[Federal Register: August 1, 2003 (Volume 68, Number 148)]
[Notices]
[Page 45249-45252]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01au03-75]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
Establishment of Prescription Drug User Fee Rates for Fiscal Year
2004
AGENCY: Food and Drug Administration, HHS.
ACTION: Notice.
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SUMMARY: The Food and Drug Administration (FDA) is announcing the rates
for prescription drug user fees for fiscal year (FY) 2004. The Federal
Food, Drug, and Cosmetic Act (the act), as amended by the Prescription
Drug User Fee Amendments of 2002 (PDUFA III), authorizes FDA to collect
user fees for certain applications for approval of drug and biological
products, on establishments where the products are made, and on such
products. Revenue amounts for application fees, establishment fees, and
product fees for FY 2004 were established by PDUFA III. Fees for
applications, establishments, and products are to be established each
year by FDA so that revenues from each category will approximate the
levels established in the statute, after those amounts have been first
adjusted for inflation and workload. This notice establishes fee rates
for FY 2004 for application fees ($573,500 for an application requiring
clinical data, and $286,750 for an application not requiring clinical
data or a supplement requiring clinical data), establishment fees
($226,800), and product fees ($36,080). These fees are effective on
October 1, 2003, and will remain in effect through September 30, 2004.
For applications and supplements that are submitted on or after October
1, 2003, the new fee schedule must be used. Invoices for establishment
and product fees for FY 2004 will be issued in August 2003, using the
new fee schedule.
FOR FURTHER INFORMATION CONTACT: Frank Claunts, Office of Management
and Systems (HFA-20), Food and Drug Administration, 5600 Fishers Lane,
Rockville, MD 20857, 301-827-4427.
SUPPLEMENTARY INFORMATION:
I. Background
Sections 735 and 736 of the act (21 U.S.C. 379g and h), establish
three different kinds of user fees. Fees are assessed on: (1) Certain
types of applications and supplements for approval of drug and
biological products, (2) certain establishments where such products are
made, and (3) certain products (see 21 U.S.C. 379h(a)). When certain
conditions are met, FDA may waive or reduce fees (see 21 U.S.C.
379h(d)).
For FY 2003 through FY 2007 revenue amounts for application fees,
establishment fees, and product fees are established by PDUFA III (the
Prescription Drug User Fee Amendments of 2002, title 5 of the Public
Health Security and Bioterrorism Preparedness and Response Act of
2002). Revenue amounts established for years after FY 2003 are subject
to adjustment for inflation and workload. Fees for applications,
establishments, and products are to be established each
[[Page 45250]]
year by FDA so that revenues from each category will approximate the
levels established in the statute, after those amounts have been first
adjusted for inflation and workload. The revenue levels established by
PDUFA III continue the arrangement under which one-third of the total
user fee revenue is projected to come from each of the three types of
fees: Application fees, establishment fees, and product fees.
This notice establishes fee rates for FY 2004 for application,
establishment, and product fees. These fees are effective on October 1,
2003, and will remain in effect through September 30, 2004.
II. Revenue Amount for FY 2004, and Adjustments for Inflation and
Workload
A. Statutory Fee Revenue Amounts
PDUFA III specifies that the fee revenue amount for FY 2004 for
each category of fees (application, product, and establishment) is
$77,000,000, before any adjustments are made, for a total of
$231,000,000 from all three categories of fees (see 21 U.S.C. 379h(b)).
B. Inflation Adjustment to Fee Revenue Amount
PDUFA III provides that fee revenue amounts for each FY after 2003
shall be adjusted for inflation. The adjustment must reflect the
greater of: (1) The total percentage change that occurred in the
consumer price index (CPI) (all items; U.S. city average) during the
12-month period ending June 30 preceding the FY for which fees are
being set, or (2) the total percentage pay change for the previous FY
for Federal employees stationed in the Washington, DC, metropolitan
area. PDUFA III provides for this annual adjustment to be cumulative
and compounded annually after FY 2003 (see 21 U.S.C. 379h(c)(1)).
The inflation adjustment for FY 2004 is 4.27 percent. This is the
greater of the CPI increase during the 12-month period ending June 30
preceding the FY for which fees are being set (June 30, 2003--which was
2.11 percent) or the increase in pay for the previous FY (2003 in this
case) for Federal employees stationed in the Washington, DC,
metropolitan area (4.27 percent). No compounding is applied to this
amount because there was no inflation increase applied in FY 2003.
