Summary: A GAO report pointed out that the Food and Drug Administration (FDA) system for assessing the benefits and risks of drugs could be speeded up by the use of new procedures. The delays were caused by the scientific and professional disagreement between FDA and industry, imprecise FDA guidelines, tardy FDA feedback to industry, lengthy chemistry reviews, and the slow rate of industry's resolution of identified deficiencies. Following the issuance of the report, GAO studied FDA efforts to speed up the drug review process and found a considerable improvement in processing time. To improve the review time, FDA made efforts to improve communication with industry, invited the early submission of manufacturing and controls information, instigated a priority review system to expedite the processing of important new drug applications, made efforts to speed up the validation procedures used in the testing of new drugs, and made efforts to improve the timeliness of the work performed by the Divisions of Biometrics and Biopharmaceutics. Several other changes are being considered. In fiscal year 1980, the Federal Government was involved in the development of some 35 so-called orphan drugs at a cost of $79.6 million. The primary reason for Federal involvement in research and development of these drugs is the perceived need for attention to a specific disease or problem in cases where industry might not be reasonably expected to contribute because of uncertain profitability. In most instances, Federal involvement in securing approval of a new drug ends when clinical studies are completed and the evidence is turned over to industry for use in applying for and securing approval from FDA. GAO has suggested increases in the patent term as an economic incentive to the pharmaceutical industry to stimulate research and development and to increase new drug innovation. Also suggested was: improvement of the relationship between FDA and the drug companies, FDA acceptance of foreign studies without the necessity of having to carry out domestic pivotal studies, FDA allowing the drug companies to retain patient records, improvement of the advisory committee structure in FDA, changes in the FDA classification system to give important drugs top priority, the possible increased use of part-time physicians by FDA in clinical work or research, increased flexibility in FDA operations, improvements in post-marketing surveillance, and a routine review of marketed drugs.