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A Working Paper of the 21st century
FDA Task Force

June 2006

Prescription for Progress: The Critical Path To Drug Development

Robert Goldberg, Ph.D. and Peter Pitts
Center for Healthcare and Insurance Studies, University of Connecticut, School of Business

Appendix I: A Brief history of the FDA[27]

The Food and Drug Administration's origins date from the Civil War, when President Lincoln appointed Charles M. Wetherill, a chemist, to test agricultural products at the newly created Department of Agriculture. Eventually, Wetherill’s laboratories grew into the Bureau of Chemistry. In 1883, Dr. Harvey W. Wiley, considered the patron saint of the modern FDA, was appointed to lead the bureau and began a crusade against adulterated foods and "patent" medicines that claimed to be cure-alls.

The FDA gained influence with the growth of the national economy. For most of U.S. history, states retained power over food and drug products. In the nineteenth century, after America became an industrialized nation where consumer products moved rapidly across state borders, reformers became concerned that dozens of fraudulent firms were hawking fake or even dangerous foods and medicines to an unsuspecting public. Demands for more stringent federal labeling requirements and safer products flowed out of a series of tragic events and muckraking exposés—Sinclair's The Jungle being among the most famous—and led to the Food and Drugs Act of 1906.

Even after passage of the 1906 act, the FDA lacked injunctive power to prevent potentially harmful products from reaching the market. Its ability to restrain manufacturers was limited to launching a lawsuit in federal court, a very expensive and uncertain tool for setting public policy. Additional regulatory powers, particularly in the area of drug safety, came after a national tragedy, when a Tennessee firm marketed a syrup-based antibiotic called Elixir Sulfanilamide, which contained a highly poisonous solvent that killed more than a hundred people, including many children. The resulting public outcry led to the congressional passage of the 1938 Food, Drug, and Cosmetic Act, requiring companies to submit a pre-market application proving the safety of their products and giving the FDA power to prevent dangerous products from being marketed.[28]

In 1962, the FDA's regulatory power assumed the form that we know today after another scandal, this time involving thousands of birth defects in Europe and Japan caused by the antinausea drug thalidomide. The law that was passed in response to the thalidomide tragedy, the 1962 Kefauver-Harris Amendments, added the requirement that manufacturers prove efficacy as well as safety in clinical trials. The amendments also gave the FDA greater control over drug trials, mandated informed consent for patients in clinical trials, gave the agency the ability to police drug advertising, established manufacturing standards for the pharmaceutical industry, and gave the agency the right to inspect production facilities and records.[29]

The 1970s were rife with criticisms of the FDA's new regulatory powers and with claims that the FDA's drug approval process was unduly slow and cost American lives. Nevertheless, there was little movement on FDA reform until the advent of the AIDS crisis in the 1980s. In response to public and often highly controversial tactics from groups like ACT UP, the FDA instituted "treatment INDs," where investigational new drugs for AIDS could be sold after Phase 1 trials (provided that research regarding safety and efficacy was ongoing) and "parallel track," which allowed patients who were excluded from clinical trials to receive experimental drugs.

The AIDS controversy led to the growing realization that drug approval policies designed to protect the general population from unforeseen dangers might be causing more harm to small groups of seriously or terminally ill patients. In 1988, President Reagan's Task Force on Regulatory Relief, led by Vice President George H. W. Bush, commissioned the National Committee to Review Current Procedures of New Drugs for Cancer and AIDS.

In 1992, based on the findings and recommendations of this commission, the FDA adopted its acceleratedapproval program for serious or life-threatening diseases where accelerated drugs demonstrated "therapeutic benefit over existing therapy" based on surrogate end points, provided that company sponsors agreed to conduct Phase 4 or post-market studies that confirmed Phase 2 efficacy findings. Accelerated approval was codified by Congress in the Food and Drug Administration Modernization Act of 1997.

To this day, the FDA's accelerated approval process has remained a subject of debate. While AIDS drugs have sailed through the FDA, some patient advocacy groups still believe that drugs for serious illnesses are approved too slowly; other critics assert that the surrogate end points used by the program are unproven and that they allow harmaceutical companies to market expensive drugs that may have significant toxicity profiles but only marginal value for patients. It can be hoped that the Critical Path initiative will alleviate some of this controversy by creating objective benchmarks for drug safety and efficacy based on a more mechanistic understanding of human biology.