The inflation-adjusted revenue amount for each category of fees for
FY 2004 is the statutory fee amount ($77,000,000) increased by 4.27
percent, the inflation adjuster for FY 2004. The FY 2004 inflation-
adjusted revenue amount is $80,287,900 for each category of fee, for a
total inflation-adjusted fee revenue amount of $240,863,700 in FY 2004.
C. Workload Adjustment to Inflation Adjusted Fee Revenue Amount
For each FY beginning in FY 2004, PDUFA III provides that fee
revenue amounts, after they have been adjusted for inflation, shall be
further adjusted to reflect changes in workload for the process for the
review of human drug applications (see 21 U.S.C. 379h(c)(2)).
The conference report accompanying the PDUFA III, House of
Representatives report number 107-481, provides additional instructions
on how the workload adjustment provision of PDUFA III is to be
implemented. Following that guidance, FDA calculated the average number
each of the four types of applications specified in the workload
adjustment provision (human drug applications, commercial
investigational new drug applications, efficacy supplements, and
manufacturing supplements) received over the 5-year period that ended
on June 30, 2002 (base years), and the average number of each of these
types of applications over the most recent 5-year period that ended
June 30, 2003.
The results of these calculations are presented in the first 2
columns of table 1 of this document Column 3 reflects the percent
change in workload over the two 5-year periods. Column 4 shows the
weighting factor for each type of application, reflecting how much of
the total FDA drug review workload was accounted for by each type of
application in the table during the most recent 5 years. This weighting
factor was developed by applying data generated in a 2002 KPMG study of
FDA's drug review workload to submission data for the most recent 5-
year period. Column 5 of table 1 of this document, is the weighted
percent change in each category of workload, and was derived by
multiplying the weighting factor in each line in column 4 by the
percent change from the base years in column 3. At the bottom right of
the table the sum of the values in column 5 is added, reflecting a
total change in workload of negative 1.4 percent for FY 2004.
Table 1.--Workload Adjuster Calculation
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Summary of Workload Adjustment Calculations
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Application Type Column 1 5- Column 2 Column 4 Column 5
year Avg. Base Latest 5-year Column 3 % Weighting Weighted %
Years Avg. Change Factor Change
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New Drug Applications/Biological 119.8 116.6 -2.7% 45.0% -1.2%
License Applications
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Commercial Investigational New 629.8 617.8 -1.9% 40.7% -0.8%
Drug Exemptions
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Efficacy Supplements 159.2 164.8 3.5% 5.7% 0.2%
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Manufacturing Supplements 2100.6 2193.0 4.4% 8.7% 0.4%
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FY 2004 Workload Adjuster -1.4%
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PDUFA III specifies that the workload adjuster may not result in
fees that are less than the inflation-adjusted revenue amount. For this
reason, the workload adjustment will not be applied in FY 2004, and the
inflation-adjusted revenue amount for each category of fees for FY 2004
($80,287,900) becomes the revenue target for fees in FY 2004, for a
total inflation-adjusted fee revenue target in FY 2004 of $240,863,700
for fees from all three categories.
III. Application Fee Calculations
PDUFA III provides that the rates for application, product, and
establishment fees be established 60 days before the beginning of each
FY (see 21 U.S.C. 379h(c)(4)). The fees are to be established so that
they will generate
[[Page 45251]]
the fee revenue amounts specified in the statute, as adjusted for
inflation and workload.
A. Application Fee Revenues and Application Fees
The application fee revenue amount that PDUFA III established for
FY 2004 is $80,287,900, as calculated in the previous section.
Application fees will be set to generate this amount.
B. Estimate of Number of Fee-Paying Applications and Establishment of
Application Fees
For FY 2003 through FY 2007, FDA will estimate the total number of
fee-paying full application equivalents (FAEs) it expects to receive
the next FY by averaging the number of fee-paying FAEs received in the
five most recent fiscal years. This use of the rolling average of the
five most recent fiscal years is the same method that was applied in
making the workload adjustment.
