picture of U.S. Food and Drug Administration logo

FY 2000 PDUFA
FINANCIAL REPORT

REQUIRED BY THE

PRESCRIPTION DRUG USER
FEE ACT OF 1992

AS AMENDED BY THE

FOOD AND DRUG ADMINISTRATION
MODERNIZATION ACT OF 1997

FOOD AND DRUG ADMINISTRATION
DEPARTMENT OF HEALTH AND HUMAN SERVICES

January 2001


Contents

Letter from the Secretary, HHS

Executive Summary

Background

Meeting the Legal Conditions for User Fees in FY 2000

User Fee Revenues

Obligation of User Fee Revenues

Carryover Balances

Total Costs of the Process for the Review of Human Drug Applications

Management Challenges for FY 2001

Appendices

Appendix A: Conditions for Assessment and Use of Fees

Appendix B: Exemptions and Waivers

Appendix C: Allowable and Excluded Costs for the Process for the Review of Human Drug Applications

Appendix D: Development of Costs for the Process for The Review of Human Drug Applications


HHS Letterhead logo

January 19, 2001

Honorable Al Gore
President of the Senate
Washington, D.C.

Dear Mr. President:

Enclosed for your consideration is the annual financial report to the Congress required by the Prescription Drug User Fee Act (PDUFA) as amended (section 104(b)). This report covers fiscal year (FY) 2000, documenting how each of the conditions specified in PDUFA for continued collection of prescription drug user fees was met by the Food and Drug Administration (FDA).

The report also presents the user fee revenues and related expenses for FY 2000, comparative data for earlier periods, and details the amounts carried over at the end of each year that remain available. In FY 2000 FDA collected $137 million in user fees, and spent $147 million, including balances collected in earlier periods that remained available. Over 65% of the fees were spent for salaries and benefits, funding a total of 1009 staff years.

This infusion of human resources is the single most critical factor enabling FDA to meet the performance goals associated with PDUFA-goals that become increasingly more stringent each year. The resources PDUFA provides are essential to the vitality of FDA's program assuring the safety and quality of the nation's prescription drugs. One of the major challenges ahead is assuring the continuation of these resources, since PDUFA expires at the end of FY 2002. In assuring the continuation of these funds, we also need to reverse the erosion of FDA's core programs. This erosion has been caused by both increasing appropriations spent on drug review at the cost of other FDA programs, as required now by the PDUFA triggers, and the absorption of mandatory pay increases over many years.

Sincerely,

/s/

Donna E. Shalala

Enclosure

Identical letters to:

Speaker of the House of Representatives
Chairman and Ranking Minority Member, Committee on Health, Education, Labor, and Pensions, United States Senate
Chairman and Ranking Minority Member, Committee on Commerce, House of
Representatives



EXECUTIVE SUMMARY

The law requires the Food and Drug Administration (FDA) to report annually on the financial aspects of its implementation of the Prescription Drug User Fee Act of 1992 (PDUFA), as amended and extended by the Food and Drug Administration Modernization Act of 1997 (FDAMA). This report covers fiscal year (FY) 2000.

The PDUFA, as amended, specifies that the following three conditions must be satisfied each year in order for FDA to collect and spend PDUFA fees:

  1. FDA's overall salaries and expenses appropriation, excluding fees, must exceed FDA's overall FY 1997 salaries and expenses appropriation (excluding fees and adjusted for inflation).
  2. Fee revenues collected must be specified in Appropriation Acts.
  3. FDA must spend at least as much from appropriated funds for the review of human drug applications as it spent in FY 1997, adjusted for inflation.

This report describes how those specific statutory conditions or "triggers" were met in FY 2000. The statements and tables included in this report also provide information on the user fee revenues and expenditures in FY 2000, and on the carryover balance. Comparative data for earlier periods are also provided.

In FY 2000, FDA collected $137.7 in fees and refunded $4.7 million, mostly from pre-1998 fees that exceeded limitations set in FDA's Appropriation Acts on the amount of fees FDA may keep and spend. Collections, net of these refunds, totaled $133.1 million. At the end of the year FDA also had receivables of $9.5 million.

