[Federal Register Volume 82, Number 177 (Thursday, September 14, 2017)]
[Notices]
[Pages 43244-43248]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-19494]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2017-N-0007]


Prescription Drug User Fee Rates for Fiscal Year 2018

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) 2018. The Federal 
Food, Drug, and Cosmetic Act (the FD&C Act), as amended by the 
Prescription Drug User Fee Amendments of 2017 (PDUFA VI), authorizes 
FDA to collect application fees for certain applications for the review 
of human drug and biological products, and prescription drug program 
fees for certain approved products. This notice establishes the fee 
rates for FY 2018.

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 two different kinds of user fees. Fees are 
assessed on the following: (1) Application fees are assessed on certain 
types of applications for the review of human drug and biological 
products; and (2) prescription drug program fees are assessed on 
certain approved products (section 736(a) of the FD&C Act). When 
specific conditions are met, FDA may waive or reduce fees (section 
736(d) of the FD&C Act).
    For FY 2018 through FY 2022, the base revenue amounts for the total 
revenues from all PDUFA fees are established by PDUFA VI. The base 
revenue amount for FY 2018 is $878,590,000. The FY 2018 base revenue 
amount is to be adjusted for inflation and for the resource capacity 
needs for the process for the review of human drug applications (the 
capacity planning adjustment). An additional dollar amount specified in 
the statute (see section 736(b)(1)(F) of the FD&C Act) is then added to 
provide for additional full-time equivalent (FTE) positions to support 
PDUFA VI initiatives. The FY 2018 revenue amount may be adjusted 
further, if necessary, to provide for sufficient operating reserves of 
carryover user fees. Finally, the amount is adjusted to provide for 
additional direct costs to fund PDUFA VI initiatives. Fee amounts are 
to be established each year so that revenues from application fees 
provide 20 percent of the total revenue, and prescription drug program 
fees provide 80 percent of the total revenue.
    This document provides fee rates for FY 2018 for an application 
requiring clinical data ($2,421,495), for an application not requiring 
clinical data ($1,210,748), and for the prescription drug program fee 
($304,162). These fees are effective on October 1, 2017, and will 
remain in effect through September 30, 2018. For applications that are 
submitted on or after October 1, 2017, the new fee schedule must be 
used.

II. Fee Revenue Amount for FY 2018

    The base revenue amount for FY 2018 is $878,590,000 prior to 
adjustments for inflation, capacity planning, additional FTE, operating 
reserve, and additional direct costs (see section 736(b)(1) of the FD&C 
Act).

A. FY 2018 Statutory Fee Revenue Adjustments for Inflation

    PDUFA VI specifies that the $878,590,000 is to be adjusted for 
inflation increases for FY 2018 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 FTE positions at FDA for the first three of the preceding four 
FYs, multiplied by the proportion of PC&B costs to total FDA costs of 
the 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 the 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 2018. The 3-year average is 2.2354 percent.

              Table 1--FDA Personnel Compensation and Benefits (PC&B) Each Year and Percent Changes
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             Fiscal year                     2014                2015                2016         3-year average
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Total PC&B..........................      $2,054,937,000      $2,232,304,000      $2,414,728,159
Total FTE...........................              14,555              15,484              16,381
PC&B per FTE........................            $141,184            $144,168            $147,408
Percent Change From Previous Year...              2.3451              2.1136              2.2474          2.2354
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[[Page 43245]]

    The statute specifies that this 2.2354 percent should be multiplied 
by the proportion of PC&B costs to the 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
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             Fiscal year                     2014                2015                2016         3-year average
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Total PC&B..........................        $585,260,720        $615,483,892        $652,508,273
Total Costs.........................      $1,077,263,695      $1,127,664,528      $1,157,817,695
PC&B Percent........................             54.3285             54.5804             56.3567         55.0885
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    The payroll adjustment is 2.2354 percent from table 1 multiplied by 
55.0885 percent (or 1.2314 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 3 years of the preceding 4 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)(B) 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 Three-Year Average Percent Change in CPI for Washington-Baltimore Area
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                   Fiscal year                         2014            2015            2016       3-year average
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Annual CPI......................................         154.847         155.353         157.180
Annual Percent Change...........................          1.5390          0.3268          1.1760          1.0139
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    The statute specifies that this 1.0139 percent should be multiplied 
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 
55.0885 percent was obligated for PC&B (as shown in table 2), 44.9115 
percent is the portion of costs other than PC&B (100 percent minus 
55.0885 percent equals 44.9115 percent). The non-payroll adjustment is 
1.0139 percent times 44.9115 percent, or 0.4554 percent.
    Next, we add the payroll adjustment (1.2314 percent) to the non-
payroll adjustment (0.4554 percent), for a total inflation adjustment 
of 1.6868 percent (rounded) for FY 2018.
    We then multiply the base revenue amount for FY 2018 ($878,590,000) 
by 1.016868, yielding an inflation-adjusted amount of $893,410,056.

