FDA’s User Fee Programs at a Crossroads: User Fee Deadlines and Funding at Risk

Client Alert | April 4, 2025

Gibson Dunn is closely monitoring developments and is prepared to help companies consider and address the implications of potential changes to FDA’s funding structure and authorities, including through regulatory counseling, agency and legislative engagement, and litigation.

Following recent mass layoffs at the Food and Drug Administration and growing criticism from senior administration officials of FDA’s user fee funding programs, the life sciences industry can expect significant changes to both FDA’s ability to meet medical product user fee deadlines and the future of the user fee programs more broadly.

Although the reductions in force at FDA have not included medical officers responsible for product reviews, other key members of review teams have been terminated. These staffing changes are expected to have an immediate and sustained impact on FDA’s ability to meet current user fee performance goals. At the same time, concerns about FDA’s reliance on industry user fees from Robert F. Kennedy, Jr., Secretary of the Department of Health and Human Services, and other senior HHS officials, as well as an increasingly unpredictable legislative process in Congress, call into question whether the various medical product user fee programs, which start to expire as early as this year, will be renewed.

A shift away from user fee funding to appropriated funds would have a significant impact on the timing of agency medical product reviews and other life sciences industry interactions with the agency.

The Current User Fee Framework

A large portion of FDA’s regulatory activities are funded by industry-paid user fees. Medical product user fee acts, which must be renewed by Congress every five years, are in place for prescription drugs,[1] biosimilars,[2] approved generic drugs,[3] over-the-counter (OTC) drugs marketed under OTC monographs,[4] medical devices,[5] innovator animal drugs,[6] and animal drugs.[7]
User fees fund a range of FDA regulatory activities, depending on the particular user fee program, such as review of product submissions, research monitoring, and certain inspections. The use of those funds is specified in, and restricted by, the statutory text of the user fee provisions.[8]
Each user fee program assesses different types of fees on industry (e.g., for applications for marketing authorization, for establishments and facilities), and the fee structure may change as part of the renewal process.
Renewal of each user fee program involves a multi-step, months-long process. First, FDA and industry negotiate the proposed user fee structure and performance goals, with opportunity for public comment. Following those negotiations, FDA is required to transmit final recommendations for reauthorization to the committees of jurisdiction in Congress (the House Energy and Commerce Committee and the Senate Health, Labor, Education, and Pensions (HELP) Committee). Those recommendations include both proposed statutory changes and commitment letters that outline review timelines, program enhancements, and other goals. In considering the recommendations, the Committees hold a series of hearings and vote on their passage. The Committees typically also consider other pieces of FDA-related legislation to ride along with the user fee reauthorization package. The packages are then voted on by the full House and Senate.

All user fee acts are up for renewal between 2025 and 2028, with the vast majority requiring reauthorization in 2027—meaning that user fee act negotiation activities are either already in progress or are scheduled to commence soon.[9]

What Is Changing?

FDA likely will not be able to meet current user fee goals. FDA layoffs and certain retirement incentives have not targeted review staff in FDA’s medical product centers or staff that conduct inspections; however, reports indicate that some medical reviewers are looking to leave the agency due to recent agency tumult.[10] In addition, product reviews rely heavily on a broad spectrum of review team staff, many of whom have been dismissed, including project managers and labeling reviewers. Layoffs of other agency staff likely will have a ripple effect on product review times. For example, although staff that conduct inspections have not been the subject of reductions in force, the office that arranges travel for those inspections was eliminated. These staffing gaps are expected to result in delays in inspections, including those conducted in connection with user-fee funded product applications.[11] If FDA does decide to increase staffing to meet its needs, it may be difficult to find high-quality candidates, given uncertainty with respect to job security and agency morale. Finally, Secretary Kennedy has suggested that some HHS staff subject to layoffs will be reinstated. It is not clear whether that effort will include staff integral to the user fee review process, or whether those staff will choose to return and, if so, for how long.[12]
The future of FDA’s user fee programs is increasingly in doubt. Secretary Kennedy and FDA Commissioner Makary have expressed concerns about what they see as the improper influence of regulated industry over FDA. Secretary Kennedy in particular has suggested that user fees paid by industry may lead the agency to make decisions regarding marketing authorization and enforcement at the expense of the public health.[13] These statements raise uncertainty about the future of user fee programs at FDA.

