Amid a firestorm over its approval of a new Alzheimer’s treatment, the Food and Drug Administration is holding closed-door meetings with companies it regulates — talks that critics say allow drug and device makers to exert outsize influence over the agency’s operations, threatening to erode public trust in the agency at a critical moment.
The talks focus on “user fees” that pharmaceutical and medical-device companies pay to the FDA annually and when applying for approval of new products. The FDA in recent years has become increasingly reliant on such payments, which funded nearly half of the agency’s total spending in fiscal year 2020. In exchange for the fees, the FDA agrees to certain deadlines for reviewing new-product applications, the type and frequency of meetings with companies submitting applications, and other commitments. The medical-product user-fee agreements are generally renegotiated every five years — a process that’s happening now, in advance of the current agreements’ expiration next year — and submitted to Congress for authorization.
Although the FDA is required by law to consult with patient and consumer advocacy groups on the discussions and make minutes of its industry meetings public, the meat of the talks often remains hidden, observers say. Since September of last year, the FDA has held more than 150 meetings with industry to discuss fee agreements for brand-name prescription drugs, generics, medical devices and biosimilars (products similar to branded biologic drugs), which together are expected to generate nearly $2 billion for the agency this fiscal year. Yet consumer advocates and other outside groups attempting to track the discussions say they remain in the dark about most of the details. FDA summaries of some recent meetings have been posted months after the fact or sum up a discussion in a single sentence. Medical-product safety experts say they’ve repeatedly asked for more access and details on the negotiations, to no avail.
“We simply can’t get a view into this process, and the lack of transparency is deliberate,” says Madris Kinard, a former public health analyst at the FDA and CEO of Device Events, which tracks medical-device adverse-event reports.
Details about the negotiations that have trickled out raise alarms among some medical-product safety experts, academic researchers and consumer advocates that the industry’s leverage in these talks ultimately puts patients at risk. User fees are speeding more products to market without a corresponding increase in resources to track the safety of those products, critics say. Yet in the current round of negotiations, FDA efforts to allocate more user fees toward monitoring the safety of medical products already on the market have met industry resistance.
Some experts would like to get rid of user fees entirely — or at least overhaul the system with greater consideration for public trust and safety. “Ideally, I’d like to see the FDA fully funded by the government,” says Dr. Aaron Kesselheim, a Harvard Medical School professor. But, since that’s an unlikely scenario, he says, more transparency in the industry negotiations and more user-fee funding directed toward postmarket oversight and safety would improve the system. The industry, however, “is incentivized to try to get the maximum it can for its user-fee contributions,” he says, and increased safety surveillance that could lead to more product recalls “doesn’t financially benefit them.” At a meeting last summer, an FDA official put it bluntly: “User fees pay for services that directly benefit fee payers,” he said. “This is what distinguishes it from a tax.”
Major pharmaceutical companies generally don’t disclose their user-fee payments. Standard rates for 2021 include roughly $2.9 million for a new prescription-drug application with clinical data and a $336,000 “program fee” levied annually on certain products.
The negotiations come at a delicate time for the FDA. For more than five months, the agency has been without a permanent commissioner, or even a nominee for the position. As the pandemic lingers, public trust in FDA decisions regarding COVID-19 vaccines and treatments is more critical than ever, researchers say. Yet the agency’s leadership is under fire. Two House committees announced in late June that they would investigate the FDA’s recent approval of the Biogen
Alzheimer’s treatment, Aduhelm, which got a green light despite an FDA advisory committee’s finding that there wasn’t sufficient evidence of its effectiveness. Several advisory committee members, including Kesselheim, resigned in the wake of the approval, which also triggered calls for the removal of acting commissioner Dr. Janet Woodcock and other top FDA officials. Woodcock on Friday asked the Department of Health and Human Services acting inspector general to investigate interactions between Biogen and FDA staff during the review process.
