[Federal Register: December 9, 1997 (Volume 62, Number 236)]
[Notices]
[Page 64849-64851]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09de97-110]
[[Page 64849]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
Establishment of Prescription Drug User Fee Rates for Fiscal Year
1998
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) 1998. The
Prescription Drug User Fee Act of 1992 (the PDUFA), as amended by the
Food and Drug Administration Modernization Act of 1997 (the FDAMA),
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. Fees for applications for FY
1998 were set by the FDAMA, subject to adjustment for inflation. Total
application fee revenues fluctuate with FDA application review
workload. Fees for establishments and products are based on the
revenues to be derived from applications.
FOR FURTHER INFORMATION CONTACT: Michael E. Roosevelt, Office of
Financial Management (HFA-120), Food and Drug Administration, 5600
Fishers Lane, Rockville, MD 20857, 301-827-5088.
SUPPLEMENTARY INFORMATION:
I. Background
The PDUFA (Pub. L. 102-571), as amended by the FDAMA (Pub. L. 105-
115), establishes three different kinds of user fees. Fees are assessed
on: (1) Certain types of applications and supplements for approval of
drug and biologic products, (2) certain establishments where such
products are made, and (3) certain products (21 U.S.C. 379h(a)). When
certain conditions are met, FDA may waive or reduce fees (21 U.S.C.
379h(d)). Under the PDUFA, as amended, one-third of the total user fee
revenue for each FY must come from each of the three types of fees.
For 1998 through 2002, under the amendments enacted in the FDAMA,
the total fee revenues and fee rates for application fees are set in
the statute, but are to be adjusted annually for cumulative inflation
since 1997. In addition, total application fee revenues are structured
to increase or decrease each year as the number of applications
submitted to FDA increases or decreases.
For 1998 through 2002, FDA is authorized to set fee rates for
establishment and for product categories each year, so that the total
fee revenue from each of these two categories will equal the total
revenue FDA expects to collect from application fees that year. This
procedure continues the arrangement under which one-third of the total
user fee revenue comes from each of the three types of fees.
This notice establishes fee rates for FY 1998 for application,
establishment, and product fees. These fees are retroactive to October
1, 1997, and will remain in effect through September 30, 1998. Prior to
the enactment of the FDAMA, only half of the application fee was due
upon submission of the application, and the second half was due when
FDA issued an action letter after review of the application. Beginning
in FY 1998, the entire application fee is due upon submission of the
application to FDA. For fees already paid on applications and
supplements submitted on or after October 1, 1997, FDA will bill
applicants for the difference between fees paid and fees due under the
new fee schedules and under the new requirement that application fees
be paid in full at the time an application is submitted. For
applications and supplements submitted after December 31, 1997, the new
fee schedule must be used. Invoices for establishment and product fees
for FY 1998 will be issued in December 1997, using the new fee
schedules.
II. Inflation and Workload Adjustment Process
The PDUFA, as amended by the FDAMA, provides that fee rates for
each FY shall be adjusted by notice in the Federal Register. The
adjustment must reflect the greater of : (1) The total percentage
change that occurred during the preceding FY in the Consumer Price
Index (the CPI) (all items; U.S. city average), or (2) the total
percentage pay change for that FY for Federal employees, as adjusted
for any locality-based payment applicable to employees stationed in the
District of Columbia. The FDAMA provides for this annual adjustment to
be cumulative and compounded annually after 1997 (see 21 U.S.C.
379h(c)).
The FDAMA also structures the total application fee revenue to
increase or decrease each year as the number of applications submitted
to FDA increases or decreases. This provision allows revenues to rise
or fall as FDA's workload rises or falls. To implement this provision
each year, FDA will estimate the number of applications it anticipates
receiving, based on its actual receipts the previous year, and making
an allowance for waivers and refunds. FDA has made similar estimates
each year since 1993 under the PDUFA fee setting process. The number of
applications estimated by this process will then be multiplied by the
inflation-adjusted statutory application fee. This calculation will
produce the FDA's estimate of total application fee revenues to be
received each year.
