Input:
	Background

VA’s mission is to serve America’s veterans and their families, and one of  the ways it does so is by providing veterans with medical services. To  help meet the health care needs of veterans, VHA is planning to complete  approximately 70 new major medical projects between 2020 and 2024.  Activation is one of the key steps that must occur before veterans can  access care at these facilities.
According to VA’s Activation Process Guide, activation typically involves  activities such as planning for, purchasing, and installing new furniture,  fixtures, and equipment (FF&E), ordering supplies, and hiring staff. For  new buildings, the Guide states that activation activities begin when the  building is being designed, continue through construction, and end when  the facility is fully operational.
The expenses associated with activation can reflect either one-time  purchases or ongoing expenditures. One time purchases—called non- recurring activation expenses—involve the acquisition of assets such as  furniture or equipment, or payment to a contractor for services such as  equipment installation. Ongoing expenses, or expenses incurred more  than once—called recurring activation expenses—are for staff salaries  and consumable supplies, such as gowns and gloves. After a facility  opens and begins serving patients, facilities are permitted to treat  supplies and the salaries of new staff as activation costs until the site is  serving enough patients to receive funding through one of VA’s regular  funding processes, known as the Veterans Equitable Resource Allocation  (VERA). Figure 1 provides examples of recurring and non-recurring  activation expenses.
The total cost of activation for major lease and major construction projects  can be substantial. The median activation funding that facilities reported  spending on major activations from fiscal year 2012 through 2018 was  approximately $16 million. The four newest hospitals (in Denver, Las  Vegas, Orlando, and New Orleans) spent a cumulative total of more than  $1.9 billion for activation during this time period.
The types of facilities undergoing activation can vary in size, services  provided, and overall purpose within the VHA healthcare system, as  shown in figure 2. For example, a community-based outpatient clinic  (CBOC) is typically much smaller than a medical center but can provide  primary, specialty, subspecialty, mental health, or any combination of  delivery services that can be appropriately provided in an outpatient  setting. Large medical centers can provide outpatient services as well as  a broad range of inpatient services, including emergency services,  surgery, and acute psychiatric care. Smaller facilities may refer patients to  medical centers for complex treatment.
National, regional, and local staffs play different roles in the activation  process:  National: VHA’s Activations Office—under the Office of Capital Asset  Management (OCAM)—historically provided ad-hoc support to sites  activating a major lease or construction project, such as providing on-site  training related to the activation process and facilitating input from subject  matter experts within VHA. The office also determines the base amount  of activation funding that sites receive. Officials overseeing the office  stated that its role is being reassessed and that the type of support it  provides for activations may change in light of an internal reorganization  and consideration for VA’s future growth plans.
Regional: VHA’s18 regional networks, known as Veterans Integrated  Service Networks (VISN), are responsible for the coordination and  oversight of all administrative and clinical activities at health care facilities  within their specified region. A VISN’s role in activation varies depending  on the expertise available at the facility level, but VISNs can help facilities  arrange contracts for services (like laundry or hazardous waste removal);  review a facility’s budget submissions to VHA; and facilitate discussions  with senior management or knowledge-sharing with other sites that have  recently completed activation. The VISNs are also responsible for  distributing activation funding from VHA.
Local: In addition to providing medical services, medical centers function  as administrative hubs for services in the area. As a result, the medical  center director is ultimately responsible for activating facilities within the  center’s administrative boundary. The medical centers can appoint staff to  manage the activities required for activation. These staff can include the  activations project manager, financial officers, and subject matter experts  like interior designers. As a team, the staff are responsible for developing  technical requirements, creating risk mitigation strategies, and deciding  key acquisition dates, among other tasks.

		Activation Tasks Include Identifying and Fulfilling Staffing, Equipment, and Other Needs Planning and Execution of Activation Tasks Align with Building Acceptance and the First Day of Clinical Services

While VHA has not identified standard milestones for activation, based  upon our review of VHA documents and interviews with local and regional  VHA officials, we found that two events are especially relevant to the  planning and execution of activation activities: (1) building acceptance  (when VHA formally takes possession of and occupies a building) and (2)  providing medical services to the first patient. Figure 3 describes  examples of activation activities in relation to these events, although the  actual timing of tasks will vary depending on the needs of individual  facilities.

		Activation Teams Begin Equipping and Staffing New Facilities Prior to Building Acceptance

Officials from selected facilities said that prior to building acceptance,  their activation activities typically focus on determining furniture and  equipment needs, placing orders, anticipating staffing needs, and hiring  new staff.
Determining furniture and equipment needs is intertwined with the  building design process, according to officials from three VHA facilities,  because the design of the physical space can dictate what equipment is  purchased. For example, a VHA official from one health-care center said  that the activations team showed the medical care providers a mock-up of  a treatment room and created cardboard models of furniture to help them  select items. The official told us that getting the medical care team’s input  early in the planning process can avoid the need to make costly changes  in order to make the physical space fit the equipment or furniture  requested by the medical care providers.
Conversely, the building may be designed to accommodate specific  equipment. For example:
Officials from one facility shared the specifications of the radiology  equipment with the team designing the building in order to leave a  proper amount of space for the equipment.
Similarly, an annex’s activation staff worked with the resident engineer  to design an enclosed area separate from their main building for a  mobile MRI machine. This design ensured a new MRI machine could  be swapped out in the event of a breakdown without causing a  disruption to the facility’s operations.
Officials said that they also begin the purchasing process for equipment  and furniture prior to building acceptance. VHA officials stated they work  backwards from the construction endpoint to determine when to order  items. VHA officials told us they need to place orders for certain items— such as high-tech equipment or made-to-order furniture—well in advance  of the facility’s opening because the items are known to have long  delivery times. For example:
Officials from one clinic reported they ordered their facility’s imaging  equipment 22 months before they needed it.
Similarly, an official from a different clinic said that furniture is often  not manufactured until it is ordered, so it can take several months to  arrive. In contrast, the official said items like a staff refrigerator could  be picked up at a local store within days and do not require  substantial advance planning.
Facilities also begin planning for their workforce needs prior to building  acceptance. For example:
An official from one clinic stated that facilities typically identify their  staffing needs during this time period by position, title, and pay.
Officials from an annex said that before their facility’s construction  groundbreaking, they discussed how many staff would move from the  old facility to the new facility, and how many new staff they expected  to hire.
After activation teams determine their staffing needs, facilities hire and  begin training new staff. For example:
An official from one clinic said that new staff needed to be trained  prior to opening day, so it is not uncommon for staff to be hired and  brought on-board before the facility begins providing clinical services.
In the case of a very large facility, such as a medical center, hiring the  required staff can require an extensive search that must commence  before the building is finished. An official from a medical center said  that a shortage of skilled medical workers required a nationwide  search for suitable candidates.

