FDA User Fees Promote Manufacturing Readiness

Published on: 
Pharmaceutical Technology, Pharmaceutical Technology-10-02-2017, Volume 41, Issue 10
Pages: 16–18

Industry and FDA face new fee structures and new challenges in implementing fee initiatives.

The US Senate approved legislation in early August 2017 reauthorizing critical five-year user fee programs that fund FDA oversight of medical products, just in time to avoid major agency disruptions (1). The vote was delayed by contentious debate on Capitol Hill over revising the Affordable Care Act. But once the wrangling over Obamacare fizzled out, the Senate quickly enacted the FDA Reauthorization Act (FDARA). It mirrored the bill approved by the House in early July and was signed by President Trump on August 18. 

By enacting new fee programs for drugs, biologics, generic drugs, medical devices, and biosimilars before they expired on Sept. 30, 2017, Congress avoided massive FDA layoffs. Equally important for agency staffers charged with implementing new fee policies, this user fee bill is relatively “clean,” benefitting from enactment of the extensive 21st Century Cures Act last December, which tackled many of the more controversial proposals for accelerating and streamlining the development, testing, and review of medical products.

Key provisions added to FDARA seek to spur development of pediatric cancer therapies and innovative medical devices and to deter import of illegal or counterfeit medicines. The bill reauthorizes the orphan drug grants program, while limiting orphan drug exclusivity awards to products that demonstrate a clear superiority over existing therapies, and it requires sponsors to conduct studies on new tropical disease treatments to qualify for priority review vouchers. Several provisions aim to speed up field inspections of manufacturing facilities and to assess whether delays in resolving deficiencies found in preapproval inspections block new product approvals. The legislation seeks expedited review of responses to inspection observations for priority applications and for those related to drug shortages. 

Efforts to lower prescription drug prices ended up with largely symbolic language backing patient access to therapies, plus provisions for speeding the development and marketing of generic drugs to enhance market competition. FDARA establishes a priority review track for competitive generic therapies and an accelerated development initiative for high-demand products; brand manufacturers have to update information on products withdrawn from the market to help clarify which drugs have limited competition. 

New fees and disclosures

This latest version of the Prescription Drug User Fee Act (PDUFA VI) aims to make revenues more predictable for FDA by relying more on a new product fee paid by manufacturers that is based on number of approved products. At the same time, PDUFA reduces application fees and discontinues levies for manufacturing establishments and supplements (2). 

The overall increase in funding will help improve FDA’s electronic submission process and IT initiatives and expand programs for hiring and retaining review staff. Because PDUFA already has reduced review times for new drug applications (NDAs) by achieving more first-cycle approvals, the new PDUFA agreement focuses more on managing the mushrooming demand for development-phase meetings, boosting resources for the breakthrough drug program, advancing the review process for rare disease treatments, and bolstering support for combination products. There’s continued emphasis on advancing model-informed drug development, biomarker qualification, the use of real-world evidence, and incorporating the “patient’s voice” into regulatory decision-making. 

Manufacturers of drugs, biologics, and generic drugs face added pressure to ensure that all facilities involved in product development and future production are fully identified in applications. Omitting this information in a submission can delay needed facility inspections, says FDA. Under PDUFA, applications that lack full facility information face a three-month approval delay for an NDA or efficacy supplement and two months extra for approving a manufacturing supplement. FDA states that it aims to complete all inspections of clinical and manufacturing sites within six months of accepting a priority application and within 10 months for standard submissions, leaving two months at the end of the review process to address deficiencies found during site visits. 


FDA’s biosimilar user fee program (BSUFA II) is revised to collect $45 million in revenues through program and application fees to support product development and review (3). BSUFA also wants manufacturers to identify all planned production facilities in applications and supplements to avoid inspection delays that could add two months to a review timetable. FDA specifies that mid-cycle and late-cycle meetings will discuss chemistry, manufacturing, and controls (CMC) issues, and that it aims to complete all facility inspections within 10 months of application receipt. 

The BSUFA program will advance through publication of guidance on key regulatory issues, including statistical methods for demonstrating similarity and a final policy for developing interchangeable biosimilars. FDA published draft guidance on CMC postapproval changes for biological products in August 2017 (4), and a similar document for biosimilars is scheduled for early 2019, along with final advisories on biosimilar naming, labeling, and clinical pharmacology data development. 

The revised Generic Drug User Fee Amendments (GDUFA II) also increases fees overall, to reflect a greater volume of abbreviated new drug applications (ANDAs) submitted to FDA than originally anticipated. More revenues will come from a new program fee based on approved products and facilities, with large generic-drug makers (more than 20 approved products) paying the full $1.5-million fee in 2018, medium companies (5-19 products) paying about half, and firms with less than five approved generics paying one-tenth the amount, or $160,000 in 2018 (5). Fees for filing an ANDA rise from approximately $70,000 in 2017 to $172,000 in 2018; facility fees for finished drugs and active ingredients remain fairly even, with the exception of a sizeable reduction for contract manufacturing organizations (CMOs). In announcing the 2018 fees (6), FDA notes that it will assess facility fees based on information submitted in applications, rather than relying on company self-identification. 

Moving on

A number of key issues failed to make it into FDARA, largely to avoid legislative delay, but they may linger, as Congress is under pressure to deal with the federal budget and tax reform proposals by year-end. One topic that could surface is a proposal for establishing user fees to support expedited review and approval of over-the-counter (OTC) drugs (7). FDA and manufacturers have negotiated an agreement for accelerating development of OTC monographs, but too late to include it in FDARA. Congress recently held hearings on the program, and it could be included in other health policy legislation this year.

Another high-profile topic is the right-to-try (RTT) legislation approved by the Senate, which promotes access to certain experimental therapies that have completed Phase I testing for individuals with terminal illnesses and no other treatment options (8). Under the Senate bill, patients would not have to apply for FDA approval to access these drugs, and it limits liability of pharma companies, prescribers, and dispensers for problems arising from early use of such products. This aims to encourage manufacturers to provide a test therapy when requested, but still does not require sponsors to agree to such action. House RTT advocates have proposed their own reform bill, and it may take some time to reach agreement on a measure that satisfies all parties. 


1. H. R. 2430, FDA Reauthorization Act of 2017.
2. FDA, PDUFA Reauthorization Performance Goals and Procedures Fiscal Years 2018 Through 2022
3. FDA, Biosimilar Biological Product Reauthorization Performance Goals and Procedures Fiscal Years 2018 Through 2022
4. FDA, CMC Postapproval Manufacturing Changes for Specified Biological Products to be Documented in Annual Reports, Guidance for Industry, Draft Guidance (CDER, CBER, August 2017). 
5. FDA, GDUFA Reauthorization Performance Goals and Program Enhancements Fiscal Years 2018-2022
6. FDA, “Generic Drug User Fee Rates for Fiscal Year 2018,” Federal Register 82 (166), August 29, 2017. 
7. FDA, Potential Over-the-Counter Monograph User Fees
8. US Congress, S. 204, August 4, 2017.

Article Details

Pharmaceutical Technology
Volume 41, Number 10
October 2017
Pages: 16–18


When referring to this article, please cite it as J. Wechsler, “FDA User Fees Promote Manufacturing Readiness," Pharmaceutical Technology 41 (10) 2017.