Establishment of Prescription Drug User Fee Rates for Fiscal Year 2006, 44106-44109 [05-15159]
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Federal Register / Vol. 70, No. 146 / Monday, August 1, 2005 / Notices
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
Establishment of Prescription Drug
User Fee Rates for Fiscal Year 2006
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) 2006. The Federal Food,
Drug, and Cosmetic Act (the FD& C Act),
as amended by the Prescription Drug
User Fee Amendments of 2002 (Title 5
of the Public Health Security and
Bioterrorism Preparedness and
Response Act of 2002 (PHSBPRA or
PDUFA III)), authorizes FDA to collect
user fees for certain applications for
approval of drug and biological
products, on establishments where the
products are made, and on such
products. Base revenue amounts for
application fees, establishment fees, and
product fees for FY 2006 were
established by PDUFA III. Fees for
applications, establishments, and
products are to be established each year
by FDA so that revenues from each
category will approximate the revenue
levels established in the statute, after
those amounts have been first adjusted
for inflation and workload. This notice
establishes fee rates for FY 2006 for
application fees for an application
requiring clinical data ($767,400), for an
application not requiring clinical data or
a supplement requiring clinical data
($383,700), for establishment fees
($264,000), and for product fees
($42,130). These fees are effective on
October 1, 2005, and will remain in
effect through September 30, 2006. For
applications and supplements that are
submitted on or after October 1, 2005,
the new fee schedule must be used.
Invoices for establishment and product
fees for FY 2006 will be issued in
August 2005, using the new fee
schedule.
FOR FURTHER INFORMATION CONTACT:
Frank Claunts, Office of Management
(HFA–20), Food and Drug
Administration, 5600 Fishers Lane,
Rockville, MD 20857, 301–827–4427.
SUPPLEMENTARY INFORMATION:
I. Background
The FD&C Act, sections 735 and 736
(21 U.S.C. 379g and 379h), establishes
three different kinds of user fees. Fees
are assessed on: (1) Certain types of
applications and supplements for
approval of drug and biological
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products, (2) certain establishments
where such products are made, and (3)
certain products (21 U.S.C. 379h(a)).
When certain conditions are met, FDA
may waive or reduce fees (21 U.S.C.
379h(d)).
For FY 2003 through FY 2007 base
revenue amounts for application fees,
establishment fees, and product fees are
established by PDUFA III. Base revenue
amounts established for years after FY
2003 are subject to adjustment for
inflation and workload. Fees for
applications, establishments, and
products are to be established each year
by FDA so that revenues from each
category will approximate the revenue
levels established in the statute, after
those amounts have been first adjusted
for inflation and workload. The revenue
levels established by PDUFA III
continue the arrangement under which
one-third of the total user fee revenue is
projected to come from each of the three
types of fees: Application fees,
establishment fees, and product fees.
This notice establishes fee rates for FY
2006 for application, establishment, and
product fees. These fees are effective on
October 1, 2005, and will remain in
effect through September 30, 2006.
II. Revenue Amounts for FY 2006, and
Adjustments for Inflation and
Workload
A. Statutory Fee Revenue Amounts
PDUFA III specifies that the fee
revenue amount for FY 2006 for
application fees is $86,434,000 and for
both product and establishment fees is
$86,433,000, for a total of $259,300,000
from all 3 categories of fees (21 U.S.C.
379h(b)), before any adjustments are
made.
B. Inflation Adjustment to Fee Revenue
Amount
PDUFA III provides that fee revenue
amounts for each FY after 2003 shall be
adjusted for inflation. The adjustment
must reflect the greater of the following
percentage change: (1) The total
percentage change that occurred in the
Consumer Price Index (CPI) (all items;
U.S. city average) during the 12-month
period ending June 30 preceding the FY
for which fees are being set, or (2) the
total percentage pay change for the
previous FY for Federal employees
stationed in the Washington, DC
metropolitan area. PDUFA III provides
for this annual adjustment to be
cumulative and compounded annually
after FY 2003 (see 21 U.S.C. 379h(c)(1)).
The inflation increase for FY 2004
was 4.27 percent. This was the greater
of the CPI increase during the 12-month
period ending June 30 preceding the FY
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for which fees are being set (June 30,
2003—which was 2.11 percent) or the
increase in pay for the previous FY
(2003 in this case) for Federal
employees stationed in the Washington,
DC metropolitan area (4.27 percent).
The inflation increase for FY 2005
was 4.42 percent. This was the greater
of the CPI increase during the 12-month
period ending June 30 preceding the FY
for which fees are being set (June 30,
2004—which was 3.27 percent) or the
increase in pay for the previous FY
(2004 in this case) for Federal
employees stationed in the Washington,
DC metropolitan area (4.42 percent).
The inflation adjustment for FY 2006
is 3.71 percent. This is the greater of the
CPI increase during the 12-month
period ending June 30 preceding the FY
for which fees are being set (June 30,
2005—which was 2.53 percent) or the
increase in pay for FY 2005 for Federal
employees stationed in the Washington,
DC metropolitan area (3.71 percent).
