FDA Proposes Generic Drug User Fee System and Performance Goals

By Kurt R. Karst –      

Just one day after FDA announced a December 16th public meeting and comment period to discuss the Agency’s proposed recommendations for a user fee program for biosimilar biological products for Fiscal Years (“FYs”) 2013 through 2017 (see our post here), the Agency will announce in a December 8, 2011 Federal Register notice – a prepublication version of which is available here – a December 19th public meeting and comment period (Docket No. FDA-2010-N-0381) to discuss the Agency’s proposed recommendations for enactment of a Generic Drug User Fee Act (“GDUFA”) to collect fees and use them for the review of ANDAs and associated Type II Active Pharmaceutical Ingredient Drug Master Files (“DMFs”), and for conducting associated inspections for Fiscal Years (“FYs”) 2013 through 2017.  FDA also released a draft version of the “Generic Drug User Fee Act Program Performance Goals and Procedures” negotiated with the generic drug industry over many months earlier this year and that would accompany any GDUFA legislation enacted next year.

As we previously reported upon the completion of GDUFA negotiations back in September, the aims of a generic drug user fee program are three-fold:

(1) Safety – “To ensure that industry participants, foreign or domestic, who participate in the U.S. generic drug system are held to consistent high quality standards and are inspected biennially, using a risk-based approach, with foreign and domestic parity.”

(2) Access – “To expedite the availability of low-cost, high-quality generic drugs by bringing greater predictability to the review times for abbreviated new drug applications, amendments and supplements, increasing predictability, and timeliness in the review process.”

(3) Transparency – “To enhance FDA’s ability to protect Americans in the complex global supply environment by requiring the identification of facilities involved in the manufacture of generic drugs and associated active pharmaceutical ingredients and improving FDA’s communications and feedback with industry in order to expedite product access.” 

The agreement reached between FDA and the generic drug industry is complex (to say the least) and will make significant changes to the ANDA review process that FDA says will put “FDA’s generic drugs program on a firm financial footing and [provide] additive resources necessary to assure timely access to safe, high-quality, affordable generic drugs.” 

In our previous post, we discussed some of the financial and metrics aspects of the proposed program, and also noted that the program is structured based on five cohorts of submission dates for original ANDAs corresponding to the five fiscal years under GDUFA.  To recap, the total amount of annual funding from GDUFA user fees is supposed to be set at $299 million in FY 2013 (and at $299 million plus an annual adjustment in FYs 2014-2017), and would come from application fees and facility fees.  FDA states in the draft goals letter that:

legislative language will require that approximately 70% of GDUFA fees shall be derived from facility fees (for facilities producing or pending review to produce active pharmaceutical ingredients or finished dosage forms for a generic drug application), approximately 30% of GDUFA fees shall be derived from application fees (DMF Fees and ANDA and PAS (Prior Approval Supplement) Fees).  As discussed and agreed by the various industry business segments, overall fees will be divided 80 percent to 20 percent between the finished dosage form (FDF) and API and manufacturers, respectively in industry.   In the first year of the program, $50 million of the total GDUFA user fee funding shall be generated by a one time backlog fee for ANDAs pending (except for ANDAs that are pending but have received tentative approval) on October 1, 2012.

As part of a GDUFA program, FDA would agree to make several “enhancements,” including ANDA review efficiency enhancements, DMF review efficiency enhancements, inspection efficiency enhancements, and other efficiency enhancements.   For example:

• FDA will develop enhanced refusal to receive standards for ANDAs and other related submissions by the end of year 1 of the program and will publish such standards in advance of implementation.
• For ANDAs in the year 1 and 2 cohorts, FDA will expedite review of Paragraph IV applications that are submitted on the first day that any valid Paragraph IV application for the drug in question is submitted. Expedited review will be implemented consistent with existing procedure for expediting applications as set forth in CDER’s MAPP 5240.3, and will also include those applications that become eligible for approval during the review period as a result of no blocking exclusivities, patent(s) and/or applicable stays based on appropriate documentation submitted. 
• FDA will employ a risk-adjusted biennial CGMP surveillance inspection model for inspection of generic API and FDF manufacturers, with the goal of achieving parity of inspection frequency between foreign and domestic establishments in FY 2017 and will prioritize inspections of establishments associated with ANDAs that are otherwise approvable or eligible for tentative approval except for an outstanding inspection, as well as establishments that have not been inspected previously.
• During the five years of the program, FDA will undertake a study of foreign government regulator inspections (CGMP and bioequivalence), report findings publicly, and develop a program to utilize foreign inspection classifications when and where appropriate.

