On the new drug side we have had user fees since 1992. The Prescription Drug User Fee Act (PDUFA) has been renewed many times. The Act provides that FDA will adhere to certain goals in return for fees levied on industry. The pharmaceutical industry has benefited from PDUFA in greater certainty of the timeframe for approval of a new drug application. In contrast, sponsors seeking approvals for a generic drug under 505j (ANDA) are uncertain when their drug may be approved. Indeed, approval times for ANDA’s in the Office of Generic Drugs has steadily gotten worse over the years, with median review times approaching 26 months.
For fiscal year 2011 (for the U.S. federal government, that means starting October, 2010), the President introduced $38 million in generic user fees in his budget (discussed in this blog). In order to actually obtain this money, Congress has to enact legislation, presumably along the lines of PDUFA. FDA is initiating this process with a public meeting, announced in the Federal Register. The meeting will be held September 17th at the Hilton Washington in Rockville, MD.
Stakeholders will include the generic industry and the public that depends on generic drugs to bring down the cost of healthcare. Modest fees would allow small companies to continue to participate in this business. Fees of hundreds of thousands of dollars (remember, the 2011 PDUFA fee is $771,000 for a 505(b)(2) NDA based only on Phase 1 data, similar to an ANDA based on a bioequivalence study) could remove some producers from the market. Watch for the large generic companies to push for higher fees and earlier approval times. Approval of generic user fees will add one more reason for industry consolidation. On the other hand, generic user fees would bring important new generics to market faster, potentially reducing the public cost of healthcare.