Alert -Alert -Alert-Annual Program Fee Coming for GDUFA II – You Better be Ready!

In the GDUFA II negotiations, there have been some significant changes in the fee structure.  For instance, no facility will pay an establishment fee until it is named in an approved application; CMOs will only pay one-third of the establishment fee when named in an approved application; the prior approval supplement fee has been eliminated; if a firm manufactures both API and finished dosage forms, it will pay only one establishment fee instead of two; and (of particular interest to this post), the most significant change is the introduction of the three-tiered annual program fee.

Industry and the FDA agreed to the introduction of the program fee to have a more predictable income stream over each of the 5 year GDUFA II program.  The program fee will have three payment tiers. The tiers will be broken down based on the number of approved applications a firm has. Tier 1 will pay a full program fee (PF) which would be assessed to firms that have 20 or more approved applications; tier 2 would pay 40% of the full PF and that will be assessed to firms having 6-19 ANDAs; and tier 3 will pay 10% of the full PF which will be assessed to firms that have 5 or fewer approved applications.

How is the FDA going to determine what fee to charge each applicant? And this is where you better be paying attention or you may be paying a lot more than required.  The PF will be an annual change to applicants and their affiliates (we are not yet quite sure how FDA will define affiliate in this instance but we will likely see additional information on this point soon).  The FDA has outlined the process it will use to make such determinations but they need industry’s help. The following information is taken from a FDA presentation at the October 21, 2016 public meeting:

ANDA Ownership Determination Process

FDA must publish FY18 fees in August of 2017. In order to meet that deadline, FDA will be posting information about its process on its website to clarify who will pay the new generic application program user fee (aka ANDA holder fee).

  • December 2016: FDA publishes list of approved ANDAs
  • February 2017: Sponsors may let FDA know about any errors in its database about approved ANDAs owned by them or their affiliates
  • March 2017: FDA identifies unclaimed ANDAs and publishes revised list with tiers
  • April 2017: Sponsors may submit corrections to list
  • June 2017: FDA publishes corrected list
  • August 2017: FDA publishes FY18 fees

The thing is that FDA does not have statutory or regulatory authority to force firms to review and make corrections and identify its affiliates.  FDA is asking firms to voluntarily review the list and make necessary changes.  Failure for some firms to do so may result in firms or their affiliates being changed multiple PFs when they might only be changed one.

As more details become available on this process, we will try to provide them to you as quickly as possible, but be ready to have a team to review the lists that FDA publishes. The process will start sometime next month!