FY 2001 PDUFA Financial Report: Executive Summary
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). This report covers fiscal year (FY) 2001.
The PDUFA, as amended, specifies that the following three conditions must be satisfied each year in order for FDA to collect and spend PDUFA fees:
- 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).
- Fee revenues collected must be specified in Appropriation Acts.
- 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 2001. The statements and tables included in this report also provide information on the user fee revenues and expenditures in FY 2001, and on the carryover balance. Comparative data for earlier periods are also provided.
For FY 2001, FDA collected $132.2 million in fees and, at the end of the year, FDA also had receivables of $6.2 million.
In FY 2001, FDA spent $160.7 million from PDUFA revenues-$28.5 million more than its net collections. This resulted from two events. The first was planned spending of carryover balances in order to fund adequate staffing levels to permit FDA to meet increasingly challenging PDUFA goals that involve a wide range of industry activities, not just review of the types of applications upon which the fees are based. The second was an unexpected and sharp drop in the number of applications in FY 2001 that paid fees, decreasing revenues by about $17 million. This caused FDA's carryover balances to drop to $35 million by the end of the fiscal year-the lowest level since the end of FY 1993.
The drop in fee-paying applications in FY 2001 has serious implications for operations in FY 2002. It causes the level of application fees projected for FY 2002 to drop, and that will also cause the level of both establishment and product fee revenues to drop-by about $22 million in aggregate. This will mean that virtually all of the $35 million in carryover balances will be consumed to support FY 2002 operations. There will be no carryover balances going into FY 2003. This drop in revenue is not an indication that overall FDA review workload has declined-only that a large and increasing number of FDA submissions do not pay fees. FDA overall review workload continues to increase. This drop in revenue is not an indication that overall FDA review workload has declined-only that a large and increasing number of industry submissions are in categories for which fees are not paid.
Challenges facing FDA in FY 2002 include carefully monitoring fee receipts and, if necessary, adjusting operations to manage within available resources. Since PDUFA expires at the end of FY 2002, and FDA does not anticipate having any carryover balances in FY 2003, it is important that PDUFA be reauthorized in advance of September 30, 2002, to prevent disruption of FDA's drug review program. Reauthorization is supported in the President's FY 2003 budget, and FDA will have a draft bill in the spring.
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