The draft goals letter also states that “FDA will strive to review and act on all ANDAs that are submitted on the first day that any valid Paragraph IV application for the drug in question is submitted within 30 months of submission to avoid causing first applicants to inadvertently forfeit 180-day exclusivity eligibility under 21 U.S.C. § 355(j)(5)(D)(i)(IV).”  With median ANDA approval times hovering around 33 months these days, forfeiture of 180-day exclusivity eligibility under the failure to obtain timely tentative approval statutory provision has been a significant industry concern.  The enactment of a human generic drug user fee program to speed up ANDA review will (hopefully) make forfeiture less likely.

With the user fee funding “FDA will hire and train at least 25 percent of incremental staff in FY 2013, 50 percent in FY 2014 and will strive to complete GDUFA-funded human resources hiring goals in FY 2015 as necessary to achieve the program’s performance metrics and goals,” according to the goals letter.  It is unclear how many of the new hires will be direct hires to the Office of generic Drugs. 

With respect to FDA’s goals for acting on submissions, the draft goals letter tackles original applications, amendments, PASs, Type II DMFs, controlled correspondence, CGMP inspections, and the ANDA backlog.  For original ANDAs:

• FDA will review and act on 60 percent of original ANDA submissions within 15 months from the date of submission for the year 3 cohort.
• FDA will review and act on 75 percent of original ANDA submissions within 15 months from the date of submission for the year 4 cohort.
• FDA will review and act on 90 percent of original ANDA submissions within 10 months from the date of submission for the year 5 cohort.
• For ANDAs in the year 1 and 2 cohorts, FDA will expedite review of Paragraph IV applications that are submitted on the first day that any valid Paragraph IV application for the drug in question is submitted.

ANDA amendment review would be governed by a complex system in which they are categorized as Tier 1, Tier 2 or Tier 3.  (With the exception that “unsolicited amendments that are submitted to a pending ANDA that are neither Tier 1, Tier 2 or Tier 3 amendments, but rather are routine or administrative in nature and do not require scientific review . . . will not lengthen or impact the original review goal date.”)  Tier 1 and Tier 2 amendments would be subject to detailed metrics, whereas there would not be metrics for Tier 3 amendments.  Each of the amendment types is defined in the draft goals letter. 

For PAS review, the draft goals letter provides the following:

• FDA will review and act on 60 percent of PASs not requiring inspection within 6 months from the date of submission for receipts in FY 2015; FDA will review and act on 60 percent of PASs requiring inspection within 10 months from the date of submission for receipts in FY 2015.
• FDA will review and act on 75 percent of PASs not requiring inspection within 6 months from the date of submission for receipts in FY 2016; FDA will review and act on 75 percent of PASs requiring inspection within 10 months from the date of submission for receipts in FY 2016.
• FDA will review and act on 90 percent of PASs not requiring inspection within 6 months from the date of submission for receipts in FY 2017; FDA will review and act on 90 percent of PASs requiring inspection within 10 months from the date of submission for receipts in FY 2017.

With respect to the ANDA backlog, the draft goals letter states that “FDA will review and act on 90 percent of all ANDAs, ANDA amendments, and ANDA prior approval supplements regardless of current review status (whether electronic, paper, or hybrid) pending on October 1, 2012 by the end of FY 2017.”   The original ANDA backlog stood at about 2,500 ANDAs a month ago.  That number may decrease as sponsors decide whether or not they want to pay the backlog fee. 

The draft goals letter also includes a Regulatory Science Plan with several items of interest.  In FY 2013, FDA would address bioequivalence of local acting orally inhaled drug products, local acting topical dermatological drug products and local acting gastro-intestinal drug products, product- and patient-related factors affecting switchability of drug-device combination products, and physicochemical characterization of complex drug substances.  In FY 2014, topics would include a recommendation for a draft guidance “to clarify FDA recommendations with regard to complex product development” and guidance to help limit ANDA deficiencies.

Draft legislation to implement GDUFA has not yet been publicly released, but you can be assured that it is chock-full of interesting provisions.  Presumably the draft legislation will see the light of day early next year when a formal bill is introduced in Congress.

Additional Reading:

• GPhA Statement