User Fees

11 Oct 1988

Seize control

On 11 October 1988 AIDS activists went to the FDA’s headquarters in Rockville, Maryland, to demand faster approval of AIDS drugs. ACT UP counts about 1,500 people; the FDA’s own history says “hundreds.” The FDA writes that the protest pushed it to write new accelerated approval rules. A separate story about the agency was starting in Baltimore, and no source here ties it to the protest.

1988

A trash can in Maryland

The Associated Press wrote in 1992 that the probe of the generic drug industry “literally began in a Maryland trash can.” It had uncovered, the AP said, corruption in the FDA and fraud among drug companies; by its count seven drug companies, one laboratory and 29 individuals had been convicted, with $20 million in fines. Federal prosecutors in Baltimore expected to close it in the fall of 1993. What the courts actually found comes next, case by case.

22 Sep 1989

Gift certificates

At a House hearing on 11 July 1989, Representative John Dingell said seven of the 30 chemists and officers in the FDA’s generic drugs division were implicated in receiving, or accepting offers of, illegal gratuities, the trade paper The Pink Sheet reported. One of them, review chemist Walter Kletch, took two $500 gift certificates from a drug company’s president and turned them into cash; he pleaded guilty and on 22 September 1989 was sentenced for receiving an unlawful gratuity, under 18 U.S.C. 201(c)(1)(B). He told the FDA the gift came from a social friendship and changed nothing he did; the FDA answered that his conviction establishes it was “for, and because of, official acts.” The law keeps two crimes apart: a bribe is given “corruptly” to influence an official act, a gratuity “for or because of” one.

18 Oct 1990

What the courts found

Charles Chang, who led a generic review branch, pleaded guilty in 1989 to two racketeering counts, over a free trip to Hong Kong and furniture from a generic drug firm, and was barred from the industry for life in 1993. That firm’s chief executive was sentenced in 1990 to two years on the count about the trip, and to a suspended sentence on a second, about furniture and computer equipment; the company pleaded guilty to four counts, among them paying illegal gratuities and falsifying data. FDA Commissioner Frank Young told Congress in July 1989 that after the 1984 reforms “many generic drug companies did not hesitate to exert tremendous pressure on FDA drug reviewers.” That was his account to Congress, not a court’s finding, and no court finding on which approvals were affected is quoted here.

13 May 1992

The law that followed

On 13 May 1992 the Generic Drug Enforcement Act became law; it opens by finding “substantial evidence that significant corruption” had occurred in approving generic drugs. The act lets the FDA bar people convicted of drug-related felonies, and by March 1997 it had barred 38, whose felonies the FDA’s own magazine said included false data and “paying or accepting bribes.” The court cases named here were gratuity and racketeering counts. The finding of corruption is Congress’s own.

38People FDA had barred for life from the drug industry, by March 1997, in cases wider than the scandal

29 Oct 1992

A fee for speed

In the late 1980s the median wait for a new drug decision was 29 months, the Congressional Research Service says; industry, consumer groups and the FDA agreed that was too long, and the FDA, which said it lacked money to hire reviewers, had asked Congress for fees for decades. Drug makers opposed them until Commissioner David Kessler agreed to review-time goals and a promise that fees would add to, not replace, tax money. The Prescription Drug User Fee Act became law on 29 October 1992; a writer in ASBMB Today ties it to the AIDS protests, while the law itself says only that prompt approval is critical to public health. It covers new drugs: generic makers paid no FDA fee until fiscal 2013, and no source here connects the fees to the generic drug case.

2025

Three-quarters of the review program

Fees paid 9.7% of the FDA’s human drugs program in 1994 and 64.7% in 2016, in the Congressional Research Service’s table of FDA budget figures; from 2013 that includes generic and biosimilar fees. For the drug-review program alone, the CRS reports fees at 56% of total costs in 2007 and 72% in 2016, and the FDA’s 2025 report puts them at 74%, 76%, 74%, 78% and 77% of obligations for 2021 to 2025; earlier reports round two of those years differently. These measures count different things and do not line up year by year. By law the fees can pay only for the review process, and the FDA must keep spending a set amount of tax money alongside them.

