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 Table of Contents  
Year : 2022  |  Volume : 14  |  Issue : 1  |  Page : 7-15

Impact of generic drug user fee act and other initiatives on generic drug approval process in the USA

1 Centre for Drug Regulatory Affairs and Pharmacy Practice, Amity Institute of Pharmacy, Amity University Uttar Pradesh, Noida, Uttar Pradesh; Mankind Research Centre, Gurgaon, Haryana, India
2 Centre for Drug Regulatory Affairs and Pharmacy Practice, Amity Institute of Pharmacy, Amity University Uttar Pradesh, Noida, Uttar Pradesh, India
3 Mankind Research Centre, Gurgaon, Haryana, India
4 Gokaraju Rangaraju College of Pharmacy, Hyderabad, Telangana, India

Date of Submission16-Nov-2021
Date of Decision27-Dec-2021
Date of Acceptance31-Dec-2021
Date of Web Publication14-Mar-2022

Correspondence Address:
Arti R Thakkar
Amity Institute of Pharmacy, Amity University Uttar Pradesh, Sector 125, Noida - 201 303, Uttar Pradesh
Giriraj T Kulkarni
Gokaraju Rangaraju College of Pharmacy, Hyderabad - 500 090, Telangana,
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Source of Support: None, Conflict of Interest: None

DOI: 10.4103/ajprhc.ajprhc_7_21

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Introduction: Regulations of the drug approval process either new drug or generic has come a long way. Hatch-Waxman Act was one of the most important milestones in the drug regulations history of the USA, followed by various acts such as the Prescription Drug User Fee Act and Generic Drug User Fee Act (GDUFA). Methods: In this study, various data related to generic drug submission and approval were evaluated and critically reviewed, specifically impact of GDUFA II. Results and Discussion: Although the first 5-year term of GDUFA, i.e., GDUFA I was majorly known for clearing backlog at the Food and Drug Administration (FDA), enhancing resources, and putting processes in place, it is the second 5-year term, GDUFA II, which is expected to bring the real benefit to industry in the form of higher-number and faster approvals, including increased first-cycle approvals. Apart from reduction in abbreviated new drug application approval times, more focus has also come on approval of first generic, complex products, increased FDA-Industry meetings to resolve complex matters, and reforms on review of DMFs. Conclusion: GDUFA legislation is credited for giving push to the availability of generic drugs by increased competition and it now helps save more than USD 300 Bn annually for the American healthcare system.

Keywords: Abbreviated new drug application, approval process, Generic Drug User Fee Act, generic drugs

How to cite this article:
Singh R, Singh S, Kumar A, Kulkarni GT, Thakkar AR. Impact of generic drug user fee act and other initiatives on generic drug approval process in the USA. Asian J Pharm Res Health Care 2022;14:7-15

How to cite this URL:
Singh R, Singh S, Kumar A, Kulkarni GT, Thakkar AR. Impact of generic drug user fee act and other initiatives on generic drug approval process in the USA. Asian J Pharm Res Health Care [serial online] 2022 [cited 2022 Sep 27];14:7-15. Available from: http://www.ajprhc.com/text.asp?2022/14/1/7/339410

  Introduction Top

Global generic drugs market in 2020 was valued at USD 387.92 billion and is expected to be USD 675.2 billion by the end of 2030 with a compound annual growth rate of 5.7% between 2021 and 2030. Among the major countries, the United States of America (USA) is the largest pharmaceuticals market in the word, and with 2020 valuation of U.S. generic drugs market at USD 127.8 billion, it is almost one-third share of global generic market.[1],[2]

Regulations of the drug approval process either new drug or generic has come a long way. Regulatory authority was originally based on the 1906 Pure Food and Drug Act followed by Food, Drug and Cosmetics Act of 1938 and with every passing decade, it went on improving further. After the thalidomide tragedy, the Act was further amended in 1962 to introduce Kefauver–Harris Drug Amendments which required the efficacy studies as a prerequisite for application approval[3] The landmark legislation of 1984, Drug Price Competition and Patent Term Restoration Act, also known as Hatch–Waxman Act introduced the use of bioequivalence as the basis of approving generic copies of the brand-name drugs and was in the larger public interest to bring more low-price generics with equivalent safety and efficacy to the market.[3],[4]

