[Federal Register: August 1, 2003 (Volume 68, Number 148)]
[Notices]
[Page 45246-45249]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01au03-74]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
Establishment of Medical Device 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 fee
rates and payment procedures for medical device user fees for fiscal
year (FY) 2004. The Federal Food, Drug, and Cosmetic Act (the act), as
amended by the Medical Device User Fee and Modernization Act of 2002
(MDUFMA) authorizes FDA to collect user fees for certain medical device
applications. The FY 2004 fee rates are provided in this notice. For
all applications submitted on or after October 1, 2003, and through
September 30, 2004, fees must be paid at the FY 2004 rates at the time
that applications are submitted to FDA. It is the date that the
application is received by FDA, not the date that the check is
received, that governs the fee that must be paid. This notice provides
details on how fees for FY 2004 were determined and payment procedures
for those submitting medical device applications subject to user fees.
FOR FURTHER INFORMATION CONTACT:
For further information on MDUFMA: Visit the FDA Web site at
http://www.fda.gov/oc/mdufma.
For questions relating to this notice: 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
Section 738 of the act (21 U.S.C. 379j), establishes fees for
different kinds of medical device applications. Fees are assessed on
certain types of medical device applications and supplements. When
certain conditions are met, FDA may waive or reduce fees (21 U.S.C.
379j(d) and (e)).
For FY 2003 through FY 2007, MDUFMA (Public Law 107-250)
establishes revenue amounts for the aggregate of all application fee
revenues. Revenue amounts established for years after FY 2003 are
subject to adjustment for inflation, workload, and compensation for
revenue shortfalls from previous years. Fees for applications are to be
established each year by FDA so that revenues will approximate the
levels established in the statute, after those amounts have been first
adjusted for inflation, workload, and, if required, revenue shortfalls
from previous years.
This notice establishes fee rates for FY 2004. 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,
Workload, and Compensation for Revenue Shortfalls from Previous Fiscal
Years
A. Statutory Fee Revenue Amount
MDUFMA specifies that the fee revenue amount for FY 2004 is
$27,255,000, before any adjustments are made (21 U.S.C. 379j(b)).
B. Inflation Adjustment to Fee Revenue Amount
MDUFMA 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. MDUFMA provides for this annual adjustment to be cumulative and
compounded annually after 2003 (see 21 U.S.C. 379j(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) 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 FY 2004 is the statutory
fee
[[Page 45247]]
amount ($27,255,000) increased by 4.27 percent, the inflation adjuster
for FY 2004. The FY 2004 inflation-adjusted revenue amount is
$28,418,789.
C. Workload Adjustment to Inflation Adjusted Fee Revenue Amount
For each FY beginning in FY 2004, MDUFMA provides that fee revenue
amounts, after they have been adjusted for inflation, shall be further
adjusted to reflect increases in workload for the process for the
review of medical device applications (see 21 U.S.C. 379j(c)(2)). FDA's
current assessment reflects that the change in total review workload as
defined in MDUFMA has changed by less than 1 percent. Based on this
assessment, FDA is not applying a workload adjustment to the FY 2004
inflation-adjusted revenue amount of $28,418,789. The need for workload
adjustment will be assessed anew next year when FY 2005 fees are
established.
D. Compensating Adjustment to Fee Revenue Amount Once Adjustments for
Inflation and Workload Have Been Made
For each FY beginning in FY 2004, MDUFMA provides that fee revenue
amounts, after they have been adjusted for inflation and workload,
shall be further adjusted, if necessary, to compensate for the
cumulative shortfall in fee revenue from previous years (see 21 U.S.C.
379j(c)(3)). In FY 2003, FDA had expected to collect a total of
$25,125,000 in MDUFMA fees, the fee revenue amount stated in the
statute (see 21 U.S.C. 379j(b)). As of June 30, 2003, for 9 months of
the fiscal year, total fee collections were $14,360,304. If fee
collections in the last 3 months are proportional to collections in the
first 9 months, FDA will collect another $4,786,768 million--for a
total of about $19,147,000 million for the year. In addition FDA
expects to collect about $500,000 of outstanding accounts receivable,
for a FY 2003 estimated total fee collection of $19,647,000. This is
$5,478,000 million less than the statutory revenue amount for FY 2003.
