A Cautionary Note on Measuring the Duration of FDA Drug and Device Reviews

Abstract

The Prescription Drug User Fee Act (PDUFA) created rewards for the Food and Drug Administration (FDA) if it can meet goals related to the duration of the 'formal review stage' of the drug development process. Later, the Medical Device User Fee and Modernization Act (MDUFMA) set up a similar scheme for medical devices. This short note assembles some evidence showing that FDA has in recent years changed its patterns of interaction with drug and device sponsors: Some interactions or steps that previously would have been carried out during the formal review stage are now very often carried out prior to that stage. In light of these changes, it could well be that the main driver causing shorter durations of the formal review stage is not an increase in review efficiency, but rather that sponsor submission of the formal application — which is the marker in time identifying the start of the formal review stage — is happening later in the new-product development process. Sponsors are likely quite willing to submit their formal applications later so long as the development process ends no later, and indeed a sponsor may be very happy to do so if it means that its product will undergo only one 'cycle' of FDA review, since a sponsor's reputation in the medical marketplace can be damaged whenever a product does not succeed on the first cycle of FDA review. The FDA's increased interaction with sponsors prior to application submission thus may have caused a real gain in reducing needless negative shocks to sponsor reputations, but it may also mean that the much-touted success of PDUFA and MDUFMA in increasing the speed with which drugs secure FDA approval has become partially illusory or false; both of these effects, however, would be difficult to verify through observation. In the limit, continued changes in the pattern of FDA-sponsor interaction could turn the formal review stage into something of a formality, with measurements of FDA's performance during the formal review stage in turn becoming mostly meaningless.

JEL Classification: I18, O38