B. FY 2018 Statutory Fee Revenue Adjustments for Capacity Planning

    The statute specifies that after $878,590,000 has been adjusted for 
inflation, the inflation-adjusted amount shall be further adjusted to 
reflect changes in the resource capacity needs for the process of human 
drug application reviews (see section 736(c)(2) of the FD&C Act). The 
statute prescribes an interim capacity planning adjustment be utilized 
until a new methodology can be developed through a process involving an 
independent evaluation as well as obtaining public comment. The interim 
capacity planning adjustment is applied to FY 2018 fee setting.
    To determine the FY 2018 capacity planning adjustment, FDA 
calculated the average number of each of the five elements specified in 
the capacity planning adjustment provision: (1) Human drug applications 
(new drug applications (NDAs)/biologics license applications (BLAs)); 
(2) active commercial investigational new drug applications (INDs) (IND 
applications that have at least one submission during the previous 12 
months); (3) efficacy supplements; (4) manufacturing supplements; and 
(5) formal meetings, type A, B, B(EoP), C, and written responses only 
(WRO) issued in lieu of such formal meetings, over the 3-year period 
that ended on June 30, 2016, and the average number of each of these 
elements over the most recent 3-year period that ended June 30, 2017.
    The calculations are summarized in table 4. The 3-year averages for 
each element are provided in column 1 (``3-Year Average Ending 2016'') 
and column 2 (``3-Year Average Ending 2017''). Column 3 reflects the 
percent change from column 1 to column 2. Column 4 shows the weighting 
factor for each element. The weighting factor methodology has been 
updated for PDUFA VI. The previous methodology relied on the relative 
value of the standard costs for the elements included in the adjuster, 
and summed to 100 percent. The weighting factor now is the time 
invested in activities related to the element expressed as a percentage 
of total time invested in PDUFA activities, and will adjust only the 
costs attributed to the elements included in the model (hence the 
weighting factor does not now sum to 100 percent). Column 5 is the 
weighted percent change in each element. This is calculated by 
multiplying the weighting factor in each line in column 4 by the 
percent change in column 3. The values in column 5 are summed, 
reflecting an adjustment of 2.5090 percent (rounded).

[[Page 43246]]



                Table 4--Capacity Planning Adjuster (Interim Methodology) Calculation for FY 2018
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                                     Column 1        Column 2        Column 3        Column 4        Column 5
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                                                                      Percent
             Element                  3-year          3-year          change         Weighting       Weighted
                                      average         average      (column 1  to      factor          percent
                                    ending 2016     ending 2017      column 2)       (percent)        change
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NDAs/BLAs.......................        147.3333        153.0000          3.8462         18.0915          0.6958
Active Commercial INDs..........      7,598.0000      7,846.6667          3.2728         23.3890          0.7655
Efficacy Supplements............        196.3333        212.3333          8.1494          4.1848          0.3410
Manufacturing Supplements.......      2,368.0000      2,482.6667          4.8423          4.3690          0.2116
Meetings Scheduled and WROs.....      2,720.6667      2,940.0000          8.0617          6.1417          0.4951
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    FY 2018 Capacity Planning     ..............  ..............  ..............  ..............          2.5090
     Adjuster...................
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    Table 5 shows the calculation of the inflation and capacity 
planning adjusted amount for FY 2018. The FY 2018 base revenue amount, 
$878,590,000, shown on line 1 is multiplied by the inflation adjustment 
factor of 1.016868, resulting in the inflation-adjusted amount of 
$893,410,056 shown on line 3. That amount is then multiplied by one 
plus the capacity planning adjustment of 2.5090 percent, resulting in 
the inflation and capacity planning adjusted amount of $915,825,714 
shown on line 5.

