Outsourcing Facility Fee Rates for Fiscal Year 2024, 48878-48881 [2023-15909]
Download as PDF
<![CDATA[
48878
Federal Register / Vol. 88, No. 144 / Friday, July 28, 2023 / Notices
prompt you through the entry of
information about your establishment
and your devices. If you have any
problems with this process, email:
reglist@cdrh.fda.gov or call 301–796–
7400 for assistance. (Note: This email
address and this telephone number are
for assistance with establishment
registration only; they are not to be used
for questions related to other aspects of
medical device user fees.) Problems
with the eBER system should be
directed to https://
www.accessdata.fda.gov/scripts/email/
cber/bldregcontact.cfm or call 240–402–
8360.
D. Enter Your DFUF Order PIN and PCN
After completing your annual or
initial registration and device listing,
you will be prompted to enter your
DFUF order PIN and PCN, when
applicable. This process does not apply
to establishments engaged only in the
manufacture, preparation, propagation,
compounding, or processing of licensed
biologic devices. CBER will send
invoices for payment of the
establishment registration fee to such
establishments.
IX. Small Business Fee Reductions and
Fee Waivers
lotter on DSK11XQN23PROD with NOTICES1
To qualify for reduced fees for small
businesses or a small business fee
waiver, please see the requirements for
qualification provided in Section V.
How To Qualify as a Small Business for
Purposes of Medical Device Fees. The
applicant should submit a Small
Business Certification Request and the
supporting materials showing you
qualify as a small business at least 60
days before you send your submission
to FDA. FDA will review your
information and determine whether you
qualify as a small business eligible for
the reduced fee and/or fee waiver. If you
make a submission before FDA finds
that you qualify as a small business, you
must pay the standard (full) fee for that
submission.
If you need assistance, please contact
the Division of Industry and Consumer
Education at 800–638–2041 or 301–796–
7100 or email at DICE@fda.hhs.gov.
A. Premarket Approval Fee Reduction
or Waiver
A small business applicant may
request to pay a reduced rate for
premarket approval fees. An applicant
may also request a fee waiver for their
first premarket application or premarket
report (see 21 U.S.C. 379j(d)).
VerDate Sep<11>2014
17:16 Jul 27, 2023
Jkt 259001
B. Premarket Notification Submission
Fee Reduction
A small business applicant may
request to pay a reduced rate for a
premarket notification submission.
C. Annual Establishment Registration
Fee
There is no small business waiver for
the annual establishment registration
fee; all establishments pay the same fee.
X. Refunds
To qualify for consideration for a
refund, a person shall submit to FDA a
written request for a refund not later
than 180 days after such fee is due. FDA
has discretion to refund a fee or a
portion of the fee. A determination by
FDA concerning a refund shall not be
reviewable. For more information on
qualifying and submitting a refund, see
21 U.S.C. 379j(a)(2)(D).
Dated: July 21, 2023.
Lauren K. Roth,
Associate Commissioner for Policy.
[FR Doc. 2023–15919 Filed 7–27–23; 8:45 am]
BILLING CODE 4164–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA–2023–N–2895]
Outsourcing Facility Fee Rates for
Fiscal Year 2024
AGENCY:
Food and Drug Administration,
HHS.
ACTION:
Notice.
The Food and Drug
Administration (FDA) is announcing the
fiscal year (FY) 2024 rates for the
establishment and reinspection fees
related to entities that compound
human drugs and elect to register as
outsourcing facilities under the Federal
Food, Drug, and Cosmetic Act (FD&C
Act). The FD&C Act authorizes FDA to
assess and collect an annual
establishment fee from outsourcing
facilities, as well as a reinspection fee
for each reinspection of an outsourcing
facility. This document establishes the
FY 2024 rates for the small business
establishment fee ($6,196), the nonsmall business establishment fee
($20,036), and the reinspection fee
($18,588) for outsourcing facilities;
provides information on how the fees
for FY 2024 were determined; and
describes the payment procedures
outsourcing facilities should follow.
SUMMARY:
PO 00000
Frm 00093
Fmt 4703
Sfmt 4703
These fee rates are effective
October 1, 2023, and will remain in
effect through September 30, 2024.
ADDRESSES: Office of Financial
Management, Food and Drug
Administration, 4041 Powder Mill Rd.,
Rm. 61075, Beltsville, MD 20705–4304.
FOR FURTHER INFORMATION CONTACT: For
more information on human drug
compounding and outsourcing facility
fees, visit FDA’s website at: https://
www.fda.gov/drugs/guidancecompliance-regulatory-information/
human-drug-compounding.
