ANDA USER FEES TO PAY FOR EXPANDED CONTROLS OVER GENERIC REVIEW PROCESS RECOMMENDED BY HHS INSPECTOR GENERAL; TESTING OF BIOEQUIVALENCE SAMPLES URGED

The HHS Inspector General's office is recommending that the generic industry bear the cost of improving FDA's ANDA review process through the imposition of user fees. In an Aug. 17 report to HHS Assistant Secretary for Health James Mason, MD, Inspector General Kusserow concluded: "The generic drug approval process depended in large measure on the 'honor system.' IG investigations to date have demonstrated that this can no longer be relied upon. Increased surveillance and independent testing is necessary. The add-on costs should be borne by the industry in the form of user fees and not at taxpayers' expense." Based on a two-month audit of FDA's ANDA review procedures completed on July 7, the report recommends a series of administrative changes for protecting the ANDA review process from fraud and corruption. Kusserow has asked FDA to prepare a response to the report by the Labor Day weekend. The Inspector General plans to update the report, possibly as early as September, to include additional recommendations. The Inspector General's review was requested by FDA Commissioner Young and House Energy & Commerce/Oversight Subcommittee Chairman Dingell (D-Mich.). The purpose of the review, the report explains, "was to identify vulnerabilities in the generic drug application review process that could allow preferential or detrimental treatment to be provided to certain drug firms." The Inspector General's office reviewed "statutes, regulations, policies, procedures and guidelines relating to the review and approval of generic drug applications" and held "extensive" interviews with FDA management and staff. Workload data from Oct. 1 through June 30 also were analyzed. The report concludes that "FDA does not have adequate internal controls over the ANDA review process to maintain its integrity." The lack of controls, Kusserow said, "made the ANDA process susceptible to manipulation and preferential treatment." The bulk of the Inspector General's observations and recommendations focus on FDA procedures for assigning ANDAs to reviewers and ensuring that the applications are reviewed in turn and by consistent standards. For example, Kusserow recommended that FDA develop "policies and procedures for the random assignment of ANDAs to reviewing chemists, or for other appropriate methods for reducing the opportunity to show any partiality to applicants" (see box for complete list of recommendations on following page). Referring to former FDA Branch Chief Charles Chang's admission that he assigned certain firms' ANDAs to faster reviewers, the report observes that "the current arbitrary system for assigning ANDAs to reviewing chemists could permit favoritism." The Inspector General's survey showed a wide variance in the workloads of different generic drug reviewers and in the amount of time it took to complete assignments. From Oct. 1, 1988 to May 31, 1989, the Inspector General found workloads among six FDA chemists could vary as much as fourteen-fold (see box on next page). The Inspector General's report also identifies a "potential area of vulnerability" in FDA's current system if different firms' applications for the same drug are given to the same reviewer. In that situation, Kusserow noted, "a chemist could deliberately identify fewer deficiencies in one application while identifying numerous deficiencies in a competitor's application. Because both companies must correct all deficiencies in their amended applications to FDA, the company with the fewest deficiencies can respond more quickly." The Inspector General said the audit did not "prove or disprove that favoritism had occurred from this vulnerability," but noted that the report found three instances where ANDAs for the same drug from competing firms were assigned to the same chemist: sulindac, submitted by four different companies in March and April of this year; amoxapine, submitted by three firms in June; and timolol maleate, submitted by three firms in October 1988. Based on Vitarine's switch of SmithKline's Dyazide for its own product, the report concludes that FDA should require drug firms to submit bioequivalence samples with their ANDAs and test them for authenticity. That suggestion mirrors a comment by Danbury's William Haddad to FDA on Aug. 7 ("The Pink Sheet" Aug. 14, T&G-6). FDA is considering a requirement for retention, but not submission and validation, of bioequivalence samples, the report notes. "FDA is proposing to amend its current bioequivalence regulations to require the retention, for a specified period, of samples of the test product and reference standards used in performing bioequivalence testing of drug products." The proposal would require