Generic drug approval process

With the enactment of Kefauver–Harris Drug Amendments in 1962, all products released in the market between 1938 and 1962 were declared as new drugs and the pioneer products had to submit the efficacy data for evaluation. If any product was found to be ineffective, the pioneer and all related products were removed from the market. Manufacturers of all the related products manufactured between 1938 and 1962 were asked to submit abbreviated new drug applications (ANDAs) with information similar to pioneer products, except safety and efficacy data. At this time, the Food and Drug Administration (FDA) also allowed to submit “literature based” New Drug Applications which relied on published data for safety and efficacy.[5] A timeline chart in [Figure 1] reflects the various landmark legislation and regulations related FDA and drug approval process.[6] [Figure 1] gives a clear indication that various legislations have created a huge impact on filing of generic drug products registration.
Figure 1: The various landmark legislation and regulations related Food and Drug Administration and drug approval process

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In the present study, the improvements in generic drug approval process over a period of time, and specific contributions of the Generic Drug User Fee Act (GDUFA) program of U. S. Food and Drug Administration have been critically evaluated. Furthermore, the impact of Prescription Drug User Fee Act (PDUFA) program on new drug approvals, assessment of available historical data on generic drugs, with specific emphasis on data from GDUFA I period have been studied.

  Methods Top

In this study, the following data were evaluated and critically reviewed regarding generic drug application processes in the USA. Data[6],[7],[8],[9] was determined such as:

  1. Median new drug approval time from 1979 to 2019 and first-cycle approval of New Drug Applications
  2. User fee changes under GDUFA

    1. One-time application fees for generic drugs application from 2014 to 2021 i.e., during the GDUFA I and GDUFA II
    2. Annual fees expenditures to the small, medium, and large companies. Companies were considered small, medium, or large based on the how many applications were submitted by them.

  3. Impact on ANDA approvals

    1. Trends in forecasted versus actual fee-paying ANDAs and drug master files (DMFs)
    2. Trends in refuse-to-receive (RTR) for ANDAs
    3. Total generic drug approvals under GDUFA
    4. Submission, approval, and complete response letters (CRLs) under GDUFA

  4. 4. Efforts taken by FDA under GDUFA such as

    1. Controlled correspondence for queries
    2. Guidance documents for complex products and
    3. Public meetings held.

  5. Impact of GDUFA on generic drug approvals as reflected by median approval time of ANDAs before and during GDUFA I and GDUFA II.

Each of the above studies is illustrated as figures or tables followed by a critical review and discussion.

  Results and Discussion Top

Median new drug approval time from 1979 to 2019 and first-cycle approval of new drug application

Before the Hatch–Waxman Act came into effect in 1984, the median annual number of approved ANDAs was 136, between 1970 and 1984. This number increased to 284 between 1985 and 2012. The annual median approval number of generic applications increased further to 588 between 2013 and 2018, after the milestone year 2012 of GDUFA enactment. The year 2019 saw 935 ANDA approvals, which is a record of the highest approval numbers so far. While generic product ANDA approval numbers have increased significantly over the years, the mean annual number of new drug NDA approvals did not reflect any significant increase, and number remained low at 34 (1990-1999) 25 (2000-2009) and 41 (2010-2018).[6]

When the generic drug program was still very young in late 1980s, the new drug program started showing delays in the NDA approval process over a period of time, and the possibility of funding the drug-review process by the pharmaceutical companies was discussed. In 1992, Congress enacted the first PDUFA. Although the annual fee collected under PDUFA has increased manyfold, from USD 29 million in 1993 to USD 908 million in 2018,[6] it has also positively and effectively contributed to reducing the median NDA approval time. [Figure 2]a describes median NDA approval time which suggests median approval time has reduced from 26.9 months in 1993-10 months in 2018. Not only the time taken for NDA approval has been reduced but also timely approval of NDA saw more than 50% first-cycle approvals as illustrated in [Figure 2]b.[7]
Figure 2: (a) Median NDA approval time. (b). First-cycle approvals

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User fee changes under Generic Drug User Fee Act

Modernization of the ANDA review process started in 2012 with the implementation of GDUFA I and for the first-time goal-driven dates were assigned for the review of ANDAs. FDA got the authority to take user fee under GDUFA I, primarily to improve the ANDA review process by enhancing resources through user fee funding. The primary objective of GDUFA implementation was to improve the review efficiency and thereby clear the backlog, reduce the review cycle, reduce the approval time, increase the first-cycle review.