In February, President Trump issued Executive Order 14212, which established the Make America Healthy Again (MAHA) Commission.[14] Part of the remit of the MAHA Commission, which is led by Secretary Kennedy and includes FDA Commissioner Makary, is to provide a report within 100 days of the order to, among other things, “restore the integrity of science, including by eliminating undue industry influence.”[15] Observers have noted that this report could provide for a change in how FDA is funded to eliminate industry funding.[16]

Other advisors to the White House and Secretary Kennedy have also opposed industry-funded user fees, including Calley Means, who has stated that “FDA “should stop being funded by pharma[ceutical companies]” and called for other measures to limit ties between FDA and industry, including limits on departing employees joining pharmaceutical companies.[17] Republican members of Congress aligned with the MAHA movement could follow suit as user fee programs approach expiration and discussions on reauthorizations ramp up.

Even if senior HHS and FDA leadership do allow for the renewal of user fee programs, without sufficient allocation of resources and support, the reauthorization processes could flounder. Managing the negotiations process and engaging with members of Congress and their staff involve significant agency resources and effort. Staff that had been working on forthcoming user fee negotiations reportedly were part of last week’s layoffs.[18]

Lawmakers in the Democratic caucus could also present obstacles to user fee program renewals. Senator Bernie Sanders — the highest-ranking member in the Democratic caucus on the Senate HELP Committee — has voted against user fee bills in the past,[19] and previously criticized user fees as enabling “industry, in a sense, [to] regulat[e] itself.” Without Ranking Member Sanders’ support, it will be difficult to move user fee reauthorizations through the HELP Committee.

Once relatively routine, the Congressional process for negotiating and passing future FDA funding legislation could become more unpredictable following precedent-breaking process during the last major reauthorization cycle. Moving legislation through Congress is always a challenge, even for so-called “must pass” legislation with respect to expiring programs such as user fees, but, until recently, user fee legislation had passed without significant issue. In 2022, however, during the last reauthorization cycle for prescription drug, medical device, biosimilar, and generic drug user fees, disagreements arose in the Senate over which riders carrying specific policy changes should be attached to the user fee package. As a result, action on user fee legislation was delayed and then tacked onto a continuing resolution approved by the House in late September, narrowly avoiding a lapse in the user fee programs, before reauthorization was secured in December.[20]

The OTC Monograph Drug User Fee Program (OMUFA), which is first up for reauthorization by September 30, 2025, may be a harbinger for potential FDA funding changes.[21] The Subcommittee on Health of the House’s Energy and Commerce Committee started hearings on OMUFA last week. Questions from Subcommittee members reflected general alignment on reauthorizing the OMUFA program, despite some concerns about how FDA has been implementing the program. The Senate HELP Committee has not yet scheduled a hearing on OMUFA reauthorization.

More trouble on the horizon for current user fee funding? Finally, we note the possibility that ongoing efforts to cut staffing and funding for FDA could force the agency to both refund user fees it has already collected and prevent it from collecting further fees. A lesser-known feature of user fee acts is a “trigger mechanism” put in place to ensure that user fees supplement, not replace, appropriation funds. For example, the Prescription Drug User Fee Act (PDUFA) requires that user fees, such as per-product program fees, be refunded if spending of appropriated funding for FDA salaries and expenses for prescription drug staff falls below a certain level.[22] Similarly, under the Medical Device User Fee Act (MDUFA), FDA cannot assess medical device user fees if appropriated funding spend for medical device salaries and expenses falls beneath a threshold.[23] While this mechanism has not been an issue historically, recent staffing cuts, coupled with a lack of administration support for FDA funding and user fee programs, could significantly interfere with agency product reviews.

[1] Prescription Drug User Fee Amendments of 2022 (PDUFA), 21 U.S.C. § 379g et seq.

