The Cost of Free: What Removing FDA User Fees Could Mean for Drug Innovation and Public Health

In the ongoing debate over regulatory reform, the MAHA Commission’s proposal to eliminate FDA user fees has sparked renewed scrutiny of the relationship between industry and government. At first glance, removing these fees may seem like a step toward reducing corporate influence and restoring scientific integrity. But a deeper look reveals that such a move could have unintended consequences for drug innovation, regulatory efficiency, and public health.

What Are FDA User Fees—and Why Do They Exist?

User fees were introduced through the Prescription Drug User Fee Act (PDUFA) in 1992, allowing the FDA to collect fees from pharmaceutical companies to help fund the review of new drug applications. These fees now support a significant portion of the FDA’s budget—over 60% for drug reviews—enabling the agency to hire specialized reviewers, conduct timely evaluations, and engage with sponsors throughout the development process.

The rationale is straightforward: drug development is a public-private partnership. While basic science is often funded by federal agencies like NIH, NSF, VA, DoD, and CDC, translating discoveries into therapies requires private investment. User fees are a mechanism for the government to recoup part of its investment and ensure that the FDA has the resources to evaluate increasingly complex therapies.

Why Is MAHA Proposing to Remove Them?

The MAHA report raises concerns about “corporate capture” and conflicts of interest, suggesting that user fees compromise the FDA’s independence. It cites examples of revolving doors between industry and regulators and argues that industry-funded research may bias outcomes. While these concerns may be valid, the report does not offer a clear alternative funding model for the FDA, nor does it quantify the impact of removing user fees on agency operations.

The Economic and Operational Impact

Eliminating user fees would likely reduce the FDA’s budget by billions of dollars. Without replacement funding from Congress, this could lead to:

•    Reviewer Workforce Reductions: Fewer staff would mean longer review times, delayed approvals, and reduced capacity for scientific engagement.
•    Slower Innovation: Companies rely on timely feedback from FDA reviewers during pre-submission meetings and advisory interactions. A constrained FDA could become a bottleneck for innovation.
•    Reduced Global Competitiveness: The U.S. leads the world in drug development partly because of its efficient regulatory system. Undermining that system could shift investment to countries with more predictable timelines.

Engagement with FDA: A Hidden Cost

User fees also fund critical engagement mechanisms like pre-IND meetings to discuss regulatory submissions, advisory committee support, and regulatory science initiatives. These interactions help companies design better trials, avoid costly mistakes, and align with FDA expectations. Removing fees could reduce access to these services, especially for smaller biotech firms that depend on FDA guidance.

A Flawed Argument?

The idea that user fees inherently compromise scientific integrity overlooks the broader context. Most foundational drug discovery research is conducted in academic institutions funded by federal dollars. Industry builds on this foundation, and user fees help sustain the regulatory infrastructure needed to evaluate and approve new therapies. Rather than a conflict of interest, this is a model of shared responsibility.

Conclusion: Reform, Not Retreat

If the goal is to reduce undue influence, the solution is not to defund the FDA but to strengthen its transparency, oversight, and independence. User fees should be accompanied by rigorous conflict-of-interest policies, public accountability, and robust scientific standards. Removing them without a viable alternative risks weakening the very institution tasked with safeguarding public health.

The Medical & Scientific Solutions team at Womble Bond Dickinson will continue to cover the scientific, public health, regulatory, and legal implications of the MAHA Commission’s Report.