The fee collection under different buckets was finalized in GDUFA I based on mutual agreements between FDA and industry representatives and based on the first 5-year experience; changes were made in the basic categories of the fee structure in GDUFA II. While overall funding in GDUFA I started with USD 299 million in 2013, it has increased over a period of time, over GDUFA I and GDUFA II period, and estimated to be more than USD 530 million by cohort year 2022 [Table 1]. Accordingly, the fee structure in the currently ongoing GDUFA II is as described [Table 2]. The transition of fee structure in GDUFA II reflected increase in one-time fee, specifically ANDA fee, which was due to the fact the PAS fee has been waived as described in [Figure 3].
Figure 3: The transition of fee structure in Generic Drug User Fee Act I and Generic Drug User Fee Act II

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Table 1: Forecasted and actual revenue collection by fee type and cohort year

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Table 2: Generic drug user fee act II user fee rates

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While an additional head of program fee was introduced in GDUFA II, but due consideration was given to small businesses (with 5 or fewer approved ANDAs) and medium businesses (6-19 approved ANDAs), by introducing a tier system in the program fee structure [Figure 4]a. Small businesses were the biggest beneficiaries of the new tier system. Although the overall fee calculation will depend on the number of applications, number of facilities, etc., a broad representation of the difference in payable amounts is reflected for small businesses [Figure 4]b, medium business [Figure 4]c, and for large business [Figure 4]d. Fee allocation changes from GDUFA I period to GDUFA II period is reflected in [Table 3].
Figure 4: (a) Program Fee Tier Chart under Generic Drug User Fee Act II. (b) Annual Fee– Small company, 5 or fewer abbreviated new drug applications. (c) Annual Fee– Medium company, 6-19 approved abbreviated new drug applications. (d) Annual Fee– Large company, 20 or more abbreviated new drug applications

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Table 3: Generic drug user fee act I versus generic drug user fee act II fee allocations

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Impact on abbreviated new drug application approvals

Prior to the enactment of GDUFA, FDA lacked resources to keep the pace with the increasing number of generic drug applications. This had resulted in backlog of submitted ANDAs. Further, this backlog was due to delay in the review of the applications and pending inspections of foreign facilities of these generic applications. While the revenue generated through user fee paid by generic drug applicants under GDUFA funded for the resources, FDA in return agreed to meet the performance goals for timely approval of ANDAs, which were mutually agreed during the negotiations process.[8]

During GDUFA implementation, FDA forecasted the number of DMFs and ANDA applications for the purpose of fee calculation for the upcoming year. This trend was analyzed at the end of 5-year of GDUFA I period, it indicated that for some years there was a major difference in the forecasted versus actual number of applications as illustrated in [Figure 5]. While FY 2013 saw a sudden spike in the fee-paying DMF numbers, the FY 2014 saw a sudden spike in fee-paying ANDA applications followed by a sudden dip in the following year FY 2015.[9] However, since then the trend of ANDA submission numbers has been increasing every year.
Figure 5: Forecasted versus actual fee-paying abbreviated new drug applications and DMF

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Once the ANDA applications are submitted by the applicant to the Agency, the Filing Review Division of the Office of Generic Drugs does the “filing review” to determine if the application is sufficiently complete to allow FDA review. If the ANDA is found to be deficient, the Agency will RTR the ANDA. The RTR percentage was very high in the initial years of GDUFA, specifically in FY 2015, but after that the Agency has increased its communications with industry through meetings, conferences, etc., and also issued a guidance document[10] to help the industry meet FDA expectations. Since the issuance of the RTR Guidance in 2016 and constant efforts by FDA communications in various forums, the RTR number has been regularly on the downward trend as observed in [Figure 6]a. Issuance of RTR for any ANDA by FDA indicates that the application is of poor quality.
Figure 6: (a) Refuse to review trend after implementation of Generic Drug User Fee Act. (b) Submission, approvals, tentative approvals and complete response letter after implementation of Generic Drug User Fee Act