In FY 2000, FDA spent $147.3 million from PDUFA revenues-$14.2 more than its net collections. This was possible using carryover balances from previous years, and is consistent with the PDUFA II Five-Year Plan published annually by FDA. Language allowing the PDUFA fees to be retained until expended has been included in each of the annual Appropriations Acts. Almost 65 percent of the FY 2000 expenditures went for employee pay and benefits. Throughout FY 2000, user fees financed 1009 more staff-years for the drug review process than in FY 1992 (before PDUFA was enacted), and 100 more than were financed from fees in FY 1999. This continued infusion of human resources is the single most important factor enabling FDA to meet the increasingly challenging performance goals associated with PDUFA.

The balance of the fee revenues spent in FY 2000 funded operating support for these additional employees and investments in FDA's infrastructure supporting the process for the review of human drug applications (including vital investments in the continued development of information technology capabilities).

Challenges facing FDA in FY 2001 include assuring the continuation these resources, since PDUFA expires at the end of FY 2002, and reversing, or at least halting, the erosion of FDA's core programs from both continued absorption of pay increases and the third PDUFA trigger described above.


BACKGROUND

PDUFA authorizes FDA to collect fees from the pharmaceutical industry to augment appropriations spends on drug review. These additional resources are to be used to hire and support additional staff for the review of human drug applications so that effective drug products could reach the American public more quickly. PDUFA has been very successful and, with support from the pharmaceutical industry and the Administration, Congress amended and extended it through FY 2002.

Under PDUFA, as amended, an application fee must be submitted when certain new drug applications or biologic license applications are submitted. The application fee amount is set in statute, but is adjusted each year for cumulative inflation since FY 1997. In addition, FDA collects annual establishment and product fees. Under FDAMA amendments, FDA sets those fees each fiscal year so that the total revenue FDA receives from each category equals the amount FDA expects to collect from application fees. Thus, a third of the fee revenue each year comes from application fees, a third from establishment fees, and a third from product fees.

PDUFA, as amended, also requires FDA to submit two reports to Congress each fiscal year. A performance report is to be sent within 60 days of the end of the fiscal year, and a financial report is to be sent within 120 days. The FY 2000 PDUFA Performance Report, which discusses FDA's progress in meeting the goals referred to in FDAMA, is being separately transmitted to Congress. This is FDA's FY 2000 PDUFA Financial Report, covering the period October 1, 1999, through September 30, 2000.

As required by statute, this report presents the legal conditions or "triggers" that must be satisfied before FDA can collect and spend the fees, and FDA's calculations showing how those conditions were met for FY 2000. This report also presents FY 2000 revenues and obligations from user fees and a summary statement of user fees by source (application, establishment, or product fees). The total costs applicable to the process for the review of human drug applications, as defined in FDAMA, are also presented, with the amounts paid from fee revenues and from appropriations.

In keeping with the requirements of the Chief Financial Officers Act of 1990, the Office of the Inspector General (OIG), Department of Health and Human Services, audits FDA's annual financial statements. The audit covers FDA's financial systems and funds, including PDUFA revenues and expenses. The OIG rendered unqualified audit opinions on FDA's financial statements for FY 1998 and 1999. This is the most favorable category of auditor opinion. The OIG audit report on FDA's FY 2000 financial statement is expected to be available in March of 2001.

MEETING THE LEGAL CONDITIONS FOR USER FEES IN FY 2000

PDUFA, as amended, contains three legal conditions or "triggers" that must be satisfied each year before FDA can collect and spend user fees. FDA's calculations showing how those conditions were met for FY 2000 are summarized below and presented in more detail in Appendix A.

The first condition is that FDA's Salaries and Expenses Appropriation (excluding user fees) must meet or exceed FDA's FY 1997 Salaries and Expenses Appropriation (excluding user fees and adjusted for inflation). In FY 2000, FDA's Salaries and Expenses Appropriation (excluding user fees and excluding rent to GSA, which was also not included in the FY 1997 Appropriation amount) totaled $940,458,000. FDA's FY 1997 total Salaries and Expenses appropriation, excluding user fees, and adjusted as required by the statute, was $850,719,913. Therefore, since the FY 2000 amount is greater, the first condition was met.

The second condition is that the amount of user fees collected each year must be specifically included in Appropriation Acts. For FY 2000, FDA's Appropriation Act specified that $145,434,000 would come from PDUFA fees, in addition to sums provided in regular appropriations. The Appropriation Act specified that the fees collected could remain available until expended. Thus, the second condition was met.

The third condition is that user fees may be collected and used only in years when FDA also uses a specified minimum amount of appropriated funds for the review of human drug applications. The specified minimum is the amount FDA spent on the review of human drug applications from appropriations (exclusive of user fees) in FY 1997, adjusted for inflation. That amount, adjusted for inflation, is $153,508,177. As this report shows, in FY 2000 FDA obligated $167,646,122 from appropriated funds for the review of human drug applications, which exceeds the specified minimum amount. Thus, the third condition has been met.

