[Federal Register Volume 69, Number 147 (Monday, August 2, 2004)]
[Notices]
[Pages 46147-46151]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-17441]


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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 Fiscal Year 2005

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is announcing the rates 
and payment procedures for fiscal year (FY) 2005 animal drug user fees. 
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 fee rates for FY 2005.
    For FY 2005, the animal drug user fee rates are: $119,300 for an 
animal drug application; $59,650 for a supplemental animal drug 
application for which safety or effectiveness data is required; $3,085 
for an annual product fee; $42,600 for an annual establishment fee; and 
$32,150 for an annual sponsor fee. FDA will issue invoices for FY 2005 
product, establishment and sponsor fees by December 30, 2004, and these 
invoices will be due and payable by January 31, 2005.
    The application fee rates are effective for applications submitted 
on or after October 1, 2004, and will remain in effect through 
September 30, 2005. Applications will not be accepted to review until 
FDA has received full payment of application fees and any other animal 
drug user fees owed.

FOR FURTHER INFORMATION CONTACT:  Visit FDA's Web site at: http://www.fda.gov/oc/adufa or contact Robert Miller, Center for Veterinary 
Medicine (HFV-10), Food and Drug Administration, 7519 Standish Pl., 
Rockville, MD 20855, 301-827-5436. For general questions, you may also 
e-mail the Center for Veterinary Medicine (CVM) 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.

[[Page 46148]]

379j-12(a).) When certain conditions are met, FDA will waive or reduce 
fees (21 U.S.C. 379j-12(d)).
    For FY 2004 through FY 2008, the act establishes aggregate yearly 
base revenue amounts for each of these fee categories. Base 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.

II. Revenue Amount for FY 2005 and Adjustments for Inflation and 
Workload

A. Statutory Fee Revenue Amounts

    ADUFA specifies that the aggregate revenue amount for FY 2005 for 
each of the four animal drug user fee categories is $2,000,000, before 
any adjustments for inflation or workload are made. (See 21 U.S.C. 
379j-12(b)(1)-(b)(4).)

B. Inflation Adjustment to Fee Revenue Amount

    ADUFA provides that fee revenue amounts for each FY after 2004 
shall be adjusted for inflation. (See 21 U.S.C. 379j-12(c)(1).) The 
adjustment must reflect the greater of: (1) The total percentage change 
that occurred in the consumer price index (CPI) for all urban consumers 
(all items; U.S. city average) during the 12-month period ending June 
30 preceding the FY for which fees are being set or (2) the total 
percentage pay change for the previous FY for Federal employees 
stationed in Washington, DC. ADUFA provides for this annual adjustment 
to be cumulative and compounded annually after FY 2004. (See 21 U.S.C. 
379j-12(c)(1).)
    The inflation adjustment for FY 2005 is 4.42 percent. This is the 
greater of the CPI increase during the 12-month period ending June 30, 
2004 (3.27 percent) or the increase in pay for FY 2004 for Federal 
employees stationed in Washington, DC (4.42 percent). No compounding is 
applied to this amount because there was no inflation increase applied 
in FY 2004.
    The inflation-adjusted revenue amount for each category of fees for 
FY 2005 is the statutory fee amount ($2,000,000) increased by 4.42 
percent, the inflation adjuster for FY 2005. The inflation-adjusted 
revenue amount is $2,088,400 for each category of fee, for a total 
inflation-adjusted fee revenue amount of $8,353,600 for all four 
categories of fees in FY 2005.

C. Workload Adjustment to Inflation Adjusted Fee Revenue Amount

    For each FY beginning in FY 2005, ADUFA provides that fee revenue 
amounts, after they have been adjusted for inflation, shall be further 
adjusted to reflect changes in review workload (21 U.S.C. 379j-
12(c)(2)).
    FDA calculated the average number of each of the five types of 
applications and submissions specified in the workload adjustment 
provision (animal drug applications, supplemental animal drug 
applications for which data with respect to safety or efficacy are 
required, manufacturing supplemental animal drug applications, 
investigational animal drug study submissions, and investigational 
animal drug protocol submissions) received over the 3-year period that 
ended on September 30, 2002, (the base years). The agency also 
calculated the average number of each of these types of applications 
and submissions over the most recent 3-year period that ended May 31, 
2004.
    The results of these calculations are presented in the first two 
columns of table 1 of this document. Column 3 reflects the percent 
change in workload over the two 3-year periods. Column 4 shows the 
weighting factor for each type of application, reflecting how much of 
the total FDA animal drug review workload was accounted for by each 
type of application or submission in the table during the most recent 3 
years. Column 5 of table 1 of this document is the weighted percent 
change in each category of workload and was derived by multiplying the 
weighting factor in each line in column 4 by the percent change from 
the base years in column 3. At the bottom right in table 1 of this 
document, the sum of the values in column 5 is added, reflecting a 
total change in workload of -4 percent for FY 2005. This is the 
workload adjuster for FY 2005.