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Once the ANDA is received by FDA, the first review cycle begins for all major disciplines such as Quality, Bioequivalence, and Labeling, apart from the inspection of facilities named in the application. Abbreviated New Drug Applications undergoes two-level review process, first primary review to assess that application meets the technical and regulatory requirements, followed by secondary review to assess the quality, consistency, and communication with the applicant.[11] During the review process FDA may seek additional information by issuing information request (IR) at any stage of review or Discipline Review Letter (DRL) at the mid-point of review cycle– which is 10-months for a standard application in currently ongoing GDUFA II program. As per GDUGA II commitment letter,[12] while FDA has a performance goal to complete the review as per defined timeframe [Table 4], it is also the responsibility of the industry to submit a good quality application and provide timely and complete responses to IR or DRL to achieve approval after first-cycle review.
Table 4: Goal for original abbreviated new drug applications s under generic drug user fee act II commitment letter

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At the end of the first-cycle review, if the ANDA is approvable, FDA will take one of the two actions, send approval letter or send tentative approval (TA) letter (in case all patents have not yet expired) to the applicant. However, if the ANDA is not approvable, FDA will send a CRL. After the implementation of GDUFA, the trend of number of ANDA approvals has been moving northwards [Figure 6]b.

A careful analysis of the ANDA approval numbers [Figure 6]b reflects that in the early phase of GDUFA I period, the numbers were relatively low at 440 approvals and 95 TAs in 2013, and the approvals remained below 500 till 2015. However, after 2015 the full approvals and TAs have steadily increased and the year 2019 saw the highest number of ANDA approvals at 935 and TAs at 236 in the history of FDA's generic drugs program. This reflects that the GDUFA program has helped in systematically improving the approval process.

A comparative analysis of ANDA submissions and approvals [Figure 6]b indicates that although the ANDA submission numbers are variable over the GDUFA period years, the ANDA approval numbers are consistently improving. However, the consistently increasing trend of CRLs is not a desirable trend as it indicates that FDA is unable to approve many ANDAs in the first-cycle review.

Efforts taken by Food and Drug Administration under Generic Drug User Fee Act

The median approval time of ANDAs before the GDUFA was 31 months,[13] and <1% ANDAs were approved in the first cycle.[14] To improve the ANDA approval time, FDA has taken many initiatives during GDUFA I and GDUFA II periods. Few of these initiatives include improvement in communication with industry through number of guidance documents, product-specific guidance, periodic public webinars and meetings including those on current topics, periodic updates in IID and dissolution databases. Apart from these, FDA has been answering the specific questions from industry through ever-increasing number of controlled correspondence [Figure 7]a which is helping the industry. Since many of the patent-expired complex drug products were lacking completion, FDA has started periodic publication of off-patent products list[15] In addition, the guidance documents now published include a good number of guidelines for complex products [Figure 7]b, and not only that but FDA has also started publishing a list of upcoming guidelines specifically for complex products.[16] In addition, as per reporting requirements under GDUFA II, the real-time reports under FDARA are published quarterly and reports on the numbers of public meetings and published guidance as illustrated in [Figure 7]c.
Figure 7: (a) Controlled correspondence by Food and Drug Administration. (b) Release of various guidance documents. (c) Real time reports published under FDARA, number of public meetings and published guidance

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FDA has also published guidance to simplify the compliance by moving many postapproval changes to the lower categories of reporting. In 2014, FDA issued a guidance “CMC Postapproval Changes to be Documented in Annual Reports”,[17] with a purpose to reduce the reporting and compliance burden on the industry.

Impact of Generic Drug User Fee Act on generic drug approvals as reflected by median approval time of abbreviated new drug applications before and during Generic Drug User Fee Act I and Generic Drug User Fee Act II

While the median ANDA approval time was more than 31 months before GDUFA implementation, and it went up further[18] because of a huge backlog in early years of GDUFA, the median approval time has now started coming down as described in [Figure 8]a. Just like PDUFA took time to significantly increase the number of first-cycle approvals, it seems that the approval numbers of generic product ANDAs will also take a similar path and will continue to improve on the first-cycle approvals. The quarterly review of the median approval time as reported by FDA in its performance reports[19] reflects that the trend has come down [Figure 8]b as compared to the period prior to GDUFA II.
Figure 8: (a) Median approval time of abbreviated new drug applications. (b) Quarterly review of the median approval time of abbreviated new drug applications prior Generic Drug User Fee Act II. (c) Median approval time for fastest 25% of cohort of receipt as per different matrix

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However, using a different matrix,[20] median approval time for fastest 25% of cohort of receipt, over a 6-year period from GDUFA era, it looks like the trend is really encouraging as the ANDA approval time has come down from 32.5 months to 10.8 months as illustrated in [Figure 8]c. If that trend remains, it is an indication for more first-cycle approvals in future.

