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Foreign Generic Drug, API Manufacturers Hit Hardest by GDUFA Fees

By Zachary Brennan , 17-Jan-2013
Last updated on 17-Jan-2013 at 12:56 GMT

Foreign Generic Drug, API Manufacturers Hit Hardest by GDUFA Fees

Foreign generic drug and API manufacturers will have to pay $15,000 more than their US counterparts because of additional costs required for the US Food and Drug Administration (FDA) to inspect the overseas facilities.

On Wednesday, the FDA for the first time released the amount that all generic drug and API facilities will have to pay to bring their products to market in the US, according to a notice in the Federal Register.

Of the 758 self-registered fixed-dose formula (FDF) facilities, the 325 US facilities will pay $175,389 each, while the 433 foreign facilities will each pay $190,389. And of the 885 API plants that self-identified, the 122 domestic facilities will each pay $26,458 while each of the foreign plants will pay $41,458. The fees are due March 4.

There aren’t any real surprises in the announcement, John DiLoreto, executive director of the Society of Chemical Manufacturers and Affiliate’s Bulk Pharmaceutical Task Force, told in-Pharmatechnologist.com. But he added that a “major shortcoming in the FDA’s inspection program has been its ability to identify and inspect foreign facilities...  Over the next five years, the goal is to have all foreign facilities inspected at the same frequency of US facilities.”

The fees are mandated by the Generic Drug User Fee Act (GDUFA) and generic drug and API manufacturers that did not self-identify will not be allowed to introduce their products in the US. No new generic drug submission referencing the facility will be received until the fee is paid and the facility will be placed on a publicly available arrears list if the fee is not fully paid within 20 days of the due date, according to the FDA.

Early in the discussions GDUFA industry negotiators agreed that API producers would pay 20% of the total cost and FDF manufacturers the remaining 80%,” DiLoretto added. “This agreement among industry representatives was in recognition of the razor-thin profit margins for the API manufacturers and accounts for the cost differential.”

And although 1,643 total facilities self-identified, the FDA had previously estimated that about 2,000 facilities would self-identify.

FDA has always struggled with this number and that’s one of the reasons for the identification process,” DiLoreto said, adding that “it’s important to remember that not all facilities are subject to fees under GDUFA.”

Sites and organizations that only perform testing, repackaging, or relabeling are not required to pay a user fee, according to the FDA, but facilities that package the FDF of a generic drug into the primary container/closure system and/or label the primary container/closure system are considered to be manufacturers and are required to pay an annual FDF fee.

The fees are based on the $50 million in backlog fees that were subtracted from the total fee revenue amount of $299 million, which was set in the GDUFA statute.

The agency previously set the FY 2013 original abbreviated new drug application (ANDA) fee at $51,520, the prior approval supplement fee at $25,760, the Type II drug master file fee at $21,340, and the ANDA backlog fee at $17,434.

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