For questions relating to this notice:
Olufunmilayo Ariyo, Office of Financial
Management, Food and Drug
Administration, 4041 Powder Mill Rd.,
Beltsville, MD 20705–4304, 240–402–
4989; or the User Fee Support Staff at
OO-OFBAP-OFM-UFFS-Government@
fda.hhs.gov.
DATES:
SUPPLEMENTARY INFORMATION:
I. Background
Under section 503B of the FD&C Act
(21 U.S.C. 353b), a human drug
compounder can register with FDA as
an ‘‘outsourcing facility.’’ Outsourcing
facilities, as defined in section
503B(d)(4), are facilities that meet all
the conditions described in section
503B(a), including registering with FDA
as an outsourcing facility and paying an
annual establishment fee. If the
conditions of section 503B are met, a
drug compounded by or under the
direct supervision of a licensed
pharmacist in an outsourcing facility is
exempt from three 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;
(2) section 505 (21 U.S.C. 355),
concerning the approval of human drug
products under new drug applications
or abbreviated new drug applications;
and (3) section 582 (21 U.S.C. 360eee–
1), concerning drug supply chain
security requirements. 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
requirements 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:
(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
E:\FR\FM\28JYN1.SGM
28JYN1
48879
Federal Register / Vol. 88, No. 144 / Friday, July 28, 2023 / Notices
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 outsourcing facilities
and adjustments required by law,
reinspection fees, how to submit
payment, the effect of failure to pay fees,
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 website at: https://
www.fda.gov/media/136683/download.
II. Fees for FY 2024
A. Methodology for Calculating FY 2024
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-payroll costs for the first 3 of the 4
previous fiscal years. The payroll
component of the annual inflation
adjustment is calculated by taking the
average change in FDA’s per full-time
equivalent (FTE) personnel
compensation and benefits (PC&B) in
the first 3 of the 4 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 3
of the 4 fiscal years preceding FY 2024.
The 3-year average is 3.9280 percent.
TABLE 1—FDA PC&BS EACH YEAR AND PERCENT CHANGE
FY 2020
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 3.9280 percent
should be multiplied by the proportion
FY 2021
$2,875,592,000
$17,535
$163,992
7.3063%
FY 2022
$3,039,513,000
$18,501
$164,289
0.1811%
$3,165,477,000
$18,474
$171,348
4.2967%
3-Year average
............................
............................
............................
3.9280%
of PC&B to total costs of an average FDA
FTE for the same 3 fiscal years.
TABLE 2—FDA PC&BS AS A PERCENT OF FDA TOTAL COSTS OF AN AVERAGE FTE
FY 2020
Total PC&B ......................................................................................
Total Costs .......................................................................................
PC&B Percent ..................................................................................
The payroll adjustment is 3.9280
percent multiplied by 49.3432 percent,
or 1.9382 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 2024 is equal to the average
annual percent change in the Consumer
Price Index (CPI) for urban consumers
FY 2021
$2,875,592,000
$6,039,320,747
47.6145%
FY 2022
$3,039,513,000
$6,105,480,000
49.7834%
(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 FDA FTE for the
same period.
Table 2 provides the summary data
for the percent change in the specified
$3,165,477,000
$6,251,981,000
50.6316%
3-Year average
............................
............................
49.3432%
CPI for U.S. cities. These data are
published by the Bureau of Labor
Statistics and can be found on its
website: https://data.bls.gov/cgi-bin/
surveymost?cu. The data can be viewed
by checking the box marked ‘‘U.S. city
average, All items—CUUR0000SA0’’
and then selecting ‘‘Retrieve Data.’’
TABLE 3—ANNUAL AND 3-YEAR AVERAGE PERCENT CHANGE IN U.S. CITY AVERAGE CPI
FY 2020
lotter on DSK11XQN23PROD with NOTICES1
Annual CPI .......................................................................................
Annual Percent Change ..................................................................
Section 744K(c)(2)(A)(iii) of the FD&C
Act specifies that this 4.6448 percent
should be multiplied by the proportion
of all non-PC&B costs to total costs of an
average FTE for the same 3 fiscal years.
The proportion of all non-PC&B costs to
total costs of an average FDA FTE for
FYs 2019 to 2021 is 50.6568 percent
(100 percent minus 49.3432 percent
equals 50.6568 percent). Therefore, the
VerDate Sep<11>2014
17:16 Jul 27, 2023
Jkt 259001
FY 2021
258.81
1.2337%
non-pay adjustment is 4.6448 percent
times 50.6568 percent, or 2.3529
percent.
