No Product Review for You: FDA Issues MAPP Concerning Failure to Pay PDUFA Fees

Many of us remember the Seinfeld episode where the owner of a soup restaurant refuses to fulfill an order if the consumer talks back or otherwise upsets him, angrily stating, “No soup for you.” Recently, the Food and Drug Administration, while not so harshly, revised Manual of Policies and Procedures (MAPP) 6050.1 (rev. 2) (“Effect of failure to Pay PDUFA [Prescription Drug User Fee Act] Fees), whereby it introduces the phrase, “unacceptable for filing” (UN) for new drug and biologics license applications and supplements that are not appropriate for review due to outstanding PDUFA fees.¹ This Bulletin will highlight the MAPP, first introduced in July 2017, FDA’s revisions, and the relevance to drug companies. We will not describe PDUFA here, which dates back to 1992.²

Highlights

• The Federal Food, Drug, and Cosmetic Act defines the term “affiliate” to mean a business entity that has a relationship with a second business entity if, directly or indirectly: (1) one business entity controls, or has the power to control, the other business entity; or (2) a third party controls, or has the power to control, both of the business entities.

• An applicant is considered to be in arrears for any annual prescription drug program fees invoiced by FDA if the applicant or its affiliate has not paid all fees by the payment due date. Applicants are not deemed to be in arrears for an unpaid human drug application fee unless a fee has been invoiced for that application.

• The terms “unacceptable for filing” and “refused for filing” are not the same. “Unacceptable for filing” applies when applications or supplements are not suitable for evaluation by FDA because of outstanding PDUFA fees. “Refused for filing” applies when the application has met all user fee obligations (paid or waived), but FDA does not make a threshold determination that the application is sufficiently complete to permit a substantive review or all pertinent information and data has been received by the agency.

• When FDA receives a new application or supplement, the user fee staff conducts a user fee assessment within 10 calendar days to determine: (1) whether the applicant (including its affiliates) is in arrears; and (2) whether any user fee obligation for the application has been met (e.g., the appropriate application fee has been received by FDA or application fee was waived).

• FDA will place an applicant on the arrears list the calendar day after the annual user fees are due if the invoice is unpaid in full by the due date and the fee has not been waived by FDA.

• If an applicant is on the arrears list, an application or supplement submitted by the applicant or its affiliates is deemed UN on the FDA receipt date of the application or supplement.

• If the applicant is in arrears for non-payment of invoiced fees and an application or supplement is received, the FDA user fee staff (in consultation with other divisions) will inform the applicant that the application is UN due to non-payment of fees; an Applicant in Arrears Letter, also known as the Unacceptable for Filing letter (UN Letter), is prepared and sent to the applicant to notify that the application or supplement has not been accepted for filing because of the lack of payment.

• If the applicant is not in arrears but has not paid the appropriate application fee (g., only half fee paid or entire payment missing due to wiring issues), the user fee staff will notify the applicant by email that FDA deems the application UN if the appropriate fee is not received or is otherwise met (e.g., exempted, waived) within five calendar days of the date of notification.
  • If the prescription drug user fee obligation is not met within five calendar days, the user fee staff will inform the applicant by email that the application is deemed UN due to non-payment of the appropriate application fee.

• Once payment is made to fulfill a previously deemed UN submission, the date that the user fee obligation is met is the date that starts the application review clock.

AGG Observations

• New drug and biologic license applicants should review the MAPP to make sure they understand the concept of “UN” versus “refused for filing.”

• We recommend that a company conducting due diligence on possible product licensing, co-promotion, or acquisition inquire of the other party whether there are any outstanding invoices or if the company is in arrears. Failure to ask could delay product approval, which could have significant economic consequences. Similarly, a company that is acquiring another business should make such an inquiry.

• We advise a number of clients, some one-product companies, that evaluate whether it makes economic sense to continue to market the product (e.g., the costs of the user fee may exceed product sales) and, thus, question whether to pay the user fee. However, if the company falls into arrears for non-payment, this could affect FDA review of subsequent product applications, so any analysis should consider this consequence.

• FDA is not the company’s bookkeeper and, once a company receives a user fee payment letter, the clock starts ticking. The agency has made it clear that it has deadlines, and the failure of a company to meet these deadlines results in a “No product review for you” letter, a UN Letter. You have been warned.

[1] See www.fda.gov/media/72756/download.

[2] See 21 U.S.C. §§ 379h and 379g Congress enacted PDUFA IV in 2017 to give FDA authority to collect user fees for fiscal years 2018 through 2022. The law authorizes the collection of two types of user fees: (1) human drug application fees due at the time certain human drug applications are submitted; and (2) prescription drug program user fees collected annually. PDUFA VI eliminates user fees for supplements and establishments but does not eliminate prior outstanding invoiced user fees.