[Federal Register Volume 61, Number 247 (Monday, December 23, 1996)]
[Notices]
[Pages 67557-67559]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-32493]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Establishment Prescription Drug User Fee Revenues and Rates 
Fiscal Year 1997

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) 1997. 
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 future 
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 rates for FY 1997. These fees are 
retroactive to October 1, 1996, and will remain in effect through 
September 30, 1997. For fees already paid on applications and 
supplements submitted on or after October 1, 1996, FDA will bill/refund 
applicants for the difference between fees paid and fees due under the 
new fee schedules. For applications and supplements submitted after 
December 31, 1996, the new fee schedule should be used. Invoices for 
establishment and product fees for FY 1997 will be issued in December 
1996, 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 FY in the Consumer Price Index (the CPI) (all items; U.S. city 
average), 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 each from applications, establishments, and product 
fees (21 U.S.C. 379h(c)(2)).

III. Total Fee Revenue Adjustment

    For FY 1996, the total percentage increase in the CPI was 3.00 
percent, whereas the increase in applicable Federal salaries for FY 
1997 is 3.33 percent. Thus, for computing the total fee revenues for FY 
1997, the percentage is 3.33. The new adjusted total fee revenue is 
computed by applying the increase as a percentage (103.33 percent) to 
the FY 1997 target fee revenue amount from the PDUFA schedule ($84 
million). The FY 1997

[[Page 67558]]

total adjusted fee revenue amount then totals $86,797,200.

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 $28,932,400 ($86,797,200 
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) Review of certain new drug applications submitted after 
September 1, 1992, under section 505(b)(1) of the act (21 U.S.C. 
355(b)(1)); (2) for review of an application for certain molecular 
entities or indications for use submitted after September 30, 1992, 
under section 505(b)(2) of the act; (3) review of applications 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 review of applications for licensure of certain biological 
products under 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 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 
with 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 (see 21 U.S.C. 379g(6)(B)), or at the time 
an application is withdrawn, unless FDA waives this portion of the fee 
(21 U.S.C. 379h(a)(1)(A)(ii)). 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 1997. FDA 
makes this estimate based on the number of products, establishments, or 
applications subject to fees in FY 1996.
    For FY 1996, FDA received and filed 131 original applications (New 
Drug Applications, Product License Applications, and Establishment 
License Applications) and received and filed 109 efficacy supplements. 
After subtracting those that were not assessed fees because they did 
not meet the definition of human drug application or supplement under 
the PDUFA, FDA received, filed, and assessed fees for 107 applications 
that require clinical data, 17 applications that did not require 
clinical data, and 82 supplements that require clinical data. 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, 1996, FDA assessed fees for two 
applications that required clinical data that were refused to file, or 
were withdrawn before filing. After refunds, each of these applications 
paid one-fourth the full application fee and are counted as one-fourth 
of an application.
    Using this methodology, the approximate equivalent number of 
applications that required clinical data and were assessed fees in FY 
1996 was 157, before any further decisions were made on requests for 
waivers or reductions. Additional waivers or reductions of FY 1996 fees 
are expected to account for approximately 16 equivalents of 
applications that require clinical data. Therefore, FDA estimates that 
approximately 141 equivalent applications that require clinical data 
will qualify for fees in FY 1997, after allowing for possible waivers 
or reductions. Thus, the FY 1997 application fee rate is determined by 
dividing the adjusted total fee revenue to be derived from applications 
($28,932,400) by the equivalent number of applications projected to 
qualify for fees in FY 1997 (141), for a fee of $205,000 per 
application that requires clinical data (rounded to the nearest 
$1,000). A fee of one-half this amount or $102,500 applies to 
applications that do not require clinical data and to supplements that 
require clinical data. The following calculations summarize the 
determination of FY 1997 application fee rates:
     107 applications that require clinical data, + 
(172) applications that do not require clinical data, + 
(822) supplements that require clinical data, + (24) 
applications that require clinical data and which FDA refuses to file 
or the sponsor withdraws before filing minus 16 waivers or reductions = 
141 (the estimated number of ``full fee'' applications for FY 1997 
based on FY 1996 experience).
     $28,932,400 (FY 1997 estimated revenue to be derived from 
applications) 141 (the estimated number of applications for FY 
1997) = $205,000 per application (rounded to the 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 $102,500.

B. Establishment Fees

    The FY 1996 establishment fee was based on an estimate of 197 
establishments subject to fees. In FY 1996, 264 establishments 
qualified for fees before any decisions on requests for waivers or 
reductions were made. FDA estimates that approximately 250 
establishments will qualify for fees in FY 1997 after allowing for 
possible waivers or reductions. Thus, the number 250 was 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 ($28,932,400), by the estimated 250 establishments, 
for an establishment fee rate for FY 1997 of $115,700 (rounded to the 
nearest $100).

C. Product Fees

    The FY 1996 product fee was based on an estimate that 2,115 
products would be subject to product fees in FY 1996. For FY 1996, 
2,241 products qualified for fees before any decisions on requests for 
waivers or reductions were made. However, FDA estimates that only 2,200 
products will qualify for product fees in FY 1997, after allowing for 
estimated waivers or reductions. Accordingly, the FY 1997 product fee 
rate was determined by dividing the adjusted total fee revenue to be 
derived from product fees ($28,932,400) by the estimated 2,200 products 
for a product fee rate of $13,200 (rounded to the nearest $100).

V. Adjusted Fee Schedules for FY 1997

    The fee rates for FY 1997 are set out in the following table:

[[Page 67559]]



                                                                        
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                 Fee category                    Fee rates for FY 1997  
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Applications.................................                           
      Requiring clinical data                           $205,000        
      Not requiring clinical data                        102,500        
      Supplements requiring clinical data                102,500        
Establishments...............................            115,700        
Products.....................................             13,200        
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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, 1996, must be accompanied by the 
appropriate application fee established in the new fee schedule. FDA 
will refund applicants who submitted application fees between October 
1, 1996, and December 31, 1996, based on the adjusted rate schedule.

B. Establishment and Product Fees

    By December 31, 1996, FDA will issue invoices for establishments 
and product fees for FY 1997 under the new fee schedules. Payment will 
be due by January 31, 1997. FDA will issue invoices in October 1997 for 
any products and establishments subject to fees for FY 1997 that 
qualify for fees after the December 1996 billing.

    Dated: December 15, 1996.
William B. Schultz,
Deputy Commissioner for Policy.
[FR Doc. 96-32493 Filed 12-19-96; 10:33 am]
BILLING CODE 4160-01-F