Generic drug user fees should only be considered in the context of changes to the Waxman/Hatch-related barriers to generic entry, the Generic Pharmaceutical Association told FDA during a Sept. 15 meeting on the Prescription Drug User Fee Act reauthorization process.

"User fees for generic drugs is a very complex issue," Teva VP-Generic R&D Chris Pelloni commented. "An in-depth analysis of the entire review, approval, and launch processes and their related statutory, regulatory, and legal constraints, would be required before any attempt is made to develop a meaningful proposal, if indeed a user fee program which will achieve the desired outcome (timely access for consumers to affordable generic drug products) is feasible."

"While the focus of user fees is on the reduction of review/approval times for product applications, 'reduction in review/approval time' is simply a surrogate for the desired endpoint," Pelloni observed. "What is the value of a six-month review if launch is routinely delayed another two or three years because of other factors?" Pelloni chairs the GPhA Science Committee.

The expansion of the prescription drug user fee program to encompass generics will be one of the sub-issues for debate during the PDUFA reauthorization cycle. The current program sunsets in 2002.

The issue is also a point of difference between the two remaining generic drug industry trade associations. The National Association of Pharmaceutical Manufacturers has endorsed generic drug user fees and spoke in favor of them at the Sept. 15 meeting.

GPhA was formed in June from the merger of the Generic Pharmaceutical Industry Association and the National Pharmaceutical Alliance. NAPM participated in the discussions to form a unified generic trade association, but voted not to join GPhA.

One impetus for the drive for a unified generic association is the interest expressed by Sen. Hatch (R-Utah) in re-opening the Waxman/Hatch Act during the next legislative session.

Sens. Schumer (D-N.Y.) and McCain (R-Ariz.) floated a legislative proposal presenting the generic industry wish list for Waxman/Hatch reform at a press conference Sept. 14 (¹ Also see "Generic Drug Bill Would Limit Rx Patents To Drug Substance, Method Of Use" - Pink Sheet, 18 September, 2000.).

If Waxman/Hatch reform is taken up by the 107th Congress, it would be moving in parallel with the PDUFA reauthorization process.

GPhA's desire to consider user fees in the context of the overall generic drug process follows the model established by the brand name industry during the last reauthorization cycle, which opened up a broader FDA reform debate and produced the FDA Modernization Act of 1997.

At the time, the five-year user fee reauthorization cycle was hailed as an opportunity for perpetual FDA reform.

However, the upcoming PDUFA debate may show a downside to the cyclical user fee process for brand name companies, if, as appears likely, PDUFA III is moving at the same time as a Medicare prescription drug benefit. Under those circumstance, the brand name industry will have a difficult time focusing the same level of attention on FDA issues as it did in 1997.

In addition, the political positioning of the Medicare debate may make it more difficult for the brand name companies to preserve or expand provisions of PDUFA that are viewed as favorable to them. If "PDUFA III" is linked to "Waxman/Hatch II," arguments focused on pharmaceutical costs will likely carry additional weight.

GPhA and NAPM agree that the PDUFA system has placed a strain on the FDA Office of Generic Drugs, since non-user fee programs have faced flat budgets while PDUFA programs have built-in inflation increases.

Pelloni noted that the number of FTEs assigned to generic drug reviews has declined by 16% from 1993 to 2000, even though appropriated salary and expense funding increased by 39%.

"There have been reports of pre-approval inspections for NDAs receiving priority over those for ANDAs when both types of applications compete for resources," Pelloni maintained. "There has been concern that even those funds appropriated by Congress specifically for the Office of Generic Drugs are being diverted to some extent as a consequence of PDUFA demands."

NAPM "believes that a user fee program for generic drugs is the best answer for ensuring adequate and appropriate FDA resources to prevent delays in generic competition caused by the inefficient and slow reviews of generic drug applications," association President Robert Milanese said.

NAPM's endorsement of user fees gives the Pharmaceutical Research & Manufacturers of America an ally in the PDUFA III negotiation process.

Most of the consumer and patient representatives who spoke during the Sept. 15 meeting argued for significant changes to the system, ranging from requiring that fees be used for support of post-marketing surveillance and other activities, to reconsidering the whole concept of industry-supported product reviews.

NAPM, however, agrees with PhRMA that user fees should be limited to supporting product reviews. "FDA enforcement and inspection activities should be funded with public monies, not industry cash, in order to eliminate even the appearance of a conflict of interest."

Although GPhA is wary of generic user fees, the association agrees with the principle that "user-fee funded activities should be the exception, not the rule," Pelloni said. "Any drug user fee program, whether for the brand industry or the generic industry, should have clear, measurable goals and objectives, directly related to the review, approval and launch of a drug product only."

An expansion of the user fee program to include generic drugs could heighten the concern expressed by consumer groups during the meeting that the user fee program involves an inherent conflict of interest if there are lingering memories of the generic drug/FDA bribery cases from the late 1980s.

PhRMA was non-committal about expanding the user fee program to include issues like post-marketing safety or advertising surveillance.

"There are certainly additional goals that should be considered as we go forward, goals that continue to build upon PDUFA's enhancement of the pharmaceutical development and review process," Procter & Gamble VP-Regulatory Affairs Larry Versteegh said.

"Industry believes there is still much to be gained by looking at ways to improve the efficiency of all aspects of pharmaceutical development and this should be considered as consistent with the 'spirit' of PDUFA," he added.

Versteegh suggested that increased efficiencies from the movement towards electronic NDA reviews could free up resources to fund other FDA priorities.

The PhRMA representative made a similar argument in responding to concerns raised by FDA about new performance goals established under PDUFA II regarding meeting schedules and dispute resolution.

The focus of refinements to the user fee goals should be on easing the burden on FDA to document performance without easing the goals themselves, Veersteegh maintained.

"The challenge of the future should be to minimize the work necessary to document achievements, not reduce goal setting," he said. "It is entirely within our capabilities to establish a means whereby FDA can maintain their performance-based environment, but collect data on performance against these objectives in a less time-consuming manner."

FDA has complained that new performance measures established under the 1997 FDA Modernization Act related to categorizing and scheduling meetings with industry involve data collection requirements that offset the intended increase in efficiency.

During the Sept. 15 meeting, Center for Biologics Evaluation & Research Director Kathryn Zoon, PhD, maintained that the extensive performance goals have created a "sweatshop atmosphere" that is leading to an increase in staff turnover.

"While FDA's concerns are understandable, it has only been through the accountability requirement associated with goal-setting, and measurement of performance against these goals, that the advances of the past several years have been accomplished," Versteegh said. Versteegh suggested that the move towards all-electronic NDA submissions by 2002 allows opportunities for "an easier electronic record keeping capability."

Given the reservations expressed by consumer groups, a PDUFA reauthorization that left the basic program intact with an easing of the meeting deadlines would presumably represent a good outcome for PhRMA.

GPhA Still Wary Of Generic User Fees; Issue Tied To Waxman/Hatch Reform

More from Archive

More from Pink Sheet