user fee programs success” (Tauzin, 2002). These goals are contained in the “PDUFA Reauthorization Performance Goals and Procedures,” or the PDUFA “goals letter” (a letter with enclosures), which is transmitted by the Secretary of HHS to Congress annually.

PDUFA required that FDA and specifically CDER review staff meet certain performance goals and report annually to Congress on their progress in meeting those goals. PDUFA also required that companies pay three types of fees to FDA, including a one-time fee submitted with each NDA, an establishment fee, and a product fee (FDA, 2005a,b).* Congress reauthorized PDUFA in 1997 (as part of the FDA Modernization Act) and in 2002 as part of the Bioterrorism and Preparedness and Response Act. In PDUFA I and II, funds were limited to use to the review of sponsor applications for new drugs and indications. No PDUFA funds were allocated to postmarketing drug safety activities until 2002, when limited funds were allocated for limited safety activities. The 1992 PDUFA Amendments to the FD&C Act stipulated that PDUFA user fees must not be used in lieu of but to supplement appropriations. FDA was authorized to assess user fees only if appropriations for drug review were equal to or greater than appropriations for salaries and other FDA expenses in 1992 (Zelenay, 2005). PDUFA II set the trigger at 1997 levels: “Fees under subsection (a) of this section shall be refunded for a fiscal year beginning after fiscal year 1997 unless appropriations for salaries and expenses of the Food and Drug Administration for such fiscal year (excluding the amount of fees appropriated for such fiscal year) are equal to or greater than the amount of appropriations for the salaries and expenses of the Food and Drug Administration for the fiscal year 1997 (excluding the amount of fees appropriated for such fiscal year) multiplied by the adjustment factor applicable to the fiscal year involved” (21 US Code 379h(f)). The adjustment factor is based on the Consumer Price Index (Zelenay, 2005), and that may help explain why, although the agency has always met the trigger that allowed the collection of user funds, appropriations have grown at a much lower rate than user fees (FDA, 2005b). Appropriations have not only not kept pace, but they have declined since 2003, as FDA’s payroll costs have increased (FDA, 2005b).


*For FY 2006, the application fee is $767,400, the establishment fee is $264,000, and the product fee is $42,130 (FDA, 2005a).

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