Editorial

Generically Speaking

Plus: More players in sterile injectables?

By: Gil Roth

President, Pharma & Biopharma Outsourcing Association

Well, I was planning to write all about the Cyprus financial crisis, the grounding of the Dreamliner 787 fleet and the patent issues hamstringing biosimilars development — it was going to be called Bailouts, Boeing and BIO — but last issue’s article on the Generic Drug User Fee Amendments, Generic Manufacturing: GDUFA & CMOs, seems to have struck a chord with readers, so I thought I’d share some of their comments with you. (And feel free to leave your own comments on our online edition, or e-mail me directly, if you want remarks to be kept anonymous.)

A commenter who referred to him/herself as “Primary Packager” left the following comment on our site:

Another dimension to the pitfalls of GDUFA is industry participants misidentifying themselves. I know of several small primary contract packagers in particular who have identified themselves as [secondary packagers], which are exempt from any fees, when in fact they are primary packagers and are named as such in ANDAs. That’s a $380,000 advantage in calendar 2013 (paying the fee for FY 2013 in March 2013, and FY 2014 on October 1, 2013), and $205,000 in the following year, over primary contract packagers identifying themselves correctly. Who is policing this? The FDA has audited at least two of these facilities in the past 12 months, and never raised a concern about registration as a repackager versus a primary packager. Why should we expect they will detect and enforce this down the road? There needs to be a way to — at a minimum — keep the playing field fair! With $380,000 in fees this year, that’s between 5% and 15% of top-line revenues for most contract packaging firms. I see only one eventual end to this, and that’s consolidation and more layoffs. The FDA says they particularly considered small businesses, but it’s quite apparent that they did not.


Another reader e-mailed me to say:

We are quite frustrated with the fees and honestly, learned most of the information you wrote about just before the March 4 payment deadline. The real concern here is that 80% of the drugs on the FDA’s shortage list are sterile injectables. These fees, in my opinion, will only make matters worse. Further, the 80/20 split on Final Dosage Form vs. API sites makes no sense. Lastly, the fact that pure-play CMOs are now paying fees as if they were receiving benefits from the approval process of our clients products is ridiculous. In fact, we don’t even get a letter from the FDA telling us our site is approved — it goes to the license holder!


Most of the other comments I’ve received have been e-mails of the “right on!” variety, and many were from companies that gave me a “no comment” when I contacted them for the article. It was clear to me during the reporting of this piece that there was much confusion and consternation on the part of CMOs that are expected to pay at least $1 million each toward GDUFA’s funding. It’s my hope that we can keep the conversation going and help the FDA better understand the economics and practices of the sponsor-provider relationship. That way, maybe we can get outsourcing a seat at the table in future negotiations.

Gil Roth

What I’m Reading
Pharma
Drug Makers’ Rising Interest in Injectables
Could Ease Shortages • Jonathan D. Rockoff, WSJ on.wsj.com/XHqGCj
Comment: In some contrast to my March 2013 editorial about the (omitted) causes of the sterile injectables shortage, the Wall Street Journal reports that new players are getting into the market. On balance, “Making sterile drugs for injection is difficult, and margins can be thin. Yet the market is big: Each year, about a billion of the vials are sold. Supply issues have created openings for new manufacturers looking to seize share.” We can only hope, but sudden ramp-ups in capacity is not a recipe for success . . .

Non-Pharma
Readings • Michael Dirda • amzn.to/16R9HnK
Comment: This collection of “essays and literary entertainments” from the 1990’s by the former editor of the Washington Post’s Book World section is a joy to read. The pieces don’t presume too much literary knowledge, but do require some intellectual curiosity, as well as (in my case) a certain desire to check out a road less traveled.

Why don’t you tell us what you’re reading? Write us at [email protected]www.goodreads.com/grothwww.linkedin.com/groups?gid=1775433 or www.facebook.com/contractpharma — and the first respondent wins a prize!

Keep Up With Our Content. Subscribe To Contract Pharma Newsletters