The PC&B component (1.9382
percent) is added to the non-PC&B
component (2.3529 percent), for a total
inflation adjustment of 4.2911 percent
(rounded). Section 744K(c)(2)(A)(i) of
the FD&C Act specifies that one is
PO 00000
Frm 00094
Fmt 4703
Sfmt 4703
FY 2022
270.97
4.6980%
292.66
8.0027%
3-Year average
............................
4.6448%
added to that figure, making the
inflation adjustment 1.042911.
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 2024 (4.2911 percent) is
compounded by adding one to it, and
then multiplying it by one plus the
inflation adjustment factor for FY 2023
(18.8227 percent), as published in the
E:\FR\FM\28JYN1.SGM
28JYN1
48880
Federal Register / Vol. 88, No. 144 / Friday, July 28, 2023 / Notices
lotter on DSK11XQN23PROD with NOTICES1
Federal Register on July 28, 2022 (87 FR
45335). The result of this multiplication
of the inflation factors for the 8 years
since FY 2015 (1.042922 × 1.239215)
becomes the inflation adjustment for FY
2024. For FY 2024, the inflation
adjustment is 12.39215 percent
(rounded). We then add one, making the
FY 2024 inflation adjustment factor
1.1239215.
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 2024, FDA must
estimate: (1) the number of outsourcing
facilities that will pay the reduced fee
for small businesses for FY 2024 and (2)
the total fee revenue it would have
collected if no entity had qualified for
the small business exception (i.e., if
each entity that registers as an
outsourcing facility for FY 2024 were to
pay the inflation-adjusted fee amount of
$18,588).
With respect to (1), FDA estimates
that 10 entities will qualify for small
business exceptions and will pay the
reduced fee for FY 2024. With respect
to (2), to estimate the total number of
entities that will register as outsourcing
facilities for FY 2024, FDA used data
submitted by outsourcing facilities
through the voluntary registration
process, which began in December 2013.
Accordingly, FDA estimates that 79
outsourcing facilities, including 10
small businesses, will be registered with
FDA in FY 2024.
If the projected 79 outsourcing
facilities paid the full inflation-adjusted
fee of $18,588, this would result in total
revenue of $1,468,452 in FY 2024
($18,588 × 79). However, 10 of the
entities that are expected to register as
VerDate Sep<11>2014
17:16 Jul 27, 2023
Jkt 259001
outsourcing facilities for FY 2024 are
projected to qualify for the small
business exception and to pay one-third
of the full fee ($6,196 × 10), totaling
$61,960 instead of paying the full fee
($18,588 × 10), which would total
$185,880. This would leave a potential
shortfall of $123,920 ($185,880 minus
$61,960).
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. FDA has determined that it
is appropriate to credit excess fees
collected from the last completed fiscal
year, due to the inability to conclusively
determine the amount of excess fees
from the fiscal year that is in progress
at the time this calculation is made.
This crediting is done by comparing the
small business adjustment factor for the
last completed fiscal year, FY 2022
($2,056), to what would have been the
small business adjustment factor for FY
2022 ($1,731) if FDA had estimated
perfectly.
The calculation for what the small
business adjustment would have been if
FDA had estimated perfectly begins by
determining the total target collections
(15,000 × [inflation adjustment factor] ×
[number of registrants]). For the most
recent complete fiscal year, FY 2022,
this was $1,485,120 ($17,472 × 85). The
actual FY 2022 revenue from the 85
total registrants (i.e., 74 registrants
paying FY 2022 non-small business
establishment fee and 11 small business
registrants) paying establishment fees is
$1,356,992. $1,356,992 is calculated as
follows: (FY 2022 Non-Small Business
Establishment Fee adjusted for inflation
only) × (total number of registrants in
FY 2022 paying Non-Small Business
Establishment Fee) + (FY 2022 Small
Business Establishment Fee) × (total
number of small business registrants in
FY 2022 paying Small Business
Establishment Fee). $17,472 × 74 +
$5,824 × 11 = $1,356,992. This left a
shortfall of $128,128 from the estimated
total target collection amount
($1,485,120 minus $1,356,992). This
amount ($128,128) divided by the total
number of registrants in FY 2022 paying
Standard Establishment Fee (74) equals
$1,731.
The difference between the small
business adjustment factor used in FY
2022 and the small business adjustment
factor that would have been used had
FDA estimated perfectly is $325 ($2,056
minus $1,731). The $325 (rounded to
the nearest dollar) is then multiplied by
PO 00000
Frm 00095
Fmt 4703
Sfmt 4703
the number of actual registrants who
paid the standard fee for FY 2022 (74),
which provides us a total excess
collection of $24,050 in FY 2022.
