Outsourcing Facility Fee Rates for Fiscal Year 2016, 46007-46010 [2015-18916]

Download as PDF mstockstill on DSK4VPTVN1PROD with NOTICES Federal Register / Vol. 80, No. 148 / Monday, August 3, 2015 / Notices The application or supplement fee for a biosimilar biological product is due upon submission of the application or supplement. To make a payment of the initial BPD, reactivation, supplement, or application fee, complete the Biosimilar User Fee Cover Sheet, available on FDA’s Web site (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 wire transfer. 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 FDA’s Web site after completing the Biosimilar User Fee Cover Sheet and generating the user fee ID number. Please include the user fee ID number on your check, bank draft, or postal money order, and make it payable to the Food and Drug Administration. Your payment can be mailed to: Food and Drug Administration, P.O. Box 979108, St. Louis, MO 63197–9000. If you prefer to send a check by a courier such as Federal Express or United Parcel Service, the courier may deliver the check and printed copy of the cover sheet 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. Contact U.S. Bank at 314–418–4013 if you have any questions concerning 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. If paying by wire transfer, please reference your unique user fee ID number when completing your transfer. The originating financial institution may charge a wire transfer fee. Please ask your financial institution about the fee and include it with your payment to ensure that your fee is fully paid. The account information is as follows: New York Federal Reserve Bank, U.S. Department of Treasury, TREAS NYC, 33 Liberty St., New York, NY 10045, Acct. No.: 75060099, Routing No.: 021030004, SWIFT: FRNYUS33, Beneficiary: FDA, 8455 Colesville Rd., Silver Spring, MD 20993–0002. The tax identification number of FDA is 53–0196965. B. Annual BPD, Establishment, and Product Fees FDA will issue invoices for annual BPD, biosimilar biological product establishment, and biosimilar biological VerDate Sep<11>2014 18:35 Jul 31, 2015 Jkt 235001 product fees under the new fee schedule in August 2015. Payment instructions will be included in the invoices. Payment will be due on October 1, 2015. If sponsors join the BPD program after the annual BPD invoices have been issued in August 2015, FDA will issue invoices in November 2015 to firms subject to fees for FY 2016 that qualify for the annual BPD fee after the August 2015 billing. FDA will issue invoices in November 2016 for any annual products and establishments subject to fees for FY 2016 that qualify for fee assessments after the August 2015 billing. Dated: July 28, 2015. Leslie Kux, Associate Commissioner for Policy. [FR Doc. 2015–18908 Filed 7–31–15; 8:45 am] BILLING CODE 4164–01–P DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration [Docket No. FDA–2015–N–0007] Outsourcing Facility Fee Rates for Fiscal Year 2016 AGENCY: Food and Drug Administration, HHS. ACTION: Notice. The Food and Drug Administration (FDA) is announcing the fiscal year (FY) 2016 rates for the establishment and reinspection fees related to human drug compounding outsourcing facilities (outsourcing facilities) that elect to register under the Federal Food, Drug, and Cosmetic Act (the FD&C Act). The FD&C Act authorizes FDA to assess and collect an annual establishment fee from outsourcing facilities that have elected to register, as well as a reinspection fee for each reinspection of an outsourcing facility. This document establishes the FY 2016 rates for the small business establishment fee ($5,203), the nonsmall business establishment fee ($16,465), and the reinspection fee ($15,610) for outsourcing facilities; provides information on how the fees for FY 2016 were determined; and describes the payment procedures outsourcing facilities should follow. FOR FURTHER INFORMATION CONTACT: For information on pharmacy compounding and pharmacy compounding user fees: Visit FDA’s Web site at https://www.fda.gov/Drugs/ GuidanceComplianceRegulatory Information/PharmacyCompounding/ default.htm. For questions relating to this notice: Rachel Richter, Office of Financial SUMMARY: PO 00000 Frm 00076 Fmt 4703 Sfmt 4703 46007 Management, Food and Drug Administration, 8455 Colesville Rd., COLE–14216, Silver Spring, MD 20933– 0002, 301–796–7111. SUPPLEMENTARY INFORMATION: I. Background On November 27, 2013, President Obama signed the Drug Quality and Security Act (DQSA), legislation that contains important provisions relating to the oversight of compounding of human drugs. Title I of this law, the Compounding Quality Act, creates a new section 503B in the FD&C Act (21 U.S.C. 353b). Under section 503B of the FD&C Act, a human drug compounder can become an ‘‘outsourcing facility.’’ Outsourcing facilities, as defined in section 503B(d)(4) of the FD&C Act, are facilities that meet all of the conditions described in section 503B(a), including registering with FDA as an outsourcing facility and paying an annual establishment fee. If these conditions are satisfied, a drug compounded by or under the direct supervision of a licensed pharmacist in an outsourcing facility is exempt from two sections of the FD&C Act: (1) Section 502(f)(1) (21 U.S.C. 352(f)(1)) concerning the labeling of drugs with adequate directions for use and (2) section 505 (21 U.S.C. 355) concerning the approval of human drug products under new drug applications (NDAs) or abbreviated new drug applications (ANDAs). Drugs compounded in outsourcing facilities are not exempt from the requirements of section 501(a)(2)(B) of the FD&C Act (21 U.S.C. 351(a)(2)(B)) concerning current good manufacturing practice for drugs. Section 744K of the FD&C Act (21 U.S.C. 379j–62) authorizes FDA to assess and collect the following fees associated with outsourcing facilities that elect to register under section 503B of the FD&C Act: (1) An annual establishment fee from each outsourcing facility and (2) a reinspection fee from each outsourcing facility subject to a reinspection (see section 744K(a)(1) of the FD&C Act). Under statutorily defined conditions, a qualified applicant may pay a reduced small business establishment fee (see section 744K(c)(4) of the FD&C Act). FDA announced in the Federal Register of November 24, 2014 (79 FR 69856), the availability of a final guidance for industry entitled ‘‘Fees for Human Drug Compounding Outsourcing Facilities Under Sections 503B and 744K of the FD&C Act.’’ The guidance provides additional information on the annual fees for registered outsourcing facilities and adjustments required by law, reinspection fees, how to submit payment, the effect of failure to pay fees, E:\FR\FM\03AUN1.SGM 03AUN1 46008 Federal Register / Vol. 80, No. 148 / Monday, August 3, 2015 / Notices and how to qualify as a small business to obtain a reduction of the annual establishment fee. This guidance can be accessed on FDA’s Web site at https:// wcms.fda.gov/downloads/Drugs/ GuidanceComplianceRegulatory Information/Guidances/UCM391102. pdf. II. Fees for FY 2016 1 A. FY 2016 Rates for Small Business Establishment Fee, Non-Small Business Establishment Fee, and Reinspection Fee 1. Establishment Fee for Qualified Small Businesses 2 The amount of the establishment fee for a qualified small business fee is equal to $15,000 multiplied by the inflation adjustment factor for that fiscal year, divided by three (see section 744K(c)(4)(A) and (c)(1)(A) of the FD&C Act). The inflation adjustment factor for FY 2016 is 1.040646. See section II.B.1 for the methodology used to calculate the FY 2016 inflation adjustment factor. Therefore, the establishment fee for a qualified small business for FY 2016 is one third of $15,610, which, rounded to the nearest dollar, equals $5,203. 2. Establishment Fee for Non-Small Businesses is no reduction in this fee for small businesses. Under section 744K(c) of the FD&C Act, the amount of the establishment fee for a non-small business fee is equal to $15,000 multiplied by the inflation adjustment factor for that fiscal year, plus the small business adjustment factor for that fiscal year, and plus or minus an adjustment factor to account for over- or under-collections due to the small business adjustment factor in the prior year. The inflation adjustment factor for FY 2016 is 1.040646. The small business adjustment amount for FY 2016 is $855. See section II.B.2 for the methodology used to calculate the small business adjustment factor for FY 2016. Therefore, the establishment fee for a non-small business for FY 2016 is $15,000 multiplied by 1.040646 plus $855, which equals $16,465.3. B. Methodology for Calculating FY 2016 Adjustment Factors 3. Reinspection Fee Section 744K(c)(1)(B) of the FD&C Act provides that the amount of the FY 2016 reinspection fee is equal to $15,000, multiplied by the inflation adjustment factor for that fiscal year. The inflation adjustment factor for FY 2016 is 1.040646. Therefore, the reinspection fee for FY 2016 is $15,000 multiplied by 1.040646, which equals $15,610. There 1. Inflation Adjustment Factor Section 744K(c)(2) of the FD&C Act specifies the annual inflation adjustment for outsourcing facility fees. The inflation adjustment has two components: One based on FDA’s payroll costs and one based on FDA’s non-pay costs for the first three of the four previous fiscal years. The payroll component of the annual inflation adjustment is calculated by taking the average change in the FDA’s per-full time equivalent (FTE) personnel compensation and benefits (PC&B) in the first three of the four previous fiscal years (see section 744K(c)(2)(A)(ii) of the FD&C Act). FDA’s total annual spending on PC&B is divided by the total number of FTEs per fiscal year to determine the average PC&B per FTE. Table 1 summarizes the actual cost and FTE data for the specified fiscal years, and provides the percent change from the previous fiscal year and the average percent change over the first three of the four fiscal years preceding FY 2016. The 3-year average is 2.2328 percent. TABLE 1—FDA PC&B’S EACH YEAR AND PERCENT CHANGE Fiscal year 2012 Total PC&B .............................................................................. Total FTE ................................................................................. PC&B per FTE ......................................................................... Percent change from previous year ........................................ Section 744K(c)(2)(A)(ii) of the FD&C Act specifies that this 2.2328 percent should be multiplied by the proportion $1,824,703,000 13,382 $136,355 3.1843% 2013 2014 $1,927,703,000 13,974 $137,949 1.1690% $2,054,937,000 14,555 $141,184 2.3451% 3-Year average .............................. .............................. .............................. 2.2328% of PC&B to total costs of an average FTE of FDA for the same three fiscal years. TABLE 2—FDA PC&B’S AS A PERCENT OF FDA TOTAL COSTS OF AN AVERAGE FTE Fiscal year 2012 mstockstill on DSK4VPTVN1PROD with NOTICES Total PC&B .............................................................................. Total Costs ............................................................................... PC&B Percent .......................................................................... $1,824,703,000 $3,550,496,000 51.3929% 2013 2014 $1,927,703,000 $4,151,343,000 46.4356% $2,054,937,000 4,298,476,000 47.8062% 3-Year average .............................. .............................. 48.5449% The payroll adjustment is 2.2328 percent multiplied by 48.5449 percent, or 1.0839 percent. Section 744K(c)(2)(A)(iii) of the FD&C Act specifies that the portion of the inflation adjustment for non-payroll costs for FY 2016 is equal to the average annual percent change in the Consumer Price Index (CPI) for urban consumers (U.S. City Average; 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 non-PC&B costs to total costs of an average FTE of the FDA for the same period. 1 FY 2016 runs from October 1, 2015, through September 30, 2016. 2 To qualify for a small business reduction of the FY 2016 establishment fee, entities had to submit their exception requests by April 30, 2015. See section 744K(c)(4)(B) of the FD&C Act. Although the time for requesting a small business exception for FY 2016 has now passed, an entity that wishes to request a small business exception for FY 2017 should consult section 744K(c)(4) of the FD&C Act and section III.D of FDA’s guidance for industry entitled ‘‘Fees for Human Drug Compounding Outsourcing Facilities Under Sections 503B and 744K of the FD&C Act,’’ which can be accessed on FDA’s Web site at https://wcms.fda.gov/downloads/ Drugs/GuidanceComplianceRegulatoryInformation/ Guidances/UCM391102.pdf. VerDate Sep<11>2014 18:35 Jul 31, 2015 Jkt 235001 PO 00000 Frm 00077 Fmt 4703 Sfmt 4703 E:\FR\FM\03AUN1.SGM 03AUN1 46009 Federal Register / Vol. 80, No. 148 / Monday, August 3, 2015 / Notices Table 2 provides the summary data for the percent change in the specified CPI for U.S. cities. These data are published by the Bureau of Labor Statistics and can be found on its Web site at https://data.bls.gov/cgi-bin/ surveymost?cu by checking the box marked ‘‘U.S. All items, 1982–84 = 100 ¥ CUUR0000SA0’’ and then clicking