		New Facilities Prepare for Patient Care after Building Acceptance

Officials said that after a building is accepted as complete, activation  typically focuses on tasks associated with moving into the space, such as  equipment installation and training staff. For example:
One clinic’s project calendar showed in the weeks leading up to  opening day that the activations staff planned to install office furniture  such as desks and filing cabinets, as well as to perform checks on  biomedical equipment to ensure proper functioning.
Officials from another clinic coordinated equipment and furniture  deliveries between the warehouse (where items were being stored)  and the new facility.
The extent of staff training after building acceptance depends on the need  to familiarize staff with the new facility, and the complexity of services  offered. Activation staff might choose to have medical staff become  familiar with the new facility by working at the facility prior to new  operations. For example:
One clinic’s staff started working in the building before their first  patient was seen in order to become familiar with the new space.
An official from a medical center said that facility staff adjusted to  operating newer infrastructure, such as learning to operate a modern  computerized boiler system. That official also stated that the medical  center might need to conduct extensive training exercises to simulate  24/7 inpatient care. In contrast, outpatient facilities that do not operate  around the clock may not have these same training needs.

		Activation Continues after Facilities Begin Providing Clinical Services

Once a facility begins providing medical care, officials said that activation  tasks are typically related to facility operations. These tasks can include  on-the-job training in the new space and making necessary adjustments  to the facility to ensure it runs properly while concurrently serving new  patients. For example:
An official at one clinic said that beginning patient care with a  decreased workload, known as a “soft opening,” can help facilitate on- the-job training. The same official explained that this approach allows  staff to become accustomed to their new facility’s operations and  address any issues that may emerge without the demands of  operating at full capacity.
VHA officials from a health care center said that space adjustments  included repositioning exam beds and ordering ergonomic chairs.
Officials at several sites stated that they used SharePoint, an internal  communication tool, to keep track of needed adjustments. This  approach enables staff to monitor ongoing issues during the  beginning of new operations, resolve unexpected problems, and track  issues as they occur.
Several VHA officials also said that some activation tasks —such as  hiring staff—may occur after a facility begins serving patients. If a facility  plans on a phased opening, in which some services will not be available  on the first day, processes that would typically be completed earlier may  take place during this time frame instead. For example, a medical center  in our review utilized a phased-opening approach, as it expanded its  capabilities with new medical services after opening.

	Selected Facilities Provided Most Clinical Services within Expected Time Frames, but Delays Occurred for a Variety of Reasons

The facilities included in our review provided most medical services within  planned time frames; however, nearly one-third of services were  delayed for various reasons. Overall, 59 of the 87 services were offered  within planned time frames (69 percent). Of the 28 services that were not  provided on time, staffing, equipment size, “commissioning”, and  procurement issues contributed to the delays, according to officials.
Staffing issues delayed a total of 14 services in two of the seven  facilities reviewed. One facility had 13 services with delays that  ranged from 4 to 6.5 months. Officials said the delays were due to  difficulties recruiting the staff necessary for those services, which  included various types of surgery, radiology, and mental health,  among others. Similarly, difficulties recruiting a dentist at a second  facility delayed dental service 4 months beyond the expected delivery  time frame.
Equipment at one facility did not fit into some of the rooms and the  space needed to be altered in order to accommodate it. Officials  said that all 12 services were delayed by approximately 1 month so  that the facility could open with all services available, though officials  noted that the full extent to which the equipment issues contributed to  these delays was unknown (i.e., there could have been other causes  that they could not recall.)
Commissioning issues delayed women’s healthcare services at one  annex by approximately 1 month. Officials said that the air circulation  rate—which needed to be higher in rooms where certain procedures  are performed—was inadequate. As a result, the air exchange had to  be improved before the facility could begin performing the planned  clinical procedures.
Procurement issues led to delays in providing radiology services at  one facility. Officials told us that x-ray services were delayed by 3  months because the equipment was ordered through the centralized  purchasing process, which took longer than local officials had  anticipated.
These delays primarily affected services that were originally planned to  be offered within 2 months of building acceptance. While selected  facilities planned to offer approximately 92 percent of services within 2  months of building acceptance, as shown in figure 4, 61 percent were  actually offered within that time frame.
VHA does not provide a guideline for how much time facilities should  need after building acceptance to provide clinical services. Officials  explained that the appropriate amount of time will vary based upon the  scope of the project, including factors such as the number and kinds of  services offered and the level of effort associated with installing the  equipment (e.g., a replacement hospital will require more effort than a  small outpatient clinic). Thus, we did not determine if facilities were  allotting appropriate amounts of time to complete activation activities and  serve patients. However, VA’s Activation Process Guide provides some  information regarding when full services should be available. The Guide  states that clinical services can be added for up to 6 months after opening  day (i.e., the first day that patients receive any services at the facility).  The Guide further states that facilities may expect to offer services  gradually—versus all on opening day—when services are new to an area.
Of the 87 services offered by the facilities in our review, 86 were offered  within 6 months of opening day. The remaining service—a clinic that  provides colonoscopy and other related procedures at one facility— opened on schedule approximately 11 months after opening day. This  facility was replacing another facility that had not previously offered this  service. Officials explained that because the service was new, they  needed more time to develop and equip the space as well as hire staff, so  they planned on offering this service later than services that were being  transferred from the previous facility.

	VHA Lacks Processes and Clear Definitions to Estimate and Oversee Total Activation Costs

VHA lacks processes to develop total cost estimates for major activations.  Without total cost estimates, VHA is unable to determine whether actual  activation expenses are higher or lower than planned. Furthermore, VHA  does not have documentation that defines allowable activation costs,  including what facilities can purchase with activation funding and when  facilities should cease spending activation funds. As a result, VHA  officials lack critical information to support decision-making about  resource allocation, and are not well positioned to effectively identify and  investigate deviations from planned spending.

