[Federal Register Volume 84, Number 149 (Friday, August 2, 2019)]
[Notices]
[Pages 37888-37891]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-16495]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2019-N-3560]


Biosimilar User Fee Rates for Fiscal Year 2020

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is announcing the rates 
for biosimilar user fees for fiscal year (FY) 2020. The Federal Food, 
Drug, and Cosmetic Act (FD&C Act), as amended by the Biosimilar User 
Fee Amendments of 2017 (BsUFA II), authorizes FDA to assess and collect 
user fees for certain activities in connection with biosimilar 
biological product development; review of certain applications for 
approval of biosimilar biological products; and each biosimilar 
biological product approved in a biosimilar biological product 
application.
    BsUFA II directs FDA to establish, before the beginning of each 
fiscal year, the amount of initial and annual biosimilar biological 
product development (BPD) fees, the reactivation fee, and the 
biosimilar biological product application and program fees for such 
year. These fees apply to the period from October 1, 2019, through 
September 30, 2020.

FOR FURTHER INFORMATION CONTACT: Melissa Hurley, Office of Financial 
Management, Food and Drug Administration, 4041 Powder Mill Rd., Rm. 
61075, Beltsville, MD 20705-4304, 240-402-4585.

SUPPLEMENTARY INFORMATION:

I. Background

    Sections 744G, 744H, and 744I of the FD&C Act (21 U.S.C. 379j-51, 
379j-52, and 379j-53), as amended by BsUFA II (title IV of the FDA 
Reauthorization Act of 2017, Pub. L. 115-52), authorize the collection 
of fees for biosimilar biological products. Under section 744H(a)(1)(A) 
of the FD&C Act, the initial BPD fee for a product is due when the 
sponsor submits an investigational new drug (IND) application that FDA 
determines is intended to support a biosimilar biological product 
application or within 5 calendar days after FDA grants the first BPD 
meeting, whichever occurs first. A sponsor who has paid the initial BPD 
fee is considered to be participating in FDA's BPD program for that 
product.
    Under section 744H(a)(1)(B) of the FD&C Act, once a sponsor has 
paid the initial BPD fee for a product, the annual BPD fee is assessed 
beginning with the next fiscal year. The annual BPD fee is assessed for 
the product each fiscal year until the sponsor submits a marketing 
application for the product that is accepted for filing or the sponsor 
discontinues participation in FDA's BPD program for the product.
    Under section 744H(a)(1)(D) of the FD&C Act, if a sponsor has 
discontinued participation in FDA's BPD program and wants to re-engage 
with FDA on development of the product, the sponsor must pay a 
reactivation fee to resume participation in the program. The sponsor 
must pay the reactivation fee by the earlier of the following dates: No 
later than 5 calendar days after FDA grants the sponsor's request for a 
BPD meeting for that product or upon the date of submission by the 
sponsor of an IND describing an investigation that FDA determines is 
intended to support a biosimilar biological product application for 
that product. The sponsor will be assessed an annual BPD fee beginning 
with the first fiscal year after payment of the reactivation fee.
    BsUFA II also authorizes fees for certain biosimilar biological 
product applications and for each biosimilar biological product 
identified in an approved biosimilar biological product application 
(section 744H(a)(2) and (3) of the FD&C Act). Under certain conditions, 
FDA will grant a small business a waiver from its first biosimilar 
biological product application fee (section 744H(d)(1) of the FD&C 
Act).
    For FY 2018 through FY 2022, the base revenue amounts for the total 
revenues from all BsUFA fees are established by BsUFA II. For FY 2020, 
the base revenue amount is the FY 2019 inflation adjusted fee revenue 
amount of $40,947,463. The FY 2020 base revenue amount is to be 
adjusted for inflation and may be reduced, as appropriate, for long-
term financial planning purposes.
    This document provides fee rates for FY 2020 for the initial and 
annual BPD fee ($117,987), for the reactivation fee ($235,975), for an 
application requiring clinical data ($1,746,745), for an application 
not requiring clinical data ($873,373), and for the program fee 
($304,162). These fees are effective on October 1, 2019, and will 
remain in effect through September 30, 2020. For applications that are 
submitted on or after October 1, 2019, the new fee schedule must be 
used.

II. Fee Revenue Amount for FY 2020

    The base revenue amount for FY 2020 is $40,947,463 prior to 
adjustments for inflation and operating reserves (see section 
744H(c)(1) and (3) of the FD&C Act).

