Finding the Good in GDUFA

It’s been just under a year since the U.S. Congress enacted the Food and Drug Safety and Innovation Act containing the Generic Drug User Fee Amendments, or GDUFA in the parlance of the industry. As most are aware, GDUFA is intended to speed the public’s access to safer, effective generic drugs by supporting financially the expansion of the Food and Drug Administration’s regulatory efforts covering the generics space. It is also intended to reduce overall costs to the industry by speeding up the Abbreviated New Drug Application (ANDA) approval process, which most in the industry recognize is broken. 
 

At this year’s Interphex, Jason Money, senior director of Federal Government Affairs for The Generic Pharmaceutical Association (GPhA) participated in a panel session “Understanding GDUFA” to discuss the emerging regulatory environment and its impact on the industry. According to Money, whose trade organization was one of the principle negotiators of GDUFA, the intent was “to fund all activities, so not only just the review and approval of generic-drug applications, but also with the inspections.” 
 

And funding has been woefully inadequate, witnessed by the number of ANDAs languishing in regulatory purgatory. One panelist noted 2,800 ANDAs are backlogged right now and that he was still waiting for one pre-approved in 2009. Of course, this kind of uncertainty is extremely costly, disrupting the industry’s ability to bring new generic formulations to the market. Said Money, “the key goals of GDUFA are: to advance the public health, the timely review and approval of generic drugs, ensure the safe and high quality of generic medicine, increase FDA transparency, help FDA address the challenges of globalization through greater inspection and advance regulatory science.” 
 

Money explained that an important portion of his association’s negotiations involved getting the FDA to agree to performance metrics that commit the administration to processing 90% of all ANDAs within 10 months of acceptance within five years. Currently the average approval takes 32 months. The intent was to assure that the FDA would create an efficient, well-staffed infrastructure to administer the approximately $300 million program.
 

GDUFA aims to address safety and quality concerns and level the playing field among the global players. Panelist Ed Price, president and CEO of PCI Synthesis offered this insight: “There are definitely concerns about the supply chain, and the safety of the supply chain, and by having all of these sites around the world self identifying themselves it allows the FDA to start collecting that data to the end, and implementing a system like GDUFA. And, hopefully, over the long term, it will reduce the risks within that supply chain.”
 

Unfortunately, GDUFA’s fee rubric is coming to be recognized as something that will disproportionately and negatively impact smaller players in the industry, primarily CMOs. “Obviously a big concern within the industry is who decided all of this,” said Price. “There seems to [have been] very little involvement of small to mid-sized companies.” Panelist Padam Bansai, vice president of R&D at Amino Pharmaceuticals, offered this: “It may create financial hardship to many small-scale industry. Some small branches may not be able to sustain such user fees, and ... it may discourage small business to enter into this field looking at these heavy expenses, and it may also discourage entrepreneurship in the field of pharma development and manufacturing.”
 

There is a great deal of evidence to suggest that GDUFA, as it is structured, will begin to deliver big benefits to the industry, but it’s going to take some time. At least the performance metrics the FDA and Congress agreed to set a timeline to meet these goals. But there’s also been some pushback and not everyone is happy about it — especially smaller players in the industry. Nevertheless, as the ANDA process begins to untangle and producers begin to see less risk and a faster path to positive cash flow, the market and its regulatory environment will be healthier for all.