Small CMOs face potential closure, consolidation overhang if GDUFA 2 renews or raises inspection fees - experts

17 Jun 2016

Small contract manufacturing organisations (CMOs) may be forced to close shop if next year’s Generic Drug User Fee Amendments (GDUFA) continues to charge inspection fees at the same rates or higher, experts said. They noted the interests of large CMOs and generics companies are not aligned with their smaller counterparts as to how to negotiate fees and generic drug application review timelines.

The FDA introduced GDUFA in 2012 to levy fees on drug companies for reviewing abbreviated generic drug applications (ANDAs) and on manufacturers and CMOs for agency inspection of generics production facilities. The agency and US Congress will need to authorise a new version (“GDUFA 2”) before the current one expires in September 2017, or extend the current regulation if it is to continue collecting revenue, said experts.

CMOs and generic drug companies have been in official and unofficial consultations with FDA throughout the last year to negotiate the content of GDUFA 2, said experts.

Since the introduction of GDUFA in 2012, the generics industry has been adjusting to paying fees for ANDAs and facility inspections for the first time, which previously only the branded industry paid under the Prescription Drug User Fee Act (PDUFA), said Jim Miller, president, PharmSource Information Services, Fairfax, Virginia. While the GDUFA reduced the backlog of generic applications, it resulted in a major ongoing renegotiation between pharma, CMOs and FDA over which bodies should pay facility fees, he said.

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