[Federal Register Volume 65, Number 243 (Monday, December 18, 2000)]
[Notices]
[Pages 79107-79111]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-31949]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration


Establishment of Prescription Drug User Fee Rates for Fiscal Year 
2001

AGENCY: Food and Drug Administration, HHS.

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) 2001. 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 
2001 were set by the PDUFA, as amended, 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: Frank P. Claunts, Office of Management 
and Systems (HF-20), Food and Drug Administration, 5600 Fishers Lane, 
Rockville, MD 20857, 301-827-4427.

SUPPLEMENTARY INFORMATION:

I. Background

    The PDUFA (Public Law 102-571), as amended by the FDAMA (Public Law 
105-115), referred to as the PDUFA II in this document, establishes 
three different kinds of user fees. Fees are assessed on: (1) Certain 
types of applications and supplements for approval of drug and 
biological 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 PDUFA II, 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 fees: 
Application fees, establishment fees, and product fees.
    This notice establishes fee rates for FY 2001 for application, 
establishment, and product fees. These fees are retroactive to October 
1, 2000, and will remain in effect through September 30, 2001. For fees 
already paid on applications and supplements submitted on or after 
October 1, 2000, 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, 2000, the new fee schedule 
must be used. Invoices for establishment and product fees for FY 2001 
will be issued in December 2000, using the new fee schedule.

II. Inflation and Workload Adjustment Process

    The PDUFA II 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 PDUFA II provides for this annual adjustment to be cumulative and 
compounded annually after 1997 (see 21 U.S.C. 379h(c)(1)).

[[Page 79108]]

    The PDUFA II 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 II 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 PDUFA II 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 PDUFA II 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 PDUFA II 
for FY 2001 ($267,606 for applications requiring clinical data, and 
$133,803 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 stationed in DC, as adjusted for any 
locality-based payment. The PDUFA II 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 was 4.94 percent (64 FR 72669 at 72670, 
December 28, 1999). This was the greater of the CPI increase for FY 
1999 (2.62 percent) or the increase in applicable Federal salaries 
(4.94 percent).
    The adjustment for FY 2001 is 3.81 percent. This is the greater of 
the CPI increase for FY 2000 (3.45 percent) or the increase in 
applicable Federal salaries (3.81 percent).
    Compounding these amounts (1.0245 times 1.0368 times 1.0494 times 
1.0381) yields a total compounded inflation increase of 15.71 percent 
for FY 2001. The adjusted application fee rates are computed by adding 
one to the decimal equivalent of this percent (0.1571) and multiplying 
this amount (1.1571) by the FY 2001 statutory application fee rates 
stated above ($267,606 for applications requiring clinical data, and 
$133,803 for applications not requiring clinical data or supplements 
requiring clinical data). For FY 2001 the adjusted application fee 
rates are $309,647 for applications requiring clinical data, and 
$154,823 for applications not requiring clinical data or supplements 
requiring clinical data. These amounts must be submitted with all 
applications during FY 2001.

B. Estimate of Total Application Fee Revenue

    Total application fee revenues for FY 2001 will be estimated by 
multiplying the number of fee-paying applications FDA receives in FY 
2001 (from October 1, 2000, through September 30, 2001) 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 2001 application fee revenues. To do 
this FDA first determines its FY 2000 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 2001. This is the same technique applied in each of the previous 
2 fiscal years.
    In FY 2000, FDA received and filed 117 human drug applications that 
require clinical data for approval, 21 that did not require clinical 
data for approval, and 131 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 2. 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, 2000, FDA refused to file, or 
firms withdrew before filing, 11 applications that required clinical 
data, and 5 applications that either did not require clinical data or 
that were 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 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 2000 was 196.4, before any 
exemptions, waivers or reductions. Under the PDUFA II, FDA waives 
application fees for certain small businesses submitting their first 
application and for certain orphan products. Certain application 
supplements for pediatric indications are also exempt from fees. In 
addition, the PDUFA II provides a number of other grounds for waivers 
(public health necessity, preventing significant barriers to 
innovation, and fees exceed the cost). In FY 2000 waivers or exemptions 
were applied to 42.9 full application equivalents (14 for orphan 
products, 8 for small businesses, 12.5 for pediatric supplements, and 
8.4 miscellaneous exemptions/waivers). Therefore, for FY 2000, FDA 
estimates that it received the equivalent of 153.5 (196.4 minus 42.9) 
full application equivalents that will

[[Page 79109]]

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 2000 total of 153.5 fee-paying full application equivalents, 
projects the receipt of 163.6 fee-paying full application equivalent 
(FAE) submissions in FY 2001, as reflected in table 1 of this document 
and graph below.

