[Federal Register Volume 81, Number 145 (Thursday, July 28, 2016)]
[Notices]
[Pages 49674-49678]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-17870]


-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2016-N-0007]


Prescription Drug User Fee Rates for Fiscal Year 2017

AGENCY: Food and Drug Administration, HHS

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The Food and Drug Administration (FDA) is announcing the rates 
for prescription drug user fees for fiscal year (FY) 2017. The Federal 
Food, Drug, and Cosmetic Act (the FD&C Act), as amended by the 
Prescription Drug User Fee Amendments of 2012 (PDUFA V), authorizes FDA 
to collect user fees for certain applications for the review of human 
drug and biological products, on establishments where the products are 
made, and on such products. This notice establishes the fee rates for 
FY 2017.

FOR FURTHER INFORMATION CONTACT: Robert J. Marcarelli, Office of 
Financial Management, Food and Drug Administration, 8455 Colesville 
Rd., COLE-14202F, Silver Spring, MD 20993-0002, 301-796-7223.

SUPPLEMENTARY INFORMATION:

I. Background

    Sections 735 and 736 of the FD&C Act (21 U.S.C. 379g and 379h, 
respectively) establish three different kinds of user fees. Fees are 
assessed on the following: (1) Certain types of applications and 
supplements for the review of human drug and biological products; (2) 
certain establishments where such products are made; and (3) certain 
products (section 736(a) of the FD&C Act). When certain conditions are 
met, FDA may waive or reduce fees (section 736(d) of the FD&C Act).
    For FY 2013 through FY 2017, the base revenue amounts for the total 
revenues from all PDUFA fees are established by PDUFA V. The base 
revenue amount for FY 2013, which became the base amount for the 
remaining four FYs of PDUFA V, is $718,669,000, as published in the 
Federal Register of August 1, 2012 (77 FR 45639). The FY 2013 base 
revenue amount is further adjusted each year after FY 2013 for 
inflation and workload. For FY 2017, fee revenue and fees may be 
further adjusted by the final year adjustment. In addition, for FY 
2017, excess collections are offset as required by the FD&C Act. Fees 
for applications, establishments, and products are to be established 
each year

[[Page 49675]]

by FDA so that revenues from each category will provide one-third of 
the total revenue to be collected each year.
    This document provides fee rates for FY 2017 for an application 
requiring clinical data ($2,038,100), for an application not requiring 
clinical data or a supplement requiring clinical data ($1,019,050), for 
an establishment ($512,200), and for a product ($97,750). These fees 
are effective on October 1, 2016, and will remain in effect through 
September 30, 2017. For applications and supplements that are submitted 
on or after October 1, 2016, the new fee schedule must be used. 
Invoices for establishment and product fees for FY 2017 will be issued 
in August 2016 using the new fee schedule.

II. Fee Revenue Amount for FY 2017

    The base revenue amount for FY 2017 is $718,669,000 prior to 
adjustments for inflation, workload, the offset of excess collections, 
and the final year adjustment (see sections 736(c)(1), 736(c)(2), 
736(g)(4), and 736(c)(3) of the FD&C Act, respectively).

A. FY 2017 Statutory Fee Revenue Adjustments for Inflation

    PDUFA V specifies that the $718,669,000 is to be further adjusted 
for inflation increases for FY 2017 using two separate adjustments--one 
for personnel compensation and benefits (PC&B) and one for non-PC&B 
costs (see section 736(c)(1) of the FD&C Act).
    The component of the inflation adjustment for payroll costs shall 
be one plus the average annual percent change in the cost of all PC&B 
paid per full-time equivalent (FTE) position at FDA for the first three 
of the preceding four FYs, multiplied by the proportion of PC&B costs 
to total FDA costs of process for the review of human drug applications 
for the first three of the preceding four FYs (see section 736(c)(1)(A) 
and (c)(1)(B) of the FD&C Act).
    Table 1 summarizes that actual cost and FTE data for the specified 
FYs, and provides the percent changes from the previous FYs and the 
average percent changes over the first three of the four FYs preceding 
FY 2017. The 3-year average is 1.8759 percent.

