FDA releases budget request as GPhA shows generic savings

On 7th May 2009, the FDA announced its budget request for fiscal year 2010. The agency has requested a budget of US$3.2 billion overall, representing an increase of 19% over the current FDA fiscal year budget. Much of the request focuses on two major initiatives for FY2010: Protecting America’s Food Supply and Safer Medical Products. However, the request also includes proposals for four new user fees; one of these relates to generic drugs. The issue of introducing generic drug user fees has been around for a while, and the Generic Pharmaceutical Association (GPhA) responded to the proposal with the same views it has expressed when the issue has come round before. The organisation commented that the generic industry is open to user fees, but with the caveat that there would need to be guarantees that the fees would aid in the timely review and approval of generic applications.

Specifically, the GPhA has identified what it considers to be core issues, which it claims have been around for over a decade. These include the citizen petition process, scientific, regulatory and legal consultations, enhanced communication, more inspection resources and the accountability and structure of the Office of Generic Drugs (OGD). The organisation cites as an example that in 2007, the brand industry held 2,200 meetings with the FDA, yet the generic industry had only seven meetings, making the argument that unless the FDA and the industry communicate more effectively, generics will not get to consumers faster. The organisation added that generic applications that are subject to scientific, regulatory or legal consults can remain stuck in limbo for months, if not years, which again results in products being delayed entry to the market. The GPhA has acknowledged that the FDA needs more resources to review and approve generics, but argues that increasing resources alone will not help; instead, the agency also needs to tackle the underlying problem of timely consumer access. For its part, the FDA has released figures which show that the Center for Drug Evaluation and Research (CDER) has seen a dramatic increase in its workload, with the number of ANDAs almost doubling over the past five years, whilst its staffing levels have increased at a much slower rate. In FY2008, CDER approved or tentatively approved 598 applications, and received 830 ANDAs. This compared to 310 approvals or tentative approvals and 307 receipts in FY2001. Interestingly, the number of receipts in FY2008 was down slightly, compared to the 880 received in FY2007, marking the first dip since before FY2001.

It can surely be no coincidence that on the same day that the FDA released its budget request, the GPhA also released details of a report it commissioned from IMS Health showing that generics had saved the American healthcare system more than US$734 billion in the last decade. The report also showed around US$121 billion was saved in 2008 alone. The report was commissioned as part of efforts to mark the 25th anniversary of the passing of the Hatch-Waxman Act, but the timing and its message that generics save money, seems to be more aimed at pushing for an increase of funding for the FDA’s generic drugs function. Preferably, it seems, through tax money rather than user fees from the industry.

Ian Platts - Editor, World Generic Markets