Appendix A provides more detail on the calculations that show that these three statutory conditions were met.

USER FEE REVENUES

The PDUFA specifies that fee revenues are to be collected from establishment, product, and application fees. Under FDAMA, annual application fee amounts are specified in statute, but adjusted for inflation. Fees for establishments and products are set each year so that the total amount of revenue collected from each category (establishment fees and product fees) equals the revenue FDA expects to collect from application fees that year.

Under PDUFA and FDAMA, any fees collected and not spent by the end of a fiscal year continue to remain available to FDA to spend in future fiscal years. The balances carried over from year to year are covered in the section on carryover balances beginning on page 6. The following table provides a breakout of user fees by fee source during the past two fiscal years, and also reflects estimates of receivables.

FOOD AND DRUG ADMINISTRATION
STATEMENT OF USER FEE REVENUES BY FEE SOURCE

as of September 30, 2000
FY 1999 FY 2000
Fees Collected:
Product Fees $41,833,192 $43,829,964
Establishment Fees $41,541,794 $45,802,542
Application Fees $38,636,530 $48,066,442
TOTAL FEES COLLECTED: $122,011,516 $137,698,948
Fees Receivable:
Product Fees $293,824 $3,033,768
Establishment Fees $647,955 $5,245,781
Application Fees $0 $0
TOTAL FEES RECEIVABLE: $941,779 $8,279,549
Total User Fee Revenues: $122,953,295 $145,978,497

Note that user fee revenues are reported in the year the fee was originally due-referred to as cohort years. For example, a fee due in FY 1999, even if it is received in FY 2000, is attributed to FY 1999 revenues. Totals reported for each year are net of any refunds for that year. Application fees collected for FY 2000 include a few fees for applications that will not be filed until FY 2001.

The Fees Receivable for FY 1999 of $941,779 includes deferred collections of $684,796, pending final resolution of waiver requests. Most of the FY 2000 accounts receivable are product and establishment fees billed near the end of the fiscal year.

A summary of exemption and waiver actions is included in Appendix B.

OBLIGATION OF USER FEE REVENUES

User fee revenues are expended only for costs necessary to support the process for the review of human drug applications, as defined in FDAMA. Allowable and excludable costs for the process for the review of human drug applications are defined in Appendix C. In FY 2000, FDA continued to improve and expedite the activities involved with the process for review of human drug applications, obligating $147,276,000 from user fees.

FOOD AND DRUG ADMINISTRATION
STATEMENT OF USER FEE OBLIGATIONS BY EXPENSE CATEGORY

as of September 30, 1999 and 2000
Expense Category FY 1999 FY 2000
Personnel Compensation and Benefits $75,580,000 $95,145,000
Travel and Transportation $2,923,000 $4,034,000
Rent $5,428,000 $5,643,000
Communications $1,322,000 $1,646,000
Contract Services $25,210,000 $29,031,000
Equipment and Supplies $11,949,000 $11,196,000
Other $103,000 $581,000
TOTAL OBLIGATIONS: $122,515,000 $147,276,000

FDA dedicated 1,277 FTE's (Full Time Equivalents or staff-years) to the review of human drug applications in FY 1992, before PDUFA was enacted. These 1,277 FTE's are sometimes referred to as baseline FTE's. A time reporting study was undertaken in 1993 to determine the percentage of time each division devotes to user fee related activities. This allowed calculation of FTE related costs. The percentages are updated quarterly through additional time surveys, which parallel the method used by independent consultants in FY 1993. The development of these user fee related costs associated with the review of human drug applications is described in Appendix D.

FY 2000, PDUFA fees paid for 1009 more FTE's than were used in 1992 for the process for the review of human drug applications, and 100 more FTE's than were paid from fees the preceding year. FDA's payroll costs paid from user fee funds in FY 2000 totaled $95,145,000-almost 65% of the funds expended. This includes all pay and benefits for the additional FTE's and costs of the FY 2000 payroll increases for the baseline FTE's.

