[Federal Register Volume 70, Number 146 (Monday, August 1, 2005)]
[Notices]
[Pages 44106-44109]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-15159]
[[Page 44106]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
Establishment of Prescription Drug User Fee Rates 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
for prescription drug user fees for fiscal year (FY) 2006. The Federal
Food, Drug, and Cosmetic Act (the FD& C Act), as amended by the
Prescription Drug User Fee Amendments of 2002 (Title 5 of the Public
Health Security and Bioterrorism Preparedness and Response Act of 2002
(PHSBPRA or PDUFA III)), 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. Base
revenue amounts for application fees, establishment fees, and product
fees for FY 2006 were established by PDUFA III. Fees for applications,
establishments, and products are to be established each year by FDA so
that revenues from each category will approximate the revenue levels
established in the statute, after those amounts have been first
adjusted for inflation and workload. This notice establishes fee rates
for FY 2006 for application fees for an application requiring clinical
data ($767,400), for an application not requiring clinical data or a
supplement requiring clinical data ($383,700), for establishment fees
($264,000), and for product fees ($42,130). These fees are effective on
October 1, 2005, and will remain in effect through September 30, 2006.
For applications and supplements that are submitted on or after October
1, 2005, the new fee schedule must be used. Invoices for establishment
and product fees for FY 2006 will be issued in August 2005, using the
new fee schedule.
FOR FURTHER INFORMATION CONTACT: Frank Claunts, Office of Management
(HFA-20), Food and Drug Administration, 5600 Fishers Lane, Rockville,
MD 20857, 301-827-4427.
SUPPLEMENTARY INFORMATION:
I. Background
The FD&C Act, sections 735 and 736 (21 U.S.C. 379g and 379h),
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 2003 through FY 2007 base revenue amounts for application
fees, establishment fees, and product fees are established by PDUFA
III. Base revenue amounts established for years after FY 2003 are
subject to adjustment for inflation and workload. Fees for
applications, establishments, and products are to be established each
year by FDA so that revenues from each category will approximate the
revenue levels established in the statute, after those amounts have
been first adjusted for inflation and workload. The revenue levels
established by PDUFA III continue 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 2006 for application,
establishment, and product fees. These fees are effective on October 1,
2005, and will remain in effect through September 30, 2006.
II. Revenue Amounts for FY 2006, and Adjustments for Inflation and
Workload
A. Statutory Fee Revenue Amounts
PDUFA III specifies that the fee revenue amount for FY 2006 for
application fees is $86,434,000 and for both product and establishment
fees is $86,433,000, for a total of $259,300,000 from all 3 categories
of fees (21 U.S.C. 379h(b)), before any adjustments are made.
B. Inflation Adjustment to Fee Revenue Amount
PDUFA III provides that fee revenue amounts for each FY after 2003
shall be adjusted for inflation. The adjustment must reflect the
greater of the following percentage change: (1) The total percentage
change that occurred in the Consumer Price Index (CPI) (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 the Washington,
DC metropolitan area. PDUFA III provides for this annual adjustment to
be cumulative and compounded annually after FY 2003 (see 21 U.S.C.
379h(c)(1)).
The inflation increase for FY 2004 was 4.27 percent. This was the
greater of the CPI increase during the 12-month period ending June 30
preceding the FY for which fees are being set (June 30, 2003--which was
2.11 percent) or the increase in pay for the previous FY (2003 in this
case) for Federal employees stationed in the Washington, DC
metropolitan area (4.27 percent).
The inflation increase for FY 2005 was 4.42 percent. This was the
greater of the CPI increase during the 12-month period ending June 30
preceding the FY for which fees are being set (June 30, 2004--which was
3.27 percent) or the increase in pay for the previous FY (2004 in this
case) for Federal employees stationed in the Washington, DC
metropolitan area (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
preceding the FY for which fees are being set (June 30, 2005--which was
2.53 percent) or the increase in pay for FY 2005 for Federal employees
stationed in the Washington, DC metropolitan area (3.71 percent).
