FDA is researching alternative methods for collecting the product development fee included in its biosimilar user fee proposal as negotiations with industry moved away from performance goals.

Fee levels also appear to be a sticking point, as some industry members remain uncomfortable paying the same price for a biosimilar product review as an innovator review. FDA may be growing tired of the industry argument however, as minutes hinted discussions of the subject may be growing tense.

Negotiations shifted their focus to the fee that would be collected prior to the filing of a marketing application during a June 30 negotiating session. Meeting minutes were released July 28.

Biosimilar applicants would pay the advance fee upon submission of an IND to support necessary agency activities leading up to filing the marketing application. The fee would be charged each year the product is in active development, but FDA would discount the charges from the marketing application bill (Also see "Biosimilar User Fees Would Be Same As BLAs, Only Earlier" - Pink Sheet, 9 May, 2011.).

The agency proposed a $150,000 product development fee in fiscal year 2013. That's about 8% of the $1.84 million to be charged for a marketing application requiring clinical data in FY 2012, although the amount would become a smaller percentage of the total assessment if application fees continue to increase annually as expected.

Two More Payment Plan Options

The minutes indicated the agency will research two other ways of collecting the fee and the impact they would have on review and other performance goals. They included a lump sum product development fee and charging a higher fee initially followed by lower annual fees.

The agency did not include a detailed description of the ideas in the minutes and it was not clear whether industry supported either alternative. The lump-sum plan would require sponsors to have more capital available up-front, which may be difficult, especially for small companies, while the higher fee and lower annual payments may not generate an adequate funding stream for the agency's IND activities.

FDA conducted the analysis assuming 351(k) and 351(a) application fees would be the same and was expected to present it at a July 11 meeting with industry. Minutes of that meeting have not been released.

Both sides also will continue to talk about where in the approval process the product development fee should be charged.

Some industry representatives argued it should be charged at IND filing, as the agency proposed. Others suggested collecting the fee after the pre-IND meeting, according to the minutes.

Draft proposals for several mechanisms "for initiation and application" of the product development fee were expected at the July 11 meeting, according to the minutes.

FDA hopes to reach an agreement with industry by the end of July and gain congressional approval for it in conjunction with a generic drug user fee program and reauthorizations of the Prescription Drug User Fee and Medical Device User Fee and Modernization acts (Also see "Biosimilar User Fee Negotiations Under Way; Timetable Compressed" - Pink Sheet, 4 July, 2011.).

Innovator, Follow-On Fee Levels Create Tension

Negotiations over the biosimilar fee level compared to innovator biologics appeared to become a little chippy during the June 30 session. Some individual companies participating in the talks, as well as the Pharmaceutical Research and Manufacturers of America and Biotechnology Industry Organization, said they supported paying the same amount for both application types at least through the first five-year program cycle. The Generic Pharmaceutical Association again said it did not fully support it.

The groups largely stuck to their original positions on the subject. GPhA has argued FDA should charge 50% to 65% of the full BLA (Also see "Biosimilar Product Development Fee Should Be Temporary, Trade Groups Say" - Pink Sheet, 20 June, 2011.).

The minutes then stated "industry" was not certain it was "willing to pay 100 percent of the fee amount charged for 351(a) marketing applications," according to the minutes. Whether industry participants shifted their stance is unclear, but FDA fired back quickly, according to the minutes.

"In response, FDA questioned whether industry was interested in increasing business certainty and enabling shorter timeframes for the completion of FDA reviews," according to the minutes. "If so, then the program would require adequate resourcing to support that. FDA would need fees comparable to those charged under PDUFA."

There was no industry response in the minutes.

During the first negotiating session, industry and FDA disagreed on how performance goals should be implemented. Industry did not believe the agency should phase in the percentage of applications reviewed on time throughout the first program cycle. FDA countered there would not be enough funding or staff at program launch to support a more ambitious goal (Also see "Biosimilar User Fees: Industry, FDA Tussle On Ramp-Up Speed For Program" - Pink Sheet, 14 July, 2011.).

Guidance By The End Of The Year

The agency also intends to issue "general guidance" on biosimilar product development by the end of 2011, Commissioner Margaret Hamburg said in written testimony released July 28 to the Senate Committee on Health, Education, Labor and Pensions. She also said the agency is working with sponsors to provide development program-specific advice.

Many sponsors already are in talks with the agency about using the biosimilar pathway, even though no guidance has been issued on how it will work (Also see "FDA “Busy” With Biosimilars; Sponsors Already In Pre-IND Meetings" - Pink Sheet, 16 May, 2011.).

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

How Should FDA Collect The Biosimilar Product Development Fee?

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