              Table 1--FDA Personnel Compensation and Benefits (PC&B) Each Year and Percent Changes
----------------------------------------------------------------------------------------------------------------
             Fiscal year                     2013               2014               2015          3-year average
----------------------------------------------------------------------------------------------------------------
Total PC&B..........................     $1,927,703,000     $2,054,937,000     $2,232,304,000  .................
Total FTE...........................             13,974             14,555             15,484  .................
PC&B per FTE........................           $137,949           $141,184           $144,168  .................
Percent Change From Previous Year...             1.1690             2.3451             2.1136             1.8759
----------------------------------------------------------------------------------------------------------------

    The statute specifies that this 1.8759 percent should be multiplied 
by the proportion of PC&B costs to total FDA costs of the process for 
the review of human drug applications. Table 2 shows the PC&B and the 
total obligations for the process for the review of human drug 
applications for three FYs.

    Table 2--PC&B as a Percent of Fee Revenues Spent on the Process for the Review of Human Drug Applications
----------------------------------------------------------------------------------------------------------------
             Fiscal year                     2013               2014               2015          3-year average
----------------------------------------------------------------------------------------------------------------
Total PC&B..........................       $568,206,210       $585,260,720       $615,483,892  .................
Total Costs.........................       $966,169,007     $1,077,263,695     $1,127,664,528  .................
PC&B Percent........................            58.8102            54.3285            54.5804            55.9064
----------------------------------------------------------------------------------------------------------------

    The payroll adjustment is 1.8759 percent from table 1 multiplied by 
55.9064 percent (or 1.0487 percent).
    The statute specifies that the portion of the inflation adjustment 
for non-payroll costs is the average annual percent change that 
occurred in the Consumer Price Index (CPI) for urban consumers 
(Washington-Baltimore, DC-MD-VA-WV; not seasonally adjusted; all items; 
annual index) for the first three years of the preceding four years of 
available data multiplied by the proportion of all costs other than 
PC&B costs to total costs of the process for the review of human drug 
applications for the first three years of the preceding four FYs (see 
section 736(c)(1)(C) of the FD&C Act). Table 3 provides the summary 
data for the percent changes in the specified CPI for the Washington-
Baltimore area. The data are published by the Bureau of Labor 
Statistics and can be found on its Web site at: http://data.bls.gov/cgi-bin/surveymost?cu. The data can be viewed by checking the box 
marked ``Washington-Baltimore All Items, November 1996=100--
CUURA311SA0'' and then selecting ``Retrieve Data''.

             Table 3--Annual and 3-Year Average Percent Change in CPI for Washington-Baltimore Area
----------------------------------------------------------------------------------------------------------------
                Year                         2013               2014               2015          3-year average
----------------------------------------------------------------------------------------------------------------
Annual CPI..........................            152.500            154.847            155.353  .................
Annual Percent Change...............             1.5232             1.5390             0.3268             1.1297
----------------------------------------------------------------------------------------------------------------

    To calculate the inflation adjustment for non-payroll costs, we 
multiply the 1.1297 percent by the proportion of all costs other than 
PC&B to total costs of the process for the review of human drug 
applications obligated. Since 55.9064 percent was obligated for PC&B as 
shown in Table 2, 44.0936 percent is the portion of costs other than 
PC&B (100 percent minus 55.9064 percent equals 44.0936 percent). The 
non-payroll adjustment is 1.1297 percent times 44.0936 percent, or 
0.4981 percent.
    Next, we add the payroll adjustment (1.0487 percent) to the non-
payroll adjustment (0.4981 percent), for a total

