E-DRUG: Indian pharmas to be hit as US hikes fee (3)
I think that the adverse reactions to the FDA price increases are not
providing sufficient insight to the process and justification for the
fee increases - to review applications faster, have more inspections of
foreign manufacturing sites and the like. Given the volume of dosage
units to be sold, any price increase to the consumer is likely to be
small and not greatly impact on their affordability of the medicines.
The increased fees are retained by the FDA to fund their work and if
they are to hire more staff or make more site visits they need to raise
more money (whether this is a good model for funding of a regulatory
agency is another issue). The following article from the Medical Daily
(copied as Fair Use) provides some more perspective on this.
Pharmaceutical consultant, The Philippines
Douglas Ball <email@example.com>
FDA Decision To Increase Charges To Pharmaceutical Companies For Generic
Drug Reviews Is A Good Thing
By Jonathan Weiss | Aug 10, 2013 10:30 AM EDT
With pharmaceutical companies all vying to be get their drug on the
market, the Food and Drug Administration (FDA) approval process can,
unfortunately, be as much about science and data as it is about politics
and making sure all paperwork is in order. In addition, recent removals
of drugs (such as Vioxx) from the market have led the FDA to be more
attentive and sift through even more data before approving a drug. The
goal, ultimately, is to determine if a new drug is safe, is an
improvement over previous drugs, or if, in the case of a generic, it is
as effective as the brand name drug.
To accomplish this complex approval process, the FDA has decided it
needs to hire new people and put clinical trial results through a
rigorous and stringent evaluation process. To pay for this, about two
decades ago, the FDA started collecting fees from companies seeking to
have their drugs approved. The Prescription Drug User Fee Act (PDUFA)
was passed in 1992 and gave the FDA the ability to hire more people and
expand their review operation.
The original expansion increased the FDA drug reviewer staff by 77
percent and reduced the time a non-priority drug goes through the
approval process from 27 months to 14 months. In 2008, the fee for new
drugs was $1,178,000 for a full new drug application including clinical
trials. But this fee only applies to brand name drug makers who spend
hundreds of millions of dollars on drug development, not copycat
generics drug makers who only need to prove safety and that their drug
is the same as the brand name one. Generic drug makers, to this point,
had been exempt from the charges.
However, even though the fees bring in $707 million a year to the FDA,
it only covers a quarter of the operating budget of the organization.
Also, it only covers 65 percent of the drug approval process.
Now, the FDA is increasing the fees charged to companies who hope to get
generic drugs approved. These are the same drugs that have already been
approved, yet have lost their patent protection, so other companies can
produce the drug and sell it for cheaper. The new abbreviated new drug
application (ANDA) will now be $64,000 for each application, beginning
Many news organizations are stating that this is outrageous and an
egregious increase. But the truth is that $64,000 is not that much money
for a company to get their drug approved for the market. It is less than
the salary of a single pharmaceutical drug rep, and companies make
millions off of generics.
The companies mostly affected are Indian drug makers who specialize in
generics such as Ranbaxy Laboratories, Cipla, Dr. Reddy's and Lupin.
"We do not think that the decision to hike GDUFA fees will have an
impact on product filings made by large Indian companies operating in
the U.S.,” Glenn Saldanha, Chairman and Managing Director of Glenmark
Pharmaceuticals told the Times of India. “Our plans to file 18 to 20
ANDAs in the U.S. this year also remain unchanged. However, the increase
in GDUFA fees will make smaller companies to strategically think about
their product filings in the US."
With the increase of drug applications, specifically from generics
makers who want a piece of the pie, it makes sense that the FDA needs
more staff to evaluate the drugs. But the burden must shift a little to
the generics makers; it makes no sense for brand name companies who
spent billions developing the drugs to foot most of the bill for
Additionally, with the increase in FDA staff, generics will be approved
faster and the U.S. government will spend less public funds on the
approval process. The Congressional Budget Office projects that the fees
will reduce federal spending by $311 million over 10 years, mostly by
helping generic drugs reach the market faster. That would slash federal
drug expenditures for Medicare and insurance companies across the
country, in addition to individuals.
So, the generics companies can complain about having to spend a few
thousand more on their drug approval process, but in the end their drugs
will get to the market faster and they are sure to make up the