[Federal Register Volume 69, Number 81 (Tuesday, April 27, 2004)]
[Notices]
[Pages 22846-22849]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-9565]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration


Establishment of Animal Drug User Fee Rates and Payment 
Procedures for Product, Establishment, and Sponsor Fees for Fiscal Year 
2004

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is announcing the fee 
rates and payment procedures for product, establishment, and sponsor 
fees for fiscal year (FY) 2004. The Federal Food, Drug, and Cosmetic 
Act (the act), as amended by the Animal Drug User Fee Act of 2003 
(ADUFA), Public Law 108-130, authorizes FDA to collect user fees for 
certain animal drug applications, on certain animal drug products, on 
certain establishments where such products are made, and on certain 
sponsors of such animal drug applications and/or investigational animal 
drug submissions. This notice establishes the product, establishment, 
and sponsor fee rates for FY 2004. A separate notice was published 
establishing fee rates and payment procedures for animal drug 
application fees for FY 2004. For FY 2004, the product fee rate is 
$1,750, the establishment fee rate is $23,950, and the sponsor fee rate 
is $15,450. FDA will issue invoices for FY 2004 product, establishment, 
and sponsor fees on or about May 1, 2004. Those invoices will be due 
and payable within 30 days of the date of the invoice.

FOR FURTHER INFORMATION CONTACT: Visit the FDA Web site at http://www.fda.gov/oc/adufa or contact Robert Miller, Center for Veterinary 
Medicine (HFV-10), Food and Drug Administration, 7529 Standish Pl., 
Rockville, MD 20855, 301-827-5436. For general questions, you may also 
e-mail the Center for Veterinary Medicine at [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    Section 740 of the act (21 U.S.C. 379j-12), establishes four 
different kinds of user fees: (1) Fees for certain types of animal drug 
applications and supplements, (2) annual fees for certain animal drug 
products, (3) annual fees for certain establishments where such 
products are made, and (4) annual fees for certain sponsors of animal 
drug applications and/or investigational animal drug submissions (see 
21 U.S.C. 379j-12(a)). When certain conditions are met, FDA will waive 
or reduce fees (21 U.S.C. 379j-12(d)).
    For FYs 2004 through 2008, the act establishes aggregate yearly 
revenue amounts for each of these fee categories. Revenue amounts 
established for years after FY 2004 are subject to adjustment for 
inflation and workload. Fees for applications, establishments, 
products, and sponsors are to be established each year by FDA so that 
the revenue for each fee category will approximate the level 
established in the statute, after the level has been adjusted for 
inflation and workload.
    This notice establishes rates for FY 2004 for product, 
establishment, and sponsor fees. These fees are effective in FY 2004. 
FDA will publish a separate notice on or about August 1, 2004, 
providing rates for FY 2005, which begins October 1, 2004. In the 
Federal Register of February 18, 2004, FDA published a separate notice 
establishing fee rates and payment procedures for animal drug 
application fees for FY 2004 (69 FR 7646).

II. Product Fee Calculations for FY 2004

A. Product Fee Revenues and Numbers of Fee-Paying Products

    The animal drug product fee (also referred to as the product fee) 
must be paid annually by the person named as the applicant in an animal 
drug application or supplemental animal drug application for an animal 
drug product submitted for listing under section 510 of the act (21 
U.S.C. 360), and who had an animal drug application or supplemental 
animal drug application pending at FDA after September 1, 2003 (see 21 
U.S.C. 379j-12(a)(2)). The term ``animal drug product'' is defined in 
21 U.S.C. 379j-11(3). The product fees are to be established so that 
they will generate the fee revenue amounts specified in the statute: 
$1,250,000 for FY 2004; $2,000,000 in FY 2005; and $2,500,000 in FYs 
2006, 2007, and 2008 (see 21 U.S.C. 379j-12(b)(2)), adjusted for 
inflation and workload. Since FY 2004 is the first year of the program, 
there are no adjustments for workload or inflation. However, these 
adjustments will be made to the statutory revenue amounts each year 
after FY 2004 (see 21 U.S.C. 379j-12(c)(1) and (c)(2)).
    To set animal drug product fees to realize $1,250,000, FDA must 
make some assumptions about the number of products for which these fees 
will be paid in FY 2004. FDA developed data on all animal drug products 
that have been submitted for listing under section 510 of the act, and 
matched this to the

