On July 9, 2012, Congress passed the Generic Drug User Fee Amendments (“GDUFA”), Public Law 112-144, Title III, in response to the backlog of abbreviated new drug applications (“ANDAs”) awaiting FDA review. Congress passed GDUFA with the purpose of accelerating the ANDA approval process, allowing lower-cost generic drugs to enter the market sooner and more efficiently than under the previous regulatory landscape.
GDUFA establishes a new system that requires generic pharmaceutical manufacturers to pay fees for filing ANDAs and related submissions such as drug master files (“DMFs”) and prior approval supplements (“PASs”), as well as maintaining approved pharmaceutical manufacturing facilities. In addition, GDUFA authorizes FDA to impose a one-time “backlog fee” for all ANDAs submitted to the agency before October 1, 2012, that had yet to receive tentative approval. GDUFA also sets forth new approval requirements for generic drug submissions tied to the fee collection system that include a completeness assessment for DMFs, delineation of what changes to an ANDA require a PAS, and increased inspection requirements for manufacturing facilities.
GDUFA will supplement traditional appropriated FDA funding with fees on the generic pharmaceutical industry. The Act calls for a $299 million annual collection for the five-year term of the program, which began October 1. Because the fee sources are variable, amounts will change year-to-year, ensuring that the annual collection goal is met. The extra funding will allow the FDA to: 1) address the backlog of un-reviewed ANDAs, as discussed above; 2) establish consistent and biennial inspections of foreign and domestic generic pharmaceutical production facilities; and 3) increase transparency in the global supply environment by requiring that generic manufacturers identify international production facilities.
FY 2013 GDUFA Fees
On October 24, 2012, FDA issued notices in the Federal Register releasing the FY 2013 fee amounts and deadlines for submission of ANDAs, PASs and DMFs, as well as the one-time “backlog fee.” These amounts and deadlines are presented below:
Click here to view the table.
FDA will publish the required facilities fees by January 13, 2013, which will divide up approximately $174 million in total fees between facilities making active pharmaceutical ingredients (APIs) (~$35 million divided by number of facilities ) and finished dosage forms (FDFs) (~$139 million divided by number of facilities), with facilities located outside the United States and its territories bearing the burden of higher fees to reflect the increased costs of inspections. Facility fees will be due within 45 days of FDA’s publication of the fee amounts in the Federal Register.
Penalties for Lack of Compliance
GDUFA imparts strict penalties upon generic pharmaceutical manufacturers and facilities that fail to make timely payment of the required fees. FDA has already stressed that any manufacturer owning an applicable ANDA that fails to pay the backlog fee by the due date will be placed on a publicly available arrears list, and FDA will not receive a new ANDA or supplement submitted by that manufacturer, or any affiliate, until the outstanding fee is paid.
Similarly, the submission fees for an ANDA or PAS must be submitted within 20 days of the due date or FDA will deem the submission incomplete. An ANDA or PAS deemed incomplete will lose its original filing date and will not be awarded a new filing date until the fee is submitted.
Finally, there are several consequences for failure to pay a facility fee within 20 days of the due date. Like the penalties for failing to pay the backlog fee, failure to pay a facility fee means that FDA will not accept any new generic submission referencing the facility until the outstanding fee is paid, and the facility will be placed on a publicly available arrears list. But in addition, and perhaps most important, all FDFs or APIs manufactured in the non-paying facility and all FDFs containing APIs manufactured in such a facility will be deemed misbranded – meaning that it will be a violation of federal law to ship these products in interstate commerce or to import them into the United States. Such violations can result in hefty fines, product seizures and import bans.
FDA Industry Assistance
Given the short deadlines, large variety of fees and heavy penalties, GDUFA presents an immediate challenge to the generic pharmaceutical industry. FDA has set up a website that provides the industry with assistance in complying with GDUFA and its new regulations, click here for access to this site. Among the materials FDA has made available at the site are the full text of the statute and regulations, as well as draft guidance documents. FDA also has created a variety of FAQ pages designed to explain how each type of fee will be assessed, how to fill out the necessary forms, and what arrangements are required for the submission and processing of fee payments.