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How much money do drug companies pay the FDA?

Friday, 27 January 2012
by Jessica Wapner

The Prescription Drug User Fee Act became a law in 1992. PDUFA (or as most people say, padoofa) allows the FDA to collect fees from pharmaceutical companies filing new drug applications. A new drug application, or NDA, is the process by which the FDA reviews new drugs. Updated performance goals, which have been part of PDUFA from the start, for 2013 through 2017 were issued this past September.

PDUFA was mainly created as a response to complaints among consumers, the pharmaceutical industry and the FDA that drug approvals were taking too long. The FDA said that without more money, there would never be enough staff support to churn out approvals at a rate that met with public and industry approval, and that met the needs of patients awaiting better treatments. In that light, the arrangement seems reasonable: drug companies are private, for-profit businesses that require regulatory approval of products they want to bring to market, so it seems right that they should have to pay for the time a government agency has to spend reviewing the compound.

On the other hand, another point of view holds that PDUFA spells not just padoofa, but also trouble, because its puts the FDA in the pockets of the drug industry. In the same way that doctors are accused of subjecting themselves to bias when they receive consulting or speaker fees from a drug company, so has the FDA been accused of kowtowing to the pharmaceutical industry, approving drugs that maybe shouldn’t be approved for one reason or another, and allowing the committees assembled to review NDAs to be stacked with conflicts of interest.

All of the information about what fees are paid to the FDA is public information. But few people who have tried to navigate through the FDA’s labyrinthine website have lived to tell the tale. So, apropos of nothing, here are some of the relevant numbers.

In FY 2012, the fee for filing an NDA that requires clinical data is $1,841,500. For an application that does not require clinical data, the fee is $920,750.

The most recent year for which the payment amounts are available is 2010. In FY 2010, the total amount paid to the FDA for application fees was $172,238,150. Establishment fees (another, smaller component of PDUFA) totaled $183,328,513. Product fees (yet another, still smaller component) came to $173,709,880. (Fun task: See if you can make heads or tails of the definitions on establishment fees and product fees at this FAQ on PDUFA) That brings the grand total of PDUFA fees collected in FY 2010 to $529,276,543.