Opinion: For PDUFA VIII, the most valuable incentive may be time
The FDA’s proposal to offer 50% off application fees for drugs with early-stage trials conducted in the U.S. is unlikely to achieve the intended result. What biotechs really want is speed.
The FDA will hold its public meeting on PDUFA VIII on Sept. 16. Aiming to encourage companies to conduct Phase 1 development in the U.S., the FDA has proposed offering qualifying drugs a 50% reduction in the application fee, roughly $2.3 million in savings at current rates. I support the objective but question the means. This incentive is being offered near the end of development—at the time of an approval filing—to influence a decision that was made years earlier about where to conduct the first clinical trial.
For a small biotech, the more practical incentive is time. Speed matters—whether a drug succeeds or fails. Finding out earlier that the biology is wrong stops further investment, limits unnecessary exposure of patients and allows scientists and resources to move elsewhere. Failure is part of science; failing slowly is expensive.
If the eighth iteration of PDUFA can include incentives to bring Phase 1 research to the U.S., shouldn’t it also address how efficiently those trials can get started? When Congress reauthorized PDUFA in 2022, the statute referred to “expediting the drug development process,” not just drug applications.
During recent PDUFA negotiations, the biopharma industry asked the FDA to improve the IND review process alongside the financial incentive. The FDA responded that its “America First” proposal focused on fees and that other process changes need to be addressed separately—something the agency is now trying to do through Operation TrialBlazer and the proposed Expedited IND Pilot. But if the goal is to bring more clinical research back to the U.S., it makes sense to consider them both together.
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The increasingly tense global competition is not simply for Phase 1 trials; it is also for the biotech ecosystem that supports them. Companies decide where to develop medicines based on access to strong investigators and institutions, regulatory engagement, available capital, predictable manufacturing rules and how quickly one experiment can inform the next. A discounted application fee may help the bottom line, but it does not create conditions supportive to efficient drug development or strengthen biotechnology as a national strategic asset.
PDUFA must codify approaches to expediting clinical research
The FDA is beginning to address some of these challenges through Operation TrialBlazer, a broad Department of Health and Human Services initiative that could streamline first-in-human IND preparation and accelerate Institutional Review Boards (IRBs), contracting and site preparation. If these approaches work, PDUFA should make them part of routine practice vs. leaving them as pilots.
We should also learn from countries approaching early drug development differently. China’s accelerated pathway expects sponsors to be ready to move, with investigators, institutions and ethics processes prepared. The FDA should expect the same. There is little benefit in accelerating review of an IND if sponsors then lose the time getting the study started.
Australia offers another lesson. Its Clinical Trial Notification system puts more responsibility on investigators, ethics committees, institution and sponsor, rather than requiring the same level of pre-study review by the national regulator. The U.S. system is different, but the model raises an important question: Does every early-stage experiment require the same level of regulatory scrutiny?
First-in-class drugs with novel targets entering humans for the first time clearly require rigorous review. But well-characterized drugs supported by information the FDA has already reviewed present a different level of risk. The agency should focus its resources where uncertainty is greatest rather treat every study the same. Physician-sponsored INDs are a logical place to start, with standardized national format for appropriate academic submissions and reuse of previously reviewed information, wherever permitted.
Still, none of this will work without staffers. The damage caused by DOGE needs to be repaired. In FY2025, the Center for Drug Evaluation and Research (CDER) lost about 18% of its workforce and the Center for Biologics Evaluation and Research (CBER) 16%, while the FDA’s central human-capital office was cut by roughly 30% and key hiring offices were eliminated. The result was a smaller workforce and less capacity to rebuild it. The FDA has acknowledged that staffing shortages contributed to missed PDUFA commitments, while hiring restrictions made it harder to fill open positions.
Hiring is not administrative overhead—it is regulatory capacity. If the FDA is expected to review drugs faster and engage with companies earlier, it needs enough experienced clinical, toxicology and CMC reviewers to do the work. PDUFA VIII should make rebuilding FDA’s capacity a priority. PDUFA funds should strengthen the workforce responsible for drug review. The FDA cannot be expected to move faster after its scientific capacity has been weakened.
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COVID showed what becomes possible when the system is organized differently. Regulators and developers communicated continuously, activities that normally occurred sequentially took place in parallel and manufacturing began at financial risk. Much of the time saved came from removing the gaps between decisions.
The same thinking should continue after Phase 1. A well-designed early study can show how therapeutic substances work, thereby informing what experiment should follow long before efficacy is established. If a sponsor has interpretable human data and clearly framed questions, PDUFA VIII should provide a rapid route to discussing that proof-of-concept study with FDA.
PDUFA should track the time from a complete IND submission to authorization and from meaningful early human data to regulatory alignment on the next experiment. Those measurements would tell us more about whether development is moving faster.
The U.S. should also learn from China’s efforts to create greater urgency and Australia’s application of greater proportionality to clinical trials and early drug discovery, as well as FDA’s own TrialBlazer initiative to reconsider inherited processes. However, none of those changes will matter if the institution expected to implement them continues to lose capacity.
Without a strong FDA, America risks losing the early scientific development that made it the global biotechnology leader and the agency the world’s regulatory benchmark. PDUFA VIII is not really about fees. It is about whether America intends to remain the country that turns biology into medicines faster, more rigorously and more reliably than anyone else.