Compounding these amounts (1.0427 times 1.0442 times 1.0371) yields
a total compounded inflation adjustment of 12.92 percent for FY 2006.
The inflation adjustment for each category of fees for FY 2006 is
the statutory fee amount increased by 12.92 percent, the inflation
adjuster for FY 2006. The FY 2006 inflation-adjusted revenue amount for
application fees is $97,601,273 ($86,434,000 times 1.1292). For both
product and establishment fees the inflation-adjusted revenue amount is
$97,600,144 ($86,433,000 times 1.1292). The total inflation-adjusted
fee revenue amount for all three fee categories combined is
$292,801,561 in FY 2006.
C. Workload Adjustment to Inflation Adjusted Fee Revenue Amount
For each FY beginning in FY 2004, PDUFA III provides that fee
revenue amounts, after they have been adjusted for inflation, shall be
further adjusted to reflect changes in workload for the process for the
review of human drug applications (see 21 U.S.C. 379h(c)(2)).
The conference report accompanying the Prescription Drug User Fee
Amendments of 2002, House of Representatives Report number 107-481,
provides guidance on how the workload adjustment provision of PDUFA III
is to be implemented. Following that guidance, FDA calculated the
average number each of the four types of applications specified in the
workload adjustment provision (human drug applications, commercial
investigational new drug applications, efficacy supplements, and
manufacturing supplements) received over the 5-year period that ended
on June 30, 2002 (base years), and the
[[Page 44107]]
average number of each of these types of applications over the most
recent 5-year period that ended June 30, 2005.
The results of these calculations are presented in the first 2
columns of table 1 of this document. Column 3 reflects the percent
change in workload over the two 5-year periods. Column 4 shows the
weighting factor for each type of application, reflecting how much of
the total FDA drug review workload was accounted for by each type of
application in the table during the most recent 5 years. This weighting
factor was developed by averaging data generated in a 2002 KPMG study
of FDA's drug review workload and data from FDA's time reporting
systems to submission data for the most recent 5-year period. 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 of the table the sum of the
values in column 5 is added, reflecting a total increase in workload of
1.43 percent for FY 2006 when compared to the base years.
Table 1.--Workload Adjuster Calculation
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Summary of Workload Adjustment Calculations
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Application Type Column 1 5-Year Column 2 Latest 5- Column 3 Percent Column 4 Weighting Column 5 Weighted
Avg. Base Years Year Avg. Change Factor % Change
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NDA's/BLA's 119.6 116.2 -2.8% 41.9% -1.19%
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Commercial IND's 629.8 641.6 1.9% 41.8% 0.78%
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Efficacy Supps. 159.2 166.0 4.3% 6.0% 0.26%
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Manufacturing Supps. 2,100.6 2,422.8 15.3% 10.3% 1.58%
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FY 2006 Workload Adjuster 1.43%
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Increasing the inflation-adjusted revenue amount for application
fees of $97,601,273 by the FY 2005 workload adjuster (1.43 percent)
results in an increase of $1,395,698, for a total inflation and
workload adjusted application fee revenue amount of $98,996,971.
Increasing the inflation-adjusted revenue amount for establishment and
product fees, each of which is $97,600,144, by the FY 2005 workload
adjuster (1.43 percent) results in an increase of $1,395,682, for a
total inflation and workload adjusted application fee revenue amount of
$98,995,826 for each category. The total FY 2006 inflation and workload
adjusted fee revenue target for all three fee categories combined is
$296,988,623.
III. Application Fee Calculations
PDUFA III provides that the rates for application, product, and
establishment fees be established 60 days before the beginning of each
FY (21 U.S.C. 379h(c)(4)). The fees are to be established so that they
will generate the fee revenue amounts specified in the statute, as
adjusted for inflation and workload.
