The Risk We Bear: The Effects of Review Speed and Industry User Fees on New Drug Safety

Posted: 21 Mar 2008

Abstract

Drug review speed has increased substantially in the 1990s, largely due to industry-funded user fees. Following several drug withdrawals, however, new questions have emerged about the effects of this change on drug safety. This article examines the impact of review speed and user fees on counts of serious adverse reactions among drugs approved in 1990-2001. The analysis controls for the influence of drug utilization, patient conditions, drug novelty, black box warnings, foreign drug launch, US launch lags, patient age, and gender on drug reactions. Results show that drugs receiving faster reviews are associated with increased counts of serious adverse drug reactions. Other results show that novel drugs, drugs with black box warnings, drugs first launched abroad, and drugs with shorter US launch lags also have increased adverse drug reactions. Although any increase in risks must be weighed against benefits, the results show a trade-off between review speed and drug safety.

Keywords: new-drug review, drug safety, pharmaceutical regulation, FDA, PDUFA

JEL Classification: I18, L50, L65

Suggested Citation

Olson, Mary K., The Risk We Bear: The Effects of Review Speed and Industry User Fees on New Drug Safety. Journal of Health Economics, Vol. 27, No. 2, 2008, Available at SSRN: https://ssrn.com/abstract=1109132

Mary K. Olson (Contact Author)

Tulane University ( email )

Department of Economics
306 Tilton Hall
New Orleans, LA 70118
United States
504 862-8342 (Phone)
504 865-5869 (Fax)

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