In implementing the compensating adjustment provision, FDA will
increase the FY 2004 revenue amount by the amount of the revenue
shortfall in FY 2003, $5,478,000. Accordingly, adding $5,478,000 to the
inflation-adjusted revenue amount of $28,418,789 derived above (see
section II.B of this document), provides a final adjusted revenue
amount for FY 2004 of $33,896,789. Fees for FY 2004 are being set to
generate this amount of revenue.
III. Fee Calculations for FY 2004
A. Estimating Numbers of Applications That Will Pay Fees
Under MDUFMA, the amount of fee revenue collected is a function of
two factors--the fee rate for the application and the number of
applications that will pay each type of fee.
To set fees for FY 2004, FDA must first estimate the number of
applications that will pay each type of fee. For FY 2003, before MDUFMA
was enacted, FDA estimated the number of applications that would pay
each type of fee. That estimate was based on the average number of each
category of applications over the 5-year period before MDUFMA was
enacted, FY 1997 through FY 2001. These estimates took into account
FDA's estimates of the number of applications that would qualify for a
small business reduction or exemption. (It should be noted that the
two-tier fee structure for 510(k)'s is to begin in FY 2004.) The
original FY 2003 estimates are shown in Table 1 of this document.
Table 1.--Original Estimates of Numbers of Fee-Paying Applications
------------------------------------------------------------------------
Full Year Numbers Based on Original Estimates
Type of Fee-Paying -----------------------------------------------
Application Full Fee Reduced Fee Waived
------------------------------------------------------------------------
Original Premarket 58 10 10
Applications (PMAs)/
Product Development
Protocols (PDPs)/
Premarket Reports
(PMRs)/Biologics
License Applications
(BLAs) and Full Fee
Supplements
------------------------------------------------------------------------
180-Day PMA/PDP 171 24 ..............
Supplements to PMAs
------------------------------------------------------------------------
Real Time Supplements to 86 14 ..............
PMAs
------------------------------------------------------------------------
Premarket Notifications 880 3,120 ..............
(510(k)s)
------------------------------------------------------------------------
The reason that MDUFMA fee revenues are projected to fall
approximately $5,478,000 short of the revenue target in FY 2003 is that
FDA collected fewer full fees than projected for Original PMAs and BLAs
and their full-fee supplements, and fewer fees for 180-day supplements.
The major reasons for this are twofold. A number of the applications
were ``bundled,'' using guidance developed after MDUFMA was enacted,
and did not have to pay separate fees. In addition, the agency received
fewer full PMAs, BLAs and 180-day supplements in the first 9 months of
FY 2003 than the 5-year averages estimated. Because of this, FDA
considered basing fees for FY 2004 on lower estimates of the number of
full PMA/BLA fees and 180-day supplement fees. This would have resulted
in even higher fees for FY 2004.
The agency decided against revising estimated numbers of fee-paying
applications in setting the FY 2004 fees, however, because such a
revision would have been based on data from too brief a period--the 3
months from April 1 through June 30, 2003, during which applications
were not accepted for filing unless the fee was paid. Instead, the
agency will continue to use its original estimate of the numbers of
fee-paying applications (see Table 1 of this document) again in setting
fees for FY 2004.
FDA will reassess whether or not it needs to adjust its original
estimates of the number of each type of fee-paying application a year
from now when it sets fees for FY 2005. At that time the agency will
have 15 months of data to use to determine whether its original
estimates for annual numbers of applications were too high.
B. Determining The Fee Rates
Under MDUFMA, all fees are set as a percent of the full fee for a
PMA (see 21 U.S.C. 379j(a)(1)(A)). In order to generate $33,896,789 in
FY 2004, using the above estimates of the numbers of each type of
application that will pay a fee at each rate (see Table 1 of this
document), the rate for a full PMA will be $206,811 for FY 2004. For
all applications other than premarket notification submissions, the
small business rate is 38 percent of the full fee rate (see 21 U.S.C.
379j(d)(2)(C)). For premarket notification submissions (510(k)'s), the
small business rate is 80
[[Page 45248]]
percent of the full rate for premarket notification submissions (see 21
U.S.C. 379j(e)(2)(C)(i)). The FY 2004 fee rates for all application
categories are set out in Table 2 of this document.