  Table 5--PDUFA Inflation and Capacity Planning Adjusted Amount for FY
                        2018, Summary Calculation
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FY 2018 Revenue Amount..................    $878,590,000          Line 1
Inflation Adjustment Factor for FY 2018         1.016868          Line 2
 (1 plus 1.6868 percent)................
Inflation Adjusted Amount...............    $893,410,056          Line 3
Capacity Planning Adjustment Factor for         1.025090          Line 4
 FY 2018 (1 plus 2.5090 percent)........
Inflation and Capacity Planning Adjusted    $915,825,714          Line 5
 Amount.................................
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    The capacity planning adjustment adds $22,415,658 to the fee 
revenue amount for FY 2018. This increase is driven by the fact that 
the counts of elements for 2017 (year ending June 30) are at or near 
the highest levels since the first incorporation of the workload 
adjuster in 2003. The NDA/BLA count in 2017 is equal to the highest 
annual number recorded since the advent of the workload adjuster 
methodology in 2003. Active commercial INDs, efficacy supplements, and 
meetings/WROs are higher in 2017 than in any previous year recorded in 
the workload adjuster (note: Meetings/WROs are only counted back to 
2014 while the other elements are counted back to 2003). The 
manufacturing supplement count is approximately 2 percent below the 
highest number recorded in the history of the workload adjuster. 
Comparing 2017 to 2014, the first year included in the average in 
column 1 in the adjustment, NDA/BLAs are 12 percent higher, active 
commercial INDs are 10 percent higher, efficacy supplements are 25 
percent higher, manufacturing supplements are 15 percent higher, and 
meetings scheduled and WROs are 27 percent higher. This significant and 
across the board increase in submission activity is the driver of the 
$22,415,658 upward adjustment to the fee revenue amount.
    Per the commitments made in PDUFA VI, this increase in the revenue 
amount will be allocated and used by organizational review components 
engaged in direct review work to enhance resources and expand staff 
capacity and capability (see II.A.4 on p.37 of the PDUFA VI commitment 
letter).\1\
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    \1\ The PDUFA VI commitment letter can be viewed at https://www.fda.gov/downloads/forindustry/userfees/prescriptiondruguserfee/ucm511438.pdf.
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C. FY 2018 Statutory Fee Revenue Adjustments for Additional Dollar 
Amounts

    PDUFA VI provides an additional dollar amount for each of the next 
five fiscal years for additional FTE to support PDUFA VI enhancements 
outlined in the PDUFA VI commitment letter. The amount for FY 2018 is 
$20,077,793 (see section 736(b)(1)(F) of the FD&C Act). Adding this 
amount to the inflation and capacity planning adjusted revenue amount, 
$915,825,714, equals $935,904,000 (rounded to the nearest thousand 
dollars).

D. FY 2018 Statutory Fee Revenue Adjustments for Operating Reserve

    PDUFA VI provides for an operating reserve adjustment to allow FDA 
to increase the fee revenue and fees for any given fiscal year during 
PDUFA VI to maintain up to 14 weeks of operating reserve of carryover 
user fees. If the carryover balance exceeds 14 weeks of operating 
reserves, FDA is required to decrease fees to provide for not more than 
14 weeks of operating reserves of carryover user fees.
    To determine the 14-week operating reserve amount, the FY 2018 
annual base revenue adjusted for inflation and capacity planning, 
$915,825,714, is divided by 52, and then multiplied by 14. The 14-week 
operating reserve amount for FY 2018 is $246,568,461.
    To determine the end of year operating reserve amount, the Agency 
must assess actual operating reserve at the end of the third quarter of 
FY 2017, and forecast collections and obligations in the fourth quarter 
of FY 2017. The estimated end of year FY 2017 operating reserve is 
$279,856,044.
    Because the estimated end of year FY 2017 PDUFA operating reserve 
exceeds the 14-week operating reserve for FY 2018, FDA will reduce the 
FY 2018 PDUFA fee revenue of $935,903,507 by $33,287,582, resulting in 
an adjusted fee revenue of $902,615,925.

E. FY 2018 Statutory Fee Revenue Adjustments for Additional Direct Cost

    PDUFA VI specifies that $8,730,000 be added in addition to the 
operating reserve adjustment to account for additional direct costs in 
FY 2018. This additional direct cost adjustment will be adjusted for 
inflation each year beginning in FY 2019.

[[Page 43247]]

    The final FY 2018 PDUFA fee revenue is $911,346,000 (rounded to the 
nearest thousand dollars).

