FDA Staff Cuts Threaten User Fee Negotiations, Jeopardizing Drug Review Process

The pharmaceutical industry faces a potential crisis as recent staff cuts at the U.S. Food and Drug Administration (FDA) have claimed key negotiators responsible for renewing the agency's critical user fee programs. This development threatens to disrupt the drug review process and could have far-reaching consequences for both the regulator and drugmakers.

Massive Layoffs Impact FDA's Negotiating Power

In a sweeping downsizing initiative rolled out by Health and Human Services (HHS) Secretary Robert F. Kennedy Jr., the FDA has lost approximately 3,500 staffers. Among those affected are 15 FDA employees who were preparing for upcoming user fee negotiations, including the head negotiator and deputy head negotiator for one of the agency's user fee agreements.

The Prescription Drug User Fee Act (PDUFA) of 1992 allows the FDA to collect application fees from companies seeking product reviews. These fees currently comprise about 70% of the FDA's drug review budget and are crucial for ensuring timely approval processes. The loss of experienced negotiators puts the FDA at a significant disadvantage as it prepares for reauthorization talks with the pharmaceutical industry.

Paul Kim, a health policy lawyer who helped draft the first user fee agreement in 1992, warned, "You can always find a warm body to get into a room with biotech and pharma, but they will get their lunch eaten."

Disruptions to Reauthorization Process and Public Meetings

The staff cuts have not only impacted the FDA's negotiating team but have also affected employees responsible for organizing legally mandated public meetings that precede user fee negotiations. Meetings scheduled for June and July to gather input on generic and branded drug programs, respectively, are now in jeopardy.

Janet Woodcock, former principal deputy FDA commissioner, highlighted the severity of the situation: "There are no people at the FDA now doing overall tracking and reporting on whether the agency is meeting its required comments under PDUFA and GDUFA. These programs have been hobbled by losing all of their support staff. They are what enable the system to bring safe and effective medicines to the American public."

Industry Concerns and Potential Consequences

The threat to the FDA's user fee programs has become a growing concern among industry experts. Some warn that the framework could "effectively collapse" if the FDA falls below historic funding levels. There is also a risk that the agency could be forced to return user fees it has already collected under a trigger framework designed to maintain balance between federal and industry funding.

Steven Grossman, co-founder of the Alliance for a Stronger FDA, framed the issue as existential for the agency, noting that "we now have leaders who seem ready, perhaps eager, to let the user fee programs lapse." He called for the industry to think "outside the box" to help "prevent a potential disaster."

Beyond funding concerns, there are fears that the FDA may struggle to meet its drug review timelines in the coming years. A former director of the agency's Center for Biologics Evaluation and Research (CBER) told BMO Capital Markets that while FDA staffers remain dedicated to their mission, the changes disclosed publicly may be just the "tip of the iceberg."

As the situation unfolds, industry leaders and lawmakers are being urged to act swiftly. David Risinger, senior managing director for biopharma at Leerink Partners, suggested that Congress could implement a statutory delay if appropriated funding drops below the trigger point for the user fee program. Additionally, he emphasized the need for the industry and FDA to work together quickly to create a path for reauthorization, while also engaging with lawmakers to address concerns about the current state of the regulatory agency.