Table 2.--Fee Types, Percent of PMA Fee, and FY 2004 Fee Rates
------------------------------------------------------------------------
FY 2004
Full Fee Amount as a FY 2004 Small
Application Fee Type Percent of PMA Fee Full Fee Business
Fee
------------------------------------------------------------------------
PMA (submitted under ........................ $206,811 $78,588
section 515(c)(1)
or 515(f) of the
act or section 351
of the Public
Health Service (PHS
Act)
------------------------------------------------------------------------
PMR (submitted under 100% $206,811 $78,588
section 515(c)(2)
of the act)
------------------------------------------------------------------------
Panel Track 100% $206,811 $78,588
Supplement (to an
approved PMA or PMR
that requests a
significant change
in design or
performance of the
device, or a new
indication for use
of the device, and
for which clinical
data are generally
necessary to
provide reasonable
assurance of safety
and effectiveness)
------------------------------------------------------------------------
Efficacy Supplement 100% $206,811 $78,588
(to an approved
premarket
application under
section 351 of the
PHS Act)
------------------------------------------------------------------------
180-Day Supplement 21.5% $44,464 $16,896
(to an approved PMA
or PMR that is not
a panel track
supplement and
requests a
significant change
in components,
materials, design,
specification,
software, color
additives, or
labeling)
------------------------------------------------------------------------
Real Time Supplement 7.2% $14,890 $5,658
(to an approved PMA
or PMR that is not
a panel track
supplement and
requests a minor
change to the
device, such as a
minor change to the
design of the
device, software,
manufacturing,
sterilization, or
labeling, and for
which the applicant
has requested and
the agency has
granted a meeting
or similar forum to
jointly review and
determine the
status of the
supplement)
------------------------------------------------------------------------
Premarket 1.42% in aggregate $3,480 $2,784
Notification
(submitted under
section 510(k) of
the act)
------------------------------------------------------------------------
IV. Adjustment for Excess Collections in Previous Years
Under the provisions of MDUFMA, if the agency collects more fees
than were provided for in appropriations in any year, FDA is required
to reduce its anticipated fee collections in a subsequent year by that
amount (21 U.S.C. 379j(h)(4)). No adjustments under this provision are
required for fees assessed in FY 2004. If fees assessed in FY 2004
should inadvertently result in excess collections in FY 2004, then when
fees are set for FY 2005 a reduction in fee rates for FY 2005 will be
made for any excess collections that may have occurred in FY 2004.
V. Small Business Qualification for Purposes of MDUFMA Fees
Firms with annual gross sales and revenues of $30 million or less,
including gross sales and revenues of all affiliates, partners, and
parent firms, may qualify for a fee waiver for their first PMA, and for
lower rates for subsequent PMA's, premarket reports, supplements, and
premarket notification submissions.
Even if a firm qualified under MDUFMA as a small business in FY
2003, it must obtain a new small business certification and decision
number for FY 2004 and for each subsequent fiscal year. This can be
initiated any time after the publication of this notice. For FY 2004,
firms that have not received a FY 2004 small business qualification
decision number from FDA will not be permitted to submit the reduced
small business fees. FDA urges firms to apply for this qualification 60
days before they intend to submit their application and fee.
To qualify, you are required to submit the following:
[sbull] Certified copies of your Federal Income Tax Return for the
most recent taxable year (2002 or later), including certified copies of
the income tax returns of your affiliates, partners, and parent firms.
[sbull] A certified list of all parents, partners, and affiliate
firms since October 1, 2002.
You can find information for determining if an applicant qualifies
for a small business first-time PMA waiver and lower rates for
subsequent applications on the FDA Web site at http://www.fda.gov/oc/mdufma.
At that Web site, under the heading ``Guidance Documents,''
click on the link ``Qualifying as a Small Business.'' This Web site
provides detailed instructions and the address for mailing
documentation to support qualification as a small business under
MDUFMA.
VI. Procedures for Paying Application Fees
Any application or supplement subject to fees under MDUFMA that is
received on or after October 1, 2003, through September 30, 2004, is
subject to the FY 2004 fee rate. It is the date that the application is
received in the reviewing center's document room that determines
whether the fee rates for FY 2003 or FY 2004 apply--not the date that
FDA receives the payment. FDA must receive the correct fee at the time
that an application is submitted, or the application will not be
accepted for filing or review.
