[Federal Register Volume 72, Number 206 (Thursday, October 25, 2007)]
[Notices]
[Pages 60677-60681]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-5282]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. 2007N-0390]


User Fee Program for Advisory Review of Direct-to-Consumer 
Television Advertisements for Prescription Drug and Biological 
Products; Request for Notification of Participation and Number of 
Advertisements for Review

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice; request for notification of participation.

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SUMMARY: The Food and Drug Administration (FDA) is issuing this notice 
to explain the new direct-to-consumer (DTC) user fee program (DTC user 
fee program) established by the Food and Drug Administration Amendments 
Act of 2007 (FDAAA) and, as required by the new law, to ask companies 
to notify FDA within 30 calendar days if they intend to participate in 
the DTC user fee program during fiscal year (FY) 2008 and, if they do 
plan to participate, to identify the number of DTC television 
advertisements for prescription drug and biological products they plan 
to

[[Page 60678]]

submit for advisory review during FY 2008. The information gathered in 
response to this notice will be used to establish the FY 2008 fee that 
will be charged for each FY 2008 advisory review submission to FDA and 
to fund the operating reserve established under FDAAA.

DATES: Submit written responses by November 26, 2007.

ADDRESSES: Submit written responses by overnight courier service to 
Wayne Amchin, Project Manager, Division of Drug Marketing, Advertising, 
and Communications (DDMAC), Food and Drug Administration, 10903 New 
Hampshire Ave., Bldg. 22, rm. 1477, Silver Spring, MD 20993-0002. For 
companies that use Federal Express or DHL for overnight courier 
service, the courier will be able to deliver packages directly to 
DDMAC's office. Other courier services will need to call 301-796-1200 
to request that the DDMAC project manager meet the courier at the 
security desk for package pickup. In addition, fax a copy of your 
response to 301-796-9878 or e-mail a copy to [email protected].

FOR FURTHER INFORMATION CONTACT:  For questions about the DTC user fee 
program, contact Wayne Amchin, Center for Drug Evaluation and Research, 
Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 22, rm. 
1477, Silver Spring, MD 20993-0002, 301-796-1200, FAX: 301-796-9878, e-
mail: [email protected].

SUPPLEMENTARY INFORMATION:

I. Introduction

    On September 27, 2007, the President signed into law FDAAA (Public 
Law 110-85). Title I of this statute reauthorized the Prescription Drug 
User Fee Act (PDUFA) for FYs 2008 to 2012. In addition, Title I also 
created new section 736A of the Federal Food, Drug, and Cosmetic Act 
(the act), which authorizes a new and separate user fee program for the 
advisory review of DTC prescription drug television advertisements. 
Participation in the program is voluntary. Sponsors can decide, at 
their own discretion, whether to seek FDA advisory review of DTC 
prescription drug television advertisements in advance of publicly 
broadcasting them. However, under the new law, if a sponsor decides to 
seek FDA advisory review of a DTC television advertisement, the sponsor 
must pay a required fee for that review. FDA has agreed to use the 
resources collected under this program to meet certain performance 
goals set forth in an enclosure to letters dated September 27, 2007, 
from the Secretary of Health and Human Services (the Secretary) to the 
Chairmen and Ranking Minority Members of the Senate Committee on 
Health, Education, Labor, and Pensions and the House of Representatives 
Committee on Energy and Commerce. The letters are posted at http://www.fda.gov/cder/pdufa.
    FDA is issuing this Federal Register notice to explain the new 
program and to ask companies to notify FDA by November 26, 2007: (1) If 
they intend to participate in the FY 2008 DTC user fee program and (2) 
if they do plan to participate, to identify the number of DTC 
television advertisements they plan to submit for advisory review 
during FY 2008 to DDMAC in the Center for Drug Evaluation and Research 
or the Advertising and Promotional Labeling Branch in the Center for 
Biologics Evaluation and Research. The information gathered in response 
to this notice will be used to establish the fees that will be charged 
for each advisory review submission to FDA during FY 2008 and to create 
an operating reserve.

