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Washington Post, May 23, 2002, Page 1

 Bill to Boost Industry Fees That Fund FDA

 By Marc Kaufman

With little public discussion and limited debate on Capitol Hill,
Congress
is moving to substantially expand the program through which companies
pay
large fees to the Food and Drug Administration to review their new drug
applications, making the agency increasingly dependent on the businesses
that it regulates.

The expansion, a top priority for makers of drugs and medical devices,
was
put on a congressional fast track and added to the bioterrorism bill, a
popular bipartisan effort that negotiators signed off on early this week
and
the House overwhelmingly approved yesterday.

The expanded FDA "user fee" bill is speeding toward final approval after
receiving unusually little public debate or scrutiny. The program was
crafted in private meetings between the industry and the FDA, was never
debated or voted on in either chamber before going to the negotiators,
and
is moving forward before a General Accounting Office review of the
current
program can be finished and made public.

If passed as proposed, the user fees from pharmaceutical and
biotechnology
companies would add almost 500 employees to the FDA centers that review
proposed new drugs and other substances used to treat patients by 2007,
bringing the FDA workforce funded by industry to at least 1,530. That
would
constitute more than 55 percent of the FDA staff involved in reviewing
drug
applications.

Having drugmakers fund the FDA is viewed as such a success by lawmakers
and
industry representatives that other health product suppliers are eager
to
follow, and the makers of medical devices and drugs for animals
completed
negotiations recently with the FDA to start similar industry-funding
programs. Intense efforts to tack those programs onto the bioterrorism
bill
failed Tuesday, but industry spokesmen said they will continue pressing
for
quick congressional approval.

The FDA user-fee program is a decade old, and agency leaders say that
funds
from drugmakers have allowed the agency to review applications more
promptly
and efficiently, and with the same intense scrutiny as before. The
result,
they say, is that new drugs get to patients more quickly and more than
half
of the world's new drugs are launched first in the United States.

But some legislators and public health advocates are concerned that
industry
funding of the FDA will undermine its independence and credibility with
the
public. Some also worry that the user fees -- plus the accompanying
requirements for the FDA to act on drug applications within set periods
of
time -- are encouraging the agency to move too quickly when it reviews
new
drug applications and without enough attention to safety. Nine drugs
approved in the past 10 years were later withdrawn because of deadly
side
effects.

Because of such concerns, Sen. Edward M. Kennedy (D-Mass.) last summer
requested a GAO evaluation into "potential unintended consequences" of
the
current FDA user fees and asked that it be completed before Congress
took up
the bill to reauthorize and expand the program. That report has not been
finished or made public.

Kennedy still strongly supports the user-fee legislation, but some of
his
colleagues are skeptical. "Our concern is that with so much industry
money
coming in, the fox may be guarding the henhouse at FDA," said Rep. Bart
Stupak (D-Mich.) before the final bill was approved. "There's no doubt
in my
mind that bigger and bigger [user fees] harm the credibility of the
agency."

But those arguments have carried little weight on Capitol Hill,
especially
since congressional authority for the FDA to pay the drug reviewers
currently funded through industry fees expires in September. The agency
has
said it would have to start sending out layoff notices by mid-summer
unless
the authority was renewed -- a deadline that encouraged congressional
leaders to act quickly and attach it to the popular bioterrorism bill.

Health and Human Services Secretary Tommy G. Thompson said yesterday
that
the expanded drug user-fee program, as well as the proposed medical
device
and animal drug user fees, are "vitally important" to his department.
"If
you look at the scarce resources that all of us have, you have to
balance
the good with the problems," he said. "And the good is that . . . the
public
will get drugs faster than if we didn't have the fee situation."

The drug and biotechnology industries pay about $160,million yearly in
user
fees to the FDA, but that sum would jump to $260,million yearly in 2007
under the proposed expansion. The new money would not only allow the
agency
to hire more staff but also to upgrade its technology and improve
management
at FDA headquarters. In return, the FDA would commit to maintaining its
speedier pace for new drug reviews and to more quickly move applications
for
new uses of older drugs. In addition, it would begin pilot programs to
further speed review of certain fast-track drugs.

The proposed fees for veterinary medicine and medical devices would be
much
smaller, but would embed the program throughout the FDA. According to
industry sources, private funding of the Center for Veterinary Medicine
would reach $10 million within three years under the negotiated
agreement,
and more than $25,million for the Center for Devices and Radiological
Health.

Drugmakers pay three user fees to the FDA – one when they submit an
application for a new drug, one for inspections of their manufacturing
plants and another for each approved drug on the market. The funds,
which
will total $1.2,billion over the next five years, go to staff and supply
the
two FDA centers that review new drug applications. FDA officials say the
industry money does not affect agency decision-making -- that it speeds
the
review process but makes it no more likely that any single drug
application
will be approved.

The details of all the user-fee programs have been negotiated in private
between the FDA and organizations that represent the industries
involved:
the Pharmaceutical Research and Manufacturers of America and
Biotechnology
Industry Organization for drugs, the Animal Health Industry for
veterinary
drugs and the Advanced Medical Technology Association for medical
devices.

When the first drug user-fee bill was passed in 1992 and when it was
reauthorized in 1997, intense debates followed in Congress before the
program became law. But with the current expansion, Congress had only
one
limited hearing (in March in the House) and the animal drug and medical
devices user-fee programs were never publicly debated. The final
negotiations on medical devices were completed over the past weekend.

"It's an amazing thing that all this is going on behind closed doors,
that
this bill isn't being discussed in the sunshine at all," said Diana
Zuckerman, president of the National Center for Policy Research for
Women &
Families, a public interest group in Washington. "Patient and consumer
groups are really not getting a chance to weigh in properly."

But the expanded drug user-fee bill contains some provisions that
patient
and consumer groups applaud. It would allow the FDA to use industry
funds to
pay for expanded safety reviews after drugs come on the market and sets
aside up to $20,million in dedicated funds. The bill that passed the
conference committee also requires greater public participation in the
future in the user-fee negotiations between the FDA and the drug
industry.

The decision to add the drug user-fee bill to the bioterrorism
legislation
was initially announced by conference committee chairman Rep. W.J.
"Billy"
Tauzin (R-La.). He and other legislators agreed to keep all
"controversial"
elements out of the user-fee proposal, but that effort hit some
roadblocks.

The medical device user-fee legislation was opposed by some smaller
manufacturers in the industry, and makers of generic veterinary drugs
also
fought the fee program for their center. Large trade associations
representing both industries believe that the FDA centers that regulate
their products are underfunded and that the drug user-fee program has
increased that underfunding.

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