		VHA Lacks Processes to Develop Total Activation Cost Estimates and Compare Them against Actual Costs

VHA lacks processes to develop reliable total activation cost estimates for  major activation projects and to compare actual costs against these  estimates. According to our assessment of information from VHA, the  current cost estimation process does not cover the full duration of  activation and does not reflect best practices for developing reliable cost  estimates. In addition, VHA officials said that until recently, the agency  lacked the accounting mechanisms necessary to facilitate comparisons of  a project’s total activation costs against estimated costs; however, while  VHA now possesses these mechanisms, it has not documented the  process for how the new information should be used.
The Activations Office and facility activation staff annually develop cost  estimates for the upcoming 3 fiscal years using (1) an activation cost  model (the model) and (2) a cost template (the template). According to  Activations Office officials, the model is managed by the Activations  Office and uses inputs such as a facility’s square footage and project  schedule. Activations Office officials also said that the template is typically  completed by facility activation staff and includes inputs such as planned  clinical services as well as estimated staffing, equipment, and supply  costs. While the cost estimate is driven primarily by the model,  information in the template is also considered before annual activation  funds are distributed, according to Activations Office officials. Figure 5  shows the steps for determining and distributing annual activation funds.
We determined that the model and template do not estimate costs for the  entire duration of a facility’s activation. According to our review of  facilities’ spending data, activation spending for a given facility can occur  over more than 3 fiscal years. All eight of the facilities in our review, for  example, spent activation funds over 4 or 5 fiscal years. Thus, the  estimate the Activations Office would have developed at the beginning of  these projects would not have reflected total activation costs. Moreover,  we did not see evidence that VHA medical facilities independently  develop total activation cost estimates that are appropriate to compare  against total actual costs. None of the eight selected facilities we  reviewed could provide total activation cost estimates appropriate for this  use, according to officials at each facility. Officials from five facilities  stated that they had not developed such estimates, an official from one  facility said that an estimate could not be located and probably had never  been done, and officials from two facilities said that such documentation  could not be located.
VHA officials said that the existing cost estimation tools reflected the  budgeting process (i.e., the current fiscal year and two future years) and  that they had not previously been required to develop a cost estimate for  the entirety of activation. Officials noted that as the Activations Office’s  role shifts to include more oversight, it will be important for the Office to  have total cost estimates for activation; however, as of September 2019,  VHA did not have any specific plans for how to collect estimates for a  project’s entire activation cost.
We also found that VHA’s current process for developing activation cost  estimates does not fully align with best practices for developing cost  estimates as established in the GAO Cost Guide (see table 1 below).  VHA’s process minimally met 10 and did not meet 2 of the steps—each of  which reflects multiple best practices—required to develop reliable cost  estimates. A reliable cost estimate is critical to the success of any  program, providing the basis for informed decision-making, realistic  budget formulation and program resourcing, and accountability for results.  VHA officials acknowledged that following these practices would be  valuable for the activations process, and explained that the agency did  not previously incorporate these practices because they had not  assessed the strength of their activation cost estimation process in this  manner.
Lastly, the Activations Office does not compare existing estimates and  actual activation costs. While the Activations Office develops activation  cost estimates for the upcoming 3 fiscal years and has some capabilities  to track activation costs, to date it has not compared the planned costs to  actual expenses. According to Activations Office officials, they have  historically been unable to track how activation funding was spent at the  facility level, which impeded such comparisons. Starting in fiscal year  2020, officials from the Activations Office plan to use accounting codes  associated with each activation project, which will allow them to track  expenses at the facility level. An internal review conducted in mid-2019 by  the department overseeing the Activations Office concluded that the  agency needed to regularly assess the extent to which activations spent  funds as planned. As of October 2019, however, officials said the office  has not documented the process for how they will deploy their new  accounting oversight capabilities, including which personnel would be  responsible for conducting such comparisons, the frequency of  comparisons, and any follow-up steps that would be considered in the  event of significant differences.
Without processes for estimating total costs and comparing them against  actual expenses, the Activations Office is limited in its ability to improve  resource planning, budgeting, and allocation—critical elements that  support VA’s stated management priority to enhance data-driven  decision-making. Further, guidance from the Office of Management and  Budget states that agencies should obtain information on actual project  costs and compare them against planned expenses so managers can  have a clear understanding of how resources are being used and whether  cost goals are being met. Documented processes for cost estimation  and comparison would be particularly important in the case of large  medical centers, whose activation costs are in the hundreds of millions of  dollars.

		VHA’s Activations Office Has Not Clearly Defined Allowable Activation Costs or Spending Time Frames

The Activations Office has not clearly defined what officials at local  facilities can purchase with activation funding and how long activation  funding should continue after opening day. Activations Office officials said  that there is a general understanding that some expenses, such as  medical equipment for new facilities or services, are activation expenses,  and that the Activations Office intends to provide activation funding until  the facility begins to receive VERA funding to cover operational  expenses. However, there is no policy to inform facility activation staff of  what they can purchase with activation funding and when funding will  cease. In mid-2019, an internal review conducted by the department  overseeing the Activations Office found that the lack of clarity regarding  what could or could not be purchased should be remedied; however, as  of September 2019, no specific plans have been established to define  appropriate purchases.
Officials we spoke with—both at the selected medical facilities and  VISNs—expressed uncertainty about what expenses they could pay for  using activation funding.
Officials from two of eight facilities told us that there were times when  they did not know if they should charge an expense to activation or  another funding source, such as construction accounts. For  example, officials at one facility told us that they were unsure whether  construction or activation funds would pay for the special window  blinds needed for the intensive care units.
Officials at four of the VISNs also said that when contacted by medical  facility officials for guidance on allowable expenses, there were times  when they did not know if facilities should charge an expense to  activation or another funding code.
In addition, officials from the selected sites held differing views on how  long they were eligible to receive activation funding from the Activations  Office. Finance officials for one of the selected facilities said that  activation funding is provided for up to 5 years, while officials from several  other facilities said that activation funding is available until operational  expenses are covered by VERA. Activations Office officials said that the  latter interpretation is accurate and that this transition to ongoing VERA  support should take place within approximately 2 years after opening  day. However, an official from the Activations Office said that a few  facilities have received funding from the Activations Office for more than 2  years after opening because there was no clear definition for when  activation funding should cease.
The lack of clear definitions regarding what constitutes allowable  activation expenses and when activation funding should end limits VHA’s  ability to consistently and accurately estimate and track activation costs.  For example, similar facilities could develop varying total cost estimates  due to different understandings of what expenses are allowable. VA  management priorities include making data-driven decisions to improve  resource planning, budgeting, and allocation. In addition, Standards for  Internal Control in the Federal Government states that management  should use quality information to achieve the entity’s objectives. Clear  definitions on what expenses facilities should charge to activation  accounts, and for how long, would improve the Activations Office’s ability  to monitor activation costs and improve resource stewardship.