[[Page 49676]]

inflation adjustment of 1.5468 percent (rounded) for FY 2017.
    PDUFA V provides for this inflation adjustment to be compounded 
after FY 2013 (see section 736(c)(1) of the FD&C Act). This factor for 
FY 2017 (1.5468 percent) is compounded by adding one and then 
multiplying by one plus the compound inflation adjustment factor for FY 
2016 (6.4414 percent), as published in the Federal Register of August 
3, 2015 (80 FR 46028 at 46032), which equals to 1.080878 (rounded) 
(1.015468 x 1.064414) for FY 2017. We then multiply the base revenue 
amount for FY 2017 ($718,669,000) by 1.080878, yielding an inflation-
adjusted amount of $776,793,511.

B. FY 2017 Statutory Fee Revenue Adjustments for Workload

    The statute specifies that after the $718,669,000 has been adjusted 
for inflation, the inflation-adjusted amount shall be further adjusted 
for workload (see section 736(c)(2) of the FD&C Act).
    To calculate the FY 2017 workload adjustment, FDA calculated the 
average number of each of the four types of applications specified in 
the workload adjustment provision: (1) Human drug applications; (2) 
active commercial investigational new drug applications (INDs) 
(applications that have at least one submission during the previous 12 
months); (3) efficacy supplements; and (4) manufacturing supplements 
received over the 3-year period that ended on June 30, 2012 (base 
years), and the average number of each of these types of applications 
over the most recent 3-year period that ended June 30, 2016.
    The calculations are summarized in table 4. The 3-year averages for 
each application category are provided in column 1 (``3-Year Average 
Base Years 2010-2012'') and column 2 (``3-Year Average 2014-2016''). 
Column 3 reflects the percent change in workload from column 1 to 
column 2. Column 4 shows the weighting factor for each type of 
application, estimating how much of the total FDA drug review workload 
was accounted for by each type of application in the table during the 
most recent 3 years. Column 5 is the weighted percent change in each 
category of workload. This was derived by multiplying the weighting 
factor in each line in column 4 by the percent change from the base 
years in column 3. The values in column 5 are summed, reflecting an 
increase in workload of 13.1047 percent (rounded) for FY 2017 when 
compared to the base years.

                               Table 4--Workload Adjuster Calculation for FY 2017
----------------------------------------------------------------------------------------------------------------
                                     Column 1        Column 2        Column 3        Column 4        Column 5
                                 -------------------------------------------------------------------------------
        Application type          3-year average                  Percent change     Weighting
                                    base years    3-year average   (column 1 to       factor         Weighted
                                     2010-2012       2014-2016       column 2)       (percent)    percent change
----------------------------------------------------------------------------------------------------------------
New Drug Applications/Biologics         124.3000        147.3000         18.5036         35.8514          6.6338
 License Applications...........
Active Commercial INDs..........       6830.0000       7598.0000         11.2445         41.0966          4.6211
Efficacy Supplements............        136.3000        196.3000         44.0205          6.8122          2.9988
Manufacturing Supplements.......       2548.3000       2368.0000         -7.0753         16.2399         -1.1490
                                 -------------------------------------------------------------------------------
    FY 2017 Workload Adjuster...  ..............  ..............  ..............  ..............         13.1047
----------------------------------------------------------------------------------------------------------------

    Table 5 shows the calculation of the inflation and workload 
adjusted amount for FY 2017. The $718,669,000 subject to adjustment on 
line 1 is multiplied by the inflation adjustment factor of 1.080878, 
resulting in the inflation-adjusted amount on line 3, $776,793,511. 
That amount is then multiplied by one plus the workload adjustment of 
13.1047 percent on line 4, resulting in the inflation and workload 
adjusted amount of $878,590,000 on line 5, rounded to the nearest 
thousand dollars.

