The minutes of the GDUFA IV negotiations meeting of December 17, 2025 (here) suggests so. With declining ANDA submissions and the intense dislike of the current GDUFA program fee, the FDA is proposing an alternative.
Program fees are currently assessed based on a tier system that relates to the number of ANDAs that a firm holds. “Under GDUFA III, if a person and its affiliates own at least one but not more than five approved ANDAs on October 1, 2025, the person and its affiliates shall owe a small business generic drug applicant program fee” of $191,838. “If a person and its affiliates own at least 6 but not more than 19 approved ANDAs, the person and its affiliates shall owe a medium size operation generic drug applicant program fee” of $767,351. “If a person and its affiliates own at least 20 approved ANDAs, the person and its affiliates shall owe a large size operation generic drug applicant program fee” of $1,918,377.
The problem with the program fee is that those in large- to medium-size tiers can, in some instances, manipulate the number of ANDAs that they hold by “parking them” with another owner, thus shifting them to a lower tier with a substantially lower fee. There are a couple of companies that have made a business of being parking lots for ANDAs.
Rather than the program fee, the FDA is proposing “a change in the current tiered program fee structure to a per ANDA program fee model with a cap on the number of ANDAs charged per sponsor to address under collection driven by movement across tiers and firms in arrears.” The FDA indirectly called out the parking issue as it explained “that the current tiered structure creates incentives that contribute to under-collections, such as transfers of ownership designed to avoid fee liability (though FDA acknowledged there are legitimate business reasons to transfer ANDAs which also impact collections) and a significant per ANDA fee burden for small companies that are more likely to be in arrears.” And while the Agency acknowledged that some firms would pay a somewhat higher fee based on the new proposal, the new system of paying per ANDA owned would stabilize the fees collected. This is especially relevant based on the continued decrease in the number of ANDAs being submitted over the past few years.
“Industry expressed concern regarding whether any subset of companies would see an increase in fees and raised concerns of unintended consequences, such as companies requesting withdrawal of approved applications which could potentially introduce a drug shortage risk.” This is not an unlikely scenario as some firms are reluctant to withdraw an ANDA as it represents an asset to the company, so some of the ANDAs that are not being marketed are just held by a firm and are listed in the discontinued section of the Orange Book. Those ANDAs can be activated at any time if the market conditions are more favorable. If a firm knows that it is going to have to pay a fee for each ANDA it owns, even those not being marketed, firms are more likely to withdraw the application not generating current revenue if the fee it must pay each year is substantial, and once the application is withdrawn, it is gone to them forever. On one hand, if the FDA decides not to charge a fee for an ANDA in the discontinued section of the Orange Book, this could fix the problem; however, firms could shift products into the discontinued section of the Orange Book in anticipation of the April 1st date and then move them back into the active section of the Orange Book after that date. This issue should be vetted to prevent firms from manipulating the system while at the same time addressing the finality of ANDA withdrawal.
“FDA proposed modifying the date used to determine the approved ANDA portfolio for program fee purposes (i.e., to establish fee liability and each company’s program fee amount for the upcoming fiscal year) to April 1st, so that the date is prior to fee setting, instead of the current October 1st date, which occurs after fee setting. FDA also proposed adding clarifying language that for ANDA transfers to be considered when establishing GDUFA program fee liability, they must be submitted to FDA by April 1st of the preceding fiscal year.” Industry seemed okay with the shift in the date for notification of the number of ANDAs owned for the following fiscal year albeit the FDA and industry acknowledged that no agreement on these proposals has been reached. Please see the minutes of the meeting for other issues discussed.
The new negotiation minutes are a welcome event as previous GDUFA and other UFA negotiation meeting minutes did not have much substance. It’s really nice to see what the FDA and industry are discussing at the negotiation table. However, you may want to brace yourselves as GDUFA IV may have a distinctly different look. We all know one thing for sure, and that is change can also have unintended consequences, so be prepared.