Compounding these amounts (1.0427
times 1.0442 times 1.0371) yields a total
compounded inflation adjustment of
12.92 percent for FY 2006.
The inflation adjustment for each
category of fees for FY 2006 is the
statutory fee amount increased by 12.92
percent, the inflation adjuster for FY
2006. The FY 2006 inflation-adjusted
revenue amount for application fees is
$97,601,273 ($86,434,000 times 1.1292).
For both product and establishment fees
the inflation-adjusted revenue amount is
$97,600,144 ($86,433,000 times 1.1292).
The total inflation-adjusted fee revenue
amount for all three fee categories
combined is $292,801,561 in FY 2006.
C. Workload Adjustment to Inflation
Adjusted Fee Revenue Amount
For each FY beginning in FY 2004,
PDUFA III provides that fee revenue
amounts, after they have been adjusted
for inflation, shall be further adjusted to
reflect changes in workload for the
process for the review of human drug
applications (see 21 U.S.C. 379h(c)(2)).
The conference report accompanying
the Prescription Drug User Fee
Amendments of 2002, House of
Representatives Report number 107–
481, provides guidance on how the
workload adjustment provision of
PDUFA III is to be implemented.
Following that guidance, FDA
calculated the average number each of
the four types of applications specified
in the workload adjustment provision
(human drug applications, commercial
investigational new drug applications,
efficacy supplements, and
manufacturing supplements) received
over the 5-year period that ended on
June 30, 2002 (base years), and the
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Federal Register / Vol. 70, No. 146 / Monday, August 1, 2005 / Notices
average number of each of these types
of applications over the most recent 5year period that ended June 30, 2005.
The results of these calculations are
presented in the first 2 columns of table
1 of this document. Column 3 reflects
the percent change in workload over the
two 5-year periods. Column 4 shows the
weighting factor for each type of
application, reflecting how much of the
total FDA drug review workload was
accounted for by each type of
application in the table during the most
recent 5 years. This weighting factor
was developed by averaging data
generated in a 2002 KPMG study of
FDA’s drug review workload and data
from FDA’s time reporting systems to
submission data for the most recent 5year period. Column 5 of table 1 of this
document is the weighted percent
change in each category of workload,
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and was derived by multiplying the
weighting factor in each line in column
4 by the percent change from the base
years in column 3. At the bottom right
of the table the sum of the values in
column 5 is added, reflecting a total
increase in workload of 1.43 percent for
FY 2006 when compared to the base
years.
TABLE 1.—WORKLOAD ADJUSTER CALCULATION
Summary of Workload Adjustment Calculations
Application Type
Column 1 5-Year
Avg. Base Years
Column 2 Latest 5Year Avg.
Column 3 Percent
Change
Column 4
Weighting Factor
Column 5 Weighted
% Change
NDA’s/BLA’s
119.6
116.2
-2.8%
41.9%
-1.19%
Commercial IND’s
629.8
641.6
1.9%
41.8%
0.78%
Efficacy Supps.
159.2
166.0
4.3%
6.0%
0.26%
2,100.6
2,422.8
15.3%
10.3%
1.58%
Manufacturing Supps.
FY 2006 Workload Adjuster
1.43%
Increasing the inflation-adjusted
revenue amount for application fees of
$97,601,273 by the FY 2005 workload
adjuster (1.43 percent) results in an
increase of $1,395,698, for a total
inflation and workload adjusted
application fee revenue amount of
$98,996,971. Increasing the inflationadjusted revenue amount for
establishment and product fees, each of
which is $97,600,144, by the FY 2005
workload adjuster (1.43 percent) results
in an increase of $1,395,682, for a total
inflation and workload adjusted
application fee revenue amount of
$98,995,826 for each category. The total
FY 2006 inflation and workload
adjusted fee revenue target for all three
fee categories combined is
$296,988,623.
III. Application Fee Calculations
PDUFA III provides that the rates for
application, product, and establishment
fees be established 60 days before the
beginning of each FY (21 U.S.C.
379h(c)(4)). The fees are to be
established so that they will generate
the fee revenue amounts specified in the
received for FY 2001 through 2005. For
FY 2005, FDA is estimating the number
of fee-paying FAEs for the full year
based on the actual count for the first 9
months and estimating the number for
the final 3 months.
Table 2 of this document shows, in
column 1, the total number of each type
of FAE received in the first 9 months of
FY 2005, whether fees were paid or not.
Column 2 shows the number of FAEs for
which fees were waived or exempted
during this period, and column 3 shows
the number of fee-paying FAEs received
through June 30, 2005. Column 4
estimates the 12-month total fee-paying
FAEs for FY 2005 based on the
applications received through June 30,
2005. All of the counts are in FAEs. A
full application requiring clinical data
counts as one FAE. An application not
requiring clinical data counts one-half
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 it initially
paid a full application fee, or one-eighth
of an FAE if it initially paid one-half of
the full application fee amount.
statute, as adjusted for inflation and
workload.
A. Application Fee Revenues and
Application Fees
The application fee revenue amount
that PDUFA III established for FY 2006
is $98,996,971, as calculated in section
II.C of this document. Application fees
will be set to generate this amount.