Therefore, to calculate the small
business adjustment factor for FY 2024,
FDA subtracts $24,050 from the
projected shortfall of $123,920 for FY
2024 to arrive at the numerator for the
small business adjustment amount,
which equals $99,870. This number
divided by 69 (the number of expected
non-small businesses for FY 2024) is the
small business adjustment amount for
FY 2024, which is $1,447 (rounded to
the nearest dollar).
B. FY 2024 Rates for Small Business
Establishment Fee, Non-Small Business
Establishment Fee, and Reinspection
Fee
1. Establishment Fee for Qualified Small
Businesses 1
The amount of the establishment fee
for a qualified small business is equal to
$15,000 multiplied by the inflation
adjustment factor for that fiscal year,
divided by 3 (see section 744K(c)(4)(A)
and (c)(1)(A) of the FD&C Act). The
inflation adjustment factor for FY 2024
is 1.239215. See section II.A.1 of this
document for the methodology used to
calculate the FY 2024 inflation
adjustment factor. Therefore, the
establishment fee for a qualified small
business for FY 2024 is one third of
$18,588, which equals $6,196 (rounded
to the nearest dollar).
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 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 2024 is 1.239215. The
small business adjustment amount for
FY 2024 is $1,447. See section II.A.2 of
this document for the methodology used
1 To qualify for a small business reduction of the
FY 2024 establishment fee, entities had to submit
their exception requests by April 30, 2023. See
section 744K(c)(4)(B) of the FD&C Act. The time for
requesting a small business exception for FY 2024
has now passed. An entity that wishes to request
a small business exception for FY 2025 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
website at https://www.fda.gov/media/136683/
download.
E:\FR\FM\28JYN1.SGM
28JYN1
Federal Register / Vol. 88, No. 144 / Friday, July 28, 2023 / Notices
to calculate the small business
adjustment factor for FY 2024.
Therefore, the establishment fee for a
non-small business for FY 2024 is
$15,000 multiplied by 1.239215 plus
$1,447, which equals $20,036 (rounded
to the nearest dollar).
lotter on DSK11XQN23PROD with NOTICES1
3. Reinspection Fee
Section 744K(c)(1)(B) of the FD&C Act
provides that the amount of the FY 2024
reinspection fee is equal to $15,000,
multiplied by the inflation adjustment
factor for that fiscal year. The inflation
adjustment factor for FY 2024 is
1.239215. Therefore, the reinspection
fee for FY 2024 is $15,000 multiplied by
1.239215, which equals $18,588
(rounded to the nearest dollar). There is
no reduction in this fee for small
businesses.
result in a loss of status as an
outsourcing facility on January 1, 2024.
Entities should submit their registration
information no later than December 10,
2023, 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. Payments must be made within
30 days of the invoice date.
C. Fee Payment Procedures
1. The preferred payment method is
online using electronic check
(Automated Clearing House (ACH) also
C. Summary of FY 2024 Fee Rates
known as eCheck) or credit card
(Discover, VISA, MasterCard, American
TABLE 4—OUTSOURCING FACILITY
Express). Secure electronic payments
FEES
can be submitted using the User Fees
Payment Portal at https://
Qualified Small Business Estabuserfees.fda.gov/pay. (Note: only full
lishment Fee ...........................
$6,196.00 payments are accepted. No partial
Non-Small Business Establishpayments can be made online.) Once
ment Fee .................................
20,036.00
Reinspection Fee ........................
18,588.00 you search for your invoice, click ‘‘Pay
Now’’ to be redirected to Pay.gov.
Electronic payment options are based on
III. Fee Payment Options and
the balance due. Payment by credit card
Procedures
is available for balances less than
A. Establishment Fee
$25,000. If the balance exceeds this
amount, only the ACH option is
Once an entity submits registration
available. Payments must be made using
information and FDA has determined
U.S. bank accounts as well as U.S. credit
that the information is complete, the
cards.
entity will incur the annual
2. If a check, bank draft, or postal
establishment fee. FDA will send an
money order is submitted, make it
invoice to the entity, via email to the
payable to the order of the Food and
email address indicated in the
Drug Administration and include the
registration file. The invoice will
user fee ID number to ensure that the
contain information regarding the
payment is applied to the correct fee(s).
obligation incurred, the amount owed,
and payment procedures. A facility will Payments can be mailed to: Food and
Drug Administration, P.O. Box 979107,
not be registered as an outsourcing
St. Louis, MO 63197–9000. If a check,
facility until it has paid the annual
establishment fee under section 744K of bank draft, or money order is to be sent
by a courier that requests a street
the FD&C Act. Accordingly, it is
address, the courier should deliver your
important that facilities seeking to
payment to: U.S. Bank, Attention:
operate as outsourcing facilities pay all
Government Lockbox 979107, 1005
fees immediately upon receiving an
invoice. If an entity does not pay the full Convention Plaza, St. Louis, MO 63101.