9.7% to 64.7%Industry fees as a share of the FDA’s human drugs program, 1994 to 2016 (CRS table of FDA budget figures)

2022

Every five years

The fees lapse unless Congress renews them, so every five years the FDA negotiates with the industry, in public: the law requires comment, monthly talks with patient groups and posted minutes. The Congressional Research Service reports “the general view” that the law “has succeeded,” with more reviewers and shorter reviews. Professor C. Michael White credits fees with cutting the wait to 10 months by 2018, cites a study in which 21% of drugs approved before the act were later withdrawn or given a boxed warning against 27% after, lists possible reasons, and warns the “pendulum may be swinging too far” toward manufacturers. Some critics, the CRS adds, worry that reliance on fees could affect “the impartiality of FDA’s scientists.”

2026

Across the Atlantic

The European Medicines Agency, in Amsterdam since 2019, says that for 2026 about 91.5% of its €615.5 million budget comes from fees and charges, and 8.2% from the EU. It charges companies fees for evaluating applications, for scientific advice, for inspections and for monitoring safety. That is a share of a whole agency’s budget, while the FDA figures above are for its drug-review program, so the two do not compare directly. Neither source says that fees changed any decision.

91.5%Share of the European Medicines Agency’s 2026 budget that comes from fees and charges

2023

The most of any industry

A 2020 study in JAMA Internal Medicine, using Center for Responsive Politics (OpenSecrets) data in 2018 dollars, found the drug and health product industry reported $4.7 billion in federal lobbying from 1999 to 2018, the most of any industry; the peak, $318 million in 2009, came the year before the Affordable Care Act. These totals cover every issue, not the FDA alone, though PhRMA’s 2022 reports list “PDUFA reauthorization” among their topics. PhRMA’s own reports, in each year’s dollars, add up to $26.2 million in 2009, $18.3 million in 2015, $28.9 million in 2019, $28.3 million in 2022 and $27.1 million in 2023. Lobbying is legal and must be reported; these sums show what was spent and disclosed, not that any decision was bought.

$4.7 billionFederal lobbying reported by the pharmaceutical and health product industry, 1999 to 2018, in 2018 dollars: the most of any industry

15 Dec 2004

Tauzin and PhRMA

The Medicare Modernization Act, signed on 8 December 2003, added a drug benefit; one clause says the Secretary “may not interfere with the negotiations between drug manufacturers and pharmacies and PDP sponsors.” NBC News called the act “a boon to the nation’s pharmaceutical companies” and said PhRMA was pursuing Billy Tauzin, who chaired House Energy and Commerce, that December; House Minority Leader Nancy Pelosi called his consideration of the job “inappropriate.” PhRMA named him its president in December 2004, at a reported $1 million to $2 million a year. Tauzin says the job had no link to the bill and that he had no talks while working on it; an aide told Roll Call PhRMA first approached him in mid-January 2004, and NBC wrote that even if he had done what he denies, “he would have broken no laws, watchdog groups agree.”

29 Dec 2022

The cosmetics law

The Modernization of Cosmetics Regulation Act became law on 29 December 2022 inside a spending bill; the FDA calls it “the most significant expansion” of its cosmetics powers since 1938, and it adds a mandatory recall power. It is paid for by authorized appropriations, $14.2 million for 2023, with no industry fee, though the 2015 and 2021 versions of Senator Dianne Feinstein’s Personal Care Products Safety Act would have charged one; the 2015 bill got a hearing, none of the four passed on its own, and the council backed the final law, its chief calling it “a truly historic moment.”

29 Dec 2022

Council reports

The Personal Care Products Council’s 2022 reports, $1.55 million across all issues, name the act, and also list bills such as the No PFAS in Cosmetics Act, so a listing does not show support. No critic of the law could be read for this story; the FDA itself says no test of individual products or ingredients is required.

27 Sep 2016

Jobs after the agency

In 2016 Jeffrey Bien and Vinay Prasad of Oregon Health and Science University looked up what became of 55 FDA medical reviewers of blood and cancer drugs who worked on approvals between 2001 and 2010, in a short research letter. Of the 26 who had left the FDA, 15 later worked for the drug industry or consulted to it; 27 still worked at the FDA. The authors said this “raises concern,” and that they probably undercounted because not every career could be traced. A job move shows a path, not a finding: the study does not say any reviewer’s decision was influenced, and when Pfizer’s board elected Scott Gottlieb in June 2019, citing his “expertise in health care, public policy and the industry,” he had been FDA Commissioner until earlier that year, with no source here reporting a rule broken.

