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  5. Transcript: FDA Addresses Small Business Concerns in GDUFA II
  1. CDER Small Business & Industry Assistance (SBIA)

Transcript: FDA Addresses Small Business Concerns in GDUFA II

Welcome to the CDER Small Business and Industry Assistance (SBIA) Podcast Series. Today’s topic: GDUFA II. The FDA and the Generic Drug Industry have completed negotiations for  The agreement is now with Congress, which must write it into legislation in order for it to become effective. When GDUFA II tajes effect, it will be great news for both the FDA and industry, as it will address questions that arose with the implementation of GDUFA I.  

Today we’re talking with the FDA’s  Gisa Perez. Gisa is the Generics Branch Chief in the Division of User Fee Management and Budget Formulation.

SBIA: Welcome Gisa.

Gisa: Thank you Colleen, thank you for having me.

SBIA: To get us started Gisa, what are some of the primary regulatory enhancements in GDUFA II?

Gisa: Well Colleen, one of the primary concerns that we had in GDUFA I was that it did not provide any relief for small businesses. Under GDUFA II, we have three elements that are going to be aimed directly at small businesses:

1.  First, under GDUFA I, a facility incurred an annual facility fee if it was referenced in a pending or approved Abbreviated New Drug Application (ANDA).  As a result, all those facilities referenced in pending submissions would be incurred in annual GDUFA facility fees, and they had no generic drug revenue stream – which was a very big concern in GDUFA I and we’re trying to address that in GDUFA II.  

2.  Second, under the GDUFA II user fee structure, we have three tiers for the program fee and we have a large tier - it’s comprised of  20 or more approved ANDAs); the medium tier  is companies that have between 6 and 19 ANDAs, and a small one, which is companies that have 5 or fewer approved ANDAs. And of course we look in the “large” tier paying 100% of the annual program fee, and the “medium” and “small” would pay 40% and 10%, respectively. And we believe this is going to be a major relief for small businesses.

3.  Third, within the Finished Dosage Form (FDF) facilities, GDUFA II has carved out a subcategory that we call Contract Manufacturing Organizations (CMOs. These facilities are contracted by ANDA sponsors to manufacture their generic drugs. Under GDUFA II, CMOs will pay only one-third of FDF fee otherwise paid by manufacturers of ANDAs that actually own the application or are actually affiliated with the owners of the ANDAs. So we believe that those three little elements are going to be a major relief for small businesses.

SBIA: So great! These elements then are just really good news for small business. So, okay now, moving onto the major changes in the user fees… what are the major changes in user fees included in GDUFA II?

Gisa: Well, one of the major things that we are very happy to announce is that Facilities that actually manufacture APIs and FDFs only have to pay FDF fee under GDUFA II.  And other items that we are happy to announce again as I mentioned before, we have the CMO categories and we have the generic drug applicant fee with three tiers – small, medium, and large – and we believe the small tier is going to be a major benefit to small businesses.

SBIA: So, can you expand just a bit on the differences between the fee structures with GDUFA I and GDUFA II?

Gisa: My pleasure. Under GDUFA II, for the folks that have been in the generic industry for the entire interaction of GDUFA I, you’re going to see that GDUFA II has a very different user fee structure. For example, under GDUFA I, the facilities carry 70% of the revenue stream, which was very hard on the facility side, and the ANDA was going to be between 24% and 6% between the applicant fee and the DMF fee. Under GDUFA II, the applicant pays 33% of the revenue stream, the DMF applicants would pay 5%, and you’re looking at the facilities paying 27%. One new thing we have right now is the program fee paying 35%. So if you look at the shift between GDUFA I and GDUFA II, under GDUFA I, the facilities, which is the generic drug manufacturers, are paying 70% of the entire revenue stream. Under GDUFA II, we’re looking at the applicant paying 73% of the revenue stream and the facilities only paying 27%. And we believe this difference in user fee structure shifts the burden between facilities and manufacturers, I would say, more even, if you will.  