(Note: This U.S. Bank address is for
invoiced amount within 15 calendar
courier delivery only. If you have any
days after FDA issues the invoice, FDA
questions concerning courier delivery,
will consider the submission of
contact the U.S. Bank at 314–418–4013.
registration information to have been
This telephone number is only for
withdrawn and adjust the invoice to
questions about courier delivery.) Please
reflect that no fee is due.
Outsourcing facilities that registered
make sure that the FDA post office box
in FY 2023 and wish to maintain their
number (P.O. Box 979107) is written on
status as an outsourcing facility in FY
the check, bank draft, or postal money
2024 must register during the annual
order.
registration period that lasts from
3. For payments made by wire
October 1, 2023, to December 31, 2023.
transfer, the invoice number must be
Failure to register and complete
included. Without the invoice number
payment by December 31, 2023, will
the payment may not be applied.
VerDate Sep<11>2014
17:16 Jul 27, 2023
Jkt 259001
PO 00000
Frm 00096
Fmt 4703
Sfmt 4703
48881
Regarding reinspection fees, if the
payment amount is not applied, the
invoice amount will be referred to
collections. The originating financial
institution may charge a wire transfer
fee. If the financial institution charges a
wire transfer fee, it is required that the
outsourcing facility add that amount to
the payment to ensure that the invoice
is paid in full. Use the following
account information when sending a
wire transfer: U.S. Dept of the Treasury,
TREAS NYC, 33 Liberty St., New York,
NY 10045, Acct. No. 75060099, Routing
No. 021030004, SWIFT: FRNYUS33. If
needed, FDA’s tax identification
number is 53–0196965.
Dated: July 24, 2023.
Lauren K. Roth,
Associate Commissioner for Policy.
[FR Doc. 2023–15909 Filed 7–27–23; 8:45 am]
BILLING CODE 4164–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA–2023–N–2850]
Prescription Drug User Fee Rates for
Fiscal Year 2024
AGENCY:
Food and Drug Administration,
HHS.
ACTION:
Notice.
The Food and Drug
Administration (FDA, Agency, or we) is
announcing the rates for prescription
drug user fees for fiscal year (FY) 2024.
The Federal Food, Drug, and Cosmetic
Act (FD&C Act), as amended by the
Prescription Drug User Fee
Amendments of 2022 (PDUFA VII),
authorizes FDA to collect application
fees for certain applications for the
review of human drug and biological
products and prescription drug program
fees for certain approved products. This
notice establishes the fee rates for FY
2024.
DATES: These fees apply to the period
from October 1, 2023, through
September 30, 2024.
FOR FURTHER INFORMATION CONTACT:
Olufunmilayo Ariyo, Office of Financial
Management, Food and Drug
Administration, 4041 Powder Mill Rd.,
6th Floor, Beltsville, MD 20705, 240–
402–4989; and the User Fee Support
Staff at OO-OFBAP-OFM-UFSSGovernment@fda.hhs.gov.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Background
Sections 735 and 736 of the FD&C Act
(21 U.S.C. 379g and 379h, respectively)
E:\FR\FM\28JYN1.SGM
28JYN1
]]>Agencies
[Federal Register Volume 88, Number 144 (Friday, July 28, 2023)]
[Notices]
[Pages 48878-48881]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-15909]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA-2023-N-2895]
Outsourcing Facility Fee Rates for Fiscal Year 2024
AGENCY: Food and Drug Administration, HHS.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: The Food and Drug Administration (FDA) is announcing the
fiscal year (FY) 2024 rates for the establishment and reinspection fees
related to entities that compound human drugs and elect to register as
outsourcing facilities under the Federal Food, Drug, and Cosmetic Act
(FD&C Act). The FD&C Act authorizes FDA to assess and collect an annual
establishment fee from outsourcing facilities, as well as a
reinspection fee for each reinspection of an outsourcing facility. This
document establishes the FY 2024 rates for the small business
establishment fee ($6,196), the non-small business establishment fee
($20,036), and the reinspection fee ($18,588) for outsourcing
facilities; provides information on how the fees for FY 2024 were
determined; and describes the payment procedures outsourcing facilities
should follow.
DATES: These fee rates are effective October 1, 2023, and will remain
in effect through September 30, 2024.
ADDRESSES: Office of Financial Management, Food and Drug
Administration, 4041 Powder Mill Rd., Rm. 61075, Beltsville, MD 20705-
4304.
