How to Fix the FDA

We need the FDA to be 100% public funded.

Idea: Eliminate FDA user fees and add $5B per year in public funding to expedite FDA approvals.

  • This will lead to many more new FDA applications and less regulatory capture.
    • People benefit by getting more treatment options at lower prices.
    • Startups benefit by getting to compete with Big Pharma on a more level playing field.

Trend: Nearly half of the FDA’s budget is now generated by user fees:

  • In 1992, Congress passed the Prescription Drug User Fee Act (PDUFA), which allows the FDA to collect fees from pharmaceutical companies they regulate.
  • A series of bills (MDUFMA, ADUFA, AGDUFA, FSMA, TCA, BsUSF, and GDUFA), expanded user fees throughout FDA’s jurisdiction by 2012.

Problem: The FDA charges millions of dollars per new drug application.

  • Tying FDA funding to industry fees creates a regressive, pay-to-play approval system.
    • This benefits big pharmaceutical companies who can afford to make many applications.
  • When regulatory approval is expensive and time-consuming, incumbents win.
    • Biotech startups are forced to sell most or all of their equity to VCs and pharma companies to pay for expensive trials and applications.
  • This is a classic example of regulatory capture.
    • We all pay the costs of this political failure, and the benefits are all going to a few huge companies.

Remember: If you’re not paying for it, you’re not the customer, you’re the product.

  • 100% public funding of the FDA will allow many more startups to submit new applications, increasing our access to life-saving treatments and reducing the power of large corporations to influence our health regulations.

Solution: Pass an bill in Congress to fully fund the FDA through appropriations.

  • With just $5B per year in new FDA funding, we can eliminate user fees, fully fund the FDA, and expedite approvals.
  • This will level the playing field for startups

How: Cut $5B+ per year in wasteful defense spending.

By Kaj Tallungs – Own work, CC BY-SA 4.0

Why: The FDA is our first line of defense in many industries critical to our health.

  • There were almost 2X as many FDA approvals from 2011-2020 (410) vs. 2001-2010 (229).
  • The next decade should see drug applications and approvals skyrocket as biotech creates many more potential therapeutics.
    • The FDA needs to be ready for this surge in new applications!
Source: Fact Sheet: FDA at a Glance – November 2021

Opportunity: Making clinical trials faster will fix the #1 bottleneck in drug development.

Compare how much time was spent on Moderna’s mRNA development vs. regulatory work:


  • January 9, 2020: Chinese health authorities announce the discovery of a novel coronavirus.
  • January 11, 2020: Sequence of full coronavirus genome is published online.
  • January 13, 2020: Design of Moderna mRNA vaccine is complete.
  • January 14, 2020: Moderna initiates cGMP production.
  • February 4, 2020: Moderna ships pre-clinical drug product.
  • February 24, 2020: Moderna ships clinical drug product.


  • March 4, 2020: FDA approves Moderna mRNA clinical trials.
  • March 16, 2020: Moderna Phase I clinical trial starts.
  • May 29, 2020: Moderna Phase II clinical trial starts.
  • July 27, 2020: Moderna Phase III clinical trial starts.
  • November 16, 2020: Moderna publishes interim Phase III data.
  • November 30, 2020: Moderna publishes final Phase III data.
  • December 18, 2020: FDA issues EUA for Moderna vaccine.
  • January 31, 2022: FDA grants full approval of Moderna vaccine.

Future: The FDA should be its own executive branch department.

  • The FDA is currently only one agency within HHS.
    • Elevating the FDA to cabinet-level status will increase both its funding and oversight.
    • The FDA should have a specific agency tasked to accelerating clinical trials.

This idea is a work-in-progress. If you’d like to riff on it, hit me up @neilthanedar on Twitter!

Published by Neil Thanedar

Neil Thanedar is an entrepreneur, investor, scientist, altruist, and author. He is the founder & GP of Utopic, a pre-seed biotech VC fund investing in the future of science. He is also the founder & chairman of Air to All, a 501(c)3 nonprofit medical device startup, and Labdoor, a consumer watchdog with $7M+ in funding and 20M+ users. He previously co-founded Avomeen Analytical Services, a product development and testing lab acquired for $30M+ in 2016. He has also served as Executive Director of The Detroit Partnership and Senior Advisor to his father Shri Thanedar in his campaigns for Governor, State Representative, and US Congress in Michigan.