Generic Drug Companies Fund FDA User-Fee Program

A tentative deal between the generic drug industry and the federal government will require generic drugmakers to pay annual fees in order to increase FDA inspection of foreign-based manufacturing plants. The proposed deal, which totals approximately $299 million, is similar to the ones that currently exist for companies who produce brand-name drugs and medical devices.

At present, the FDA rarely inspects foreign-based manufacturing plants that produce active pharmaceutical ingredients and final products for sale in the United States. The lack of such regulatory oversight can lead to quality-control issues for generic drug products. Moreover, the FDA’s limited inspection of foreign plants ultimately incentivizes drug companies to ship American jobs overseas, as the regulatory process that exists in the U.S. makes generic drug production much less profitable.

Representatives from generic drug companies have been in negotiations with FDA officials to create a fee to boost government inspectors and reviewers. While the negotiations are still ongoing, a tentative deal is in place and the final deal should be completed very soon. The addition of the fee will enable the FDA to level the playing field and provide the footing necessary to ensure product safety on a global scale.

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