Approval of ANDA within first cycle of review is the wish of any ANDA applicant, however, <1% of the ANDAs were approved in first cycle before GDUFA implementation. It has been the endeavor of the FDA and Industry alike to reduce the number cycles to approval of ANDAs, it has been one of the objectives of ANDA Review Program Enhancements under GDUFA II. Historically, it has taken FDA about four review cycles to approve an ANDA, as per the FDA data of 2009 to July 2014.[16]

Under the provisions of FDARA of 2017, Government Accounting Office (GAO) reviewed the data of 2015-2017 and found that only 12% of applications are approved within first-cycle review. Not satisfied with the performance of first-cycle approvals, GAO recommended that “FDA should take additional steps to address factors that may affect approval rates in the first review cycle.”[21] Although the improvement has been seen in ANDA approvals within first-cycle review, the number has been below 20% as observed in [Figure 9].
Figure 9: Improvement in abbreviated new drug application approvals within first-cycle review from FY 2018-2021

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Although the overall improvement in the ANDA Approval time matrix may be debatable, the benefits to the industry are gradual but real during GDUFA period. As per the various performance reports FDA is presenting as a part of reporting requirements for transparency initiative or reporting to the Congress, FDA has demonstrated over the GDUFA period that it has either met or exceeded the agreed goals and objectives.

  Conclusion Top

The benefit of high-quality and affordable generic drugs can truly be passed on to the public only when the ANDAs are approved, rather timely approved. This study has found that the implementation of GDUFA and many other initiatives have resulted in improvements in the approval times, and specifically, the significant improvement observed by using the matrix of fastest 25% of cohort year of receipt. This indicates that lately FDA and Industry have been working closely to improve the quality of submissions by knowledge and expectation sharing through guidelines/webinars and increase in transparency. FDA's focus to expedite first-generic approvals is laudable and yielding results, and so is the benefit on complex products through pre-ANDA program and additional exclusivity through competitive generic therapy. While GDUGA II was better than its first 5 years, any challenges and shortfalls observed during GDUFA II period are likely to be mutually resolved between FDA and Industry, as the consultations for GDUFA III have already started by its first meeting in July 2021. Needless to say that the increase in competition with the availability of more generic products is bringing the drug prices down. As per the estimates by a recent study,[22] contribution of more than 90% prescriptions with <20% cost is contributing to more than USD 300 Bn annual savings by generics in the USA market alone. Thus, enactment of GDUFA brought positive changes to the generic industry; from clearing the backlogs, expedited approval process with assigned goal dates, introducing new guidelines, and better communication between the industry and FDA which helped in getting quality generic drugs to the market at a faster pace that were economically viable for the patient. Furthermore, overall, there is increase in ANDA submission from generic manufacturers as the review time have been reduced to about 10 months from 32 months after enactment of GDUFA [Figure 8]c. This has impacted very strongly on the generic industries, and it has been observed that the overall inflow of application has been increased after the enactment of GFUFA [Figure 5]. This has led to the overall increase in inflow of generic drugs in the United States.


Authors are thankful to the Amity University Uttar Pradesh and Mankind Pharma Ltd. for providing the basic infrastructure to carry out the present study. Authors are very thankful to Mr. Mahesh Kumar, Senior Office Assistant, Amity Institute of Pharmacy, Amity University Uttar Pradesh for helping in the preparation of all the illustrations.

Financial support and sponsorship


Conflicts of interest

There are no conflicts of interest.

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  [Figure 1], [Figure 2], [Figure 3], [Figure 4], [Figure 5], [Figure 6], [Figure 7], [Figure 8], [Figure 9]

  [Table 1], [Table 2], [Table 3], [Table 4]


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