on the ‘‘Retrieve Data’’ button. TABLE 3—ANNUAL AND 3-YEAR AVERAGE PERCENT CHANGE IN U.S. CITY AVERAGE CPI Year 2012 Annual CPI ............................................................................... Annual Percent Change .......................................................... Section 744K(c)(2)(A)(iii) of the FD&C Act specifies that this 1.7188 percent should be multiplied by the proportion of all non-PC&B costs to total costs of an average FTE for the same three fiscal years. The proportion of all non-PC&B costs to total costs of an average FTE of FDA for FYs 2012 to 2014 is 51.4551 percent (100 percent ¥ 48.5449 percent = 51.4551 percent). Therefore, the nonpay adjustment is 1.7188 percent times 51.4551 percent, or 0.8844 percent. The PC&B component (1.0839 percent) is added to the non-PC&B component (0.8844 percent), for a total inflation adjustment of 1.9683 percent (rounded), and then one is added, making the inflation adjustment 1.019683. Section 744K(c)(2)(B) of the FD&C Act provides for this inflation adjustment to be compounded after FY 2015. This factor for FY 2016 (1.9683 percent) is compounded by adding one to it, and then multiplying it by one plus the inflation adjustment factor for FY 2015 (2.0558 percent), as published in the Federal Register of August 1, 2014 (79 FR 44805). The result of this multiplication of the inflation factors for the 1 year since FY 2015 (1.019683 × 1.020558) becomes the inflation adjustment for FY 2016. For FY 2016, the inflation adjustment is 4.0646 percent (rounded). We then add one, making the FY 2016 inflation adjustment factor 1.040646. mstockstill on DSK4VPTVN1PROD with NOTICES 2. Small Business Adjustment Factor Section 744K(c)(3) of the FD&C Act specifies that in addition to the inflation adjustment factor, the establishment fee for non-small businesses is to be further adjusted for a small business adjustment factor. Section 744K(c)(3)(B) of the FD&C Act provides that the small business adjustment factor is the adjustment to the establishment fee for non-small businesses that is necessary to achieve total fees equaling the amount that FDA would have collected if no entity qualified for the small business exception in section 744K(c)(4) of the FD&C Act. Additionally, section 744K(c)(5)(A) states that in establishing VerDate Sep<11>2014 18:35 Jul 31, 2015 Jkt 235001 229.594 2.0694% 2013 232.957 1.4648% the small business adjustment factor for a fiscal year, FDA shall provide for the crediting of fees from the previous year to the next year if FDA overestimated the amount of the small business adjustment factor for such previous fiscal year. Therefore, to calculate the small business adjustment to the establishment fee for non-small businesses for FY 2016, FDA must estimate: (1) The number of outsourcing facilities that will pay the reduced fee for small businesses for FY 2016 and (2) the total fee revenue it would have collected if no entity had qualified for the small business exception (i.e., if each outsourcing facility that registers for FY 2016 were to pay the inflationadjusted fee amount of $15,610). With respect to (1), FDA estimates that eight entities will qualify for small business exceptions and will pay the reduced fee for FY 2016. With respect to (2), to estimate the total number of outsourcing facilities that will register for FY 2016, FDA used data submitted by outsourcing facilities through the voluntary registration process, which began in December 2013. Accordingly, FDA estimates that 55 outsourcing facilities, including 8 small businesses, will register with FDA in FY 2016. If the projected 55 outsourcing facilities paid the full inflation-adjusted fee of $15,610, this would result in total revenue of $858,550 in FY 2016 ($15,610 × 55). However, because 8 of the outsourcing facilities expected to register for FY 2016 are estimated to qualify for the small business exception and will pay one-third of the full fee ($5,203 × 8), totaling $41,624 instead of paying the full fee ($15,610 × 8), which totals $124,880. This would leave a shortfall of $83,256 ($124,880 ¥ $41,624). Additionally, section 744K(c)(5)(A) of the FD&C Act states that in establishing the small business adjustment factor for a fiscal year, FDA shall provide for the crediting of fees from the previous year to the next year if FDA overestimated the amount of the small business adjustment factor for such previous PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 3-Year average 2014 236.736 1.6222% .............................. 1.7188% fiscal year. For each year, total target collections are calculated as (15,000 × [inflation adjustment factor] × [number of registrants]). This would have been $887,864 for FY 2015 ($15,308 × 58). However, because FDA did not have the exact number of registrants and had to rely on estimates of the number of small businesses and non-small businesses that would register in FY 2015, FDA’s FY 2015 small business adjustment factor resulted in excess collections of $43,094 ($930,958 ¥ $887,864) as of June 30, 2015.3 Therefore, to calculate the small business adjustment factor for FY 2016, FDA subtracts the $43,094 overage from FY 2015 from the $83,256 projected shortfall for FY 2016 to arrive at the numerator for the small business adjustment amount, which equals $40,162. This number divided by 47 (the number of expected non-small businesses for FY 2016) is the small business adjustment amount for FY 2016, which is $855. Therefore, the establishment fee for a non-small business for FY 2016 is $15,000 multiplied by 1.040646 plus $855, which equals $16,465. C. Summary of FY 2016 Fee Rates TABLE 4—OUTSOURCING FACILITY FEES Qualified Small Business Establishment Fee ................ Non-Small Business Establishment Fee ..................... Reinspection Fee .................. $5,203 16,465 15,610 III. Fee Payment Options and Procedures A. Establishment Fee Once an entity submits registration information and FDA has determined that the information is complete, the entity will incur the annual establishment fee. FDA will send an invoice to the entity, via email to the 3 If FDA receives additional excess collections for FY 2015 after June 30, 2015, then FDA will credit this amount when it establishes the small business adjustment factor for FY 2017. E:\FR\FM\03AUN1.SGM 03AUN1 46010 Federal Register / Vol. 80, No. 148 / Monday, August 3, 2015 / Notices email address indicated in the registration file, or via regular mail if email is not an option. The invoice will contain information regarding the obligation incurred, the amount owed, and payment procedures. A facility will not be deemed registered as an outsourcing facility until it has paid the annual establishment fee under section 744K of the FD&C Act. Accordingly, it is important that facilities seeking to operate as registered outsourcing facilities pay all fees immediately upon receiving an invoice. If an entity does not pay the full invoiced amount within 15 calendar days after FDA issues the invoice, FDA will consider the submission of registration information to have been withdrawn and adjust the invoice to reflect that no fee is due. Outsourcing facilities that registered in FY 2015 and wish to maintain their status as an outsourcing facility in FY 2016 must register during the annual registration period that lasts from October 1, 2015, to December 31, 2015. Failure to register and complete payment by December 31, 2015, will result in a loss of status as an outsourcing facility on January 1, 2016. Entities should submit their registration information no later than December 10, 2015, to allow enough time for review of the registration information, invoicing, and payment of fees before the end of the registration period. mstockstill on DSK4VPTVN1PROD with NOTICES B. Reinspection Fee FDA will issue invoices for each reinspection after the conclusion of the reinspection, via email to the email address indicated in the registration file or via regular mail if email is not an option. Invoices must be paid within 30 days. C. Fee Payment Procedures 1. The preferred payment method is online using electronic check (Automated Clearing House (ACH) also known as eCheck) or credit card (Discover, VISA, MasterCard, American Express). Secure electronic payments can be submitted using the User Fees Payment Portal at https:// userfees.fda.gov/pay. Once you search for your invoice, click ‘‘Pay Now’’ to be redirected to Pay.gov. Note that electronic payment options are based on the balance due. Payment by credit card is available for balances less than $50,000. If the balance exceeds this amount, only the ACH option is available. Payments must be drawn on U.S. bank accounts as well as U.S. credit cards. 2. If paying with a paper check: Checks must be in U.S. currency from a U.S. bank and made payable to the VerDate Sep<11>2014 18:35 Jul 31, 2015 Jkt 235001 Food and Drug Administration. Payments can be mailed to: Food and Drug Administration, P.O. Box 956733, St. Louis, MO 63195–6733. If a check is sent by a courier that requests a street address, the courier can deliver the check to: U.S. Bank, Attn: Government Lockbox 956733, 1005 Convention Plaza, St. Louis, MO 63101. (Note: This U.S. Bank address is for courier delivery only; do not send mail to this address.) 3. If paying with a wire transfer: Use the following account information when sending a wire transfer: New York Federal Reserve Bank, U.S. Dept of Treasury, TREAS NYC, 33 Liberty St., New York, NY 10045, Acct. No. 75060099, Routing No. 021030004, SWIFT: FRNYUS33, Beneficiary: FDA, 8455 Colesville Rd., Silver Spring, MD 20993. The originating financial institution may charge a wire transfer fee. An outsourcing facility should ask its financial institution about the fee and add it to the payment to ensure that the order is fully paid. The tax identification number of FDA is 53– 0196965. Dated: July 28, 2015. Leslie Kux, Associate Commissioner for Policy. [FR Doc. 2015–18916 Filed 7–31–15; 8:45 am] BILLING CODE 4164–01–P DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration [Docket No. FDA–2015–N–2372] Promoting Semantic Interoperability of Laboratory Data; Public Workshop; Request for Comments AGENCY: Food and Drug Administration, HHS. Notice of public workshop; request for comments. ACTION: The Food and Drug Administration (FDA), the Centers for Disease Control and Prevention (CDC), and the National Library of Medicine (NLM) of the National Institutes of Health are announcing the following public workshop entitled ‘‘FDA/CDC/NLM Workshop on Promoting Semantic Interoperability of Laboratory Data.’’ The purpose of this workshop is to receive and discuss input from stakeholders regarding proposed approaches to promoting the semantic interoperability of laboratory data between in vitro diagnostic devices and database systems, including laboratory information systems and electronic health records. PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 Date and Time: The public workshop will be held on September 28, 2015, from 8 a.m. to 5 p.m. Location: The public workshop will be held at FDA White Oak Campus, 10903 New Hampshire Ave., Building 31 Conference Center, the Great Room (Rm. 1503), Silver Spring, MD 20993. Entrance for the public meeting participants (non-FDA employees) is through Building 1 where routine security check procedures will be performed. For parking and security information, please refer to https:// www.fda.gov/AboutFDA/ WorkingatFDA/BuildingsandFacilities/ WhiteOakCampusInformation/ ucm241740.htm. Contact Person: Steven Gitterman, Food and Drug Administration, Center for Devices and Radiological Health, Bldg. 66, Rm. 5518, 10903 New Hampshire Ave., Silver Spring, MD 20993–0002, 301–796–6694, FAX: 301– 847–2512, email: steven.gitterman@ fda.hhs.gov. Registration: Registration is free and available on a first-come, first-served basis. Persons interested in attending this public workshop must register online by 4 p.m. September 18, 2015. Early registration is recommended because facilities are limited and, therefore, FDA may limit the number of participants from each organization. If time and space permits, onsite registration on the day of the public workshop will be provided beginning at 7 a.m. (EDT). If you need special accommodations due to a disability, please contact Susan Monahan, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 32, Rm. 5231, Silver Spring, MD 20993–0002, 301–796–5661, email: susan.monahan@fda.hhs.gov no later than 4 p.m. on September 14, 2015. To register for the public workshop, please visit FDA’s Medical Devices News & Events—Workshops & Conferences calendar at https:// www.fda.gov/MedicalDevices/ NewsEvents/WorkshopsConferences/ default.htm. (Select this public workshop from the posted events list.) Please provide complete contact information for each attendee, including name, title and affiliation, address, email, and telephone number. Those without Internet access should contact Susan Monahan to register. Registrants will receive confirmation after they have been accepted. You will be notified if you are on a waiting list. Streaming Webcast of the Public Workshop: This public workshop will also be Webcast. Persons interested in viewing the Webcast must register E:\FR\FM\03AUN1.SGM 03AUN1

