Cut GDUFA Fees to Promote Competition: Analysis
Three Harvard University professors and two Zuckerman attorneys who used to work at HHS say FDA should use the GDUFA 3 reauthorization negotiations to “balance the need to ensure sustainability with the goal of providing a level playing field for competition among firms of all sizes.” Writing in Health Affairs, the five say the agency should impose fees on the market segments where they are least likely to discourage supply.
“Evidence suggests that at typical rates of participation found in small generic drug markets (those with an average of 2.5 products), adding a new entrant would reduce generic prices by 5% to 9%,” they write. “Our finding that introduction of GDUFA fees was associated with 20% fewer market entries by small manufacturers suggests that reducing these fees could lead more small firms to enter. This effect would be especially important in markets for injectable products. Therefore, the next step in refining GDUFA should be to redesign the user fee structure so that larger manufacturers pay more and fees for small manufacturers decline.”
The authors say the medical device user fee program provides a good model that could be used to change the GDUFA structure.