B. Estimate of Number of Fee-Paying
Applications and Establishment of
Application Fees
For FY 2003 through FY 2007, FDA
will estimate the total number of feepaying full application equivalents
(FAEs) it expects to receive the next FY
by averaging the number of fee-paying
FAEs received in the five most recent
fiscal years. This use of the rolling
average of the five most recent fiscal
years is the same method that was
applied in making the workload
adjustment.
In estimating the number of feepaying FAE’s that FDA will receive in
FY 2006, the 5-year rolling average for
the most recent 5 years will be based on
actual counts of fee-paying FAEs
TABLE 2.—FY 2005 FULL APPLICATION EQUIVALENTS RECEIVED THROUGH JUNE 30, 2005, AND PROJECTED THROUGH
SEPTEMBER 30, 2005
Application or Action
Column 1 Total
Received Through
6/30/2005
Applications Requiring Clinical Data
70.0
23.0
47.0
62.7
4
0.0
4
5.3
Applications Not Requiring Clinical Data
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Column 2 Fee
Exempt or Waived
Through 6/30/2005
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Column 3 Total Fee
Paying Through
6/30/2005
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Column 4 12-Month
Projection
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Federal Register / Vol. 70, No. 146 / Monday, August 1, 2005 / Notices
TABLE 2.—FY 2005 FULL APPLICATION EQUIVALENTS RECEIVED THROUGH JUNE 30, 2005, AND PROJECTED THROUGH
SEPTEMBER 30, 2005—Continued
Column 1 Total
Received Through
6/30/2005
Application or Action
Supplements Requiring Clinical Data
Column 2 Fee
Exempt or Waived
Through 6/30/2005
45
Withdrawn or Refused to File
Column 3 Total Fee
Paying Through
6/30/2005
5.0
Column 4 12-Month
Projection
40
53.3
0.25
In the first 9 months of FY 2005 FDA
received 119.25 FAE’s, of which 91.25
were fee-paying. Based on data from the
last 7 fiscal years, on average, 25 percent
of the applications submitted each year
come in the final 3 months. Dividing
91.25 by 3 and multiplying by 4
extrapolates the amount to the full 12
months of the FY and projects the
number of fee-paying FAEs in FY 2005
at 121.6.
All pediatric supplements, which had
been exempt from fees prior to January
4, 2002, were required to pay fees
effective January 4, 2002. This is the
0.25
0.3
119.25
Total
0.0
28.0
91.25
121.6
result of section 5 of the Best
Pharmaceuticals for Children Act that
repealed the fee exemption for pediatric
supplements effective January 4, 2002.
Thus, in estimating FY 2006 fee-paying
receipts we must add all the pediatric
supplements that were previously
exempt from fees prior to January 4,
2002. The exempted number of FAEs for
pediatric supplements for FY 2001 and
FY 2002 respectively were 19 and 4.5.
Since fees on these supplements are
paid for pediatric applications
submitted in FY 2003 and beyond, the
number of pediatric supplement FAEs
exempted from fees each in both FY
2001 and FY 2002 (the years in the table
when fees were exempted) are added to
the total of fee-paying FAEs received
each year.
As table 3 of this document shows,
the average number of fee-paying FAEs
received annually in the most recent 5year period, assuming all pediatric
supplements had paid fees, and
including our estimate for FY 2005, is
129 FAEs. FDA will set fees for FY 2006
based on this estimate as the number of
full application equivalents that will
pay fees.
TABLE 3.—FEE-PAYING FULL APPLICATION EQUIVALENT—FIVE YEAR AVERAGE
Year
2001
Fee-Paying FAEs
2003
2004
2005
5-Year Avg.
107.6
The FY 2006 application fee is
estimated by dividing the average
number of full applications that paid
fees over the latest 5 years, 129, into the
fee revenue amount to be derived from
application fees in FY 2006,
$98,996,971. The result, rounded to the
nearest one hundred dollars, is a fee of
$767,400 per full application requiring
clinical data, and $383,700 per
application not requiring clinical data or
per supplement requiring clinical data.
IV. Adjustment for Excess Collections in
Previous Years
Under the provisions of PDUFA, as
amended, if the agency collects more
fees than were provided for in
appropriations in any year after 1997,
FDA is required to reduce its
anticipated fee collections in a
subsequent year by that amount (21
U.S.C. 379h(g)(4)).
In FY 1998, Congress appropriated a
total of $117,122,000 to FDA in PDUFA
fee revenue. To date, collections for FY
1998 total $117,737,470—a total of
$615,470 in excess of the appropriation
limit. This is the only FY since 1997 in
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Jkt 205001
119.5
145.1
121.6
124.3
4.5
0.0
0.0
0.0
4.7
126.6
Total
127.6
19.0
Exempt Pediatric Supplement FAEs
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2002
132.1
119.5
145.1
121.6
129.0
which FDA has collected more in
PDUFA fees than Congress
appropriated.
FDA also has some requests for
waivers or reductions of FY 1998 fees
that have been decided but that are
pending appeals. For this reason, FDA
is not reducing its FY 2006 fees to offset
excess collections at this time. An offset
will be considered in a future year, if
FDA still has collections in excess of
appropriations for FY 1998 after the
pending appeals for FY 1998 waivers
and reductions have been resolved.
