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FY 2004 ADUFA Financial Report

required by the

ANIMAL DRUG USER FEE ACT OF 2003

January 2005

Food and Drug Administration
Department of Health and Human Services

 

 This Report is available in printer-friendly PDF format (245 KB)

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Table of Contents

 

Letter to Congress

Executive Summary

 

Main Report

Background

Meeting the Legal Conditions for User Fees in FY 2004

User Fee Revenues

Obligation of User Fee Revenues

Carryover Balances

Total Costs of the Process for the Review of Animal Drug Applications

Management Challenges for FY 2005

Appendices

Appendix A: Conditions for Assessment and Use of Fees

Appendix B: Summary of Number of Application Fees Paid in FY 2004

Appendix C: Waived or Reduced Fees

Appendix D: Allowable and Excluded Costs for the Process for the Review of Animal Drug Applications

Appendix E: Development of Costs for the Process for the Review of Animal Drug Applications

 


HHS Letterhead 

 


 

April 28,2005

The Honorable Richard Cheney
President of the Senate
United States Senate
Washington, D.C. 20510

Dear Mr. President:

Enclosed for your consideration is the first annual financial report to Congress required by the Animal Drug User Fee Act of 2003 (ADUFA). This report covers fiscal year

(FY) 2004, documenting how each of the conditions specified in ADUFA for the continued collection of animal drug user fees was met.

The report also presents the user fee revenues and related expenses for FY 2004, baseline data for FY 2003, and details the amounts carried over at the end of the year that remain available. For FY 2004, FDA collected $4.9 million in user fees, and spent $1.1 million. Over 30 percent of the fees were spent for salaries and benefits for additional staff, and the remainder went toward increased support and infrastructure for the animal drug review program. This enhanced infrastructure and the infusion of human resources are critical in enabling FDA to meet the performance goals associated with ADUFA--goals that become increasingly more stringent each year.

We are pleased that Congress enacted ADUFA, which will provide increasing levels of user fees through FY 2008. These additional resources will enable FDA to substantially strengthen and speed its animal drug review process, while ensuring that only safe and effective animal drugs are available to the public.

Sincerely,

/s/

Michael O. Leavitt


Enclosure

Identical letters to:

  • Speaker of the House of Representatives
  • Chairman and Ranking Minority Member, Committee on Health, Education, Labor, and Pensions, United States Senate
  • Chairman and Ranking Minority Member, Committee on Energy and Commerce, House of Representatives

 


 

EXECUTIVE SUMMARY

 

The law requires the Food and Drug Administration (FDA) to report annually on the financial aspects of its implementation of the Animal Drug User Fee Act of 2003 (ADUFA). This is FDA's first financial report required under this Act, and it covers fiscal year (FY) 2004.

ADUFA (Public Law 108-130) was signed into law by the President on November 18, 2003. The Act authorizes FDA to collect fees for certain applications and supplements, establishments, products, and sponsors in support of the review of new animal drugs. On January 23, 2004, the President signed appropriations legislation (Public Law 108-199) for FY 2004 which included animal drug user fees for FDA. That action, approximately 4 months into FY 2004, enabled FDA to begin to collect and spend the authorized fees.

ADUFA specifies that the following three conditions must be satisfied each year in order for FDA to collect and spend ADUFA fees:

  1. FDA's overall salaries and expenses appropriation, excluding fees, must exceed FDA's overall FY 2003 salaries and expenses appropriation, excluding fees and adjusted for inflation.
  2. Fee revenues collected must be specified in Appropriation Acts.
  3. FDA must spend at least as much from appropriated funds for the review of animal drug applications as it spent in FY 2003, adjusted for inflation.

This report describes how the specific statutory conditions or "triggers" were met in

FY 2004. The statements and tables included in this report also provide baseline data on the expenditures for the animal drug review process in FY 2003.

For FY 2004, FDA collected $4.9 million in fees, spent $1.1 million from ADUFA revenues, and carried the balance of $3.8 million forward for use in FY 2005. The funds spent in FY 2004 facilitated the recruitment of over 20 new staff resulting in additional 7 staff years to the animal drug review process and to pay for start-up expenses such as space, computers, furniture, supplies, rent, and other infrastructure needs. Most of the additional staffs were hired toward the end of the fiscal year, and FDA utilized only a small fraction of a staff year for each person hired. During FY 2005, FDA expects to spend user fees to pay for about 30 more staff years to conduct and support animal drug reviews than were used in FY 2003, positioning the agency to be able to meet the challenging performance goals associated with this program in FY 2005 and beyond. Hiring to accomplish the substantial increase in review staff necessary to meet the ADUFA goals was well underway by the end of FY 2004.