GDUFA III fiscal details emerge

The generics industry can expect the US Food and Drug Administration (FDA) to take a more flexible approach to resource capacity planning and continue a commitment to financial transparency, according to fiscal experts from the agency who spoke at an FDA meeting earlier this week.
 
Although much of the framework for the third reauthorization of the Generic Drug User Fee Amendments (GDUFA III) program could be gleaned from the commitment letter released by the US Food and Drug Administration (FDA) on 2 November, some details were left to be fleshed out. Agency officials reviewed updates and entertained comments from industry and the public during a virtual meeting held 16 November.
 
The GDUFA III commitment letter devotes several pages to describing plans for “continued enhancement of user fee resource management,” with an emphasis on achieving sustainability of program resources and ensuring that the program can meet the changing needs of the generic industry. (RELATED: GDUFA III commitment letter details coming changes to FDA's generic review program, Regulatory Focus 02 November 2021)
 
Only generic-related activities will go into resource capacity planning under GDUFA III. These include abbreviated new drug applications (ANDAs), resubmissions, supplements and amendments. Other activities contributing to generics-related FDA workload include controlled correspondence and pre-ANDA meetings, as well as surveillance inspections and other post-marketing safety activities. Suitability petitions are the final contributor to workload that may be taken into consideration for generic-related resource capacity planning, according to the commitment letter.
 
Lisa Berry, an analyst in CDER’s Office of Management, and Bethany Rue, a data scientist in the Office of Strategic Programs, gave meeting attendees an overview of the fiscal and resource management landscape for GDUFA III, and also provided finer detail about how the agency plans to implement the resource capacity planning promised in GDUFA II.
 
“As in GDUFA II, GDUFA III has five fee types,” said Berry. The ANDA filing fee will bump up slightly from 35% to 36% of target revenue. However, the active pharmaceutical ingredient facility fee is dropping from 7% to 6% of target revenue. Otherwise, said Berry, allocations are staying the same. Although facility fee allocation is overall unchanged at 20%, the fee for contract manufacturing organization will drop from one third to 24% of the finished drug form fee. “The fees remain unchanged at $15,000,” noted Berry.
 
Regarding hiring, FDA plans to hire 128 additional staff to support generics efforts, and the agency expects to provide progress updates as hiring progresses “as part of our commitment to financial transparency,” said Berry.
 
Rue then reviewed the capacity planning adjustment that will roll out with GDUFA III, setting the initiative in the context of plans made in the last reauthorization. “During GDUFA II, FDA committed to build a resource capacity planning capability which included implementation of modernized time reporting and development of a methodology to accurately assess changes and the resource needs of the generic drug program,” she said. The plan to implement this capability is due for publication in March 2023, with annual updates in the interval.
 
By the end of FY 2025, FDA has committed to publishing the results of an independent third-party evaluation of resource capacity planning and the capacity planning adjustment (CPA), she added.
 
Rather than have a final year adjustment as in GDUFA II, the GDUFA III framework sees the transition to an operating reserve framework. “The adjustment will be baked in and give FDA the operation to increase target revenue to maintain at least 8 weeks of reserve in fiscal year 2024, 9 weeks in fiscal year 2025 and 10 weeks for fiscal year 2026 and thereafter,” explained Rue. The maximum estimated operating reserve cannot exceed 12 weeks, she added; each year also includes an adjustment for inflation.
 
Public Meeting on the Reauthorization of Generic Drug User Fee Amendments (GDUFA)