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FY 2005 ADUFA Financial Report

required by the


October 2006

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


Main Report


Meeting the Legal Conditions for User Fees in FY 2005

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 2006


Appendix A: Conditions for Assessment and Use of Fees

Appendix B: Summary of Number of Application Fees Paid in FY 2005

Appendix C: Waivers and Reductions Granted

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 



October 13, 2006

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

Dear Mr. President:

Enclosed for your consideration is the second annual financial report to Congress required by the Animal Drug User Fee Act of 2003 (ADUFA). This report covers fiscal year 2005, documenting how each of the conditions specified in ADUFA for the continued collection of animal drug user fees was met.

In addition, this report presents the user fee revenues and related expenses for FY 2005, baseline data for FY 2003, and details the amounts carried over at the end of the year that remain available to continue to enhance the process to review new animal drug applications and submissions. In FY 2005, FDA had net collection of $8.3 million and spent $8.5 million animal drug user fees. Slightly more than 50 percent of fees were spent in salaries and benefits for staff. The remainder went toward other operational expenses including support and infrastructure for the animal drug review program. The 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. The 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.



Michael O. Leavitt


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

Copy of letter with signature (188 KB PDF)



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 the second financial report required under ADUFA. It covers fiscal year (FY) 2005.

ADUFA (Public Law No. 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 December 8, 2004, the President signed appropriations legislation (Public Law No. 108-447) for FY 2005, which included animal drug user fees for FDA. That action, approximately 3 months into FY 2005, enabled FDA to begin to collect and spend the authorized FY 2005 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 2005. The statements and tables in the report also provide baseline data on the expenditures for the animal drug review process in FY 2003.

In FY 2005, FDA collected an additional $8.3 million in animal drug user fees, spent $8.5 million from fee revenues, and carried a balance of $3.6 million forward for future fiscal years. ADUFA implementation strategies facilitated the recruitment of 27 new review staff in FY 2005. The animal drug user fees spent in FY 2005 supported 42 full time equivalent staff years in addition to other operational expenses such as computers, furniture, supplies, rent, and other infrastructure needs. During FY 2006, FDA expects to spend user fees to continue enhancing the review program and recruit the additional review staff necessary to meet the challenging performance goals associated with this program in FY 2006 and beyond.