[Federal Register Volume 59, Number 236 (Friday, December 9, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-30418]


[[Page Unknown]]

[Federal Register: December 9, 1994]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
[Docket No. 94N-0434]

 

Establishment of Prescription Drug User Fee Revenues and Rates 
for Fiscal Year 1995

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is announcing that it 
is establishing user fee revenues and rates for Fiscal Year (FY) 1995. 
The Prescription Drug User Fee Act of 1992 (the PDUFA) 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 marketed products. Fees for applications, establishments, and 
products for FY 1993 were established by the PDUFA. Fees for FY 1994 
and later years are to be determined by FDA using criteria delineated 
in the statute.

FOR FURTHER INFORMATION CONTACT: Michael E. Roosevelt, Office of 
Financial Management (HFA-120), Food and Drug Administration, 5600 
Fishers Lane, Rockville, MD 20857, 301-443-4872.

SUPPLEMENTARY INFORMATION:

I. Background

    The PDUFA (Pub. L. 102-571) 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 marketed 
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, one-third of 
the total user fee revenue for each FY must come from each of the three 
types of fees.
    For FY 1993, the total revenues to be derived from fees and the fee 
rates for each of the categories were established in the PDUFA (21 
U.S.C. 379h(b)(1)). For FY 1994 through 1997, however, the PDUFA 
establishes only target total fee revenues and fees. For these years, 
FDA is authorized to increase the total fee revenues and to establish 
new fee rates for each of the three categories so that the revised 
total fee revenues are realized (21 U.S.C. 379h(c)).
    This notice establishes total fee revenues and sets application, 
establishment, and product fee rates for FY 1995. These fees are 
retroactive to October 1, 1994, and will remain in effect through 
September 30, 1995. Invoices for establishment and product fees for FY 
1995 will be issued in December 1994, using the new fee schedules.

II. Revenue Increase and Fee Adjustment Process

    The PDUFA provides that total fee revenues for each FY, as set out 
in the original fee schedule (see 21 U.S.C. 379h(b)(1)), shall be 
increased by notice in the Federal Register. The increase must reflect 
the greater of: (1) The total percentage increase that occurred during 
the preceding FY in the Consumer Price Index (all items; U.S. city 
average) (the CPI), or (2) the total percentage pay increase for that 
FY for Federal employees, as adjusted for any locality-based payment 
applicable to employees stationed in the District of Columbia (see 21 
U.S.C. 379h(c)(1)). The PDUFA also provides that within 60 days after 
the end of each FY, FDA shall adjust the user fee rates in each of the 
three categories of fees (application, establishment, and product) to 
achieve the revised total fee revenues. The new individual user fees 
must be adjusted in a manner that maintains the proportions established 
in the original fee schedules, so that approximately one-third of the 
revenues will come from each of three categories: Application fees, 
establishment fees, and product fees (21 U.S.C. 379h(c)(2)).

III. Total Fee Revenue Adjustment

    For FY 1994, the total percentage increase in the CPI was 2.96 
percent, whereas the increase in applicable Federal salaries was 3.22 
percent. Thus, for computing the total fee revenues for FY 1995, the 
latter percentage applies. The new adjusted total fee revenue is 
computed by applying the increase as a percentage (103.22 percent), to 
the FY 1995 target fee revenue amount from the PDUFA schedule 
($75,000,000). The FY 1995 total adjusted fee revenue amount then 
totals $77,415,000.

IV. Fee Calculations for Application, Establishment, and Product 
Fees

    The PDUFA provides that in making adjustments to the user fee 
rates, the one-third proportionality must be maintained among 
application, product, and establishment fees. Thus, the amount of 
revenues to be obtained from each category are $25,805,000 ($77,415,000 
divided by 3).