II. Background

    FDA's prescription drug advertising regulations give companies the 
option of submitting proposed television advertisements to FDA for 
advisory review before publicly disseminating them. In this way, 
companies can benefit from FDA's advice on whether or not the 
advertisements are accurate, balanced, and adequately supported. The 
submission of advertisements for advisory review gives sponsors the 
opportunity to address any problems before the advertisements are shown 
to the public and can improve the quality of the advertisements. 
Companies have recognized the benefits of this advisory review 
mechanism, and between 2000 and 2006, FDA received an average of 
approximately 150 television advertisements for advisory review each 
year. Recognizing the value of this review, the Pharmaceutical Research 
and Manufacturers of America (PhRMA) recently stated in its voluntary 
guiding principles on DTC advertising (see ``PhRMA Guiding Principles; 
Direct to Consumer Advertisements About Prescription Medicines'' at 
http://www.phrma.org/files/DTCGuidingprinciples.pdf) that companies 
should submit all new DTC television advertisements to FDA before 
broadcasting them. In addition, FDAAA provides that FDA may require the 
submission of drug television advertisements for review before 
dissemination. However, this provision does not take effect until 180 
days after FDAAA's enactment, and does not affect this user fee 
program, which only applies to voluntary submissions for advisory 
review.
    As FDA's DTC advisory review workload has grown, FDA's ability to 
keep pace with the demands for reviews has decreased, and the time it 
takes to review DTC materials submitted for advisory review, including 
television advertisements, has been increasing. The lack of timely, 
predictable FDA review times for DTC television advertisements has 
hindered companies' ability to accurately set timeframes for their 
marketing campaigns and has discouraged companies from taking advantage 
of the DTC advisory review process.

III. DTC User Fee Program

    The DTC user fee program is available to companies interested in 
voluntarily submitting to FDA for advisory review a DTC television 
advertisement for any product that qualifies as a ``prescription drug 
product,'' as defined in 21 U.S.C. 379g(3). Under this program, a 
company that chooses to submit a DTC television advertisement for 
advisory review will be assessed two types of fees: (1) A fee for each 
proposed DTC television advertisement submitted for advisory review 
prior to its initial public dissemination (``advisory review fee'') and 
(2) a fee paid during the company's first year of participation in the 
program to establish a reserve fund (``operating reserve fee'').
    The decision to seek an advisory review from FDA remains voluntary. 
However, FDA will not accept for review any prescription drug DTC 
television advertisements voluntarily submitted by a company for 
advisory review unless the company has paid both fees.
    The payment of an advisory review fee under new section 736A of the 
act entitles a company to submit for advisory review by FDA one 
proposed predissemination DTC television advertisement, and one 
resubmission of the same proposed DTC television advertisement, after 
receipt of FDA advisory comments on the initial submission. It should 
be noted that fees will not be assessed for advertisements required to 
be submitted to FDA prior to initial public dissemination, such as 
advertisements for accelerated approval drugs (21 CFR 314.550 and 
314.640 (subparts H and I)), biologics (21 CFR 601.45 and 601.94 
(subparts E and H)), and submissions required by the Secretary under 
section 901 of FDAAA (as it amends the act to add section 503B, 
``Prereview of Television Advertisements''), unless the sponsor 
voluntarily designates the required

[[Page 60679]]

submission as a submission for advisory review under this program. Fees 
also will not be assessed for advisory reviews of advertising or 
promotional material other than DTC television advertisements (e.g., 
print advertisements or promotional labeling).
    The user fees associated with this program are structured to 
provide incentives for companies to join the program in FY 2008 and to 
pay all fees on time, as this will give FDA the funding it needs to 
hire sufficient staff to review the identified number of advisory 
submissions in FY 2008. FDA will recruit staff to conduct reviews based 
upon the expected number of submissions for FY 2008 that are identified 
in response to this participation notice. Fees for FY 2008 must be paid 
in a timely manner to allow FDA to actually obtain these staffing 
resources to conduct timely reviews and meet performance metrics during 
this year. In addition, the program contains incentives for timely 
participation and payment. Participants who do not pay their fees on 
time or who join the program late in a fiscal year must pay individual 
fees that are 50 percent greater than the established individual fees 
for participants who both join the program and pay on time.