                                     Table 1.--Workload Adjuster Calculation
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                         Column 1 3-Year                                                            Column 5
   Application Type       Average (Base    Column 2 Latest  Column 3 Percent      Column 4      Weighted Percent
                             Years)        3-Year Average        Change       Weighting Factor       Change
----------------------------------------------------------------------------------------------------------------
New Animal Drug                 23                20              -13%                3%                -0.4%
 Applications (NADAs)
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Supplemental NADAs              31                20              -35%               12%                -4.2%
 with Safety or
 Efficacy Data
----------------------------------------------------------------------------------------------------------------
Manufacturing                  368               417              +13%               25%                +3.3%
 Supplements
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Investigational Study          272               270                -0.7%            46%                -0.3%
 Submissions
----------------------------------------------------------------------------------------------------------------
Investigational                283               235              -17%               14%                -2.4%
 Protocol Submissions
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FY 2005 Workload Adjuster                                                     ................          -4.0%
----------------------------------------------------------------------------------------------------------------

    ADUFA specifies that the workload adjuster may not result in fees 
that are less than the inflation-adjusted revenue amount (21 U.S.C. 
379j-12(c)(2)(B)). For this reason, the workload adjustment will not be 
applied in FY 2005, and the inflation-adjusted revenue amount for each 
category of fees for FY 2005 ($2,088,400) becomes the revenue target 
for fees in FY 2005, for a total inflation-adjusted fee revenue target 
in FY 2005 of $8,353,600 for fees from all four categories.

III. Application Fee Calculations for FY 2005

    The terms ``animal drug applications'' and ``supplemental animal 
drug applications'' are defined in section 739 of the act (21 U.S.C. 
379j-11(1).

[[Page 46149]]

A. Application Fee Revenues and Numbers of Fee-Paying Applications

    The application fee must be paid for any animal drug application or 
supplemental animal drug application that is subject to fees under 
ADUFA and that is submitted on or after September 1, 2003. The 
application fees are to be set so that they will generate $2,088,400 in 
fee revenue for FY 2005. This is the amount set out in the statute 
after it has been adjusted for inflation and workload, as previously 
discussed in section II of this document. The fee for a supplemental 
animal drug application for which safety or effectiveness data are 
required is to be set at 50 percent of the animal drug application fee. 
(See 21 U.S.C. 379j-12(a)(1)(A)(ii).)
    To set animal drug application fees and supplemental animal drug 
application fees to realize $2,088,400, FDA must first make some 
assumptions about the number of fee-paying applications and supplements 
the agency will receive in FY 2005.
    The agency knows the number of applications that have been 
submitted in previous years. That number fluctuates significantly from 
year to year. Further, it is possible that the user fee program will 
affect the number of applications submitted, exacerbating the kinds of 
fluctuation in applications that is normally experienced. In addition, 
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. For these reasons, in estimating the fee 
revenue to be generated by animal drug application fees in FY 2005, FDA 
is assuming that the number of applications that will pay fees in FY 
2005 will be only 80 percent of the lower of the average number of 
submissions over the past 3 years or the number in the most recent 
year. This should account both for the effect of fluctuations in the 
numbers of applications submitted and for the effect of fee waivers or 
reductions that FDA estimates will be granted. Based on experience with 
other application user fee programs and the experience with ADUFA fees 
in FY 2004, FDA believes that this is a reasonable basis for estimating 
the number of fee-paying applications for the second year of this 
program.
    Over the past 3 years, the average number of animal drug 
applications that would have been subject to the full fee was 14.3, and 
the number for the most recent year is estimated at 15. Over this same 
period, the average number of supplemental applications that would have 
been subject to half of the full fee was 15.3, and the number for the 
most recent year is estimated at 15.
    Thus, for FY 2005, FDA estimates receipt of 11.5 fee paying 
original applications (80 percent of the 3-year average of 14.3) and 12 
fee-paying supplemental animal drug applications (80 percent of the 15 
estimated for the most recent years).

B. Fee Rates for FY 2005

    FDA must set the fee rates for FY 2005 so that the estimated 11.5 
applications that pay the full fee and the estimated 12 supplements 
that pay half of the full fee will generate a total of $2,088,400. To 
generate this amount, the fee for an animal drug application, rounded 
to the nearest $100, will have to be $119,300. The fee for a 
supplemental animal drug application, for which safety or effectiveness 
data, are required will have to be $59,650.

