Prescription Drug User Fee Rates for Fiscal Year 2025, 61474-61481 [2024-16875]

Agencies

• Food and Drug Administration
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 89, Number 147 (Wednesday, July 31, 2024)]
[Notices]
[Pages 61474-61481]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-16875]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2024-N-0007]


Prescription Drug User Fee Rates for Fiscal Year 2025

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The Food and Drug Administration (FDA, Agency, or we) is 
announcing the rates for prescription drug user fees for fiscal year 
(FY) 2025. 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 2025.

DATES: These fees apply to the period from October 1, 2024, through 
September 30, 2025.

FOR FURTHER INFORMATION CONTACT: Olufunmilayo Ariyo, Office of 
Financial Management, Food and Drug Administration, 10903 New Hampshire 
Ave, Silver Spring, MD 20903, 240-402-4989; and the User Fee Support 
Staff at [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    Sections 735 and 736 of the FD&C Act (21 U.S.C. 379g and 379h) 
establish two different kinds of user fees. Fees are assessed as 
follows: (1) application fees are assessed on certain types of 
applications for the review of human drug and biological products and 
(2) prescription drug program fees are assessed on certain approved 
products (section 736(a) of the FD&C Act). The statute also includes 
conditions under which such fees may be waived or reduced (section 
736(d) of the FD&C Act), or under which fee exceptions, refunds, or 
exemptions apply (sections 736(a)(1)(C) through (H), 736(a)(2)(B) 
through (C), and 736(k) of the FD&C Act).
    For FY 2023 through FY 2027, the base revenue amounts for the total 
revenues from all PDUFA fees are established by PDUFA VII. The base 
revenue amount for FY 2025 is $1,358,764,346. The FY 2025 base revenue 
amount is adjusted for inflation, strategic hiring and retention, and 
for the resource capacity needs for the process for the review of human 
drug applications (the capacity planning adjustment (CPA)). This amount 
is further adjusted to include the additional dollar amount as 
specified in the statute (see section 736(b)(1)(G) of the FD&C Act) to 
provide for additional full-time equivalent (FTE) positions to support 
PDUFA VII initiatives. If applicable, an operating reserve adjustment 
is added to provide sufficient operating reserves of carryover user 
fees. The amount from the preceding adjustments is then adjusted to 
provide for additional direct costs to fund PDUFA VII initiatives. Fee 
amounts are to be established each year so that revenues from 
application fees provide 20 percent of the total revenue, and 
prescription drug program fees provide 80 percent of the total revenue 
(see section 736(b)(2) of the FD&C Act).
    This document provides fee rates for FY 2025 for an application 
requiring covered clinical data \1\ ($4,310,002), for an application 
not requiring covered clinical data ($2,155,001), and for the 
prescription drug program fee ($403,889). These fees are effective on 
October 1, 2024, and will remain in effect through September 30, 2025. 
For applications that are submitted on or after October 1, 2024, the 
new fee schedule must be used.
---------------------------------------------------------------------------

    \1\ As used herein, ``covered clinical data'' is ``clinical data 
(other than bioavailability or bioequivalence studies) with respect 
to safety or effectiveness [that] are required for approval'' (see 
section 736(a)(1)(A) of the FD&C Act).
---------------------------------------------------------------------------

II. Fee Revenue Amount for FY 2025

    The base revenue amount for FY 2025 is $1,358,764,346 (see section 
736(b)(1)(A) and (b)(3) of the FD&C Act). This amount is prior to any 
adjustments made for inflation, the strategic hiring and retention 
adjustment, CPA, additional dollar amount, operating reserve adjustment 
(if applicable), and additional direct costs (see section 736(b)(1) of 
the FD&C Act).

A. FY 2025 Statutory Fee Revenue Adjustments for Inflation

    PDUFA VII specifies that the $1,358,764,346 is to be adjusted for 
inflation increases for FY 2025 using two separate adjustments: one for 
personnel compensation and benefits (PC&B) and one for non-PC&B costs 
(see section 736(c)(1) of the FD&C Act).
    The component of the inflation adjustment for payroll costs is the 
average annual percent change in the cost of all PC&B paid per FTE 
positions at FDA for the first 3 of the preceding 4 fiscal years, 
multiplied by the proportion of PC&B costs to total FDA costs of the 
process for the review of human drug applications for the first 3 of 
the preceding 4 fiscal years (see section 736(c)(1)(A) and (B)(i) of 
the FD&C Act).
    Table 1 summarizes the actual cost and FTE data for the specified 
fiscal years, provides the percent changes from the previous fiscal 
years, and provides the average percent changes over the first 3 of the 
4 fiscal years preceding FY 2025. The 3-year average is 3.8539 percent.