In estimating the number of fee-paying FAEs that FDA will receive
in FY 2004, the 5-year rolling average for the most recent 5 years will
be based on actual counts of fee-paying FAEs received for fiscal years
1999 through 2003. For FY 2003, FDA is estimating the number of fee-
paying FAEs for the full year based on the actual count for the first 9
months and estimating the number for the final 3 months.
Table 2 of this document shows, in column 1, the total number of
each type of FAE received in the first 9 months of FY 2003, whether
fees were paid or not. Column 2 shows the number of FAEs for which fees
were waived or exempted during this period, and column 3 shows the
number of fee-paying FAEs received through June 30, 2003. Column 4
estimates the 12-month total fee-paying FAEs for FY 2003 based on the
applications received through June 30, 2003. All of the counts are in
FAEs. A full application requiring clinical data counts as one FAE. An
application not requiring clinical data counts one-half an FAE, as does
a supplement requiring clinical data. An application that is withdrawn
or refused for filing counts as one-fourth of an FAE if it initially
paid a full application fee, or one-eighth of an FAE if it initially
paid one-half of the full application fee amount.
Table 2.--FY 2003 FAEs Received through June 30, 2003 and Projected Through September 30, 2003
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Column 2 Fee Column 4 12-
Column 1 Total Exempt or Column 3 Total Month
Application or Action FAEs Received Waived FAEs Fee Paying Projection for
Through June Through June FAEs Through Fee Paying
30, 2003 30, 2003 June 30, 2003 FAEs
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Applications Requiring Clinical Data 65.0 17.0 48.0 64.0
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Applications Not Requiring Clinical Data 6.5 0.5 6.0 8.0
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Supplements Requiring Clinical Data 40.0 6.0 34.0 45.3
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Withdrawn or Refused to File 0.0 0.0 0.0 0.0
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Total 111.5 23.5 88.0 117.3
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In the first 9 months of FY 2003 FDA received 111.5 FAEs, of which
88 were fee-paying. Based on data from the last 7 FYs, on average, 25
percent of the applications submitted each year come in the final 3
months. Dividing 88 by 3 and multiplying by 4, extrapolates the amount
to the full 12 months of the FY and projects the number of fee-paying
FAEs in FY 2003 at 117.3.
All pediatric supplements, which had been exempt from fees prior to
January 4, 2002, were required to pay fees effective January 4, 2002.
This is the result of section 5 of the Best Pharmaceuticals for
Children Act that repealed the fee exemption for pediatric supplements
effective January 4, 2002. Thus, in estimating FY 2004 fee-paying
receipts, we must add all the pediatric supplements that were
previously exempt from fees prior to January 4, 2002. The exempted
number of FAEs for pediatric supplements for FY 1999, FY 2000, FY 2001,
and FY 2002 respectively were 5.3, 12.5, 19, and 4.5. Since fees on
these supplements will be paid for pediatric applications submitted in
FY 2004, the number of pediatric supplement FAEs exempted from fees
each year from FY 1999 through FY 2002 (the years in the table when
fees were exempted) are added to the total of fee-paying FAEs received
each year.
As table 3 shows, the average number of fee-paying FAEs received
annually in the most recent 5-year period, assuming all pediatric
supplements had paid fees, and including our estimate for FY 2003, is
140.0 FAEs. FDA will set fees for FY 2004 based on this estimate as the
number of full application equivalents that will pay fees.
Table 3.--FAEs 5-Year Average
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5-year
Year 1999 2000 2001 2002 2003 Avg.
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Fee-Paying FAEs 118.7 153.0 107.6 127.6 117.3 131.8
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Exempt Pediatric Supplement FAEs 5.3 12.5 19.0 4.5 0.0 8.2
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Total 158.3 165.9 126.6 132.1 117.3 140.0
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The FY 2004 application fee is estimated by dividing the estimated
number of full applications that will pay fees, 140, into the fee
revenue amount to be derived from application fees in FY 2004,
$80,287,900. The result, rounded to the nearest one hundred dollars, is
a fee of $573,500 per full application requiring clinical data, and
[[Page 45252]]
$286,750 per application not requiring clinical data or per supplement
requiring clinical data.