   Table 5--PDUFA Inflation and Workload Adjusted Amount for FY 2017,
                           Summary Calculation
------------------------------------------------------------------------
 
------------------------------------------------------------------------
FY 2013 Revenue Amount and Base           $718,669,000  Line 1.
 Subsequent FYs as published in the
 Federal Register of August 1, 2012
 (77 FR 45639) (rounded to nearest
 thousand dollars).
Inflation Adjustment Factor for FY            1.080878  Line 2.
 2017 (1 plus 8.0878 percent).
Inflation Adjusted Amount..........       $776,793,511  Line 3.
Workload Adjustment Factor for FY             1.131047  Line 4.
 2017 (1 plus 13.1047 percent).
Inflation and Workload Adjusted           $878,590,000  Line 5.
 Amount (rounded to nearest
 thousand dollars).
------------------------------------------------------------------------

III. Offset for Excess Collections Through FY 2016

    Under the provisions of the FD&C Act, if the sum of the cumulative 
amount of the fees collected for FY 2013 through 2015, and the amount 
of fees estimated to be collected under this section for FY 2016, 
exceeds the cumulative amount appropriated for fees for FYs 2013 
through 2016, the excess shall be credited to FDA's appropriation 
account and subtracted from the amount of fees that FDA would otherwise 
be authorized to collect for FY 2017 under the FD&C Act (see section 
736(g)(4) of the FD&C Act as amended by PDUFA V).
    Table 6 shows the amounts specified in appropriation acts for each 
year from FY 2013 through FY 2016, and the amounts FDA has collected 
for FYs 2013, 2014, and 2015 as of June 30, 2016, and an additional 
$70,907,000 (rounded to the nearest thousand dollars) that FDA 
estimates it will collect in FY 2016 based on historical data. Table 6 
shows the estimated cumulative difference between PDUFA fee amounts 
specified in appropriation acts for FY 2013 through FY 2016 and PDUFA 
fee amounts collected.

[[Page 49677]]



                                    Table 6--Offsets To Be Taken for PDUFA V
----------------------------------------------------------------------------------------------------------------
                                                                                                Amount in excess
                                                                            Collection amount    of collection
                      Fiscal year                           Collections        specified in     amount specified
                                                            realized ($)      appropriation     in appropriation
                                                                                 acts ($)           acts ($)
----------------------------------------------------------------------------------------------------------------
2013...................................................        721,224,494        718,669,000          2,555,494
2014...................................................        805,856,366        760,000,000         45,856,366
2015...................................................        852,746,867        798,000,000         54,746,867
2016...................................................        872,388,000        851,481,000         20,907,000
                                                        --------------------------------------------------------
    Net Balance to be Offset When Fees are Set for FY    .................  .................        124,065,726
     2017..............................................
----------------------------------------------------------------------------------------------------------------
Note: FY 2016 `Collections Realized' is the amount FDA estimates it will collect in FY 2016 based on historical
  data.

    The cumulative fees collected for FYs 2013 through 2016 are 
estimated to be $124,065,726 greater than the cumulative fee amounts 
specified in appropriation acts during this same period. Reducing the 
inflation and workload adjusted amount of $878,590,000 by the PDUFA V 
offset of $124,066,000 (rounded to the nearest thousand dollars) 
results in an amount of $754,524,000, before the final year adjustment.

IV. Final Year Adjustment

    Under the provisions of the FD&C Act, as amended, for FY 2017 the 
Secretary of Health and Human Services may, in addition to the 
inflation and workload adjustments, further increase the fees and fee 
revenues if such an adjustment is necessary to provide for not more 
than 3 months of operating reserves of carryover user fees for the 
process for the review of human drug applications for the first 3 
months of FY 2018. If such an adjustment is necessary, the rationale 
for the amount of this increase shall be contained in the annual notice 
establishing fee revenues and fees for FY 2017 (see section 736(c)(3) 
of the FD&C Act).
    After running analyses on the status of PDUFA's operating reserves 
and its estimated balance as of the beginning of FY 2018, FDA estimates 
that the PDUFA program will have sufficient funds for the operating 
reserves, thus FDA will not be performing a final year adjustment for 
FY 2018 because FDA has determined such an adjustment to be 
unnecessary.
    The FD&C Act specifies that one-third of the total fee revenue is 
to be derived from application fees, one-third from establishment fees, 
and one-third from product fees (see section 736(b)(2) of the FD&C 
Act). Accordingly, one-third of the total revenue amount 
($754,524,000), or a total of $251,508,000, is the amount of fee 
revenue that will be derived from each fee type: Application fees, 
establishment fees, and product fees.

