US to hike fees for generic drugmakers; Indian firms to be hit

India is the second largest drug exporter to the US, according to FDA

Many Indian drugmakers will soon have to bear higher costs for sale of products in American markets, as the US health regulator FDA is hiking the fees for generic drugmakers by up to 48% from October.

India is the second largest drug exporter to the US, according to the Food and Drug Administration (FDA).

Indian drugmakers 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% share in the $30-billion US generic drug market.

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

However, the FDA's proposed hike in fees for generic drugmakers is expected to push up the overall costs for companies from India and other countries, including US itself.

The FDA said it is aware that industry is adjusting to the new requirements and fees, and it has minimised the increase in fees "as much as possible".

The increased fees have been published in the Federal Register -- the official journal of the US government -- are would be effective from October 1, 2013. The fees would be reviewed after a year.

The new Abbreviated New Drug Application (ANDA) fee has been fixed at $63,860, which is around 24% higher than the existing $51,520.

An ANDA contains data which when submitted to FDA's Center for Drug Evaluation and Research, Office of Generic Drugs, provides for the review and ultimate approval of a generic drug product.

Similarly, the Prior Approval Supplement (PAS) fees for fiscal year 2014 (from October 1, 2013 to September 30, 2014) has been hiked by 24% to $31,930. The PAS application includes change to be made to approved products.

The steepest increase has been made in Drug Master File (DMF) fees, which has been hiked by 48% to $31,460.

A DMF submission is required to be made to the USFDA to provide detailed information about facilities, processes, or articles used in the manufacturing, processing, packaging, and storing of one or more human drugs.

The annual facility fees for finished dosage forms (FDF) have been increased by about 25%. The domestic FDF facility fee has been revised to $220,152 and foreign FDF facility fee to $235,152.

However, the FDA has lowered the annual active pharmaceutical ingredient (API) fees for both domestic and foreign API facilities.

FDA says that these fees help it reduce the backlog of pending applications, cut the average time required to review generic drug applications for safety, and improve the risk-based inspections.