FOR FURTHER INFORMATION CONTACT: For more information on human drug
compounding and outsourcing facility fees, visit FDA's website at:
https://www.fda.gov/drugs/guidance-compliance-regulatory-information/human-drug-compounding.
For questions relating to this notice: Olufunmilayo Ariyo, Office
of Financial Management, Food and Drug Administration, 4041 Powder Mill
Rd., Beltsville, MD 20705-4304, 240-402-4989; or the User Fee Support
Staff at [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
Under section 503B of the FD&C Act (21 U.S.C. 353b), a human drug
compounder can register with FDA as an ``outsourcing facility.''
Outsourcing facilities, as defined in section 503B(d)(4), are
facilities that meet all the conditions described in section 503B(a),
including registering with FDA as an outsourcing facility and paying an
annual establishment fee. If the conditions of section 503B are met, a
drug compounded by or under the direct supervision of a licensed
pharmacist in an outsourcing facility is exempt from three 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; (2) section 505
(21 U.S.C. 355), concerning the approval of human drug products under
new drug applications or abbreviated new drug applications; and (3)
section 582 (21 U.S.C. 360eee-1), concerning drug supply chain security
requirements. 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
requirements 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: (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
[[Page 48879]]
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 outsourcing facilities and
adjustments required by law, reinspection fees, how to submit payment,
the effect of failure to pay fees, 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 website at: https://www.fda.gov/media/136683/download.
II. Fees for FY 2024
A. Methodology for Calculating FY 2024 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-payroll costs for the first 3 of the 4 previous fiscal years. The
payroll component of the annual inflation adjustment is calculated by
taking the average change in FDA's per full-time equivalent (FTE)
personnel compensation and benefits (PC&B) in the first 3 of the 4
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 3 of the 4 fiscal
years preceding FY 2024. The 3-year average is 3.9280 percent.
Table 1--FDA PC&Bs Each Year and Percent Change
----------------------------------------------------------------------------------------------------------------
FY 2020 FY 2021 FY 2022 3-Year average
----------------------------------------------------------------------------------------------------------------
Total PC&B.............................. $2,875,592,000 $3,039,513,000 $3,165,477,000 ................
Total FTE............................... $17,535 $18,501 $18,474 ................
PC&B per FTE............................ $163,992 $164,289 $171,348 ................
Percent Change From Previous Year....... 7.3063% 0.1811% 4.2967% 3.9280%
----------------------------------------------------------------------------------------------------------------
Section 744K(c)(2)(A)(ii) of the FD&C Act specifies that this
3.9280 percent should be multiplied by the proportion of PC&B to total
costs of an average FDA FTE for the same 3 fiscal years.
Table 2--FDA PC&Bs as a Percent of FDA Total Costs of an Average FTE
----------------------------------------------------------------------------------------------------------------
FY 2020 FY 2021 FY 2022 3-Year average
----------------------------------------------------------------------------------------------------------------
Total PC&B.............................. $2,875,592,000 $3,039,513,000 $3,165,477,000 ................
Total Costs............................. $6,039,320,747 $6,105,480,000 $6,251,981,000 ................
PC&B Percent............................ 47.6145% 49.7834% 50.6316% 49.3432%
----------------------------------------------------------------------------------------------------------------
The payroll adjustment is 3.9280 percent multiplied by 49.3432
percent, or 1.9382 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 2024
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 FDA FTE for the same
period.
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 website: https://data.bls.gov/cgi-bin/surveymost?cu. The data can be viewed by checking
the box marked ``U.S. city average, All items--CUUR0000SA0'' and then
selecting ``Retrieve Data.''
Table 3--Annual and 3-Year Average Percent Change in U.S. City Average CPI
----------------------------------------------------------------------------------------------------------------
FY 2020 FY 2021 FY 2022 3-Year average
----------------------------------------------------------------------------------------------------------------
Annual CPI.............................. 258.81 270.97 292.66 ................
Annual Percent Change................... 1.2337% 4.6980% 8.0027% 4.6448%
----------------------------------------------------------------------------------------------------------------
Section 744K(c)(2)(A)(iii) of the FD&C Act specifies that this
4.6448 percent should be multiplied by the proportion of all non-PC&B
costs to total costs of an average FTE for the same 3 fiscal years. The
proportion of all non-PC&B costs to total costs of an average FDA FTE
for FYs 2019 to 2021 is 50.6568 percent (100 percent minus 49.3432
percent equals 50.6568 percent). Therefore, the non-pay adjustment is
4.6448 percent times 50.6568 percent, or 2.3529 percent.
The PC&B component (1.9382 percent) is added to the non-PC&B
component (2.3529 percent), for a total inflation adjustment of 4.2911
percent (rounded). Section 744K(c)(2)(A)(i) of the FD&C Act specifies
that one is added to that figure, making the inflation adjustment
1.042911.
