[Federal Register Volume 64, Number 248 (Tuesday, December 28, 1999)]
[Notices]
[Pages 72669-72673]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-33685]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
Establishment of Prescription Drug User Fee Rates for Fiscal Year
2000
AGENCY: Food and Drug Administration.
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) 2000. 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
2000 were set by the FDAMA, subject to adjustment for inflation. Total
application fee revenues fluctuate with the number of fee-paying
applications FDA receives. Fees for establishments and products are
calculated so that total revenues from each category will approximate
FDA's estimate of 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 (Public Law 102-571), as amended by the FDAMA (Public Law
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)).
For FY 1998 through 2002, under the amendments enacted in the
FDAMA, the application fee rates are set in the statute, but are to be
adjusted annually for cumulative inflation since FY 1997. Total
application fee revenues are structured to increase or decrease each
year as the number of fee-paying applications submitted to FDA
increases or decreases.
Each year from FY 1998 through 2002, FDA is required to set
establishment fees and product fees so that the estimated 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 is projected to come from each of the three types of fee:
Application fees, establishment fees, and product fees.
This notice establishes fee rates for FY 2000 for application,
establishment, and
[[Page 72670]]
product fees. These fees are retroactive to October 1, 1999, and will
remain in effect through September 30, 2000. For fees already paid on
applications and supplements submitted on or after October 1, 1999, FDA
will bill applicants for the difference between fees paid and fees due
under the new fee schedule. For applications and supplements submitted
after December 31, 1999, the new fee schedule must be used. Invoices
for establishment and product fees for FY 2000 will be issued in
December 1999, 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 (CPI)
(all items; U.S. city average), or (2) the total percentage pay change
for that FY for Federal employees stationed in the Washington, DC
metropolitan area. The FDAMA provides for this annual adjustment to be
cumulative and compounded annually after 1997 (see 21 U.S.C.
379h(c)(1)).
The FDAMA also structures the total application fee revenue to
increase or decrease each year as the number of fee-paying applications
submitted to FDA increases or decreases. This provision allows revenues
to rise or fall as this portion of FDA's workload rises or falls. To
implement this provision, each year FDA will estimate the number of
fee-paying applications it anticipates receiving. The number of
applications estimated will then be multiplied by the inflation-
adjusted statutory application fee. This calculation will produce the
FDA estimate of total application fee revenues to be received.
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 is projected to equal the revenues FDA expects to
collect from application fees that year. The FDAMA provides that the
new fee rates based on these calculations be adjusted within 60 days
after the end of each FY (21 U.S.C. 379h(c)(2)).
III. Inflation Adjustment and Estimate of Total Application Fee
Revenue
The FDAMA provides that the application fee rates set out in the
statute be adjusted each year for cumulative inflation since 1997. It
also provides for total application fee revenues to increase or
decrease based on increases or decreases in the number of fee-paying
applications submitted.
A. Inflation Adjustment to Application Fees
Application fees are assessed at different rates for qualifying
applications depending on whether the applications require clinical
data for safety or effectiveness (other than bioavailability or
bioequivalence studies) (21 U.S.C. 379h(a)(1)(A) and 379h(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
FY 2000 ($256,338 for applications requiring clinical data, and
$128,169 for applications not requiring clinical data or supplements
requiring clinical data) (21 U.S.C. 379h(b)(1)), but must be adjusted
for cumulative inflation since 1997. That adjustment each year is to be
the greater of: (1) The total percentage change that occurred during
the preceding FY in the CPI, 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 adjustment for FY 1998 was 2.45 percent (62 FR 64849, December
9, 1997). This was the greater of the CPI increase for FY 1997 (2.15
percent) or the increase in applicable Federal salaries (2.45 percent).
The adjustment for FY 1999 was 3.68 percent (63 FR 70777 at 70778,
December 22, 1998). This was the greater of the CPI increase for FY
1998 (1.49 percent) or the increase in applicable Federal salaries
(3.68 percent).
The adjustment for FY 2000 is 4.94 percent. This is the greater of
the CPI increase for FY 1999 (2.62 percent) or the increase in
applicable Federal salaries (4.94 percent).
Compounding these amounts (1.0245 times 1.0368 times 1.0494) yields
a total compounded inflation increase of 11.47 percent for FY 2000. The
adjusted application fee rates are computed by adding one to the
decimal equivalent of this percent (0.1147) and multiplying this amount
(1.1147) by the FY 2000 statutory application fee rates stated above
($256,338 for applications requiring clinical data, and $128,169 for
applications not requiring clinical data or supplements requiring
clinical data). For FY 2000 the adjusted application fee rates are
$285,740 for applications requiring clinical data, and $142,870 for
applications not requiring clinical data or supplements requiring
clinical data. These amounts must be submitted with all applications
during FY 2000.
B. Estimate of Total Application Fee Revenue
Total application fee revenues for FY 2000 will be estimated by
multiplying the number of fee-paying applications FDA receives in FY
2000 (from October 1, 1999, through September 30, 2000) by the fee
rates calculated in the preceding paragraph. Before fees can be set for
establishment and product fee categories, each of which are projected
to be equal to total revenues FDA collects from application fees, FDA
must first estimate its total FY 2000 application fee revenues. To do
this FDA first determines its FY 1999 fee-paying full application
equivalents, and uses that number in a linear regression analysis to
predict the number of fee-paying full application equivalents expected
in FY 2000. This is the same technique applied last year.
