CHAPTER VI - CONCLUSION
In 1992, with the passage of the Prescription Drug User Fees Act (PDUFA), Congress allowed the FDA to collect budgetary funds directly from the pharmaceutical manufacturers. In the spirit of new public management and entrepreneurial type public administration theories, PDUFA represented a method of increasing a public agency's resources to increase the agency's efficiency without increasing the burden on American taxpayers.
Due specifically to PDUFA legislation, the connection between the regulators and those regulated changed the dynamics of the principal-agent relationship away from protecting the public and toward protecting the drug industry. Over time, the capture theory took precedence and allowed the regulators and regulated to form stronger alliances that further compromised the FDA's mission of protecting and safeguarding the public. User fees paid by the drug companies to the FDA to ensure favored status, special considerations, more control over the agency, and biased regulatory decisions represent a blatant FDA conflict of interest that is at minimum unethical and possibly illegal.
If the collection of user fees had ended after the first 5 years, as was originally intended, then the new money from the pharmaceutical companies may have been more of an asset than a liability. With the addition of user fees in the first 5 years, the FDA could have increased its new drug efficiency enough to clear its backlog and get the existing lifesaving AIDs medications to patients. Unfortunately, user fees have been extended twice, and with each extension, the pharmaceutical manufacturers have agreed to give more money to the FDA in exchange for getting more leverage to take increasingly control over the agency that regulates them.
The 1906 Food and Drug Act created the FDA, the nation's first regulatory agency. This law represented a shift in national policy asserting that the job of government was to protect consumers from some kinds of commerce. The law was recognition that the average citizen did not have the means to evaluate food and medicine, and that it was the job of government to protect consumers from potentially predatory business practices. Eighty-six years later, PDUFA represented another major national policy shift. PDUFA shifted the FDA's focus and resources to fast-tracking new drug approvals. The shift in agency function and resources significantly benefited the drug industry, but it short-changed vital functions that protected the public.
Research Design
The research concept map (Figure 2) was used to take a pre- and post-user-fee "snapshot" of the FDA to determine what, if any, changes occurred at the FDA since the introduction of user fees.
Figure 2. Research design concept map
Research Results
FDA user fees increased from zero dollars in 1992 to more than $170,000,000 in 2002. As intended by the original legislation, user fees initially increased the FDA's new drug approval efficiency. However, after year 5, new drug approval times leveled off. Thus, with no additional NDA efficiencies after year 5, it is clear that the primary purpose of user fees shifted. Since year 6 (i.e., 1998), the brand-name pharmaceutical industry paid increasing amounts of money in the form of user fees to receive other unintended benefits which may include but is not limited to the following: more leverage and control over the FDA; more lenient FDA regulations; more leniency on clinical studies; protection of brand-name drug industry prices; protection of brand-name drug industry's U.S. monopoly from lower cost imports; and protection of the brand-name drug industry's monopoly over supplements, over-the-counter medications and generics.
User fees compromise citizen safety in many ways. A higher percentage of medications are being approved with less clinical testing, and a higher percentage of new drugs are now being introduced in the U.S. first. First in the world release of new medications makes U.S. citizens the guinea pigs to test for unintended adverse drug reactions. Reauthorization of user fee legislation allowed the drug companies to advertise directly to consumers, and allowed the drug companies to promote medications off-label (i.e., promoting medication advantages for uses without supporting clinical studies). Furthermore, user fee legislation has given the drug industry the ability to set FDA employee workloads, FDA priorities, and FDA goals.
With the FDA's new drug approval efficiencies, the brand-name drug industry can promote its new drugs under monopoly protection for a longer period of time. This added drug industry benefit can significantly increase drug company profits. Unfortunately, higher brand-name drug company profits are not passed onto consumers. In fact, drug companies continue to use their U.S. monopoly and the American government's self-proclaimed inability to negotiate lower medication prices to increase the prices of medications at nearly twice the rate as hospital rates and physician fees.
Due to user fees, the FDA has shifted its budgetary and employee resources to prioritize creating greater NDA efficiencies. The shift to support the drug industry's prices and profits by fast-tracking new medications has short-changed many other FDA consumer protection services. Legislation mandated that user fees be used exclusively to get new drugs approved. Postmarketing surveillance, the FDA safety monitoring division after drugs are approved, received no additional funds from user fees. This was another example in which the FDA worked with the drug industry to get its drugs to the market sooner, but did not allow additional resources to be spent on protecting citizens once the medications received initial approval.