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 2024
(4.2911 percent) is compounded by adding one to it, and then
multiplying it by one plus the inflation adjustment factor for FY 2023
(18.8227 percent), as published in the
[[Page 48880]]
Federal Register on July 28, 2022 (87 FR 45335). The result of this
multiplication of the inflation factors for the 8 years since FY 2015
(1.042922 x 1.239215) becomes the inflation adjustment for FY 2024. For
FY 2024, the inflation adjustment is 12.39215 percent (rounded). We
then add one, making the FY 2024 inflation adjustment factor 1.1239215.
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 2024, FDA must
estimate: (1) the number of outsourcing facilities that will pay the
reduced fee for small businesses for FY 2024 and (2) the total fee
revenue it would have collected if no entity had qualified for the
small business exception (i.e., if each entity that registers as an
outsourcing facility for FY 2024 were to pay the inflation-adjusted fee
amount of $18,588).
With respect to (1), FDA estimates that 10 entities will qualify
for small business exceptions and will pay the reduced fee for FY 2024.
With respect to (2), to estimate the total number of entities that will
register as outsourcing facilities for FY 2024, FDA used data submitted
by outsourcing facilities through the voluntary registration process,
which began in December 2013. Accordingly, FDA estimates that 79
outsourcing facilities, including 10 small businesses, will be
registered with FDA in FY 2024.
If the projected 79 outsourcing facilities paid the full inflation-
adjusted fee of $18,588, this would result in total revenue of
$1,468,452 in FY 2024 ($18,588 x 79). However, 10 of the entities that
are expected to register as outsourcing facilities for FY 2024 are
projected to qualify for the small business exception and to pay one-
third of the full fee ($6,196 x 10), totaling $61,960 instead of paying
the full fee ($18,588 x 10), which would total $185,880. This would
leave a potential shortfall of $123,920 ($185,880 minus $61,960).
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. FDA has determined
that it is appropriate to credit excess fees collected from the last
completed fiscal year, due to the inability to conclusively determine
the amount of excess fees from the fiscal year that is in progress at
the time this calculation is made. This crediting is done by comparing
the small business adjustment factor for the last completed fiscal
year, FY 2022 ($2,056), to what would have been the small business
adjustment factor for FY 2022 ($1,731) if FDA had estimated perfectly.
The calculation for what the small business adjustment would have
been if FDA had estimated perfectly begins by determining the total
target collections (15,000 x [inflation adjustment factor] x [number of
registrants]). For the most recent complete fiscal year, FY 2022, this
was $1,485,120 ($17,472 x 85). The actual FY 2022 revenue from the 85
total registrants (i.e., 74 registrants paying FY 2022 non-small
business establishment fee and 11 small business registrants) paying
establishment fees is $1,356,992. $1,356,992 is calculated as follows:
(FY 2022 Non-Small Business Establishment Fee adjusted for inflation
only) x (total number of registrants in FY 2022 paying Non-Small
Business Establishment Fee) + (FY 2022 Small Business Establishment
Fee) x (total number of small business registrants in FY 2022 paying
Small Business Establishment Fee). $17,472 x 74 + $5,824 x 11 =
$1,356,992. This left a shortfall of $128,128 from the estimated total
target collection amount ($1,485,120 minus $1,356,992). This amount
($128,128) divided by the total number of registrants in FY 2022 paying
Standard Establishment Fee (74) equals $1,731.
The difference between the small business adjustment factor used in
FY 2022 and the small business adjustment factor that would have been
used had FDA estimated perfectly is $325 ($2,056 minus $1,731). The
$325 (rounded to the nearest dollar) is then multiplied by the number
of actual registrants who paid the standard fee for FY 2022 (74), which
provides us a total excess collection of $24,050 in FY 2022.
Therefore, to calculate the small business adjustment factor for FY
2024, FDA subtracts $24,050 from the projected shortfall of $123,920
for FY 2024 to arrive at the numerator for the small business
adjustment amount, which equals $99,870. This number divided by 69 (the
number of expected non-small businesses for FY 2024) is the small
business adjustment amount for FY 2024, which is $1,447 (rounded to the
nearest dollar).
B. FY 2024 Rates for Small Business Establishment Fee, Non-Small
Business Establishment Fee, and Reinspection Fee
1. Establishment Fee for Qualified Small Businesses \1\
---------------------------------------------------------------------------
\1\ To qualify for a small business reduction of the FY 2024
establishment fee, entities had to submit their exception requests
by April 30, 2023. See section 744K(c)(4)(B) of the FD&C Act. The
time for requesting a small business exception for FY 2024 has now
passed. An entity that wishes to request a small business exception
for FY 2025 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 website
at https://www.fda.gov/media/136683/download.
