Generic Drug and Biosimilar User Fees Gain Traction

FDA issued last week its recommendations for three user-fee programs: the fifth authorization of the Prescription Drug User Fee Act (PDUFA) and new user-fee programs for human generic drugs and biosimilar biological products. The recommendations were transmitted to Congress, which will evaluate the recommendations.

Under a user-fee program, industry agrees to pay fees to help fund a portion of the FDA’s drug-review activities while the FDA agrees to overall performance goals, such as reviewing a certain percentage of applications within a particular timeframe. The proposed user-fee programs for generic drugs and biosimilars are modeled on the PDUFA program. PDUFA was created by Congress in 1992 and must be reauthorized every five years. The current program, known as PDUFA IV, will expire on Sept. 30, 2012, unless reauthorized by Congress. FDA’s recommendations for PDUFA V were developed in consultation with drug-industry representatives and with patient and consumer advocates, according to an FDA press release.

The proposed new generic-drug user-fee program would provide the FDA with funding at a time when generic-drug applications are on the rise. FDA receives 800 to 900 new generic-drug-related applications annually, according to the agency. In exchange for fees on facilities and product applications, the proposal includes performance metrics, such as review timeframes and a commitment to achieve parity between surveillance inspections of foreign and domestic establishments by fiscal year 2017. FDA expects that the proposal would effectively eliminate the review backlog and significantly reduce review times.

The Generic Pharmaceutical Association (GPhA) issued its support for a proposed Generic Drug User Fee Act (GDUFA) and FDA’s recommendations for a generic-drug user-fee program. “This is an important landmark that could not have been achieved without the extraordinary efforts of the FDA, my colleagues in the generic industry, and all other stakeholders,” said Ralph G. Neas, President and CEO of GPhA, in a Jan. 13, 2012, GPhA statement. “We now look forward to working with members of Congress in the weeks and months ahead to ensure that the final program is one that expedites access to low-cost, high-quality generic drugs for Americans and further safeguards the quality and accessibility of our nation’s drug supply.”

GDUFA calls for the generic-drug industry to pay $299 million annually in user fees for the next five years, beginning Oct. 1, 2012. This funding is supplemental to what Congress appropriates to FDA each year and will enable  FDA’s Office of Generic Drugs to hire the scientific resources needed to provide timely approval of generic medicines, according to GPhA. The new fees also will boost spending for generic-drug manufacturer facility inspections, which are required before new generic drugs can be approved.

The proposed Biosimilar and Interchangeable Products User Fee program is intended for products approved under a new abbreviated approval pathway for biological products shown to be biosimilar to or interchangeable with an FDA-licensed biological product. The Affordable Care Act of 2010 contains a subtitle called the Biologics Price Competition and Innovation Act of 2009, which established this pathway. The recommended user-fee program for biosimilars includes fees for products in development to generate revenue in the near term and to provide FDA with the resources needed to support development-phase meetings with sponsors of biosimilar biological product candidates.

The Pharmaceutical Research and Manufacturers of America (PhRMA) supports the premise of a biosimilar user-free program.” We endorse a clear, science-based, separately funded regulatory program for biosimilars that is supported by a mix of appropriations dollars and user fees,” said a PhRMA Vice-President Sascha Haverfield-Gross in a Dec. 6, 2011, statement.

The Biotechnology Industry Organization (BIO) did not comment on the proposed generic-drug and biosimilar user-fee programs, but offered its support for the reauthorization of PDUFA. “BIO strongly supports the PDUFA V recommendations as they will enhance the drug-development and review process through increased transparency and scientific dialogue, advance regulatory science, and strengthen postmarket surveillance,” said BIO president and CEO Jim Greenwood, in a Jan. 13, 2012, statement. “Most importantly, PDUFA V will provide patients and doctors with earlier access to innovative new therapies.”

Congress will take up the issue of user fees in a series of Congressional hearings, scheduled for next month. The House Energy and Commerce Health Subcommittee will hold hearings on Feb. 1, 2012, on PDUFA reauthorization and on Feb. 7, 2012, on the proposed generic-drug user fee and biosimilar user-fee programs. Senators Tom Harkin (D-IA) and Mike Enzi (R-WY), the chairman and ranking member of the Senate Committee on Health, Education, Labor and Pensions (HELP), offered their support for the PDUFA reauthorization and the proposed generic-drug and biosimilar user fee programs. “These user fee agreements are crucial to ensuring that medications become available to the American public quickly and safely,” said the senators in joint Jan. 13, 2012, statement. “We applaud the FDA and the industries for the dedication and hard work it took to finalize these agreements.” During the past several months, the HELP Committee has convened a series of hearings to explore issues related to the user-fee legislation.

With strong fiscal constraints, the user-fee programs, both the PDUFA reauthorization and user-fee programs for generic drugs and biosimilars seem likely. The key item in the coming months is to see if Congress will be able to move forward with the initiatives per FDA’s recommendations.