IV. Product Fee Calculations for FY 2005

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 by the person 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 set so 
that they will generate $2,088,400 in fee revenue for FY 2005. This is 
the amount set out in the statute after it has been adjusted for 
inflation and workload, as previously discussed in section II of this 
document.
    To set animal drug product fees to realize $2,088,400, FDA must 
make some assumptions about the number of products for which these fees 
will be paid in FY 2005. 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 list of all persons who had an animal drug 
application or supplement pending after September 1, 2003. As of July 
1, 2004, FDA found a total of 752 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, could increase between 
July 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 75. Based on experience over the past several 
months, FDA is assuming that none of these remaining products will 
qualify for fees because their sponsors will submit an application 
between July 1, 2004, and the end of September 2004. Based on this 
information, FDA believes that a total of 752 products will be subject 
to this fee in FY 2005.
    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 2005, FDA is assuming 
that 10 percent of the products invoiced, or 75, will not pay fees in 
FY 2005 due to fee waivers and reductions. Based on experience with 
other user fee programs and the first year of ADUFA, FDA believes that 
this is a reasonable basis for estimating the number of fee-paying 
products in the first year of this program.
    Accordingly, the agency estimates that a total of 677 products will 
be subject to product fees in FY 2005 (752 minus 75).

B. Product Fee Rates for FY 2005

    FDA must set the fee rates for FY 2005 so that the estimated 677 
products that pay fees will generate a total of $2,088,400. To generate 
this amount, the agency will require the fee for an animal drug 
product, rounded to the nearest $5, to be $3,085.

V. Establishment Fee Calculations for FY 2005

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 qualifications: (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 FY. (See 21 U.S.C. 379j-12(a)(3).) An establishment subject 
to animal drug establishment fees is assessed only one such fee per FY. 
(See

[[Page 46150]]

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 $2,088,400 in fee revenue for FY 2005. This 
is the amount set out in the statute after it has been adjusted for 
inflation and workload, as previously discussed in section II of this 
document.
    To set animal drug establishment fees to realize $2,088,400, FDA 
must make some assumptions about the number of establishments for which 
these fees will be paid in FY 2005. 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 July 1, 2004, FDA found a total of 54 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, could 
increase between July 1, 2004, and the end of FY 2004, the number of 
establishments potentially subject to fees that have not already 
qualified for fees by July 1, 2004, is only 10. Based on experience 
over the last several months, FDA is assuming that none of these 
remaining establishments will qualify for fees because of additional 
applications submitted between July 1, 2004, and the end of FY 2004. 
Based on this information, FDA believes that 54 establishments will be 
subject to this fee in FY 2005.
    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 2005, FDA is 
assuming that 10 percent of the establishments invoiced, or five, will 
not pay fees in FY 2005 due to fee waivers and reductions. Based on 
experience with other user fee programs and the first year of ADUFA, 
FDA believes that this is a reasonable basis for estimating the number 
of fee-paying establishments in the second year of this program.
    Accordingly, the agency estimates that a total of 49 establishments 
will be subject to establishment fees in FY 2005 (54 minus 5).

B. Establishment Fee Rates for FY 2005

    FDA must set the fee rates for FY 2005 so that the estimated 49 
establishments that pay fees will generate a total of $2,088,400. To 
generate this amount, the agency will require the fee for an animal 
drug establishment, rounded to the nearest $50, to be $42,600.

VI. Sponsor Fee Calculations for FY 2005

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 
qualifications: (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 FY. (See 21 U.S.C. 379j-
12(a)(4).) The sponsor fees are to be set so that they will generate 
$2,088,400 in fee revenue for FY 2005. This is the amount set out in 
the statute after it has been adjusted for inflation and workload, as 
previously discussed in section II of this document.
    To set animal drug sponsor fees to realize $2,088,400, FDA must 
make some assumptions about the number of sponsors who will pay these 
fees in FY 2005. Based on the number of firms that would have met this 
definition in each of the past 3 years, FDA estimates that a total of 
138 sponsors will meet this definition in FY 2005.
    Careful review indicates that about one third or 33 percent of all 
of these sponsors will qualify for minor use/minor species exemption. 
Based on the agency's experience with sponsor fees in FY 2004, FDA's 
current best estimate is that an additional 20 percent will qualify for 
other waivers or reductions, for a total of 53 percent of the sponsors 
invoiced, or 73, who will not pay fees in FY 2005 due to fee waivers 
and reductions. FDA believes that this is a reasonable basis for 
estimating the number of fee-paying sponsors in the second year of this 
program.
    Accordingly, the agency estimates that a total of 65 sponsors will 
be subject to sponsor fees in FY 2005 (138 minus 73).

B. Sponsor Fee Rates for FY 2005

    FDA must set the fee rates for FY 2005 so that the estimated 65 
sponsors that pay fees will generate a total of $2,088,400. To generate 
this amount, the agency will require the fee for an animal drug 
sponsor, rounded to the nearest $50, to be $32,150.

