[Federal Register Volume 70, Number 146 (Monday, August 1, 2005)]
[Notices]
[Pages 44101-44104]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-15158]


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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 2006

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) 2006 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), 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 2006.
    For FY 2006, the animal drug user fee rates are: $151,800 for an 
animal drug application; $75,900 for a supplemental animal drug 
application for which safety or effectiveness data is required; $3,905 
for an annual product fee; $49,200 for an annual establishment fee; and 
$44,400 for an annual sponsor fee. FDA will issue invoices for FY 2006 
product, establishment, and sponsor fees by December 30, 2005, and 
these invoices will be due and payable by January 31, 2006.
    The application fee rates are effective for applications submitted 
on or after October 1, 2005, and will remain in effect through 
September 30, 2006. 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 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, 7519 Standish Pl., 
Rockville, MD 20855, 240-276-9707. 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 (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 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 2006 and Adjustments for Inflation and 
Workload

A. Statutory Fee Revenue Amounts

    ADUFA (Public Law 108-130) specifies that the aggregate revenue 
amount for FY 2006 for each of the four animal drug user fee categories 
is $2,500,000, before any adjustments for inflation or workload are 
made (see 21 U.S.C. 379j-12(b)(1)-(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 was 4.42 percent. This was 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).
    The inflation adjustment for FY 2006 is 3.71 percent. This is the 
greater of the CPI increase during the 12-month period ending June 30, 
2005 (2.53 percent) or the increase in pay for FY 2005 for Federal 
employees stationed in Washington, DC (3.71 percent).
    Compounding these amounts (1.0442 times 1.0371) yields a total 
compounded inflation adjustment of 8.29 percent for FY 2006.
    The inflation-adjusted revenue amount for each category of fees for 
FY 2006 is the statutory fee amount ($2,500,000) increased by 8.29 
percent, the inflation adjuster for FY 2006. The inflation-adjusted 
revenue amount is $2,707,250 for each category of fee, for a total 
inflation-adjusted fee revenue amount of $10,829,000 for all four 
categories of fees in FY 2006.

[[Page 44102]]

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), and the average number 
of each of these types of applications and submissions over the most 
recent 3-year period that ended May 31, 2005.
    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 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 of table 1 the sum of the values 
in column 5 is added, reflecting a total change in workload of negative 
6.4 percent for FY 2006. This is the workload adjuster for FY 2006.

                                                         Table 1.--Workload Adjuster Calculation
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                                                        Column 13-Year    Column 2Latest 3-    Column 3Percent    Column 4Weighting   Column 5Weighted %
                  Application Type                   Avg.  (Base Years)       Year Avg.            Change              Factor               Change
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New Animal Drug Applications (NADAs)                                 22                  18                -18%                  3%               -0.5%
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Supplemental NADAs with Safety or Efficacy Data                      31                  13                -58%                 12%               -7.0%
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Manufacturing Supplements                                           368                 432                +17%                 25%               +4.3%
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Investigational Study Submissions                                   272                 274               +0.7%                 46%               +0.3%
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Investigational Protocol Submissions                                283                 212                -25%                 14%               -3.5%
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FY 2006 Workload Adjuster                                                                                                                         -6.4%
--------------------------------------------------------------------------------------------------------------------------------------------------------

    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 2006, and the inflation-adjusted revenue amount for each 
category of fees for FY 2006 ($2,707,250) becomes the revenue target 
for fees in FY 2006, for a total inflation-adjusted fee revenue target 
in FY 2006 of $10,829,000 for fees from all four categories.

III. Application Fee Calculations for FY 2006

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

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 $2,707,250 in 
fee revenue for FY 2006. This is the amount set out in the statute 
after it has been adjusted for inflation and workload, as set out 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 $2,707,250, FDA must first make some 
assumptions about the number of fee-paying applications and supplements 
it will receive in FY 2006.
    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 know 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 application fees in FY 2006, FDA is assuming that the number of 
applications that will pay fees in FY 2006 will equal the average 
number of submissions over the 3 most recent years (including an 
estimate for the current year). This may not fully account for possible 
year to year fluctuations in numbers of fee-paying applications, but 
FDA believes that this is a reasonable approach after nearly 2 years of 
experience with this program.
    Over the past 3 years, the average number of animal drug 
applications that would have been subject to the full fee was 12, 
including the number for the most recent year, estimated at 8. Over 
this same period, the average number of supplemental applications that 
would have been subject to half of the full fee was 11.7, including the 
number for the most recent year, estimated at 8.
    Thus, for FY 2006, FDA estimates receipt of 12 fee paying original 
applications and 11.7 fee-paying supplemental animal drug applications.

[[Page 44103]]

B. Fee Rates for FY 2006

    FDA must set the fee rates for FY 2006 so that the estimated 12 
applications that pay the full fee and the estimated 11.7 supplements 
that pay half of the full fee will generate a total of $2,704,250. To 
generate this amount, the fee for an animal drug application, rounded 
to the nearest hundred dollars, will have to be $151,800, and the fee 
for a supplemental animal drug application for which safety or 
effectiveness data are required will have to be $75,900.