The research showed that, due to user fees, the entire agency shifted its focus to new drug approvals. FDA employees working on all consumer protection programs unrelated to new drug approvals decreased from 7,736 full-time employees in 1992 to 6,571 total full-time employees in 2000. On the other hand FDA employees involved in drug and biologic review processes increased from 1,277 in 1992 to 2,346 in 2000. As noted, the number of employees in the NDA division nearly doubled while full-time employees in all other consumer protection areas decreased.
According to the research, to ensure the continuation of receiving user fees, every year the FDA reduced the budgets of non-drug-approval-related programs and redirected those funds to NDAs. In 1996 alone, the FDA took nearly $28 million from other agency consumer protection services to further increase the NDA division's budget.
According to the brand-name pharmaceutical industry, maintaining higher U.S. medication prices is needed to pay for more breakthrough lifesaving medications. This study contradicts the pharmaceutical industry's explanation for higher U.S. prices. In fact, the research showed that the drug industry is utilizing the FDA's NDA efficiencies to put out more profitable "me-too" medications while priority reviews (i.e., breakthrough, lifesaving medications) actually decreased.
User fees increased the number of deadly drugs that were marketed to American consumers first. Since user fees, more deadly "me-too" medications were marketed off-label, with less clinical testing, with less scrutiny of clinical testing and often with known preapproval, serious adverse drug side effects.
Voluntary adverse drug reaction reports more than doubled from 117,718 in 1992 to 286,755 in 2001. Since user fees were initiated, Americans have a 32% higher chance of experiencing a reportable adverse drug reaction. In the 7 years prior to user fees, 1985-1992, five medications were taken off the market. In the first 7 years after user fees, 1993-2000, the number of unsafe medications removed from the U.S. market nearly doubled to 9. In the early years after user fees, 1993-1996, the overall percentage of medications withdrawn from the market decreased slightly from the 3 years prior to user fees, 1989-1992. However, from 1997-2000 the percentage of unsafe medications that were withdrawn increased more than 300%.
User fees began as a mechanism to get lifesaving medications to American consumers quicker without increasing the burden on taxpayers. The unintended consequence is that user fees gave one of the world's most profitable, profiteering and historically predatory industries the opportunity to gradually take control over the consumer protection agency that is mandated to oversee them. The drug industry wasted no time in exploiting this opportunity, and now, American citizens can no longer trust the FDA to objectively safeguard and protect them.
Major Findings
This thesis offers the following four major findings: (a) continuation of user fees impedes the FDA's ability to maintain the public trust; (b) public agencies are held to a higher moral, legal and ethical standard; (c) to secure the continuation of user fees, the FDA has made a dramatic shift that protects the drug industry and puts U.S. citizens in jeopardy; (d) to best protect the public and to ensure the public trust, the FDA needs a better system of checks and balances.
Loss of Public Trust
Public service is a public trust, and maintaining the public trust has long been a guiding principle of American government. Therefore, the single most important finding of this thesis is that the continuation of user fees adversely affects the FDA's ability to maintain the public trust. To better understand how the continuation of user fees negatively affects the FDA, this thesis examined the following six public administration pillars: dichotomy, efficiency vs. effectiveness, responsibility, legitimacy, accountability, and representation.
Democratic governments develop safeguards to minimize the political and big business exploitation of the public administration process. The very core of public administration is based on the axiom that government workers are insulated and protected from unethical fiduciary alliances and associated conflicts of interest. To be a legitimate public organization, the agency must be held accountable and responsible for representing citizens. The agency must protect, safeguard, and be singularly focused in working in the best interest of citizens. User fees create an inherent conflict of interest and a shift in the principal-agent, and thus, the continuation of this funding source undermines the FDA's ability to maintain the public trust.
For more than a hundred years, public administration theorists have debated the importance of separating politics from public administrators (i.e., politics/administration dichotomy). In the last few decades, most theorists have dismissed the dichotomy at the highest levels. However, the dichotomy that protects and safeguards citizens is the separation between the top-level public administrators (policymakers) and the civil servants (policy implementers). User fees have infiltrated and, therefore, compromised all levels within the FDA.
