FY 2000 PDUFA Financial Report: Background
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PDUFA authorizes FDA to collect fees from the pharmaceutical industry to augment appropriations spends on drug review. These additional resources are to be used to hire and support additional staff for the review of human drug applications so that effective drug products could reach the American public more quickly. PDUFA has been very successful and, with support from the pharmaceutical industry and the Administration, Congress amended and extended it through FY 2002.
Under PDUFA, as amended, an application fee must be submitted when certain new drug applications or biologic license applications are submitted. The application fee amount is set in statute, but is adjusted each year for cumulative inflation since FY 1997. In addition, FDA collects annual establishment and product fees. Under FDAMA amendments, FDA sets those fees each fiscal year so that the total revenue FDA receives from each category equals the amount FDA expects to collect from application fees. Thus, a third of the fee revenue each year comes from application fees, a third from establishment fees, and a third from product fees.
PDUFA, as amended, also requires FDA to submit two reports to Congress each fiscal year. A performance report is to be sent within 60 days of the end of the fiscal year, and a financial report is to be sent within 120 days. The FY 2000 PDUFA Performance Report, which discusses FDA's progress in meeting the goals referred to in FDAMA, is being separately transmitted to Congress. This is FDA's FY 2000 PDUFA Financial Report, covering the period October 1, 1999, through September 30, 2000.
As required by statute, this report presents the legal conditions or "triggers" that must be satisfied before FDA can collect and spend the fees, and FDA's calculations showing how those conditions were met for FY 2000. This report also presents FY 2000 revenues and obligations from user fees and a summary statement of user fees by source (application, establishment, or product fees). The total costs applicable to the process for the review of human drug applications, as defined in FDAMA, are also presented, with the amounts paid from fee revenues and from appropriations.
In keeping with the requirements of the Chief Financial Officers Act of 1990, the Office of the Inspector General (OIG), Department of Health and Human Services, audits FDA's annual financial statements. The audit covers FDA's financial systems and funds, including PDUFA revenues and expenses. The OIG rendered unqualified audit opinions on FDA's financial statements for FY 1998 and 1999. This is the most favorable category of auditor opinion. The OIG audit report on FDA's FY 2000 financial statement is expected to be available in March of 2001.
Next Section: Meeting the Legal Conditions for User Fees in FY 2000