FDA primes industry for GDUFA II fee structure changes

In the nearly five years since the Generic Drug User Fee Agreement was enacted under the Food and Drug Administration Safety and Innovation Act of 2012, through the FDA’s Office of Generic Drug, GDUFA has generated some $1.5 billion in user fees and has seen 1,992 approvals issued.

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And as the final year of GDUFA’s initial form kicked off in October, the FDA already was laying the groundwork for GDUFA II, which, if authorized by Congress next year, will last from fiscal year 2018 to fiscal year 2022. By the end of August, the FDA had completed its industry negotiations.

As it prepares for GDUFA II, the FDA is preparing manufacturers for coming changes both in communications and transparency, as well as changes to its fee structuring, which are central to how GDUFA II will differentiate itself from GDUFA I. Currently, 24% of revenue comes from ANDA fees and Prior Approval Supplement Fees. About 6% comes from Drug Master File fees, 14% from active pharmaceutical ingredient facility fees and 56% from final dosage form facility fees.

“The commitments outlined in GDUFA II enable the FDA to continue delivering on its promise to protect public health by ensuring access to safe and effective generic medicines,” GPhA SVP sciences and regulatory affairs David Gaugh said. “The generic drug review process is largely supported and funded by industry stakeholders. These funds are applied toward streamlining and expediting the application review and approval process, improving regulatory consistency and predictability, and ensuring that millions of patients have timely access to safe and effective generic medicines.”

In an Oct. 28 webinar, FDA director of user fee management and budget formulation Donald Parks outlined that under GDUFA II, the agency is introducing the Generic Drug Application Program Fee, or the ANDA Holder Program Fee, a tiered system wherein each company and its affiliated will pay an annual fee based on the number of ANDAs approved. Those with 20 or more approved ANDAs will pay the full fee, those that have between six and 19 will pay 40% of the full fee and those with five or fewer will pay 10% of the large fee.

“The agency, in combination with the industry, was looking for a way to address concerns expressed by small businesses during GDUFA I,” Parks said. “It was decided that we would incorporate features that would affect small business into the overall agreement.”

In addition to the new ANDA Holder Program Fee, which will make up 35% of GDUFA II’s total target revenue (a target of $493.6 million), the agency is eliminating prior approval supplement fees, with ANDA fees accounting for 33% of target revenue, DMF fees contributing 5%, API facility fees bringing in 7% of revenue and FDF facility fees accounting for 20% of target revenue.

And though the FDA doesn’t yet know what the full ANDA holder fee will be, as it will be set in August, the agency will begin offering manufacturers an opportunity to avoid excessive fees before year’s end. In December, the FDA will release a list of all approved ANDAs alongside the holder of the ANDA (all public-record information), allowing companies to consolidate the ANDAs they control across multiple entities, as each entity would have to pay a fee based on the number of ANDAs it holds once GDUFA II begins.

By March 2017, the agency plans to publish a list of unclaimed ANDAs with a goal of publishing an updated list of ANDA holders by June 2017, and a list of fiscal year 2018 fees by August.

Another effort to assist small businesses involved in the manufacturing process include a new ability for applicants to recoup 75% of their fee for a submission that was withdrawn before it was received, as well as a change that allows facilities that handle both APIs and FDFs to pay only the FDF fee. Finally, a contract manufacturing organization, CMO, which provides contract manufacturing for ANDA sponsors but is unaffiliated, will only pay 10% of the FDF fee.

These fee changes come alongside other transparency changes. Among them is the continued goal for the FDA to respond to 90% of standard ANDAs within 10 months of receipt and responding to 90% of priority ANDAs within eight months.

“GPhA is hopeful that these updates will help the agency take stronger steps to expedite the review and approval of generic drug applications, an effort that boosts generic competition and helps increase patient access to more affordable medicines,” Gaugh said.