February 20, 2006

A top FDA official said the agency is considering user fees for generic drug companies -- a move that comes as the FDA's generics division faces a backlog of applications and is slated for virtually flat funding in fiscal 2007.

Scott Gottlieb, the agency's deputy commissioner for medical and scientific affairs, raised the possibility of industry fees at the Generic Pharmaceutical Association's (GPhA) annual conference Feb. 17. "It's clear we cannot continue to improve our generic drug program alone," Gottlieb said in prepared remarks. User fees have been applied with great success in both the brand drug and medical device industries, he added.

When asked how much the FDA might charge generic firms for user fees, Gottlieb told FDAnews, "We haven't thought that through yet."

But GPhA President and CEO Kathleen Jaeger said generic user fees are not appropriate. "The purpose of brand company user fees is to ensure a faster approval process for applications," she said. Unlike applications from brand or medical device companies, generic applications are subject to an intellectual property approval system, Jaeger said. This system is fraught with unintended legal and regulatory loopholes.

"Given this environment, the generic pharmaceutical industry would consider paying user fees if the FDA and the Bush administration would endorse legislative and other changes that the industry believes would speed its products to market," Jaeger said. Instead of user fees, GPhA suggested increased funding for Office of Generic Drugs (OGD). "A modest investment in OGD -- such as $15 million -- would help to make more affordable medicines available to consumers and public and private health care purchasers, who would save billions of dollars," Jaeger said.

Gottlieb defended the FDA's fiscal 2007 budget for OGD, and strongly rejected criticism by some observers that the proposed funding level calls into question the agency's commitment to the generic approval process. The proposed budget would fund OGD at $29.1 million in 2007, compared to $28.3 million in 2006. The slim increase comes as OGD faces a backlog of 800 generic drug applications.

"The fact is since [fiscal 2001], the budget of the Office of Generic Drugs has doubled, and during this time the overall number of full time personnel has increased from 143 to the present level of 201," Gottlieb said. "In 2005 alone, 12 employees were added and we plan to add more in 2006."