V. Application Fee Calculations

A. Application Fee Revenues and Application Fees

    Application fees will be set to generate one-third of the total fee 
revenue amount, or $251,508,000 in FY 2017.

B. Estimate of the Number of Fee-Paying Applications and Setting the 
Application Fees

    For FY 2013 through FY 2017, 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 
three most recently completed FYs. Beginning with FY 2016, prior year 
FAE totals will be updated annually to reflect refunds and waivers 
processed after the close of the FY.
    In estimating the number of fee-paying FAEs, a full application 
requiring clinical data counts as one FAE. An application not requiring 
clinical data counts as one-half of 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 the applicant initially 
paid a full application fee, or one-eighth of an FAE if the applicant 
initially paid one-half of the full application fee amount.
    As Table 7 shows, the average number of fee-paying FAEs received 
annually in the most recent 3-year period is 123.405 FAEs. FDA will set 
fees for FY 2017 based on this estimate as the number of full 
application equivalents that will pay fees.


                                            Table 7--Fee-Paying FAEs
----------------------------------------------------------------------------------------------------------------
                     FY                             2013             2014             2015        3-year average
----------------------------------------------------------------------------------------------------------------
Fee-Paying FAEs.............................         109.010          128.750          132.456          123.405
----------------------------------------------------------------------------------------------------------------
Note: Beginning with FY 2016, prior year FAE totals will be updated annually to reflect refunds and waivers
  processed after the close of the FY.

    The FY 2017 application fee is estimated by dividing the average 
number of full applications that paid fees over the latest 3 years, 
123.405, into the fee revenue amount to be derived from application 
fees in FY 2017, $251,508,000. The result, rounded to the nearest 
hundred dollars, is a fee of $2,038,100 per full application requiring 
clinical data, and $1,019,050 per application not requiring clinical 
data or per supplement requiring clinical data.

VI. Fee Calculations for Establishment and Product Fees

A. Establishment Fees

    At the beginning of FY 2016, the establishment fee was based on an 
estimate that 485 establishments would be subject to and would pay 
fees. By the

[[Page 49678]]

end of FY 2016, FDA estimates that 523 establishments will have been 
billed for establishment fees, before all decisions on requests for 
waivers or reductions are made. FDA estimates that a total of 16 
establishment fee waivers or reductions will be made for FY 2016. In 
addition, FDA estimates that another 16 full establishment fees will be 
exempted this year based on the orphan drug exemption in section 736(k) 
of the FD&C Act. Subtracting 32 establishments (16 waivers, plus the 
estimated 16 establishments under the orphan exemption) from 523 leaves 
a net of 491 fee-paying establishments. FDA will use 491 to estimate 
the FY 2017 establishments paying fees. The fee per establishment is 
determined by dividing the adjusted total fee revenue to be derived 
from establishments ($251,508,000) by the estimated 491 establishments, 
for an establishment fee rate for FY 2017 of $512,200 (rounded to the 
nearest hundred dollars).

B. Product Fees

    At the beginning of FY 2016, the product fee was based on an 
estimate that 2,480 products would be subject to and would pay product 
fees. By the end of FY 2016, FDA estimates that 2,646 products will 
have been billed for product fees, before all decisions on requests for 
waivers, reductions, or exemptions are made. FDA assumes that there 
will be 41 waivers and reductions granted. In addition, FDA estimates 
that another 32 product fees will be exempted this year based on the 
orphan drug exemption in section 736(k) of the FD&C Act. FDA estimates 
that 2,573 products will qualify for and pay product fees in FY 2016, 
after allowing for an estimated 73 waivers and reductions, including 
the orphan drug products, and will use this number for its FY 2017 
estimate. The FY 2017 product fee rate is determined by dividing the 
adjusted total fee revenue to be derived from product fees 
($251,508,000) by the estimated 2,573 products for a FY 2017 product 
fee of $97,750 (rounded to the nearest ten dollars).