A. Application Fee Revenues and Application Fees
The application fee revenue amount that PDUFA III established for
FY 2006 is $98,996,971, as calculated in section II.C of this document.
Application fees will be set to generate this amount.
B. Estimate of Number of Fee-Paying Applications and Establishment of
Application Fees
For FY 2003 through FY 2007, FDA will estimate the total number of
fee-paying full application equivalents (FAEs) it expects to receive
the next FY by averaging the number of fee-paying FAEs received in the
five most recent fiscal years. This use of the rolling average of the
five most recent fiscal years is the same method that was applied in
making the workload adjustment.
In estimating the number of fee-paying FAE's that FDA will receive
in FY 2006, the 5-year rolling average for the most recent 5 years will
be based on actual counts of fee-paying FAEs received for FY 2001
through 2005. For FY 2005, FDA is estimating the number of fee-paying
FAEs for the full year based on the actual count for the first 9 months
and estimating the number for the final 3 months.
Table 2 of this document shows, in column 1, the total number of
each type of FAE received in the first 9 months of FY 2005, whether
fees were paid or not. Column 2 shows the number of FAEs for which fees
were waived or exempted during this period, and column 3 shows the
number of fee-paying FAEs received through June 30, 2005. Column 4
estimates the 12-month total fee-paying FAEs for FY 2005 based on the
applications received through June 30, 2005. All of the counts are in
FAEs. A full application requiring clinical data counts as one FAE. An
application not requiring clinical data counts one-half an FAE, as does
a supplement requiring clinical data. An application that is withdrawn,
or refused for filing, counts as one-fourth of an FAE if it initially
paid a full application fee, or one-eighth of an FAE if it initially
paid one-half of the full application fee amount.
Table 2.--FY 2005 Full Application Equivalents Received through June 30, 2005, and Projected Through September
30, 2005
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Column 1 Total Column 2 Fee Exempt Column 3 Total Fee
Application or Action Received Through6/ or Waived Through 6/ Paying Through 6/ Column 4 12-Month
30/2005 30/2005 30/2005 Projection
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Applications Requiring 70.0 23.0 47.0 62.7
Clinical Data
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Applications Not Requiring 4 0.0 4 5.3
Clinical Data
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Supplements Requiring Clinical 45 5.0 40 53.3
Data
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Withdrawn or Refused to File 0.25 0.0 0.25 0.3
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Total 119.25 28.0 91.25 121.6
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In the first 9 months of FY 2005 FDA received 119.25 FAE's, of
which 91.25 were fee-paying. Based on data from the last 7 fiscal
years, on average, 25 percent of the applications submitted each year
come in the final 3 months. Dividing 91.25 by 3 and multiplying by 4
extrapolates the amount to the full 12 months of the FY and projects
the number of fee-paying FAEs in FY 2005 at 121.6.
All pediatric supplements, which had been exempt from fees prior to
January 4, 2002, were required to pay fees effective January 4, 2002.
This is the result of section 5 of the Best Pharmaceuticals for
Children Act that repealed the fee exemption for pediatric supplements
effective January 4, 2002. Thus, in estimating FY 2006 fee-paying
receipts we must add all the pediatric supplements that were previously
exempt from fees prior to January 4, 2002. The exempted number of FAEs
for pediatric supplements for FY 2001 and FY 2002 respectively were 19
and 4.5. Since fees on these supplements are paid for pediatric
applications submitted in FY 2003 and beyond, the number of pediatric
supplement FAEs exempted from fees each in both FY 2001 and FY 2002
(the years in the table when fees were exempted) are added to the total
of fee-paying FAEs received each year.
As table 3 of this document shows, the average number of fee-paying
FAEs received annually in the most recent 5-year period, assuming all
pediatric supplements had paid fees, and including our estimate for FY
2005, is 129 FAEs. FDA will set fees for FY 2006 based on this estimate
as the number of full application equivalents that will pay fees.