IV. Establishing the Advisory Review Fee

A. Process

    Congress directed FDA to issue a Federal Register notice, not later 
than 30 days after enactment of FDAAA, asking companies to indicate 
whether they intend to participate in the DTC user fee program by 
voluntarily submitting for FDA advisory review DTC television 
advertisements for prescription drugs during FY 2008. Companies that 
indicate they intend to participate must specify the number of 
advertisements they intend to submit in FY 2008. Once companies have 
responded to this notice, FDA will issue another Federal Register 
notice establishing the fee for each advisory review submission for FY 
2008.

B. Basis for the Fee

    The fee will be based on the number of advertisements identified in 
response to this participation notice. The advisory review fees in FY 
2008 will be set at a level to generate target revenues of $6.25 
million in the first year of the program. Individual fees will be 
determined by dividing the target revenue, established in the statute, 
by the number of proposed television advertisements that all companies 
have indicated (in response to the participation notice) that they 
intend to submit during FY 2008. For example, if companies indicate 
that they intend to submit 150 total advertisements, the fee for each 
advisory review submission will be $41,667 ($6.25 million divided by 
150). The statute limits this fee to no more than $83,000 per 
submission for FY 2008. This limitation is one of several provisions in 
the statute that help ensure individual sponsors will not individually 
bear a disproportionate share of the cost of the program. The target 
revenue figures will be adjusted annually for inflation and workload in 
subsequent years. In each subsequent fiscal year of the program, FDA 
will issue a new request for notice of participation by June 1 of the 
previous fiscal year and a second notice by August 1 of the previous 
fiscal year establishing the fees for the fiscal year beginning October 
1.

C. Additional Submissions

    If, in response to this notice, a participant notifies FDA that it 
plans to submit a certain number of advertisements for FY 2008 and then 
exceeds that number of advertisements, the participant will be assessed 
a fee for each additional submission. The fee will be 50 percent 
greater than the established individual fee. In addition, a participant 
who does not pay the fees for which it is billed within the timeframe 
specified by the Secretary once the fees are set for FY 2008 will be 
assessed a penalty that is 50 percent greater than the established 
individual fee.

D. Year-to-Year Carry Overs

    If a company identifies and pays for more advisory reviews than it 
submits in a given fiscal year, the company may carry over one paid 
submission for advisory review to the next fiscal year. This means that 
a submission for advisory review for which the fee was paid in 1 fiscal 
year can be submitted for advisory review in the following fiscal year. 
Companies cannot carry over more than one such submission to the next 
fiscal year; for unused submissions over and above the one available 
for carryover, the paid user fee will not be refunded, waived, 
exempted, or reduced. However, resubmissions are not subject to a 
fiscal year limitation. For example, a company can submit an 
advertisement for advisory review in fiscal year 2008 and resubmit a 
revised version of that same advertisement for advisory review in 
fiscal year 2009, at no additional cost.

E. Operating Reserves

    To establish operating reserves for the program, in the first year 
of their participation in the program, participants will be assessed a 
one-time participation fee that will be based on the number of 
anticipated submissions the participant identifies for that year. In 
this way, FDA will collect additional revenues of $6.25 million to be 
placed in reserve from which funds can be drawn if target revenues 
fluctuate downward in subsequent years. For companies responding by 
November 26, 2007, the operating reserve fee for each participant in FY 
2008 will be an amount equal to the total amount that company is 
charged for its annual advisory review fees for FY 2008. For companies 
who respond by November 26, 2007, but do not pay the assessed operating 
reserve fee within the timeframe specified by the Secretary, their 
operating reserve fee will be 50 percent higher than what they would 
have owed had they paid on time. For participants who join the program 
late in FY 2008, i.e., those who do not notify FDA of their intent to 
participate until after November 26, 2007, the operating reserve fee 
will be 50 percent higher than what they would have owed had they both 
notified FDA and paid on time. Companies who join the program in 
subsequent fiscal years (FYs 2009 to 2012) will be assessed an amount 
for the operating reserve fee that will be at least as much as the 
amount they would have been assessed if they had joined the program at 
the start of FY 2008. Specifically, in subsequent years, the operating 
reserve fee for new participants will be the higher of: (1) The total 
amount of advisory review fees for all of the new participant's 
proposed DTC television advertisements in the fiscal year they join the 
program or (2) the total amount of advisory review fees that would have 
been assessed in FY 2008 for that number of proposed DTC television 
advertisements. This statutory fee structure limits the incentive for 
companies to join the program late, which could prevent the program 
from receiving sufficient funding in the initial year and place a 
disproportionate share of the cost of the program on those participants 
who join the program in its initial year of operation.