[[Page 22847]]

list of all persons who had an animal drug application or supplement 
pending after September 1, 2003. As of April 1, 2004, FDA found a total 
of 774 products submitted for listing by persons who had an animal drug 
application or supplemental animal drug application pending after 
September 1, 2003. While the number of applications pending after 
September 1, 2003, will increase between April 1, 2004, and the end of 
FY 2004, the number of products potentially subject to fees that have 
not already qualified for fees by April 1, 2004, is only 76. FDA is 
assuming that 25 percent of these remaining products, or 19, will 
qualify for fees because their sponsors will submit an application 
between April 1, 2004, and the end of September 2004. Based on this, 
FDA believes that 793 products will be subject to this fee in FY 2004.
    The agency does not have data on the number of waivers and 
reductions that will be granted, though this number will reduce the 
revenues that the agency will realize. In estimating the fee revenue to 
be generated by animal drug product fees in FY 2004, FDA is assuming 
that 10 percent of the products invoiced, or 79, will not pay fees in 
FY 2004 due to fee waivers and reductions. Based on experience with 
other user fee programs, FDA believes that this is a reasonable basis 
for estimating the number of fee-paying products in the first year of 
this program. FDA may further adjust this estimate in setting fees for 
future years based on actual experience with product fee waivers and 
reductions.
    Accordingly, the agency estimates that a total of 714 products will 
be subject to product fees in FY 2004 (793 minus 79).

B. Product Fee Rates for FY 2004

    FDA must set the fee rates for FY 2004 so that the estimated 714 
products that pay fees will generate a total of $1,250,000. To generate 
this amount will require the fee for an animal drug product, rounded to 
the nearest $5, to be $1,750.

III. Establishment Fee Calculations for FY 2004

A. Establishment Fee Revenues and Numbers of Fee-Paying Establishments

    The animal drug establishment fee (also referred to as the 
establishment fee) must be paid annually by the person who meets the 
following criteria: (1) Owns or operates, directly or through an 
affiliate, an animal drug establishment; (2) is named as the applicant 
in an animal drug application or supplemental animal drug application 
for an animal drug product submitted for listing under section 510 of 
the act; (3) had an animal drug application or supplemental animal drug 
application pending at FDA after September 1, 2003; and (4) whose 
establishment engaged in the manufacture of the animal drug product 
during the fiscal year (see 21 U.S.C. 379j-12(a)(3)). An establishment 
subject to animal drug establishment fees is assessed only one such fee 
per fiscal year (see 21 U.S.C. 379j-12(a)(3)). The term ``animal drug 
establishment'' is defined in 21 U.S.C. 379j-11(4). The establishment 
fees are to be set so that they will generate the fee revenue amounts 
specified in the statute: $1,250,000 for FY 2004; $2,000,000 in FY 
2005; and $2,500,000 in FYs 2006, 2007, and 2008 (see 21 U.S.C. 379j-
12(b)(3)), adjusted for inflation and workload. Since FY 2004 is the 
first year of the program there are no adjustments for workload or 
inflation. However, these adjustments will be made to the statutory 
revenue amounts each year after FY 2004 (see 21 U.S.C. 379j-12(c)(1) 
and (c)(2)).
    To set animal drug establishment fees to realize $1,250,000, FDA 
must make some assumptions about the number of establishments for which 
these fees will be paid in FY 2004. FDA developed data on all animal 
drug establishments and matched this to the list of all persons who had 
an animal drug application or supplement pending after September 1, 
2003. As of April 1, 2004, FDA found a total of 55 establishments owned 
or operated by persons who had an animal drug application or 
supplemental animal drug application pending after September 1, 2003. 
While the number of applications pending after September 1, 2003, will 
increase between April 1, 2004, and the end of FY 2004, the number of 
establishments potentially subject to fees that have not already 
qualified for fees by April 1, 2004, is only 12. FDA is assuming that 
25 percent of these remaining establishments, or 3, will qualify for 
fees because of additional applications submitted between April 1, 
2004, and the end of September 2004. Based on this, FDA believes that 
58 establishments will be subject to this fee in FY 2004.
    The agency does not have data on the number of waivers and 
reductions that will be granted, though this number will reduce the 
revenues that the agency will realize. In estimating the fee revenue to 
be generated by animal drug establishment fees in FY 2004, FDA is 
assuming that 10 percent of the establishments invoiced, or 6, will not 
pay fees in FY 2004 due to fee waivers and reductions. Based on 
experience with other user fee programs, FDA believes that this is a 
reasonable basis for estimating the number of fee-paying establishments 
in the first year of this program. FDA may further adjust this estimate 
in setting fees for future years based on actual experience with 
establishment fee waivers and reductions.
    Accordingly, the agency estimates that a total of 52 establishments 
will be subject to establishment fees in FY 2004 (58 minus 6).

