FDA will see three seats across from it when negotiations for a generic drug user fee program begin later this month.

The Society of Chemical Manufacturers & Affiliates' Bulk Pharmaceutical Task Force and European Chemical Industry Council's European Fine Chemical Group will join the Generic Pharmaceutical Association in hammering out user fee terms with the agency.

EFCG and SOCMA asked to join the discussions, FDA said, although the agency was eager to have them participate in the talks. Both groups represent active pharmaceutical ingredient manufacturers and the agency felt it was important to have the sector represented in user fee negotiations.

While FDA received a number of written comments after a generic drug user fee public hearing last year, they appeared to be from only the ANDA sponsor side of the industry. In December, the agency said it wanted to solicit input from groups that represent the manufacturing side of the business in an effort to help make the program sustainable and build some political momentum.

SOCMA and EFCG both confirmed at that time they had been contacted by the agency (Also see "Generic User Fees: FDA Reaches Out To More Trade Groups; Plan Could Mix Inspection and Application Fees" - Pink Sheet, 3 January, 2011.).

Including a European group may seem odd on its face, but EFCG justified its inclusion in written comments submitted to the public docket on generic user fees. The group noted that "Europe represents the largest concentration of FDA-inspected sites dedicated to active pharmaceutical ingredients," a number several times larger than those in the U.S.

"Holistic" Approach Favored By CEO Panel

Negotiations on the structure of the potential Generic Drug User Fee Act are scheduled to begin Feb. 28, following a stakeholder update five days earlier, Commissioner Margaret Hamburg told the GPhA Annual Meeting in Orlando, Fla., on Feb. 18.

Last fall, the initial public hearing on generic user fees, industry presentations had mostly featured largely agreement from industry and other groups that a fee was necessary and should be based on applications filed. Mylan Pharmaceuticals President Heather Bresch moved the discussion in an alternate direction, proposing a focus on safety through establishment and inspection fees for domestic and foreign facilities.

Hamburg speech at GPhA suggests she may have been persuaded by Bresch's argument. The commissioner said recycling the Prescription Drug User Fee Act model for generics would not fit because the generic industry is not the same as the brand side.

The answer could be a combination of the inspection- and application-based ideas. The agency already has said it would like to conduct more detailed inspections more often, especially at foreign sites.

The tide now seems to have shifted in terms of the preferred user fee structure, at least among some leading generic companies. During a panel discussion at the GPhA annual meeting, CEOs from six leading generic manufacturers, including Bresch, mostly agreed that a "holistic" approach to the user fee structure was preferred.

"We not only need to address the question of moving our applications through the process ... but we also know that we have to deal with compliance matters and inspectional issues, particularly overseas, because that's part of the approval process as well," Paul Bisaro, president and CEO of Watson Pharmaceuticals Inc., said. "So if we just address the application process, we only address half the problem."

EFCG and SOCMA proposed in their comments annual establishment registration fees and a fee per foreign site compliance inspection for API manufacturers. The groups also supported ANDA review fees that would be charged to ANDA holders.

The Missing Chair At the Table

Once talks begin, there will be some pressure to have an agreement in place so it can be combined with PDUFA and the Medical Device User Fee and Modernization Act reauthorizations, as well as biosimilar user fees, to make a single bill for Congress to consider. PDUFA and MDUFMA have to be reauthorized next year.

Congressional leaders may end up targeting this fall to begin committee hearings on the user fee bills. Schedules may not line up, but a combined bill still is planned (Also see ""Mega-UFA" Is Behind Schedule; Combined User Fee Bill Will Be Difficult, But Still Expected" - Pink Sheet, 14 February, 2011.).

One challenge for the negotiators may be crafting a program in the absence of the brand industry, since any establishment fee program would seem likely to eventually apply to them in some fashion as well, even though their manufacturing processes are usually much less dependent on outside suppliers than generic operations typically are.

A universal establishment fee would seem a much more difficult program to create, and FDA "globalization" bills aimed at mandating one have stalled in Congress over the last several sessions.

So, while the generic industry and FDA seem to be aligning on a holistic user fee approach, getting a program successfully off the ground may still depend on keeping the fee targets as circumscribed as possible.

-Derrick Gingery (d.gingery@elsevier.com)

Generic User Fee Negotiations Begin In Ernest On Feb. 28 With Four Seats At The Table

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