              Table 1--FDA Personnel Compensation and Benefits (PC&B) Each Year and Percent Changes
----------------------------------------------------------------------------------------------------------------
                                                  2021              2022              2023        3-Year average
----------------------------------------------------------------------------------------------------------------
Total PC&B................................    $3,039,513,000    $3,165,477,000    $3,436,513,000  ..............
Total FTEs................................            18,501            18,474            18,729  ..............
PC&B per FTE..............................          $164,289          $171,348          $183,486  ..............
Percent Change from Previous Year.........           0.1811%           4.2967%           7.0838%         3.8539%
----------------------------------------------------------------------------------------------------------------

    The statute specifies that this 3.8539 percent be multiplied by the 
proportion of PC&B costs to the total FDA costs of the process for the 
review of human drug applications. Table 2 shows the PC&B and the total 
obligations for the process for the review of human drug applications 
for the first 3 of the preceding 4 fiscal years.

[[Page 61475]]



        Table 2--PC&B as a Percent of Total Cost of the Process for the Review of Human Drug Applications
----------------------------------------------------------------------------------------------------------------
                                                  2021              2022              2023        3-Year average
----------------------------------------------------------------------------------------------------------------
Total PC&B (proportion of costs)..........      $959,387,333      $931,302,114    $1,040,590,183  ..............
Total Costs...............................    $1,499,064,056    $1,480,601,875    $1,686,733,841  ..............
PC&B percent..............................          63.9991%          62.9002%          61.6926%        62.8640%
----------------------------------------------------------------------------------------------------------------

    The payroll adjustment is 3.8539 percent from table 1 multiplied by 
62.8640 percent from table 2 resulting in 2.4227 percent.
    The statute specifies that the portion of the inflation adjustment 
for non-payroll costs is the average annual percent change that 
occurred in the Consumer Price Index for urban consumers (Washington-
Arlington-Alexandria, DC-VA-MD-WV; Not Seasonally Adjusted; All items; 
Annual Index) for the first 3 years of the preceding 4 years of 
available data multiplied by the proportion of all costs other than 
personnel compensation and benefits costs to total costs of the process 
for the review of human drug applications (as defined in section 
735(6)) for the first 3 years of the preceding 4 fiscal years (see 
section 736(c)(1)(A) and (B)(ii)). Table 3 provides the summary data 
for the percent changes in the specified CPI for the Washington-
Arlington-Alexandria area.\2\
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    \2\ The data are published by the Bureau of Labor Statistics and 
can be found on its website at: https://data.bls.gov/pdq/SurveyOutputServlet?data_tool=dropmap&series_id=CUURS35ASA0,CUUSS35ASA0.

        Table 3--Annual and 3-Year Average Percent Change in CPI for Washington-Arlington-Alexandria Area
----------------------------------------------------------------------------------------------------------------
                                                  2021              2022              2023        3-Year average
----------------------------------------------------------------------------------------------------------------
Annual CPI................................            277.73            296.12            305.32  ..............
Annual Percent Change.....................           3.9568%           6.6212%           3.1069%         4.5616%
----------------------------------------------------------------------------------------------------------------

    The statute specifies that this 4.5616 percent be multiplied by the 
proportion of all costs other than PC&B to total costs of the process 
for the review of human drug applications obligated. Because 62.8640 
percent was obligated for PC&B (as shown in table 2), 37.1360 percent 
is the portion of costs other than PC&B (100 percent minus 62.8640 
percent equals 37.1360 percent). The non-payroll adjustment is 4.5616 
percent times 37.1360 percent, or 1.6940 percent.
    Next, we add the payroll adjustment (2.4227 percent) to the non-
payroll adjustment (1.6940 percent), for a total inflation adjustment 
of 4.1167 percent (rounded) for FY 2025.
    We then multiply the base revenue amount for FY 2025 
($1,358,764,346) by 4.1167 percent, which produces an inflation 
adjustment amount of $55,936,252. Adding this amount to the base 
revenue amount yields an inflation-adjusted base revenue amount of 
$1,414,700,598.

  Table 4--Base Revenue Amount and Section 736(c)(1) Adjustment Amount
------------------------------------------------------------------------
                          Fee                                Amount
------------------------------------------------------------------------
Statutory Fee Revenue Base Amount (section 736(b)(3)      $1,358,764,346
 of the FD&C Act).....................................
Inflation Adjustment (section 736(c)(1) of the FD&C           55,936,252
 Act).................................................
Revenue Amount after Adjustments in sections 736(c)(1)     1,414,700,598
 of the FD&C Act......................................
------------------------------------------------------------------------

B. FY 2025 Strategic Hiring and Retention Adjustment

    For each fiscal year, after the annual base revenue established in 
section II is adjusted for inflation in accordance with section II.A, 
the statute directs FDA to further increase the fee revenue and fees to 
support strategic hiring and retention. For FY 2025, this amount is 
$4,000,000 (see section 736(c)(2)(A) of the FD&C Act).