	Conclusions

As VHA undertakes the process of replacing facilities to better reflect its  focus on outpatient and specialized care, it is poised to spend hundreds  of millions of dollars per year to equip and staff these new sites. However,  VHA does not have a clear understanding of total costs and whether  individual activation projects are spending funds effectively. Because  VHA does not have a process for developing an estimate for the entire  activation cost of a project, the agency lacks a critical baseline that can  inform future spending decisions. In addition, because VHA lacks a  process that describes how officials should compare actual expenses to  that estimate, the agency has no mechanism to regularly identify and  respond to unplanned differences in activation costs. Furthermore,  defining allowable activation expenses would better position VHA to  ensure total cost estimates are consistent from facility to facility. Lastly,  additional clarification on how to estimate activation costs and compare  them against actual expenses would help VHA to more effectively  manage the activations process. Without processes and clear definitions  associated with activation cost measurement, VHA does not have  reasonable assurance that it will be able to effectively manage the  resources associated with activation.

	Recommendations for Executive Action

We are making the following four recommendations to VA:
The Assistant Deputy Under Secretary for Health for Administrative  Operations should develop and document a process for estimating  total activation costs for major medical facility projects. This process  should reflect the 12 steps for developing a reliable cost estimate  outlined in the GAO Cost Guide. (Recommendation 1)
The Assistant Deputy Under Secretary for Health for Administrative  Operations should develop and document a process for comparing  actual activation costs for major medical facility projects to estimates.  This process should identify the personnel responsible for comparing  the estimated costs to the actual expenses and document their  responsibilities. (Recommendation 2)
The Assistant Deputy Under Secretary for Health for Administrative  Operations should define and document what items and services  officials can purchase with activation funds. (Recommendation 3)
The Assistant Deputy Under Secretary for Health for Administrative  Operations should define and document when facilities should cease  to spend activation funds. (Recommendation 4)

	Agency Comment

We provided a draft of our report to VA for review and comment. VA  provided written comments, which are reprinted in appendix II. VA  concurred with all of our recommendations. VA further provided  information on how it intends to address our recommendations, with  target dates for completion in December 2020.
We are sending this report to the appropriate congressional committees  and to the Secretary of the Department of Veterans Affairs. In addition,  this report is available at no charge on the GAO website at http://gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-2834 or vonaha@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. Other key contributors to this report are listed in  appendix III.

Appendix I: Reported Activation Costs at Selected VHA Medical Facilities

To understand the costs of the activations of the eight selected facilities,  we asked activation officials at each facility to provide a breakdown of the  activation costs by the following categories: (1) Furniture, Fixtures, and  Equipment; (2) Staffing; (3) Supplies; (4) Other; and (5) Total Cost. We  used these cost categories because these are the categories in the  template that facilities complete to estimate activation costs.

Appendix II: Comments from the Department of Veterans Affairs

Appendix III: GAO Contact and Staff Acknowledgments

	GAO Contact

	Staff Acknowledgments

In addition to the contact above, Heather Halliwell (Assistant Director);  Alison Snyder (Analyst-in-Charge); Rose Almoguera; Brian Bothwell;  Geoffrey Hamilton; Jason Lee; Terence Lam; Ethan Levy; Josh Ormond;  Daniel Setlow; Laurel Voloder; Mary Weiland; and Elizabeth Wood made  key contributions to this report.


Input:
	Background

GDUFA and GDUFA II both provided supplemental resources to FDA by  giving it the authority to collect user fees from the generic drug industry, in  addition to its regular appropriations, in order to make improvements to  the generic drug application review process. GDUFA was enacted in  July 2012, in part, to provide funding for more generic drug application  reviewers at FDA in order to handle an increase in the volume of  application submissions and speed up reviews. GDUFA II was enacted in  August 2017 to reauthorize the generic drug user fee program from fiscal  year 2018 through fiscal year 2022. In return, FDA provided Commitment  Letters to Congress that detailed its plans to implement program  enhancements and meet certain performance measures related to the  review of generic drug applications. For example, in its Commitment  Letter for GDUFA II, FDA stated that, for applications in the first review  cycle, it would review and act on at least 90 percent of them within  specified timeframes—8 months for certain priority applications and 10  months for all other applications. FDA stated that it met this  performance measure for fiscal year 2018. The Commitment Letter also  indicated that one of the goals of GDUFA II is to minimize the number of  review cycles for applications to attain approval.

		Generic Drug Application Review Process

FDA’s generic drug application review process includes a number of  steps. The process begins when a generic drug application is submitted  to FDA for review by the Office of Generic Drugs and the Office of  Pharmaceutical Quality within FDA’s Center for Drug Evaluation and  Research. The Office of Generic Drugs is responsible for providing  regulatory oversight and strategic direction for FDA’s generic drug  program to make safe, effective, and high-quality generic drugs available  to the public. The Office of Generic Drugs’ Division of Filing Review  determines whether the generic drug application is acceptable for review,  meaning that the application is sufficiently complete for FDA to review the  application, such as information about the amount of active ingredients  present in the drug. If the generic drug application is not acceptable for  review, FDA issues a Refuse to Receive letter to the applicant explaining  what additional information is required before the application can be  accepted for review. In response, the applicant can resubmit the generic  drug application with additional information and officials within the  Division of Filing Review will assess the information and determine if the  resubmitted application is acceptable for review.
Once the Division of Filing Review determines that a generic drug  application is acceptable for review, the first review cycle begins, and  FDA officials review the application across the following three review  disciplines:
Bioequivalence. Officials within the Office of Bioequivalence are  responsible for examining whether the generic drug application is  bioequivalent to the brand-name drug, meaning that the drug delivers  the same amount of active ingredient in the same amount of time as  the brand-name drug.
Labeling. Officials within the Division of Labeling Review are  responsible for ensuring that the proposed labeling language in the  generic drug application, including the drug’s prescribing information,  matches the language found in the labeling of the corresponding  brand-name drug.
Pharmaceutical quality. Officials within the Office of Pharmaceutical  Quality have responsibility for ensuring the quality of drug products  and assessing all drug manufacturing facilities, including both  domestic and foreign. Officials within this office assess the risk of toxic  substances or bacterial content in the drug, among other things.
All generic drug applications are reviewed by primary reviewers and  secondary reviewers. Primary reviewers assess the application to ensure  that the documentation meets regulatory requirements in their specific  disciplines. For example, primary reviewers within the Office of  Pharmaceutical Quality evaluate documentation related to the proposed  drug manufacturing process to ensure that the process produces quality  drugs consistently. Secondary reviewers ensure the quality and  consistency of primary reviewers’ assessments and the clarity of  communication to applicants.
During the first review cycle, FDA communicates with applicants when  issues arise during its review that may prevent the agency from approving  the generic drug application. This communication is typically made  through the issuance of information requests or discipline review letters:  Information requests. Information requests are letters sent to  applicants to request clarification or additional information that is  needed or would be helpful for FDA to complete its review. These  letters may be sent by any review discipline and can be sent at any  point after the Office of Generic Drugs accepts the generic drug  application for review.
Discipline review letters. Discipline review letters are letters issued  by each review discipline at about the mid-point of the review cycle to  identify possible deficiencies. FDA officials said they aim to issue  these letters no later than 6 months into the first review cycle.
In response to these letters, applicants can submit additional information  for FDA to consider before the end of the review cycle.
After FDA’s three review disciplines complete their review of an  application and any additional information the applicant has submitted in  response to information requests and discipline review letters, the agency  issues an action letter that informs the applicant of whether the  application is approved, marking the end of the first review cycle and the  end of FDA’s review if the application is approved. There are three types  of action letters:
Approval letter. Issued when the agency has concluded its review of  a generic drug application and the applicant is authorized to  commercially market the drug.
Tentative approval letter. Issued when the agency has completed its  review of an application and has concluded that the generic drug  application is sufficient, but patents or other exclusivities prevent  approval. A tentative approval letter does not allow the applicant to  market the generic drug.
Complete response letter. Issued at the completion of the review of  an application where deficiencies remain at the end of the review  cycle. The complete response letter describes any deficiencies that  must be corrected in order for the application to be approved.
For a generic drug application that receives a complete response letter,  the applicant can amend the application and seek another full review,  which begins the second or subsequent review cycles. During these  cycles, FDA officials review changes made to generic drug applications in  response to deficiencies that FDA identified.

