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The generic drug user fee amendments: an economic perspective
Ernst R Berndt1, Rena M Conti2, Stephen J Murphy3
1Department of Applied Economics, Massachusetts Institute of Technology, Sloan School of Management, and National Bureau of Economic Research, Cambridge, Massachusetts, USA.
Journal of Law and the Biosciences
|May 1, 2018
Summary
The Generic Drug User Fee Amendments (GDUFA) program, established in 2012, has led to a more concentrated and foreign generic drug manufacturing market. GDUFA II aimed to reduce entry barriers created by initial user fees.
Area of Science:
- Pharmaceutical Policy
- Health Economics
- Regulatory Affairs
Background:
- The majority of prescription drugs in the US are generic, making their regulation and supply critical.
- The Generic Drug User Fee Amendments (GDUFA I) were enacted in 2012, requiring annual fees from generic manufacturers in exchange for FDA performance goals.
Purpose of the Study:
- To analyze the impact of GDUFA I and II on the generic drug market structure.
- To examine the self-reported data submitted by generic manufacturers under GDUFA legislation.
- To discuss the implications of market concentration and foreign manufacturing for GDUFA II.
Main Methods:
- Analysis of legislative history and fee structures of GDUFA I and GDUFA II.
- Examination of public, self-reported data on domestic and foreign generic drug manufacturing facilities.
- Comparative analysis of market structure before and after GDUFA implementation.
Main Results:
- GDUFA I user fees created barriers to entry and favored established manufacturers.
- Generic drug manufacturing supplying the US market is increasingly concentrated and located abroad.
- GDUFA II introduced changes to user fees to mitigate entry barriers.
Conclusions:
- The structure of generic drug manufacturing has evolved significantly under GDUFA legislation.
- Observed market concentration and foreign dominance have implications for GDUFA II's effectiveness.
- Policy adjustments in GDUFA II were intended to foster a more competitive generic drug market.
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