Issues

User Fees

GPhA Position

GPhA and its member companies support full implementation of the generic user fee program (GDUFA) as created by the 2011 Food and Drug Administration Safety and Innovation Act. Under GDUFA, manufacturers of finished dose generic drugs and their active pharmaceutical ingredients will pay to FDA $299 million in user fees each year for fiscal years 2013 through 2017. This money, coupled with appropriations provided each year to FDA’s Office of Generic Drugs, will enable timely facility inspections and generic drug approvals. And because FDA-approved generics can cost up to 80 percent less than their brand name counterparts, GDUFA will expedite access to affordable and therapeutically equivalent medicines for millions of consumers and patients.

Key Points

GDUFA represents a historic event for both FDA and the generic pharmaceutical industry. Uncertainty related to time lines for actions on generic drug applications (ANDAs) has plagued the industry for several years, with median ANDA approval times increasing to more than 30 months. Given the reality of inadequate federal appropriations for the generic drug program, it was highly unlikely that the uncertainty would improve in the coming years without dedicated revenue from a user fee program.
Three major goals of GDUFA: (1) Safety—ensure that foreign or domestic companies who participate in the U.S. generic drug system are held to consistent high-quality standards with biennially inspections; (2) Access—speed the availability of low cost, high quality generic drugs by bringing greater predictability and timeliness to the review times for ANDAs; and (3) Transparency—enhance FDA’s ability to protect Americans in the complex global supply environment by requiring the identification and registration of all facilities involved in manufacturing of generics and their active ingredients.
Three primary metrics of GDUFA: (1) Approvals—by the end of FY2017, FDA will review and act on 90 percent of generic applications (ANDAs) within 10 months after the date of submission; (2) Backlog—by the end of FY2017, FDA will have acted on 90 percent of all ANDAs and amendments that were pending on October 1, 2012 (the backlog); (3) Inspections—by the end of FY2017, FDA will achieve parity in conducting risk-adjusted biennial inspections of all foreign and domestic generic active ingredient makers and finished dose manufacturers.
Two sources of generic drug user fees: (1) Facility (establishment) fees will account for 70 percent of annual GDUFA fees, of which 80 percent will be paid by finished dose manufacturers and 20 percent paid by active pharmaceutical ingredient manufacturers; (2) Application Fees—the remaining 30 percent of the annual GDUFA fees will come from generic drug applications.
Given the critical mission of the FDA to protect public health, GPhA will continue its advocacy for additional congressional appropriations for the Office of Generic Drugs (OGD). Robust OGD funding coupled with generic drug user fees will yield a significant return on investment as generic drug use currently saves the U.S. healthcare system more than $1 billion every other day.
FDA will use a portion of GDUFA fees to implement efficiency enhancements impacting application reviews and facility inspections. FDA also will undertake various initiatives designed to enhance post-market safety of generic medicines.

GPhA Efforts

GPhA has designed an implementation training program based on the GDUFA agreement negotiated between FDA and generic-drug industry representatives. The program enables continual communications and working relationships with the FDA GDUFA Implementation Team to ensure that year-one and year-two GDUFA performance goals are attained.

During the initial 5-year GDUFA program, GPhA will regularly communicate the status of the performance goals and metrics to industry stakeholders to assure that FDA is maintaining productivity relative to performance. If implementation begins to stall, GPhA will undertake a public relations campaign to gain support for full and immediate implementation.