	FDA Approved 12 Percent of Generic Drug Applications in the First Review Cycle and Several Factors May Have Contributed to Whether Applications Were Approved

Our analysis of FDA data shows that 12 percent of the 2,030 generic drug  applications that FDA reviewed in fiscal years 2015 through 2017  received approval in the first review cycle. See figure 1.
We identified several factors, including certain characteristics of generic  drug applications, that may have contributed to whether an application  received approval in the first review cycle, including the sufficiency of the  application, deficiencies in drug quality, the type of drug reviewed, and  the application’s priority status.
Sufficiency of the application. We found that the sufficiency of the  generic drug application, including the completeness of the application  and the degree to which the applicants understood and fulfilled  application requirements, affected its likelihood of receiving an approval in  the first review cycle. According to FDA, one indication of the sufficiency  of the generic drug application is whether FDA had previously refused to receive the application for review because it was not substantially  complete upon its first submission. Our analysis of FDA data found that  applications that had previously been refused were slightly less likely to  be approved in the first review cycle compared with applications that had  not previously been refused, and rates of approvals decreased for  applications with two previously refused attempts. See table 1.
According to stakeholders we interviewed, the sufficiency of a generic  drug application may partially reflect the level of experience the applicant  has in submitting applications, and we found some evidence to support  this explanation. FDA managers and reviewers said that, in general, less  experienced applicants are more likely to produce lower-quality generic  drug applications compared to applicants with relatively more experience.  Our analysis of FDA data found that applicants that submitted just one  application during fiscal years 2015 through 2017 had a slightly lower rate  of approval in the first review cycle (10 percent) compared to the rate  across all applicants (12 percent). Additionally, in our review of 35  selected generic drug applications, we identified three applications that  were from applicants that had no previously approved generic drug  application submissions, an indication that they may have little or no  experience with these applications. None of the three applications were  approved in the first review cycle. One of these applications elicited  reviewer comments that outlined basic application requirements,  potentially reflecting the lack of experience of the applicant.
Drug quality deficiencies. Our review of documentation from the first  review cycle for 35 generic drug applications included 26 that were not  approved in that cycle. Among those 26 applications, the most common  deficiencies that remained at the end of the first cycle were related to the  quality of the drug—356 out of 435 deficiencies. These deficiencies  included issues related to the drug manufacturing facilities, which can  affect the quality of the drug produced and the stability of the drug over  time, among others. Officials from one large applicant told us that most of  the comments they received from FDA reviewers are related to the quality  of the drug. Three out of five applicants we interviewed also noted that  the results from inspections of drug manufacturing facilities—which FDA  includes as a component of its review of the quality of the drug—are a  factor that may cause an application not to be approved in the first review  cycle. Among the 26 applications we reviewed that were not approved,  eight had an outstanding deficiency related to the manufacturing facility.
Type of drug. We also found that the rate of approval in the first review  cycle differed based on certain characteristics of the type of drug  reviewed, including the route of administration, which may indicate the  complexity of the drug. Complexity can also be influenced by other factors  including, for example, the drug’s active ingredient or formulation. FDA  officials noted that some complex drugs—including those that combine  drug products with drug delivery devices, such as asthma inhalers—are  less likely to be approved in the first review cycle. Officials we interviewed  from one large applicant—which we identified based on the number of  approved generic drug applications it had in fiscal year 2018—reported  that their company had never submitted a generic drug application for a  complex drug product that received approval in the first review cycle  despite having significant experience with producing complex drugs.  Officials we interviewed from another applicant said that very few of its  dermatological products, which are considered complex, had received  approval in the first review cycle.
In our review of FDA data, we also found that applications for drugs with  certain routes of administration—the method by which the drug is taken,  such as oral, topical, or intravenous—had different rates of approval in  the first review cycle. In particular, from fiscal years 2015 through 2017,  FDA reviewed generic drug applications for 41 ophthalmic and 20  transdermal drugs—types of drugs that FDA considers complex—and  none of these applications received approval in the first review cycle. In  contrast, generic drug applications for topical drugs, which FDA also  identifies as complex, had higher approval rates. Specifically, our analysis  found that the rate of approvals in the first review cycle for generic drug  applications for topical drugs was 25 percent—more than double the rate  for all applications included in our analysis. FDA officials stated that in  recent years FDA released several product-specific guidances for topical  drugs—technical guidance intended to help applicants identify the most  appropriate methodology for developing certain drugs and generating the  evidence needed to gain approval. FDA officials told us these guidances  may have contributed to the higher rates of approval in the first review  cycle for topical drugs. See table 2.
Generic drug application priority review designation. In addition, we  found that a generic drug application’s priority review status may affect  the rate of approval in the first review cycle. FDA may grant priority review  status to applications under several circumstances, including for the first  generics of brand-name drugs and other designations, such as for drugs  that could help address public health emergencies. Our analysis of FDA  data found that the rates of approval in the first cycle were lower for  applications for first generics than for applications with no priority  designation—6 percent and 14 percent, respectively. One potential  explanation for the relatively low rate of approval is that for a first generic,  applicants have a financial incentive to be the first to submit an  application to FDA. Officials from one trade association stated that  applications for first generics may be of lower quality because the  applicants are rushing to submit their applications. In other cases,  priority designations were associated with higher first-cycle approval  rates. First-cycle approval rates for applications with other types of priority  designations were higher than for applications with no priority  designation—18 percent for applications that were marked as priority for  other reasons, such as drug shortages or public health emergencies. See  table 3.