A. Application Fees

    Application fees are assessed on each ``human drug application,'' 
as defined in the PDUFA (see 21 U.S.C. 379g(1)). Application fees are 
levied for: (1) Approval of certain new drug applications submitted 
after September 1, 1992, under section 505(b)(1) of the Federal Food, 
Drug, and Cosmetic Act (the act) (21 U.S.C. 355(b)(1)); (2) for 
approval of an application for certain molecular entities or 
indications for use submitted after September 30, 1992, under section 
505(b)(2) of the act (21 U.S.C. 355(b)(2)); (3) for initial 
certifications or approvals of antibiotic drugs submitted after 
September 1, 1992, under section 507 of the act (21 U.S.C. 357); and 
(4) for licensure of certain biological products under section 351 of 
the Public Health Service Act (42 U.S.C. 262).
    Fees are assessed at different rates for qualifying applications 
depending on whether the applications require for approval clinical 
data on safety and 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.
    In most cases, a first payment of 50 percent of an application or 
supplement fee is due at the time the application or supplement is 
submitted (21 U.S.C. 379h(a)(1)(B)(i)). The final payment is due 30 
days from the date FDA issues an invoice after issuance of an action 
letter for the application, or at the time an application is withdrawn, 
unless FDA waives this portion of the fee (21 U.S.C. 379h(a)(1)(B)). If 
FDA refuses to file an application or supplement, one-half of the first 
payment is refunded to the applicant (21 U.S.C. 379h(a)(1)(D)).
    In setting the specific rate for each type of fee, FDA is required 
to estimate the numbers of applications, supplements, establishments, 
and products that it expects will qualify for fees in FY 1995. FDA 
makes this estimate based on the number of products, establishments, or 
applications subject to fees in FY 1994.
    For FY 1994, FDA received and assessed fees for 78 filed 
applications that required clinical data, 16 applications that did not 
require clinical data, and 78 supplements that required clinical data, 
after excluding applications or supplements for which fees were waived. 
Because applications that do not require clinical data and supplements 
that require clinical data are assessed only one-half the full fee 
(that is, one-half the fee due on an application that requires clinical 
data), 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, 1994, FDA refused to file, or 
there were withdrawn before filing, 11 applications that required 
clinical data, and 5 applications that did not require clinical data. 
After refunds, each of the former applications paid one-fourth the full 
application fee and are counted as one-fourth of an application. 
Similarly, after refunds, each of the latter applications paid one-
eighth of the full application fee rate and are 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 
1994 was 129, before any further decisions were made on requests for 
waivers or reductions. Additional waivers or reductions of FY 1994 fees 
are expected to account for approximately five equivalents of 
applications that require clinical data. Therefore, FDA estimates that 
approximately 124 equivalent applications that require clinical data 
will qualify for fees in FY 1995, after allowing for possible waivers 
or reductions. Thus, the FY 1995 application fee rate is determined by 
dividing the adjusted total fee revenue to be derived from applications 
($28,805,000), by the equivalent number of applications projected to 
qualify for fees in FY 1995 (124), for a fee of $208,000 per 
application that requires clinical data (rounded to the nearest 
$1,000). A fee of one-half this amount or $104,000 applies to 
applications that do not require clinical data and to supplements that 
require clinical data. The following calculations summarize the 
determination of FY 1995 application fee rates:
     78 applications that require clinical data, +(162) 
applications that do not require clinical data, +(782) 
supplements that require clinical data, +(124) applications 
that require clinical data and which FDA refuses to file or the sponsor 
withdraws before filing, +(58) other applications that FDA 
refuses to file or the sponsor withdraws before filing, -5 waivers or 
reductions=124 (the estimated number of ``full fee'' applications for 
FY 1995 based on FY 1994 experience).
     $25,805,000 (FY 1995 estimated revenue to be derived from 
applications) 124 (the estimated number of applications for FY 
1995)=$208,000 per application (rounded to nearest $1,000).
     For applications that do not require clinical data and 
supplements that require clinical data the rate will be one-half the 
full application fee or $104,000.

B. Establishment Fees

    The PDUFA FY 1994 establishment fee revenue was based on an 
estimate of 200 establishments subject to fees. In FY 1994, 206 
establishments qualified for fees, before any decisions on requests for 
waivers or reductions were made. FDA estimates that approximately 200 
establishments will qualify for fees in FY 1995, after allowing for 
possible waivers or reductions. Thus, the number 200 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 ($25,805,000), by the estimated 200 establishments, for 
an establishment fee rate for FY 1995 of $129,000 (rounded to the 
nearest $100).

C. Product Fees

    The FY 1994 product fee was based on an estimate that 2,000 
products would be subject to product fees in FY 1994. For FY 1994, 
2,156 products qualified for fees, before any decisions on requests for 
waivers or reductions were made. However, FDA estimates that only 2,116 
products will qualify for product fees in FY 1995, after allowing for 
an estimated 40 waivers or reductions. Accordingly, the FY 1995 product 
fee rate is determined by dividing the adjusted total fee revenue to be 
derived from product fees ($25,805,000), by the estimated 2,116 
products, for a product fee rate for FY 1995 of $12,200 (rounded to the 
nearest $100).

V. Adjusted Fee Schedules for FY 1995

    The fee rates for FY 1995 are set out in the following table:

------------------------------------------------------------------------
                                                               Fee rates
                        Fee Category                            for FY  
                                                                 1995   
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Applications:                                                           
    Requiring clinical data                                     $208,000
    Not requiring clinical data                                  104,000
    Supplements requiring clinical data                          104,000
Establishments                                                   129,000
Products                                                          12,200
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VI. Implementation of Adjusted Fee Schedules

A. Application Fees

    Application fees in the adjusted fee schedule for FY 1995 are the 
same as the projected 1995 fees in PDUFA. Any applications or 
supplements subject to fees under the PDUFA that are submitted in FY 
1995 must be accompanied by the appropriate application fee.

B. Establishment and Product Fees

    By December 31, 1994, FDA will issue invoices for establishment and 
product fees for FY 1995 under the new fee schedules. Payment will be 
due by January 31, 1995. FDA will issue invoices in October 1995 for 
any products and establishments subject to fees for FY 1995 that 
qualify for fees after the December 1994 billing.

    Dated: December 5, 1994.
William K. Hubbard,
Interim Deputy Commissioner for Policy.
[FR Doc. 94-30418 Filed 12-6-94; 5:02 pm]
BILLING CODE 4160-01-P