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FY 2005 PDUFA Financial Report

required by the

Prescription Drug User Fee Act of 1992

as amended by the

Food and Drug Administration
Modernization Act of 1997

and by the

Prescription Drug User Fee Amendments of 2002

Food and Drug Administration
Department of Health and Human Services

October 2006

 

This Report is available in printer-friendly PDF format 210 KB)

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Contents

 

Letter from the Secretary of Health and Human Services

Executive Summary

 

Main Report

Background

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 Human Drug Applications

Management Challenges for FY 2006

Appendices

Appendix A: Conditions for Assessment and Use of Fees

Appendix B: Exemptions and Waivers

Appendix C: Allowable and Excluded Costs for the Process for the Review of Human Drug Applications

Appendix D: Development of Costs for the Process for the Review of Human Drug Applications

Appendix E: Risk Management Component of Costs for the Review of Human Drug Applications

 



Letter to the Secretary Department of Health and Human Services

HHS Letterhead


 

October 13, 2006

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

Dear Mr. President:

The Prescription Drug User Fee Act of 1992 (PDUFA), as amended, requires an annual financial report to Congress. Please find enclosed the Fiscal Year 2005 report which documents how the Food and Drug Administration (FDA) met each of the necessary conditions specified in PDUFA for continued collection of prescription drug user fees. Availability of these fees makes FDA better able to strengthen its drug review process and meet the performance goals established for this program.

I look forward to working with the Congress during the reauthorization of PDUFA in the coming months.

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

Copy of letter with signature [124 KB PDF]

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Executive Summary

 

The Prescription Drug User Fee Amendments of 2002 requires the Food and Drug Administration (FDA or the Agency) to report annually on the financial aspects of its implementation of the Prescription Drug User Fee Act (PDUFA), as amended. This report covers fiscal year (FY) 2005.

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

  1. FDA's overall Salaries and Expenses Appropriation, excluding fees, must exceed FDA's overall FY 1997 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 human drug applications as it spent in FY 1997, adjusted for inflation, within certain tolerances.

This report describes how FDA met those specific statutory conditions or "triggers" during FY 2005. The statements and tables included in this report also provide the user fee revenues and expenditures in FY 2005, the carryover balance, and comparative data for earlier periods.

For FY 2005, FDA collected $283 million in fees, including fees collected for earlier periods. This is slightly more than the $278 million FDA projected at the beginning of the year when fees for FY 2005 were established. The higher revenue is attributable to receiving a greater than anticipated number of fee-paying applications.

In FY 2005, FDA obligated $269 million from PDUFA fee revenues. This accounted for about 56 percent of all funds obligated by FDA from all sources in support of the process for the review of human drug applications. This $269 million was about $14 million less than net collections for the year, increasing the balance of funds collected and appropriated in previous years, and still available for obligation, to $65 million at the end of FY 2005. FDA spent over 65 percent of the fee revenue for employee salaries and benefits.

Challenges facing FDA in FY 2006 include hiring, training and maintaining the staff to meet the PDUFA III goals and maintaining application review productivity. In addition, during the current fiscal year FDA must negotiate the initial terms of draft legislation to extend PDUFA beyond FY 2007 and publish this information shortly after the end of September 2006.

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