V. Fee Calculations for Establishment
and Product Fees
A. Establishment Fees
At the beginning of FY 2005, the
establishment fee was based on an
estimate that 354 establishments would
be subject to and would pay fees. By the
end of FY 2005, FDA estimates that 400
establishments will have been billed for
establishment fees, before all decisions
on requests for waivers or reductions are
made. FDA again estimates that a total
of 25 establishment fee waivers or
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reductions will be made for FY 2005, for
a net of 375 fee-paying establishments.
FDA will use this same number again,
375, for its FY 2006 estimate of
establishments paying fees, after taking
waivers and reductions into account.
The fee per establishment is determined
by dividing the adjusted total fee
revenue to be derived from
establishments ($98,995,826) by the
estimated 375 establishments, for an
establishment fee rate for FY 2006 of
$264,000 (rounded to the nearest $100).
B. Product Fees
At the beginning of FY 2005, the
product fee was based on an estimate
that 2,225 products would be subject to
and pay product fees. By the end of FY
2005, FDA estimates that 2,390 products
will have been billed for product fees,
before all decisions on requests for
waivers or reductions are made.
Assuming that there will be about 40
waivers and reductions granted, FDA
estimates that 2,350 products will
qualify for product fees in FY 2005, after
allowing for waivers and reductions,
and will use this number for its FY 2006
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Federal Register / Vol. 70, No. 146 / Monday, August 1, 2005 / Notices
estimate. Accordingly, the FY 2006
product fee rate is determined by
dividing the adjusted total fee revenue
to be derived from product fees
($98,995,826) by the estimated 2,350
products for a FY 2006 product fee of
$42,130 (rounded to the nearest $10).
Dated: July 26, 2005.
Jeffrey Shuren,
Assistant Commissioner for Policy.
[FR Doc. 05–15159 Filed 7–29–05; 8:45 am]
VI. Fee Schedule for FY 2006
The fee rates for FY 2006 are set out
in table 4 of this document.
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
TABLE 4.—FY 2006 FEE RATES
FEE CATEGORY
FEE RATES
FOR FY 2006
[Docket No. FR–4975–N–22]
Notice of Proposed Information
Collection: Comment Request;
Mortgagee Request for Extension of
Time Requirements
Office of the Assistant
Secretary for Housing—Federal Housing
Commissioner, HUD.
ACTION: Notice.
AGENCY:
Applications
Requiring clinical data
Not requiring clinical data
Supplements requiring clinical data
Establishments
Products
$767,400
$383,700
$383,700
$264,000
$42,130
VII. Implementation of Adjusted Fee
Schedule
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 after September
30, 2005. Payment must be made in U.S.
currency by check, bank draft, or U.S.
postal money order payable to the order
of the Food and Drug Administration.
Please include the user fee ID number
on your check. Your payment can be
mailed to: Food and Drug
Administration, P.O. Box 360909,
Mellon Client Service Center—rm. 670,
500 Ross St., Pittsburgh, PA 15251–
6909.
If checks are to be sent by a courier,
the courier can deliver the checks to:
Food and Drug Administration
(360909), Mellon Client Service
Center—rm. 670, 500 Ross St.,
Pittsburgh, PA 15262–0001. (Note: This
Mellon Bank address is for courier
delivery only.)
Please make sure that the FDA post
office box number (P.O. Box 360909) is
written on the check. The tax
identification number of the Food and
Drug Administration is 530 19 6965.
B. Establishment and Product Fees
By August 31, 2005, FDA will issue
invoices for establishment and product
fees for FY 2006 under the new Fee
Schedule. Payment will be due on
October 1, 2005. FDA will issue
invoices in October 2006 for any
products and establishments subject to
fees for FY 2006 that qualify for fees
after the August 2005 billing.
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14:01 Jul 29, 2005
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SUMMARY: The proposed information
collection requirement described below
will be submitted to the Office of
Management and Budget (OMB) for
review, as required by the Paperwork
Reduction Act. The Department is
soliciting public comments on the
subject proposal.
DATES: Comments Due Date: September
30, 2005.
ADDRESSES: Interested persons are
invited to submit comments regarding
this proposal. Comments should refer to
the proposal by name and/or OMB
Control Number and should be sent to:
Wayne Eddins, Reports Management
Officer, Department of Housing and
Urban Development, 451 7th Street,
SW., L’Enfant Plaza Building, Room
8001, Washington, DC 20410 or
Wayne_Eddins@hud.gov.
FOR FURTHER INFORMATION CONTACT:
JeniRuth Nix, Program Analyst, Office of
Single Family Housing, Department of
Housing and Urban Development, 451
7th Street SW., Washington, DC 20410,
telephone (202) 708–1672 (this is not a
toll free number) for copies of the
proposed forms and other available
information.
The
Department is submitting the proposed
information collection to OMB for
review, as required by the Paperwork
Reduction Act of 1995 (44 U.S.C.
Chapter 35, as amended).