	FDA Made Changes That Could Increase the Rates of Approval for Generic Drugs in the First Review Cycle, but Opportunities Exist to Enhance Its Efforts

		FDA Has Taken Steps to Enhance Communication with Applicants and Improve Reviewer Consistency to Increase the Rate of Generic Drug Approvals in the First Review Cycle

Our review of FDA guidance and regulations found that FDA has taken  steps to enhance communication with applicants to increase the rate of  generic drug application approvals in the first review cycle. Specifically,  since the beginning of fiscal year 2013 in response to GDUFA, FDA  increased communication with applicants prior to and during a generic  drug application’s first review cycle consistent with its goal of helping  applicants prepare approvable applications. These changes have  included the following:
Additional product-specific guidance. FDA has continued to  release new and revised product-specific guidance to support a  generic drug application’s approval within the first review cycle. Since  GDUFA’s implementation and at the time of our review, FDA told us  that it issued 993 new and revised product-specific guidance  documents that describe acceptable methodologies for developing  generic drugs and generating evidence needed to support a generic  drug application’s approval. FDA officials indicated that product- specific guidance helps streamline both application development and  review.
Additional regulatory guidance. FDA has also issued regulatory  guidance to communicate the agency’s expectations for the content  and format of generic drug applications, which can facilitate approval  in the first review cycle. In addition, in 2018, FDA issued draft  guidance that described common application deficiencies and sought  to promote approval during the first review cycle by providing  recommendations on avoiding these recurring deficiencies.
Presentations to industry. In presentations to applicants and others,  FDA officials have presented information about generic drug  application reviews and deficiencies frequently identified in generic  drug applications. FDA has posted some of these presentation  materials, including several video recordings, publicly on its website to  share the information with industry.
Communication during the review cycle. FDA has changed its  review process to encourage reviewers to communicate with  applicants at about the mid-point of the review cycle. FDA reviewers  now aim to issue discipline review letters at about the mid-point of the  first review cycle, rather than waiting until the end of the review cycle  to communicate deficiencies. According to FDA, these earlier  communications are intended to provide applicants with an  opportunity to address issues before the end of the first review cycle  and facilitate more approvals during that cycle.
Assistance with applications for complex drugs. FDA has taken  steps to assist applicants developing generics of complex drugs, such  as drugs with complex active ingredients, formulations, or routes of  administration. Beginning in fiscal year 2018 when GDUFA II was  implemented, applicants developing complex drugs may request  meetings with FDA prior to submitting a generic drug application and  at the mid-point of the review cycle. In addition, FDA officials told us  that since fiscal year 2013 when GDUFA was implemented, the  agency has released 378 product-specific guidance documents  focused on complex drugs.
While all five applicants we interviewed generally described FDA’s efforts  to increase communication as helpful, they offered opportunities for  improvement. For example, four out of the five applicants said that  product-specific guidance helps them understand exactly what the  requirements are for product development, which can facilitate approval  in the first review cycle. However, two of these applicants also said that  FDA does not obtain sufficient input from the generic drug industry when  developing product-specific guidance documents. To increase  transparency, stakeholders said that FDA could solicit industry input to  avoid proposing unrealistic guidance and one stakeholder suggested that  FDA could create a workgroup to prevent unintended consequences  following the implementation of new and revised guidance. However, FDA  officials told us that draft guidance documents have a public comment  period for stakeholders to provide comments on guidances before they  are finalized.
In December 2017, we similarly found that stakeholders indicated they  would benefit from greater transparency in FDA’s process for developing  guidance. We recommended that FDA publicly announce the agency’s  plans for issuing new and revised product-specific guidance for  nonbiological complex drugs within the next year. FDA agreed with this  recommendation and published a website in April 2019 that provides  information about upcoming product-specific guidance documents for  complex generic drugs.
In addition, all five applicants we interviewed said that FDA has improved  communication with them, such as by increasing the frequency and timing  of communications, and two applicants indicated that discipline review  letters add predictability to the review process. (See app. I for more  information on FDA’s changes to the generic drug application review  process to improve communication with applicants.) While all five  applicants we interviewed generally agreed that the increased  communications would help increase rates of first-cycle approval, they  also suggested that additional flexibility to communicate with FDA  informally mid-cycle, such as by phone, could further facilitate the review  process by helping applicants respond to questions or get clarity on  questions included in the information requests or discipline review letters.  FDA officials told us that applicants currently can request teleconferences  with FDA, such as after receiving a complete response letter; however,  they also noted that applicants generally prefer email communications  and such teleconferences are not frequently utilized.
FDA has also taken steps to improve consistency among reviewers.  These steps could facilitate more approvals in the first review cycle  because receiving consistent comments from FDA reviewers typically  makes it easier for applicants to respond more quickly, which—according  to some stakeholders—can result in approval in the first review cycle.  These changes include the following:
Creating review templates. Officials from FDA’s review disciplines  have developed templates to guide reviewers through the generic  drug application review process. According to FDA’s Manual of  Policies and Procedures, these templates are intended to increase  reviewers’ efficiency and improve assessment consistency.
Developing common phrases. FDA also issued internal guidance on  common phrases that reviewers may use to communicate generic  drug application deficiencies in their comments to applicants during  the first review cycle. For example, officials from the Division of  Labeling Review said they maintain a database of common phrases  and train reviewers on how to explain deficiencies to applicants.  Officials explained that the Division of Labeling Review is also working  toward pre-populating some parts of the review template to increase  efficiency and consistency in the review process.
Understanding the generic drug industry. FDA has taken steps to  increase reviewers’ and applicants’ common understanding of  industry practices and FDA review standards, such as through visits  to manufacturing facilities, to improve the quality and consistency of  reviewers’ comments in the first review cycle. However, all five  applicants we interviewed noticed inconsistency among reviewers.  FDA officials and two applicants suggested that this may be because  FDA reviewers have different professional backgrounds. One  applicant noted that some reviewers benefit from visiting  manufacturing facilities if they do not have prior experience in the  generic drug industry. Officials from a trade association said that such  steps improve applicants’ understanding of what FDA reviewers are  looking for in generic drug applications and may enhance their ability  to submit applications that are approvable in the first review cycle.