Appendix II: Recent FDA Budgets


The Food and Drug Administration (FDA) Fiscal Year (FY) 2007 budget request to Congress totals $1.95 billion, a 3.8 percent increase over FY 2006. The FY07 request, which covers the period of October 1, 2006, to September 30, 2007, includes $1.55 billion in budget authority and $402 million in industry user fees.

The proposed increase of $70.8 million over the current budget will enable FDA to focus its staff and resources on priority initiatives, including:

  • Preparedness for the potential threat of pandemic influenza
  • Protection of the food supply from bioterrorism
  • Diverse initiatives to realize the promise of molecular medicine
  • Strengthening the safety of drugs and human tissues for transplantation
  • Meeting statutory obligations under the animal drug and medical devices user fee programs.

The following are FDA's key proposed budget increases:

Pandemic Preparedness ($30,490,000)

To protect the nation against the threat of pandemic flu, the FDA proposes intensifying ongoing preparedness activities and launching additional measures to safeguard the public health from this potential threat. Preparedness activities include the development of viral reference strains that manufacturers require to produce influenza vaccines; acceleration of manufacturing capability to produce and deliver sufficient quantities of safe and effective vaccines; collaboration with the international public health community on recognizing and responding to emerging pandemic threats; and the development of measures to address the potential pandemic-related impacts on FDA-regulated food and animal feed.

Critical Path ($5,940,000)

The FDA proposes funding for its Critical Path for Personalized Medicine Initiative, a major nation wide project designed to make personalized medicine a reality and to translate discoveries in medical science into safe and effective new medical treatments. This is the first time Critical Path funding has been included in the Administration's proposed budget. The Critical Path Initiative will seek to mitigate or eliminate obstacles to medical product development that impede the ability to transform investments in basic medical research into products that benefit patients' health.

Food Defense ($19,873,000)

The FDA will expand the network of laboratories that would rapidly and competently analyze samples in the event of a terrorist attack on our nation's food supply. This cooperative effort, which involves states and several federal agencies, will substantially enhance the FDA's capacity to detect and effectively respond to intentional contamination of our food. As part of this effort, the FDA will also expand its program of targeted food defense research.

Medical Product Safety ($6,435,000)

To improve patient safety, FDA proposes significant new investments in the agency’s safety programs for human drugs and transplantable human tissues. The FDA seeks $3,960,000 to strengthen its capacity to recognize and act on emerging drug safety issues by modernizing its adverse drug event information systems and broaden the sources of data the agencyanalyzes for drug safety signals. To increase the safety and effectiveness of human tissue transplants, which are involved in more than a million procedures a year, the FDA is requesting $2,475,000 for its new risk-based program to detect, analyze, and respond to actual or potential disease transmission involving human tissues.

Cost of Living Pay Increase ($20,267,000)

The FDA is responsible for protecting the nation against the numerous known and emerging public health hazards; ensuring that the FDA-regulated food for the family table is safe and wholesome; that new human and animal drugs, vaccines, and medical devices are available in a timely manner with demonstrated benefits that outweigh risks; and that equipment that emits radiation and cosmetics do no harm. The agency could not carry out this critical and demanding mission without a highly trained staff of scientists, health care professionals, and support personnel whose salaries make up more than 60 percent of its budget.

User Fee "Triggers" ($7,425,000)

The FDA is requesting resources to meet statutory requirements, called "triggers." This will enable the agency to continue collecting user fees under the Medical Device User Fee and Modernization Act (MDUFMA) and Animal Drugs User Fee Act (ADUFA). These acts require a minimum level of federal spending for reviewing medical devices, and animal drugs and feed as a condition for the agency's collecting user fees from manufacturers. These additional resources have greatly strengthened the agency's ability to accelerate the review and approval of these products.