Some experts have pointed to user fees as a potential factor behind the Aduhelm decision. “If you are an FDA drug reviewer and your salary is paid mainly by drug companies, you will naturally be tempted to smile favorably on their drugs,” Dr. Marcia Angell, former editor-in-chief of the New England Journal of Medicine, wrote in a June op-ed about the Aduhelm decision. “But it’s a clear conflict of interest, and it should be seen as such.”
An FDA spokesperson said that “user fees provide instrumental funding for the FDA’s independent review of medical products that make a difference in the lives of all Americans, without compromising the agency’s commitment to scientific integrity, public health and regulatory standards, patient safety, and transparency.” In addition to publicly posting meeting minutes and regularly meeting with outside groups, the agency says it invites public feedback on the draft user-fee recommendations.
Time is money
FDA medical-product user fees originated in the 1992 enactment of the Prescription Drug User Fee Act, and they’ve been expanding ever since, with new fees added for medical devices, generic drugs, biosimilars and, just last year, certain over-the-counter drugs. They were always intended as add-ons to — not replacements for — congressional appropriations, but the fees have taken on increasing significance as they’ve grown faster than the FDA’s congressional funding. Between fiscal years 2017 and 2021, FDA’s congressional appropriations increased 18%, while user-fee revenue increased nearly 42%, according to the Congressional Research Service. For human drugs, user fees covered about 65% of the FDA’s spending in fiscal 2020.
The main idea behind the user-fee programs was to speed up FDA review of medical-product marketing applications — and they’ve delivered on that front. The median time to approval for standard new-drug applications was 10 months in fiscal 2018. In the years before user fees were first enacted, the median FDA application review time was nearly three years, according to a study by Kesselheim and colleagues at Harvard and Brigham and Women’s Hospital.
Faster FDA reviews can benefit both patients who need access to new drugs and drug companies eager to see their products on pharmacy shelves. The enactment of user fees “was the best thing that ever happened to patients in the U.S.,” says Ira Loss, senior healthcare analyst at institutional research firm Washington Analysis. The idea that the FDA is influenced by industry money is “baloney,” he says, because plenty of applications still get a thumbs-down from the agency.
But user-fee deadlines can have serious side effects, some experts say. As the opioid crisis was exploding, “there was a question of ‘Why does the FDA keep approving the opioids?’ ” says a former FDA official. “One reason was that they had applications and had user-fee obligations to review the applications.” So long as an application met the standard requirements, “it would be approved,” he says. “That’s an example of the mindset” created by the deadlines.
Several studies have linked faster drug-approval timelines to safety issues. A 2014 study in Health Affairs found that drugs approved after user fees were enacted were more likely to get new black-box warnings or be withdrawn from the market than drugs approved in the pre-user-fee era. Other studies have found that, compared with drugs approved at other times, drugs given the green light shortly before their user-fee deadlines were more likely to have subsequent safety issues. Deadlines “can discourage asking important questions or requesting additional data that might delay a decision,” says Dr. Michael Carome, director of the health research group at Public Citizen.
Some experts are also concerned about user fees’ impact on the safety of medical devices, which include pacemakers, artificial hips and dental implants. As the fees help propel more devices to market, medical-device adverse-event reports are also soaring. Those reports, which detail everything from minor device malfunctions to patient death, topped 1.5 million in 2020, a nearly 50% increase from 2018, according to Device Events. This year, adverse-event reports are on pace to break through that record level, Device Events data show, with nearly 1 million reports received through the end of June. The user fees generally fund operations related to products that haven’t yet hit the market, and resources to monitor red flags among devices already on the market — and, in many cases, implanted in patients — aren’t keeping up, researchers say. Between fiscal 2017 and 2021, user fees funding the FDA’s work on devices and radiological health have climbed about 85%, while budget authority for that work rose about 24%.
In the current round of medical-device user-fee negotiations, one of the FDA’s goals is to improve device safety, including through increased funding for surveillance of devices already on the market, the agency says. That proposal met stiff resistance from the industry, according to outside groups that have received FDA briefings on the talks. At an April 7 negotiation meeting, the industry expressed the view that fees “should be solely for the premarket review process,” according to a summary posted by FDA. Medical-device trade group AdvaMed didn’t respond to requests for comment.
