FDA Funded By Pharmaceutical Firms…Million Dollar Application Fees or Bribes?

pillsMost people believe that the FDA is a huge governmental agency tasked with evaluating the safety and effectiveness of the food, medications, medical devices and even the cosmetics used by the public.  These same people  have a false sense of security and dependence in knowing that the FDA has put their stamp of approval on something.

If questioned, most Americans would say that the FDA is funded by our tax dollars. While that is partly true, the FDA is also directly funded from the very pharmaceutical companies that apply for FDA approval.  Monies paid by these companies, tagged as a “user fee”, are a significant part of the FDA’s budget and accounts for nearly $500 million dollars.  I find it ironic that fees tied to incentives surrounding performance in other industries is strictly forbidden and often comes with harsh penalties.  The government plays by a different set of rules.

The Prescription Drug User Fee Act (PDUFA) and the Medical Device User Fee Act (MDUFA) are federal statutes that allow the FDA to collect fees from drug and medical device manufacturers. The manufacturers pay this fee when they apply for FDA approval in exchange for the FDA’s commitment to attain certain performance goals, such as their promise to review 90% of new drug applications within six to ten months. In 2011, the applications fees paid by drug manufacturers are estimated to be between $700,000 and $1.5 million dollars for each application.   These fees are negotiated and then sent to Congress for vote.  Funny…I don’t remember hearing Congress fighting over this one.

On the surface most people would have no issue with the payment of an application fee when applying for FDA approval.  The fact that these fees are exorbitant AND the fact that these fees come with approval/timeline strings attached make it a whole different picture.  In addition to the appearance of being a white-collar bribe, the fact that the fees put timelines on approval to rush the process is frightening.

If you are one to sleep better at night if you see an FDA approval label on a product, you might want to re-evaluate your decision process.   It doesn’t appear to be one to put a whole lot of faith in.



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