Table 3.--Fee-Paying Full Application Equivalent--Five Year Average
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Year 2001 2002 2003 2004 2005 5-Year Avg.
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Fee-Paying FAEs 107.6 127.6 119.5 145.1 121.6 124.3
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Exempt Pediatric 19.0 4.5 0.0 0.0 0.0 4.7
Supplement FAEs
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Total 126.6 132.1 119.5 145.1 121.6 129.0
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The FY 2006 application fee is estimated by dividing the average
number of full applications that paid fees over the latest 5 years,
129, into the fee revenue amount to be derived from application fees in
FY 2006, $98,996,971. The result, rounded to the nearest one hundred
dollars, is a fee of $767,400 per full application requiring clinical
data, and $383,700 per application not requiring clinical data or per
supplement requiring clinical data.
IV. Adjustment for Excess Collections in Previous Years
Under the provisions of PDUFA, as amended, 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 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 FY since 1997 in which FDA has collected more in PDUFA
fees than Congress appropriated.
FDA also has some requests for waivers or reductions of FY 1998
fees that have been decided but that are pending appeals. For this
reason, FDA is not reducing its FY 2006 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 appeals 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 2005, the establishment fee was based on an
estimate that 354 establishments would be subject to and would pay
fees. By the end of FY 2005, FDA estimates that 400 establishments will
have been billed for establishment fees, before all decisions on
requests for waivers or reductions are made. FDA again estimates that a
total of 25 establishment fee waivers or reductions will be made for FY
2005, for a net of 375 fee-paying establishments. FDA will use this
same number again, 375, for its FY 2006 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 ($98,995,826) by the
estimated 375 establishments, for an establishment fee rate for FY 2006
of $264,000 (rounded to the nearest $100).
B. Product Fees
At the beginning of FY 2005, the product fee was based on an
estimate that 2,225 products would be subject to and pay product fees.
By the end of FY 2005, FDA estimates that 2,390 products will have been
billed for product fees, before all decisions on requests for waivers
or reductions are made. Assuming that there will be about 40 waivers
and reductions granted, FDA estimates that 2,350 products will qualify
for product fees in FY 2005, after allowing for waivers and reductions,
and will use this number for its FY 2006
[[Page 44109]]
estimate. Accordingly, the FY 2006 product fee rate is determined by
dividing the adjusted total fee revenue to be derived from product fees
($98,995,826) by the estimated 2,350 products for a FY 2006 product fee
of $42,130 (rounded to the nearest $10).
VI. Fee Schedule for FY 2006
The fee rates for FY 2006 are set out in table 4 of this document.
Table 4.--FY 2006 Fee Rates
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FEE CATEGORY FEE RATES FOR FY 2006
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Applications
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Requiring clinical data $767,400
Not requiring clinical data $383,700
Supplements requiring clinical data $383,700
Establishments $264,000
Products $42,130
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VII. Implementation of Adjusted Fee Schedule
A. Application Fees
The appropriate application fee established in the new fee schedule
must be paid for any application or supplement subject to fees under
PDUFA that is received 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. Please
include the user fee ID number on your check. Your payment can be
mailed to: Food and Drug Administration, P.O. Box 360909, Mellon Client
Service Center--rm. 670, 500 Ross St., Pittsburgh, PA 15251-6909.
If checks are to be sent by a courier, 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 post office box number (P.O. Box
360909) is written on the check. The tax identification number of the
Food and Drug Administration is 530 19 6965.
B. Establishment and Product Fees
By August 31, 2005, FDA will issue invoices for establishment and
product fees for FY 2006 under the new Fee Schedule. Payment will be
due on October 1, 2005. FDA will issue invoices in October 2006 for any
products and establishments subject to fees for FY 2006 that qualify
for fees after the August 2005 billing.
Dated: July 26, 2005.
Jeffrey Shuren,
Assistant Commissioner for Policy.
[FR Doc. 05-15159 Filed 7-29-05; 8:45 am]
BILLING CODE 4160-01-S