Other User Fee Increases ($20,170,000)

The budget request includes user fee increases statutorily prescribed under the Prescription Drug User Fee Act (PDUFA) ($15,268,000); MDUFMA ($3,426,000); ADUFA ($286,000); Mammography Quality Standards Act ($349,000); and for drugs and devices export certification ($661,000) and color certification ($180,000). These user fees support the Administration's vision of transforming health care and improving access to FDA-regulated products through enhanced agency performance. Since 1993, when the first prescription drug user fees went into effect, they have enabled the agency to significantly reduce the time needed for product reviews and to upgrade other activities, principally by hiring additional staff and acquiring essential information technology.

New User Fees ($25,536,000)

In addition, the FDA is proposing two new sets of mandatory user fees. The first, estimated at $22,000,000, would pay the full cost of reinspection and other FDA follow-up work after the manufacturer fails to meet such major FDA requirements as Good Manufacturing Practices, which ensure high quality standards in regulated products. These reinspection and laboratory analyses, which are currently funded by the agency, are essential to verify the manufacturer's corrective measures. The second new user fee, estimated at $3,536,000, would cover the cost of issuing an estimated 37,000 food and animal feed export certificates.

The FDA's budget request for FY 2007 is futureoriented, a characteristic reflecting the agency's performance strategy since its founding 100 years ago. As it is preparing to enter its second century of service to the nation, the FDA will intensify its efforts that have made it the world’s premier regulatory agency, and an accomplished and steadfast protector of the nation's health.

Appendix III: Timeline of the Critical Path

March 2004: FDA releases white paper, "Innovation or Stagnation?: Challenge and Opportunity on the Critical Path to New Medical Products," and creates the Critical Path Initiative, calling attention to the declining number of new product submissions to the FDA despite growing expenditures on diomedical research.

April–August 2004: FDA reaches out to various private and public stakeholders for input on the Critical Path Initiative.

August 2004: FDA, SRI International, and the University of Arizona propose the establishment of the Institute for Global November 2005: FDA and industry begin collaboration to develop better ways to predict liver toxicity (one of the most common reasons for a drug not being approved).

December 2005: Critical Path Institute (C-Path, formerly the Institute for Global Pharmaceutical Development) opens in Tucson with $10 million in seed funding.

January 2006: FDA issues guidance on how to make the earliest stages of clinical drug development more efficient through an exploratory IND.

March 2006: FDA and C-Path announce the formation of the Predictive Safety Testing Consortium between C-Path and five of America's largest pharmaceutical companies to share internally developed laboratory methods to predict the safety of new treatments before they are tested on humans. The FDA, while not a member of the partnership, will assist it in an advisory capacity. This unprecedented sharing of potential early indicators of clinical safety may streamline the cost and time of preclinical drug safety evaluation and better inform the use of "personalized medicine."

March 2006: Acting Commissioner Andrew von Eschenbach releases the Critical Path Opportunities List and Report, a summary of FDA consultation with stakeholders during the previous two years, which outlines consensus areas for additional Critical Path research.

Source: FDA

Appendix IV
The FDA's Enabling Statue

United States Code[30]

Sec393. Food and Drug Administration

(a)In general
There is established in the Department of Health and Human Services the Food and Drug Administration (hereinafter in this section referred to as the "Administration").

(b) Mission
The Administration shall—
(1) promote the public health by promptly and efficiently reviewing clinical research and taking appropriate action on the marketing of regulated products in a timely manner;
(2) with respect to such products, protect the public health by ensuring that—

(A) foods are safe, wholesome, sanitary, and properly labeled;
(B) human and veterinary drugs are safe and effective;
(C) there is reasonable assurance of the safety and effectiveness of devices intended for human use;
(D) cosmetics are safe and properly labeled; and
(E) public health and safety are protected from electronic product radiation;

(3) participate through appropriate processes with representatives of other countries to reduce the burden of regulation, harmonize regulatory requirements, and achieve appropriate reciprocal arrangements; and (4) as determined to be appropriate by the Secretary, carry out paragraphs (1) through (3) in consultation with experts in science, medicine, and public health, and in cooperation with consumers, users, manufacturers, importers, packers, distributors, and retailers of regulated products.