A substantial amount of the remaining funds were spent on information technology (IT). FDA is engaged in an Agency-wide IT program to support the transition from a largely paper-based regulatory submission and review environment to an electronic environment. This effort is called the Electronic Regulatory Submission and Review (ERSR) program. ERSR is comprised of a variety of projects, each of which is designed to satisfy a different part of the overall PDUFA IT goal that:

the agency shall develop and update its information management infrastructure to allow, by FY 2002, the paperless receipt and processing of exemptions for investigational new drugs (IND's) and human drug applications….

The major ERSR project areas are described below.

The total expenditure of $147,276,000 in FY 2000 is an increase of about 20% over FY 1999 amounts spent from fee revenue. This spending amount is consistent with the latest PDUFA II Five-Year Plan, and is in excess of the revenues FDA collected in FY 2000. Spending at this level was possible because FDA spent substantially less than it collected in several earlier years, and the amounts carried over are available to FDA for spending on the drug review process in subsequent years, as explained in the next section of this report.

CARRYOVER BALANCES

Under PDUFA and FDAMA, any fees collected and not obligated by the end of a fiscal year continue to remain available to FDA in future fiscal years. These revenues are referred to as carryover balances. The net result of operations in FY 2000 decreased the carryover balances by $14,215,661.

The table below captures the changes in carryover balances over the course of PDUFA.

FOOD AND DRUG ADMINISTRATION
STATEMENT OF COLLECTIONS, OBLIGATIONS, AND CARRYOVER BALANCES
BY FISCAL YEAR

as of September 30, 2000
Fiscal Year Beginning Carryover Net Collections Obligations Year-End Carryover
1993 - $28,531,996 $8,949,000 $19,582,996
1994 $19,582,996 $53,730,244 $39,951,020 $33,362,220
1995 $33,362,220 $70,953,500 $74,064,015 $30,251,705
1996 $30,251,705 $82,318,400 $85,053,030 $27,517,075
1997 $27,517,075 $93,234,125 $84,289,046 $36,462,154
1998 $36,462,154 $132,671,143 $101,615,000 $67,518,297
1999 $67,518,297 $126,580,456 $122,515,000 $71,583,753
2000 $71,583,753 $133,060,339 $147,276,000 $57,368,092
2001 $57,368,092

The balances above reflect cumulative cash at the beginning/end of each fiscal year, and net cash collected during each fiscal year for all cohort years. The figures do not include accounts receivable. The collections balance shown above for FY 2000 of $133,060,339 is substantially less than the FY 2000 collections balance on page 3 of $137,698,948. Most of this difference is the result of refunds made in FY 2000 of excess collections in three previous years-1994, 1996 and 1997-when total collections exceeded the ceiling on collections established in FDA's Appropriations Act.

There are also a number of claims on these carryover funds. Those claims (refunds, reserve for future operations, and FY 2001 and 2002 operating needs) are explained below. As a result of these claims, we expect a further reduction in the carryover balance at the end of FY 2001.

COLLECTION CEILINGS AND POTENTIAL REFUNDS AND OFFSETS

PDUFA prohibited FDA from keeping fees in excess of the amount specified in appropriations (collection ceiling) each fiscal year through FY 1997. Amounts collected that exceed collection ceilings through FY 1997 will be refunded. Under FDAMA, balances collected in excess of amounts specified in appropriations after FY 1997 may be kept, and used to reduce fee charges that would otherwise be made in a later fiscal year. The following table depicts collections since FY 1993, collection ceilings specified in appropriations, and amounts to be either refunded or used to offset future collections.

FOOD AND DRUG ADMINISTRATION
STATEMENT OF FEES COLLECTED, COLLECTION CEILINGS, AND POTENTIAL REFUNDS

as of September 30, 2000
Fiscal Year Collections Realized Collection Ceiling Potential Refund Potential Offset to Future Collections
1993 $35,973,490 $36,000,000 - -
1994 $56,326,883 $56,284,000 $42,883 -
1995 $77,627,800 $79,423,000 - -
1996 $85,212,514 $84,723,000 $489,514 -
1997 $88,782,276 $87,528,000 $1,254,276 -
1998 $117,446,776 $117,122,000 - $324,776
1999 $122,011,516 $132,273,000   -
2000 $137,698,948 $145,434,000   -
Total:     $1,786,673 $324,776

As of September 30, 2000, collections have exceeded appropriations in FY's 1994 ($42,833), 1996 ($489,514) and 1997 ($1,254,276). A total of $4,661,464 of pre-1998 surplus collections was refunded in FY 2000, substantially decreasing the carryover balance from last year. We expect to refund the remainder of the pre-1998 surplus collections in FY 2001.

