This project studies how the introduction of user fees for the review of new drugs has affected bureaucratic incentives and output in the Food and Drug Administration. The study has two objectives. First, it develops an understanding of the mechanism by which user fees impact bureaucratic behavior in the FDA review process. This requires an understanding of the relevant institutional environment inside the agency and the relevant constraints and incentives facing FDA bureaucrats. Second, it empirically analyzes the impact of user fees on FDA review times for new drugs and the impact of user fees on the responsiveness of bureaucrats to pharmaceutical firms. Previous work by Olson (1997) empirically examined the effect of firm characteristics on the length of time required by the Food and Drug Administration (FDA) to review and approve new drug applications between 1990-1992. The primary finding from the analysis is that FDA reviewers respond systematically to the differences between pharmaceutical firms. The reason is that firm characteristics contain information which reduces reviewers' uncertainty about approving a dangerous or ineffective drug and leads to faster review times. Other firm characteristics such as firm size and country of firm ownership also influence the speed of the review process. This project extends this analysis by examining how bureaucratic responsiveness to firms changed after the adoption of user fees for new drug review. The approach taken is one which treats regulatory decisions as endogenous and explains the variation in FDA review times as a function of differences that exist between firms and drugs. The analysis considers the set of new drugs approved by the FDA between 1990-1995. Coefficients of regulator responsiveness to various firm and drug characteristics are estimated for the 1990-1992 new drug approvals (prior to the implementation of user fees) and these coefficients are compared to estimates of regulator responsiveness to firm characteristics for the 1993-1995 new drug approvals (following the implementation of user fees). User fees are expected to shift regulatory responsiveness to pharmaceutical firms because they provide a financial incentive for regulators to process more applications and because they convey information to regulators that may reduce type I error. Results from this study have policy implications concerning the continued use of user fees in the FDA. This study also contributes to the growing body of empirical research which uses positive political theories to generate and test hypotheses about bureaucratic behavior in regulatory agencies. ó ¬ñ«¬^Ѭ½¼^+á(ñ +?+¬ ó ¬ñ«^¼?&ñ^ó|ñ^|<ú +?+¬ ó ¬ñ«^½¼¼½^ó|úñ^|<ú +?+¬ ó ¬ñ«^&¬|&^¬¼+ª^ó|úñ+?+¬ ¬ñ«^&¬|&^¬¼+ª^ó|úñ^|<ú ó ¬ñ«^¬¼¬+^úá¼ñ^|<ú ??+¬ ó <á½¼^¡&ú¼^¡½ñ¬ +?+¬ ó <á½¼^¡&ú¼^&ª( +?+¬ ó <á½¼^¡&ú¼^¼(½& +?+¬ ó Ñ|½^¼?¼ +?+¬ ó ªñ+ú^ó|úñ +?+¬ ó ¬ñ«¬^áúú¬^|+ñ +?+¬ ó ¬ñ«¬^áúú¬^¼»| +?+¬ ó ¬ñ«¬^áúú¬^¼º¬ññ +?+¬ ó ¬ñ«¬^áúú¬^Ñ|¡¬ +?+¬ ó ¬ñ«¬^áúú¬^Ñ¿«ñ +?+¬ ó ¬ñ«¬^áúú¬^½¿? +?+¬