		Opportunities Exist to Enhance FDA’s Efforts to Increase the Rates of Approval for Generic Drugs in the First Review Cycle

While stakeholders stated that the changes FDA made to improve  reviewer consistency were positive, they noted that inconsistency among  reviewers still remained, and we also found inconsistencies among  reviewers. In addition, while stakeholders we interviewed raised concerns  that the timing of brand-name labeling changes could affect whether  applications were approved in the first review cycle, FDA has not taken  steps to assess the validity of these concerns.
Inconsistency among FDA reviewers. While FDA has taken steps to  improve consistency among generic drug application reviewers,  stakeholders noted that inconsistencies persist, and these inconsistencies  may influence whether an application is approved during the first review  cycle. For example, most stakeholders we interviewed (three out of five  trade associations and four out of five applicants) indicated that they were  aware of examples when different FDA reviewers within the same review  discipline provided substantively different assessments of similar generic  drug applications, specifically by requesting additional information from  applicants for some applications and not others. For example, one  applicant cited an example of two similar topical drugs whose applications  relied on the same data set. The reviewer for one application required  additional data, while the reviewer for the other application did not. To  improve consistency, four applicants we interviewed suggested that FDA  improve its reviewer training and one suggested that FDA create a  workgroup to examine and address inconsistencies among reviewers.
Four of the five applicants we interviewed also reported variation in the  consistency of reviewers’ comments, including a lack of clarity in the  information required for the applicant to address the comments. For  example, one applicant said that they have received comments where  reviewers did not specify what further information was required, and  added that comments that suggest specific resolutions are extremely  helpful, which would be consistent with FDA’s Manual of Policies and  Procedures. This manual describes a standard process for FDA  reviewers to use when assessing the completeness of generic drug  applications, including clearly communicating with applicants about  deficiencies that must be corrected for their applications to be approved in  order to reduce the number of review cycles. According to the manual,  primary reviewers are responsible for assessing whether applications  meet the regulatory requirements for approval, while secondary reviewers  are responsible for ensuring consistency among assessments and quality  of communications to the applicant. Further, the manual advises primary  and secondary reviewers to ensure that comments to applicants about  deficiencies include similar content. The manual also indicates that  comments should include the following four elements: (1) refer to a  specific location within the generic drug application; (2) identify the  omitted information or explain the problem with the information submitted;  (3) explain the actions necessary to resolve the deficiency; and (4)  explain why the information or revision is needed. Finally, FDA provides  reviewers with plain language writing guidelines and other writing  resources to support the development of clear messages for external  communications.
In our review of documentation from the first review cycle for 35 generic  drug applications, we found variation in the clarity and specificity of some  reviewer comments that may have influenced the outcome of the first  review cycle. For example, some discipline review letters included clear  descriptions of potential remedies for some deficiencies, while others did  not clearly describe the deficiency or FDA’s expectations for an  approvable generic drug application. Of the 35 generic drug applications,  we conducted a more detailed review of four applications from fiscal year  2018—two that received approval in the first review cycle and two that did  not. In the two applications that were not approved in the first review  cycle, we identified 32 instances in which the comments did not fully meet  FDA’s criteria.
Two of the four applications we reviewed in more detail had similar  numbers and types of deficiencies identified in the discipline review letters  sent to the applicants mid-way through the first review cycle, such as  quality deficiencies related to the drug substance and drug product, but  the clarity and content of the comments included in the discipline review  letters varied considerably. For one of the applications, the comments were written clearly and, consistent with FDA’s Manual of Policies and  Procedures, identified options for addressing the deficiencies. For the  other application, the comments were less clear and did not clearly  identify ways to address the deficiencies. The applicant of the generic  drug application with clearly written comments resolved all of the  deficiencies raised in their discipline review letter and the generic drug  application was approved in the first review cycle. In contrast, the  applicant of the other application did not resolve all deficiencies raised in  their discipline review letter and was not approved in the first cycle. See  Table 4 for more detail on these two examples.
Inconsistency among reviewers could affect the rate of approvals in the  first review cycle if comments provided to applicants differ in content or  are not clearly communicated. For example, if some reviewers provide  unclear comments, it could be more difficult for the applicant to address  deficiencies in a timely manner, while applicants that received clear  comments could potentially address deficiencies within the first review  cycle. This could delay some generic drugs from entering the market if  applicants require more time, including potentially additional FDA review  cycles, to understand and respond to unclear comments. This has  potential impacts on patient access to generic drugs and on applicants’  abilities to effectively manage their expectations for when their generic  drug applications will be approved.
FDA officials explained that although secondary reviewers are  experienced, they do not consistently receive additional training to ensure  clarity and consistency among primary reviewers. They noted that FDA  offers training in clear writing for FDA employees but it is not required for  reviewers. FDA managers noted that some inconsistency among  reviewers may persist due to various factors such as tenure with the  agency and different professional backgrounds or interpretations of the  generic drug application information. They also said that standardizing  reviewers’ writing is challenging since each reviewer might have his or  her own writing style and scientific expertise. Two applicants and one  trade association we interviewed also said that the length of reviewers’  tenure with the agency could impact the substance of their comments in  information requests and discipline review letters and the likelihood of the  applicant attaining approval in the first review cycle. For example, one  trade association we interviewed said that inexperienced reviewers  typically request information from applicants that a more experienced  reviewer would already know, such as information about drug  manufacturing facilities.
Unknown effects of labeling changes. Three applicants we interviewed  noted that they believe FDA could improve the rate of approvals during  the first review cycle if they took steps to mitigate delays that  stakeholders said result from brand-name drug labeling changes that  occur mid-cycle. Because generic drug labels generally must match  brand-name labels, most applicants we interviewed said that changes  made by brand-name drug companies to the labeling of drugs during the  review process can delay or prevent approval of generic drugs in the first  review cycle because the applicant of the generic drug would likely need  to update the label before it is approved. In addition, five of the 10  stakeholders we interviewed said they believe such labeling changes  negatively impact the rate of first-cycle approvals, and three said they  believe that brand-name companies may strategically time updates to a  brand-name drug’s labeling to occur right before the approval of a generic  competitor in order to delay generic drug approvals.
Although our review of 35 selected applications did not identify examples  where labeling changes made during the first review cycle were the only  factor that prevented approval, we identified two instances where labeling  changes were among multiple factors that prevented approval.  Specifically, we identified two applications for which the complete  response letters noted recent changes in the brand-name drug’s labeling  as one of multiple factors that contributed to the generic drug application’s  failure to receive approval in the first review cycle. One of these  applications had successfully addressed several labeling deficiencies  during the first review cycle, but received a complete response letter that  included new labeling deficiencies because of recent changes in the  brand-name drug’s labeling.
Three applicants and one trade association identified labeling changes as  a concern during our interviews. Two of these applicants and the trade  association suspected updates are strategically timed to delay generic  drug approvals. However, FDA does not know whether there is validity to  these concerns because it has not conducted analysis that would enable  it to assess their validity. FDA officials noted that they were aware of  these types of concerns, but thought it would be difficult for brand-name  drug companies to successfully time changes in their drugs’ labeling to  affect applications under review, and that labeling changes for brand- name drugs must be justified, for example, to note an adverse reaction  identified after approval. However, FDA officials also acknowledged that  there may be an incentive for brand-name drug companies to change the  label on a drug frequently to make it more difficult for a generic drug  application to be approved.
FDA officials stated that the Office of Generic Drugs does not assess how  often brand-name companies change their labeling or track how often  such labeling changes occur because such changes are reviewed by the  Office of New Drugs. Further, while FDA officials noted that the two  offices have coordinated on the review of some labeling changes, they  stated that they do not coordinate on the timing of approval of brand- name drug label changes. This is inconsistent with federal internal control  standards, which state that agencies should identify risks that affect their  defined objectives and use quality information to achieve these  objectives, including by identifying the information required to achieve the  objectives and address related risks. In addition, FDA can approve a  generic drug application even though changes have been made in the  brand-name drug labeling that the applicant has not incorporated into its  proposed labeling, provided the applicant meets certain criteria; however,  FDA officials told us that applications rarely meet the required criteria.  Conducting an assessment of the extent to which the timing of such  changes affect the approval of generic drugs in the first cycle of review  would provide FDA with the necessary information to respond to  stakeholder concerns and take action, as appropriate, such as by  coordinating with the Office of New Drugs on this issue. To the extent that  brand-name companies’ labeling changes are creating unnecessary  delays in generic drug approval, such delays may impede generic drug  entry into the market, which would be inconsistent with FDA’s stated  goals of speeding up generic drug reviews.