Agencies

[Federal Register Volume 80, Number 148 (Monday, August 3, 2015)]
[Notices]
[Pages 46007-46010]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-18916]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2015-N-0007]

Outsourcing Facility Fee Rates for Fiscal Year 2016

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is announcing the
fiscal year (FY) 2016 rates for the establishment and reinspection fees
related to human drug compounding outsourcing facilities (outsourcing
facilities) that elect to register under the Federal Food, Drug, and
Cosmetic Act (the FD&C Act). The FD&C Act authorizes FDA to assess and
collect an annual establishment fee from outsourcing facilities that
have elected to register, as well as a reinspection fee for each
reinspection of an outsourcing facility. This document establishes the
FY 2016 rates for the small business establishment fee ($5,203), the
non-small business establishment fee ($16,465), and the reinspection
fee ($15,610) for outsourcing facilities; provides information on how
the fees for FY 2016 were determined; and describes the payment
procedures outsourcing facilities should follow.

FOR FURTHER INFORMATION CONTACT:
For information on pharmacy compounding and pharmacy compounding
user fees: Visit FDA's Web site at https://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/PharmacyCompounding/default.htm.
For questions relating to this notice: Rachel Richter, Office of
Financial Management, Food and Drug Administration, 8455 Colesville
Rd., COLE-14216, Silver Spring, MD 20933-0002, 301-796-7111.

SUPPLEMENTARY INFORMATION:

