FDA Unveils User Fee Program for Generics

Associated Press
01/17/2012

By Matthew Perrone, AP Health Writer

WASHINGTON (AP) — The Food and Drug Administration would collect hundreds of millions of dollars in new fees from pharmaceutical companies to help speed up the review of generic drugs, under an agreement with industry released by the agency on Friday.

The user fee proposal is one of three such agreements that the agency is submitting to Congress for approval by lawmakers. The agreements would each charge drug manufacturers application fees for reviewing traditional drugs, generic drugs and a new class of generic biotech drugs, respectively.

The FDA has used industry fees to hire extra staff to review regular prescription drugs since 1992. One of the proposals unveiled Friday extends that approach to generic drugs, which have long had slower review times.

Whereas most new drugs are reviewed in 10 months, the typical review time for a generic drug is 30 months. The FDA has a backlog of more than 2,000 generic drug applications awaiting review, according to the Generic Pharmaceutical Association.

The FDA proposes collecting $299 million in fees annually to hire additional generic drug reviewers starting in fiscal year 2013. That figure would come from an estimated 750 generic drug applications per year as well as other fees, including the inspection of foreign drug manufacturing sites. In return for these fees, the FDA will aim to review 90 percent of generic drug applications within 10 months.

"These agreements are important because they are a substantial resource that lets the agency carry out its mission of protecting patients and ensuring important products come to market in a timely way," said Allan Coukell, director of the Pew Charitable Trusts' health advocacy group. "For the first time we will also have funding directed at increasing FDA's inspection of foreign manufacturing facilities."

Another first-of-a-kind agreement would charge companies for the review of generic versions of biotech drugs, which are complex medicines that often contain proteins and living microorganisms.

Up until 2010, the FDA did not have authority to approve knock-off versions of biotech drugs, or biosimilars, which are produced using far more complicated manufacturing processes than traditional chemical drugs. But the Obama administration's health reform law signed into law in March 2010 instructed the FDA to begin reviewing and approving biosimilars. The FDA is still drafting instructions on how companies should submit applications for biosimilars.

The FDA also sent Congress its proposal for the traditional prescription drug user fee program, which is expected to raise more than $712.8 million in fees annually over five years. Like the other agreements, the deal must be approved and drafted into law by Congress before Oct 1, 2012, to be in place for the government's next fiscal year.

Lawmakers already have granted three 5-year extensions to the Prescription Drug User Fee Act, which has allowed the FDA to hire hundreds of additional scientists in return for meeting certain performance goals. Under the latest version of the agreement, the FDA would be tasked with providing more meetings and updates to companies that have submitted first-of-a-kind drugs for review.

Separate but similar talks between the FDA and medical device makers are dragging out over a number of disagreements. Those companies have made shorter review times a priority, though the FDA says that goal will require significantly more funding, according to minutes from closed-door meetings between regulators and company executives.

Copyright © 2012 The Associated Press. All rights reserved.

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