(c)Interagency collaboration

The Secretary shall implement programs and policies that will foster collaboration between the Administration, the National Institutes of Health, and other science-based Federal agencies, to enhance the scientific and technical expertise available to the Secretary in the conduct of the duties of the Secretary with respect to the development, clinical investigation, evaluation, and post-market monitoring of emerging medical therapies, including complementary therapies, and advances in nutrition and food science.

(d) Commissioner

(1) Appointment

There shall be in the Administration a Commissioner of Food and Drugs (hereinafter in this section referred to as the "Commissioner") who shall be appointed by the President by and with the advice and consent of the Senate.

(2) General powers

The Secretary, through the Commissioner, shall be responsible for executing this chapter and for—

(A) providing overall direction to the Food and Drug Administration and establishing and implementing general policies respecting the management and operation of programs and activities of the Food and Drug Administration;
(B) coordinating and overseeing the operation of all administrative entities within the Administration;(C) research relating to foods, drugs, cosmetics, and devices in carrying out this chapter;
(D) conducting educational and public information programs relating to the responsibilities of the Food and Drug Administration; and
(E) performing such other functions as the Secretary may prescribe.

(e) Technical and scientific review groups

The Secretary through the Commissioner of Food and Drugs may, without regard to the provisions of title 5 governing appointments in the competitive service and without regard to the provisions of chapter 51 and subchapter III of chapter 53 of such title relating to classification and General Schedule pay rates, establish such technical and scientific review groups as are needed to carry out the functions of the Administration, including functions under this chapter, and appoint and pay the members of such groups, except that officers and employees of the United States shall not receive additional compensation for service as members of such groups.

(f) Agency plan for statutory compliance

(1) In general

Not later than 1 year after November 21, 1997, the Secretary, after consultation with appropriate scientific and academic experts, health-care professionals, representatives of patient and consumer advocacy groups, and the regulated industry, shall develop and publish in the Federal Register a plan bringing the Secretary into compliance with each of the obligations of the Secretary under this chapter. The Secretary shall review the plan biannually and shall revise the plan as necessary, in consultation with such persons.

(2) Objectives of agency plan

The plan required by paragraph (1) shall establish objectives and mechanisms to achieve such objectives, including objectives related to—

(A) maximizing the availability and clarity of information about the process for review of applications and submissions (including petitions, notifications, and any other similar forms of request) made under this chapter;
(B) maximizing the availability and clarity of information for consumers and patients concerning new products;
(C) implementing inspection and post-market monitoring provisions of this chapter;
(D) ensuring access to the scientific and technical expertise needed by the Secretary to meet obligations described in paragraph (1);
(E) establishing mechanisms, by July 1, 1999, for meeting the time periods specified in this chapter for the review of all applications and submissions described in subparagraph (A) and submitted after November 21, 1997; and
(F) eliminating backlogs in the review of applications and submissions described in subparagraph (A), by January 1, 2000.

(g) Annual report

The Secretary shall annually prepare and publish in the Federal Register and solicit public comment on a report that—

(1) provides detailed statistical information on the performance of the Secretary under the plan described in subsection (f) of this section;
(2) compares such performance of the Secretary with the objectives of the plan and with the statutory obligations of the Secretary; and (3) identifies any regulatory policy that has a significant negative impact on compliance with any objective of the plan or any statutory obligation and sets forth any proposed revision to any such regulatory policy.

(June 25, 1938, chap. 675, Sec. 903, as added Pub. L.100-607, title V, Sec. 503(a), Nov. 4, 1988, 102 Stat.3121; amended Pub. L. 100-690, title II, Sec. 2631, Nov. 18, 1988, 102 Stat. 4244; Pub. L. 105-115, title IV, Secs. 406, 414, Nov. 21, 1997, 111 Stat. 2369, 2377)

References in Text

The provisions of title 5 governing appointments in the competitive service, referred to in subsec. (e), are classified generally to section 3301 et seq. of Title 5, Government Organization and Employees.


Another section 903 of the Federal Food, Drug, and Cosmetic Act was renumbered section 904 and is classified to section 394 of this title.




