[Federal Register Volume 71, Number 148 (Wednesday, August 2, 2006)]
[Notices]
[Pages 43776-43780]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-12396]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration


Animal Drug User Fee Rates and Payment Procedures for Fiscal Year 
2007

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) 2007 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 2007.
    For FY 2007, the animal drug user fee rates are: $168,600 for an 
animal drug application; $84,300 for a supplemental animal drug 
application for which safety or effectiveness data is required; $4,115 
for an annual product fee; $51,350 for an annual establishment fee; and 
$44,850 for an annual sponsor fee. FDA will issue invoices for FY 2007 
product, establishment, and sponsor fees by December 30, 2006, and 
these invoices will be due and payable by January 31, 2007.
    The application fee rates are effective for applications submitted 
on or after October 1, 2006, and will remain in effect through 
September 30, 2007. 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-

[[Page 43777]]

10), Food and Drug Administration, 7519 Standish Place, 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 2007 and Adjustments for Inflation and 
Workload

A. Statutory Fee Revenue Amounts

    ADUFA (Public Law 108-130) specifies that the aggregate revenue 
amount for FY 2007 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 was 3.71 percent. This was 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).
    The inflation adjustment for FY 2007 is 4.32 percent. This is the 
greater of the CPI increase for the 12-month period ending June 30, 
2006, (4.32 percent) or the increase in pay for FY 2006 for Federal 
employees stationed in Washington, DC (3.44 percent).
    Compounding these amounts (1.0442 times 1.0371 times 1.0432) yields 
a total compounded inflation adjustment of 12.97 percent for FY 2007.
    The inflation-adjusted revenue amount for each category of fees for 
FY 2007 is the statutory fee amount ($2,500,000) increased by 12.97 
percent, the inflation adjuster for FY 2007. The inflation-adjusted 
revenue amount is $2,824,250 for each category of fee, for a total 
inflation-adjusted fee revenue amount of $11,297,000 for all four 
categories of fees in FY 2007.

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, 2006.
    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 
10.5 percent for FY 2007. This is the workload adjuster for FY 2007.

                                     Table 1.--Workload Adjuster Calculation
----------------------------------------------------------------------------------------------------------------
                    Column 1 3-Year   Column 2 Latest 3-  Column 3 Percent       Column 4      Column 5 Weighted
 Application Type  Avg. (Base Years)      Year Avg.            Change        Weighting Factor       % Change
----------------------------------------------------------------------------------------------------------------
New Animal Drug                   22                 13               -41%                 3%              -1.2%
 Applications
 (NADAs)
----------------------------------------------------------------------------------------------------------------
Supplemental                      31                 13               -58%                12%              -7.0%
 NADAs with
 Safety or
 Efficacy Data
----------------------------------------------------------------------------------------------------------------
Manufacturing                    368                424               +15%                25%              +3.8%
 Supplements
----------------------------------------------------------------------------------------------------------------
Investigational                  272                259                -5%                46%              -2.3%
 Study
 Submissions
----------------------------------------------------------------------------------------------------------------
Investigational                  283                208               -27%                14%              -3.8%
 Protocol
 Submissions
----------------------------------------------------------------------------------------------------------------

[[Page 43778]]

 
FY 2007 Workload Adjuster                                                                                 -10.5%
----------------------------------------------------------------------------------------------------------------

    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 2007, and the inflation-adjusted revenue amount for each 
category of fees for FY 2007 ($2,824,250) becomes the revenue target 
for fees in FY 2007, for a total inflation-adjusted fee revenue target 
in FY 2007 of $11,297,000 for fees from all four categories.

III. Application Fee Calculations for FY 2007

    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 $2,824,250 in 
fee revenue for FY 2007. 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 $2,824,250, FDA must first make some 
assumptions about the number of fee-paying applications and supplements 
it will receive in FY 2007.
    The agency knows the number of applications that have been 
submitted in previous years. That number fluctuates significantly from 
year to year. In estimating the fee revenue to be generated by animal 
drug application fees in FY 2007, FDA is assuming that the number of 
applications that will pay fees in FY 2007 will equal the average 
number of submissions over the 4 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 3 years of 
experience with this program.
    Over the past 4 years, the average number of animal drug 
applications that would have been subject to the full fee was 10.25, 
including the number for the most recent year, estimated at 6. Over 
this same period, the average number of supplemental applications that 
would have been subject to half of the full fee was 13, including the 
number for the most recent year, estimated at 16.
    Thus, for FY 2007, FDA estimates receipt of 10.25 fee paying 
original applications and 13 fee-paying supplemental animal drug 
applications.

B. Fee Rates for FY 2007

    FDA must set the fee rates for FY 2007 so that the estimated 10.3 
applications that pay the full fee and the estimated 13 supplements 
that pay half of the full fee will generate a total of $2,824,250. To 
generate this amount, the fee for an animal drug application, rounded 
to the nearest hundred dollars, will have to be $168,600, and the fee 
for a supplemental animal drug application for which safety or 
effectiveness data are required will have to be $84,300.

