A largely unknown residual effect of the generic drug user fee program may be that it could stimulate the secondary market for ANDAs, creating more opportunities for companies looking for a quick approval or faster entry into the U.S. market.

GDUFA forced sponsors with pending applications to either remove them or pay the charge. Some companies appear interested in grabbing some of those ANDAs that were dropped and are essentially dormant.

Richard DiCicco, chairman of Harvest Moon Pharmaceuticals, said at the recent World Generic Medicines Congress that it is an opportunity for foreign companies looking to enter the U.S. market.

DiCicco said the sale price can be $250,000 to $500,000 per ANDA. Most of those available likely would be from companies not willing to pay the fee, he said.

It is unclear how many withdrawn ANDAs have been sold or are available. Information about withdrawals tend to be closely held by the ANDA holders and selling usually is company-to-company or through a broker, said Claire Sheahan, a spokesperson for the Generic Pharmaceutical Association.

The time required for acquisitions, as well as the necessary work to prepare them for resubmission, may mean it could be a while before any return to the agency queue.

FDA also said it is not tracking whether withdrawn applications are changing hands and being resubmitted.

The GDUFA program included a one-time charge for all submissions in the backlog at program launch, which was Oct. 1, 2012. Sponsors were charged $17,434 per pending submission ([A#14121024002]).

FDA allowed companies to remove inactive or incomplete ANDAs from the backlog and avoid the charge.

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But many companies seemed to rush to get their applications into the backlog, preferring paying less to risk waiting several years for a review than paying the application fee, which was $51,520.

The backlog actually increased leading up to GDUFA launch, but there were a couple hundred ANDAs that were removed from the backlog voluntarily prior to Oct. 1, according to the agency Also see "Backlog Backfire: FDA Sees Increase In Pending Generic Applications At Deadline" - Pink Sheet, 15 October, 2012..

FDA also removed 364 applications that had been inactive and were incomplete ([A#00120618014]).

Some also remain in the backlog, but their sponsors have not paid the fee. FDA does not have the ability to forcibly remove them for non-payment, however (see related story,Also see "GDUFA Launch Pains: Facility List Fluctuations, Back-Due Backlog Fees" - Pink Sheet, 18 February, 2013.).

Those circumstances suggest a group of new ANDAs that could be available for purchase, in addition to any that had been on the secondary market prior to GDUFA launch.

A Leg Up, But How Much?

An ANDA’s ultimate value can vary, based on what is available at purchase.

Among the most desirable applications available for purchase likely are those that would not require new bioequivalence studies or can retain access to active pharmaceutical ingredient suppliers.

If bioequivalence already has been established, some time and cost may be saved. It allows the new sponsor to begin at a mid-point in the ANDA approval process, rather than the start.

It may not be a huge head-start, however. The buyer would receive the ingredient list, but not the actual production process. The new ANDA holder most likely would have to figure out how to manufacture it alone, Sheahan said.

An application where production is done by a contract manufacturer that can be retained by the buyer may be more desirable than one where the sponsor had made the product in-house and the buyer would be forced to essentially start over.

“It’s really all going to come back to what’s the product and how much work has to be done,” said Kurt Karst, a director at the law firm Hyman, Phelps and McNamara PC.

It would not be surprising to find incomplete applications that were withdrawn from the backlog. FDA can refuse to file applications lacking elements, but sometimes in the race to get a submission to the agency sponsors leave required portions of the application out, promising to submit them later Also see "What’s A "Complete" Application? Clarity From FDA Could Speed Review Times" - Pink Sheet, 17 January, 2011..

The agency has pushed in the last several years for applications to arrive complete.

The prescription drug user fee reauthorization agreement with industry included a new review model that required a substantially complete application upon filling. FDA and the sponsor must agree in advance what information can arrive late Also see "Buying Time: Industry Sacrifices Early To Gain Later With PDUFA V Review Model" - Pink Sheet, 1 October, 2012..

Type II Drug Master Files are also now undergoing a completeness assessment at submission. A DMF must pass the initial check before it can be referenced in an ANDA ([A#00121015011]).

Even those sponsors willing to complete the work required to finish an ANDA, including qualifying new manufacturing facilities, may run into road blocks that delay approval.

GDUFA manufacturer requirements may necessitate a wait of several months or years for an initial inspection, if necessary.

FDA told manufacturers to register their facilities with the agency to help determine the extent of the U.S. generic manufacturing sector. That process also may create a larger backlog of facility inspections that the agency cannot eliminate quickly ([A#14130104002]).

The cuts that would be part of the looming budget sequester also could reduce the agency’s inspection capacity Also see "Hamburg Details Some Sequestration Impact On FDA" - Pink Sheet, 6 February, 2013..

New Sponsors Will Find Quality Focus

New generic manufacturers in the U.S. also face an increased FDA focus on quality, in part because of the drug shortage problem.

FDA wants to encourage quality manufacturing as part of a strategic plan it is formulating to fight drug shortages ([A#14130211003]).

The agency attributed at least some of the blame for the shortage problem on manufacturing problems. Officials argued the market does not adequately reward quality and forces competition primarily on price Also see "Drug Shortages: FDA Says Market Must Reward Production Quality" - Pink Sheet, 28 January, 2013..

ANDA Backlog Withdrawals May Stimulate Secondary Market By Foreign Firms

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