Budget impasse stalls generic pharmaceutical sales user fee

The ongoing budget debate in Congress is threatening the multi-million dollar generic pharmaceutical sales user fee program, which could have a direct impact on industry jobs.

Bloomberg reports that the impasse could mean that the Food and Drug Administration (FDA) will not begin to review a slew of applications by generic drug makers, which was planned to start on October 1.

However, FDA officials said that without a budget agreement, the implementation of the Generic Drug User Fee Act (GDUFA) may not happen until well after the November 6 elections.

"This is an extraordinary law that has enormous consequences," Ralph Neas, chief executive officer of the Generic Pharmaceutical Association, said in a phone interview with the news agency. "We cannot allow implementation to be delayed."

The GDUDA is part of a bill that was passed in June that has pharmaceutical sales companies that make cheaper generic copycat versions of expensive blockbuster drugs pay $1.6 billion in fees over the next five years for the FDA to review their products. The broader scope of the act also allows the FDA to inspect factories outside the U.S. for contamination and safety violations more frequently. Those facilities supply as much as 80 percent of the nation's drug ingredients. Under the previous agreement, overseas plants were only inspected once every nine years on average, according to the news source.

Other provisions of the act will help to expedite the availability of low cost, high quality biosimilars while increasing what the agency said is "predictability and timeliness in the review process," which could help generate more pharmaceutical sales jobs.

According to the FDA, the program is not expected to significantly increase the overall costs of generic drugs to consumers. The agency said that approximately 78 percent of the 3.99 billion retail prescriptions that were filled in the U.S. in 2010 were for generics.

Without a budget agreement, the FDA is only required to ask the industry to pay $50 million of the $300 million in fees for fiscal 2013.

Mary Beth Clarke, acting director of the office of executive programs in the FDA's Center for Drug Evaluation and Research, told the news outlet that while the agency is prepared to start the program on time, it will lack the necessary resources to do so effectively if Congress does not pass a budget agreement before the fiscal year, which begins on October 1.