FDA requests that you follow the steps below before submitting a
medical device application subject to a fee. Please pay close attention
to these procedures to ensure that FDA links the fee with the correct
application. (Note: In no case should the check for the fee be
submitted to FDA with the application.)
[[Page 45249]]
A. Step One--Secure a Payment Identification Number and Medical Device
User Fee Cover Sheet From FDA Before Submitting Either the Application
or the Payment. Note: FY 2004 Fee Rates Will be Available on the Cover
Sheet Beginning on August 25, 2003.
Log onto the MDUFMA Web site at http://www.fda.gov/oc/mdufma and,
under the forms heading, click on the link ``User Fee Cover Sheet.''
Complete the Medical Device User Fee Cover Sheet. Be sure you choose
the correct application submission date range. (Two choices will be
offered from August 25, 2003, until the middle of October 2003. One
choice is for applications that will be received on or before September
30, 2003, which will be subject to FY 2003 fee rates. A second choice
is for applications that will be received on or after October 1, 2003,
which will be subject to FY 2004 fee rates.) After completing data
entry, print a copy of the Medical Device User Fee Cover Sheet and note
the unique Payment Identification Number located in the upper right-
hand corner of the printed cover sheet.
B. Step Two--Electronically Transmit a Copy of the Printed Cover Sheet
with the Payment Identification Number to FDA's Office of Financial
Management
Once you are satisfied that the data on the cover sheet is
accurate, electronically transmit that data to FDA according to the
instructions on the screen. Since electronic transmission is possible
beginning on August 25, 2003, it will no longer be necessary to fax a
copy of the sheet to FDA. After August 25, 2003, applicants will be
required to set up a user account and use passwords to assure data
security in the creation and electronic submission of Cover Sheets.
C. Step Three--Mail Payment and a Copy of the Completed Medical Device
User Fee Cover Sheet to the Saint Louis Address Specified Below
[sbull] Make the payment in U. S. currency by check, bank draft, or
U.S. Postal money order payable to the Food and Drug Administration.
(The tax identification number of the Food and Drug Administration is
53-0196965, should your accounting department need this information.)
[sbull] Please write your application's unique Payment
Identification Number, from the upper right-hand corner of your
completed Medical Device User Fee Cover Sheet, on your check, bank
draft, or U.S. Postal money order.
[sbull] Mail the payment and a copy of the completed Medical Device
User Fee Cover Sheet to: Food and Drug Administration, P.O. Box 956733,
Saint Louis, MO, 63195-6733.
If you prefer to send a check by a courier such as FEDEX or UPS,
the courier may deliver the checks to: US Bank, Attn: Government
Lockbox 956733, 1005 Convention Plaza, St. Louis, Missouri 63101.
(Note: This address is for courier delivery only. Contact the US
Bank at 314-418-4821 if you have any questions concerning courier
delivery.)
It is helpful if the fee arrives at the bank at least 1 day before
the application arrives at FDA. FDA records the official application
receipt date as the later of the following:
[sbull] The date the application was received by FDA.
[sbull] The date US Bank notifies FDA that payment has been
received. US Bank is required to notify FDA within 1-working day, using
the Payment Identification Number described previously.
D. Step Four--Submit your Application to FDA With a Copy of the
Completed Medical Device User Fee Cover Sheet
Please submit your application and a copy of the completed Medical
Device User Fee Cover Sheet to one of the following addresses:
[sbull] Medical device applications should be submitted to: Food
and Drug Administration, Center for Devices and Radiological Health,
Document Mail Center (HFZ-401), 9200 Corporate Blvd., Rockville, MD
20850.
[sbull] Biologic applications should be sent to: Food and Drug
Administration, Center for Biologics Evaluation and Research, Document
Control Center (HFM-99), suite 200N, 1401 Rockville Pike, Rockville, MD
20852-1448.
Dated: July 29, 2003.
Jeffrey Shuren,
Assistant Commissioner for Policy.
[FR Doc. 03-19655 Filed 7-31-03; 8:45 am]
BILLING CODE 4160-01-S