User Fees for Generic Drugs: A Foregone Conclusion?

Article excerpt

Now that user fees appear to be working well for brand-name drug companies, the generic drug industry is toying with the concept.

Under the user-fee system, manufacturers agree to pay the Food & Drug Administration a certain fee per application to enable the agency to hire more staffers to expedite the review of their Abbreviated New Drug Applications (ANDAs).

At the recent National Association of Pharmaceutical Manufacturers' annual meeting, held in Naples, Fla., president Robert Milanese reported that the NAPM's board has decided to negotiate user fees with the FDA and Congress.

Dissatisfied with the speed with which ANDAs are currently approved, NAPM members would consider paying user fees in return for performance guarantees from the FDA. Swifter approval of generics would make available more affordable drugs to consumers.

Not that all NAPM board members favor this position. In fact, two NAPM board members abstained from voting on this issue since they were opposed. Said one board member at the meeting who did not wish to be identified, "I am philosophically and irrevocably opposed" to user fees. By statute, the FDA is supposed to review each ANDA within 180 days. Opponents of user fees don't see why they should pay the agency a fee for something that it should be doing anyway. User fees also don't sit well with the smaller generic companies, which may have a more difficult time making the payment, estimated at almost $50,000 per application.

On the other hand, many generic firms say that user fees make sense since the FDA is in a Catch 22 position: It has been receiving an increasing number of ANDA submissions per year but has been given diminishing resources in today's climate of government downsizing. User fees would be a welcome relief for the FDA's Office of Generic Drugs. An attendee at the NAPM meeting admitted as much when he told Drug Topics, "User fees are a good idea. After all, there's no free lunch."

Support for user fees also stems from the fact that they've worked well for innovator drug companies. Passed in 1992, the Prescription Drug User Fee Act (PDUFA) has accelerated the review of brand-name drug applications. …