Washington Report: PDUFA Blues

Money makes the world go round—especially in Washington, where the prospect of a few hundred million expendable dollars tends to set off a whirlwind of creativity devoted to spending it. FDA is catching more than its share of the breeze these days. On the one hand, the Prescription Drug User Fee Act has to be reauthorized by October 1, 2007, and all the interested parties are busily fine-tuning their wish lists for "improvements." And, on the other, the Bush administration's plan for pandemic-flu preparedness, which puts billions of dollars on the table to purchase antivirals and vaccines, promises to create an enormous workload for the agency—one that is currently unfunded. The situation poses some threats for FDA. But pharmahas a substantial stake in the PDUFA debate as well—especially if the triple-whammy of new PDUFA-funded mandates, rising workloads, and avian flu initiatives leads to a breakdown in the drug approval process.

Jill Wechsler

Seeking Flexibility

PDUFA season officially opened November 14, at an FDA stakeholder meeting to discuss the reauthorization. Acting commissioner Andrew von Eschenbach and deputy commissioner Janet Woodcock, among others, praised the $250 million program. Although some consumer advocates and their Congressional allies blast user fees, arguing that they boost industry control over the drug approval process, FDA officials, pharma companies, and patient disease groups applaud the program for ending "drug lag" and speeding new therapies to market:

• Funding for human drug review rose by more than 225 percent from 1992, when PDUFA first passed, to 2004.

• Median approval time for priority new-drug applications (NDAs) and biologics license applications (BLAs) decreased from 13.2 months in 1993 to 6.4 months in 2003.

• Half of new drugs today are launched in the United States, compared with 8 percent pre-PDUFA.

The program has been expanded twice since 1992 to support post-market surveillance and modernize agency information systems. Now FDA wants more flexibility to use fee revenues to further extend drug-safety oversight and to review DTC advertising before it goes public (an important concern now that companies have pledged under the PhRMA DTC Code to seek such review). The agency also would like to devote some fee revenues to modernizing the ever-longer and more complex drug-development process, as part of its Critical Path initiative (see "What Ever Happened to Critical Path?").

FDA cites a growing workload to justify fee revisions: While NDAs and BLAs are fairly flat, efficacy and manufacturing supplements continue to rise. The agency struggled last year to prepare for more than 2,000 industry-requested meetings and to assess nearly 350 special research protocols for innovations in carcinogenicity testing and clinical trial design, among others.

Similar discussions have begun involving reauthorization of user fees for medical device manufacturers, which also expire in 2007. Officials at FDA's Center for Devices and Radiological Health (CDRH) want to be able to use some of the fees collected under the Medical Device User Fee and Modernization Act (MDUFMA) of 2002 for post-market surveillance, a proposal that has gained momentum following recent safety crises involving pacemakers and defibrillators.

No Christmas Trees

The pharmaceutical industry, for its part, wants to hold the line on fee increases (it currently costs a sponsor nearly $800,000 to file an NDA or BLA) and to restrain the use of fee revenues for activities unrelated to drug development and approval. A broader goal is to prevent a reauthorization bill from becoming a "Christmas tree" loaded with miscellaneous legislation. That's a legitimate concern. Proposals are already circulating on the Hill to establish new drug-safety-oversight arrangements, spur development of follow-on biologics, mandate completion of post-approval studies, and boost oversight of DTC advertising, to name just a few.

There's even an item industry would like to put on the tree: a measure to reauthorize the use of patent extensions as incentive for conducting studies of drugs in pediatric populations, which also is up for renewal in 2007. The six-month extensions have been a boon for pharma companies, while also generating important pediatric labeling information.

At the November meeting, Abbott senior vice president Bruce Burlington, representing PhRMA, urged further analysis of whether current user-fee revenues are wisely spent. Burlington noted that an FDA study of first-cycle reviews and a review of the impact of risk-management plans may be informative. Industry supports further development of FDA computer information systems, as well as a suggestion from the Biotechnology Industry Organization to improve drug safety through better evaluation of trade names.

The most serious danger: The whole PDUFA program could collapse if Congress tries to boost user fees without also increasing FDA appropriations. The program has a complex trigger arrangement, established in 1992, to ensure that user fees would supplement FDA appropriations and not merely replace public funding, an arrangement backed by all parties. But FDA's personnel costs rise 5 to 6 percent a year because of mandated cost-of-living increases, and FDA appropriations seldom cover those costs. While the agency has managed to make the numbers work each year, the continued squeeze on FDA's budget challenges the program's basic principle.

The long-discussed proposal to institute user fees for generic drugs has resurfaced in recent months, as prospects have dimmed for budget increases earmarked for FDA's Office of Generic Drugs. Generics makers say they're willing to discuss the idea, but application fees for abbreviated NDAs are tricky due to often lengthy delays between when FDA approves an ANDA and when the product actually comes to market.

Planning for Pandemics

Meanwhile, the Bush administration's $7.1 billion Pandemic Influenza Plan poses a different kind of challenge to FDA. The plan, which was released in November, includes a whopping $2.8 billion "crash program" to revitalize US vaccine manufacturing—in part by shifting from egg-based flu vaccine production to advanced cell-culture approaches able to produce a new vaccine in six months. Another $1.5 billion would buy 40 million vaccine doses by 2009, plus $1 billion to stockpile enough antivirals, such as Roche's Tamiflu (oseltamivir) and GlaxoSmithKline's Relenza (zanamivir), to treat 25 percent of the population.

Public health officials praise the administration's focus on pandemic preparedness and support for research on new vaccines and treatments. But the plan has drawn fire from politicians on both sides of the aisle.

Congressional conservatives oppose spending billions that the government doesn't have, and Democrats blast the administration for providing a paltry $100 million to support state preparedness efforts and antiviral purchases. The largess to vaccine and drug makers also faces challenges—there are still fears that government and manufacturers are too cozy. On the manufacturers' side, the prospect of compulsory licensing has put pressure on Roche to negotiate licensing arrangements with generic-drug makers to boost Tamiflu supplies, and similar responses are likely for future potentially life-saving vaccines and treatments.

Squeezing FDA

While the administration's preparedness plan acknowledges FDA's central role in ensuring access to safe and effective flu vaccines and treatments, the initiative provides only $20 million to cover a long list of added duties: evaluating new production strategies and investigational vaccine lots, as well as assessing new antivirals and diagnostic tests and devices.

The 2004 flu vaccine crisis required FDA officials to spend weeks monitoring vaccine quality and inspecting manufacturing sites in the United States and overseas, while also engineering accelerated approval for new sources of supply. A huge ramp-up of stockpiles will tax FDA's ability to monitor drug stability, while growing demand for flu treatments will require close scrutiny for counterfeit products.

FDA has assembled a Rapid Response Team to coordinate agency pandemic-preparedness activities with industry, the Centers for Disease Control and Prevention and the National Institutes of Health. The aim is to detect production roadblocks to ensure an adequate supply of antivirals and vaccines in case of a domestic pandemic outbreak. The team would have authority to allow other firms to manufacture a patented product under "emergency-use" authorization.

While every bird that catches avian flu now makes headlines, many scientists are skeptical that a pandemic will emerge in the near future. Reminders are resurfacing of the 1976 swine flu debacle, when the government wasted billions developing vaccines for a flu pandemic that never materialized.

If the current plan succeeds in modernizing and expanding the US vaccine-production infrastructure, that may be money well spent. But industry may share the blame if it benefits from government grants but never has to respond to a real emergency.

Jill Wechsler is Pharm Exec's Washington correspondent. She can be reached at jwechsler@advanstar.com