---------------------------------------------------------------------------
The amount of the establishment fee for a qualified small business
is equal to $15,000 multiplied by the inflation adjustment factor for
that fiscal year, divided by 3 (see section 744K(c)(4)(A) and (c)(1)(A)
of the FD&C Act). The inflation adjustment factor for FY 2024 is
1.239215. See section II.A.1 of this document for the methodology used
to calculate the FY 2024 inflation adjustment factor. Therefore, the
establishment fee for a qualified small business for FY 2024 is one
third of $18,588, which equals $6,196 (rounded to the nearest dollar).
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 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 2024 is 1.239215. The
small business adjustment amount for FY 2024 is $1,447. See section
II.A.2 of this document for the methodology used
[[Page 48881]]
to calculate the small business adjustment factor for FY 2024.
Therefore, the establishment fee for a non-small business for FY 2024
is $15,000 multiplied by 1.239215 plus $1,447, which equals $20,036
(rounded to the nearest dollar).
3. Reinspection Fee
Section 744K(c)(1)(B) of the FD&C Act provides that the amount of
the FY 2024 reinspection fee is equal to $15,000, multiplied by the
inflation adjustment factor for that fiscal year. The inflation
adjustment factor for FY 2024 is 1.239215. Therefore, the reinspection
fee for FY 2024 is $15,000 multiplied by 1.239215, which equals $18,588
(rounded to the nearest dollar). There is no reduction in this fee for
small businesses.
C. Summary of FY 2024 Fee Rates
Table 4--Outsourcing Facility Fees
------------------------------------------------------------------------
------------------------------------------------------------------------
Qualified Small Business Establishment Fee.................. $6,196.00
Non-Small Business Establishment Fee........................ 20,036.00
Reinspection Fee............................................ 18,588.00
------------------------------------------------------------------------
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 email address indicated in the registration file. The
invoice will contain information regarding the obligation incurred, the
amount owed, and payment procedures. A facility will not be 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 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 2023 and wish to
maintain their status as an outsourcing facility in FY 2024 must
register during the annual registration period that lasts from October
1, 2023, to December 31, 2023. Failure to register and complete payment
by December 31, 2023, will result in a loss of status as an outsourcing
facility on January 1, 2024. Entities should submit their registration
information no later than December 10, 2023, 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.
Payments must be made within 30 days of the invoice date.
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. (Note: only full payments are accepted. No
partial payments can be made online.) Once you search for your invoice,
click ``Pay Now'' to be redirected to Pay.gov. Electronic payment
options are based on the balance due. Payment by credit card is
available for balances less than $25,000. If the balance exceeds this
amount, only the ACH option is available. Payments must be made using
U.S. bank accounts as well as U.S. credit cards.
2. If a check, bank draft, or postal money order is submitted, make
it payable to the order of the Food and Drug Administration and include
the user fee ID number to ensure that the payment is applied to the
correct fee(s). Payments can be mailed to: Food and Drug
Administration, P.O. Box 979107, St. Louis, MO 63197-9000. If a check,
bank draft, or money order is to be sent by a courier that requests a
street address, the courier should deliver your payment to: U.S. Bank,
Attention: Government Lockbox 979107, 1005 Convention Plaza, St. Louis,
MO 63101. (Note: This U.S. Bank address is for courier delivery only.
If you have any questions concerning courier delivery, contact the U.S.
Bank at 314-418-4013. This telephone number is only for questions about
courier delivery.) Please make sure that the FDA post office box number
(P.O. Box 979107) is written on the check, bank draft, or postal money
order.
3. For payments made by wire transfer, the invoice number must be
included. Without the invoice number the payment may not be applied.
Regarding reinspection fees, if the payment amount is not applied, the
invoice amount will be referred to collections. The originating
financial institution may charge a wire transfer fee. If the financial
institution charges a wire transfer fee, it is required that the
outsourcing facility add that amount to the payment to ensure that the
invoice is paid in full. Use the following account information when
sending a wire transfer: U.S. Dept of the Treasury, TREAS NYC, 33
Liberty St., New York, NY 10045, Acct. No. 75060099, Routing No.
021030004, SWIFT: FRNYUS33. If needed, FDA's tax identification number
is 53-0196965.
Dated: July 24, 2023.
Lauren K. Roth,
Associate Commissioner for Policy.
[FR Doc. 2023-15909 Filed 7-27-23; 8:45 am]
BILLING CODE 4164-01-P
