FDA Sets GDUFA Fiscal Year 2013 Facility User Fee Rates; Fewer Facilities Result in Higher Rates

By Kurt R. Karst –

In a notice that will be published in the January 17th Federal Register, FDA announces the establishment of Fiscal Year 2013 (“FY2013”) user fee rates established pursuant to the Generic Drug User Fee Amendments of 2012 (“GDUFA”) for both Active Pharmaceutical Ingredient (“API”) and Finished Dosage Form (“FDF”) manufacturing facilities.  The announcement comes after completion of the so-called “self-identification process” by which the Agency sought to obtain an accurate inventory of facilities, sites, and organizations involved in the manufacture of generic drugs for purposes of setting annual facility fee user fee rates and targeting inspections (see here, here, and here).  Although FDA initially set the self-identification deadline at December 3, 2012 (see here), that deadline was effectively extended by a two-week grace period to December 18, 2012 after FDA determined that the number of self-identified facilities was below Agency estimates. 

The establishment of the FY2013 API and FDF facility user fee rates completes the GDUFA rate-setting for FY2013.  As we previously reported, GDUFA establishes several types of user fees that together will generate $299 million in funding for FDA in FY2013, and adjusted annually thereafter.  Application fees 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.”  An application containing information concerning the manufacture of an 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” (also referred to as the “(a)(3)(F) fee”) 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 must be paid by both FDF and API  manufacturers.  Finally, there is an ANDA backlog fee (assessed in FY 2013 only) for ANDAs pending on October 1, 2012.  In previous notices (here and here) FDA set the FY2013 original application fee at $51,520 (and the PAS fee at $25,760), the Type II DMF fee and “(a)(3)(F) fee” at $21,340, and the ANDA backlog fee at $17,434.

Under GDUFA, the annual facility fees account for 70% of total fee revenue generated each FY.  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).  Facilities that produce both FDFs and APIs must pay two annual facility fees – one with respect to FDF manufacturing and another with respect to API manufacturing.  In addition, 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.  For FY2013, FDA has set the foreign FDF and API facility fee differential at $15,000. 

With respect to the FY2013 FDF facility fee, FDA reports that 758 facilities were self-identified (325 domestic and 433 foreign).  Based on these numbers FDA has established the FY2013 FDF facility fee rate at $175,389 for domestic facilities and $190,389 for foreign facilities.  The FY2013 API facility fee rate is $26,458 for domestic facilities and $41,458 for foreign facilities.  This is based on a total of 885 API facilities (122 domestic and 763 foreign) that self-identified as such.  Both rates are higher than many in the generic drug industry and FDA had anticipated.  The GDUFA Performance Goals and Procedures include an estimate of 2,000 FDF and API facilities supporting ANDAs.

Payment of the FY2013 API and FDF facility fees is due on March 4, 2013.  Although FDA’s Federal Register notice does not mention the consequences for failure to pay facility fees (a separate notice does), we note that the failure to pay within 20 calendar days of the due date can result in the several consequences:

(1)    identification of the facility on a “publicly available arrears list, such that no new [ANDA] or supplement submitted on or after October 1, 2012, from [that] person that is responsible for paying such fee, or any affiliate of that person, will be received within the meaning of [FDC Act § 505(j)(5)(A)];”

(2)    “[a]ny new generic drug submission submitted on or after October 1, 2012, that references such a facility shall not be received, within the meaning of section [FDC Act § 505(j)(5)(A)] if the outstanding facility fee is not paid within 20 calendar days of the Secretary providing the notification to the sponsor of the failure of the owner of the facility to pay the facility fee under [FDC Act § 744B(a)(4)(C);” and

(3)    “[a]ll drugs or [APIs] manufactured in such a facility or containing an ingredient manufactured in such a facility being deemed misbranded under [FDC Act § 502(aa)].” 

These pentalties apply until the facility fee is paid or until the facility is removed from all generic drug submissions that refer to the facility.