F. Effect of Inadequate Funding

    The statute provides that if FDA fails to receive sufficient 
funding from companies within 120 days after enactment of FDAAA, the 
program will not commence. Sufficient funding consists of a combined 
total amount of

[[Page 60680]]

at least $11.25 million from advisory review fees and operating reserve 
fees. In the event that insufficient funding is received and the 
program does not commence, all collected fees will be refunded to the 
companies that paid.

G. FDA Commitment

    The fees will be used to fund approximately 27 additional staff for 
predissemination advisory review of DTC television advertisements. 
These additional resources will enable FDA to provide more timely 
reviews of DTC television advertisements. FDA has committed to phased-
in performance metrics. For example, assuming 150 submissions in FY 
2008, FDA will review and provide advisory comments to the sponsor 
within 45 days on 50 percent of the 150 original submissions. In 
addition, FDA is committed to reviewing 50 percent of resubmissions 
within 30 days. The performance metrics will be phased in over the 5 
years of the program, with each year including more stringent 
performance goals.

V. Request for Notice of Participation

    FDA is asking companies that intend to submit advertisements to FDA 
for advisory review in FY 2008 to notify FDA by November 26, 2007 of: 
(1) Their intent to submit advertisements for advisory review and (2) 
the number of DTC television advertisements they plan to submit for 
advisory review during FY 2008.
    Notification of participation without specifying the number of DTC 
television advertisements to be submitted in FY 2008 will be considered 
an incomplete notification, and subsequent notification of intent to 
submit advertisements after November 26, 2007 would be treated as late.
    The agency requests that all companies submit their written 
responses within 30 calendar days (see DATES) by overnight courier 
service to Wayne Amchin (see ADDRESSES) and fax or e-mail a copy of 
their response (see ADDRESSES).

A. What Should Those Wishing To Participate Submit in Their Written 
Notification?

    The following information should be included in a company's DTC 
television advertisement written notification:
     A statement that they will submit DTC television 
advertisements to FDA for advisory review during FY 2008,
     The number of proposed DTC television advertisements they 
will submit for advisory review under the DTC user fee program in FY 
2008, and
     The name, title, billing address, and contact information 
(phone, e-mail, fax) of the company representative who will be the 
primary person for FDA to contact concerning the company's 
participation in the program.

B. What Does Written Notification to FDA Mean?

    Each company's written notification to FDA of the number of DTC 
television advertisements it intends to submit for advisory review in 
FY 2008 is a legally binding commitment by that company to pay the FY 
2008 advisory review fee for each submission (see section 
736A(a)(1)(D)(ii) of the act). Each person who is assessed an advisory 
review fee is also required to pay an operating reserve fee for those 
submissions (a one-time fee in the first year of participation to fund 
the operating reserve) (see section 736A(a)(2) of the act). FDA will 
send invoices to each company for all submissions identified in 
response to this notice, and the advisory review fee and the operating 
reserve fee for all these submissions are due and payable on the date 
specified in the invoices. FDA will also assign each participant a 
series of unique user fee ID numbers to correspond with the number of 
advisory reviews that the participant identified in response to this 
notice. For example, a company identifying 10 advisory reviews will 
receive 10 unique user fee ID numbers in its invoice. Each submission 
of a DTC television advertisement for FDA advisory review will be 
identified with a user fee ID number to show that the fee has been 
paid. A company's request for advisory review will be considered 
incomplete and submissions will not be accepted for review until all 
fees owed by the company for all advisory reviews and the operating 
reserve fee have been paid (see section 736A(e) of the act).

