Does FDA Funding Increase Drug and Medical Device Innovation?

The U.S. Food and Drug Administration receives funding through the general fund and user fees. Additional funding comes from the regulated industries. Specifically, the drug industry funds FDA through the Prescription Drug User Fee Act, and the medical device industry funds FDA through the Medical Device User Fee Act. Both acts are considered a success for requiring FDA to improve approval time for drugs and devices. However, decreased approval times have not resulted in more drug and device innovation. For drugs, the situation is much worse. It costs an average of $2.6 billion simply to get a drug through the FDA process and onto the market. This does not include postmarket monitoring, the terms of which are laid out by FDA upon approval. These costs have increased from about $1 billion between 1983 and 1994. FDA has grown in both resources and statutory authority, and to continue those increases, it must meet user fee goals and avoid bad publicity.

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