VII. Adjustment for Excess Collections

    Under the provisions of ADUFA, 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 adjustment under this 
provision is required for fees assessed in FY 2005 because FDA has not 
collected animal drug user fees in excess of amounts provided in 
appropriations in any previous year.

VIII. Fee Schedule for FY 2005

    The fee rates for FY 2005 are summarized in table 2 of this 
document.

                                           Table 2.--FY 2005 Fee Rates
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    Animal Drug User Fee Category                                 Fee Rate for FY 2005
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Animal Drug Application Fee            .........................................................................
  Animal Drug Application                                                                               $119,300
  Supplemental Animal Drug                                                                               $59,650
   Application for which Safety or
   Effectiveness Data are Required
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Animal Drug Product Fee                                                                                   $3,085
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Animal Drug Establishment Fee\1\                                                                         $42,600
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Animal Drug Sponsor Fee\2\                                                                               $32,150
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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 46151]]

IX. Procedures for Paying the FY 2005 Fees

A. Application Fees and Payment Instructions

    The appropriate application fee established in the new fee schedule 
must be paid for an animal drug application or supplement subject to 
fees under ADUFA that is submitted after September 30, 2004. 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. 
On your check, bank draft, or U.S. postal money order, please write 
your application's unique payment identification number, beginning with 
the letters ``AD,'' from the upper right-hand corner of your completed 
Animal Drug User Fee Cover Sheet. Also write FDA's post office box 
number (P.O. Box 953877) on the enclosed check, bank draft, or money 
order. Your payment and a copy of the completed Animal Drug User Fee 
Cover Sheet can be mailed to: Food and Drug Administration, P.O. Box 
953877, St. Louis, MO, 63195-3877.
    If you prefer to send a check by a courier such as Federal Express 
or United Parcel Service, the courier may deliver the check and printed 
copy of the cover sheet to: U.S. Bank, Attn: Government Lockbox 953877, 
1005 Convention Plaza, St. Louis, MO 63101. (Note: This address is for 
courier delivery only. If you have any questions concerning courier 
delivery contact the U.S. Bank at 314-418-4821. This telephone number 
is only for questions about courier delivery.)
    The tax identification number of the FDA is 530 19 6965. (Note: In 
no case should the check for the fee be submitted to FDA with the 
application.)
    It is helpful if the fee arrives at the bank at least a day or 2 
before the application arrives at FDA's CVM. FDA records the official 
application receipt date as the later of the following: The date the 
application was received by FDA's CVM, or the date U.S. Bank notifies 
FDA that your check in the full amount of the payment due has been 
received. U.S. Bank is required to notify FDA within 1 working day, 
using the payment identification number described previously.

B. Application Cover Sheet Procedures

    Step One--Create a user account and password. Log onto the ADUFA 
Web site at http://www.fda.gov/oc/adufa and, under the ``Forms'' 
heading, click on the link ``User Fee Cover Sheet.'' For security 
reasons, each firm submitting an application will be assigned an 
organization identification number, and each user will also be required 
to set up a user account and password the first time you use this site. 
Online instructions will walk you through this process. It may take a 
day or 2 to get the organization number and have the user account and 
password established.
    Step Two--Create an Animal Drug User Cover Sheet, transmit it to 
FDA, and print a copy. After logging into your account with your user 
name and password, complete the steps required to create an Animal Drug 
User Fee Cover Sheet. One cover sheet is needed for each animal drug 
application or supplement. Once you are satisfied that the data on the 
cover sheet is accurate and you have finalized the cover sheet, you 
will be able to transmit it electronically to FDA, and you will be able 
to print a copy of your cover sheet showing your unique payment 
identification number.
    Step Three--Send the payment for your application as described in 
section IX.A of this document.
    Step Four--Please submit your application and a copy of the 
completed Animal Drug User Fee Cover Sheet to the following address: 
Food and Drug Administration, Center for Veterinary Medicine, Document 
Control Unit (HFV-199), 7500 Standish Pl., Rockville, MD 20855.

C. Product, Establishment, and Sponsor Fees

    By December 30, 2004, FDA will issue invoices and payment 
instructions for product, establishment, and sponsor fees for FY 2005 
using this fee schedule. Payment will be due and payable by January 31, 
2005. FDA will issue invoices in October 2005 for any products, 
establishments, and sponsors subject to fees for FY 2005 that qualify 
for fees after the December 2004 billing.

    Dated: July 23, 2004.
Jeffrey Shuren,
Assistant Commissioner for Policy.
[FR Doc. 04-17441 Filed 7-30-04; 8:45 am]
BILLING CODE 4160-01-S