GDUFA Accounting Challenge Already Felt By FDA, Industry
This article was originally published in The Pink Sheet Daily
Executive Summary
Commissioner Hamburg tells GPhA that if the agency does not get an accurate count of facilities covered by the user fee program, it could under- or over-collect fees, neither of which benefits industry – or even FDA.
ORLANDO, Fla. – FDA Commissioner Margaret Hamburg reminded the Generic Pharmaceutical Association’s annual meeting on Feb. 23 that the pending generic drug user fee program will not just place performance pressures on the agency, it will create critical auditing issues for the industry as well.
The Generic Drug User Fee Act negotiated between FDA and industry calls for industry payments to support faster ANDA review times, and also more uniform manufacturing inspections through facility fees. The program, which would begin next fiscal year, is expected to be enacted as part of the massive user fee bill moving through Congress.
“At its core, GDUFA calls for the generic drug industry to pay $299 million annually in user fees for the next five years, beginning October 1, 2012, and with an annual adjustment for inflation,” Hamburg noted.
“To properly assess individual fee amounts – which will be set annually to generate a statutorily mandated user fee revenue amount – we will need you to help identify your facilities: how many you have; the type; whether they are foreign or domestic, whether they make APIs or finished doses, or both,” she said.
FDA is already predicting that the effort to get a good database of facilities established will mean that initial fee collection won’t begin until next year (Also see "Generic Facility Fee Unlikely To Be Charged Until A Few Months After GDUFA Implementation" - Pink Sheet, 19 Dec, 2011.). But Hamburg’s talk emphasized the downside for all parties that would stem from an inaccurate count.
“This is vital for all of us, because to collect the agreed amount of user fee revenue – as negotiated with industry – FDA needs to be able to accurately predict the number of fee paying facilities and the number of applications. Otherwise, we risk over or under collecting. If we under-collect, GDUFA will not be as effective in achieving its goals,” she said.
“And I want to note that if we over-collect, it doesn’t do any of us any good. You pay too much, and anything above the agreed and appropriated statutory cap doesn’t stay with the FDA, but goes to the general fund.”
FDA’s proposed budget for next year is largely focused on implementing the expected new user fee programs and meeting the appropriations triggers for them (Also see "Biosimilars, Generic Programs Leave Little Room For Other New FDA Drug Initiatives In FY ‘13" - Pink Sheet, 20 Feb, 2012.).
“GDUFA is truly landmark, and it illustrates what we can accomplish when we come together and work together,” Hamburg said, noting that funding for regulatory science projects was especially important (Also see "ANDA User Fees Will Fund Public Relations-focused Studies On Palatability Of Generics" - Pink Sheet, 12 Dec, 2011.).
Mylan President Tony Mauro, incoming chairman of the GPhA board, emphasized, “It will be the responsibility of our association and our industry to educate all finished dosage form and active pharmaceutical manufacturers that sell into the United States of the requirement” to register with FDA.
“It is critical that we reply in a timely manner so that accurate fee amounts can be set and our ANDAs not be impacted due to the failure to register by us or by our suppliers.”
No Director For Office of Generic Drugs Yet
Hamburg also discussed another upcoming shift for the agency in dealing with the industry – a permanent director for the Office of Generic Drugs. The position has been vacant for nearly two years since Gary Buehler, now Teva’s VP of regulatory strategic operations, was moved out of the post in March 2010 (Also see "FDA's Generic Drugs Office Faces Transition As Director Buehler Departs" - Pink Sheet, 8 Mar, 2010.).
“Very soon we will be announcing our new director of the Office of Generic Drugs … to help ensure strong, efficient program management, and scientifically sound generic drug regulatory decision-making,” Hamburg said. “Once the selection is finalized – I hoped I’d be able to announce it here – we will make sure that you will all be among the first to know” she told the association.