A. FY 2020 Statutory Fee Revenue Adjustments for Inflation

    BsUFA II specifies that the $40,947,463 is to be adjusted for 
inflation increases for FY 2020 using two separate adjustments--one for 
personnel compensation and benefits (PC&B) and one for non-PC&B costs 
(see section 744H(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) positions at FDA for the first 3 of 
the preceding 4 FYs,

[[Page 37889]]

multiplied by the proportion of PC&B costs to total FDA costs of the 
process for the review of biosimilar biological product applications 
for the first 3 of the preceding 4 FYs (see section 744H(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 3 of the 4 FYs preceding FY 
2020. The 3-year average is 3.1175 percent.

                                 Table 1--FDA PC&B Each Year and Percent Changes
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           Fiscal year                   2016                2017                2018           3-Year  average
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Total PC&B......................      $2,414,728,159      $2,581,551,000      $2,690,678,000  ..................
Total FTE.......................              16,381              17,022              17,023  ..................
PC&B per FTE....................            $147,408            $151,660            $158,061  ..................
Percent Change From Previous                 2.2474%             2.8845%             4.2206%             3.1175%
 Year...........................
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    The statute specifies that this 3.1175 percent be multiplied by the 
proportion of PC&B costs to the total FDA costs of the process for the 
review of biosimilar biological product applications. Table 2 shows the 
PC&B and the total obligations for the process for the review of 
biosimilar biological product applications for the first 3 of the 
preceding 4 FYs.

     Table 2--PC&B as a Percent of Total Cost of the Process for the Review of Biosimilar Biological Product
                                                  Applications
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                                                                                                      3-Year
                   Fiscal year                         2016            2017            2018           average
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Total PC&B......................................     $26,775,674     $30,707,050     $35,477,032  ..............
Total Costs.....................................     $45,569,430     $55,814,043     $62,604,122  ..............
PC&B Percent....................................        58.7580%        55.0167%        56.6688%        56.8145%
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    The payroll adjustment is 3.1175 percent from table 1 multiplied by 
56.8145 percent (or 1.7712 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 biosimilar 
biological product applications for the first 3 years of the preceding 
4 FYs (see section 744H(c)(1)(B) of the FD&C Act). As a result of a 
geographical revision made by the Bureau of Labor and Statistics in 
January 2018,\1\ the ``Washington-Baltimore, DC-MD-VA-WV'' index was 
discontinued and replaced with two separate indices (i.e., 
``Washington-Arlington-Alexandria, DC-VA-MD-WV'' and ``Baltimore-
Columbia-Towson, MD''). In order to continue applying a CPI which best 
reflects the geographic region in which FDA is headquartered and which 
provides the most current data available, the Washington-Arlington-
Alexandria index will be used in calculating the relevant adjustment 
factors for FY 2020 and subsequent years. Table 3 provides the summary 
data for the percent changes in the specified CPI for the Washington-
Arlington-Alexandria area. The data are published by the Bureau of 
Labor Statistics and can be found on its website at: https://data.bls.gov/pdq/SurveyOutputServlet?data_tool=dropmap&series_id=CUURS35ASA0,CUUSS35ASA0.

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    \1\ The Bureau of Labor Statistics' announcement of the 
geographical revision can be viewed at https://www.bls.gov/cpi/additional-resources/geographic-revision-2018.htm.

        Table 3--Annual and 3-Year Average Percent Change in CPI for Washington-Arlington-Alexandria Area
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                                                                                                      3-Year
                      Year                             2016            2017            2018           average
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Annual CPI......................................         253.422         256.221         261.445  ..............
Annual Percent Change...........................         1.1003%         1.1045%         2.0389%         1.4146%
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    The statute specifies that this 1.4146 percent be multiplied by the 
proportion of all costs other than PC&B to total costs of the process 
for the review of biosimilar biological product applications obligated. 
Since 56.8145 percent was obligated for PC&B (as shown in table 2), 
43.1855 percent is the portion of costs other than PC&B (100 percent 
minus 56.8145 percent equals 43.1855 percent). The non-payroll 
adjustment is 1.4146 percent times 43.1855 percent, 0.6109 percent.
    Next, we add the payroll adjustment (1.7712 percent) to the non-
payroll adjustment (0.6109 percent), for a total inflation adjustment 
of 2.3821 percent (rounded) for FY 2020.
    We then multiply the base revenue amount for FY 2020 ($40,947,463) 
by one plus the inflation adjustment percentage (1.023821), yielding an 
inflation-adjusted amount of $41,923,000 (rounded to the nearest 
thousand).