FDA's FY 1998 collections currently exceed the appropriations limit by $324,776. A number of FY 1998 requests for refunds or waivers are still pending, however. If the net collections still exceed the appropriation limit after these waiver requests are settled, then FDA will set fees at a lower level in FY 2002, to offset these surplus collections.

RESERVE FOR FUTURE OPERATIONS

A substantial carryover balance is necessary at the end of each fiscal year to ensure adequate operating funds in the first 4 months of each new fiscal year. Each year, two-thirds of the PDUFA fees (product and establishment fees) are not paid to FDA until January 31-4 months after the fiscal year starts. The other one-third (application fees) is spread out over the year. For estimation purposes, this portion is distributed evenly over 12 months. These application fees in aggregate would cover FDA costs for 1.3 of the first 4 months of the fiscal year. FDA needs to carry forward, as a bare minimum, at least 2.7 months of operating costs into each new fiscal year to cover expenses until the product and establishment fees are received on January 31. As shown in FDA's most recent PDUFA II Five-Year Plan, at the end of FY 2001 the Agency needs to carry forward a minimum of $38.1 million to cover essential future operating costs.

RESERVE FOR REFUNDS OF FEES PAID BUT STILL PENDING WAIVER RESOLUTION

As reflected in Appendix B, there are waivers pending for a total of $3,875,373. If all of these waivers are granted, FDA will have to refund this amount of fees already paid, so FDA has a contingent liability for this amount.

AMOUNTS ALLOCATED IN FY 2001 AND 2002

In addition to the items discussed above, at least $9 million from carryover balances will be allocated to FDA components in FY 2001, and over $9.6 million will be allocated in FY 2002, as reflected in the most recent update of FDA's PDUFA II Five-Year Plan.

FOOD AND DRUG ADMINISTRATION
SUMMARY STATEMENT OF CLAIMS ON CARRYOVER BALANCE

as of September 30, 2000
Nature of Claim Amount
Reserve for Refunds of Excess Collections $1,786,673
Future Collection Offset $324,776
Minimum Reserve for Future Operations $38,118,000
Contingent Liability for Pending Waiver Requests $3,875,373
Amount to be Allocated in FY 2001 $9,017,000
Amount to be Allocated in FY 2002 $9,603,000
TOTAL CLAIMS $62,724,822

The chart above summarizes all the claims on the carryover balance.

SUMMARY OF RECEIVABLES AND PAYMENTS DEFERRED

At the end of FY 2000, in addition to the cash collected, FDA had receivables totaling $9,520,976. Of this amount, a total of $824,478 has been deferred and will not be payable until a final decision is made on pending waiver requests.

Originally under PDUFA there was no limitation on when waivers or refunds could be requested. That has been remedied by FDAMA. No further waiver or refund requests may be made for applications submitted through FY 1998. FDA is actively working on resolving all pending waiver or refund requests.

TOTAL COSTS OF THE PROCESS FOR THE REVIEW OF HUMAN DRUG APPLICATIONS

The following table presents the costs for the review of human drug applications for FY's 1999 and 2000 by organizational component. This presents the full cost of the process for the review of human drug applications, including costs paid both from appropriations and from user fee revenues. The amounts are based upon obligations recorded as of the end of each fiscal year. Over 81 percent of amounts obligated are expended within one year, and 96 percent within two years. Thus, obligations represent an accurate measure of costs.

FOOD AND DRUG ADMINISTRATION
PROCESS FOR THE REVIEW OF HUMAN DRUG APPLICATIONS -- TOTAL COST

as of September 30, 1999 and 2000
(numbers may not add due to rounding)
FDA Component FY 1999 FY 2000
Center for Drug Evaluation and Research (CDER) $166,562,594 $187,426,061
Center for Biologics Evaluation and Research (CBER) $73,316,714 $80,038,621
Field Inspection and Investigational Costs (ORA) $17,753,152 $21,922,502
Agency General and Administrative Costs (OC) $24,552,117 $25,534,938
Total Process Costs $282,184,575 $314,922,122
Amount from Appropriations $159,669,575 $167,646,122
Amount from Fees $122,515,000 $147,276,000

The costs for CDER, CBER and ORA rose in FY 2000. This reflects: (1) mandatory increases in pay rates for federal employees; (2) increased staffing levels as a result of more aggressive and successful recruiting, especially in CDER; and (3) increased information technology expenditures as FDA gears up for the new information technology challenges imposed by PDUFA II goals.