C. Can a Company Transfer or Sell its Remaining Balance of User Fee 
Credits to Another Company?

    For each advisory review fee paid by a person for a fiscal year, 
section 736A(a)(1)(F)(i) of the act provides that the person is 
entitled to acceptance for advisory review of one DTC advertisement and 
acceptance of one resubmission for advisory review of the same 
advertisement. Section 736A(a)(1)(F)(i) of the act further provides 
that the advertisement shall be submitted for review in the fiscal year 
for which the fee was assessed, except that a person may carry over not 
more than one paid advisory review submission to the next fiscal year. 
FDA will administratively keep track of these submissions as advisory 
review credits. Each credit for an advisory review will expire at the 
end of the fiscal year for which the user fees were paid, except that 
one unused credit can be carried over from the fiscal year in which it 
was purchased to the next fiscal year. Advisory review credits are not 
transferable, except to a successor in interest (see section 
736A(a)(1)(F)(iv) of the act). If unexpired credits are transferred to 
a successor in interest, the successor company and former owner should 
notify FDA to ensure that future billing of the successor company 
reflects prior contributions to the DTC user fee program reserve fund 
and the unexpired credit balance. Evidence of a successor in interest 
could include a copy of the documentation required under 21 CFR 314.72. 
Please contact Wayne Amchin (see FOR INFORMATION CONTACT) concerning 
successor in interest issues.
    Successors in interest with an unexpired credit balance should also 
be aware of the following:
     One unused credit can be carried over from the fiscal year 
in which it was purchased to the next fiscal year.
     In responding to the annual Federal Register notice for 
company participation, the successor company must indicate its intent 
to use the unexpired carryover credit in the upcoming fiscal year.

D. How Do I Send in DTC Television Advertisements for Advisory Review 
Under the DTC User Fee Program?

    FDA intends to issue guidance to industry explaining how to submit 
DTC advisory review packages for review under the DTC user fee program. 
The guidance document will provide details on the contents, format, and 
procedures that FDA recommends be followed. The guidance will also 
explain how and where to submit advisory review packages to start the 
DTC user fee program performance clock. FDA will issue a Federal 
Register notice to announce the availability of this guidance.

E. What Happens if I Send in a DTC Television Advertisement for 
Advisory Review After October 1, 2007, but Before I'm Invoiced by FDA 
for My FY 2008 Fees?

    The effective date for the assessment and collection of fees for 
DTC television advertisements under this program is October 1, 2007. 
Therefore, any DTC television advertisement submitted for advisory 
review in FY 2008 is subject to the previously discussed fees under 
this program. FDA recognizes that, because of the timing of the 
enactment of FDAAA, the advisory review and operating reserve fees for 
FY 2008 were

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not established and billed before October 1, 2007, and that there will 
be a gap between the start of the fiscal year and the date that fees 
are due. However, the voluntary submission of a DTC television 
advertisement for FDA advisory review on or after October 1, 2007, but 
before November 26, 2007 will be considered by FDA as notification that 
the company who submitted the advertisement wishes to participate in 
the program and agrees to pay the advisory review fee and operating 
reserve fee for each such submission in a timely manner once the fees 
for FY 2008 are established and the company is invoiced. Companies who 
submit DTC television advertisements for advisory review in this period 
should respond to this participation notice, and include any such 
submissions in their count of the total number of advisory submissions 
they intend to submit in FY 2008. FDA will also contact companies who 
submit DTC television advertisements in this time period to request 
written confirmation from these companies of their commitment to pay 
these fees; if companies do not agree to make this commitment, FDA will 
request that they withdraw their submission(s), and such submissions 
will not be reviewed. For companies who do agree, FDA will begin its 
advisory review of a complete submission of a DTC television 
advertisement for advisory review on the date that it receives written 
confirmation of the company's commitment to pay the fees associated 
with the submission in a timely manner once the company is invoiced.
    For information on how FDA will treat DTC television advertisement 
advisory review submissions not identified in response to this notice 
that are submitted after November 26, 2007, see sections IV.C 
``Additional Submissions'' and IV.E ``Operating Reserves'' of this 
document.

    Dated: October 19, 2007.
Jeffrey Shuren,
Assistant Commissioner for Policy.
[FR Doc. 07-5282 Filed 10-24-07; 8:45 am]
BILLING CODE 4160-01-S