B. Establishment Fee Rates for FY 2004

    FDA must set the fee rates for FY 2004 so that the estimated 52 
establishments that pay fees will generate a total of $1,250,000. To 
generate this amount will require the fee for an animal drug 
establishment, rounded to the nearest $50, to be $23,950.

IV. Sponsor Fee Calculations for FY 2004

A. Sponsor Fee Revenues and Numbers of Fee-Paying Sponsors

    The animal drug sponsor fee (also referred to as the sponsor fee) 
must be paid annually by each person who meets the following criteria: 
(1) Is named as the applicant in an animal drug application, except for 
an approved application for which all subject products have been 
removed from listing under section 510 of the act or has submitted an 
investigational animal drug submission that has not been terminated or 
otherwise rendered inactive and (2) had an animal drug application, 
supplemental animal drug application, or investigational animal drug 
submission pending at FDA after September 1, 2003 (see 21 U.S.C. 379j-
11(6) and 379j-12(a)(4)). An animal drug sponsor is subject to only one 
such fee each fiscal year (see 21 U.S.C. 379j-12(a)(4)). The sponsor 
fees are to be set so that they will generate the fee revenue amounts 
specified in the statute: $1,250,000 for FY 2004; $2,000,000 in FY 
2005; and $2,500,000 in FYs 2006, 2007, and 2008 (see 21 U.S.C. 379j-
12(b)(4)), adjusted for inflation and workload. Since FY 2004 is the 
first year of the program there are no adjustments for workload or 
inflation. However, these adjustments will be made to the statutory 
revenue amounts each year after FY 2004 (see 21 U.S.C. 379j-12(c)(1) 
and (c)(2)).
    To set animal drug sponsor fees to realize $1,250,000, FDA must 
make some assumptions about the number of sponsors who will pay these 
fees in FY 2004. Based on the number of firms that would have met this 
definition in each

[[Page 22848]]

of the past 3 years, FDA estimates that a total of 142 sponsors will 
meet this definition in FY 2004.
    Careful review indicates that about one third, or 33 percent, of 
all of these sponsors will qualify for a minor use/minor species 
exemption. While FDA's other user fee programs do not contain a fee 
similar to a sponsor fee, FDA's current best estimate is that an 
additional 10 percent will qualify for other waivers or reductions, for 
a total of 43 percent of the sponsors invoiced, or 61, who will not pay 
fees in FY 2004 due to fee waivers and reductions. FDA believes that 
this is a reasonable basis for estimating the number of fee-paying 
sponsors in the first year of this program. FDA may further adjust this 
estimate in setting fees for future years based on actual experience 
with sponsor fee waivers and reductions.
    Accordingly, the agency estimates that a total of 81 sponsors will 
be subject to sponsor fees in FY 2004 (142 minus 61).

B. Sponsor Fee Rates for FY 2004

    FDA must set the fee rates for FY 2004 so that the estimated 81 
sponsors that pay fees will generate a total of $1,250,000. To generate 
this amount will require the fee for an animal drug sponsor, rounded to 
the nearest $50, to be $15,450.

