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Human Drug Compounding Outsourcing Facility Fees

Latest News:

  • The CQA user fee rates for Fiscal Year (FY) FY2020 was published in the Federal Register. Please see the table below for the FY2019 and FY 2020 rates.

  • NOTICE: Fiscal year (FY) 2020 registration period for outsourcing facilities begins on October 1, 2019 and ends on December 31, 2019. If you have paid your annual establishment fee for FY2019, your registration will expire on December 31, 2019 and you will need to re-register for FY2020.

FY 2019 and FY 2020 User Fee Rates

User Fee Type FY 2019 FY 2020
Annual Establishment $18,375 $18,288
Annual Establishment-Small Business $5,461 $5,599
Re-inspection $16,382 $16,798

The Compounding Quality Act

On November 27, 2013, the President signed the Drug Quality and Security Act (DQSA) into law. Title I of the DQSA was the Compounding Quality Act (CQA) which provides for additional FDA oversight of compounding pharmacies.  CQA created a new entity known as an outsourcing facility under Section 503B of the Food, Drug, and Cosmetic Act (FD&C Act), which is subject to FDA inspections and is required to pay annual and re-inspection fees. Outsourcing facilities, as defined in section 503B(d)(4) of the FD&C Act, are facilities that meet all of the conditions described in section 503B, including registering with FDA as an outsourcing facility and paying an annual establishment fee.

If these conditions are satisfied, a drug compounded by or under the direct supervision of a licensed pharmacist in an outsourcing facility may be exempt from certain sections of the FD&C Act including section 502(f)(1) (21 U.S.C. 352(f)(1)) (concerning the labeling of drugs with adequate directions for use) and section 505 (21 U.S.C. 355) (concerning the approval of human drug products under new drug applications (NDAs) or abbreviated new drug applications (ANDAs)). Drugs compounded in outsourcing facilities are not exempt from the requirements of section 501(a)(2)(B) of the FD&C Act (21 U.S.C. 351(a)(2)(B)) (concerning current good manufacturing practice for drugs).

CQA also reinstated Section 503A, exempting compounds from the drug approval provisions of the FDCA and compounding facilities from the current Good Manufacturing Practices (cGMPs) mandated by the FDA as long as it complies with the conditions stated in Section 503A.  CQA also removes from section 503A of the FD&C Act the provisions on solicitation of prescriptions and advertising that had been held unconstitutional by the U.S. Supreme Court in 2002. See Thompson v. Western States Med. Ctr., 535 U.S. 357 (2002).

Q1: What is the annual establishment fee?

A1: Beginning in fiscal year (FY) 2015, entities that elect to register with FDA as outsourcing facilities must pay an annual establishment fee. Each year, the registration period for outsourcing facilities begins on October 1st and ends on December 31st. The annual establishment fee is payable upon receipt of an invoice which will be sent after FDA has determined that the registration information submitted by the entity is complete.

Q2: What is the inflation adjustment factor?

A2: The inflation adjustment factor is a statutorily mandated increase of the annual establishment fee designed to adjust compounding fees for inflation.

Q3: How much is the annual establishment fee?

A3: The annual establishment fee is equal to the sum of $15,000, multiplied by the inflation adjustment factor, plus the small business adjustment factor. The fee calculation is reflected in the following equation: Establishment fee = $15,000 x inflation adjustment factor + small business adjustment factor.

Q4: Will the annual establishment fee be the same each year?

A4: The establishment fee for each fiscal year will be adjusted annually, using the inflation adjustment factor and the small business adjustment factor applicable to that fiscal year. The fee amount will be published in a Federal Register no later than 60 calendar days before the start of each fiscal year.

Q5: When is the annual establishment fee paid?

A5: The annual establishment fee is payable upon receipt of an invoice which will be sent after FDA has determined that the registration information submitted by the entity is complete.

Q6: When do I submit payment?

A6: Once an entity submits its registration information and FDA has reviewed the information and determined that it is complete, FDA will send an invoice to the entity via email, to the email address indicated in the registration file, or via regular mail if email is not an option. Because FDA links the payment to an invoice, payment should not be made until the invoice is received. The invoice will contain information about the obligations incurred; the amount owed, including the small business reduction if the entity has qualified for that reduction; and instructions for paying the fee. Because entities will not be considered to be registered as outsourcing facilities until payment is received, entities should pay the invoiced amount immediately upon receiving the invoice. If payment is not received by the date it is due, the submission of registration information will be considered to have been withdrawn and the invoice will be reduced to zero. To be registered, the facility would need to resubmit registration information, starting the process again from the beginning.

