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Study: FDA approval process lags well behind product innovation.

SILVER SPRING, Md. -- Despite rapid acceleration of user fees paid by drug manufacturers, product approvals have not kept pace with innovation, concludes a study by Avalere, a health care strategic consulting company.

Since 1992, the Food and Drug Administration has collected $7.67 billion in user fees from pharmaceutical manufacturers to fund drug reviews, according to an Avalere analysis of FDA data.

The fees have increased dramatically each year, driven primarily by higher application fees that manufacturers submit when they apply for new drug approvals. The fees were created as an additional revenue source to speed FDA approvals.

There are three kinds of manufacturer prescription drug user fees: product fees that are paid for each product being sold on the market; establishment fees that are paid by all manufacturers annually; and application review fees that are paid for every product application that is submitted.

"While new drug approvals increased recently, they have not kept up with the number of innovative ideas entering clinical trials, and we need to consider where the road blocks are to more efficient development. FDA review timing is a critical element," said Avalere senior vice president Gillian Woollett.

Avalere asserts that user fees are increasingly central to the funding of the drug, biologic and device review programs, and in some cases these fees account for a larger proportion of the FDA budget than congressionally appropriated monies. For example, user fees account for 68% of the FDA's review budget for prescription drugs, while 58% of the review budget for generic drugs comes from user fees.

Additionally, user fee programs for both prescription and generic drugs have large carryover balances of unspent user fees close to $300 million.

"The significant unspent funds left over from user fee programs suggest that FDA could do more to accelerate product reviews," said Avalere manager Jay Jackson.

"Particularly with public concern around drug prices, speeding approval of the second-to-market products can increase competition that may result in lower net prices."

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Title Annotation:RX/Government
Publication:Chain Drug Review
Date:Sep 26, 2016
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