V. Adjustment for Excess Collections

    If the agency collects more fees than were provided for in 
appropriations in any year, FDA is required to reduce the adjusted 
aggregate revenue amount in a subsequent year by that excess amount (21 
U.S.C. 379j-12(g)(4)). No adjustments under this provision are required 
for fees assessed in FY 2004.

VI. Procedures for Paying Product, Establishment, and Sponsor Fees

    FDA will issue invoices for product, establishment, and sponsor 
fees for FY 2004 on or about May 1, 2004. Invoices will be payable and 
due within 30 days of the date of the invoice. Complete payment 
instructions will be included with each invoice.
    FDA will issue additional invoices after October 1, 2004, for any 
products, establishments, and sponsors that become subject to these 
fees after April 1, 2004, and these invoices will likewise include 
complete payment instructions.
    Payment procedures and fee rates for FY 2004 application fees were 
provided separately on February 18, 2004 (69 FR 7646).
    In early August 2004, FDA will establish animal drug user fee rates 
for FY 2005 for application, product, establishment, and sponsor fees. 
FDA intends to issue invoices for FY 2005 product, establishment, and 
sponsor fees in December 2004, with payments due on or before January 
31, 2005 (see 21 U.S.C. 379j-12(a)(2), (a)(3), and (a)(4)). Application 
fees are due upon submission of the application (see 21 U.S.C. 379j-
12(a)(1)(B)).

VII. May Some Animal Drug User Fees Be Waived or Reduced? How Do I 
Apply for Such Waivers or Reductions?

    FDA will grant a waiver or reduction of one or more fees where the 
agency finds that:
     The assessment of the fee would present a 
significant barrier to innovation because of limited resources or other 
circumstances (see 21 U.S.C. 379j-12(d)(1)(A)).
     Fees exceed the costs (both anticipated present 
and future costs) of reviewing animal drug applications (see 21 U.S.C. 
379j-12(d)(1)(B)).
     The animal drug is intended solely for use in 
either a type C free-choice medicated feed or a type B medicated feed 
intended for use in the manufacture of type C free-choice medicated 
feeds (see 21 U.S.C. 379j-12(d)(1)(C)).
     The animal drug application or supplement is 
intended solely to provide for a minor use or minor species indication 
(see 21 U.S.C. 379j-12(d)(1)(D)).
     The application is the first ever submitted by a 
qualifying small business (see 21 U.S.C. 379j-12(d)(1)(E) and (d)(3)).
    Please note that all of the previously mentioned situations require 
the applicant to submit a written request to the agency for a waiver or 
reduction not later than 180 days after the fee is due (see 21 U.S.C. 
379j-12(i)). Please refer to the ADUFA Web site at http://www.fda.gov/oc/adufa and click on the ``Guidance for Industry: Animal Drug User 
Fees and Fee Waivers and Reductions'' link to find specific information 
on how to apply for any of the previously mentioned waivers or 
reductions. That document also discusses payment procedures for 
situations where FDA approves a waiver or reduction before the fee is 
due and situations where the fee waiver or reduction request is still 
pending when the fee is due.

VIII. Fee Schedule for FY 2004

    The fee rates for FY 2004 are summarized in table 1 of this 
document.

                     Table 1.--Fee Rates for FY 2004
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         Animal Drug User Fee Category             Fee Rate for FY 2004
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Animal drug application fee
  Animal drug application                                        $61,000
  Supplemental animal drug application for                       $30,500
   which safety or effectiveness data are
   required
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Animal drug product fee                                           $1,750
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Animal drug establishment fee\1\                                 $23,950
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Animal drug sponsor fee\2\                                       $15,450
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\1\ An animal drug establishment is subject to only one such fee each
  fiscal year.
\2\ An animal drug sponsor is subject to only one such fee each fiscal
  year.



[[Page 22849]]

    Dated: April 21, 2004.
Jeffrey Shuren,
Assistant Commissioner for Policy.
[FR Doc. 04-9565 Filed 4-22-04; 4:22 pm]
BILLING CODE 4160-01-S