the duress of negotiating with their regulator.

“So, it is Congress’ job to make sure that the negotiations were not a hostage situation, and that these agreements are a good deal for patients and the industries that bring them hope.

“The user fee programs are intended to supplement FDA’s congressionally appropriated resources to speed the review of medical products and get treatments to patients as quickly as possible.

“The user fee agreements negotiated between FDA and industry partners lay out the process for bringing new products to market that will treat, prevent, and cure diseases.

“In 1992 under the first prescription drug user fee agreement, or PDUFA, the drug application fee was about $100,000. Today, the drug application fee is more than $3.1 million.

“The medical device user fee agreements were first signed into law in 2002.

“In 2007, a 510(k) submission was just over $4,000. Today, this application costs more than $12,700.

“When Members of Congress complain about the cost of prescription drugs or medical devices, we should evaluate all aspects of the pipeline, including the cost of development and regulatory review to make sure costly and burdensome regulations are not part of the problem.

“The enormous growth in the oldest of the user free programs underscores my longstanding concerns.

“In 1993, FDA collected just over $35 million in annual fees for the prescription drug user fee program.

“Today, FDA collects over $1 billion in PDUFA user fees annually. Even accounting for inflation, that’s an increase of more than 1,500 percent since the start of the program.

“Yet FDA continues to request more and more resources from industry, even when they don’t meet the agreed upon performance goals.

“For example, in fiscal years 2019 and 2020, FDA missed 12 out of 14 goals related to scheduling meetings, delaying needed conversations for innovators to move forward with their products.

“As part of the proposed new prescription drug program commitments, FDA is requesting an additional $324 million over the five year cycle.

“The proposed agreement includes $111 million for hiring an additional 352 new people. That’s 122 more new hires than the agency committed to in the last cycle.

“In fact, across all four programs, FDA is committing to more than 880 new hires, when the agency has more than 700 vacancies outstanding.

“Generic and biosimilar drugs are our best tool in driving down the cost of prescription drugs, and should be a top priority of the agency.

“The biosimilar agreements should help bolster the number of biosimilars in the market, including biosimilar insulin products.

“FDA, again, has struggled to meet some important program goals. 

“During fiscal year 2020, FDA missed nine out of 15 goals related to product development meetings.

“Under the proposed biosimilar agreement, FDA is requesting an additional $5 million over the five-year cycle and 15 new hires.

“The generic drug program collects more than $494 million in annual fees and supports more than 2,100 staff positions. Under the proposed generic drug agreement, FDA is requesting additional funding of more than $40 million and 128 new hires. 

“While FDA appears to be on track to meet the majority of its commitments under the current generic agreement, its performance has been impacted by the COVID-19 pandemic in terms of delayed facility inspections. 

“As of last August, these inspection challenges had delayed more than 29 generic drug applications, with many more applications likely delayed since then.

“Turning our attention to the medical device agreement, I’ve watched this very carefully and I am concerned.

“This committee only recently received the draft medical device commitment letter. The final medical device agreements were due, by law, to Congress on January 15.

“By the time we receive these final agreements, the device commitment letter will be more than three months late.

“Under this proposed agreement, FDA is requesting up to $1.9 billion dollars over the five-year cycle, nearly a $1 billion increase.

“This proposed increase is roughly doubling fee collections.

“Yet again, FDA did not meet deliverables under this user fee program. The FDA missed goals for 510(k) reviews, resulting in longer review times; failed to explain its reasoning to sponsors each time it sent a letter of deficiency about their product; and failed to issue an important digital health guidance on time.

“Let me remind my colleagues, these were not optional actions, these were requirements under the last deal.

“Under the proposed agreement, FDA is committing to holding steady or improving performance for most categories of submissions.

“For the first two years, review times for Premarket Approval applications would hold steady at 290 calendar days, and in the last three years, review times would reduce to 285 calendar days.

“However, FDA is significantly walking back its current commitment to review 510(k) submissions within 108 days. Instead, FDA is proposing longer review times of 128 days.

“The FDA Safety and Innovation Act, which we passed in 2012, required FDA to review 95 percent of these applications within 90 days.

“This agreement almost doubles the user fees, and includes longer review times for some categories of products.

“Pay more, get less is not exactly a selling point to me.

“MDUFA V also includes a new pilot program called TAP that aims to initiate early and frequent engagement between FDA and sponsors of innovative devices.

“As the author of the breakthrough device pathway, I still can’t figure out whether this new program will offer anything different from FDA’s current activities for breakthrough devices.

“This new pilot program is set to grow over the five year cycle, without clear accountability metrics or deliverables to help measure the success of the program.

“The pilot has the ability to grow to 325 devices, which would cost at least $338,000 per device. Congress deserves a full accounting of how FDA plans to spend these resources and operate this new, nebulous program. 

“And I’ll tell you right now, Congress is going to require accountability in here for this new program.

“With each reauthorization, FDA receives huge increases in resources, despite not fully delivering what it previously promised.

“And with a declining percentage of congressional appropriations for the overall programs, FDA is increasingly removing itself from Congress’ reach.

“I question whether the agreements, both past and proposed, reflect a good deal for the patients they are designed to serve.

“In 2017, during the user fee hearings in this Committee, I asked each industry representative testifying about the importance of the user fee agreements and whether they would support a mechanism to hold FDA more accountable.

“The response was clear: FDA should be held accountable to its commitments.

“I look forward to hearing from each of you about why you have agreed to these commitments and how they will accelerate innovative products for Americans.

“I yield back.”