PDUFA Nation: Let's Expand a Good Policy
There are precious few federal agencies that are able to respond to issues and challenges as fast as they should. Fortunately, there’s one that is.
At a time when some oversight agencies have gone berserk—e.g., the current General Services Administration (GSA) scandal is just the most recent—it’s good to be able to point to a success story: the Prescription Drug User Fee Act, or PDUFA.
In the early 1990s the waiting time to get a new prescription drug through the Food and Drug Administration’s (FDA) approval process had grown to some 30 months. That delay:
Robbed patients of access to important new drugs in a timely manner;
Increased the cost of creating a new drug because it delayed the time when innovator drug companies could begin to sell it; and
Nibbled away at the limited patent time available to the innovator.
To address the problem, Congress passed PDUFA, which allows companies to pay the FDA an additional fee to expedite the process. With the additional funds, the FDA was able to hire more staff to do the needed work. The result was that review times have decreased by about 60 percent.
Yes, it cost the drug companies more money: between $100,000 and $2 million per drug or medical device, according to Sally Pipes of the Pacific Research Institute. But getting the drug through the approval process—if it makes it—is well worth the extra money. And those funds now make up about 25 percent of the FDA’s total budget—which, incidentally, keeps taxes (or federal borrowing) lower. Genius!
PDUFA is up for congressional reauthorization and it looks like there will be wide bipartisan support for it. But once PDUFA has passed, maybe it’s time to see if that model could work for other areas. They are already implementing such a process at the U.S. Patent and Trademark Office.
There are numerous federal and state agencies that seem to have difficulty finishing their approval processes in a timely manner. A PDUFA-style reform might help. Look at it this way: If paying a little extra would help avoid spending a whole afternoon at the DMV (Department of Motor Vehicles), I’d do it in a heartbeat.