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FY 1998 PDUFA Financial Report: Appendix C

Table of Contents

Previous Section: Appendix B: Exemptions and Waivers



The PDUFA, as amended by the FDAMA, and the related PDUFA House of Representatives Report 102-895 ("House Report") define the process for the review of human drug applications and the costs which may be included in that process. Using these definitions (and further refinements as necessary) and the methodologies described in this report, the Agency identified those activities which were applicable to the process for the review of human drug applications.

Over 96 percent of amounts obligated are expended within two years. Therefore, obligations represent an accurate measure of costs.

User Fee Related Costs

Section 735(6) of the Act defines in general terms the activities necessary for the review of human drug applications (the "human drug review process"). In summary, costs related to the following process activities have been attributed to the process for the review of human drug applications.

  • All investigational new drug (IND) review activities, including amendments
  • All review activities for new drug applications (NDA's), biologic license applications (BLA's), and product license applications (PLA's), including supplements and amendments and biologic establishment license applications (ELA's) and amendments.
  • Regulation and policy development activities related to the review of human drug applications.
  • Development of product standards for products subject to review and evaluation.
  • Meetings between the Agency and the sponsor of a covered application or supplement.
  • Review of labeling prior to approval of a covered application or supplement and the review of the initial pre-launch advertising.
  • Review of post-marketing studies that have been agreed to by sponsors as a condition for approval.
  • Inspections of facilities undertaken as part of the review of pending applications or supplements.
  • Lot release activities for covered biological products.
  • Assay development and validation to ensure batch-to-batch consistency and reliability for covered biological products.
  • Monitoring of clinical and other research conducted in connection with the review of human drug applications.
  • User Fee Act implementation activities.
  • Research related to the human drug review process-although under FDAMA FDA agreed to phase out research supported by fee revenues.

All user fee related costs represented by the above activities are collectively referred to in this report as costs for the process for the review of human drug applications.

Section 735(7) of the Act defines the "costs of resources allocated for the process for the review of human drug applications" as the expenses incurred in connection with this process for:

(A) officers and employees of the FDA, contractors of the, advisory committees, and costs related to such officers, employees, committees and contracts;
(B) management of information, and the acquisition, maintenance, and repair of computer resources;
(C) leasing, maintenance, renovation, and repair of facilities and acquisition, maintenance, and repair of fixtures, furniture, scientific equipment, and other necessary materials and supplies; and
(D) collecting user fees under section 736 of the Act and accounting for resources allocated for the review of human drug applications and supplements.

User Fee Excluded Costs

The User Fee Act excludes costs related to the following:

Excluded Products

  • Generic drugs
  • Over-the-counter drugs not associated with an NDA or NDA supplement
  • Large volume parenterals approved before 9/1/92
  • Allergenic extract products
  • Whole blood or a blood component for transfusion
  • In vitro diagnostic biologic products
  • Certain drugs derived from bovine blood

Excluded Process Activities

  • Enforcement policy development
  • Post-approval compliance activities
  • Advertising review activities once marketing of the product has begun
  • Inspections unrelated to the review of covered applications
  • Research unrelated to the human drug review process

Since these inclusions and exclusions required accounting for of a newly-created subset of FDA activities, it was necessary to develop and implement a methodology that would allow the Agency retrospectively to capture the FY 1992 costs for the newly defined "process for the review of human drug applications," and apply that same methodology for future years. Arthur Andersen & Company independently reviewed FDA procedures in 1995, and found the methodologies to be reasonable.

Next Section: Appendix D: Development of Costs for the Process for the Review of Human Drug Applications