The PDUFA also provides that FDA shall adjust the rates for
establishment and product fees so that the total revenues from each of
these categories will be equal to the revenues FDA expects to collect
from application fees that year. The PDUFA, as amended, provides that
the new fee rates based on these calculations be published within 60
days after the end of each FY (21 U.S.C. 379h(c)(2)).
III. Inflation and Workload Adjustment for Application Fees and
Total Application Fee Revenue
The FDAMA provides that the application fee rates set out in the
statute be adjusted each year for cumulative inflation. It also
provides for total application fee revenues to increase or decrease,
based on increases or decreases in FDA's application review workload.
A. Inflation Adjustment to Application Fees
Application fees are assessed at different rates for qualifying
applications depending on whether the applications require clinical
data on safety or effectiveness (other than bioavailability or
bioequivalence studies) (21 U.S.C. 379h(a)(1)(A), and 379(h)(b)).
Applications that require clinical data are subject to the full
application fee. Applications that do not require clinical data and
supplements that require clinical data are assessed one-half the fee of
applications that require clinical data. If FDA refuses to file an
application or supplement, 75 percent of the application fee is
refunded to the applicant (21 U.S.C. 379h(a)(1)(D)).
The application fees described above are set out in the FDAMA for
1998 ($250,704 for applications requiring clinical data, and $125,352
for applications not requiring clinical data or supplements requiring
clinical data) (21 U.S.C. 379h(b)(1)), but must be adjusted for
inflation. For FY 1997, the total increase in the CPI was 2.15 percent,
whereas the increase in applicable Federal salaries for FY 1998 is 2.45
percent. The higher of these, 2.45 percent, is to be used for computing
the inflation adjustment for FY 1998. Since
[[Page 64850]]
1998 is the first year after 1997, the base year from which inflation
accumulates and is compounded, there is no cumulative, compounded
inflation from previous years to be added to this percentage for FY
1998. The adjusted application fee rates are computed by applying the
inflation percentage for FY 1998 (102.45 percent) to the FY 1998
statutory application fee rates stated above. For FY 1998 the adjusted
application fee rates are $256,846 for applications requiring clinical
data, and $128,423 for applications not requiring clinical data or
supplements requiring clinical data. These amounts must be submitted
with all applications during FY 1998.
B. Workload Adjustment and Total Application Fee Revenue
Total application fee revenues for 1998 will be determined by the
number of applications FDA receives from October 1, 1997, through
September 30, 1998, multiplied by the fee rates calculated in the
preceding paragraph. Before fees can be set for establishment and
product fee categories, each of which are to equal total revenues FDA
collects from application fees, FDA must estimate its total 1998
application fee revenues. To do this, FDA calculates the number of full
application fees FDA received in 1997 and uses that figure as a basis
for estimating 1998 application volume.
For FY 1997, FDA received, filed, and assessed fees for 118
applications that require clinical data, 19 applications that did not
require clinical data, and 127 supplements that require clinical data.
Because applications that do not require clinical data and supplements
that require clinical data are assessed only one-half the full fee, the
equivalent number of these applications subject to the full fee is
determined by summing these categories and dividing by 2. This amount
is then added to the number of applications that require clinical data
to arrive at the equivalent number of applications subject to full
application fees.
In addition, as of September 30, 1997, FDA assessed fees for one
application that required clinical data, one application that did not
require clinical data, and one supplement, all of which were refused
filing or withdrawn before filing. After refunds, the full application
paid one-fourth the full application fee and is counted as one-fourth
of an application, and the application that did not require clinical
data and the supplement each paid one-eighth of the full application
fee and are each counted as one-eighth of an application.
Using this methodology, the approximate equivalent number of
applications that required clinical data and were assessed fees in FY
1997 was 192, before any further decisions were made on requests for
waivers or reductions. Under the FDAMA small businesses will receive a
full waiver for their first application (rather than waiver of half the
fee as was the case under the PDUFA). In addition, the FDAMA excludes
from fees bulk biological products that are further manufactured, and
provides new exceptions for certain orphan product applications and
certain supplements for pediatric indications. Because of these
changes, in FY 1998 FDA estimates that approximately 40 fewer
equivalents of full applications will generate fees, or fees for them
will be subject to waivers or reductions. This number is a substantial
increase over the estimate that FDA would waive or reduce 16
equivalents of full fee applications made 1 year ago when fees for 1997
were established. Therefore, FDA estimates that approximately 152
equivalent applications that require clinical data will qualify for
fees in FY 1998, after allowing for possible waivers or reductions.