Q7: What are the effects of failure to pay the annual establishment fee?

A7: An entity that does not pay its annual establishment fee for a given FY will not be considered registered as an outsourcing facility under section 503B of the FD&C Act for that FY. As a result, drugs compounded by the entity would not qualify for the exemptions under section 503B of the FD&C Act for outsourcing facilities, including the exemption from the premarket approval requirement for new drugs in section 505 of the FD&C Act. Moreover, all drugs manufactured, prepared, propagated, compounded, or processed by a facility that has not paid the full amount of the required annual establishment fee will be deemed misbranded under section 502 of the FD&C Act. Such drugs will continue to be deemed misbranded until the fees owed by that facility have been paid in full. Among other prohibitions, a facility cannot distribute in interstate commerce either misbranded or unapproved new drug products.

Q1: What is the reinspection fee?

A1: The reinspection fee is designed to reimburse FDA when it must visit a particular outsourcing facility more than once because of noncompliance identified during a previous inspection.

Q2: Who must pay the reinspection fee?

A2: An outsourcing facility will be assessed a reinspection fee each time it is subject to a reinspection. Reinspection is defined as: one or more inspections conducted under section 704 subsequent to an inspection conducted under such provision which identified noncompliance materially related to an applicable requirement of this Act, specifically to determine whether compliance has been achieved to the Secretary’s satisfaction. Please refer to Section 744J(4) of the FD&C Act.

Q3: How much is the reinspection fee?

A3: The reinspection fee will be equal to $15,000 multiplied by the inflation adjustment factor. Moreover, a reinspection fee will be incurred for each reinspection that occurs until FDA finds that the noncompliant conditions have been adequately addressed.

Q4: Will the reinspection fee be the same each year?

A4: The reinspection fee for each fiscal year will be adjusted annually, using the inflation adjustment factor. The fee amount will be published in a Federal Register no later than 60 calendar days before the start of each fiscal year.

Q5: When is the reinspection fee due?

A5: After FDA conducts a reinspection, it will send an invoice to the entity via email, to the email address indicated in the registration file, or via regular mail if email is not an option. The invoice will contain information about the obligation incurred, the amount owed, and instructions for paying the fee. The invoiced amount should be paid immediately to avoid statutory penalties.

Q6: What is the effect of failure to pay the reinspection fee?

A6: All drugs manufactured, prepared, propagated, compounded, or processed by a facility that has not paid the full amount of the required reinspection fee will be deemed misbranded under section 502 of the FD&C Act. Such drugs will continue to be deemed misbranded until the fees owed by that facility have been paid in full. In addition, drugs compounded by the facility would not qualify for the exemptions under section 503B of the FD&C Act for outsourcing facilities, including the exemption from the premarket approval requirement for new drugs in section 505 of the FD&C Act. Among other prohibitions, a facility cannot distribute in interstate commerce either misbranded or unapproved new drug products.

Q1: Are reductions in human compounding fees available to small businesses?

A1: Yes. An entity with gross annual sales totaling $1,000,000 or less in the 12 months ending on April 1 of the FY immediately preceding the FY in which the annual establishment fee is assessed may qualify for a small business reduction. Gross annual sales is defined as the “total worldwide gross annual sales, in United States dollars, for an outsourcing facility, including the sales of all of the affiliates of the outsourcing facility.” Affiliate is defined as a “business entity that has a relationship with a second business entity if, directly or indirectly—(A) one business entity controls, or has the power to control, the other business entity; or (B) a third party controls, or has power to control, both of the business entities.”

Q2: How do I qualify for a small business reduction?

A2: To qualify for a small business reduction of the annual establishment fee, an entity must submit to FDA a written request for such a reduction, and a certification that the entity meets the requirements for the reduction. The request should be made using Form 3908, and the completed form should be submitted via email to CDERCollections@fda.hhs.gov, with the subject line containing “Outsourcing Facility Small Business Reduction Request.

Q3: What is the deadline for requesting a small business reduction?

A3: Entities that seek a small business reduction of the annual establishment fee must make a request for such a reduction by April 30th of the year preceding the fiscal year for which the entity is seeking a reduced fee.

Q4: How much does a qualifying small business pay?

A4: The annual establishment fee paid by entities granted a small business reduction is one-third of the adjusted annual establishment fee amount. The fee amount for a small business will be published in the Federal Register no later than 60 calendar days before the start of each fiscal year.

Human Compounding Fee Payment Instructions

Q1. When are fees incurred?