This Notice is soliciting comments
from members of the public and affected
agencies concerning the proposed
collection of information to: (1) Evaluate
whether the proposed collection is
necessary for the proper performance of
the functions of the agency, including
whether the information will have
practical utility; (2) Evaluate the
accuracy of the agency’s estimate of the
SUPPLEMENTARY INFORMATION:
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44109
burden of the proposed collection of
information; (3) Enhance the quality,
utility, and clarity of the information to
be collected; and (4) Minimize the
burden of the collection of information
on those who are to respond; including
the use of appropriate automated
collection techniques or other forms of
information technology, e.g., permitting
electronic submission of responses.
This Notice also lists the following
information:
Title of Proposal: Mortgagee’s Request
for Extension of Time Requirements.
OMB Control Number, if applicable:
2502–0436.
Description of the need for the
information and proposed use: In the
event of default, foreclosure, and
conveyance requirements of an insured
mortgage, the mortgagee is entitled to
receive insurance benefits from the date
of default to the date of insurance
benefits. In the event of preservation
and protection (P&P) requirements of
the fiscal integrity of a conveyed
property, the mortgagee is entitled to
receive insurance benefits for the
preservation of the property. HUD
regulations require that the mortgagee
take certain actions within specific time
limitations. Failure to meet such
limitations may result in curtailment of
interest payments. Information collected
here allows the Department to evaluate
requests for extension of the regulatory
time limits within which specific
foreclosure processing and P&P steps
must be taken.
Agency form numbers, if applicable:
HUD–50012.
Estimation of the total numbers of
hours needed to prepare the information
collection including number of
respondents, frequency of response, and
hours of response: An estimation of the
total numbers of hours needed to
prepare the information collection is
4,504, number of respondents is 146,
frequency of response is on occasion,
the total number of responses is 28,150,
and the estimated response time is 10
minutes.
Status of the proposed information
collection: This is a revision of a
currently approved collection.
Authority: The Paperwork Reduction Act
of 1995, 44 U.S.C., Chapter 35, as amended.
Dated: July 22, 2005.
Brian D. Montgomery,
Assistant Secretary for Housing-Federal
Housing Commissioner.
[FR Doc. E5–4079 Filed 7–29–05; 8:45 am]
BILLING CODE 4210–27–P
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[Federal Register Volume 70, Number 146 (Monday, August 1, 2005)]
[Notices]
[Pages 44106-44109]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-15159]
[[Page 44106]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
Establishment of Prescription Drug User Fee Rates for Fiscal Year
2006
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) 2006. The Federal
Food, Drug, and Cosmetic Act (the FD& C Act), as amended by the
Prescription Drug User Fee Amendments of 2002 (Title 5 of the Public
Health Security and Bioterrorism Preparedness and Response Act of 2002
(PHSBPRA or PDUFA III)), authorizes FDA to collect user fees for
certain applications for approval of drug and biological products, on
establishments where the products are made, and on such products. Base
revenue amounts for application fees, establishment fees, and product
fees for FY 2006 were established by PDUFA III. Fees for applications,
establishments, and products are to be established each year by FDA so
that revenues from each category will approximate the revenue levels
established in the statute, after those amounts have been first
adjusted for inflation and workload. This notice establishes fee rates
for FY 2006 for application fees for an application requiring clinical
data ($767,400), for an application not requiring clinical data or a
supplement requiring clinical data ($383,700), for establishment fees
($264,000), and for product fees ($42,130). These fees are effective on
October 1, 2005, and will remain in effect through September 30, 2006.
For applications and supplements that are submitted on or after October
1, 2005, the new fee schedule must be used. Invoices for establishment
and product fees for FY 2006 will be issued in August 2005, using the
new fee schedule.
FOR FURTHER INFORMATION CONTACT: Frank Claunts, Office of Management
(HFA-20), Food and Drug Administration, 5600 Fishers Lane, Rockville,
MD 20857, 301-827-4427.
SUPPLEMENTARY INFORMATION:
I. Background
The FD&C Act, sections 735 and 736 (21 U.S.C. 379g and 379h),
establishes three different kinds of user fees. Fees are assessed on:
(1) Certain types of applications and supplements for approval of drug
and biological products, (2) certain establishments where such products
are made, and (3) certain products (21 U.S.C. 379h(a)). When certain
conditions are met, FDA may waive or reduce fees (21 U.S.C. 379h(d)).
For FY 2003 through FY 2007 base revenue amounts for application
fees, establishment fees, and product fees are established by PDUFA
III. Base revenue amounts established for years after FY 2003 are
subject to adjustment for inflation and workload. Fees for
applications, establishments, and products are to be established each
year by FDA so that revenues from each category will approximate the
revenue levels established in the statute, after those amounts have
been first adjusted for inflation and workload. The revenue levels
established by PDUFA III continue the arrangement under which one-third
of the total user fee revenue is projected to come from each of the
three types of fees: Application fees, establishment fees, and product
fees.
This notice establishes fee rates for FY 2006 for application,
establishment, and product fees. These fees are effective on October 1,
2005, and will remain in effect through September 30, 2006.
