Colgate, Other Generic Companies Hit by FDA for Failure to Pay Facility Fees
Posted 26 August 2014 | By
The US Food and Drug Administration (FDA) this week issued an unprecedented four Warning Letters to companies, including the consumer healthcare company Colgate, for failing to pay user fees as part of the Generic Drug User Fee Act (GDUFA).
The act, passed in 2012 as part of the Food and Drug Administration Safety and Innovation Act (FDASIA), includes requirements that all generic drug facilities must register with FDA and pay an associated user fee meant to fund FDA's inspections of those same facilities. Prior to the passage of the law, FDA had few resources with which to inspect generic drug manufacturing facilities, and in particular those based outside the US.
"Self-identification is a central component of an effort to promote global supply chain transparency," FDA explained in a draft guidance released in August 2012."The information provided through self-identification will enable quick, accurate, and reliable surveillance of generic drugs and facilitate inspections and compliance."
A generic drug "facility" is a defined broadly under the act, encompassing any place (foreign or domestic) that manufactures, finishes, packages, re-packages or labels the product, as well as any organization that conducts bioequivalence or bioavailability testing on generic products and other testing sites. FDA also requires active pharmaceutical ingredient (API) manufacturers to register.
In a September 2013 Question and Answer guidance document on GDUFA registration, FDA also explained what companies can expect if they fail to register with FDA and pay the GDUFA facility fee:
There are several consequences for failure to pay a facility fee. No new generic drug submission referencing the facility will be received until the fee is paid. In addition, the facility will be placed on a publicly available arrears list if the fee is not fully paid within 20 days of the due date. And, FDA will notify the ANDA applicant of the facility’s failure to satisfy its user fee obligations. Furthermore, all FDFs or APIs manufactured in the non-paying facility and all FDFs containing APIs manufactured in such a facility will be deemed misbranded. This means that it will be a violation of federal law to ship these products in interstate commerce or to import them into the United States. Such violations can result in prosecution of those responsible, injunctions, or seizures of misbranded products. Products misbranded because of failure to pay facility fees are subject to being denied entry into the United States.
Additionally, goal dates will not apply to applications that have already been received but list facilities for which facility fees are owed.
In short: New generic drug applications will be put on hold and existing drugs will be deemed "misbranded" and banned.
Existing GDUFA Letters
But despite the high costs of noncompliance, some companies have still found themselves in arrears with FDA.
To date, FDA has sent just four Warning Letters to companies regarding their failure to pay GDUFA facility registration fees:
"The owner of the above referenced facility has failed to pay the appropriate facility fee as required by the Generic Drug User Fee Amendments of 2012(GDUFA)," the letters state.
Now FDA has issued an additional four letters to generic drug facilities for allegedly failing to pay "the appropriate facility fee" under GDUFA.
All four companies were advised to take "prompt action to correct the violations." According to FDA's GDUFA arrears list, consumer products company Colgate has already paid the fee, as has Korea United Pharm, which manufactures both finished pharmaceuticals and APIs.
Calaire Chimie and Explora Labs, both API manufacturers, remain in arrears with FDA as of 26 August 2014.