IV. Adjustment for Excess Collections in Previous Years
Under the provisions of PDUFA, as amended, if the agency collects
more fees than were provided for in appropriations in any year after
1997, FDA is required to reduce its anticipated fee collections in a
subsequent year by that amount (see 21 U.S.C. 379h(g)(4)).
In FY 1998, Congress appropriated a total of $117,122,000 to FDA in
PDUFA fee revenue. To date, collections for FY 1998 total
$117,737,470--a total of $615,470 in excess of the appropriation limit.
This is the only fiscal year since 1997 in which FDA has collected more
in PDUFA fees than Congress appropriated.
FDA also has some requests for waivers or reductions of FY 1998
fees that have been decided but that are pending appeals. For this
reason, FDA is not reducing its FY 2004 fees to offset excess
collections at this time. An offset will be considered in a future
year, if FDA still has collections in excess of appropriations for FY
1998 after the pending appeals for FY 1998 waivers and reductions have
been resolved.
V. Fee Calculations for Establishment and Product Fees
A. Establishment Fees
At the beginning of FY 2003, the establishment fee was based on an
estimate that 354 establishments would be subject to and would pay
fees. By the end of FY 2003, FDA estimates that 379 establishments will
have been billed for establishment fees, before all decisions on
requests for waivers or reductions are made. FDA again estimates that a
total of 25 establishment fee waivers or reductions will be made for FY
2003, for a net of 354 fee-paying establishments. FDA will use this
number, 354, for its FY 2004 estimate of establishments paying fees,
after taking waivers and reductions into account. The fee per
establishment is determined by dividing the adjusted total fee revenue
to be derived from establishments ($80,287,900) by the estimated 354
establishments, for an establishment fee rate for FY 2004 of $226,800
(rounded to the nearest one hundred dollars).
B. Product Fees
At the beginning of FY 2003, the product fee was based on an
estimate that 2,293 products would be subject to and pay product fees.
By the end of FY 2003, FDA estimates that 2,260 products will have been
billed for product fees, before all decisions on requests for waivers
or reductions are made. Assuming that there will be about 35 waivers
and reductions made, FDA estimates that 2,225 products will qualify for
product fees in FY 2003, after allowing for waivers and reductions, and
will use this number for its FY 2004 estimate. Accordingly, the FY 2004
product fee rate is determined by dividing the adjusted total fee
revenue to be derived from product fees ($80,287,900) by the estimated
2,225 products for a FY 2004 product fee of $36,080 (rounded to the
nearest ten dollars).
VI. Fee Schedule for FY 2004
The fee rates for FY 2004 are set out in table 4 of this document:
Table 4.
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FEE CATEGORY FEE RATES FOR FY 2004
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APPLICATIONS .........................................................
Requiring clinical data $573,500
Not requiring clinical data $286,750
Supplements requiring clinical data $286,750
ESTABLISHMENTS $226,800
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PRODUCTS $36,080
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VII. Implementation of Adjusted Fee Schedule
A. Application Fees
The appropriate application fee established in the new fee schedule
must be paid for any application or supplement subject to fees under
PDUFA that is submitted after September 30, 2003. Payment must be made
in U.S. currency by check, bank draft, or U.S. postal money order
payable to the order of the Food and Drug Administration. Please
include the user fee identification (ID) number on your check. Your
check can be mailed to: Food and Drug Administration, P.O. Box 360909,
Pittsburgh, PA 15251-6909
If checks are sent by a courier that requests a street address, the
courier can deliver the checks to: Food and Drug Administration
(360909), Mellon Client Service Center, rm. 670, 500 Ross St.,
Pittsburgh, PA 15262-0001. (Note: This Mellon Bank address is for
courier delivery only.)
Please make sure that the FDA post office box number (P.O. Box
360909) is on the enclosed check. The tax ID number of the FDA is 530
19 6965.
B. Establishment and Product Fees
By August 31, 2003, FDA will issue invoices for establishment and
product fees for FY 2004 under the new Fee Schedule. Payment will be
due on October 1, 2003. FDA will issue invoices in October 2004 for any
products and establishments subject to fees for FY 2004 that qualify
for fees after the August 2003 billing.
Dated: July 29, 2003.
Jeffrey Shuren,
Assistant Commissioner for Policy.
[FR Doc. 03-19654 Filed 7-31-03; 8:45 am]
BILLING CODE 4160-01-S