In 1992, The Food & Drug Administration made what some now see as a deal with the devil. Chronically underfunded, the agency was taking two years or more to review new drugs. The pharmaceutical industry was losing billions in potential sales. AIDS activists were screaming that people were dying while the FDA fiddled. So with budget increases unlikely, the FDA and drugmakers made an historic bargain: The agency agreed to review drugs faster if industry chipped in to help pay related salaries and costs. It worked. For a mere $40 million in fees in 1994--23% of review costs--they got billions of dollars in extra sales by being on the market sooner.
But the deal turned out to have a dark side. Because the industry money was earmarked for drug reviews, it wasn't available for other FDA functions that were starved for funds. One such problem alone--a woefully inadequate system for spotting problems with drugs after they're approved--puts millions of Americans at risk for drug-related side-effects. In the 1992 law, "the country was sold a bill of goods," says Dr. Jerry Avorn, a professor of medicine at Harvard Medical School.
Now Congress is trying to tackle unintended consequences from the bargain. It must act because the clock is ticking. Without renewal of the law, the FDA would have to lay off hundreds of reviewers, sending approval times soaring. On the flip side, the current debate offers a golden opportunity to reshape 1992's uneasy bargain.
BEHOLDEN TO INDUSTRY
So will Congress keep the 15-year old deal, or seize this chance to negotiate a new one? The difficulties and underlying tensions were on vivid display in the debate leading up to a May 9 Senate vote. Lawmakers reauthorized the user fee law, adding drug safety provisions. But the final bill won't take shape until June or later, after the House acts, and many experts believe the final action Congress takes will fall short of what's really needed. "There are a lot of opportunities, but many of them will be missed," predicts George Washington University professor Susan F. Wood, a former top FDA official.
What is clear is that the existing law has few fans. Critics include everyone from public health interests and consumer groups to the pharmaceutical industry itself. Drugmakers complain that the fees are soaring to a proposed $400 million in 2008. "In effect, we have been blackmailed," says Peter Barton Hutt, senior counsel at Covington & Burling, who represents drugmakers. The industry admits it can afford the increases. But the fact that companies now pay more than half the costs of reviews "fuels a perception problem for an agency that regulates 25% of the U.S. economy," argues Biogen Idec Inc. (BIIB ) Chief Executive Officer James C. Mullen. If the FDA continues to be seen as beholden to the industry it regulates, doctors and patients will be more skeptical about newly approved drugs, and that could hurt sales.
Meanwhile, the shortfall in funding for FDA activities other than drug reviews is hurting the agency. The biggest concern: monitoring drugs after they reach the market. Clinical trials carried out before approval don't detect all safety issues. Many emerge only after millions of people start taking the drugs. Ironically, back when FDA reviews were slower, Americans were safer because Europeans got new drugs first, thus serving as guinea pigs.
The agency relies on busy doctors to send in reports of suspected injury from drugs. "That captures only a tiny fraction of the adverse events," says former FDA Commissioner Dr. Mark B. McClellan. Plus, the FDA's staff is so small that officials spend an average of just eight minutes on each report.
There's also growing evidence that the agency may cut corners on drug reviews because of deadlines in the user fee law. "Drugs approved in the two months before the deadline seem more likely to have problems once on the market," says Harvard professor Daniel Carpenter. Such drugs are more apt to be withdrawn or to have warnings added to their labels.
A coalition of industry, patient groups, and health advocates is lobbying Congress to boost FDA appropriations to replace industry dollars. Budget increases are hard to find, though, so it's virtually certain that the user fee law will be renewed. "It will pass. The question is what it will drag along with it," says Hutt.
Many interest groups want to add new provisions. Senators Edward M. Kennedy (D-Mass.) and Michael B. Enzi (R-Wyo.), the chairman and ranking member, respectively, of the Senate Health, Education, Labor & Pensions Committee, have been pushing a bill that increases the toll on industry. The measure would beef up surveillance of drugs on the market and require the agency to assess the risks of pharmaceuticals during review. "This bill gives the FDA the necessary resources and tools so moms and dads can trust that the products at the pharmacy counter are safe and effective," says Enzi.
Not so fast, says Big Pharma. Companies don't want to pay more for more regulation. Drugmakers urge "passage of a bill free of extraneous provisions," said Billy Tauzin, president of the Pharmaceutical Research & Manufacturers of America, in a statement.
Industry won't get exactly what it wishes. The bill that the Senate passed on May 9 does include the Kennedy-Enzi drug safety provisions and new protections for the food supply. But drugmakers beat back efforts to allow imports of cheaper drugs from Canada and continue to fight the added provisions. Their main strategy: get a "clean" user fee law passed by the House of Representatives. When the House and Senate versions go to conference to hammer out their differences, Senate negotiators will have an uphill battle selling the House on their more comprehensive approach.
The most likely upshot: The original bargain will receive a tweak. But the opportunity for fundamental change could be missed.
By John Carey