At the start of the prescription-drug user-fee negotiations, the FDA also emphasized its hope of improving the Sentinel Initiative, a system for assessing the safety of approved medical products. But a related proposal advanced by the FDA during the negotiations was shot down by the industry, a December meeting summary notes.
The trade group Pharmaceutical Research and Manufacturers of America (PhRMA) said it can’t discuss the recent negotiations before the user-fee agreement is released. User fees have helped ensure “that patients have timely access to safe, effective, and high-quality new drugs and biologics,” says PhRMA spokeswoman Sarah Sutton. “While the FDA has advanced in its ability to review products faster, the agency remains the gold standard for regulatory review of medicines to protect and promote public health.”
“There’s not a lot of friction between the industry and the agency” in prescription-drug user-fee negotiations, says a former FDA official. “The industry knows it’s getting good value.”
A sign of the amicable relations: One FDA official leading the current round of prescription-drug user-fee negotiations left the agency in April of this year, according to her LinkedIn profile, to become vice president of science and regulatory affairs at BIO — one of the industry groups she’d just been negotiating with. The former FDA official, Khushboo Sharma, participated in a user-fee negotiation meeting with BIO and other industry representatives as recently as Feb. 12, according to meeting summaries posted by the agency. “That is obviously an outrageous situation and clearly undermines the integrity” of the process, says Diana Zuckerman, president of the National Center for Health Research, a nonprofit think tank.
Asked for comment, the FDA sent a link to its post-employment restrictions, which say in part that current employees who have begun seeking employment outside the federal government must immediately recuse from certain matters that affect “the discrete industry, economic sector, or other defined class of organizations in which the prospective employer operates.” BIO didn’t respond to a request for comment. Sharma says that she worked with FDA ethics officials “to ensure I was recusing myself from all appropriate activities. I started seeking post-employment opportunities after negotiations had concluded.”
When the agency’s position does conflict with an industry’s, the FDA “is not going to come out on top,” says Lisa McGiffert, a patient-safety advocate at the nonprofit Patient Safety Action Network. Given the industry’s track record of snagging many items on its wish list, some observers are concerned that the current round of negotiations could chip away at FDA standards for approving new drugs. One issue: the use of “real-world data,” which can come from insurance claims, medical records, disease registries and other sources beyond the bounds of clinical trials. In an August 2020 letter to the FDA about user-fee reauthorization, PhRMA said that real-world data and evidence “may, in some circumstances, be adequate on their own to satisfy the substantial evidence criteria for demonstrating effectiveness” of drugs.
That doesn’t sit well with some experts on real-world data. “A lot of folks in the industry, I worry, see this as a cheaper way to bring products to market, because clinical trials are expensive,” says Dr. Joseph Ross, a Yale School of Medicine professor of medicine and of public health. “Even if you’re using real-world data, it should still be in the context of a clinical trial.”
Theoretically, lawmakers could strike a better balance between industry goals and public health considerations when the user-fee agreements are sent to Congress for reauthorization next year, observers say. But “in each previous reauthorization, Congress has accepted unchanged the terms and conditions as negotiated between FDA and the industry,” according to a February report from the Congressional Research Service. The user-fee reauthorization, considered must-pass legislation, also gives the politically powerful pharmaceutical and medical-device industries an opportunity to lobby for other add-on provisions. The 2012 law reauthorizing user fees also expanded the scope of the fast-track designation and accelerated approval, two approaches that can help speed new drugs to market.
This time around, Congress should have hearings on prescription-drug and medical-device user fees and take a close look at the reauthorization process as well as any language related to drug and device clearance and approval standards and review timelines, which will likely be industry-friendly, says Michael Abrams, health researcher at Public Citizen. Lawmakers need to consider what they care about most, he says. “Is it Big Pharma or the American public?”