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U.S. Department of Health and Human Services

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FY 2002 PDUFA Financial Report: Executive Summary

Table of Contents

The law requires the Food and Drug Administration (FDA) to report annually on the financial aspects of its implementation of the Prescription Drug User Fee Act of 1992 (PDUFA), as reauthorized by the Food and Drug Administration Modernization Act of 1997 (FDAMA or PDUFA II). This report covers fiscal year (FY) 2002.

The PDUFA II 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.

This report describes how those specific statutory conditions or “triggers” were met in FY 2002. The statements and tables included in this report also provide information on the user fee revenues and expenditures in FY 2002, and on the carryover balance. Comparative data for earlier periods are also provided.

For FY 2002, FDA collected $143.3 million in fees and, at the end of the year, FDA also had receivables of $1.8 million.

In FY 2002, FDA spent $161.8 million from PDUFA revenues—$18.5 million more than its net collections for the year. This resulted from planned spending of carryover balances in order to fund staffing levels to permit FDA to meet increasingly challenging PDUFA goals that involve a wide range of activities, not just review of the types of applications for which fees were paid.

A drop in fee-paying applications in FY 2001 caused the projected level of fees to be collected for FY 2002 to drop by about $22 million below earlier projections. This drop in revenue is not an indication that the overall FDA review workload has declined—only that a large and increasing number of industry submissions were in categories for which fees were not paid. However, the drop in projected revenues forced FDA to constrain expenditures in FY 2002 in order to assure that funds would be sufficient to pay employees working in the drug review process.

Recognizing the necessity of reauthorizing PDUFA before the end of FY 2002 to assure continuity of operations, Congress enacted the Public Health Security and Bioterrorism Preparedness and Response Act of 2002, which includes the Prescription Drug User Fee Amendments of 2002 (PDUFA III) reauthorizing user fees through FY 2007. The President signed PDUFA III into law on June 12, 2002. Challenges facing FDA in FY 2003 include hiring and training additional staff to meet the PDUFA III goals. Until the FY 2003 appropriation was enacted, however, spending under terms of a series of continuing resolutions delayed the hiring of additional staff.

Next Section: Background