Some generic drug manufacturers received a rude awakening Jan. 16, as FDA set their pending facility user fee charges much higher than had been anticipated.

Domestic finished dosage form manufacturers will pay $175,389 and domestic active pharmaceutical ingredient manufacturers will pay $26,458 per facility in fiscal year 2013, according to a notice scheduled to be published in the Federal Register Jan. 17.

Foreign facilities will be charged an additional $15,000 to cover the extra cost for FDA inspectors and other personnel to travel overseas.

The finished dosage form facility fees are much higher than the estimates the agency used when the generic drug user fee program was created. In December 2011, the agency indicated finished dosage form facilities would be charged about $150,000.

GDUFA Facility Fees

Domestic Finished Dosage Form: $175,389
Foreign Finished Dosage Form: $190,389
Domestic API: $26,458
Foreign API: $41,458

At that time, FDA said API facilities would be charged about $35,000 as part of the new generic drug user fee program Also see "Generic Facility Fee Unlikely To Be Charged Until A Few Months After GDUFA Implementation" - Pink Sheet, 19 December, 2011..

All of the other GDUFA fees were much lower than had been estimated ([A#14121024002]).

Among them was the fee for the backlog. Sponsors placed more applications into the backlog in the days leading up to GDUFA’s launch in part because the associated fee was cheaper than the standard ANDA fee Also see "Backlog Backfire: FDA Sees Increase In Pending Generic Applications At Deadline" - Pink Sheet, 15 October, 2012..

Donal Parks, director of the Center for Drug Evaluation and Research’s Office of User Fee Collections and Budget Formulation, said during a conference call with reporters that the agency felt the numbers were not “too far off” the initial estimates.

He reiterated that FDA was forced to rely on information submitted by industry in order to determine the fees.

“We’re just doing the math,” Parks said.

GDUFA launched in October 2012 as part of an effort to strengthen FDA’s oversight and review of generic drug products. It includes new user fees for ANDAs, Drug Master Files and prior approval supplements, along with a one-time fee for applications pending when the program launched.

The facility fee had been the only one that had not been determined because FDA had to wait until it could gain an accurate count of all manufacturers in the U.S. generic market.

That was done through a self-identification process. It was supposed to end Dec. 3, but was extended until Dec. 18 to give industry more time to register facilities Also see "GDUFA Self-Identification Woes Can’t Deflate Industry, FDA Enthusiasm" - Pink Sheet, 17 December, 2012..

After the grace period, industry officials said they thought nearly all the relevant facilities had registered ([A#14130104002]).

Foreign API Manufacturers Tilt Estimates

The total revenue from each fee in FY 2013 was pre-set in FDA’s agreement with industry.

The entire program must generate $299 million, including $139.44 million from finished dosage form facility and $34.86 million from API facility fees. The more facilities that self-identified with FDA, the less each of them would pay per facility.

Parks said negotiators had estimated about 2,000 fee-paying facilities would participate in the self-identification process. But only 758 finished dosage form and 885 API facilities actually registered.

The total, 1,643, was nearly 18% less than the estimate. It ended up forcing the finished dosage form fee 17% higher for domestic firms.

The API facility fee ended up more than 24% less than estimated for domestic firms, although that may have been due to the number of foreign API facilities that registered.

Parks said 763 of the 885 API facilities (86%) were located outside the U.S. Since the vast majority of API firms will be paying the $15,000 foreign facility surcharge, it likely affected the domestic facility fee.

Finished dosage form facilities were split more evenly. There were 325 domestic and 433 foreign facilities that registered.

FDA decided to allow the self-identification grace period in part because it determined a large number of the facilities referenced in ANDAs submitted after GDUFA launched were not registered.

Only a portion of the facilities anticipated to self-identify had actually done so as the deadline neared Also see "GDUFA Facility Self-Identification Pace Slow As Deadline Neared" - Pink Sheet, 3 December, 2012..

But Parks said after the grace period ended about 98% of all the facilities referenced in post-Oct. 1 ANDAs had registered.

Mary Beth Clarke, acting director of the CDER Office of Executive Programs, said it is possible the figures did not come out as anticipated because the industry is fast-moving.

Clarke said firms join and exit the generic industry quickly and that the figures represent only a snapshot.

Payments Due March 4

Parks said firms can begin paying fees on Jan. 17 using FDA’s online payment system.

All facility fees must be paid by March 4, which is the first business day 45 days after the notice was published. Firms that miss the deadline will be placed on an arrears list.

Any product made at facilities or using product from facilities on the arrears list will be considered misbranded.

Parks said there is no late fee or other monetary penalty for missing the payment deadline.

Any new generic drug facilities that open during the fiscal year or others that decide to manufacture for the U.S. market still can self-identify. Parks said the system will remain available for the remainder of the fiscal year and those firms will be charged the fee.

The self-identification process will begin again later in the year to determine the FY 2014 facility fees.

GDUFA Facility Fees Will Be Significantly Higher Than Expected

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