  1. In March 2004, the FDA released a white paper entitled "Innovation or Stagnation?: Challenge and Opportunity on the Critical Path to New Medical Products," available online at: This report is often termed the "Critical Path Initiative."
  2. The FDA's basic statutory authority rests on the Food Drug and Cosmetic Act of 1938 (U.S.C. Title 21, Chapter 9). The FDA's mission statement describes the agency's broad mandate: "The FDA is responsible for protecting the public health by assuring the safety, efficacy, and security of human and veterinary drugs, biological products, medical devices, our nation's food supply, cosmetics, and products that emit radiation. The FDA is also responsible for advancing the public health by helping to speed innovations that make medicines and foods more effective, safer, and more affordable; and helping the public get the accurate, science-based information they need to use medicines and foods to improve their health." The purpose of this paper is to examine and recommend ways to improve a small, but vitally important, part of the FDA's mission: the regulation and approval of new medicines to treat human disease and disability.
  3. On December 23, 2004, for instance, the FDA approved a genetic test called the Roche AmpliChip, which may help doctors determine which drugs will have fewer side effects and work better for people. The FDA noted:
    [T]this system uses DNA extracted from a patient’s blood to detect certain common genetic mutations that alter the body's ability to break down (metabolize) specific types of drugs. The enzyme produced from the gene that is tested, called cytochrome P4502D6 (CYP4502D6), is active in metabolizing many types of drugs including antidepressants, antipsychotics, beta-blockers, and some chemotherapy drugs. Variations in this gene can cause a patient to metabolize these drugs abnormally fast, abnormally slow, or not at all. For example, the same dose that is safe for a patient with one variation might be too high (and therefore toxic) to a patient with a different variation who cannot metabolize the drug.
    Center for Devices and Radiological Health (CDRH) Consumer Information, available online at:
  4. The National Academies Institute of Medicine, Committee on the Assessment of the U.S. Drug Safety System, June 8, 2005. Powerpoint presentation by Janet Woodcock and Steve Galson, Acting Director of the Center for Drug Evaluation and Research. Available online at
  5. "Innovation or Stagnation?"(see n. 1 above).
  6. This is the goal of the FDA's Predictive Safety Testing Public/Private Consortium. Members of the consortium include the FDA and the Critical Path (C-Path) Institute, along with other representatives from government, academia, and industry.
  7. "Innovation or Stagnation?" (see n. 1 above).
  8. Tufts Center for the Study of Drug Development, "Backgrounder: How New Drugs Move Through the Development and Approval Process," November 2001; and J. Gilbert, P. Henske, and A. Singh, "Rebuilding Big Pharma's Business Model,” InVivo: The Business & Medicine Report 21, no. 10 (November 2003), Windhover Information.
  9. In its recently released Critical Path Opportunities Report (March 2006), the FDA stated: "There is urgent need for successive generations of antibiotics and evolving medical countermeasures (including new vaccines and improved tests for screening donor blood and tissues) against emerging infections and bioterror attacks. Although multiple hurdles to innovation exist, modernizing the Critical Path sciences could play a significant role in solving public health needs."
  10. As in the federal Vaccines for Children program.
  11. Paul Offit, chief of the Division of Infectious Diseases and director of the Vaccine Education Center at the Children's Hospital of Philadelphia has stated:

    The cost to develop and make many vaccines is greater than that to make most drugs, because products given to healthy people are often held to higher standards of safety than those given to people who are sick. In 1998 the FDA licensed a vaccine to prevent rotavirus, a common cause of fever, vomiting, and diarrhea in young children. After the vaccine had been on the market for one year—and was given to about one million children—the CDC detected a rare adverse event: About one of every 10,000 children who received the vaccine developed intussusception, a blockage of the intestine. As a consequence, the rotavirus vaccine was withdrawn.

    Before it was licensed, the rotavirus vaccine had been given to about 11,000 children in placebocontrolled prospective studies. Because intussusception was very rare, studies performed prior to licensure were not big enough to determine that rotavirus vaccine caused the condition. Following the withdrawal of the rotavirus vaccine in 1999, children have continued to be hospitalized for and killed by rotavirus. Although many more children would have been helped by a rotavirus vaccine than hurt by it, the current culture does not allow for any serious side effects from a vaccine. As a consequence, pharmaceutical companies are now asked to disprove even very rare adverse effects prior to licensure. Two companies, Merck and GlaxoSmithKline, are now testing rotavirus vaccines in pre-licensure trials that include more than 140,000 children. The cost of these two large trials is about $400 million. The added financial burden of now disproving rare adverse events before licensure is another disincentive to making vaccines.