I. Background

On November 27, 2013, President Obama signed the Drug Quality and
Security Act (DQSA), legislation that contains important provisions
relating to the oversight of compounding of human drugs. Title I of
this law, the Compounding Quality Act, creates a new section 503B in
the FD&C Act (21 U.S.C. 353b). Under section 503B of the FD&C Act, a
human drug compounder can become an ``outsourcing facility.''
Outsourcing facilities, as defined in section 503B(d)(4) of the
FD&C Act, are facilities that meet all of the conditions described in
section 503B(a), including registering with FDA as an outsourcing
facility and paying an annual establishment fee. If these conditions
are satisfied, a drug compounded by or under the direct supervision of
a licensed pharmacist in an outsourcing facility is exempt from two
sections of the FD&C Act: (1) Section 502(f)(1) (21 U.S.C. 352(f)(1))
concerning the labeling of drugs with adequate directions for use and
(2) section 505 (21 U.S.C. 355) concerning the approval of human drug
products under new drug applications (NDAs) or abbreviated new drug
applications (ANDAs). Drugs compounded in outsourcing facilities are
not exempt from the requirements of section 501(a)(2)(B) of the FD&C
Act (21 U.S.C. 351(a)(2)(B)) concerning current good manufacturing
practice for drugs.
Section 744K of the FD&C Act (21 U.S.C. 379j-62) authorizes FDA to
assess and collect the following fees associated with outsourcing
facilities that elect to register under section 503B of the FD&C Act:
(1) An annual establishment fee from each outsourcing facility and (2)
a reinspection fee from each outsourcing facility subject to a
reinspection (see section 744K(a)(1) of the FD&C Act). Under
statutorily defined conditions, a qualified applicant may pay a reduced
small business establishment fee (see section 744K(c)(4) of the FD&C
Act).
FDA announced in the Federal Register of November 24, 2014 (79 FR
69856), the availability of a final guidance for industry entitled
``Fees for Human Drug Compounding Outsourcing Facilities Under Sections
503B and 744K of the FD&C Act.'' The guidance provides additional
information on the annual fees for registered outsourcing facilities
and adjustments required by law, reinspection fees, how to submit
payment, the effect of failure to pay fees,

[[Page 46008]]

and how to qualify as a small business to obtain a reduction of the
annual establishment fee. This guidance can be accessed on FDA's Web
site at https://wcms.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM391102.pdf.

II. Fees for FY 2016 \1\
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\1\ FY 2016 runs from October 1, 2015, through September 30,
2016.
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A. FY 2016 Rates for Small Business Establishment Fee, Non-Small
Business Establishment Fee, and Reinspection Fee

1. Establishment Fee for Qualified Small Businesses \2\
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\2\ To qualify for a small business reduction of the FY 2016
establishment fee, entities had to submit their exception requests
by April 30, 2015. See section 744K(c)(4)(B) of the FD&C Act.
Although the time for requesting a small business exception for FY
2016 has now passed, an entity that wishes to request a small
business exception for FY 2017 should consult section 744K(c)(4) of
the FD&C Act and section III.D of FDA's guidance for industry
entitled ``Fees for Human Drug Compounding Outsourcing Facilities
Under Sections 503B and 744K of the FD&C Act,'' which can be
accessed on FDA's Web site at https://wcms.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM391102.pdf.
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The amount of the establishment fee for a qualified small business
fee is equal to $15,000 multiplied by the inflation adjustment factor
for that fiscal year, divided by three (see section 744K(c)(4)(A) and
(c)(1)(A) of the FD&C Act). The inflation adjustment factor for FY 2016
is 1.040646. See section II.B.1 for the methodology used to calculate
the FY 2016 inflation adjustment factor. Therefore, the establishment
fee for a qualified small business for FY 2016 is one third of $15,610,
which, rounded to the nearest dollar, equals $5,203.
2. Establishment Fee for Non-Small Businesses
Under section 744K(c) of the FD&C Act, the amount of the
establishment fee for a non-small business fee is equal to $15,000
multiplied by the inflation adjustment factor for that fiscal year,
plus the small business adjustment factor for that fiscal year, and
plus or minus an adjustment factor to account for over- or under-
collections due to the small business adjustment factor in the prior
year. The inflation adjustment factor for FY 2016 is 1.040646. The
small business adjustment amount for FY 2016 is $855. See section
II.B.2 for the methodology used to calculate the small business
adjustment factor for FY 2016. Therefore, the establishment fee for a
non-small business for FY 2016 is $15,000 multiplied by 1.040646 plus
$855, which equals $16,465.3.
3. Reinspection Fee
Section 744K(c)(1)(B) of the FD&C Act provides that the amount of
the FY 2016 reinspection fee is equal to $15,000, multiplied by the
inflation adjustment factor for that fiscal year. The inflation
adjustment factor for FY 2016 is 1.040646. Therefore, the reinspection
fee for FY 2016 is $15,000 multiplied by 1.040646, which equals
$15,610. There is no reduction in this fee for small businesses.

B. Methodology for Calculating FY 2016 Adjustment Factors

1. Inflation Adjustment Factor
Section 744K(c)(2) of the FD&C Act specifies the annual inflation
adjustment for outsourcing facility fees. The inflation adjustment has
two components: One based on FDA's payroll costs and one based on FDA's
non-pay costs for the first three of the four previous fiscal years.
The payroll component of the annual inflation adjustment is calculated
by taking the average change in the FDA's per-full time equivalent
(FTE) personnel compensation and benefits (PC&B) in the first three of
the four previous fiscal years (see section 744K(c)(2)(A)(ii) of the
FD&C Act). FDA's total annual spending on PC&B is divided by the total
number of FTEs per fiscal year to determine the average PC&B per FTE.
Table 1 summarizes the actual cost and FTE data for the specified
fiscal years, and provides the percent change from the previous fiscal
year and the average percent change over the first three of the four
fiscal years preceding FY 2016. The 3-year average is 2.2328 percent.

Table 1--FDA PC&B's Each Year and Percent Change
----------------------------------------------------------------------------------------------------------------
Fiscal year 2012 2013 2014 3-Year average
----------------------------------------------------------------------------------------------------------------
Total PC&B.......................... $1,824,703,000 $1,927,703,000 $2,054,937,000 .................
Total FTE........................... 13,382 13,974 14,555 .................
PC&B per FTE........................ $136,355 $137,949 $141,184 .................
Percent change from previous year... 3.1843% 1.1690% 2.3451% 2.2328%
----------------------------------------------------------------------------------------------------------------

Section 744K(c)(2)(A)(ii) of the FD&C Act specifies that this
2.2328 percent should be multiplied by the proportion of PC&B to total
costs of an average FTE of FDA for the same three fiscal years.