The following calculations summarize the determination of FY 1998
application estimates, based on 1997 data:
<bullet> 118 applications that require clinical data, + (19<divide>2)
applications that do not require clinical data, + (127<divide>2)
supplements that require clinical data, + (1<divide>4) applications
that require clinical data and which FDA refuses to file or the sponsor
withdraws before filing + (2<divide>8) supplements which FDA refuses to
file or the sponsor withdraws before filing minus 40 waivers,
reductions or exceptions = 152 (the estimated number of ``full fee''
applications for FY 1998 based on FY 1997 experience, and rounded up).
The total FY 1998 application fee revenue is estimated by
multiplying the adjusted application fee rate ($256,846) by the
equivalent number of applications projected to qualify for fees in FY
1998 (152), for a total estimated application fee revenue in 1998 of
$39,040,592. This is the amount of revenue that FDA is also expected to
derive from establishment fees and from product fees.
IV. Fee Calculations for Establishment, and Product Fees
A. Establishment Fees
The FY 1997 establishment fee was based on an estimate of 250
establishments subject to fees. In FY 1997, 263 establishments
qualified for fees before any decisions on requests for waivers or
reductions were made. Under the FDAMA, the basis for assessment of
establishment fees is amended. The responsibility for the fee is placed
on the applicant whose product is manufactured at the facility, and not
on the owner of the facility. Contract manufacturing establishments
will now be subject to fees, to be paid by the applicant whose product
is manufactured at that establishment. FDA believes this will subject
additional establishments to fees, and estimates that approximately 275
establishments will qualify for fees in FY 1998 after allowing for
possible waivers or reductions. Thus, the number 275 is used in setting
the new establishment fee rate. The fee per establishment is determined
by dividing the adjusted total fee revenue to be derived from
establishments ($39,040,592), by the estimated 275 establishments, for
an establishment fee rate for FY 1998 of $141,966 (rounded to the
nearest dollar).
B. Product Fees
The FY 1997 product fee was based on an estimate that 2,200
products would be subject to product fees in FY 1997. For FY 1997,
2,267 products qualified for fees before any decisions on requests for
waivers or reductions were made. FDA estimates that only 2,100 products
will qualify for product fees in FY 1998, after allowing for the fact
that about 140 antibiotic products and 11 products manufactured by
state governments that paid fees in 1997 will no longer be subject to
fees in 1998 under the FDAMA, and for the fact that an additional 17
large volume parenteral products that were subject to fees in 1997 are
now regulated as generic drugs and will not be subject to fees in 1998.
Accordingly, the FY 1998 product fee rate is determined by dividing the
adjusted total fee revenue to be derived from product fees
($39,040,592) by the estimated 2,100 products for a product fee rate of
$18,591 (rounded to the nearest dollar).
V. Adjusted Fee Schedules for FY 1998
The fee rates for FY 1998 are set out in the following table:
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Fee rates for FY
Fee category 1997
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Applications
Requiring clinical data........................... $256,846
Not requiring clinical data....................... $128,423
[[Page 64851]]
Supplements requiring clinical data............... $128,423
Establishments...................................... $141,966
Products............................................ $18,591
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VI. Implementation of Adjusted Fee Schedule
A. Application Fees
Any application or supplement subject to fees under the PDUFA that
is submitted after December 31, 1997, must be accompanied by the
appropriate application fee established in the new fee schedule. FDA
will bill applicants who submitted application fees between October 1,
1997, and December 31, 1997, based on the adjusted rate schedule.
B. Establishment and Product Fees
By December 31, 1997, FDA will issue invoices for establishments
and product fees for FY 1998 under the new fee schedules. Payment will
be due by January 31, 1998. FDA will issue invoices in October 1998 for
any products and establishments subject to fees for FY 1998 that
qualify for fees after the December 1997 billing.
Dated: December 3, 1997.
William K. Hubbard,
Associate Commissioner for Policy Coordination.
[FR Doc. 97-32164 Filed 12-8-97; 8:45 am]
BILLING CODE 4160-01-F