     Table 5--Base Revenue Amount and Section 736(c)(1) Through (2)
                           Adjustment Amounts
------------------------------------------------------------------------
                          Fee                                Amount
------------------------------------------------------------------------
Statutory Fee Revenue Base Amount (section 736(b)(3)      $1,358,764,346
 of the FD&C Act).....................................
Inflation Adjustment (section 736(c)(1) of the FD&C           55,936,252
 Act).................................................
Strategic Hiring and Retention Adjustment (section             4,000,000
 736(c)(2) of the FD&C Act)...........................
Revenue Amount after Adjustments in sections 736(c)(1)     1,418,700,598
 and (2) of the FD&C Act..............................
------------------------------------------------------------------------

C. FY 2025 Statutory Fee Revenue Adjustments for Capacity Planning

    The statute specifies that after the base revenue amount for FY 
2025 of $1,358,764,346 has been adjusted as described in sections II.A 
and II.B, this amount shall be further adjusted to reflect changes in 
the resource capacity needs for the process of human drug application 
reviews (see section 736(c)(3) of the FD&C Act). Following a process 
agreed upon by FDA and

[[Page 61476]]

industry during PDUFA VI reauthorization discussions and subsequently 
required in statute, FDA established a new CPA methodology and first 
applied it in the setting of FY 2021 fees. The establishment of this 
methodology is described in the Federal Register of August 3, 2020 (85 
FR 46651). This methodology includes a continuous, iterative 
improvement approach, under which the Agency intends to refine its data 
and estimates for the core review activities to improve their accuracy 
over time. An adjustment for workload has been a critical aspect of the 
PDUFA program since PDUFA III in FY 2003 as it enables the program to 
adjust to shifts in review workload resulting from industry submissions 
to the Agency. The annual adjustment process allows greater accuracy 
than would be expected if workload adjustments were fixed at the start 
of the reauthorization period. The capacity planning adjustment is an 
evolution of the PDUFA workload adjuster and was implemented through a 
process agreed to by FDA and industry during PDUFA VI. The capacity 
planning adjustment builds on the concepts of the workload adjuster but 
realizes enhancements including the use of leading indicators of 
workload, use of full-time reporting data, the introduction of a 
managerial adjustment process as an internal check on the 
reasonableness of any adjustment, outputs measured in full-time 
equivalent employees, and the incorporation of adjustments into the 
base revenue amounts to ensure sustainability of payroll to support any 
new hires.
    Improvements adopted for the FY 2025 CPA include the incorporation 
of hiring plans and attrition estimates within the capacity 
calculation. In prior years, the impacts of expected hiring on the 
review capacity of the program were considered within a step in the 
managerial adjustment process. The FY 2025 resource capacity number 
includes an estimate of the onboard capacity for direct review work, as 
well as an estimate of the additional capacity that would be provided 
from any additional positions expected to be added through the course 
of FY 2024. No additional deduction for positions planned to be added 
prior to the end of FY 2024 then need to be deducted within the 
managerial adjustment moving forward. Because of this change, the 
resource capacity numbers presented in this Federal Register Notice 
cannot be directly compared to those provided in prior years' fee-
setting notices.
    The CPA methodology includes four steps:
    1. Forecast workload volumes: predictive models estimate the volume 
of workload for the upcoming FY.
    2. Forecast the resource needs: forecast algorithms are generated 
utilizing time reporting data. These algorithms estimate the required 
demand in FTEs \3\ for direct review related effort. This is then 
compared to current available resources for the direct review related 
workload.
---------------------------------------------------------------------------

    \3\ Full-time equivalents refer to a paid staff year, rather 
than a count of individual employees.
---------------------------------------------------------------------------

    The current available resources for the direct review related 
workload (presented as current resource capacity below) is a measure of 
the percentage of time onboard staff report to direct review workload 
activities, plus a percentage of the additional positions that are 
targeted to be hired within the remainder of FY 2024. Of note, the 
current resource capacity is not directly a function of the change in 
submission volume from one year to the next, but rather a summation of 
the percent of total staff time plus vacancies estimated to be 
available for direct review work. As time reporting is a direct input 
into the current review capacity calculations, the current review 
capacity may be impacted by factors such as shifts in the level of 
effort required for review work, staff reporting time exceed their tour 
of duty, or other shifts impacting the workload of the program.
    3. A managerial adjustment to assess the resource forecast in the 
context of additional internal factors: program leadership examines 
operational, financial, and resourcing data to assess whether FDA will 
be able to utilize additional funds during the FY, and whether the 
funds are required to support additional review capacity. FTE amounts 
are adjusted, if needed.
    The managerial adjustment process includes consideration of prior 
years' forecast performance, future year considerations, hiring 
capacity considerations, and other relevant considerations. While in 
some years FDA has over forecasted some submission volumes, it has 
managerially adjusted down the FTE delta considerably to take 
relatively small adjustments. For example, in FY23 CDER had a 
forecasted delta of 151 FTE but only took an adjustment for 27 FTE.
    4. Convert the FTE need to dollars: utilizing FDA's fully loaded 
FTE cost model, the final feasible FTEs are converted to an equivalent 
dollar amount. The fully loaded FTE cost model is higher in FY 2025 
than in prior years primarily due to the impact of inflation.
    To determine the FY 2025 CPA, FDA calculated a CPA for the Center 
for Drug Evaluation and Research (CDER) and the Center for Biologics 
Evaluation and Research (CBER) individually. The final center-level 
results were then combined to determine the total FY 2025 PDUFA CPA. 
The following section outlines the major components of each center's FY 
2025 PDUFA CPA.
    Table 6 summarizes the forecasted workload volumes for CDER in FY 
2025 based on predictive models, as well as historical actuals from FY 
2023 for comparison.