6 Jul 2018

After the panel

A news summary of Charles Piller’s 2018 Science article says that, in payment records for 2013 to 2016, 26 of 107 doctors who had voted on FDA advisory committees later took more than $100,000 from drug makers or their competitors, as earnings or research support. The article itself could not be read for this story, and the wording here is the summary’s. It quotes Vinay Prasad: “It’s in their best interest to play nice with the companies.” These are disclosed payments, and no source here says any vote was bought.

2023

What the agency says it does

The FDA says it can waive an adviser’s conflict only when the need for the person’s services outweighs it, and must publish the interest and the reason before the meeting; it granted 23 waivers in 2023, under 3 percent of participants. Federal law limits what a former official may do for a new employer: for two years, no contact with the government on another’s behalf about a particular matter that was under their official responsibility. It does not bar the job. The FDA report is about conflicts at the time of a meeting; payments after service are what Piller’s article raised, and no FDA reply to it is in these sources.

1995

The label

The FDA approved OxyContin in 1995. Patrick Radden Keefe wrote in The New Yorker that Purdue had run no studies on how addictive it might be, and that the FDA, “in an unusual step,” approved a label saying its slow-absorption design “is believed to reduce the abuse liability.” The examiner who oversaw the review, Dr. Curtis Wright, left the FDA shortly afterwards and, within two years, took a job at Purdue; then-Commissioner David Kessler told the magazine he was “not involved in the approval.” Keefe reports no finding against Wright and his own account is not in these sources; no court or inquiry cited here found the approval improper.

24 Nov 2020

Two pleas

In 2007 the Purdue Frederick Company pleaded guilty to a felony count of misbranding OxyContin “with intent to defraud and mislead”; FDA investigators found sales staff were trained to say it was less addictive than other opioids, and the company agreed to pay $600 million. In November 2020 Purdue Pharma pleaded guilty to three federal felonies: conspiring to defraud the United States by misleading the Drug Enforcement Administration, and conspiring to pay kickbacks to doctors and to a health-records company. Neither plea charged payments to FDA staff. The 2020 deal included a $3.544 billion criminal fine, $2 billion in forfeiture and a $2.8 billion civil claim, the civil claims being, the Justice Department says, “allegations only,” with no determination of liability, and all of it under the bankruptcy court.

18 Nov 2004

Vioxx

Merck announced a voluntary withdrawal of Vioxx on 30 September 2004 over a higher risk of heart attack and stroke; the FDA had approved it in May 1999. On 18 November the FDA’s own drug-safety scientist, David Graham, told the Senate Finance Committee that his study put the excess heart attacks and sudden deaths at nearly 28,000, and at 88,000 to 139,000 if the risks seen in Merck’s trials were applied. He said managers pressed him to change his conclusions, and that the drug center’s culture “views the pharmaceutical industry it is supposed to regulate as its client.” That is his testimony about process; he did not mention user fees, it alleges no payment to anyone, and the FDA’s and Merck’s replies are not in these sources.

29 Dec 2022

Aduhelm

On 7 June 2021 the FDA gave accelerated approval to Biogen’s Alzheimer’s drug Aduhelm, an option Roll Call says was not put to the advisory committee, which had not voted to recommend traditional approval; several members resigned in protest. A report released on 29 December 2022 by the Democratic chairs of two House committees said the FDA and Biogen had at least 115 meetings, calls and emails in 12 months and co-wrote the panel’s briefing document, calling the contacts “atypical.” The FDA said it is “the agency’s job to frequently interact with companies”; Biogen said it “stands by the integrity of the actions we have taken.” The chairs’ summary reports no payment, and the FDA’s list shows the approval withdrawn on 1 November 2024.

1960

Thalidomide

In 1960 FDA medical officer Frances Kelsey was assigned the application for thalidomide, a drug already sold in dozens of countries. Despite constant pressure from the company, she refused to approve it for lack of evidence. About a year later researchers in Germany and Australia linked the drug to severe birth defects; it was never sold in the U.S., and the 1962 Drug Amendments followed. The prescription drug user fees began in 1992, three decades later, and no source here says they changed what a reviewer decided.