FDA PDUFA II Update Emphasizes Need To Reauthorize Act Before Sunset

FDA's updated PDUFA II five-year plan may increase pressure on Congress to reauthorize the program ahead of the Sept. 30, 2002 sunset date.

The agency intends to spend about $18 mil. more than it collects in both FY 2001 and 2002 so that it has sufficient operating funds to meet PDUFA goals, FDA says in the update.

The money spent will come from funds collected but not spent in previous years, meaning substantially reduced carryover balances when PDUFA II expires.

"Increased spending is essential to meet the PDUFA goals that become increasingly difficult in the final two years of PDUFA II," FDA asserts. "However, carryover balances by the end of FY 2002 are now estimated at less than $22 mil."

The low level of funds expected at the end of FY 2002 "make it imperative that PDUFA be reauthorized before Sept. 30, 2002, to avoid a funding hiatus if PDUFA II expires before reauthorization is enacted," FDA asserts.

The agency says it has chosen to operate on carryover funds because "it is more prudent to assure goals are met than it would be to conserve the resources and risk failing to meet the goals."

The changes in the PDUFA II five-year plan are relatively minor compared to those outlined in a July 2000 plan update, FDA says. However, the agency expects a $5 mil. decline in revenues (due to decreased workload) and slightly increased expenditures (primarily for staffing) in FY '01 and '02.

FDA's July 2000 update was the first to show program expenditures exceeding revenues. At that time, the agency projected spending $13.6 mil. in carryover funds in FY 2000, $9 mil. in '01 and $9.6 mil. in '02.

The agency's latest estimates are nearly double its earlier projections for carryover fund spending in 2001 and 2002. FDA says it plans to use $18.3 mil. in carryover funds in 2001 and $17.8 mil. in 2002, leaving a carryover balance of $21.3 mil. at the end of 2002. FDA does not set aside a contingency reserve for FY '02, maintaining, "carryover balances should cover any contingencies that arise."

The $21.3 mil. carryover FDA expects will remain at the end of 2002 is just below the $24 mil. the agency had at the end of the last PDUFA cycle.

At that time, FDA estimated the $24 mil. was enough to fund up to six months of operations after PDUFA I expired in 1997, particularly for costs associated with terminating the user fee program.

FDA ultimately was able to continue collecting user fees after PDUFA's expiration under a continuing resolution and a one-year extension in an appropriations bill until the signing of the FDA Modernization Act.

Rep. Richard Burr (R-N.C.) suggested during a May 2 House Energy & Commerce/Health Subcommittee hearing that Congress should reauthorize PDUFA in 2001 ahead of its sunset date, in tandem with FDAMA's pediatric study incentive (¹ (Also see "PDUFA III Could Move Through Congress In 2001, Rep. Burr Suggests" - Pink Sheet, 7 May, 2001.)).

The update increases the Center for Drug Evaluation & Research's total PDUFA spending to $180 mil. for the five-year period, an increase of $16 mil. above the original plan and $13 mil. above last year's update. Fifty-three percent of CDER's total spending ($95 mil.) is directed toward retaining current staff and hiring additional staff for the drug evaluation process.

The center expects to hire a total of 280 full-time equivalents over the five-year period, an increase from 254 FTEs in last year's update. The increase primarily is for new staff to manage the increased workload in preapproval inspections and clinical trial inspections, FDA says.

The five-year plan explains that in the FY '01 third quarter, CDER and the Office of Regulatory Affairs will complete an infrastructure and security design and implementation plan providing field personnel access to necessary CDER documents.

"To fulfill ORA's PDUFA review responsibilities for performing premarket inspections or recommending decisions on a firm's ability to adequately manufacture a product, ORA investigators and compliance officers in the field offices must be provided access to electronic documents maintained by CDER," FDA says.

The infrastructure and security design plan is expected to be implemented beginning in the fourth quarter of '01, with a goal of achieving complete access by the fourth quarter of 2002.