Public agencies continually debate efficiency vs. effectiveness. PDUFA created greater FDA efficiency without costing taxpayers more money, but the efficiencies decreased the FDA's autonomy and objectivity. PDUFA put American citizens' health, safety, and security at risk by allowing the formation of a partnership between the regulated and the regulators. Public agencies are responsible to represent citizens and meet their needs. In turn, citizens hold public agencies accountable. Due to PDUFA legislation, citizens can no longer trust the FDA to act as an unbiased consumer protection agency and thus, user fees call into question the agency's legitimacy.
Public Agencies Held to a Higher Standard
Although what seemingly started out as a public benefit, fact after fact has been presented throughout this thesis that questions the public benefit for continuing FDA user fees. Due primarily to the introduction and continuation of user fees, there is doubt regarding the FDA's motives, ability, and/or desire to act as an objective consumer protection agency.
There can, of course, be multiple interpretations of every issue. Thus, the drug industry, the FDA, select Washington politicians and other user fee proponents may offer a completely different interpretation of the facts. However, no matter what the proponents could argue in favor of continuing FDA user fees, there are few Americans who would believe that the pharmaceutical manufacturers are paying the FDA nearly $200,000,000 per year with no strings attached. The drug industry has been historically mercenary about increasing its profits. Americans need not question if the drug industry is getting value for their dollar. Americans need only question if the value the industry is getting interferes in any way with the FDA's primary mission of objectively safeguarding and protecting U.S. citizens.
User fees, at minimum, create the appearance that the FDA has a conflict of interest. Within the field of administration, there is one undeniable, incontrovertible, unwavering, impenetrable public administration axiom: American citizens demand that a public agency be held to a higher moral, ethical, and legal standard. Thus, it makes little difference if this thesis proves that the money the drug industry gives to the FDA actually interferes with the FDA's primary objective of protecting and safeguarding citizens. Proving a public agency's impropriety beyond a shadow of a doubt is not necessary. To maintain the public trust, a public agency must eliminate any appearance of and/or potential for impropriety. User fees create doubt as to the FDA's motives, and the doubt alone is reason enough to discontinue the practice.
Since User Fees, FDA Has Shifted
Government securing new sources of nontaxpayer money is not the problem. The problem, as illustrated by the results of the 11 research questions, is that a relatively small number of organizations within a regulated industry are directly paying substantial fees to their regulators in return for gaining more leverage and control over agency personnel, control over agency goals, to receive special favors, special considerations, and biased actions that are in the best interest of those regulated and not necessarily in the best interest of American citizens.
Since the FDA started collecting user fees, there has been an undeniable agency shift. The results of the research questions show how the FDA has changed since user fees were first initiated. However, proving beyond a shadow of a doubt with statistical certainty that the drug industry maintains inappropriate control over the FDA is not a necessary position. For the purpose of this thesis, it is only necessary to prove that user fees create the "appearance" of a conflict-of-interest and/or create the "possibility" of wrongdoing.
There is no doubt that, since the introduction of user fees, the FDA has been successful in approving new drugs much faster. So fast, in fact, that is has been likened to a "sweatshop environment." More "me-too" drugs are being approved while the cost of medications in the United States climbs at twice the rate of other major healthcare expenses. The FDA's drug approval process has become more efficient while other parts of the agency suffer. The FDA shifts resources from all other consumer protection programs to increase the agency resources for approving new medications. With the FDA's increasing NDA efficiency, more new drugs are introduced in the U.S. first. Thus, as the rest of the world watches for deadly unintended consequences, millions of Americans are taking new medications with absolutely no guarantee that the medication is either safe or effective.
Increasing FDA efficiency did not occur equally throughout the agency. Since PDUFA 1992, the FDA reduced its funds for postmarketing surveillance of adverse drug reactions, increased its labeling options to allow for quicker and easier approvals, and the agency has become slower to recognize any serious side effects after a new drug is approved (Strand, 2003). So, not only are Americans testing the new drugs first, a new product will, most likely, remain on the market much longer, regardless of its negative effects.
Checks and Balances
Regarding checks and balances, James Madison wrote the following in Federalist Papers No. 51:
If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. A dependence on the people is, no doubt, the primary control on the government; but experience has taught mankind the necessity of auxiliary precautions. (Mace, 1979)
Unlike most other government agencies, organizations, officials, and entities, the FDA has no objective system of checks and balances. At present, the FDA is monitored by Congress, but due to large political contributions from the brand-name pharmaceutical industry, Congressional monitoring of the FDA represents a conflict of interest. To maximize the protection and safeguarding of U.S. citizens by the FDA, a different, objective, independent system of checks and balances must be created.