    "Why Are Pharmaceutical Companies Gradually Abandoning Vaccines?" Health Affairs 24, no. 3 (2005): 622–30.
  12. See also "Bad Bugs, No Drugs: As Antibiotic Discovery Stagnates . . . A Public Health Crisis Brews," from the Infectious Diseases Society of America (July 2004), available online at:
  13. Christopher Adams and Van Brantner, "New Drug Development," Bureau of Economics, Federal Trade Commission, July 7, 2003.
  14. 14 Food and Drug Administration Modernization Act of 1997, Public Law 105-115, 105th Congress.
  15. Carole Cruzan Morton, Focus, "Statistical Approach Speeds Up Stent Trials", February 7, 2003. Available online at:
  16. "FDA Exempts Phase-I Drugs from Strict Manufacturing," American Society of Health System Pharmacists, January 12, 2006. Available online at
  17. According to its website, the Critical Path Institute "is an independent, publicly funded, non-profit organization dedicated to the critical path initiative. C-Path fosters research and educational programs intended to enable the pharmaceutical industry to safely accelerate the development of new medications." The C-Path Institute was jointly founded by the University of Arizona, the FDA, and SRI International.
  18. Michelle Meadows, "Why Drugs Get Pulled off the Market—Pharmaceuticals," FDA Consumer, January–February 2002.
  19. The QT interval is a measurement on an electrocardiogram; QT prolongation is a biomarker for sudden cardiac arrest that is associated with drug treatment.
  20. Patrick Clinton and Jill Wechsler, "What Ever Happened to Critical Path," Pharmaceutical Executive, p. 4, available online at:
  21. FDA Critical Path Report, July 2004.
  22. "Orphan Disease Registries." The Critical Path Institute. April 3, 2006.
  23. Brett J. Davis, "BioBanking 101: Accelerating Personalized Medicine," available online at:
  24. "Mayo Clinic 2004 Highlights." The Mayo Clinic.
  25. For instance, electronic health records could be mined to produce routine adverse event reports scrubbed of personally identifiable information.
  26. J. Concato, N. Shah, and R. Horwitz, "Randomized, Controlled Trials, Observational Studies, and the Hierarchy of Research Designs," New England Journal of Medicine 342, no. 25 (June 22, 2000): 1887–92.
  27. The following information (unless noted otherwise) is adapted from the FDA's "History of the FDA," by John P. Swann, Ph.D., FDA History Office (adapted from George Kurian, ed., A Historical Guide to the U.S. Government (New York: Oxford University Press, 1998), available online at:
  28. The distinction between prescription drugs (requiring prior physician approval) and over-the-counter drugs was added by the Durham Humphrey Amendment in 1951.
  29. Medical devices follow a different regulatory track. Swann: "The legislation having failed to develop, the Secretary of HEW commissioned the Study Group on Medical Devices, which recommended in 1970 that medical devices be classified according to their comparative risk, and regulated accordingly. The 1976 Medical Device Amendments, coming on the heels of a therapeutic disaster in which thousands of women were injured by the Dalkon Shield intrauterine device, provided for three classes of medical devices, each requiring a different level of regulatory scrutiny—up to pre-market approval."
  30. 21USC393, available online at: 4489608+0+0+0&WAISaction=retrieve.


Center for Medical Progress.


Download PDF (2.86 MB)


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The Critical Path to Personalized Medicine

Public Health and the Critical Pat

Shortcomings of the Current Drug Development and Approval Process

Promoting Collaboration

Bayesian Analysis

Genomics and Postmarket Drug Safety

Eploratory INDS and Validating Biomarkers

Post-Market Drug Evaluation


Accelerating Approval




FDA Task Force Members

Manhattan Institute 21st Century FDA Task Force.

Prescription for Progress:
The Critical Path for Drug Development


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