IV. Product Fee Calculations for FY 2007

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, 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 
$2,824,250 in fee revenue for FY 2007. 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 $2,824,250, FDA must 
make some assumptions about the number of products for which these fees 
will be paid in FY 2007. 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, 2007, FDA found a total of 762 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 762 products will be subject to this fee in FY 
2007.
    In estimating the fee revenue to be generated by animal drug 
product fees in FY 2007, FDA is assuming that 10 percent of the 
products invoiced, or 76, will not pay fees in FY 2007 due to fee 
waivers and reductions. Based on experience with other user fee 
programs and the first 3 years of ADUFA, FDA believes that this is a 
reasonable basis for estimating the number of fee-paying products in FY 
2007.
    Accordingly, the agency estimates that a total of 686 (762 minus 
76) products will be subject to product fees in FY 2007.

B. Product Fee Rates for FY 2007

    FDA must set the fee rates for FY 2007 so that the estimated 686 
products that pay fees will generate a total of $2,824,250. To generate 
this amount will require the fee for an animal drug product, rounded to 
the nearest 5 dollars, to be $4,115.

V. Establishment Fee Calculations for FY 2007

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.

[[Page 43779]]

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 $2,824,250 in fee revenue for FY 2007. 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 $2,824,250, FDA 
must make some assumptions about the number of establishments for which 
these fees will be paid in FY 2007. 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, 2007, 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 2007.
    In estimating the fee revenue to be generated by animal drug 
establishment fees in FY 2007, FDA is assuming that 10 percent of the 
establishments invoiced, or six, will not pay fees in FY 2007 due to 
fee waivers and reductions. Based on experience with the first 3 years 
of ADUFA, FDA believes that this is a reasonable basis for estimating 
the number of fee-paying establishments in FY 2007.
    Accordingly, the agency estimates that a total of 55 establishments 
(61 minus 6) will be subject to establishment fees in FY 2007.

B. Establishment Fee Rates for FY 2007

    FDA must set the fee rates for FY 2007 so that the estimated 55 
establishments that pay fees will generate a total of $2,824,250. To 
generate this amount will require the fee for an animal drug 
establishment, rounded to the nearest 50 dollars, to be $51,350.

VI. Sponsor Fee Calculations for FY 2007

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 $2,824,250 in fee revenue for FY 2007. 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 $2,824,250, FDA must 
make some assumptions about the number of sponsors who will pay these 
fees in FY 2007. 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 
133 sponsors will meet this definition in FY 2007.
    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, FY 2005 
and FY 2006, 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 70, who will not pay fees in FY 
2007 due to fee waivers and reductions. FDA believes that this is a 
reasonable basis for estimating the number of fee-paying sponsors in FY 
2007.
    Accordingly, the agency estimates that a total of 63 sponsors (133 
minus 70) will be subject to sponsor fees in FY 2007.

B. Sponsor Fee Rates for FY 2007

    FDA must set the fee rates for FY 2007 so that the estimated 63 
sponsors that pay fees will generate a total of $2,824,250. To generate 
this amount will require the fee for an animal drug sponsor, rounded to 
the nearest 50 dollars, to be $44,850.

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)). In FY 2004 FDA collected 
$170,150 more than was provided for in appropriations, and in FY 2005 
at the end of the year the amount collected was less than provided in 
appropriations. No adjustment under this provision is being made for 
fees assessed in FY 2007, however, because a number of waiver requests 
for fees submitted in FY 2004 are still under consideration. Only after 
those waiver requests have been evaluated will FDA be able to determine 
if collections in FY 2004, net of waivers granted, still exceeded the 
appropriation.

VIII. Fee Schedule for FY 2007

    The fee rates for FY 2007 are summarized in table 2.

                       Table 2.--FY 2007 Fee Rates
------------------------------------------------------------------------
      Animal Drug User Fee Category            Fee Rate for FY 2007
------------------------------------------------------------------------
Animal Drug Application Fee               ..............................
------------------------------------------------------------------------
 Animal Drug Application                  $168,600
------------------------------------------------------------------------
 Supplemental Animal Drug Application     $84,300
 for which Safety or Effectiveness Data
 are Required
------------------------------------------------------------------------
Animal Drug Product Fee                   $4,115
------------------------------------------------------------------------
Animal Drug Establishment Fee\1\          $51,350
------------------------------------------------------------------------
Animal Drug Sponsor Fee\2\                $44,850
------------------------------------------------------------------------
\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 2007 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, 2006. 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

[[Page 43780]]

953877, 1005 Convention Plaza, St. Louis, Missouri 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 of the Food and Drug Administration 
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. 
FDA records the official application receipt date as the later of the 
following: The date the application was received by FDA's Center for 
Veterinary Medicine, 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 
website 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 Place, Rockville, Maryland 20855.

C. Product, Establishment and Sponsor Fees

    By December 30, 2006, FDA will issue invoices and payment 
instructions for product, establishment, and sponsor fees for FY 2007 
using this Fee Schedule. Payment will be due and payable by January 31, 
2007. FDA will issue invoices in October 2007 for any products, 
establishments, and sponsors subject to fees for FY 2007 that qualify 
for fees after the December 2006 billing.

    Dated: July 26, 2006.
Jeffrey Shuren,
Assistant Commissioner for Policy.
[FR Doc. E6-12396 Filed 8-1-06; 8:45 am]
BILLING CODE 4160-01-S