VII. Fee Schedule for FY 2017

    The fee rates for FY 2017 are displayed in table 8:

                    Table 8--Fee Schedule for FY 2017
------------------------------------------------------------------------
                                                               Fee rates
                        Fee category                            for FY
                                                               2017 ($)
------------------------------------------------------------------------
Applications:
  Requiring clinical data...................................   2,038,100
  Not requiring clinical data...............................   1,019,050
  Supplements requiring clinical data.......................   1,019,050
Establishments..............................................     512,200
Products....................................................      97,750
------------------------------------------------------------------------

VIII. Fee Payment Options and Procedures

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 on or after October 1, 2016. Payment must be 
made in U.S. currency by electronic check, check, bank draft, wire 
transfer, or U.S. postal money order payable to the order of the Food 
and Drug Administration. The preferred payment method is online using 
electronic check (Automated Clearing House (ACH) also known as eCheck) 
or credit card (Discover, VISA, MasterCard, American Express). Secure 
electronic payments can be submitted using the User Fees Payment Portal 
at https://userfees.fda.gov/pay. Once you search for your invoice, 
click ``Pay Now'' to be redirected to Pay.gov. Note that electronic 
payment options are based on the balance due. Payment by credit card is 
available for balances less than $25,000. If the balance exceeds this 
amount, only the ACH option is available. Payments must be drawn on U.S 
bank accounts as well as U.S. credit cards.
    FDA has partnered with the U.S. Department of the Treasury to use 
Pay.gov, a Web-based payment application, for online electronic 
payment. The Pay.gov feature is available on the FDA Web site after the 
user fee ID number is generated.
    Please include the user fee identification (ID) number on your 
check, bank draft, or postal money order. Your payment can be mailed 
to: Food and Drug Administration, P.O. Box 979107, St. Louis, MO 63197-
9000.
    If checks are to be sent by a courier that requests a street 
address, the courier can deliver the checks to: U.S. Bank, Attention: 
Government Lockbox 979107, 1005 Convention Plaza, St. Louis, MO 63101. 
(Note: This U.S. Bank address is for courier delivery only. If you have 
any questions concerning courier delivery contact the U.S. Bank at 314-
418-4013. This telephone number is only for questions about courier 
delivery).
    Please make sure that the FDA post office box number (P.O. Box 
979107) is written on the check, bank draft, or postal money order.
    If paying by wire transfer, please reference your unique user fee 
ID number when completing your transfer. The originating financial 
institution may charge a wire transfer fee. Please ask your financial 
institution about the fee and add it to your payment to ensure that 
your fee is fully paid. The account information for wire transfers is 
as follows: U.S. Department of the Treasury, TREAS NYC, 33 Liberty St., 
New York, NY 10045, Acct. No.: 75060099, Routing No.: 021030004, SWIFT: 
FRNYUS33, Beneficiary: FDA, 8455 Colesville Rd., 14th Floor, Silver 
Spring, MD 20993-0002.
    The tax identification number of FDA is 53-0196965.

B. Establishment and Product Fees

    FDA will issue invoices for establishment and product fees for FY 
2017 under the new fee schedule in August 2016. Payment will be due on 
October 1, 2016. FDA will issue invoices in November 2017 for any 
products and establishments subject to fees for FY 2017 that qualify 
for fee assessments after the August 2016 billing.

    Dated: July 25, 2016.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2016-17870 Filed 7-27-16; 8:45 am]
 BILLING CODE 4164-01-P