II. Revenue Amounts for FY 2006, and Adjustments for Inflation and
Workload
A. Statutory Fee Revenue Amounts
PDUFA III specifies that the fee revenue amount for FY 2006 for
application fees is $86,434,000 and for both product and establishment
fees is $86,433,000, for a total of $259,300,000 from all 3 categories
of fees (21 U.S.C. 379h(b)), before any adjustments are made.
B. Inflation Adjustment to Fee Revenue Amount
PDUFA III provides that fee revenue amounts for each FY after 2003
shall be adjusted for inflation. The adjustment must reflect the
greater of the following percentage change: (1) The total percentage
change that occurred in the Consumer Price Index (CPI) (all items; U.S.
city average) during the 12-month period ending June 30 preceding the
FY for which fees are being set, or (2) the total percentage pay change
for the previous FY for Federal employees stationed in the Washington,
DC metropolitan area. PDUFA III provides for this annual adjustment to
be cumulative and compounded annually after FY 2003 (see 21 U.S.C.
379h(c)(1)).
The inflation increase for FY 2004 was 4.27 percent. This was the
greater of the CPI increase during the 12-month period ending June 30
preceding the FY for which fees are being set (June 30, 2003--which was
2.11 percent) or the increase in pay for the previous FY (2003 in this
case) for Federal employees stationed in the Washington, DC
metropolitan area (4.27 percent).
The inflation increase for FY 2005 was 4.42 percent. This was the
greater of the CPI increase during the 12-month period ending June 30
preceding the FY for which fees are being set (June 30, 2004--which was
3.27 percent) or the increase in pay for the previous FY (2004 in this
case) for Federal employees stationed in the Washington, DC
metropolitan area (4.42 percent).
The inflation adjustment for FY 2006 is 3.71 percent. This is the
greater of the CPI increase during the 12-month period ending June 30
preceding the FY for which fees are being set (June 30, 2005--which was
2.53 percent) or the increase in pay for FY 2005 for Federal employees
stationed in the Washington, DC metropolitan area (3.71 percent).
Compounding these amounts (1.0427 times 1.0442 times 1.0371) yields
a total compounded inflation adjustment of 12.92 percent for FY 2006.
The inflation adjustment for each category of fees for FY 2006 is
the statutory fee amount increased by 12.92 percent, the inflation
adjuster for FY 2006. The FY 2006 inflation-adjusted revenue amount for
application fees is $97,601,273 ($86,434,000 times 1.1292). For both
product and establishment fees the inflation-adjusted revenue amount is
$97,600,144 ($86,433,000 times 1.1292). The total inflation-adjusted
fee revenue amount for all three fee categories combined is
$292,801,561 in FY 2006.
C. Workload Adjustment to Inflation Adjusted Fee Revenue Amount
For each FY beginning in FY 2004, PDUFA III provides that fee
revenue amounts, after they have been adjusted for inflation, shall be
further adjusted to reflect changes in workload for the process for the
review of human drug applications (see 21 U.S.C. 379h(c)(2)).
The conference report accompanying the Prescription Drug User Fee
Amendments of 2002, House of Representatives Report number 107-481,
provides guidance on how the workload adjustment provision of PDUFA III
is to be implemented. Following that guidance, FDA calculated the
average number each of the four types of applications specified in the
workload adjustment provision (human drug applications, commercial
investigational new drug applications, efficacy supplements, and
manufacturing supplements) received over the 5-year period that ended
on June 30, 2002 (base years), and the
[[Page 44107]]
average number of each of these types of applications over the most
recent 5-year period that ended June 30, 2005.
The results of these calculations are presented in the first 2
columns of table 1 of this document. Column 3 reflects the percent
change in workload over the two 5-year periods. Column 4 shows the
weighting factor for each type of application, reflecting how much of
the total FDA drug review workload was accounted for by each type of
application in the table during the most recent 5 years. This weighting
factor was developed by averaging data generated in a 2002 KPMG study
of FDA's drug review workload and data from FDA's time reporting
systems to submission data for the most recent 5-year period. Column 5
of table 1 of this document is the weighted percent change in each
category of workload, and was derived by multiplying the weighting
factor in each line in column 4 by the percent change from the base
years in column 3. At the bottom right of the table the sum of the
values in column 5 is added, reflecting a total increase in workload of
1.43 percent for FY 2006 when compared to the base years.
Table 1.--Workload Adjuster Calculation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Summary of Workload Adjustment Calculations
---------------------------------------------------------------------------------------------------
Application Type Column 1 5-Year Column 2 Latest 5- Column 3 Percent Column 4 Weighting Column 5 Weighted
Avg. Base Years Year Avg. Change Factor % Change
--------------------------------------------------------------------------------------------------------------------------------------------------------
NDA's/BLA's 119.6 116.2 -2.8% 41.9% -1.19%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Commercial IND's 629.8 641.6 1.9% 41.8% 0.78%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Efficacy Supps. 159.2 166.0 4.3% 6.0% 0.26%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manufacturing Supps. 2,100.6 2,422.8 15.3% 10.3% 1.58%
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2006 Workload Adjuster 1.43%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Increasing the inflation-adjusted revenue amount for application
fees of $97,601,273 by the FY 2005 workload adjuster (1.43 percent)
results in an increase of $1,395,698, for a total inflation and
workload adjusted application fee revenue amount of $98,996,971.
