Regulatory Focus™ > News Articles > GAO: FDA Needs a Plan for GDUFA Carryover Fees

GAO: FDA Needs a Plan for GDUFA Carryover Fees

Posted 27 June 2017 | By Michael Mezher 

GAO: FDA Needs a Plan for GDUFA Carryover Fees

As Congress looks to reauthorize the US Food and Drug Administration's (FDA) user fee programs, the Government Accountability Office (GAO) on Monday released a report saying that FDA should develop a plan for managing unspent fees collected from generic drugmakers.

"Such a documented plan could aid Congress in determining the appropriate amount of user fees to be collected by the agency during the annual appropriations process and when considering a reauthorization of the user fee program," GAO says.

The report also comes as FDA takes steps to revamp its generic drugs program to boost competition by offering shorter review times, prioritizing more applications and listing off-patent drugs with no approved generic competitors.

GAO does, however, say that FDA has put the fees it's collected under the Generic Drug User Fee Amendments (GDUFA) to good use, noting that the agency improved review times for generic applications, upgraded its IT systems and bested its goals for hiring new staff.

New generic drug application review times decreased from 28 months for those submitted in fiscal year to 2012 to about 14 months for those submitted in fiscal year 2015. GAO says FDA also committed to reviewing 60% of abbreviated new drug applications (ANDAs) submitted in fiscal year 2015 within 15 months and FDA actually took action on 89% of such ANDAs, surpassing its goal. The report contradicts recent media coverage saying FDA has not sped up generic drug approvals.

Carryover Planning

According to GAO, FDA was left with a $174 million carryover from previous years at the beginning of fiscal year 2017.

GDUFA Carryover

"Despite the large carryover amounts, FDA has not developed a planning document on how it will administer its carryover—one that includes a fully documented analysis of program costs and risks to ensure that its carryover reflects expected operational needs and probable contingencies," GAO writes.

And while GAO says that FDA keeps track of its fee collections, obligations and carryover amounts for each year, the agency was not able to show that the carryover amounts were within a pre-specified goal for any year of the program.

"We have previously found that when unobligated balances are used as carryover, it is important to establish a target range for the carryover to ensure user fee resources are used efficiently and responsibly and that the amounts carried over into the following year are reasonable to meet program needs, risks, and probably contingencies," GAO says, adding that FDA's approach is "inconsistent" with federal best practices for managing fees.

GAO also takes FDA to task over the lack of such a plan in light of FDA's commitment to increasing financial transparency under the GDUFA II negotiations.

"By not developing a planning document FDA cannot effectively communicate to external stakeholders the amount of its carryover balance and its plans for using it," GAO says.


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