   Table 6--CDER Actual FY 2023 Workload Volumes and Predicted FY 2025
                            Workload Volumes
------------------------------------------------------------------------
                                              FY 2023         FY 2025
            Workload category                 actuals       predictions
------------------------------------------------------------------------
Efficacy Supplements....................             232             233
Labeling Supplements....................             917           1,191
Manufacturing Supplements...............           2,372           2,320
NDA/BLA[hairsp]\1\ Original.............             145             133
PDUFA Industry Meetings (including WROs            3,570           3,783
 \2\)...................................
Active Commercial INDs \3\..............           9,882          10,788
Annual Reports \4\......................           3,465           3,556
PMR/PMC-Related Documents \4\...........           1,696           1,605
Active REMS Programs 4 5................              23              23
------------------------------------------------------------------------
\1\ New drug applications (NDA)/biological license applications (BLA).
\2\ Written responses only (WROs).

[[Page 61477]]

 
\3\ For purpose of the CPA, this is defined as an active commercial
  investigational new drug (IND) for which a document has been received
  in the past 18 months.
\4\ Represents activities related to the review of materials submitted
  to the application file after approval.
\5\ Represents the percentage of active risk evaluation and management
  strategy (REMS) programs proportional to Center and User Fee by total
  number of qualifying products with the exclusion of the Opioid Shared
  System.

    Utilizing the resource forecast algorithms, the forecasted workload 
volumes for FY 2025 were then converted into estimated FTE needs for 
CDER's PDUFA direct review related work. The resulting expected FY 2025 
FTE need for CDER was compared to current resource capacity for direct 
review related work to determine the FY 2025 resource delta, as 
summarized in table 7. Hiring and inclusion of hiring plans into the 
current resource capacity increased the value over prior years.

                                   Table 7--CDER FY 2025 PDUFA Resource Delta
----------------------------------------------------------------------------------------------------------------
                                                       Current resource    FY 2025 resource    Predicted FY 2025
                       Center                              capacity            forecast            FTE delta
----------------------------------------------------------------------------------------------------------------
CDER................................................              2,055               2,078                  23
----------------------------------------------------------------------------------------------------------------

    The projected 23 FTEs delta was then assessed by FDA through the 
managerial adjustment process to ensure that any fee adjustment is only 
made for resources that can be utilized in the fiscal year and for 
which funds are required to support additional review capacity. FDA 
observes that the CDER delta has been declining each year as measured 
by the CPA. This indicates that resources are coming into approximate 
alignment with the workload as measured by the CPA. The adjusted 23 FTE 
delta would represent about 1 percent growth above the current resource 
capacity of 2,055. FDA notes, however, that through the managerial 
adjustment process it was observed that review work related to rare 
and/or orphan disease conditions has been growing disproportionality. 
After consideration of additional negotiated positions to be added in 
FY 2025 that overlap with the scope of the CPA (3), and other factors 
related to the CPA, CDER is adjusting the FTE delta to 4 FTE. These 4 
FTEs positions will be allocated in a manner to address the growth in 
workload resulting from rare and/or orphan disease conditions. The FY 
2025 PDUFA CPA for CDER is therefore $1,522,700, as summarized in table 
8.

                                         Table 8--CDER FY 2025 PDUFA CPA
----------------------------------------------------------------------------------------------------------------
                                                        Additional FTEs      Cost for each    CDER FY 2025 PDUFA
                       Center                             for FY 2025       additional FTE            CPA
----------------------------------------------------------------------------------------------------------------
CDER................................................                  4            $380,675          $1,522,700
----------------------------------------------------------------------------------------------------------------

    To calculate the FY 2025 PDUFA CPA for CBER, FDA followed the 
approach outlined above. Table 9 summarizes the forecasted workload 
volumes for CBER in FY 2025 as well as the corresponding historical 
actuals from FY 2023 for comparison.