[2] Biosimilar User Fee Amendments of 2022 (BsUFA), 21 U.S.C. § 379j-51 et seq.

[3] Generic Drug User Fee Amendments of 2022 (GDUFA), 21 U.S.C. § 379j-41 et seq.

[4] OTC Monograph Drug User Fee Program (OMUFA), 21 U.S.C. § 379j-71 et seq.

[5] Medical Device User Fee Amendments of 2022 (MDUFA), 21 U.S.C.§ 379i et seq.

[6] Animal Drug User Fee Amendments of 2023 (ADUFA), 21 U.S.C. § 379j-11 et seq.

[7] Animal Generic Drug User Fee Amendments of 2023 (AGDUFA), 21 U.S.C. § 379j-21 et seq.

[8] See generally, e.g., FDA, “FDA: User Fees Explained” (last accessed Apr. 4, 2025).

[9] OMUFA is currently set to be reauthorized in September 2025. PDUFA, BsUFA, GDUFA, MDUFA are currently set to be reauthorized in September 2027. ADUFA and AGDUFA are currently set to be reauthorized in September 2028.

[10] FDA reviewers, inspectors, and investigators excluded from $25K buyout offer, Regulatory Focus (Mar. 10, 2025); Trump layoffs to erode FDA drug review system, Reuters (April 4, 2025).

[11] Trump layoffs to erode FDA drug review system, Reuters (April 4, 2025).

[12] “RFK Jr says 20% of Doge’s health agency job cuts were mistakes,” The Guardian (Apr. 4, 2025).

[13] See, e.g., “RFK Jr vow to purge FDA sets up collision with Big Pharma,” Reuters (Nov. 15, 2024); “Trump’s US FDA User Fee Cycle: ‘An Underappreciated Threat,’” Pink Sheet (Nov. 16, 2024); “Trump nominates Marty Makary, a critic of some COVID-19 health measures, to lead the FDA,” NBC Washington (Nov. 22, 2024).

[14] Exec. Order 14212, § 3, 90 Fed. Reg. 9833 (Feb. 19, 2025).

[15] Id. § 5(a)(ix).

[16] See, e.g., “Trump establishes MAHA Commission, with medicines – and maybe user fees – in its crosshairs,” AgencyIQ by Politico (Feb. 13, 2025).

[17] See, e.g., “The move to protect abortion clinics in states,” Politico (Mar. 19, 2025); Tucker Carlson, “Calley & Casey Means: How Big Pharma Keeps You Sick, and the Dark Truth About Ozempic and the Pill,” YouTube (Aug. 16, 2024).

[18] Following layoffs, the future of FDA’s user fee programs is in extreme jeopardy, AgencyIQ (April 3, 2025).

[19] See Bernie Sanders, U.S. Senator for Vermont, “Issues” (last visited Apr. 4, 2025).

[20] See, e.g., “Sigh of relief as Congress reauthorizes user fee agreements,” Regulatory Focus (Sept. 30, 2022).

[21] Subcommittee on Health, Committee on Energy and Commerce, Examining the FDA’s Regulation of Over-the-Counter Monograph Drugs (Apr. 1, 2025).

[22] 21 U.S.C. 379h(f)(1).

[23] 21 U.S.C. 379j(g)(1).

The following Gibson Dunn lawyers prepared this update: Katlin McKelvie and Carlo Felizardo.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding the issues discussed in this update. Please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any leader or member of the firm’s FDA & Health Care or Consumer Protection practice groups:

Gustav W. Eyler – Washington, D.C. (+1 202.955.8610, [email protected])
Katlin McKelvie – Washington, D.C. (+1 202.955.8526, [email protected])
John D. W. Partridge – Denver (+1 303.298.5931, [email protected])
Jonathan M. Phillips – Washington, D.C. (+1 202.887.3546, [email protected])
Carlo Felizardo – Washington, D.C. (+1 202.955.8278, [email protected])

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FDA’s User Fee Programs at a Crossroads: User Fee Deadlines and Funding at Risk

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