Executive Summary (FY 2010 PDUFA Financial Report)
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The Prescription Drug User Fee Amendments of 2007 requires the Food and Drug Administration (FDA or the Agency) to report annually on the financial aspects of its implementation of the Prescription Drug User Fee Act (PDUFA), as amended. This report covers fiscal year (FY) 2010.
PDUFA 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, within certain tolerances.
This report describes how FDA met those specific statutory conditions during FY 2010. The statements and tables included in this report also provide the user fee revenues and expenditures in FY 2010, the carryover balance, and comparative data for earlier periods.
In FY 2010, FDA collected $551.7 million in fees, including fees collected for earlier periods. This is less than the $569 million FDA projected at the beginning of the year when fees for FY 2010 were established. The lower revenue is attributable primarily to a lower number of fee paying applications received during FY 2010 than projected at the beginning of the year. The amount of revenue collected would have been much lower but it was offset by collections from earlier periods, including the additional FY 2009 product and establishment fees received in the first quarter of FY 2010.
In FY 2010, FDA obligated $573 million from PDUFA fee revenues. This accounted for about 62 percent of all funds obligated by FDA from all sources in support of the process for the review of human drug applications. This $573 million was about $21 million more than net collections for the year, decreasing the balance of funds collected in previous years to slightly less than $151 million at the end of FY 2010. Due to reserves for specific needs, only about $49.4 million of this carryover balance is available for obligation. About 60 percent of funds obligated from all sources were for employee salaries and benefits, and the balance was for costs necessary to support and maintain those employees.
Challenges FDA faces in FY 2011 include pursuing development of standards for the electronic data included in regulatory submissions. Also, effective information management has become a critical element of FDA’s strategy to address the challenges of new legislative mandates and industry shifts to multi-site worldwide operations. Additionally, FDA will need to continue work on the next reauthorization of PDUFA. Continued PDUFA funding is essential to the human drug review program.
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