When FDA officials and representatives of the pharmaceutical and biotech industries meet in January to begin serious negotiations on reauthorizing the Prescription Drug User Fee Act, they will have relatively modest goals compared to the giant agenda hammered out in 1997, when FDA reform also was on the table.

FDA's primary focus will be stabilizing the rickety financial superstructure that the last PDUFA deal created, primarily by extracting commitments from industry for larger payments and obtaining greater flexibility in how the funds are spent.

Pharmaceutical companies want as little change in the status quo as possible.

And the biotech industry hasn't yet developed detailed goals, although its overriding concern will be reversing a recent trend toward increased approval times.

At the same time, each side of the triangle has incentives to mend PDUFA and to resist efforts from consumer and patient advocacy groups to abolish or fundamentally restructure the user fee relationship.

The current user fee configuration is based on two sets of negotiations: the original PDUFA I, which was in effect from 1992 to 1997, and PDUFA II, which started in 1998 and expires Sept. 30, 2002. In both instances, FDA and industry negotiated agreements and presented them to Congress, which enacted them into law.

Under PDUFA I, industry provided the agency with funds to hire 660 additional reviewers in exchange for commitments to meet performance goals, primarily shorter review times. While reviews became faster and more predictable under PDUFA I, industry, particularly biotech companies, was frustrated by the continuous increase in total development times, which include pre-IND and clinical research periods prior to FDA reviews.

PDUFA II, which was linked to the Food and Drug Administration Modernization Act (FDAMA), was intended to streamline the entire drug development process, in large part by identifying a set of best practices for communication between the agency and sponsors and then mandating FDA's adherence to them. These included steps to ensure good communication between FDA and sponsors starting at the pre-IND stage, such as imposing strict deadlines for FDA to respond to requests from sponsors for meetings.

PDUFA II provided FDA with more money, including funds for an additional 340 staff-years and to upgrade its information technology, and imposed even faster review times.

The FDA argument

FDA last week set the table for its PDUFA agenda. Looking back on the agreement that was negotiated in 1997, senior FDA officials now argue that it was based on seriously flawed financial assumptions. According to Lisa Mullins, FDA associate commissioner for planning, PDUFA II forced FDA to comply with performance measures that are more costly to implement than expected on a budget that is far less than was anticipated.