With bigger revenues, the generic drug industry is becoming more willing to pay for faster approval of its products and now the U.S. Food and Drug Admistration (FDA) has reached a deal with the generic drug industry in a type of “pay to play” agreement in which generic companies would pay fees to give the FDA extra money to hire more staff and improve support systems in its drug review process.

A sum of $299 million will be paid in the first year to accelerate approval processes with some of the first year money coming from a one time payment by those companies whose drugs are pending review in FDA’s application backlog.

Some of the fees would pay for bulking up FDA inspection of U.S. and foreign manufacturing facilities to avoid such scandals as the 2008 recall of blood thinning drug heparin after at least 149 people died from tainted ingredients tracked to China.

More than two-thirds of all U.S. prescriptions are filled with generic drugs. They have become a formidable rival to brand-name drugs that are facing expiring patents such as Lipitor.

Industry representatives in the negotiations included the Generic Pharmaceutical Association, the European Fine Chemicals Group and the Society of Chemical Manufacturers and Affiliates Inc’s Bulk Pharmaceuticals Task Force. They represent such companies as Watson Pharmaceuticals, Teva Pharmaceutical Industries and Mylan Labs.

Similar to the other user-fee programs, Congress would have to give its approval before generic drug user fees are enacted. There seems to be no worry over the chances of this money exchange passing.

According to the FDA:

“Generic drugs are important options that allow greater access to health care for all Americans. They are copies of brand-name drugs and are the same as those brand name drugs in dosage form, safety, strength, route of administration, quality, performance characteristics and intended use. Health care professionals and consumers can be assured that FDA approved generic drug products have met the same rigid standards as the innovator drug. All generic drugs approved by FDA have the same high quality, strength, purity and stability as brand-name drugs. And, the generic manufacturing, packaging, and testing sites must pass the same quality standards as those of brand name drugs.”

The main consumer watchdog in this system is the U.S. Food and Drug Administration’s Center for Drug Evaluation and Research (CDER). The center’s best-known job is to evaluate new drugs before they can be sold. The center’s evaluation not only prevents quackery, but also provides doctors and patients the information they need to use medicines wisely. CDER ensures that drugs, both brand-name and generic, work correctly and that their health benefits outweigh their known risks.

Drug companies seeking to sell a drug in the United States must first test it. The company then sends CDER the evidence from these tests to prove the drug is safe and effective for its intended use. A team of CDER physicians, statisticians, chemists, pharmacologists, and other scientists reviews the company’s data and proposed labeling. If this independent and unbiased review establishes that a drug’s health benefits outweigh its known risks, the drug is approved for sale. The center doesn’t actually test drugs itself, although it does conduct limited research in the areas of drug quality, safety, and effectiveness standards.

Before a drug can be tested in people, the drug company or sponsor performs laboratory and animal tests to discover how the drug works and whether it’s likely to be safe and work well in humans. Next, a series of tests in people is begun to determine whether the drug is safe when used to treat a disease and whether it provides a real health benefit.

Written by Sy Kraft