The U.S. Food and Drug Administration (FDA) has adjusted its user fees for drug and medical device reviews, drawing attention to the potential impact on South Korea’s pharmaceutical and biotech industries.
The changes are expected to ease costs somewhat for companies developing biosimilars and new drugs, while increasing approval-related expenses for generic drug and medical device companies, creating different effects across the industry, according to industry sources on July 7.
The FDA recently finalized its user fees for fiscal year 2027 and published them in the Federal Register. The new fees will apply from Oct. 1 through Sept. 30, 2027.
The FDA adjusts user fees for prescription drugs, biosimilars, generics and medical devices each year based on factors including inflation, the number of applications, the number of manufacturing facilities and the cost of maintaining review staff. The fees are used to fund the personnel needed to conduct regulatory reviews and help shorten review timelines.
The most notable change this year is the reduction in fees for new drugs and biosimilars. The application fee for new drug reviews was set at $4.60 million, down 1.7% from the previous year. The biosimilar application fee was reduced 6.3% to $1.12 million.
In contrast, the application fee for generic drugs increased 4.9% to $375,684, while the medical device review fee rose 9.9% to $636,732.
As a result, South Korean companies developing biosimilars for the U.S. market are expected to see some relief in regulatory costs. Celltrion and Samsung Bioepis, which sell multiple biosimilars in the U.S. or are pursuing additional approvals, are expected to be among the companies most directly affected by the fee reduction.
Companies developing multiple products simultaneously are likely to see greater savings. Businesses that repeatedly submit biosimilar applications or market multiple products in the U.S. could reduce not only fees for individual products but also the cumulative cost of managing their annual regulatory programs.
Generic drug and medical device companies, meanwhile, are expected to face somewhat higher costs as application fees rise. For generics, however, annual fees charged to overseas active pharmaceutical ingredient (API) manufacturing facilities and finished-drug manufacturing facilities were reduced even as application fees increased. The impact is therefore likely to vary between companies operating U.S.-bound manufacturing facilities and those primarily focused on regulatory applications.
Industry observers expect the fee adjustments to have a limited impact on overall corporate earnings. “Regulatory review fees account for a relatively small share of the development costs for new drugs and biosimilars, which can run into hundreds of millions of dollars,” a biotech industry official said. “However, companies developing multiple products could see a cumulative impact.”