The very slight increase in Agency General and Administrative Costs, compared with all other components, results directly from the Commissioner's recent downsizing and streamlining of the Office of the Commissioner. As reflected in Appendix D, the percent of process costs devoted to this area since 1998 has been reduced by 22%.

MANAGEMENT CHALLENGES FOR FY 2001

Since 1990 FDA has cut in half the time it takes to evaluate new drugs, while still maintaining its traditional rigorous standards for drug safety and effectiveness. This improvement, coupled with other attractive features of the US market, has led to an increase in the number of new drugs launched first in the US before they are available in other countries, making new therapies available first to Americans. This is a dramatic shift from the previous 20 years in which most new drugs were available in America years after they were available in other countries. Without the funds derived from PDUFA fees, the substantial progress FDA has achieved in improving and expediting the review of human drug applications would not have been possible.

But without further legislative action PDUFA, and the fees it provides, will expire at the end of FY 2002. One of the major challenges the agency faces in FY 2001 is the development of a responsible legislative proposal for the continuation of PDUFA. A first step in this process occurred on September 15, 2000, when the agency hosted a public meeting to hear the views of stakeholders on the strengths and weaknesses of the current legislation and what changes they would recommend.

It was clear from the comments heard at that meeting that views on changes to PDUFA are varied, but most stakeholders want the process for developing this legislative proposal to be both public and inclusive, allowing all of our stakeholders an opportunity to observe and have their views considered. In FY 2001 FDA will be challenged to derive and implement a responsive new process for developing this legislative proposal.

In FY 2001, FDA will also be challenged both to sustain the review improvements achieved to date and to meet increasingly difficult PDUFA performance goals-while resources for most other programs continue to be eroded by inflation. Assuring that enough appropriated funds are spent on the process for the review of human drug applications to meet requirements of PDUFA, and at the same time spending our resources in a way that best protects the health and safety of the American people, is becoming increasingly difficult. Each year, PDUFA triggers require the amount that FDA must spend on the drug review process to be increased by an inflation factor. Yet since FY 1995 FDA has not received increased appropriations to cover the costs of the across-the-board pay increases that must be given to all employees. The cumulative cost of this erosion over the past 10 years is over $200 million. In assuring the continuation of PDUFA funds beyond FY 2002, FDA needs to reverse, or at least halt, the erosion of its core programs caused now by the PDUFA triggers, and compounded by the absorption of mandatory pay increases over many years.

Our workforce and real resources for most programs other than prescription drug review have contracted each year since 1994, while we struggle to assure that increasing amounts are spent on the drug review process in order to meet the PDUFA trigger. Several consecutive years of operating in this way make it difficult to continue to further reduce staffing levels in FDA programs other than prescription drug review. We are increasingly concerned that spending enough budget authority on the drug review process to meet the PDUFA triggers makes FDA less able to manage the resources available in a way that best protects the public health and merits public confidence. Examples of areas we have not been able to fund adequately include responding to reports of adverse events related to the use of prescription drugs.

In FY 2001 FDA will continue working toward the goal of receiving applications electronically by the end of FY 2002. This major change in how FDA does business should provide significant savings to industry. Setting standards and sequencing the development and implementation of the necessary infrastructure to achieve this goal demands careful planning, vigilance with respect to newly emerging technologies, and constant monitoring.

Additionally, in FY 2001 FDA will continue to be challenged by the need both to retain and to hire and train qualified reviewers. FDA's experienced reviewers are in demand and have excellent employment opportunities available to them. The Agency continued to experience review staff attrition of about 10 per cent in FY 2000. FDA implemented a number of initiatives to reduce this attrition, including both retention bonuses for reviewer mathematicians and statisticians and efforts to facilitate review work from alternative work sites. In FY 2000 the agency also conducted focus groups with review scientists to elicit their views on factors impacting on their decisions to continue to work for FDA. In response to the information from these focus groups, in FY 2001 FDA will continue to assess and implement innovations to facilitate retention of skilled reviewers. Retaining review staff and recruiting and training new review staff is a constant challenge.

Finally, the Agency continues to struggle to anticipate and fully understand the new technologies that are fundamental to many new therapies. Understanding these new technologies (especially biotechnologies) is essential to expeditious review of many new products. Since support of PDUFA related research from fee revenues is being phased out, the Agency is increasingly dependent on appropriated funds to sustain its scientific knowledge base in emerging areas such as gene and cell therapy.

Appendices


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