Increasing the inflation-adjusted revenue amount for establishment and
product fees, each of which is $97,600,144, by the FY 2005 workload
adjuster (1.43 percent) results in an increase of $1,395,682, for a
total inflation and workload adjusted application fee revenue amount of
$98,995,826 for each category. The total FY 2006 inflation and workload
adjusted fee revenue target for all three fee categories combined is
$296,988,623.
III. Application Fee Calculations
PDUFA III provides that the rates for application, product, and
establishment fees be established 60 days before the beginning of each
FY (21 U.S.C. 379h(c)(4)). The fees are to be established so that they
will generate the fee revenue amounts specified in the statute, as
adjusted for inflation and workload.
A. Application Fee Revenues and Application Fees
The application fee revenue amount that PDUFA III established for
FY 2006 is $98,996,971, as calculated in section II.C of this document.
Application fees will be set to generate this amount.
B. Estimate of Number of Fee-Paying Applications and Establishment of
Application Fees
For FY 2003 through FY 2007, 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
five most recent fiscal years. This use of the rolling average of the
five most recent fiscal years is the same method that was applied in
making the workload adjustment.
In estimating the number of fee-paying FAE's that FDA will receive
in FY 2006, the 5-year rolling average for the most recent 5 years will
be based on actual counts of fee-paying FAEs received for FY 2001
through 2005. For FY 2005, FDA is estimating the number of fee-paying
FAEs for the full year based on the actual count for the first 9 months
and estimating the number for the final 3 months.
Table 2 of this document shows, in column 1, the total number of
each type of FAE received in the first 9 months of FY 2005, whether
fees were paid or not. Column 2 shows the number of FAEs for which fees
were waived or exempted during this period, and column 3 shows the
number of fee-paying FAEs received through June 30, 2005. Column 4
estimates the 12-month total fee-paying FAEs for FY 2005 based on the
applications received through June 30, 2005. All of the counts are in
FAEs. A full application requiring clinical data counts as one FAE. An
application not requiring clinical data counts one-half 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 it initially
paid a full application fee, or one-eighth of an FAE if it initially
paid one-half of the full application fee amount.
Table 2.--FY 2005 Full Application Equivalents Received through June 30, 2005, and Projected Through September
30, 2005
----------------------------------------------------------------------------------------------------------------
Column 1 Total Column 2 Fee Exempt Column 3 Total Fee
Application or Action Received Through6/ or Waived Through 6/ Paying Through 6/ Column 4 12-Month
30/2005 30/2005 30/2005 Projection
----------------------------------------------------------------------------------------------------------------
Applications Requiring 70.0 23.0 47.0 62.7
Clinical Data
----------------------------------------------------------------------------------------------------------------
Applications Not Requiring 4 0.0 4 5.3
Clinical Data
----------------------------------------------------------------------------------------------------------------
[[Page 44108]]
Supplements Requiring Clinical 45 5.0 40 53.3
Data
----------------------------------------------------------------------------------------------------------------
Withdrawn or Refused to File 0.25 0.0 0.25 0.3
----------------------------------------------------------------------------------------------------------------
Total 119.25 28.0 91.25 121.6
----------------------------------------------------------------------------------------------------------------
In the first 9 months of FY 2005 FDA received 119.25 FAE's, of
which 91.25 were fee-paying. Based on data from the last 7 fiscal
years, on average, 25 percent of the applications submitted each year
come in the final 3 months. Dividing 91.25 by 3 and multiplying by 4
extrapolates the amount to the full 12 months of the FY and projects
the number of fee-paying FAEs in FY 2005 at 121.6.
All pediatric supplements, which had been exempt from fees prior to
January 4, 2002, were required to pay fees effective January 4, 2002.
This is the result of section 5 of the Best Pharmaceuticals for
Children Act that repealed the fee exemption for pediatric supplements
effective January 4, 2002. Thus, in estimating FY 2006 fee-paying
receipts we must add all the pediatric supplements that were previously
exempt from fees prior to January 4, 2002. The exempted number of FAEs
for pediatric supplements for FY 2001 and FY 2002 respectively were 19
and 4.5. Since fees on these supplements are paid for pediatric
applications submitted in FY 2003 and beyond, the number of pediatric
supplement FAEs exempted from fees each in both FY 2001 and FY 2002
(the years in the table when fees were exempted) are added to the total
of fee-paying FAEs received each year.
As table 3 of this document shows, the average number of fee-paying
FAEs received annually in the most recent 5-year period, assuming all
pediatric supplements had paid fees, and including our estimate for FY
2005, is 129 FAEs. FDA will set fees for FY 2006 based on this estimate
as the number of full application equivalents that will pay fees.
Table 3.--Fee-Paying Full Application Equivalent--Five Year Average
----------------------------------------------------------------------------------------------------------------
Year 2001 2002 2003 2004 2005 5-Year Avg.
