FY 2002 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

March 27, 2003

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

Dear Mr. President:

Enclosed for your consideration is the annual financial report to the Congress required by the Prescription Drug User Fee Act of 1992 (PDUFA) as amended (section 104(b) of the Food and Drug Administration Modernization Act of 1997 (FDAMA)). This report covers fiscal year (FY) 2002, documenting how each of the conditions specified in PDUFA for continued collection of prescription drug user fees was met.

The report also presents the user fee revenues and related expenses for FY 2002, comparative data for earlier periods, and details the amounts carried over at the end of each year that remain available. For FY 2002, FDA collected $143 million in user fees, and spent $162 million. The spending included balances collected in earlier periods that remained available. Almost 70 percent of the fees was spent for salaries and benefits. This infusion of human resources is the single most critical factor enabling FDA to meet the performance goals associated with PDUFA—goals that become increasingly more stringent each year.

We are pleased that Congress enacted the reauthorization of PDUFA (PDUFA III) through FY 2007 last June, well in advance of the expiration of PDUFA II. Beginning in FY 2003, PDUFA III authorizes higher levels of fee revenue to support the drug approval process.

Sincerely,

/s/

Tommy G. Thompson

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

Content

Executive Summary

Background

Meeting the Legal Conditions for User Fees in FY 2002

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 2003

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