	Conclusions

The timely approval of safe generic drugs in FDA’s first review cycle can  provide substantial cost savings to patients and third-party payers. Since  the enactment of GDUFA, FDA has taken steps to help applicants submit  stronger generic drug applications and correct deficiencies within the first  review cycle. However, according to FDA its most recent analysis found  that the average generic drug application required three cycles of review  before approval. Opportunities exist to enhance FDA’s efforts to increase  the rates of approval for generic drugs in the first review cycle, including  improving the consistency and clarity of reviewer comments and  assessing the effects of the timing of brand-name companies’ changes to  labeling.
Taking such steps could help FDA meet the agency’s goals of minimizing  the number of review cycles necessary for generic drug application  approval and increasing the overall rate of approval, including within the  first review cycle. Increasing the rate of approval in the first review cycle,  while maintaining the efficacy and safety of generic drugs, can expand  consumer access to relatively lower cost medications and has the  potential to save patients and third-party payers billions of dollars.

	Recommendations for Executive Action

We are making the following two recommendations to FDA.
The Commissioner of FDA should take additional steps to address  inconsistency in its written comments to generic drug applicants— including the clarity of writing and the content of comments—among  reviewers, such as requiring additional training for reviewers.  (Recommendation 1)
The Commissioner of FDA should assess the extent to which the timing  of brand-name drug companies’ drug labeling changes affect the approval  of generic drug applications in the first review cycle, and take steps, as  appropriate, to limit the effect of brand-name drug labeling changes on  pending generic drug applications. (Recommendation 2)

	Agency Comments

We provided a draft of this report to HHS for review and comment. In its  written comments, which are reproduced in appendix II, HHS concurred  with our recommendations. HHS stated that it will take steps to improve  the clarity and content of primary reviewers’ comments by, for example,  providing training on written communication. Additionally, HHS stated that  it will take steps to assess examples in which a brand-name drug  company labeling change impacted the timeline of a generic drug  approval and assess what actions could address this issue. In addition,  HHS provided technical comments, which we incorporated as  appropriate.
We are sending copies of this report to the congressional addresses, the  Secretary of Health and Human Services, and other interested parties. In  addition, the report is available at no charge on the GAO website at  http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at 202-512-7114 or dickenj@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made key contributions to this report  are listed in appendix III.

Appendix I: Changes to the Generic Drug Review Process to Improve Communications with Applicants

The Food and Drug Administration (FDA) made several changes to its  review process for generic drug applications in its implementation of the  Generic Drug User Fee Amendments of 2017 (GDUFA II) that are  intended to improve communications with applicants, such as drug  companies, and included the following:
Additional communication with applicants. In its GDUFA II  Commitment Letter to Congress,  1. FDA committed to notify applicants of potential deficiencies in an  application that could prevent approval in the first review cycle  through information requests or discipline review letters by about the  mid-point of the review cycle; and  2. FDA committed to continue to issue additional information requests  or discipline review letters late in the review cycle as needed, and, in  certain circumstances, to work beyond the review timeframe to issue  an approval.
Pre-submission facility correspondence. In its GDUFA II  Commitment Letter to Congress, FDA committed to communicating  with applicants of priority generic drug applications before the  application is submitted. For priority generic drug applications, FDA  accepts information about facilities associated with an application,  such as manufacturing facilities, at least 2 months before the  application is submitted. If FDA finds the pre-submission facility  correspondence includes complete and accurate information, the  application may receive a review timeline of 8 months, rather than  10.
Figure 2 provides an overview of the timeline for the first review cycle for  generic drug applications under the Generic Drug User Fee Amendments  of 2012 (GDUFA) and the revised review process under GDUFA II.

Appendix II: Comments from the Department of Health and Human Services

Appendix III: GAO Contact and Staff Acknowledgments

	GAO Contact

	Staff Acknowledgments

In addition to the contact named above, Gerardine Brennan (Assistant  Director), Rebecca Rust Williamson (Analyst-in-Charge), Caroline Hale,  and Elizabeth Leibinger made key contributions to this report. Also  contributing were Kaitlin Farquharson, Cathy Hamann, Dan Lee, Laurie  Pachter, and Vikki Porter.