[[Page 37890]]

B. FY 2020 Statutory Fee Revenue Adjustments for Operating Reserve

    BsUFA II provides for an operating reserve adjustment to allow FDA 
to adjust the fee revenue and fees for any given fiscal year during 
BsUFA II, after FY 2018, to maintain an appropriate operating reserve 
of carryover user fees. Beginning in FY 2019, FDA may reduce the fee 
revenue and fees for long-term financial planning purposes. Once the 
capacity planning adjustment is effective (see section 744H(c)(2) of 
the FD&C Act), which FDA expects to occur in FY 2021, FDA also may, if 
necessary, increase the fee revenue and fees to maintain not more than 
21 weeks of operating reserve of carryover user fees.
    As described in the BsUFA II commitment letter, Biosimilar 
Biological Product Reauthorization Goals and Procedures Fiscal Years 
2018 Through 2022, FDA is committed to reducing the BsUFA carryover 
reserve to an amount no greater than 21 weeks of operating reserve of 
carryover user fees by the end of FY 2022. FDA has determined that it 
shall not apply an operating reserve adjustment to lower the FY 2020 
target revenue amount as FDA appears on track to reduce the carryover 
reserve to the committed level.

III. Fee Amounts for FY 2020

    Under section 744H(b)(3)(A) of the FD&C Act, FDA must determine the 
percentage of the total revenue amount for a fiscal year to be derived 
from: (1) Initial and annual BPD fees and reactivation fees; (2) 
biosimilar biological product application fees; and (3) biosimilar 
biological product program fees. In establishing the fee amounts for 
the third year of BsUFA II, FDA considered how best to balance the fee 
allocation to provide stable funding and reasonable fee amounts. In 
future years, FDA will consider the most appropriate means of 
allocating the fee amounts to collect the adjusted target revenue 
amount, subject to the relevant statutory provisions.

A. Application Fees

    In establishing the biosimilar biological product application fee 
amount for FY 2020, FDA considered historical program information as 
well as input from an annual industry survey. Based on the available 
information, FDA estimates it will receive 10 biosimilar biological 
product applications requiring clinical data for approval in FY 2020.
    FDA will maintain the biosimilar biological product application fee 
for FY 2020 at the same level as FY 2019, which is $1,746,745. This is 
estimated to provide a total of $17,467,450 representing 42 percent 
(rounded to the nearest whole number) of the FY 2020 target revenue 
amount.

B. Biosimilar Biological Product Program Fee

    Under BsUFA II, FDA assesses biosimilar biological product program 
fees (``program fees''). An applicant in a biosimilar biological 
product application shall not be assessed more than five program fees 
for a fiscal year for biosimilar biological products identified in a 
single biosimilar biological product application (see FD&C Act section 
744H(a)(3)(D)). Applicants are assessed a program fee for a fiscal year 
only for biosimilar biological products identified in a biosimilar 
biological product application approved as of October 1 of such fiscal 
year.
    Based on available information, FDA estimates that 42 program fees 
will be invoiced for FY 2020, including currently approved products and 
products with the potential to be approved in pending applications with 
goal dates in FY 2019. For products invoiced in the FY 2020 regular 
billing cycle, FDA anticipates that zero program fees will be refunded. 
This is based on observations dating to 2015, when the first biosimilar 
product was approved.
    FDA will maintain the biosimilar biological product program fee for 
FY 2020 at the same level as FY 2019, which is $304,162. This is 
estimated to provide a total of $12,774,804, representing 30 percent 
(rounded to the nearest whole number) of the FY 2020 target revenue 
amount.