   Table 9--CBER Actual FY 2023 Workload Volumes and Predicted FY 2025
                            Workload Volumes
------------------------------------------------------------------------
                                              FY 2023         FY 2025
            Workload category                 actuals       predictions
------------------------------------------------------------------------
Efficacy Supplements....................              25              30
Labeling Supplements....................              58              62
Manufacturing Supplements...............             752             767
NDA/BLA[hairsp]\1\ Original.............              14              15
PDUFA Industry Meetings (including WROs              756             778
 \2\)...................................
Active Commercial INDs \3\..............           1,829           2,027
Annual Reports \4\......................             314             319
PMR/PMC-Related Documents \4\...........             143             188
Active REMS Programs 4 5................               2               2
------------------------------------------------------------------------
\1\ New drug applications (NDA)/biological license applications (BLA).
\2\ Written responses only (WROs).
\3\ For purpose of the CPA, this is defined as an active commercial
  investigational new drug (IND) for which a document has been received
  in the past 18 months.
\4\ Represents activities related to the review of materials submitted
  to the application file after approval.
\5\ Represents the percentage of active REMS programs proportional to
  Center and User Fee by total number of qualifying products with the
  exclusion of the Opioid Shared System.

    The forecasted CBER PDUFA workload for FY 2025 was then converted 
into expected FTE resources and compared to current resource capacity 
for PDUFA direct review work, as summarized in table 10. Hiring and 
inclusion of hiring plans into the current resource capacity increased 
the value over prior years.

[[Page 61478]]



                                   Table 10--CBER FY 2025 PDUFA Resource Delta
----------------------------------------------------------------------------------------------------------------
                                                       Current resource    FY 2025 resource    Predicted FY 2025
                       Center                              capacity            forecast            FTE delta
----------------------------------------------------------------------------------------------------------------
CBER................................................                492                 507                  15
----------------------------------------------------------------------------------------------------------------

    The projected 15 FTEs delta for CBER was also assessed by FDA 
through the managerial adjustment process to ensure the need and/or 
feasibility of obtaining the additional resources. After considering 
additional negotiated positions to be added in FY 2025 that overlap 
with the scope of the CPA (12), current statuses for PDUFA vacancies, 
and other factors related to the CPA, CBER adjusted the FTE delta to 0 
additional FTEs for FY 2025. The FY 2025 CPA for CBER is therefore $0, 
as summarized in table 11.

                                        Table 11--CBER FY 2025 PDUFA CPA
----------------------------------------------------------------------------------------------------------------
                                                        Additional FTEs      Cost for each
                       Center                             for FY 2025       additional FTE     CBER FY 2025 CPA
----------------------------------------------------------------------------------------------------------------
CBER................................................                  0            $372,270                  $0
----------------------------------------------------------------------------------------------------------------

    The CDER and CBER CPA amounts were then added together to determine 
the PDUFA CPA for FY 2025 of $1,522,700, as outlined in table 12. FDA 
will track the utilization of the CPA funds to ensure they are 
supporting the organizational components engaged in PDUFA direct review 
work to enhance resources and expand staff capacity and capability. 
Should FDA be unable to utilize any amounts of the CPA funds during the 
fiscal year, it will not spend those funds and the unspent funds will 
be transferred to the carryover balance at the end of the fiscal year.

                       Table 12--FY 2025 PDUFA CPA
------------------------------------------------------------------------
                      Center                          FY 2025 PDUFA CPA
------------------------------------------------------------------------
CDER..............................................            $1,522,700
CBER..............................................                     0
                                                   ---------------------
    Total.........................................             1,522,700
------------------------------------------------------------------------


     Table 13--Base Revenue Amount and Section 736(c)(1) Through (3)
                           Adjustment Amounts
------------------------------------------------------------------------
                          Fee                                Amount
------------------------------------------------------------------------
Statutory Fee Revenue Base Amount (section 736(b)(3)      $1,358,764,346
 of the FD&C Act).....................................
Inflation Adjustment (section 736(c)(1) of the FD&C           55,936,252
 Act).................................................
Strategic Hiring and Retention Adjustment (section             4,000,000
 736(c)(2) of the FD&C Act)...........................
Capacity Planning Adjustment (section 736(c)(3) of the         1,522,700
 FD&C Act)............................................
Revenue Amount after Adjustments in sections               1,420,223,298
 736(c)(1), (2), and (3) of the FD&C Act..............
------------------------------------------------------------------------

D. FY 2025 Statutory Fee Revenue Adjustments for Additional Dollar 
Amounts

    PDUFA VII provides an additional dollar amount for each of the 5 
fiscal years covered by PDUFA VII for additional FTEs to support 
enhancements outlined in the PDUFA VII commitment letter. The 
additional dollar amount for FY 2025 as outlined in statute is 
$14,154,169 (see section 736(b)(1)(G)(iii) of the FD&C Act). This 
amount will be added to the total FY 2025 PDUFA VII revenue amount.

