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FY 2002 PDUFA Financial Report: Obligation of User Fee Revenues

Table of Contents

Previous Section: User Fee Revenues

User fee revenues are expended only for costs necessary to support the process for the review of human drug applications, as defined in PDUFA II. Allowable and excludable costs for the process for the review of human drug applications are defined in Appendix C. In FY 2002, FDA obligated $161,812,100 from user fee revenues.

FOOD AND DRUG ADMINISTRATION
STATEMENT OF USER FEE OBLIGATIONS BY EXPENSE CATEGORY

as of September 30, 2001 and 2002
Expense Category FY 2001 FY 2002
Personnel Compensation and Benefits $107,331,472 $112,852,095
Travel and Transportation $3,757,259 $3,834,105
Rent $5,860,000 $1,040,000
Communications $628,269 $1,288,359
Contract Services $31,246,400 $31,834,035
Equipment and Supplies $11,614,462 $10,539,764
Other $275,138 $423,742
TOTAL OBLIGATIONS: $160,713,000 $161,812,100

FDA dedicated 1,277 FTE’s (Full Time Equivalents or staff-years) to the review of human drug applications in FY 1992, before PDUFA was enacted. A time reporting study was undertaken in 1993 to determine the percentage of time each division devotes to user fee related activities. This allowed calculation of FTE related costs. The percentages are updated regularly through additional time surveys, which parallel the method used by independent consultants in FY 1993. The development of these user fee related costs associated with the review of human drug applications is described in more detail in Appendix D.

In FY 2002, PDUFA fees and appropriations paid for 1,060 more FTE’s than were used in 1992 for the process for the review of human drug applications. FDA’s payroll costs paid from user fee funds in FY 2002 represented over 70 percent of the funds expended. This includes all pay and benefits for the additional FTE’s and costs of the FY 2002 payroll increases for all drug review process FTE’s.

A substantial amount of the remaining funds were spent on information technology (IT). FDA is engaged in an Agency-wide IT program to support the transition from a largely paper-based regulatory submission and review environment to an electronic environment. This effort is called the Electronic Regulatory Submission and Review (ERSR) program. ERSR is comprised of a variety of projects, each of which is designed to satisfy a different part of the overall PDUFA IT goal that:

The Agency shall develop and update its information management infrastructure to allow, by FY 2002, the paperless receipt and processing of investigational new drugs (IND’s) and human drug applications, as defined in PDUFA, and related submissions.

The major ERSR project areas and FY 2002 activities are described below.

  • Standards and Guidance. These projects promote consistent exchange of electronic information between the FDA and external constituents. In FY 2002, FDA continued participation in the International Conference on Harmonization (ICH) expert working groups focusing on electronic standards for transmission of regulatory information. Development of the electronic common technical document for the technical content of sections relevant to the IND/NDA/BLA was initiated. Similar development was also started on general administrative information and labeling. The FDA participated in international standards development organizations working on data standards for clinical study data.
  • Capability to Receive Electronic Submissions. These projects implement procedures and technology to support electronic submissions in lieu of paper. In FY 2002, written guidance was provided for industry to follow in preparing various types of electronic submissions. Additional work was done toward improving the efficiency of electronic submissions for both industry and the agency by harmonizing the technology used for submission of human drug applications with the submission of exemptions for IND’s and other related submissions. Industry training was provided at technical workshops and IT conferences hosted by third-party organizations. Working collaboratively with program staff, IT staff provided input and assistance for these activities.
  • Electronic Review. These projects enable FDA reviewers and field inspectors to conduct review activities in an electronic environment. In FY 2002, electronic submissions that conform to the established standards and industry guidance were transmitted via acceptable media to FDA. In FY 2002, major enhancements were initiated to systems developed to provide an automated means for creating, managing, and archiving internally generated review documents. In addition, enhancements continued on systems that track the status and progress of submissions sent to FDA, generate mandatory user fee reports, and enable tracking of milestones and workload statistics for improved management and accountability.
  • Updated Infrastructure. These projects include the implementation of underlying technologies required to support the transition to a paperless review environment. In FY 2002, FDA’s PDUFA IT systems were supported by an infrastructure including standard hardware and software (i.e., desktops, networks, office automation tools, servers). FDA’s standard desktop software suite for the reviewer community is in compliance with FDA’s information systems architecture initiative. In addition, foundational support, such as training and technical support, was provided to the FDA review community.

The total expenditure of $161,812,100 in FY 2002 is an increase of less than 1 percent over FY 2001 amounts spent from fee revenue. This spending amount is about $25 million lower than the latest PDUFA II Five-Year Plan Update, but is still in excess of the revenues FDA collected in FY 2002. This change in the spending plan in FY 2002 was necessary because FDA collected less revenue than expected in FY 2001 due to a drop in application fee revenues causing PDUFA II formulas that projected revenue in FY 2002 to drop by an additional $22 million below earlier projections. In response to these financial realities, FDA constrained expenditures in FY 2002, in order to assure that funds would be available to continue to pay existing staff working on the drug review process for the entire year. The formulas that caused much of this reduction in fee revenues in FY 2002 have been amended in the PDUFA III reauthorization for the next 5 years that was signed by the President on June 12, 2002.

Next Section: Carryover Balances