A1. Beginning in fiscal year (FY) 2015, outsourcing facilities that register with the FDA may incur one or more of the fees listed below:

  • Annual Establishment (Registration) Fee: Upon FDA determination that an entity has submitted complete registration information.
  • Reinspection Fee: After completion of an FDA reinspection of a registered outsourcing facility.

Q2. How will I be notified of my fee obligation?

A2. Once the fee is incurred, the agency will issue an invoice to the registrant via e-mail to the address indicated in the registration submission, or via regular mail if e-mail is not an option. This invoice will include the type of fee incurred, the amount of the fee and the date payment is due.

Q3. How do I make payment?

A3. Payments can be made by check, bank draft, postal money order, or wire transfer. All payments must be made in U.S. currency, drawn on a U.S. financial institution. Instructions specific to the payment method are described in the table below:

Check, Bank Draft or U.S. Postal Money Order

  • Make check/money order payable to the Food and Drug Administration.
  • Reference the invoice number on the check
  • Include a copy of the invoice
  • Mail to the address listed below
     Payment by mail  Payment by courier
    Food and Drug Administration
    P.O. Box 979033
    St. Louis, MO 63197-9000
    U.S. Bank
    Attn: Government Lockbox 979033
    1005 Convention Plaza
    St. Louis, MO 63101
    Important: For information on delivery by courier, contact U.S. Bank at (314) 418-4013.

Wire Transfer

  • Verify the cost of the wire fee with your financial institution
  • Ensure payment sent includes invoice amount plus wire fee
  • Complete wire with information below
    Bank Name| Telegraphic Name U.S. Treasury | TREAS NYC
    Bank Address 33 Liberty Street, New York, NY 10045
    Account Number 75060099
    Routing Number 021030004
    SWIFT Code FRNYUS33
    Beneficiary Name FDA
    Beneficiary Address 8455 Colesville Rd, COLE-14-14253,
    Silver Spring, MD 20993-0002
     Reference Invoice number XXXXXXXX

Q4. What happens if the FDA does not receive my payment by the due date?

A4. Any entity that does not satisfy its annual establishment fee obligation for a given fiscal year will not be considered registered as an outsourcing facility under section 503B of the FD&C Act. Additionally, all drugs manufactured, prepared, propagated, compounded or processed by an entity that has not paid the full amount of the required annual establishment fee or any applicable reinspection fee will be deemed misbranded under section 502 of the FD&C Act until all fees owed by the outsourcing facility have been paid in full.

Q5. How do I know that my fee obligation is satisfied?

A5. Entities that satisfy their annual establishment fee obligation will be notified that they are considered registered and will be added to FDA’s “Registered Outsourcing Facilities” list posted on our website. This list is generally updated weekly. Those whose obligations remain outstanding will be notified via e-mail at the address indicated in the registration submission.

Q6. What happens if the FDA does not receive my reinspection fee payment by the due date?

A6. After the close of a reinspection, FDA will issue an invoice for the reinspection fee. Delinquent debt is subject to interest, administrative fees and penalties in accordance with Department of Health and Human Services claim collection regulations described in Title 45, Code of Federal Regulations (CFR), part 30. Accordingly, if payment is not received within 30 calendar days of the reinspection fee invoice due date, interest will be charged on the amount owed. Claims that are over 180 days delinquent are submitted to the U.S. Department of Treasury for collection action, in accordance with Title 31, United States Code (USC), section 3711(g).

Q7. Whom should I contact with fee questions?

A7. Inquiries should be directed to the Division of User Fee Management and Budget Formulation at CDERCollections@fda.hhs.gov.

Q8. What should I do if I receive a full or partial refund that I was not expecting?

A8. If you do not know why you received a refund, contact the User Fee Helpdesk at userfees@fda.gov or 301-796-7200.

Questions for the Prescription Drug User Fee staff?  Contact us at CDERCollections@fda.hhs.gov, 301-796-7900, or mail us at:

For US Mail
Prescription Drug User Fee Staff
Food and Drug Administration
10001 New Hampshire Avenue, Room 3179
Silver Spring, MD 20993-0002

For Courier Delivery
Prescription Drug User Fee Staff
Food and Drug Administration
10001 New Hampshire Avenue, Room 3179
Silver Spring, MD 20903

Questions about making a payment or confirming the status of a payment?  Email the User Fee Helpdesk at userfees@fda.gov or call 301-796-7200

Questions about Pay.gov? Email them at pay.gov.clev@clev.frb.org or call 800-624-1373.

 

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