     Table 14--Base Revenue Amount and Section 736(c)(1) Through (3)
                           Adjustment Amounts
------------------------------------------------------------------------
                          Fee                                Amount
------------------------------------------------------------------------
Statutory Fee Revenue Base Amount (section 736(b)(3)      $1,358,764,346
 of the FD&C Act).....................................
Inflation Adjustment (section 736(c)(1) of the FD&C           55,936,252
 Act).................................................
Strategic Hiring and Retention Adjustment (section             4,000,000
 736(c)(2) of the FD&C Act)...........................
Capacity Planning Adjustment (section 736(c)(3) of the         1,522,700
 FD&C Act)............................................
Additional Dollar Amounts Adjustment (section                 14,154,169
 736(b)(1)(G) of the FD&C Act)........................
Cumulative Revenue Amount after Adjustments in             1,434,377,467
 sections 736(c)(1), (2), and (3) of the FD&C Act.....
------------------------------------------------------------------------


[[Page 61479]]

E. FY 2025 Statutory Fee Revenue Adjustments for Operating Reserve

    PDUFA VII provides for an operating reserve adjustment that may 
result in an increase or decrease in fee revenue and fees for a given 
FY (see section 736(c)(4) of the FD&C Act). For FY 2025, FDA is 
required to further increase fee revenue and fees if an adjustment is 
necessary to provide for at least 10 weeks of operating reserves of 
carryover user fees (see section 736(c)(4)(A)(iii) of the FD&C Act). If 
FDA has carryover balances of user fees in excess of 14 weeks of 
operating reserves, FDA is required to decrease fee revenue and fees to 
provide for not more than 14 weeks of operating reserves of carryover 
user fees (see section 736(c)(4)(B) of the FD&C Act).
    To determine the dollar amounts for the 10-week and 14-week 
operating reserve thresholds, the adjustments (inflation, strategic 
hiring and retention, capacity planning, and additional dollar amount) 
discussed in sections II.A, II.B, II.C, and II.D are applied to the FY 
2025 base revenue (see section 736(c)(4)(A) of the FD&C Act), resulting 
in $1,434,377,467. This amount is then divided by 52 to generate the 1-
week operating amount of $27,584,182. The 1-week operating amount is 
then multiplied by 10 and 14. This results in a 10-week threshold 
amount of $275,841,821 and a 14-week threshold amount of $386,178,549.
    To determine the FY 2024 end-of-year operating reserves of 
carryover user fees, the Agency assessed the operating reserve of 
carryover fees at the end of June 2024 and forecasted collections and 
obligations in the fourth quarter of FY 2024 combined. This provides an 
estimated end-of-year FY 2024 operating reserve of carryover user fees 
of $270,834,409, which equates to 9.82 weeks of operations.\4\
---------------------------------------------------------------------------

    \4\ For purposes of the operating reserve adjustment under PDUFA 
VII, the operating reserve of carryover user fees includes only user 
fee funds that are available for obligation. FDA excludes from the 
operating reserve of carryover user fee funds that were collected 
prior to 2010 and that are held by FDA, but which are considered 
unavailable for obligation due to lack of an appropriation 
($78,850,995).
---------------------------------------------------------------------------

    Because the estimated FY 2024 end-of-year operating reserves of 
carryover user fees does not exceed the 14-week threshold amount, FDA 
will not reduce the FY 2025 fees or fee revenue. However, because the 
estimated FY 2024 end-of-year operating reserves of carryover user fees 
of $270,834,409 is below the 10-week threshold amount of $275,841,821, 
FDA will apply an operating reserve adjustment of $5,007,412 to 
increase the fee revenue and fees for FY 2025.

     Table 15--Base Revenue Amount and Section 736(c)(1) Through (4)
                           Adjustment Amounts
------------------------------------------------------------------------
                          Fee                                Amount
------------------------------------------------------------------------
Statutory Fee Revenue Base Amount (section 736(b)(3)      $1,358,764,346
 of the FD&C Act).....................................
Inflation Adjustment (section 736(c)(1) of the FD&C           55,936,252
 Act).................................................
Strategic Hiring and Retention Adjustment (section             4,000,000
 736(c)(2) of the FD&C Act)...........................
Capacity Planning Adjustment (section 736(c)(3) of the         1,522,700
 FD&C Act)............................................
Additional Dollar Amounts Adjustment (section                 14,154,169
 736(b)(1)(G) of the FD&C Act)........................
Operating Reserve Adjustment (section (736(c)(4) of            5,007,412
 the FD&C Act)........................................
Cumulative Revenue Amount after Adjustments in             1,439,384,879
 sections 736(c)(1), (2), (3), and (4) of the FD&C Act
------------------------------------------------------------------------

F. FY 2025 Statutory Fee Revenue Adjustments for Additional Direct Cost

    PDUFA VII specifies that an additional direct cost of $39,355,553 
is to be added to the total FY 2025 PDUFA revenue amount (see section 
736(c)(5)(ii) of the FD&C Act). With respect to target revenue for FY 
2025, adding the additional direct cost amount of $39,355,553 to the 
inflation, strategic hiring and retention, CPA, additional dollar 
amount, and operating reserve adjustment results in the total revenue 
amount of $1,478,740,000 (rounded to the nearest thousand dollars).

