Small business fee waivers or discounts may be coming for generic drug makers, but it likely will be at the expense of larger companies.

Generic drug user fee reauthorization discussions have moved to dealing with a congressional directive to "consider relief for small businesses," which could take a number of potential forms.

But a subgroup of FDA and industry representatives indicated that any "possible solutions should be easy to operationalize," and that discounts or waivers for one industry segment "would require increased fees from all others," according to minutes of a Dec. 1 meeting.

Options involving application and facility fees were discussed during a Dec. 10 session.

The most impactful waiver in terms of dollars could be for facility fees, which are charged annually to active pharmaceutical ingredient and finished dosage form manufacturers.

Domestic finished dose facilities paid $243,905 in fiscal year 2016. Domestic API facilities paid $40,867.

Foreign API and finished dosage form facilities pay more in part because of FDA's increased travel costs for inspections.

Application fee waivers or discounts may not prove as significant, in part because they are not as expensive as some of the facility fees and are only paid per application filed.

ANDA fees in FY 2016 are $76,030 ([A#14150731001]).

ANDA filings had been low for several months, but picked up at the end of 2015 as ANDA approvals also surged ([A#14160107003]).

How Much Will Facility Fee Waiver Affect Others?

Allowing waivers could dramatically increase facility fees for those not classified as small businesses.

The current GDUFA fee structure assigns a specific percentage of the total fee revenue for the year to facility fees.

Facility fees account for 70% of all GDUFA fee revenue each year from FY 2014 through FY 2017, after charging a one-time fee for applications in the backlog during year one.

Finished dose facility fees account for 56% and API facility fees 14% of the total. ANDA, prior approval supplement and Drug Master File fees are the remaining 30% of revenue Also see "GDUFA: Fee Avoidance Affects Rates Again" - Pink Sheet, 12 August, 2013..

Facility fees also are determined in part by the total that self-identify with the agency. If small businesses are allowed a fee waiver, they could be removed from the total and increase the burden on the others.

There have been calls for some sort of small business waiver of GDUFA fees almost since the program launched.

Sponsors complained that facility fees were too high and made it difficult for new manufacturers to enter the market.

Some also said it was difficult to pay the fees without revenue from existing product sales Also see "Generic User Fees Need Small Business Waiver, Firms Say; Congress May Agree" - Pink Sheet, 24 June, 2013..

One company filed a citizen petition with the agency asking that FDA only charge GDUFA facility fee one time until a sponsor's first ANDA is approved. But the agency denied it, in part because the law states that no waivers are possible Also see "FDA Says It’s The Law, Denies Petition Requesting GDUFA Fee Payment Changes" - Pink Sheet, 26 November, 2013..

When reauthorization talks were about to begin in 2015, though, agency officials seemed to have warmed up to the idea. Stakeholders argued that multi-year ANDA approval times made paying the fees a hardship ([A#14150615006]).

The issue also may come up during a Senate Health, Education, Labor and Pensions Committee hearing on GDUFA, currently scheduled for Jan. 28, on whether GDUFA has allowed patients expeditious access to generic drugs.

Center for Drug Evaluation and Research Director Janet Woodcock is scheduled to appear.

Small Business Definition May Be Difficult

During the Dec. 1 and Dec. 10 meetings the subgroup also discussed methods of defining a small business.

Among the options discussed were using the number of employees or revenue, according to minutes of the Dec. 10 session.

FDA and industry also talked about creating different definitions for manufacturers and ANDA applicants, according to the Dec. 10 minutes.

Defining a small business may prove to be one of the more difficult aspects of the process. Other FDA user fee programs define the term differently.

The prescription drug user fee program allows application charges to be waived if the sponsor is a first-time applicant and has no other approved products. Sponsors also must employ fewer than 500 people, including affiliates.

The user fee created to fund FDA oversight of compounding operations registered with FDA as outsourcing facilities states that a small business in that case is defined as operations with gross annual sales of $1m or less during the previous year. Qualifiers pay one-third of the fee.

The reduction also means conventional outsourcers must pay more ([A#00150803021]).

Generic User Fee 'Relief' For Small Firms Would Mean Bigger Bills For Large One

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