WASHINGTON -- The government and the drug industry are near an agreement to require companies to pay fees that would be used by the Food and Drug Administration to hire 600 examiners and speed approval of drugs, officials on both sides said yesterday.
The agreement, being worked out by congressional staff members, is intended to resolve what the government and industry have said for the last few years is a catastrophe waiting to happen: The number of drug applications is rapidly increasing, especially because of the boom in biotechnology products, some of which might save lives if they were available. But the FDA has not had enough staff members to keep up with required testing.
Advocates for people with acquired immune deficiency syndrome, cancer and other rare diseases have pressed for quicker approval of potentially lifesaving drugs.
The companies also want speedier approval. FDA officials estimate that it costs an average of $10 million a month per drug for every additional month that a product is held off the market.
Congressional staff members, working with the industry and the FDA, have won the agency's tentative agreement to cut the approval time in half and be held to such a deadline. In return, companies would pay the agency to hire 600 more specialists to do the scientific work necessary on new applications for drugs and biological agents. Drug company officials have said they are willing to pay fees to the government to help cover the cost of the expanded staff.
It is the first time key parties in the administration, Congress and the industry have agreed in principle to finance drug regulation through fees paid by those who are regulated.
A bill is being drafted in the House and Senate by the staffs of Rep. Henry A. Waxman, D-Calif., Rep. John D. Dingell, D-Mich., Sen. Edward M. Kennedy, D-Mass., and Sen. Orrin G. Hatch, R-Utah.
Although many details must be discussed, the general outline of an agreement has been worked out calling for drug companies to pay several fees: one for each drug application, one annual fee for each company seeking approvals, one annual fee for each approved drug a company has on the U.S. market and a fee for the import of drugs.
Because the user fees could benefit the agency -- it would gain millions of dollars without increasing the amount it must get from the deficit-shy Congress and administration -- as well as the companies, other regulatory agencies might use the plan as a model if it works.
The agency's proposal is to charge $150,000 for each drug application, regardless of whether it is in a lifesaving category, and to charge each company $50,000 annually and $5,000 for each product on the market.
Generic drugs and medical devices would not be included in the plan. The goal is to raise about $75 million a year while phasing in the plan over five years beginning in the 1993 fiscal year.
In return for the fees, the FDA is willing to agree to cut the average time it takes to review drug applications from more than 20 months currently to 12 months, and to halve the average review time for especially important or lifesaving drugs, to six months from the current 12.
The FDA would be willing to set those goals and have the law expire in five years. If the agency failed to meet the goals, it could be held accountable when a replacement law was drafted, Dr. David Kessler, the FDA commissioner, told the House Subcommittee on Health and the Environment.