            Table 16--Total Estimated Adjusted Revenue Amount
------------------------------------------------------------------------
                          Fee                                Amount
------------------------------------------------------------------------
Statutory Fee Revenue Base Amount (section 736(b)(3)      $1,358,764,346
 of the FD&C Act).....................................
Inflation Adjustment (section 736(c)(1) of the FD&C           55,936,252
 Act).................................................
Strategic Hiring and Retention Adjustment (section             4,000,000
 736(c)(2)(B) of the FD&C Act)........................
Capacity Planning Adjustment (section 736(c)(3) of the         1,522,700
 FD&C Act)............................................
Additional Dollar Amounts Adjustment (section                 14,154,169
 736(b)(1)(G) of the FD&C Act)........................
Operating Reserve Adjustment (section (736(c)(4) of            5,007,412
 the FD&C Act)........................................
Additional Direct Cost Adjustment (section 736(c)(5)          39,355,553
 of the FD&C Act).....................................
Cumulative Revenue Amount after Adjustments in             1,478,740,432
 sections 736(c)(1), (2), (3), (4), and (5) of the
 FD&C Act.............................................
Cumulative Revenue Amount after Adjustments in             1,478,740,000
 sections 736(c)(1), (2), (3), (4), and (5) of the
 FD&C Act (rounded to the nearest thousand)...........
------------------------------------------------------------------------

III. Application Fee Calculations

A. Application Fee Revenues and Application Fees

    Application fees will be set to generate 20 percent of the total 
revenue amount, amounting to $295,748,000 in FY 2025.

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

    FDA has estimated the total number of fee-paying full application 
equivalents (FAEs) it expects to receive during the next fiscal year by 
averaging the number of fee-paying FAEs received in the ten most 
recently completed fiscal years. For FY 2025 fee setting, the 10 
relevant fiscal years are FY 2014-2023. While a 3-year average has been 
used in recent years' fee setting FRNs, FDA is using a 10-year average 
for FY 2025 to address volatility in the number of FAEs. Prior year FAE 
totals are

[[Page 61480]]

updated annually to reflect refunds and waivers processed after the 
close of the fiscal year.\5\
---------------------------------------------------------------------------

    \5\ In the PDUFA fee setting FRNs for FYs 2023 and 2024, this 
adjustment for refunds was erroneously excluded, resulting in an 
overstatement of the historical FAE data.
---------------------------------------------------------------------------

    In estimating the number of fee-paying FAEs, an application 
requiring covered clinical data \6\ counts as one FAE. An application 
not requiring covered clinical data counts as one-half of an FAE. An 
application that is withdrawn before filing, or refused for filing, 
counts as one-fourth of an FAE if the applicant initially paid a full 
application fee, or one-eighth of an FAE if the applicant initially 
paid one-half of the full application fee amount.
---------------------------------------------------------------------------

    \6\ As defined in section 736(a)(1)(A)(i) of the FD&C Act.
---------------------------------------------------------------------------

    As table 17 shows, the average number of fee-paying FAEs received 
annually in FY 2014 through FY 2023 is 68.619. FDA will set fees for FY 
2025 based on this estimate as the number of full application 
equivalents that will be subject to fees.

                                                                Table 17--Fee-Paying FAEs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                10-year
                                    2014       2015       2016       2017       2018       2019       2020       2021       2022       2023     average
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fee-Paying FAEs................    73.375     81.956     70.483     79.750     68.875     80.000     56.750     78.875     45.125     51.000     68.619
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Prior year FAE totals are updated annually to reflect refunds and waivers processed after the close of the fiscal year.

    The FY 2025 application fee is estimated by dividing the average 
number of full applications that paid fees from FY 2014 through FY 
2023, 68.619, into the fee revenue amount to be derived from 
application fees in FY 2025, $295,748,000. The result is a fee of 
$4,310,002 per full application requiring clinical data, and $2,155,001 
per application not requiring clinical data.