                                                    Table 1.
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 Fiscal Year      1993       1994       1995       1996       1997       1998       1999       2000       2001
----------------------------------------------------------------------------------------------------------------
Adjusted fee-  101.0      108.9      112.5      136.3      161.5      118.5      150.9      153.5
 paying FAE's
Regression     104.5      111.9      119.3      126.7      134.1      141.5      148.9      156.2      163.6
 line
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[[Page 79111]]

    The total FY 2001 application fee revenue is estimated by 
multiplying the adjusted application fee rate ($309,647) by the 
equivalent number of applications projected to qualify for fees in FY 
2001 (163.6), for a total estimated application fee revenue in FY 2001 
of $50,658,249. This is the amount of revenue that FDA is also expected 
to derive both from establishment fees and from product fees.

IV. Adjustment for Excess Collections in Previous Years

    Under the provisions of the PDUFA II, if the agency collects more 
fees than were provided for in appropriations in any year after 1997, 
FDA is required to reduce its anticipated fee collections in a 
subsequent year by that amount (21 U.S.C. 379h(g)(4)).
    In FY 1998, Congress appropriated a total of $117,122,000 to FDA in 
the PDUFA II fee revenue. To date, collections for FY 1998 total 
$117,446,776--a total of $324,776 in excess of the appropriation limit. 
This is the only fiscal year since 1997 in which FDA has collected more 
in the PDUFA II fees than Congress appropriated.
    FDA also has requests for waivers or reductions of FY 1998 fees 
pending that, if granted, would eliminate the excess collections. For 
this reason FDA is not reducing its FY 2001 fees to offset excess 
collections at this time. An offset will be considered next year, when 
fees for FY 2002 are established, if FDA still has collections in 
excess of appropriations for FY 1998 after the pending requests for FY 
1998 waivers and reductions have been resolved.

V. Fee Calculations for Establishment and Product Fees

A. Establishment Fees

    At the beginning of FY 2000, the establishment fee was based on an 
estimate of 318 establishments subject to fees. For FY 2000, 372 
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 or 
reductions will be made in FY 2000, for a net of 347 fee-paying 
establishments, and will use this number for its FY 2001 estimate of 
establishments paying fees, after taking waivers and reductions into 
account. The fee per establishment is determined by dividing the 
adjusted total fee revenue to be derived from establishments 
($50,658,249), by the estimated 347 establishments, for an 
establishment fee rate for FY 2001 of $145,989 (rounded to the nearest 
dollar).

B. Product Fees

    At the beginning of FY 2000, the product fee was based on an 
estimate that 2,262 products would be subject to product fees. By the 
end of FY 2000, 2,369 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 and reductions made, 
FDA estimates that 2,314 products will qualify for product fees in FY 
2000, after allowing for waivers and reductions, and will use this 
number for its FY 2001 estimate. Accordingly, the FY 2001 product fee 
rate is determined by dividing the adjusted total fee revenue to be 
derived from product fees ($50,658,249) by the estimated 2,314 products 
for a product fee rate of $21,892 (rounded to the nearest dollar).

VI. Adjusted Fee Schedule for FY 2001

    The fee rates for FY 2001 are set out in table 2 of this document:

                                Table 2.
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                Fee Category                    Fee Rates for FY 2001
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Applications
  Requiring clinical data                          $309,647
  Not requiring clinical data                      $154,823
  Supplements requiring clinical data              $154,823
Establishments                                     $145,989
Products                                            $21,892
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VII. Implementation of Adjusted Fee Schedule

A. Application Fees

    Any application or supplement subject to fees under the PDUFA II 
that is submitted after December 31, 2000, 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 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: Food and Drug 
Administration (360909) Mellon Client Service Center rm. 670, 500 Ross 
St., Pittsburgh, PA 15262-0001. (Note: This is a new Mellon Bank 
Address 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 lower application fees from 
October 1 to December 31, 2000, for the difference between the amount 
they submitted and the amount specified in the Adjusted Fee Schedule 
for FY 2001.

B. Establishment and Product Fees

    By December 31, 2000, FDA will issue invoices for establishment and 
product fees for FY 2001 under the new Adjusted Fee Schedule. Payment 
will be due by January 31, 2001. FDA will issue invoices in October 
2001 for any products and establishments subject to fees for FY 2001 
that qualify for fees after the December 2000 billing.

    Dated: December 7, 2000.
Margaret M. Dotzel,
Associate Commissioner for Policy.
[FR Doc. 00-31949 Filed 12-15-00; 8:45 am]
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