Square Pharmaceuticals Ltd. seems willing to risk delaying the review of its first ANDA in order to avoid paying the required user fees for generic drug manufacturing facilities.

The firm, based in Dhaka, Bangladesh, filed a citizen petition asking FDA Commissioner Margaret Hamburg to clarify the facility fee requirements and only collect manufacturing facility fees one time “until approval of the first ANDA manufactured” at the subject facility.

“This fee could be charged upon issuance of the approval letter or as a condition of approval of the ANDA,” according to the petition.

The company asked for fees to be waived while waiting for a decision. It also said it would not pay facility fees until the agency rules on the petition, which may actually force a delay of its ultimate goal: the approval of its ANDA.

GDUFA requirements indicate the agency will not receive an application from a company with fees that have not been paid, meaning it would not be reviewed.

Facility fee payments were due March 4 and companies that did not make payments will be put on an arrears list. Any products made at or using products from facilities on the arrears list will be considered misbranded ([A#14130115007]).

Square has registered its facility with FDA. In the agency’s most recent facility listing it is classified as a finished dosage form manufacturer.

Fees Charged Despite No Approvals

The petition, filed Feb. 14 by consultant Chrai Associates Inc., noted the company submitted its first ANDA in 2012 for a reference product with patents expiring in December 2015.

The application was filed three years before it potentially could begin marketing “to ensure timely approval of this product due to the average approval time for ANDAs now stretching beyond 30 months,” according to the petition.

The average ANDA approval time now is 32.5 months, according to the Generic Pharmaceutical Association.

GDUFA requires FDA to reduce the average review time to 10 months by fiscal year 2017 for 90% of applications. In FY 2016, when the patents for the product Square’s ANDA references would expire, the agency goal is to review 75% of applications within 15 months ([A#00111212020]).

Square does not plan to submit any other applications in the next several months and wants the agency to not charge annual facility fees to companies waiting for their first approval, according to the petition.

“If these fees are paid annually, regardless of the outcome of the ANDA, it is quite burdensome for manufacturers, especially those who do not have or do not anticipate having any revenue in [the] U.S. for [the] next few years,” Chrai wrote in the petition.

The estimated facility fees that could be levied on Square while waiting for approval would total more than $760,000, assuming the existing foreign facility fee ($190,389) remained unchanged until FY 2016.

That total should be considered a minimum. FDA has the ability to adjust the fees for inflation, most likely higher, each fiscal year.

FDA announced the FY 2013 facility fee amounts in January. Some were much higher than expected, in part because fewer facilities self-identified with the agency than estimated ([A#00130121011]).

FDA Does Not Want Waivers Allowed

The company has some precedent behind it. Manufacturing fees under the prescription drug user fee program are not charged unless the NDA holder has its product approved and commercializes it, according to the petition.

But FDA and industry wrote in the GDUFA commitment letter that no fee waivers or exceptions would be allowed “to the extent possible,” unlike PDUFA, which allows small business and orphan drug waivers of some fees Also see "FDA, Industry Reach Agreement On Major Portions Of Generic User Fee Program" - Pink Sheet, 10 August, 2011..

During congressional consideration of GDUFA, an attempt to allow waivers or fee reductions to prevent or alleviate a drug shortage was included in a draft House bill, but dropped later Also see "Generic User Fee Waivers Dropped In Latest House Draft Bill" - Pink Sheet, 17 April, 2012..

The agreement language appears to leave open some possibility that Hamburg could create a GDUFA waiver, but it seems unlikely, especially since the agency worked with industry to create the existing framework and would not want to allow future waiver requests.

FDA officials also have said repeatedly that a waiver system would make the program harder to administer and potentially take resources away from application reviews and inspections Also see "Generic User Fee Waivers Created In Draft House Bill, Breaking FDA-Industry Agreement" - Pink Sheet, 19 March, 2012..

GDUFA Facility Fees Should Be Waived Until First ANDA Approved, Petition Argues

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