FDA Gears Up for GDUFA Implementation and ANDAgeddon

By Kurt R. Karst –      

In a pair of Federal Register notices (here and here) set for publication on August 27, 2012, and in a pair of draft guidance documents released ahead of their announcement in the Federal Register next week (here and here), FDA moves full-bore ahead with efforts to implement the Generic Drug User Fee Amendments of 2012 (“GDUFA”).  GDUFA, which was enacted as part of the FDA Safety and Innovation Act (“FDASIA”) in July 2012 (see our FDASIA summary and analysis here), is set to go into effect on October 1, 2012 – the start of Fiscal Year (“FY”) 2013.  The August 2012 notices and draft guidances cover myriad GDUFA topics, but are primarily intended to notify industry of certain obligations that need to be timely completed so that FDA can get the ball rolling come October 1, 2012.  One notice announces a September 21, 2012 public meeting to discuss GDUFA implementation.

GDUFA establishes four types of user fees that together will generate $299 million in funding for FDA in FY 2013, and adjusted annually thereafter.  Application fees, which account for 30% of total user fee revenue each FY, include an original ANDA fee and a Prior Approval Supplement (“PAS”) fee, which is one half of the ANDA fee, and a Type II Drug Master File (“DMF”) “first reference fee.”  Both the original ANDA fee and the PAS fee together account for 24% of the total revenue amount.  The Type II DMF fee accounts for 6% of total revenue amount.  An application containing information concerning the manufacture of an Active Pharmaceutical Ingredient (“API”)  at a facility by means other than reference to a Type II DMF, must pay, in addition to an application fee, a special “API fee” to be determined by FDA if “a fee in the amount equal to the [Type II DMF] fee . . . has not been previously paid with respect to such information.”  An annual facility fee, which accounts for 70% of total fee revenue each FY, must be paid by both Finished Dosage Form (“FDF”) and API  manufacturers.  FDF facility fees account for 80% of facility fee revenue (56% of the total revenue amount), and API facilities account for 20% of facility fee revenue (14% of the total revenue amount).  There is a fee differential of not less than $15,000 and not more than $30,000 for foreign FDF and API facilities, which is intended to reflect the added costs of foreign inspections conducted by FDA.

GDUFA also establishes a one-time ANDA backlog fee that will be assessed in FY 2013 for ANDAs pending on October 1, 2012.  Under GDUFA, an ANDA that is “pending” on October 1, 2012, is an application “that has not received a tentative approval prior to that date.”  That fee will be calculated by dividing $50 million by the number of ANDAs in the backlog.  FDA began the process of determining what ANDAs will be included in the backlog in June 2012.  In a notice, FDA announced the Agency’s intention to deem to be withdrawn certain incomplete ANDAs as to which the applicant has not communicated with FDA since July 8, 1991 (see our previous post here).

Below is a table we borrowed from one of FDA’s draft guidance documents, and to which we made some modifications, providing a summary of GDUFA user fee requirements.  Additional information on each fee is detailed in the draft guidance titled “Generic Drug: User Fee Amendments of 2012: Questions and Answers.”

With respect to the backlog and facility fees, FDA is seeking information to facilitate the fee calculation.  In the draft guidance document titled “Self-Identification of Generic Drug Facilities, Sites, and Organizations,” FDA lays out the so-called “self-identification process.”  As explained in the draft guidance:

Self-identification is required for two purposes.  First, it is necessary to determine the universe of facilities required to pay user fees.  Second, self-identification is a central component of an effort to promote global supply chain transparency.  The information provided through self-identification will enable quick, accurate, and reliable surveillance of generic drugs and facilitate inspections and compliance.

In a separate Federal Register notice, FDA implores ANDA applicants to promptly withdraw any pending ANDAs to avoid assessment of the backlog fee.  FDA is separately sending out letters to ANDA applicants making the same request.  Written notification must be received by FDA by Friday, September 28, 2012, because October 1, 2012 (when the backlog is solidified) is a Monday; however FDA encourages applicants to submit notification by September 15, 2012.

ANDA applicants should keep in mind that the penalties for failing to pay GDUFA user fees are stiff.  Failure to pay the backlog fee will result in placing the ANDA sponsor on a public arrears list, such that no new ANDAs or supplements will be received (submitted by the applicant or its affiliates).  Failure to pay the Type II DMF fee within 20 calendar days of the due date results in the Type II API DMF not being deemed available for reference, and an affected ANDA will not be received unless the fee has been paid within 20 calendar days of FDA notification of the failure to pay the fee.  Failure to pay the application fee within 20 calendar days of the due date will result in the application not being received by FDA until the fee is paid.  (Keep in mind that ANDA receipt date is particularly important when 180-day generic drug exclusivity is at stake.)  Finally, failure to pay a facility fee within 20 calendar days of the due date will result in the several consequences, including that all FDF or API products manufactured at the facility and all FDFs containing APIs manufactured at the facility will be deemed misbranded.