C. Initial and Annual BPD Fees, Reactivation Fees

    To estimate the number of BPD fees to be paid in FY 2020, FDA must 
consider the number of new BPD programs, the number of current BPD 
programs, and the number of BPD programs that will be reactivated. 
These estimates provide information that, when aggregated, allows FDA 
to set BPD fees (initial BPD fees, annual BPD fees, reactivation fees).
    FDA uses internal data and a survey of BPD sponsors to estimate the 
total number of BPD programs for FY 2020. In FY 2020, FDA estimates 25 
new BPD programs, one reactivation (a single reactivation is weighted 
as two BPD fees), and 72 BPD programs to be invoiced for the annual BPD 
fee, for a total equivalent of 99 BPD fees assessed in FY 2020.
    The remainder of the target revenue of $11,680,746, or 28 percent 
(rounded to the nearest whole number), is to be collected from the BPD 
fees. Dividing this amount by the estimated 99 BPD fees to be paid 
equals an initial BPD and annual BPD fee amount of $117,987. The 
reactivation fee is set at twice the initial/annual BPD amount at 
$235,975. This represents a reduction of the BPD fees from the FY 2019 
levels.

IV. Fee Schedule for FY 2020

    The fee rates for FY 2020 are displayed in table 4.

                    Table 4--Fee Schedule for FY 2020
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                                                           Fee rates for
                      Fee category                            FY 2020
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Initial BPD.............................................        $117,987
Annual BPD..............................................         117,987
Reactivation............................................         235,975
Applications:
    Requiring clinical data.............................       1,746,745
    Not requiring clinical data.........................         873,373
Program.................................................         304,162
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V. Fee Payment Options and Procedures

A. Initial BPD, Reactivation, and Application Fees

    The fees established in the new fee schedule apply to FY 2020, 
i.e., the period from October 1, 2019, through September 30, 2020. The 
initial BPD fee for a product is due when the sponsor submits an IND 
that FDA determines is intended to support a biosimilar biological 
product application for the product or within 5 calendar days after FDA 
grants the first BPD meeting for the product, whichever occurs first. 
Sponsors who have discontinued participation in the BPD program for a 
product and seek to resume participation in such program must pay the 
reactivation fee by the earlier of the following dates: No later than 5 
calendar days after FDA grants the sponsor's request for a BPD meeting 
for that product or upon the date of submission by the sponsor of an 
IND describing an investigation that FDA determines is intended to 
support a biosimilar biological product application for that product.
    The application fee for a biosimilar biological product is due upon 
submission of the application (see section 744H(a)(2)(C) of the FD&C 
Act).
    To make a payment of the initial BPD, reactivation, or application 
fee, complete the Biosimilar User Fee Cover Sheet, available on FDA's 
website (https://www.fda.gov/bsufa) and generate a user fee 
identification (ID) number. Payment must be made in U.S. currency by 
electronic check, check, bank draft, U.S. postal money order, or

[[Page 37891]]

wire transfer. 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). 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 website after the user fee ID number is 
generated. 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, click ``Pay Now'' to be redirected to 
Pay.gov. Electronic payment options are based on the balance due. 
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.
    If a check, bank draft, or postal money order is submitted, make it 
payable to the order of the Food and Drug Administration and include 
the user fee ID number to ensure that the payment is applied to the 
correct fee(s). Payments can be mailed to: Food and Drug 
Administration, P.O. Box 979108, 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 979108, 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 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 979108) is written on the check, bank draft, or postal money 
order.
    For payments made by wire transfer, include the unique user fee ID 
number to ensure that the payment is applied to the correct fee(s). 
Without the unique user fee ID number, the payment may not be applied. 
The originating financial institution may charge a wire transfer fee. 
Include applicable wire transfer fees with payment to ensure fees are 
fully paid. Questions about wire transfer fees should be addressed to 
the financial institution. The following account information should be 
used to send payments by wire transfer: U.S. Department of the 
Treasury, TREAS NYC, 33 Liberty St., New York, NY 10045, Acct. No.: 
75060099, Routing No.: 021030004, SWIFT: FRNYUS33. FDA's tax 
identification number is 53-0196965.

B. Annual BPD and Program Fees

    FDA will issue invoices with payment instructions for FY 2020 
annual BPD and program fees under the new fee schedule in August 2019. 
Payment will be due on October 1, 2019. If sponsors join the BPD 
program after the annual BPD invoices have been issued in August 2019, 
FDA will issue invoices in December 2019 to firms subject to fees for 
FY 2020 that qualify for the annual BPD fee after the August 2019 
billing. FDA will issue invoices in December 2019 for any annual 
program fees for FY 2020 that qualify for fee assessments and were not 
issued in August 2019.

    Dated: July 29, 2019.
Lowell J. Schiller,
Principal Associate Commissioner for Policy.
[FR Doc. 2019-16495 Filed 8-1-19; 8:45 am]
 BILLING CODE 4164-01-P