Fee Category
GDUFA I
GDUFA II
  • ANDA Application
24%
33%
  • DMF Application
6%
5%
Annual Program Fees:
 
 
  • API Facility
14%
7%
  • FDF Facility 
     
56%
20%

CMO Facility

N/A
One-third FDF
  • ANDA Holder
N/A
35%

Small (1-5 ANDAs)

N/A
One-tenth full fee

Medium (6-19)

N/A
Four-tenths full fee

Large (20+)

N/A
Full Fee

 

SBIA: So, to sum up what you’re saying, all these changes are going to benefit small business?

Gisa: Certainly, especially because the facilities for example, the manufacturers, they only manufacture the drug at once, like a contract manufacturer - the industry believes that the folks that really has the revenue stream is the ANDA holders, because the drug is on the market for much longer. So shifting the burden between facilities to ANDA applicants seems to be the right path to go right now. 

SBIA: So, how will the facilities be assessed under the user fees in GDUFA II? Just kind of reiterate that a little bit more.

Gisa: Under GDUFA II, the facilities will only be paying an annual fee if they are identified in approved submissions. If you recall I said earlier that under GDUFA I, it was pending or approved, and they would incur an annual fee no matter what. Now under GDUFA II, these facilities will only incur a GDUFA facility fee if they are referenced in the approved ANDA submission.   

SBIA: So, you had mentioned that facilities manufacturing both active pharmaceutical ingredients and finished dosage form (FDF) will only pay the FDF fee. How will this one fee per facility work?

Gisa: Under GDUFA II, if a facility is identified in an approved ANDA submission as both an API and FDF, we have great news for you! Under GDUFA II, such a facility will only incur the FDF fee.  Now, if you are a facility manufacturer approved to manufacture APIs, you will continue to incur the API fee.   But if you, under GDUFA II, have several facilities that manufacture both API and FDF, those facilities will only have to pay the FDF fee.

SBIA: Let’s talk about refunds. Under certain circumstances in GDUFA I when FDA refused to receive an ANDA or PAS, a partial refund was possible. If the reason that the application was refused was not related to failure to pay fees, then 75% of the fee was refunded to the applicant. Are there any changes in refunds under GDUFA II?

Gisa: Yes, this is also great news for industry. Under GDUFA I, there were no provisions for ANDA withdrawals once submitted to the Agency. Now, under GDUFA II, if you submit an ANDA, and for any other reason you decide to withdraw the ANDA before it’s being received by the Office of Generic Drugs – and by received I mean received for filing – then you’re welcome to withdraw the ANDA and be entitled to a 75% refund. 

SBIA: Okay, so in my next question is: In the tiered ANDA holder program fees, are discontinued ANDAs included in the approved ANDA count for the program fee?

Gisa: Yes, all ANDAs approved that we have in the Agency right now   will be included in the program fee.  So if you have any ANDAs in your portfolio that you wish to withdraw  because you no longer want to market, or its being abandoned or you forgot about it, please submit your withdraw request to the Office of Generic drugs as soon as you can so that we no longer count it for the next fiscal year.  

SBIA: Very good. Now,  are positron emission tomography (PET) drugs manufactured under 21 CFR 212 still exempt from GDUFA fees?

Gisa: Yes, under GDUFA II we have the same exemptions for PET drug just as in GDUFA I.

SBIA: And do facilities still have to self-identify each year under GDUFA II?

Gisa: Yes, unfortunately some of the folks are thinking – we don’t have to self-ID anymore. You still have to self-ID under GDUFA II, it’s still the same period of time – you have to either self-ID or reconfirm by June 1st of every fiscal year. And of course we will have a way for CMOs to self-identify themselves so that we can locate you and identify you and correct you for the right fee.  

SBIA: So will API manufacturers be able to self-identify and pay as CMOs?

Gisa: That’s a question we get a lot. And I have to say no, unfortunately under GDUFA II, the CMO classification is carved out for the FDF manufacturers only. So if you are an API manufacturer - actually a contract API manufacturer – that’s great but there  is no additional fee release for you.  The CMO additional fee that we have (one-third of the FDF fee) is only for FDF manufacturers, so APIs are not part of that category. 

SBIA: So if our listeners have further questions for you, they can contact you via email, and that would be contact the Division of User Fees via email at CDERCollections@fda.hhs.gov.

Gisa: That’s correct

 

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