Negotiating GDUFA II
Are reduced GDUFA fees on the horizon for contract manufacturers?
The Generic Drug User Fee Act (GDUFA) was introduced by the FDA in 2012 as a means of generating industry cash to support faster FDA generic approvals and more frequent facility inspections. The Act requires manufacturers of active pharmaceutical ingredients and generic drugs to pay fees, but is due to expire at the end of September 2017. For the past year, GDUFA II has been under discussion – and the negotiations between the industry and FDA recently came to a close. The finer details, including the exact fees to be paid, have not yet been publicized, but details published in the Federal Register in September suggest there will be reduced fees for smaller contract manufacturing organizations (CMOs).
During the negotiations, the FDA invited industry groups to the table to air out any concerns with the GDUFA program – and there were many. The Society of Chemical Manufacturers and Affiliates (SOCMA) argued that GDUFA placed a disproportionately high burden on small manufacturers (1), a concern echoed by Gill Roth, CEO of the Pharma and Biopharma Outsourcing Association (PBOA) (2). Unlike the similar Medical Device User Fee Act (MDUFA), GDUFA has no provisions that guarantee reduced fees for small manufacturers or first-time filers. Generic contract manufacturers pay a flat facility fee regardless of how many generics they manufacture, meaning that small CMOs manufacturing only a few generics pay just as much as their larger counterparts. Roth argued that if this continued, some CMOs may be forced out of the market.
“CMOs are generally small businesses that are hired by ANDA [abbreviated new drug application] sponsors to manufacture their generic drugs,” the FDA acknowledged in the Federal Register. “Under the GDUFA II fee structure, CMOs will pay one-third the annual fee paid by firms that manufacture under ANDAs which they or their affiliates own.” (3).
ANDA sponsors will be required to pay a fee based on the total number of ANDAs owned. In addition, ANDA sponsors will be split into three tiers based on ANDA ownership. Details of these have not yet been released but the FDA says that the proposed tier cut-offs have been determined by industry and are meant to “reflect a firm’s size, position in the market, and reliance on the program”.
In addition, GDUFA II is expected to speed up the entire generic approval process and reduce the “generic backlog”, with the FDA offering 8-month and 10-month reviews of ANDAs.
- SOCMA, “BPTF Seeks Changes in Performance Goals, Fee Payment Schedule in GDUFA Renegotiations”, (2015). Available at: bit.ly/2eaEjJ0. Accessed October 10, 2016.
- PBOA, “PBOA argues CMO case on GDUFA fees”, Available at: bit.ly/2d9HS6n. Accessed October 10, 2016.
- FDA, “Enhancements to fee structure and related mechanisms to provide small business relief and increase predictability, stability, and efficiency”, (2016). Available at: bit.ly/2d9Ib16. Accessed October 13, 2016.
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