III. Application Fee Calculations

A. Application Fee Revenues and Application Fees

    Application fees will be set to generate 20 percent of the total 
revenue amount, or $182,269,200 in FY 2018.

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

    FDA will estimate the total number of fee-paying full application 
equivalents (FAEs) it expects to receive during the next FY by 
averaging the number of fee-paying FAEs received in the three most 
recently completed FYs. Prior year FAE totals are 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. An application that is 
withdrawn before filing, 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. Prior to PDUFA VI, the FAE amount also included 
supplements; supplements have been removed from the FAE calculation as 
the supplement fee has been discontinued in PDUFA VI.
    As table 6 shows, the average number of fee-paying FAEs received 
annually in the most recent 3-year period is 75.271347 FAEs. FDA will 
set fees for FY 2018 based on this estimate as the number of full 
application equivalents that will pay fees.

                                            Table 6--Fee-Paying FAEs
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                                                                                                      3-year
                       FY                              2014            2015            2016           average
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Fee-Paying FAEs.................................       73.375000       81.955603       70.483437       75.271347
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Note: Prior year FAE totals are updated annually to reflect refunds and waivers processed after the close of the
  FY.

    The FY 2018 application fee is estimated by dividing the average 
number of full applications that paid fees over the latest 3 years, 
75.271347, into the fee revenue amount to be derived from application 
fees in FY 2018, $182,269,200. The result is a fee of $2,421,495 per 
full application requiring clinical data, and $1,210,748 per 
application not requiring clinical data.

IV. Fee Calculations for Prescription Drug Program Fees

    PDUFA VI renamed the product fee the ``prescription drug program 
fee''; in addition, PDUFA VI introduced a limitation that an applicant 
will not be assessed more than five program fees for a fiscal year for 
prescription drug products identified in a single approved NDA or BLA 
(see section 736(a)(2)(C)). The program fee was also modified so that 
applicants are assessed a program fee only for prescription drug 
products identified in a human drug application approved as of October 
1 of such fiscal year.
    FDA estimates 2,461 program fees will be invoiced in FY 2018 before 
factoring in waivers, refunds, and exemptions. FDA approximates that 
there will be 27 waivers and refunds granted. In addition, FDA 
approximates that another 37 program fees will be exempted in FY 2018 
based on the orphan drug exemption in section 736(k) of the FD&C Act. 
FDA estimates 2,397 program fees in FY 2018, after allowing for an 
estimated 64 waivers and reductions, including the orphan drug 
exemptions. The FY 2018 prescription drug program fee rate is 
calculated by dividing the adjusted total revenue from program fees 
($729,076,800) by the estimated 2,397 program fees, for a FY 2018 
program fee of $304,162.

V. Fee Schedule for FY 2018

    The fee rates for FY 2018 are displayed in table 7:

                    Table 7--Fee Schedule for FY 2018
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                                                          Fee rates  for
                      Fee category                            FY 2018
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Application:
  Requiring clinical data...............................      $2,421,495
  Not requiring clinical data...........................       1,210,748
Program.................................................         304,162
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VI. Fee Payment Options and Procedures

A. Application Fees

    The appropriate application fee established in the new fee schedule 
must be paid for any application subject to fees under PDUFA that is 
received on or after October 1, 2017. 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 (Note: only full payments are accepted. No 
partial payments can be made online). Once you search for your invoice, 
select ``Pay Now'' to be redirected to Pay.gov. Payment by credit card 
is available for balances that are less than $25,000. If the balance 
exceeds this amount, only the ACH option is available. Payments must be 
made using 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. Mail your payment to: Food 
and Drug Administration, P.O. Box 979107, St. Louis, MO 63197-9000. If 
a check, bank draft, or money order is to be sent by a courier that 
requests a street address, the courier should deliver your payment 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

[[Page 43248]]

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. If needed, FDA's tax 
identification number is 53-0196965.

B. Prescription Drug Program Fees

    FDA plans to issue invoices and payment instructions for FY 2018 
program fees under the new fee schedule in September 2017. Payment will 
be due on October 1, 2017. FDA plans to issue invoices in December 2017 
for FY 2018 program fees that qualify for fee assessments after the 
initial 2017 billing.

    Dated: September 8, 2017.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2017-19494 Filed 9-13-17; 8:45 am]
 BILLING CODE 4164-01-P