HHS found no study linking FDA user fees to drug prices; fees are 0.5 to 2 percent of development cost
HHS's planning office reviewed the research on FDA user fees in 2023. It found no papers linking fees to brand drug prices, and put fees at 0.5 to 2 percent of the cost of developing a drug and 0.2 percent of drug revenue.
We have not finished checking this source. No judgement either way. how we score evidence
Caveat on this rating: Written by an HHS office, so it is the department describing its own agency's funding; its review of research on fees and prices is a narrative summary of the literature it found, not a systematic review, and absence of published evidence is not evidence of absence. Figures are FY2022 and earlier; the FY2026 operating plan row carries the current ones.
Significant findings
The Office of the Assistant Secretary for Planning and Evaluation, part of HHS, published an issue brief on FDA user fees in March 2023. Its key findings: "In fiscal year (FY) 2022, user fees represented 46% ($2.9 billion) of FDA's total budget of $6.2 billion." And: "In FY2022, across FDA's medical product centers, user fees accounted for $1.4 billion (66%) of the human drugs program budget, $197 million (43%) of the biologics program budget, and $228 million (35%) of the medical device program budget."
On how the fees began: "In the late 1980s, long FDA review times (on average 29 months) for human drug applications raised concerns from manufacturers that lengthy review times meant lost sales and from patient advocates about delayed access to new treatments." Then: "In response, industry, with support from patient advocates, agreed to pay user fees beginning in 1992 to supplement the FDA budget in exchange for agreements to reduce review times." The budget had been "just under $1 billion in FY 1992, when it was entirely budget authority", and reached "almost $6 billion in FY 2020, approximately $3 billion of which was for user fees."
On what the fees may buy: each program "has specific allowable and excluded costs in terms of what FDA is allowed to spend the funds on. Allowable costs are for activities that directly relate to the respective user fee program (e.g., application review, regulatory research to support the submission of high-quality applications and reduce time to approval, facility inspections, and post-market safety surveillance), while excluded costs are all FDA actions that are not specific to the user fee programs, such as agency infrastructure and other agency wide efforts."
On prices and development cost: "In 2021, gross prescription drug spending in the United States was $603 billion, while FDA collected $1.153 billion in prescription drug user fees. This means that, in aggregate, user fees made up 0.20 percent of realized revenue for prescription drugs in 2021." And: "We did not find any papers linking user fees to high prices of brand drugs." The brief estimates "that between 0.5% and 2.0% of the total cost of developing a new drug, complex medical device, or preventive vaccine went towards user fees", and 1.7 percent for a generic. The FY2023 PDUFA application fee was $3,242,026 with clinical data and $1,621,013 without; the annual program fee was $393,933 per sponsor.
Worth asking
Both halves belong together. The regulator's drug division is mostly paid by applicants, on terms the applicants negotiated, and the share has grown. And the office that wrote this looked for evidence that the fees buy something improper, found none in the published literature, and found instead that they shortened review times. A reader can hold both.
Source
FDA User Fees: Examining Changes in Medical Product Development and Economic Benefits — Office of the Assistant Secretary for Planning and Evaluation, Office of Science and Data Policy (2023)
How this was scored
- Study design
- not recorded
- Funding
- not recorded
- Published in
- not recorded
- Sample size
- not recorded
- Preregistered
- not recorded
- Conflicts disclosed
- not recorded
- Independent of proponent
- not recorded
- Retracted
- No
We have not finished checking this source, so there is no scoring to show yet. “We have not checked this yet” and “this is disputed” are different statements, so no scored band is shown rather than a low one.
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Published September 21, 2026.
Questions
How strong is the evidence behind this?
veisund rates this source "not yet assessed". We have not finished checking this source. No judgement either way. One caveat travels with that badge: Written by an HHS office, so it is the department describing its own agency's funding; its review of research on fees and prices is a narrative summary of the literature it found, not a systematic review, and absence of published evidence is not evidence of absence. Figures are FY2022 and earlier; the FY2026 operating plan row carries the current ones. The score is calculated from recorded facts about the source — study design, funding, publication venue, sample size, preregistration — not typed in by an editor.
What is the source for this?
FDA User Fees: Examining Changes in Medical Product Development and Economic Benefits — Office of the Assistant Secretary for Planning and Evaluation, Office of Science and Data Policy (2023). The full source is linked on this page so you can read it yourself.
Is this medical advice?
This is information to bring to your prescriber, not medical advice and not a reason to change anything on your own. Nothing here is an instruction to stop or reduce a medication. If you are in crisis, call or text 988.
This is information to bring to your prescriber, not medical advice and not a reason to change anything on your own. Nothing here is an instruction to stop or reduce a medication. If you are in crisis, call or text 988.