Economic Impacts of the Generic Drug User Fee Act Fee Structure

Background: A Food and Drug Administration (FDA) Generic Drug User system, Generic Drug User Fee Amendment of 2012 (GDUFA), started October 1, 2012, and has been in place for over 3 years. There is controversy about the GDUFA fee structure but no analysis of GDUFA data that we could find. Objective: To look at the economic impact of the GDUFA fee structure. Methods: We compared the structure of GDUFA with that of other FDA Human Drug User fees. We then, using FDA -published information, analyzed where GDUFA facility and Drug Master File fees are coming from. We used the Orange Book to identify the sponsors of all approved Abbreviated New Drug Applications (ANDAs) and the S&P Capital IQ database to find the ultimate parent companies of sponsors of approved ANDAs. Results: The key differences between the previous structure for Human Drug User fees and the GDUFA are as follows: GDUFA has no approved product fee and no first-time or small business fee exemptions and GDUFA charges facility fees from the time of filing and charges a foreign facility levy. Most GDUFA fees are paid by or on behalf of foreign entities. The top 10 companies hold nearly 50% of all approved ANDAs but pay about 14% of GDUFA facility fees. Conclusions: We conclude that the regressive nature of the GDUFA fee structure penalizes small, new, and foreign firms while benefiting the large established firms. A progressive fee structure in line with other human drug user fees is needed to ensure a healthy generic drug industry.