firms to provide the samples to FDA "when specifically requested." The report generally endorses FDA's "first-in, first-reviewed" policy but recommends that procedures be developed for documenting and overseeing the process. FDA's one exception to the "first-in, first-reviewed" policy is for amendments for minor chemistry deficiencies or labeling. (PARAGRAPH)The IG also criticizes FDA for not having chemistry review standards and recommends that such standards be developed and implemented. Noting that interviews with reviewers revealed "that chemists generally reviewed applications differently based on their education, training and experience," the report states that "the lack of procedures may indirectly favor one company's application for which a chemist may do a minimal review and adversely affect another company's application for which a chemist may do an exhaustive review." FDA "accepts that it has fast and slow reviewers," the IG continued. "We believe, however, that reviewers' speed could be made more equal if all reviewers worked from uniform review standards. Consequently, uniform review procedures and operating guidelines for assigning, reassigning, reviewing, and tracking under the ANDA process are necessary to avoid the appearance or reality of FDA employees favoring certain drug firms." The report concludes that FDA should have evaluated its generic approval process under the Federal Managers' Financial Integrity Act of 1982 (FMFIA), which requires agencies to perform internal control reviews of areas with moderate to high risk and to correct weaknesses. "Had FDA evaluated the generic drug review process under the provisions of the FMFIA, it may have identified and resolved the material internal control weakness in the generic drug application review process," the report states. "Now that the weakness has been identified, we believe it should be disclosed in reports required by the FMFIA as a material weakness and corrective action monitored through the FMFIA tracking system until the weakness is resolved." Also, at the FDA's request, the Inspector General is conducting a survey of industry attitudes toward FDA and the drug approval process. The survey, which was initiated during the week of Aug. 21, will contain a summary of manufacturers' perspectives collected by phone and in person from 15 to 20 brandname and generic firms. The Inspector General's staff will also solicit suggestions for improving the current approval process. The survey is expected to be completed by mid-September. IG RECOMMENDATIONS ON FDA ANDA REVIEW PROCESS Chart lists recommendations made by HHS Inspector General in a Aug. 17 report to HHS Assistant Secretary for Health Mason. The report follows the IG's May 15-July 7 investigation into FDA's ANDA review procedures. requiring branch chiefs to monitor and report to the division director on the progress of ANDA reviews; developing policies and procedures for the random assignment of ANDA's to reviewing chemists, or for other appropriate methods for reducing the opportunity to show any partiality to applicants; requiring each request for ANDA reassignment to another chemist, after the initial assignment, be approved and justification included in the ANDA file; supplementing the May 10, 1989 memorandum * regarding exceptions to the "first-in, first-reviewed" policy by defining and providing examples of minor chemistry deficiencies and including the supplement in the division's standard operating procedures manual; ensuring that exceptions to the "first-in, first-reviewed" policy are uniformly applied by all chemists; ensuring that reasons for reviewing and approving an ANDA out of sequence from the order it was received are properly documented in the ANDA file; developing policies and procedures for use by supervisory and review chemists to ensure the consistent, comprehensive review of applications; requiring drug firms to submit bioequivalency samples with the ANDA and validating the authenticity of the samples submitted; establishing a quality control review system which includes uniform standards for the review of generic drug applications and operating guidelines for the generic drug application review process; and disclosing in reports required by the FMFIA that there is a material weakness in the internal control structure for the generic drug approval process that allowed preferential treatment to drug firms, and monitoring corrective action until the weakness is resolved. (FOOTNOTE) * May 10 document refers to a memorandum from Division of Generic Drugs Director Marvin Seife, MD, to staff stating that ANDA applications may only be reviewed out of the first-in, first-reviewed sequence if there are amendments for labeling or for minor chemistry deficiencies.(END FOOT) FDA ANDA REVIEWER PERFORMANCE (Chart omitted)