Similar to the Federal Aviation Administration (FAA), which has an independent outside agency, National Transportation Safety Board (NTSB), which investigates all safety related issues, the FDA needs a similar external objective agency to oversee its activities. American consumers must demand that the Congress create an independent watchdog agency that oversees the FDA. The independent agency could be called the Consumer Drug Protection Agency (CDPA).
The following CDPA example can serve as a base to assist elected politicians, concerned citizens, scholars, and public administrators in starting a dialogue. The final configuration of the independent, objective FDA system of checks and balances could certainly be of a different design, name, and configuration. However, regardless of the end product, to protect U.S. citizens, an independent, trustworthy, objective system must be created.
Consumer Drug Protection Agency (CPDA)—Discussion Purposes "Only"
The CPDA would be an independent public agency under the jurisdiction of the General Accounting Office (GAO). The governing board would be made up of six state Health and Human Services (HHS) Directors elected by the 50 state HHS Directors. The governing board would set the agency priorities. Two potential candidates for the CDPA Director could include former Oregon Governor John Kitzhaber, M.D. and Raymond Woosely, M.D., VP, University of Arizona Health Sciences Center. The following represents a list of recommendations to be included within CPDA's responsibilities and priorities:
1. CPDA will negotiate on behalf of all 50 states and counties/cities therein for lower drug prices for government retirees and Medicaid recipients. The 50 states et al. will fund the operations of the CPDA by giving the agency 10% of what the CPDA saves in the reduction of drug costs.
2. CPDA will independently review and confirm the findings on all clinical research. Only drugs with both the FDA and CPDA approval can be marketed in the U.S.
a. To minimize further red tape on approving new drugs, the initial CPDA approval will automatically be given with the FDA's initial approval. However, similar to appealing to a higher court, if the CPDA has reason to believe that there is a problem with an FDA-approved drug, the CPDA can remove the medication until the FDA and/or drug companies adequately address the problem.
3. CPDA will create an independent drug database that lists each drug within a specific family and objectively compares price, effectiveness, efficacy, and safety. Only CPDA approved information, statistics, and data can be used to educate healthcare professionals. It would be a felony for a drug company or any representative thereof to disseminate any prescription drug information that had not been approved by the CPDA.
4. CPDA will be responsible for all postmarketing surveillance (ensuring consumer safety of all approved drugs). The FDA will close this department and redirect this department's budget to the CPDA.
a. CPDA will create a simple, efficient system of receiving adverse drug reaction reports.
i. ADR reporting will be mandatory.
ii. ADR database will be open to the public.
b. CPDA will be responsible for monitoring, investigating, label changes, requesting further information, requesting/evaluating new research, and withdrawing unsafe medications.
5. CPDA will be responsible for minimizing the dangers of prescription drugs through patient education, healthcare professional education, and offering alternatives to prescription drugs (i.e., vitamins, nutrition, exercise etc.).
6. CPDA will set the standards and monitor consumer safety prescription drug programs.
7. CPDA will investigate all reports of FDA related fraud, conflicts of interest, misrepresentation, and any FDA-related activities that creates the appearance of wrong-doing and/or puts consumer safety in jeopardy.
8. CPDA will act as an investigative arm for the State Attorney Generals related to any consumer-protection-related prescription drug issues.
9. CPDA will act as an independent investigative arm for the GAO related to prescription drugs.
10. CPDA will act as an independent Congressional investigative arm to evaluate all programs, systems, protocols, procedures, pricing, distribution, clinical studies, etc. related to prescription drugs and make recommendations for changes and improvements.
Chapter Summary
What started as a public benefit has turned into public administration disaster. The brand-name pharmaceutical manufacturers are now responsible for paying nearly 20% of the FDA's budget. To protect its new budget source, the FDA has shifted its allegiance and can no longer be trusted to protect and safeguard citizens. Due to user fees, the lives and well-being of millions of innocent Americans are now at risk. User fees paid directly to the FDA must end immediately. Congress can never again give regulated organizations an opportunity to directly pay for and receive special considerations from the agency that regulates them, and, finally, similar to other regulatory agencies, an objective system of checks and balances needs to be put in place.