The new Generic Drugs User Fee Act (GDUFA) means a “level playing field” for drugmakers, according to SOCMA members.
Last week, the US FDA’s (Food and Drug Administration) User Fee Reauthorization Bill was solidified when it passed both Senate and the House. For the first time, the legislation included laws requiring generics producers to pay a $300m (€241m) per-year fee.
Speaking to in-PharmaTechnologist.com on behalf of SOCMA members, John DiLoreto said that the move will mean manufacturers in developed markets will no longer have to compete with overly cheap drugs from emerging regions.
All companies will now be harmonised on the basic level, he said, because they will all need to adhere to GMP (good manufacturing practice) standards.
DiLoreto, who is executive director of BPTF (Bulk Pharmaceuticals Task Force), said: “For US manufacturers, trying to compete with other firms where quality standards are not the same throughout the world wasn’t a level playing field.
“Those firms did not have to incur the same level of costs associated with inspection programs, and so foreign producers could offer drugs more cheaply, however at the sacrifice of safety.”
He said that though manufacturers in emerging – and often poorer – markets would also incur the hiked costs, the move would allow them to seriously contend with the high standard generics makers of the US.
“Some of the foreign facilities have not really implemented quality programs which guarantee the drug is the safest it could possibly be, and this move will cost them,” he said. “But when it comes to the safety of drugs, I don’t think we can compromise.
“Even officials in those countries recognise the need to bring up the quality standards. They know that when drugs from their countries are manufactured and sent overseas and problems are found it hurts their industry too.”
He added that the new act will strengthen the supply chain because the FDA now has the power to destroy “bad batches” of drugs found at the border.
“In the past, the FDA was restricted to just sending back drugs,” he said. “The trouble with this is that it doesn’t take the drugs out of the supply chain, they’re still floating around somewhere and sometimes they find their way back in.”
Taking the hit?
As negotiators in finalising the new act, SOCMA has been dealing with the concerns of its members and others working within the industry.
According to DiLoreto, though there was an initial outcry about the added charges, the overall opinion of the new laws is now a positive one.
“No one likes to pay extra money, especially to do business,” he said. “But they are willing to pay the $300m per year to protect the supply chain because it’s just good business. It costs much more when it goes wrong.
“This is a big step forward for generic drugs.”
DiLoreto told us he does not believe firms working in developing countries will be driven out of business by the hefty new price tag, rather that we will see the formulation of relationships with larger firms.
He did however admit the changes may see some of the less wealthy drugmakers within emerging markets disappear, adding: “Quite frankly, if they can’t afford quality programmes to produce satisfactory drugs, do we really want them in business?”