[Federal Register Volume 67, Number 11 (Wednesday, January 16, 2002)]
[Notices]
[Pages 2222-2226]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-1068]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
Establishment of Prescription Drug User Fee Rates for Fiscal Year
2002
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) 2002. The
Prescription Drug User Fee Act of 1992 (PDUFA), as amended by the Food
and Drug Administration Modernization Act of 1997 (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 2002 were set by
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 Claunts, Office of Management
and Systems (HFA-300), Food and Drug Administration, 5600 Fishers Lane,
Rockville, MD 20857, 301-827-4427.
SUPPLEMENTARY INFORMATION:
I. Background
PDUFA (Public Law 102-571), as amended by FDAMA (Public Law 105-
[[Page 2223]]
115), referred to as 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 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 2002 for application,
establishment, and product fees. These fees are retroactive to October
1, 2001, and will remain in effect through September 30, 2002. For fees
already paid on applications and supplements submitted on or after
October 1, 2001, FDA will bill applicants for the difference between
fees paid and fees due under the new fee schedule. For applications and
supplements submitted after January 16, 2002, the new fee schedule must
be used. Invoices for establishment and product fees for FY 2002 will
be issued in January 2002, using the new fee schedule.
II. Inflation and Workload Adjustment Process
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. PDUFA II provides
for this annual adjustment to be cumulative and compounded annually
after 1997 (see 21 U.S.C. 379h(c)(1)).
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.
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. 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
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 PDUFA II for FY
2002 ($258,451 for applications requiring clinical data, and $129,226
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 the Washington, DC
metropolitan area, as adjusted for any locality-based payment. 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 was 3.81 percent (65 FR 79107 at 79108,
December 18, 2000). This was the greater of the CPI increase for FY
2000 (2.62 percent) or the increase in applicable Federal salaries
(3.81 percent).
The adjustment for FY 2002 is 4.77 percent. This is the greater of
the CPI increase for FY 2001 (2.65 percent) or the increase in
applicable Federal salaries (4.77 percent).
Compounding these amounts (1.0245 times 1.0368 times 1.0494 times
1.0381 times 1.0477) yields a total compounded inflation increase of
21.23 percent for FY 2002. The adjusted application fee rates are
computed by adding one to the decimal equivalent of this percent
(0.2123) and multiplying this amount (1.2123) by the FY 2002 statutory
application fee rates stated above ($258,451 for applications requiring
clinical data, and $129,226 for applications not requiring clinical
data or supplements requiring clinical data). For FY 2002 the adjusted
application fee rates are $313,320 for applications requiring clinical
data, and $156,660 for applications not requiring clinical data or
supplements requiring clinical data. These amounts must be submitted
with all applications during FY 2002.
B. Estimate of Total Application Fee Revenue
Total application fee revenues for FY 2002 will be estimated by
multiplying the number of fee-paying applications FDA expects to
receive in FY 2002 (from October 1, 2001, through September 30,
[[Page 2224]]
2002) 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 2002 application
fee revenues. To do this FDA first determines its FY 2001 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 2002. This is the same technique
applied in each of the previous 3 fiscal years.
In FY 2001, FDA received and filed 95 human drug applications that
require clinical data for approval, 16 that did not require clinical
data for approval, and 126 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, 2 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 equivalent
(FAE) submissions that were received for review in FY 2001 was 167.125,
before any exemptions, waivers or reductions. Under 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, 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 2001 waivers or exemptions
were applied to 59 FAE submissions (14.5 for orphan products, 12 for
small businesses, 19 for pediatric supplements, and 13.5 miscellaneous
exemptions/waivers). Therefore, for FY 2001, FDA estimates that it
received 108.125 (167.125 minus 59) FAE submissions that will pay fees,
after allowing for exemptions, waivers and reductions.
Next a linear regression line based on the adjusted number of fee-
paying FAE submissions since 1993, and including our FY 2001 total of
FAEs, must be drawn to project the number of FAEs in FY 2002.
In FY 2002, however, additional applications will have to pay fees.
All pediatric supplements will be required to pay fees effective
January 4, 2002 (for three-fourths of FY 2002). This is the result of
section 5 of the Best Pharmaceuticals for Children Act. It repealed the
fee exemption for pediatric supplements effective January 4, 2002.
