Aug. 11: Many Indian drug firms will soon have to bear higher costs for sale of products in American markets, as the Food and Drug Administration, the US health regulator, is hiking the fees for generic drug makers by up to 48 per cent from October.
India is the second-largest drug exporter to the US.
Indian drug makers mostly specialise in manufacturing generic versions of innovative drugs, after the expiry of their patents, at a fraction of the cost. They are estimated to command a 10 per cent share in the $30bn US generic drugs market.
The FDA rules require companies to pay user fees to supplement the costs of reviewing generic drug applications and inspecting facilities.
The fee hike for generic drug makers is expected to push up the overall costs for companies from India and other countries.
A representative of the Indian drugs sector said the increase in fees would impact sections of the Indian industry and, in the long run, the prices of generic drugs in America.
“(Companies) who don’t have deep pockets may find it difficult to continue to file applications and wait for periods up to 30 months for business returns to come in,” said Dilip Shah, secretary-general of the Indian Pharmaceuticals Association.
“But because only serious players will continue in the market, the waiting periods (for approvals) may come down,” Shah told The Telegraph.
“Over a long period of time, if the number of generic players comes down, the lowered levels of competition may increase the prices of generic medicines in the US,” Shah said.
He said it’s estimated that among the $450 million generated from user fees last year, about $250 million came from Indian companies.The FDA said it was aware that the industry was adjusting to the new requirements and fees, and claimed it had minimised the fee hike “as much as possible”.
The increased fees have been published in the Federal Register — the official journal of the US government — and will apply from October 1 this year. The fees will be reviewed after a year.
The new Abbreviated New Drug Application (ANDA) fee has been fixed at $63,860, which is around 24 per cent higher than the existing $51,520.
An ANDA contains data which, when submitted to the FDA’s Center for Drug Evaluation and Research, Office of Generic Drugs, facilitate review and ultimate approval of a generic drug product.
Similarly, the Prior Approval Supplement (PAS) fees for the fiscal year 2014 (from October 1, 2013, to September 30, 2014) has been hiked by 24 per cent to $31,930. The PAS application includes the changes to be made to approved products.
The steepest increase comes in the Drug Master File (DMF) fees, hiked by 48 per cent to $31,460. A DMF submission is required to be made to the FDA providing detailed information about the facilities, processes or articles used in the manufacturing, processing, packaging and storage of drugs.
The annual facility fees for finished dosage forms (FDF) have been increased by about 25 per cent. The domestic FDF facility fee has been revised to $220,152 and the foreign FDF facility fee to $235,152.