$1.2 Million Fee too Steep, Biz Tells FDA

CHICAGO (CN) – A small drug company wants the U.S. Food and Drug Administration to waive its $1.2 million fee for a new drug application, saying the FDA’s refusal to do so will cause the lab “devastating and irreparable harm.” Winston Laboratories employed only 11 workers when it requested the fee waiver for Civanex, an osteoarthritis cream.
     Winston says the FDA denied its request, stating that two nonexistent drug companies were Winston affiliates.
     According to the FDA Web site, “any time a company wants (the agency) to approve a new drug or biologic prior to marketing it must submit an application along with a fee to support the review process.”
     Companies also pay annual fees for each manufacturing establishment and for each prescription drug product marketed. The process is based on the Prescription Drug User Fee Act, which lets the FDA collect fees from companies that produce human drug and biological products.
     The Federal Food, Drug and Cosmetic Act provides waivers to small businesses for their first human drug application. To meet the criteria, companies must have less than 500 workers and must not have an approved and available drug.
     Winston says it met all those criteria and that the Small Business Administration declared it a small business, but the FDA insisted that drug companies GenDerm and Northbrook Testing were affiliates. Both companies had filed a new drug application with the FDA.
     The FDA told Winston that it considers all business affiliates, even those that no longer exist, when determining whether to grant a small business waiver, according to Winston’s federal complaint. Winston denies that the companies, which have been dissolved or merged, are its affiliates.
     Winston says it can’t pay the exorbitant fee and says the FDA’s fee waiver is arbitrary, capricious and abusive, made on no lawful basis or authority.
     Winston sued U.S. Dept. of Health and Human Services Secretary Kathleen Sebelius, and Dr. Margaret Hamburg, Commissioner and Senior Officer of the FDA.
     It seeks declaratory judgment, an injunction and the fee waiver. It is represented by William McErlean with Barnes, Thornburg.

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