An 11-member pharmaceutical company fires back after the FDA denies a fee waiver for a new drug application. Winston Pharmaceuticals, based out of Vernon Hills, Ill., recently sued the FDA after it denied Winston’s May 21, 2008 application for waiver of the Prescription Drug User Fee Act application user fee, which amounted to approximately $1.25 million in 2009. The company is developing CIVANEX (civamide (zucapsaicin)) Cream, 0.075%.

Under the small business waiver provisions of the Federal Food Drug and Cosmetic Act, Winston argued it should be exempt from paying the user fee. The FDA denied Winston’s exemption arguing that Winston's "affiliates," Northbrook Testing Company, Inc. and GenDerm Corporation, have previously submitted human drug applications to the FDA. The term "affiliate" is clearly defined in the present tense as, "a business entity that has a relationship with a second business entity if, directly or indirectly - (A) one business entity controls, or has the power to control, the other business entity; or (B) a third party controls, or has the power to control, both of the business entities." Northbrook was dissolved in 1984. The last time Winston and GenDerm had any shareholder in common was on Dec. 3, 1997. At no time did Winston control, or have the power to control, Northbrook or GenDerm.

Such a decision by the FDA is a blow to innovation in drug companies, such as Winston, whose ability to bring new advancements and therapies to the market is seriously hampered. The exemptions were put in place in 2002 to provide opportunities for up-and-coming drug companies a chance to control costs and spur pharmaceutical innovation.