By Marc Kaufman
Washington Post Staff Writer
Friday, February 17, 2006

A top Food and Drug Administration official plans to tell the generic drug industry today that it is time for the government to charge its member companies fees so the agency can hire more staff and reduce the growing backlog in the processing of applications to market new generic medications.

In a speech he is scheduled to deliver to the Generic Pharmaceuticals Association in Florida, Scott Gottlieb, the FDA's deputy commissioner for medical and scientific affairs, plans to say that user fees -- like those paid by the makers of brand-name drugs, medical devices and animal drugs -- are needed to keep up with generic reviews.

"From our perspective at FDA, we have seen user fee programs applied to our medical device and new drug programs with great success," a copy of his speech says.

The user-fee proposal is controversial because many makers of generic drugs believe the FDA has been underfunding the Office of Generic Drugs for years and is allowing the manufacturers of brand-name medications to use procedural gimmicks to block final approval of their products.

Gottlieb is scheduled to say in his speech that raising funds from generic-drug companies would allow the agency to review applications faster, to have more scientific data analyzing whether proposed new generics are equivalent to established brand-name drugs, and to address potential safety issues once the drugs are on the market.

Responding to criticism of the agency's backlog of about 800 pending generic applications, Gottlieb's text says: "It's not fair to compare our work in our generic drug office to our work in the new drug office, as some have done, without acknowledging that our new drugs program has benefited from funding tools that are not available to us when it comes to generic drugs."

Kathleen D. Jaeger, president of the generics association, who had not seen the text of Gottlieb's speech but has been involved in informal discussions about the issue, said that the industry is very skeptical about requiring user fees.

"Our problem with user fees is that they currently would not guarantee that generic drugs would be reviewed and approved any faster," she said. "There are many other legal and regulatory obstacles -- ways for the branded industry to keep our competition off the market -- and they would have to be addressed before the industry could feel comfortable with any user-fee program."

She said that Congress needs to appropriate only an additional $15 million to address the generic-drug backlog and that federal and state drug programs, as well as consumers, would benefit greatly if the money were made available.

The Office of Generic Drugs receives about $28 million a year, a fraction of the more than $400 million allocated to the Office of New Drugs. About half of that money comes from user fees paid by the makers of brand-name medications when they submit applications to market newly developed drugs.

Any user-fee program for the makers of generics would have to be approved by Congress. Senate Budget Committee Chairman Judd Gregg (R-N.H.), who has been active in drug legislation, said yesterday that he supports user fees for the generic office.

"If we [Congress] give more of the FDA's appropriated funds to the generic office, then someone else gets less," he said. "We have a proven track record here in terms of industry user fees, that the industry and the public are both winners with these kind of dedicated funds."

Use of generic drugs -- which must be equivalent to the branded products that they duplicate -- has been growing steadily, with more than 53 percent of prescriptions now filled with generics. That percentage could increase quickly because an unprecedented number of major branded drugs will lose their patent protection in the next few years.

In addition to raising the user-fee issue, Gottlieb is set to outline a number of agency initiatives to speed generic reviews. One is a formal lifting of a ban on direct telephone conversations between FDA reviewers and generic drug makers. Another involves grouping bioequivalence review applications for the same or similar drugs.