----------------------------------------------------------------------------------------------------------------
Fee-Paying FAEs 107.6 127.6 119.5 145.1 121.6 124.3
----------------------------------------------------------------------------------------------------------------
Exempt Pediatric 19.0 4.5 0.0 0.0 0.0 4.7
Supplement FAEs
----------------------------------------------------------------------------------------------------------------
Total 126.6 132.1 119.5 145.1 121.6 129.0
----------------------------------------------------------------------------------------------------------------
The FY 2006 application fee is estimated by dividing the average
number of full applications that paid fees over the latest 5 years,
129, into the fee revenue amount to be derived from application fees in
FY 2006, $98,996,971. The result, rounded to the nearest one hundred
dollars, is a fee of $767,400 per full application requiring clinical
data, and $383,700 per application not requiring clinical data or per
supplement requiring clinical data.
IV. Adjustment for Excess Collections in Previous Years
Under the provisions of PDUFA, as amended, if the agency collects
more fees than were provided for in appropriations in any year after
1997, FDA is required to reduce its anticipated fee collections in a
subsequent year by that amount (21 U.S.C. 379h(g)(4)).
In FY 1998, Congress appropriated a total of $117,122,000 to FDA in
PDUFA fee revenue. To date, collections for FY 1998 total
$117,737,470--a total of $615,470 in excess of the appropriation limit.
This is the only FY since 1997 in which FDA has collected more in PDUFA
fees than Congress appropriated.
FDA also has some requests for waivers or reductions of FY 1998
fees that have been decided but that are pending appeals. For this
reason, FDA is not reducing its FY 2006 fees to offset excess
collections at this time. An offset will be considered in a future
year, if FDA still has collections in excess of appropriations for FY
1998 after the pending appeals for FY 1998 waivers and reductions have
been resolved.
V. Fee Calculations for Establishment and Product Fees
A. Establishment Fees
At the beginning of FY 2005, the establishment fee was based on an
estimate that 354 establishments would be subject to and would pay
fees. By the end of FY 2005, FDA estimates that 400 establishments will
have been billed for establishment fees, before all decisions on
requests for waivers or reductions are made. FDA again estimates that a
total of 25 establishment fee waivers or reductions will be made for FY
2005, for a net of 375 fee-paying establishments. FDA will use this
same number again, 375, for its FY 2006 estimate of establishments
paying fees, after taking waivers and reductions into account. The fee
per establishment is determined by dividing the adjusted total fee
revenue to be derived from establishments ($98,995,826) by the
estimated 375 establishments, for an establishment fee rate for FY 2006
of $264,000 (rounded to the nearest $100).
B. Product Fees
At the beginning of FY 2005, the product fee was based on an
estimate that 2,225 products would be subject to and pay product fees.
By the end of FY 2005, FDA estimates that 2,390 products will have been
billed for product fees, before all decisions on requests for waivers
or reductions are made. Assuming that there will be about 40 waivers
and reductions granted, FDA estimates that 2,350 products will qualify
for product fees in FY 2005, after allowing for waivers and reductions,
and will use this number for its FY 2006
[[Page 44109]]
estimate. Accordingly, the FY 2006 product fee rate is determined by
dividing the adjusted total fee revenue to be derived from product fees
($98,995,826) by the estimated 2,350 products for a FY 2006 product fee
of $42,130 (rounded to the nearest $10).
VI. Fee Schedule for FY 2006
The fee rates for FY 2006 are set out in table 4 of this document.
Table 4.--FY 2006 Fee Rates
------------------------------------------------------------------------
FEE CATEGORY FEE RATES FOR FY 2006
------------------------------------------------------------------------
Applications
------------------------------------------------------------------------
Requiring clinical data $767,400
Not requiring clinical data $383,700
Supplements requiring clinical data $383,700
Establishments $264,000
Products $42,130
------------------------------------------------------------------------
VII. Implementation of Adjusted Fee Schedule
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 after September 30, 2005. Payment must be made
in U.S. currency by check, bank draft, or U.S. postal money order
payable to the order of the Food and Drug Administration. Please
include the user fee ID number on your check. Your payment can be
mailed to: Food and Drug Administration, P.O. Box 360909, Mellon Client
Service Center--rm. 670, 500 Ross St., Pittsburgh, PA 15251-6909.
If checks are to be sent by a courier, the courier can deliver the
checks to: Food and Drug Administration (360909), Mellon Client Service
Center--rm. 670, 500 Ross St., Pittsburgh, PA 15262-0001. (Note: This
Mellon Bank address is for courier delivery only.)
Please make sure that the FDA post office box number (P.O. Box
360909) is written on the check. The tax identification number of the
Food and Drug Administration is 530 19 6965.
B. Establishment and Product Fees
By August 31, 2005, FDA will issue invoices for establishment and
product fees for FY 2006 under the new Fee Schedule. Payment will be
due on October 1, 2005. FDA will issue invoices in October 2006 for any
products and establishments subject to fees for FY 2006 that qualify
for fees after the August 2005 billing.
Dated: July 26, 2005.
Jeffrey Shuren,
Assistant Commissioner for Policy.
[FR Doc. 05-15159 Filed 7-29-05; 8:45 am]
BILLING CODE 4160-01-S
