US generic drug fee relief plan may benefit Indian companies

American health regulator FDA could consider bringing some relief in payment of fees to small generic drug makers, including those from India, if a newly proposed legislation is enacted.
With the US Food and Drug Administration proposing to hike the fees for generic drug-makers for next fiscal, concerns had been raised on the financial burden that the one-size-fits-all fee structure creates issues for the smaller units, which typically face cash crunch problems.
Congressman Robert Hurt introduced a legislation along with Congressman Phil Roe this month that seeks to level the playing field for generic drug user fees so that smaller manufacturers would be expected to pay fees that reflect the relative size of their firms compared to giants.

The Small Manufacturer Protection Act of 2013 would add new provisions allowing for waivers and refunds of user fees.
"The expectation that all manufacturers pay the same fees, regardless of their size, is unrealistic and should be adjusted to accommodate these smaller companies so they can continue to innovate, produce and compete," Hurt said in a statement.
While the fees collected by FDA garner the funding required for the agency to review generic drug submissions, failure to pay up results often results in stiff penalties.

For instance, failure to timely submit the annual facility payment means that FDA would not be able to receive new Abbreviated New Drug Applications or Prior Approval Supplements referencing these facilities until outstanding fees are paid.

The FDA is tight-lipped on the effect of the legislation. "The Administration does not have a position on this legislation," Sandy Walsh, an FDA spokeswoman, said in an e-mailed reply to queries in this regard.
India is the second largest drug exporter to the US. Indian drug-makers mostly specialise in manufacturing of generic versions of innovative drugs at a fraction of cost after their patent expiry and are estimated to command 10 per cent share in the US generic drug market.
"The bill does not discriminate between domestic and foreign companies. Thus, small Indian companies could benefit if the bill is enacted," Kurt Karst, Director at top US law firm Hyman, Phelps & McNamara told PTI.

The US regulations require companies to pay user fees to supplement the costs of reviewing generic drug applications and inspecting facilities.