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FDA USER FEES UNDERMINE INTENT OF HATCH/WAXMAN LAW

Executive Summary

FDA USER FEES UNDERMINE INTENT OF HATCH/WAXMAN LAW, the American Assn. of Retired Persons (AARP) asserted in Sept. 5 comments on the agency's proposed rule to charge a fee for NDA/ANDA reviews. "The major intent of the Drug Price Competition and Patent Term Restoration Act passed last year was to encourage generic competition in the pharmaceutical industry. AARP views the proposed user fees as clearly undermining that intent," the assn. stated. "The proposed $9,900 fee for review of an ANDA seriously underestimates the cost to generic companies trying to compete. In separate comments on FDA's proposal, the Natl. Assn. of Pharmaceuti- cal Mfrs. (NAPM) also maintained that user fees would undermine the post-1962/patent restoration legislation. NAPM suggested that FDA hold a public hearing and specifically invite Rep. Waxman (D-Calif.) and Sen. Hatch (R-Utah), as well as invite comments from Rep. Whitten (D-Miss.), chairman of the House Appropriations Cmte. that has passed legislation barring FDA from adopting user fees for NDAs and ANDAs. AARP also objected to FDA's reasoning that a user fee is justified because drug applicants receive "special benefits" from FDA's review activities. "We acknowl- edge that the courts have recognized. . .that the existence of a public benefit does not preclude the imposition of a user charge, provided that the service confers a distinct benefit upon identifiable beneficiaries. The courts have made this determination, how- ever, in cases dealing with utility companies, cable television and the electronics industry," the assn. stated. "Certainly it cannot be presumed that judicial scrutiny would hold the public health in the same light as cable television." In an Aug. 6 Federal Register notice announcing the proposal, FDA said that under Title V of the Independent Offices Appropriation Act (IOAA) "a federal agency may charge for the services it provides, when such services confer a special benefit upon an identifiable recipient." In addition, FDA said the guidelines for IOAA, Circular A-25, state that a charge is only applicable to the recipient of a "special benefit. . .above and beyond those which accrue to the public at large" ("The Pink Sheet" Aug. 12, p. 8). AARP further cited the IOAA guidelines as stating that "a user charge is inappropriate when the identity of the 'ultimate beneficiary is obscure and the service can be primarily considered as benefitting broadly the general public.' "
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