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HHS GENERIC DRUG USER FEE DRAFT PROPOSAL WOULD CHARGE $18,000 FOR ANDA REVIEWS, $6,000 FOR "MONITORING"; PMA, GPIA AGREE IN OPPOSITION TO PLAN

Executive Summary

An HHS draft legislative proposal to establish generic drug user fees would establish charges of $18,000 for ANDA review and approval and $6,000 annually for field "surveillance." The draft would require FDA to collect fees "for the costs of review and approval" of every ANDA and "for the costs of surveillance and testing" of each ANDA "marketed during all or any part of a federal fiscal year." The proposal was discussed at an Oct. 12 meeting at HHS headquarters in Washington. FDA Commissioner Young attended the meeting along with representatives of HHS, the Pharmaceutical Manufacturers Association, the Generic Pharmaceutical Industry Association, the National Pharmaceutical Alliance, and the National Association of Pharmaceutical Manufacturers. The ANDA review fee would be set at $18,000 during the first two years after enactment and would be determined in FDA regulations afterward. The annual fee "for monitoring marketed" generic drugs will be $6,000 during the two years after enactment and subsequently set by FDA at a rate sufficient to cover federal expenses incurred in monitoring the industry. The surveillance fee would be due 60 days after enactment of the legislative proposal and on Oct. 1 in subsequent years. The proposal also provides for the withdrawal of ANDA approvals from companies that do not pay the annual surveillance fee. After the first two years from the effective date, the proposal requires that the fees be recalculated to cover costs of the ANDA review and monitoring activities beyond base levels. The review fee should be "sufficient to generate revenues equal to all costs to the federal government (in excess of $9.1 mil. multiplied by the change in the CPI [Consumer Price Index])" associated with review and approval of an ANDA, the draft states. The surveillance fee should be "sufficient to generate revenues equal to all costs to the federal government (in excess of $4.6 mil. multiplied by the change in the CPI) . . . associated with surveillance and testing of" marketed generics. The draft specifies that revenues from the fees will be allocated to ANDA approval and generic drug field surveillance programs. Activities that would be funded by the user fees would include "the conduct of scientific research; development of methods of analysis; purchase of chemicals, fixtures, furniture and scientific equipment and apparatus; acquisition, maintenance and repair of real property; and expenses of advisory committees," the proposal states. HHS said it would consider proposing generic drug user fees to fund a variety of heightened regulatory measures in the department's recent generic drug "action plan" ("The Pink Sheet" Aug. 21, p. 13). PMA and GPIA agreed in their opposition to the draft proposal. In an Oct. 16 letter to HHS Secretary Sullivan, PMA President Mossinghoff said: "If the [proposed] legislation for generic user fees is introduced, PMA would oppose it." Mossinghoff noted that his association "has consistently opposed and continues to oppose user fees in connection with the drug approval process." PMA suggested that greater FDA funding could be diverted from appropriations made for Catastrophic Care Act programs but no longer needed in the face of their apparently imminent repeal or rollback. Funding for increased generic drug regulation "must come not from user fees but from public monies, either through supplemental appropriations or through the reprogramming of funds already appropriated to the department," Mossingoff said. In an Oct. 17 letter to HHS Assistant Secretary for Legislation Gerald Olson, GPIA President Dee Fensterer said the draft proposal "exacts a tax on one segment of the pharmaceutical industry because of the illegal actions of a few wrongdoers."

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