CBO Costs Out New GDUFA II Program

The Congressional Budget Office (CBO) has scored (costed out) additional costs for the provisions of GDUFA II reauthorization over and above the $493.6 million/year (GDUFA II first year fee collection).

The CBO speaks about the additional costs for the new amendments added to GDUFA II, which are believed to be over the fee collection under the program (albeit not clear).  The COB states:

Generic Drugs. Title IX would require FDA to expedite its review of certain applications for generic drugs and to collect and publish additional data about such drugs. Based on an analysis of information from FDA, CBO estimates that implementing those provisions would require about 500 additional full-time-equivalent (FTE) positions by 2022 (at an average annual cost of about $300,000 per FTE) and additional funding totaling $14 million per year, on average, to carry out a variety of activities related to information technology. In total, those expenses would increase FDA’s costs by about $566 million over the 2018-2022 period. That total includes:

  • $385 million to expand the types of generic applicants to which FDA must grant priority review and to provide technical assistance to such applicants;
  • $102 million to collect information about generic drugs with three or fewer competitors and to build the necessary information technology infrastructure to gather and publish this information biannually;
  • $69 million to re-inspect generic drug manufacturing facilities, in certain instances, if they had a known deficiency that was remedied by the manufacturer;

and

  • $10 million to collect and publish information about the status of generic drug applications.

Title IX also would express the sense of the Senate that FDA should respond to suitability petitions within 90 days of submission. (Generic drug manufacturers submit suitability petitions to FDA when they would like to submit an application for a product that has a different manner of administration, dosage form, or strength than drugs with the same active ingredient that are currently on the market.) CBO estimates that there would be no budgetary effects from that provision because the bill does not require FDA to follow the 90-day guideline. However, based on information from FDA, CBO expects if FDA did follow that guideline, costs would increase by about $20 million over the 2018-2022 period.

I can tell you one thing, looking at those costs for certain activities, I would love to get the contract for collecting the additional information required by the amendments.

The last paragraph is interesting relative to suitability petitions, as there are no actual requirements, but the “sense of the Senate” is that FDA should try to meet the 90-day review requirement from the original Hatch-Waxman Act of 1984.  We will see if there are any changes in the petition review process. While the petition list that FDA publishes (here) appears to have been updated recently , the updates were only through 7/2015, still almost 2 years behind.