Consequences of not paying user fees discussed in 2 new MAPPs

The FDA has updated a prior Manual of Policies and Procedures (MAPP) describing what happens if a pharmaceutical or biopharmaceutical companies fail to pay required user fees under the Prescription Drug User Fee Act. Separately, FDA also released a another MAPP describing what happens if a biosimilar company fails to pay required user fees under the Biosimilar User Fee Act.

Regulatory Background:

• Under its user fee programs, the FDA collects funds from regulated industry to support reviews and other regulatory activities. In return for the funding (known as user fees) from sponsors of regulatory applications, the FDA commits to meeting certain target review timelines, hiring additional staff and making other programmatic improvements (such as technology system upgrades or the development of specific guidance documents).
• Each user fee program assesses different fees. Under the most recent reauthorization of the Prescription Drug User Fee Act (PDUFA VI) the FDA can collect application fees upon the submission of certain applications and assess an annual fee upon regulated companies. The reauthorization of the Biosimilar User Fee Act (BsUFA II) allows the agency to collect three fees including biosimilar biological product developed (BPD) fees, application fees and biosimilar biological product program fees.
• Failure to pay these fees can result in significant negative consequences for sponsors. A guidance from November 2020 discusses the effects of failure to pay PDUFA fees and states, “if a person submits an application without an application fee or if the person is in arrears for nonpayment of any prescription drug program fees, the application will be incomplete and FDA will not accept it for filing.” In other words: No fee, no approval.
• The agency has previously published a MAPP addressing the payment of fees under PDUFA. The MAPP was most recently recertified in April of 2012 (before the passage of the FDA Safety and Innovation Act, or PDUFA V) and stated that the policy of the Center for Drug Evaluation and Research (CDER) is to only file applications where all prescription drug user fees have been paid. This included “all such fees owed for the submitted application and all such fees (application, product, or establishment user fees) previously owed the Federal government. The policy stated that this referred to new drug applications and biologics license applications and supplements.
• The MAPP provided provides details about the processes and how different parties would be notified. After appropriate staff determine that an applicant is in arrears or that an application fee has not been received within five calendar days of the application submission, the review team and the sponsor will be notified, and an “Unacceptable for Filing” (UN) letter will be issued. The review clock won’t start until appropriate payment is received.

The FDA has now published an updated MAPP for PDUFA and a new MAPP for BsUFA to more specifically address the impact of failing to pay user fees.

• The FDA published an update to its previous MAPP addressing fees under PDUFA. In general, the concept of the MAPP is the same: it provides details on how the agency will assess an application if an applicant is in arrears (has not paid an invoiced fee) or if an application fee was not received in a timely manner.
• However, the new MAPP does provide greater detail on the process of sending an Unacceptable for Filing letter and specifically notes that the review clock will start on “the date that the user fee obligation is met.”
• Additionally, the new MAPP notes that applicants failing to pay application fees will receive a warning. If an applicant is not considered in arrears, but rather has yet to pay the application fee the FDA will notify the sponsor by email “that the FDA will deem the application UN [unnacceptible for filing] if the appropriate fee is not received or is otherwise met (e.g., exempted, waived) within 5 calendar days of the date of notification.” Applicants in arrears will not receive the same warning, but the agency will make an assessment of arrears status within 10 calendar days of receiving the application.
• FDA will issue communications after payment is received. But rather than an acknowledgement letter, the agency will instead send either a User Fees Received letter (indicating the agency has been paid the amount owed) or a Waived letter (indicating that any payment owed was dismissed).
• The MAPP on failure to pay BsUFA fees follows similar guidelines. After receiving a biosimilar application or supplement the FDA will conduct an assessment to determine if the sponsor is in arrears or if applicable user fee obligations have been met. If the sponsor is not in arrears and all fee requirements have been satisfied the agency will issue an Acknowledgement Letter. Similar to the PDUFA guidelines, the FDA will issue a UN letter if the sponsor is in arrears and provide a notification of any missing application fees. If the application fees are not received within five calendar days an Unacceptable for Filing letter will be issued. Once outstanding payments are made the review clock will start and the sponsor will receive either a User Fees Received Letter or a Waived Letter.
• The biosimilar biological product development (BPD) fee adds additional potential consequences for payment failure. BPD fees start after the FDA grants a BPD meeting request or after a sponsor submits an Investigational New Drug Application (IND) and are subsequently assessed annually until a sponsor stops participating in the program or submits an application for their product that Is accepted.
• Failure to pay BPD fees also places sponsors on the arrears list. This means any applications they submit will not be filed, any scheduled BPD meetings will be cancelled, any new IND submissions for their product will not be received and active INDs for the product will be put into a financial hold. However, the agency may allow for BPD meetings and new IND applications if “not related to the product for which the fees are owed.” Once BPD payment is received the sponsor will be taken off the arrears list and any financial holds will be removed.

To contact the author of this item, please email Lily Rosenfield.
To contact the editor of this item, please email Alexander Gaffney.

Key Documents and Dates

• MAPP: Effect of Failure to Pay BsUFA Fees
• MAPP: Effect of Failure to Pay PDUFA Fees