In FY 1999, FDA received and filed 119 human drug applications that
required clinical data for approval, 17 that did not require clinical
data for approval, and 112 supplements to human drug applications that
required clinical data for approval. 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 two. This amount is then added to the number
of applications that require clinical data to arrive at the equivalent
number of applications that may be subject to full application fees.
In addition, as of September 30, 1999, FDA refused to file, or
firms withdrew before filing, six applications that required clinical
data, three applications that did not require clinical data, and four
supplements requiring clinical data. The full applications refused for
filing or withdrawn before filing pay one-fourth the full application
fee and are counted as one-fourth of an application; the applications
that do not require clinical data and the supplements refused for
filing or withdrawn before filing pay one-eighth
[[Page 72671]]
of the full application fee and are each counted as one-eighth of an
application.
Using this methodology, the number of full application equivalents
that were submitted for review in FY 1999 was 186, before any
exemptions, waivers or reductions. Under the FDAMA, FDA waives fees for
certain small businesses submitting their first application and certain
orphan products, and certain supplements for pediatric indications are
exempted from application fees. In addition, the FDAMA provides a
number of other grounds for waivers (public health necessity,
preventing significant barriers to innovation, and fees exceed the
cost). In FY 1999, waivers or exemptions were applied to 35 full
application equivalents (thirteen for orphan products, seven for small
businesses, five for pediatric supplements, and ten miscellaneous
exemptions/waivers). Therefore, for FY 1999, FDA estimates that it
received the equivalent of 151 (186 minus 35) full application
equivalents that will pay fees, after allowing for exemptions, waivers
and reductions.
A linear regression line based on the adjusted number of fee-paying
full application equivalent submissions since 1993, and including our
FY 1999 total of 151 fee-paying full application equivalents, projects
the receipt of 158 fee-paying full application equivalent submissions
in FY 2000, as reflected in Table 1 of this document and the graph
below.
Table 1.
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Fiscal Year 1993 1994 1995 1996 1997 1998 1999 2000
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Adjusted fee- 101.0 108.9 112.5 136.3 161.5 118.5 150.9
paying FAE's
Regression 103.7 111.5 119.3 127.1 134.9 142.6 150.4 158.2
line
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[GRAPHIC] [TIFF OMITTED] TN28DE99.023
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The total FY 2000 application fee revenue is estimated by
multiplying the adjusted application fee rate ($285,740) by the
equivalent number of applications projected to qualify for fees in FY
2000 (158), for a total estimated application fee revenue in FY 2000 of
$45,146,920. This is the amount of revenue that FDA is also expected to
derive both from establishment fees and from product fees.
IV. Fee Calculations for Establishment and Product Fees
A. Establishment Fees
At the beginning of FY 1999, the establishment fee was based on an
estimate of 318 establishments subject to fees. For FY 1999, 343
establishments qualified for and were billed for establishment fees,
before all decisions on requests for waivers or reductions were made.
FDA estimates that a total of 25 establishment fee waivers will be
granted in FY1999, for a net of 318 fee-paying establishments, and will
use this number again for its FY 2000 estimate of establishments paying
fees, after taking waivers into account. The fee per establishment is
determined by dividing the adjusted total fee revenue to be derived
from establishments ($45,146,920), by the estimated 318 establishments,
for an establishment fee rate for FY 2000 of $141,971 (rounded to the
nearest dollar).
B. Product Fees
At the beginning of FY 1999, the product fee was based on an
estimate that 2,224 products would be subject to product fees. By the
end of FY 1999, 2,317 products qualified and were billed for product
fees before all decisions on requests for waivers or reductions were
made. Assuming that there will be about 55 waivers granted, FDA
estimates that 2,262 products will qualify for product fees in FY 1999,
after allowing for waivers and exemptions, and will use this number for
its FY 2000 estimate. Accordingly, the FY 2000 product fee rate is
determined by dividing the adjusted total fee revenue to be derived
from product fees ($45,146,920) by the estimated 2,262 products for a
product fee rate of $19,959 (rounded to the nearest dollar).
V. Adjusted Fee Schedules for FY 2000
The fee rates for FY 2000 are set out in Table 2 of this document:
Table 2.
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Fee Category Fee Rates for FY 2000
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Applications:
Requiring clinical data $285,740
Not requiring clinical data $142,870
Supplements requiring clinical $142,870
data
Establishments $141,971
Products $19,959
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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, 1999, must be accompanied by the
appropriate application fee established in the new fee schedule.
Payment must be made in U.S. currency by check, bank draft, or U.S.
postal money order payable to the order of the U.S. Food and Drug
Administration. Please include the user fee 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 to be sent by a courier that requests a street
address, the courier can deliver the checks to: Mellon Bank, Three
Mellon Bank Center, 27th Floor (FDA 360909), Pittsburgh, PA 15259-0001.
(Note: This Mellon Bank Address is for courier delivery only.) Please
make sure that the FDA P.O. Box number (PO Box 360909) is on the
enclosed check.
FDA will bill applicants who submitted application fees from
October 1 to December 31, 1999, for the difference between the amount
they submitted and the amount specified in the Adjusted Fee Schedule
for FY 2000.
B. Establishment and Product Fees
By December 31, 1999, FDA will issue invoices for establishment and
product fees for FY 2000 under the new Adjusted Fee Schedule. Payment
will be due by January 31, 2000. FDA will issue invoices in October
2000 for any products and establishments subject to fees for FY 2000
that qualify for fees after the December 1999 billing.
Dated: December 21, 1999.
William K. Hubbard,
Senior Associate Commissioner for Policy, Planning, and Legislation.
[FR Doc. 99-33685 Filed 12-22-99; 5:00 pm]
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