Industry Voices: PDUFA V Is A Step In The Right Direction

By Raj Riswadkar and Rita E. Numerof, Numerof & Associates

In a congressional cycle paralyzed by partisan gridlock, early reauthorization of PDUFA--the Prescription Drug User Fee Act--was hailed as a triumph for the current Congress. Not only did the law pass with bipartisan support, it passed ahead of schedule. So why was this particular piece of "must-pass" legislation able to garner the nearly unanimous support of Congress, the FDA, Big Pharma, and lobbyists alike?

Innovation in drugs and medical devices has been a crown jewel for the U.S. economy, and ensuring that the FDA can continue to add resources and reduce the time it takes to approve a product is a cause that even as divided a group as Congress can rally behind. Understanding what's included in the FDA Safety and Innovation Act (FDASIA) and its ramifications for the larger medical products market, will be critical to preparing for the implementation of the law in October.

Over the last 20 years, PDUFA has been reauthorized four previous times by Congress with an aim of improving the FDA's efficiency while fostering pharmaceutical innovation in the United States. This theme is also represented in the current reauthorization (FDASIA) with the addition of two new "UFAs" (User Fee Acts), which are the Generic Drug User Fee Act (GDUFA) and the Biosimilar User Fee Act (BsUFA). These add to the existing Medical Device User Fee Act (MDUFA) and PDUFA programs, streamlining and defining the generic and the biosimilar drug approval process.

For PDUFA and MDUFA, which are going through a 5th and third renewal respectively, the key change is a focus on efficiency, reflected in goals of an 8-month review process for New Drug Applications (NDAs) and Biologics License Applications (BLAs) in PDUFA and a 180-day premarket approval (PMA) review process in MDUFA. In addition to making the process, timing and cost of bringing a new drug or device to market more predictable, the law's target of a 90-day review for 510(k) applications for devices also helps foster competition, an important aspect in keeping device prices under control. Furthermore, PDUFA V requires earlier discussions with the agency about risk evaluation and mitigation strategies (REMS) as well as an increasing focus on post-market surveillance of drugs.

There are also some entirely new elements in FDASIA--for example, the addition of GDUFA. With an estimated 800  abbreviated new drug applications (ANDAs) submitted each year and an estimated 2,700-plus ANDAs backlogged as of 2012, generics manufacturers hope to experience a streamlined approval process through GDUFA. Given that over the last 5 years, the average wait times for ANDA approvals have gone from 12 to 18 months to more than 31 months, GDUFA aims to bring that time down to 15 months in fiscal 2013 and eventually to 12 months. This will likely increase the pace of competition as products are approved faster and flood the market thus helping drive down the cost of medication. The law also includes a backlog fee for all the ANDAs that will not receive a tentative approval by Oct. 1. Thus in fiscal 2013, $50 million of the user fee funding will be distributed equally as a "backlog fee" over the total number of unapproved ANDAs as of Oct 1. Companies can withdraw their ANDA before Oct. 1, should they not wish to pay the user fee.

Another provision of GDUFA may help ensure better vigilance of quality and safety standards at foreign-based manufacturers just as is customary for U.S.-based generics manufacturers. The agency estimates that today about 40% of drugs consumed in the U.S. are manufactured outside the country and 80% of the active pharmaceutical ingredients come from abroad. Historically, the FDA has been resource-constrained to conduct inspections overseas. In GDUFA, both domestic and foreign facilities will be subjected to a biennial inspection where foreign facilities will have to pay at least $15,000 more but no more than $30,000 in their annual facility fee to cover such inspection costs. This may help level the playing field between foreign and U.S. generics facilities in terms of FDA oversight and help improve safety of the products being manufactured abroad.

The other new program, BsUFA, deals with review and approval of biosimilar applications as defined by the Biologics Price Competition and Innovation Act (BPCIA). Via BsUFA, the government aims to create a quick, well-defined and transparent review process, a much-needed boost for the biosimilar industry to flourish in the U.S. BsUFA aims to complete 70% of the biosimilar submissions in fiscal 2013 within a period of 10 months.

While the changes to PDUFA and MDUFA and the introduction of GDUFA and BsUFA are important, they are essentially aimed at streamlining the drug/device approval process. The success or failure of these changes will depend upon how well the FDA manages to achieve its goals. The user fee acts have provided additional resources for the FDA to focus on approving products more quickly, but the next challenge will be improving its processes, ensuring sufficient focus on what happens after a product is approved, and making sure that the FDA is delivering on its mandate of ensuring safety and efficacy, even as drugs, devices and biologics grow increasingly complex.

Raj Riswadkar is a senior consultant and Rita E. Numerof is president at Numerof & Associates Inc. (NAI). NAI is a strategic management consulting firm focused on organizations in dynamic, rapidly changing industries.