IV. Product Fee Calculations for FY 2006

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 set so that they will 
generate $2,707,250 in fee revenue for FY 2006. This is the amount set 
out in the statute after it has been adjusted for inflation and 
workload, as set out in section II of this document.
    To set animal drug product fees to realize $2,707,250, FDA must 
make some assumptions about the number of products for which these fees 
will be paid in FY 2006. 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, 2005, FDA found a total of 770 products submitted for listing by 
persons who had an animal drug application or supplemental animal drug 
application pending after September 1, 2003. Based on this, FDA 
believes that a total of 770 products will be subject to this fee in FY 
2006.
    The agency does not know 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 2006, FDA is assuming that 10 percent of 
the products invoiced, or 77, will not pay fees in FY 2006 due to fee 
waivers and reductions. Based on experience with other user fee 
programs and the first 2 years of ADUFA, FDA believes that this is a 
reasonable basis for estimating the number of fee-paying products in 
the third year of this program.
    Accordingly, the agency estimates that a total of 693 (770 minus 
77) products will be subject to product fees in FY 2006.

B. Product Fee Rates for FY 2006

    FDA must set the fee rates for FY 2006 so that the estimated 693 
products that pay fees will generate a total of $2,707,250. To generate 
this amount will require the fee for an animal drug product, rounded to 
the nearest $5, to be $3,905.

V. Establishment Fee Calculations for FY 2006

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: (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 $2,707,250 in fee revenue for FY 2006. This 
is the amount set out in the statute after it has been adjusted for 
inflation and workload, as set out in section II of this document.
    To set animal drug establishment fees to realize $2,707,250, FDA 
must make some assumptions about the number of establishments for which 
these fees will be paid in FY 2006. 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, 2005, FDA found a total of 61 establishments owned 
or operated by persons who had an animal drug application or 
supplemental animal drug application pending after September 1, 2003. 
Based on this, FDA believes that 61 establishments will be subject to 
this fee in FY 2006.
    The agency does not know 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 2006, FDA is assuming that 10 
percent of the establishments invoiced, or 6, will not pay fees in FY 
2006 due to fee waivers and reductions. Based on experience with other 
user fee programs and the first 2 years of ADUFA, FDA believes that 
this is a reasonable basis for estimating the number of fee-paying 
establishments in the third year of this program.
    Accordingly, the agency estimates that a total of 55 establishments 
(61 minus 6) will be subject to establishment fees in FY 2006.

B. Establishment Fee Rates for FY 2006

    FDA must set the fee rates for FY 2006 so that the estimated 55 
establishments that pay fees will generate a total of $2,707,250. To 
generate this amount will require the fee for an animal drug 
establishment, rounded to the nearest $50, to be $49,200.

VI. Sponsor Fee Calculations for FY 2006

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: (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 $2,707,250 in fee revenue for FY 2006. This is the 
amount set out in the statute after it has been adjusted for inflation 
and workload, as set out in section II of this document.
    To set animal drug sponsor fees to realize $2,707,250, FDA must 
make some assumptions about the number of sponsors who will pay these 
fees in FY 2006. Based on the number of firms that

[[Page 44104]]

would have met this definition in each of the past 3 years, FDA 
estimates that a total of 129 sponsors will meet this definition in FY 
2006.
    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 and FY 
2005, 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 68, who will not pay fees in FY 2006 due to 
fee waivers and reductions. FDA believes that this is a reasonable 
basis for estimating the number of fee-paying sponsors in the third 
year of this program.
    Accordingly, the agency estimates that a total of 61 sponsors (129 
minus 68) will be subject to sponsor fees in FY 2006.

B. Sponsor Fee Rates for FY 2006

    FDA must set the fee rates for FY 2006 so that the estimated 61 
sponsors that pay fees will generate a total of $2,707,250. To generate 
this amount will require the fee for an animal drug sponsor, rounded to 
the nearest $50, to be $44,400.

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 2006 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 2006

    The fee rates for FY 2006 are summarized in table 2.

                       Table 2.--FY 2006 Fee Rates
------------------------------------------------------------------------
     Animal Drug User Fee Category            Fee Rate for FY 2006
------------------------------------------------------------------------
Animal Drug Application Fee
Animal Drug Application                 $151,800
Supplemental Animal Drug Application    $75,900
 for which Safety or Effectiveness
 Data are Required
------------------------------------------------------------------------
Animal Drug Product Fee                 $3,905
------------------------------------------------------------------------
Animal Drug Establishment Fee\1\        $49,200
------------------------------------------------------------------------
Animal Drug Sponsor Fee\2\              $44,400
------------------------------------------------------------------------
\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.

IX. Procedures for Paying the FY 2006 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, 2005. 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 the FDA 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 FEDEX or UPS, 
the courier may deliver the check and printed copy of the cover sheet 
to: US 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 US 
Bank at 314-418-4821. This phone number is only for questions about 
courier delivery.)
    The tax identification number for 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 two 
before the application arrives at FDA's Center for Veterinary Medicine 
(CVM). FDA records the official application receipt date as the later 
of the following: The date the application was received by CVM, or the 
date US Bank notifies FDA that your check in the full amount of the 
payment due has been received. US 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 two 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, 2005, FDA will issue invoices and payment 
instructions for product, establishment, and sponsor fees for FY 2006 
using this fee schedule. Payment will be due and payable by January 31, 
2006. FDA will issue invoices in October 2006 for any products, 
establishments, and sponsors subject to fees for FY 2006 that qualify 
for fees after the December 2005 billing.

    Dated: July 22, 2005.
Jeffrey Shuren,
Assistant Commissioner for Policy.
[FR Doc. 05-15158 Filed 7-29-05; 8:45 am]
BILLING CODE 4160-01-S