Generic Drug User Fee Agreement Nears Completion

Representatives from FDA, the Generic Pharmaceutical Association, the European Fine Chemicals Group, and a task force from the Society of Chemical Manufacturers and Affiliates are nearing completion of draft legislation for the Generic Drug User Fee Act. The draft legislative language, once enacted, will provide authority for FDA to collect a fee, define the types of applications and facilities that will be subject to fees, and identify mechanisms by which FDA will notify industry of fee amounts, among other things. Some elements, such as an inflation adjuster, from the Prescription Drug User Fee Act (PDUFA), are included and the overall statutory structure is similar to PDUFA.

According to the minutes from the Aug. 31, 2011 negotiation session, “The Generic Drug User Fee program is designed to keep individual fee amounts as low as possible to supplement appropriated funding to ensure that consumers continue to receive the significant benefits offered by generic drugs which provided more than $824 billion dollars in savings to the nation’s health care system in the last decade alone. The additional resources called for under the agreement, an inflation adjusted $299 million annually for each of the five years of the program, will provide FDA with the ability to perform critical program functions that could not otherwise occur.”

The program contains goals for application reviews and plant inspections. By year five of the program, FDA aims to review 90% of complete electronic abbreviated new drug applications within 10 months after the date of submission, and to review 90% of backlogged applications by the end of fiscal year (FY) 2017. FDA will conduct risk-adjusted biennial cGMP surveillance inspections of generic finished dosage form (FDF) and generic active pharmaceutical ingredient (API) manufacturers, with the goal of achieving parity of inspection frequency between foreign and domestic firms by FY 2017.

Fees will be derived from both applications and facilities in a 30:70 split. Fees will be split across industry segments (FDF and API) in an 80:20 split.

The final meeting between FDA and industry representatives will be held on Sept. 7, 2011, after which the plan will be submitted for formal ratification.

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