Indian drugmakers to pay higher facility fees on US hike

The US laws authorise the drug and health watchdog to assess and collect user fees for certain applications and supplements for human generic drug products

Drugmakers from India, the biggest source of medicines to the US, may soon have to cough up 12-15 per cent more in annual facility fees as the Food and Drug Administration (FDA) has announced new rates.

The US laws authorise the drug and health watchdog to assess and collect user fees for certain applications and supplements for human generic drug products.

The new rates, applicable on companies from all nations, are effective from October 1 and will remain in force through September 30, 2015, as per a communication from FDA.

A Foreign FDF (Finished Dosage Form) facility will pay $262,717 (approx Rs 1.6 crore) now compared to $235,152 a year ago -- an increase of 12 per cent.

India is home to over 150 FDA-approved plants, including facilities run by global MNCs. Of the total facilities identified as FDF, there were 271 domestic facilities and 410 foreign facilities, including those in India.

Similarly, a Foreign API (Active Pharmaceutical Ingredient) facility would attract USD 56,926 (about Rs 34.7 lakh) as fees -- 15 per cent higher than the current rate.

Of the total facilities identified as API facilities, there were 103 domestic facilities and 692 foreign facilities.

Facility fees are required to be paid by those owning a facility, which is identified or intended to be identified in at least one generic drug submission that is pending or approved to produce one or more generic drug FDFs and/or APIs.

If a facility manufactures both generic FDFs and APIs, it incurs both annual FDF and annual API facility fees. Foreign generic drug facility fees are about $15,000 higher than domestic plants as FDA reasons the differential reflects the additional costs of inspections funded.

For the US facilities, the FDF facility fee this year is $247,717 and the API facility fee is $41,926.

Interestingly, the total FDF and API fees collected from domestic as well as foreign facilities account for 70 per cent of the USD 312 million target fee revenue amount for FY 2015. This is why, industry players say, the cut in filing fees this year provides little relief.

The new fee for drug master files (DMFs) is $26,720 (approximately Rs 16.3 lakh), down 15 per cent year-on-year. The rates for abbreviated new drug applications (ANDAs) has also been lowered about 8 per cent to $58,730. The same for PAS (prior approval supplement), which is equal to half the ANDA fee, will be about 7 per cent less at $ 29,730.

FDA estimates there will be 1,065 ANDAs and 449 PASs.

In case fees are not paid, no new generic drug submission referencing the facility will be received until fees are paid. Further, all FDFs or APIs manufactured in the non-paying facility and all FDFs containing APIs manufactured in such a facility are deemed misbranded.

Indian companies usually supply about 20-25 per cent of the medicines used in the US. America accounts for about 25 per cent of India's about USD 15 billion pharma exports.