Thus, the regression line projecting FY 2002 fee-paying receipts must
be drawn to reflect this change. In FY 1998, 8 full fees were exempted
for pediatric supplements; the numbers for FY 1999, FY 2000, and FY
2001 respectively were 5.25, 12.5, and 19. Since fees on these
supplements will only be paid for three-fourths of FY 2002 (January 1
through September 30, 2002), three-fourths of the number of pediatric
supplements waived each year from FY 1998 through FY 2001 (the only
years when fees were waived) will be added to the total of fee-paying
FAEs received each year.
A linear regression line based on this adjusted number of fee-
paying FAE submissions since 1993, and including our adjusted FY 2001
total of 122.375 FAEs (108.125 fee-paying FAEs and three-fourths of the
19 pediatric supplements that were exempted in FY 2001), projects the
receipt of 158.3 fee-paying FAEs in FY 2002, 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 2001 2002
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Fee-paying FAEs 101.0 108.9 112.5 136.3 161.5 124.5 154.6 162.9 122.4
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Regression Line 110.3 115.6 121.0 126.3 131.6 137.0 142.3 147.6 152.9 158.3
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[[Page 2225]]
[GRAPHIC] [TIFF OMITTED] TN16JA02.000
The total FY 2002 application fee revenue is estimated by
multiplying the adjusted application fee rate ($313,320) by the number
of applications projected to qualify for fees in FY 2002 (158.3), for a
total estimated application fee revenue in FY 2001 of $49,598,556. 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 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
PDUFA II fee revenue. To date, collections for FY 1998 total
$117,737,470---a total of $615,470 in excess of the appropriation
limit. This is the only fiscal year since 1997 in which FDA has
collected more
[[Page 2226]]
in PDUFA II fees than Congress appropriated.
FDA also has requests for waivers or reductions of FY 1998 fees
pending. For this reason FDA is not reducing its FY 2002 fees to offset
excess collections at this time. An offset will be considered in a
future year, 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 2001, the establishment fee was based on an
estimate of 347 establishments subject to fees. For FY 2001, 379
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 for FY 2001, for a net of 354 fee-paying
establishments, and will use this number for its FY 2002 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
($49,598,556), by the estimated 354 establishments, for an
establishment fee rate for FY 2002 of $140,109 (rounded to the nearest
dollar).
B. Product Fees
At the beginning of FY 2001, the product fee was based on an
estimate that 2,314 products would be subject to product fees. By the
end of FY 2001, 2,348 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 2,293 products will qualify for product fees in FY
2002, after allowing for waivers and reductions, and will use this
number for its FY 2002 estimate. Accordingly, the FY 2002 product fee
rate is determined by dividing the adjusted total fee revenue to be
derived from product fees ($49,598,556) by the estimated 2,293 products
for a product fee rate of $21,630 (rounded to the nearest dollar).
VI. Adjusted Fee Schedule for FY 2002
The fee rates for FY 2002 are set out in table 2 of this document:
Table 2.
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Fee Category Fee Rates for FY 2002
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Applications.............................
Requiring clinical data................ $313,320
Not requiring clinical data............ $156,660
Supplements requiring clinical data.... $156,660
Establishments........................... $140,109
Products................................. $21,630
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VII. Implementation of Adjusted Fee Schedule
A. Application Fees
Any application or supplement subject to fees under PDUFA II that
is submitted after January 16, 2002, 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 Mellon Bank Address is
for courier delivery only.)
Please make sure that the FDA P.O. Box number (P.O. Box 360909) is
on the enclosed check.
FDA will bill applicants who submitted lower application fees from
October 1 to January 16, 2002, for the difference between the amount
they submitted and the amount specified in the Adjusted Fee Schedule
for FY 2002.
B. Establishment and Product Fees
By [insert date of publication in the Federal Register], FDA will
issue invoices for establishment and product fees for FY 2002 under the
new Adjusted Fee Schedule. Payment will be due by January 31, 2002. FDA
will issue invoices for any products and establishments subject to fees
for FY 2002 that qualify for fees after the January 2002 billing.
Dated: January 10, 2002.
Margaret M. Dotzel,
Associate Commissioner for Policy.
[FR Doc. 02-1068 Filed 1-11-02; 2:57 pm]
BILLING CODE 4160-01-S