Table 2--FDA PC&B's as a Percent of FDA Total Costs of an Average FTE
----------------------------------------------------------------------------------------------------------------
Fiscal year 2012 2013 2014 3-Year average
----------------------------------------------------------------------------------------------------------------
Total PC&B.......................... $1,824,703,000 $1,927,703,000 $2,054,937,000 .................
Total Costs......................... $3,550,496,000 $4,151,343,000 4,298,476,000 .................
PC&B Percent........................ 51.3929% 46.4356% 47.8062% 48.5449%
----------------------------------------------------------------------------------------------------------------

The payroll adjustment is 2.2328 percent multiplied by 48.5449
percent, or 1.0839 percent.
Section 744K(c)(2)(A)(iii) of the FD&C Act specifies that the
portion of the inflation adjustment for non-payroll costs for FY 2016
is equal to the average annual percent change in the Consumer Price
Index (CPI) for urban consumers (U.S. City Average; 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 non-PC&B costs to total costs of an average FTE of the FDA for the
same period.

[[Page 46009]]

Table 2 provides the summary data for the percent change in the
specified CPI for U.S. cities. These data are published by the Bureau
of Labor Statistics and can be found on its Web site at https://data.bls.gov/cgi-bin/surveymost?cu by checking the box marked ``U.S.
All items, 1982-84 = 100 - CUUR0000SA0'' and then clicking on the
``Retrieve Data'' button.

Table 3--Annual and 3-Year Average Percent Change in U.S. City Average CPI
----------------------------------------------------------------------------------------------------------------
Year 2012 2013 2014 3-Year average
----------------------------------------------------------------------------------------------------------------
Annual CPI.......................... 229.594 232.957 236.736 .................
Annual Percent Change............... 2.0694% 1.4648% 1.6222% 1.7188%
----------------------------------------------------------------------------------------------------------------

Section 744K(c)(2)(A)(iii) of the FD&C Act specifies that this
1.7188 percent should be multiplied by the proportion of all non-PC&B
costs to total costs of an average FTE for the same three fiscal years.
The proportion of all non-PC&B costs to total costs of an average FTE
of FDA for FYs 2012 to 2014 is 51.4551 percent (100 percent - 48.5449
percent = 51.4551 percent). Therefore, the non-pay adjustment is 1.7188
percent times 51.4551 percent, or 0.8844 percent.
The PC&B component (1.0839 percent) is added to the non-PC&B
component (0.8844 percent), for a total inflation adjustment of 1.9683
percent (rounded), and then one is added, making the inflation
adjustment 1.019683.
Section 744K(c)(2)(B) of the FD&C Act provides for this inflation
adjustment to be compounded after FY 2015. This factor for FY 2016
(1.9683 percent) is compounded by adding one to it, and then
multiplying it by one plus the inflation adjustment factor for FY 2015
(2.0558 percent), as published in the Federal Register of August 1,
2014 (79 FR 44805). The result of this multiplication of the inflation
factors for the 1 year since FY 2015 (1.019683 x 1.020558) becomes the
inflation adjustment for FY 2016. For FY 2016, the inflation adjustment
is 4.0646 percent (rounded). We then add one, making the FY 2016
inflation adjustment factor 1.040646.
2. Small Business Adjustment Factor
Section 744K(c)(3) of the FD&C Act specifies that in addition to
the inflation adjustment factor, the establishment fee for non-small
businesses is to be further adjusted for a small business adjustment
factor. Section 744K(c)(3)(B) of the FD&C Act provides that the small
business adjustment factor is the adjustment to the establishment fee
for non-small businesses that is necessary to achieve total fees
equaling the amount that FDA would have collected if no entity
qualified for the small business exception in section 744K(c)(4) of the
FD&C Act. Additionally, section 744K(c)(5)(A) states that in
establishing the small business adjustment factor for a fiscal year,
FDA shall provide for the crediting of fees from the previous year to
the next year if FDA overestimated the amount of the small business
adjustment factor for such previous fiscal year.
Therefore, to calculate the small business adjustment to the
establishment fee for non-small businesses for FY 2016, FDA must
estimate: (1) The number of outsourcing facilities that will pay the
reduced fee for small businesses for FY 2016 and (2) the total fee
revenue it would have collected if no entity had qualified for the
small business exception (i.e., if each outsourcing facility that
registers for FY 2016 were to pay the inflation-adjusted fee amount of
$15,610).
With respect to (1), FDA estimates that eight entities will qualify
for small business exceptions and will pay the reduced fee for FY 2016.
With respect to (2), to estimate the total number of outsourcing
facilities that will register for FY 2016, FDA used data submitted by
outsourcing facilities through the voluntary registration process,
which began in December 2013. Accordingly, FDA estimates that 55
outsourcing facilities, including 8 small businesses, will register
with FDA in FY 2016.
If the projected 55 outsourcing facilities paid the full inflation-
adjusted fee of $15,610, this would result in total revenue of $858,550
in FY 2016 ($15,610 x 55). However, because 8 of the outsourcing
facilities expected to register for FY 2016 are estimated to qualify
for the small business exception and will pay one-third of the full fee
($5,203 x 8), totaling $41,624 instead of paying the full fee ($15,610
x 8), which totals $124,880. This would leave a shortfall of $83,256
($124,880 - $41,624).
Additionally, section 744K(c)(5)(A) of the FD&C Act states that in
establishing the small business adjustment factor for a fiscal year,
FDA shall provide for the crediting of fees from the previous year to
the next year if FDA overestimated the amount of the small business
adjustment factor for such previous fiscal year. For each year, total
target collections are calculated as (15,000 x [inflation adjustment
factor] x [number of registrants]). This would have been $887,864 for
FY 2015 ($15,308 x 58). However, because FDA did not have the exact
number of registrants and had to rely on estimates of the number of
small businesses and non-small businesses that would register in FY
2015, FDA's FY 2015 small business adjustment factor resulted in excess
collections of $43,094 ($930,958 - $887,864) as of June 30, 2015.\3\
---------------------------------------------------------------------------

\3\ If FDA receives additional excess collections for FY 2015
after June 30, 2015, then FDA will credit this amount when it
establishes the small business adjustment factor for FY 2017.
---------------------------------------------------------------------------

Therefore, to calculate the small business adjustment factor for FY
2016, FDA subtracts the $43,094 overage from FY 2015 from the $83,256
projected shortfall for FY 2016 to arrive at the numerator for the
small business adjustment amount, which equals $40,162. This number
divided by 47 (the number of expected non-small businesses for FY 2016)
is the small business adjustment amount for FY 2016, which is $855.
Therefore, the establishment fee for a non-small business for FY 2016
is $15,000 multiplied by 1.040646 plus $855, which equals $16,465.

C. Summary of FY 2016 Fee Rates

Table 4--Outsourcing Facility Fees
------------------------------------------------------------------------

------------------------------------------------------------------------
Qualified Small Business Establishment Fee.............. $5,203
Non-Small Business Establishment Fee.................... 16,465
Reinspection Fee........................................ 15,610
------------------------------------------------------------------------

III. Fee Payment Options and Procedures

A. Establishment Fee

Once an entity submits registration information and FDA has
determined that the information is complete, the entity will incur the
annual establishment fee. FDA will send an invoice to the entity, via
email to the

[[Page 46010]]

email address indicated in the registration file, or via regular mail
if email is not an option. The invoice will contain information
regarding the obligation incurred, the amount owed, and payment
procedures. A facility will not be deemed registered as an outsourcing
facility until it has paid the annual establishment fee under section
744K of the FD&C Act. Accordingly, it is important that facilities
seeking to operate as registered outsourcing facilities pay all fees
immediately upon receiving an invoice. If an entity does not pay the
full invoiced amount within 15 calendar days after FDA issues the
invoice, FDA will consider the submission of registration information
to have been withdrawn and adjust the invoice to reflect that no fee is
due.
Outsourcing facilities that registered in FY 2015 and wish to
maintain their status as an outsourcing facility in FY 2016 must
register during the annual registration period that lasts from October
1, 2015, to December 31, 2015. Failure to register and complete payment
by December 31, 2015, will result in a loss of status as an outsourcing
facility on January 1, 2016. Entities should submit their registration
information no later than December 10, 2015, to allow enough time for
review of the registration information, invoicing, and payment of fees
before the end of the registration period.

B. Reinspection Fee

FDA will issue invoices for each reinspection after the conclusion
of the reinspection, via email to the email address indicated in the
registration file or via regular mail if email is not an option.
Invoices must be paid within 30 days.

C. Fee Payment Procedures

1. The preferred payment method is online using electronic check
(Automated Clearing House (ACH) also known as eCheck) or credit card
(Discover, VISA, MasterCard, American Express). Secure electronic
payments can be submitted using the User Fees Payment Portal at https://userfees.fda.gov/pay. Once you search for your invoice, click ``Pay
Now'' to be redirected to Pay.gov. Note that electronic payment options
are based on the balance due. Payment by credit card is available for
balances less than $50,000. If the balance exceeds this amount, only
the ACH option is available. Payments must be drawn on U.S. bank
accounts as well as U.S. credit cards.
2. If paying with a paper check: Checks must be in U.S. currency
from a U.S. bank and made payable to the Food and Drug Administration.
Payments can be mailed to: Food and Drug Administration, P.O. Box
956733, St. Louis, MO 63195-6733. If a check is sent by a courier that
requests a street address, the courier can deliver the check to: U.S.
Bank, Attn: Government Lockbox 956733, 1005 Convention Plaza, St.
Louis, MO 63101. (Note: This U.S. Bank address is for courier delivery
only; do not send mail to this address.)
3. If paying with a wire transfer: Use the following account
information when sending a wire transfer: New York Federal Reserve
Bank, U.S. Dept of Treasury, TREAS NYC, 33 Liberty St., New York, NY
10045, Acct. No. 75060099, Routing No. 021030004, SWIFT: FRNYUS33,
Beneficiary: FDA, 8455 Colesville Rd., Silver Spring, MD 20993. The
originating financial institution may charge a wire transfer fee. An
outsourcing facility should ask its financial institution about the fee
and add it to the payment to ensure that the order is fully paid. The
tax identification number of FDA is 53-0196965.

Dated: July 28, 2015.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2015-18916 Filed 7-31-15; 8:45 am]
BILLING CODE 4164-01-P

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