IV. Fee Calculation for Prescription Drug Program Fees

    PDUFA VII assesses prescription drug program fees for certain 
prescription drug products. Program fees will be set to generate 80 
percent of the total target revenue amounting to $1,182,992,000 in FY 
2025.
    An applicant will not be assessed more than five program fees for a 
FY for prescription drug products identified in a single approved NDA 
or BLA (see section 736(a)(2)(C) of the FD&C Act). Applicants are 
assessed a program fee for a FY for user fee eligible prescription drug 
products identified in a human drug application approved as of October 
1 of such FY. Additionally, applicants are assessed a program fee for a 
product that is not a prescription drug product on October 1 because it 
is included in the discontinued section of the Orange Book or the CDER/
CBER Billable Biologics List on that date, if the product becomes a 
fee-eligible prescription drug product during the FY.
    FDA estimates 3,049 program fees will be invoiced in FY 2025 before 
factoring in waivers, refunds, exceptions, and exemptions. FDA 
approximates that there will be 81 waivers and refunds granted. 
Additionally, FDA approximates that another 39 program fees will be 
exempted in FY 2025 based on the orphan drug exemption in section 
736(k) of the FD&C Act.
    FDA estimates 2,929 program fees in FY 2025, after allowing for an 
estimated 120 waivers and reductions, including the orphan drug 
exemptions, excepted and exempted fee-liable products. The FY 2025 
prescription drug program fee rate is calculated by dividing the 
adjusted total revenue from program fees ($1,182,992,000) by the 
estimated 2,929 program fees, resulting in a FY 2025 program fee of 
$403,889 (rounded to the nearest dollar).

V. Fee Schedule for FY 2025

    The fee rates for FY 2025 are displayed in table 18.

                   Table 18--Fee Schedule for FY 2025
------------------------------------------------------------------------
                                                              Fee rates
                        Fee category                         for FY 2025
------------------------------------------------------------------------
Application:
  Requiring clinical data..................................   $4,310,002
  Not requiring clinical data..............................    2,155,001
Program....................................................      403,889
------------------------------------------------------------------------

VI. Fee Payment Options and Procedures

A. Application Fees

    The appropriate application fee established in the new fee schedule 
must be paid for any application subject to fees under PDUFA VII that 
is submitted on or after October 1, 2024. Payment must be made in U.S. 
currency by electronic check, check, bank draft, wire transfer, or U.S. 
postal money order payable to the order of the Food and Drug 
Administration. The preferred payment method is online using electronic 
check (Automated Clearing House (ACH) also known as eCheck) or credit 
card (Discover, VISA, MasterCard, American Express).
    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 website after 
completing the Prescription Drug User Fee Cover Sheet and generating 
the user fee ID number. 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 an invoice is located, ``Pay Now'' should be selected to 
be redirected to Pay.gov. Electronic payment options are based on the 
balance due. Payment by credit card is available for balances that are 
less than $25,000. If the balance exceeds this amount, only the ACH 
option is available. Payments must be made using U.S. bank accounts as 
well as U.S. credit cards.
    If a check, bank draft, or postal money order is submitted, make it 
payable to the order of the Food and Drug Administration and include 
the user fee ID number to ensure that the payment is applied to the 
correct fee(s). Payments can be mailed to: Food and Drug 
Administration, P.O. Box 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, 3180 Rider Trail S, Earth City, 
MO 63045. (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 800-495-4981. This phone number is designated for courier use 
only and is not intended for payment and billing inquiries. Please make 
sure that the FDA post office box number (P.O. Box 979107) is written 
on the

[[Page 61481]]

check, bank draft, or postal money order.
    For payments made by wire transfer, include the unique user fee ID 
number to ensure that the payment is applied to the correct fee(s). 
Without the unique user fee ID number, the payment may not be applied, 
which could result in FDA not filing an application and other 
penalties. Note: the originating financial institution may charge a 
wire transfer fee, especially for international wire transfers. 
Applicable wire transfer fees must be included with payment to ensure 
fees are paid in full. Questions about wire transfer fees should be 
addressed to the financial institution. The account information for 
wire transfers is as follows: U.S. Department of the Treasury, TREAS 
NYC, 33 Liberty St., New York, NY 10045, Acct. No.: 75060099, Routing 
No.: 021030004, SWIFT: FRNYUS33. If needed, FDA's tax identification 
number is 53-0196965.

B. Prescription Drug Program Fees

    FDA will issue invoices and payment instructions for FY 2025 
program fees under the new fee schedule in August 2024. Under section 
736(a)(2)(A)(i) of the FD&C Act, prescription drug program fees are due 
on October 1, 2024.
    FDA will issue invoices in December 2025 for products that qualify 
for FY 2025 program fee assessments after the October 2024 billing.

C. Fee Waivers and Refunds

    To qualify for consideration for a waiver or reduction under 
section 736(d) of the FD&C Act, an exemption under section 736(k) of 
the FD&C Act, or the return of an application or program fee paid under 
section 736 of the FD&C Act, including if the fee is claimed to have 
been paid in error, a person must submit to FDA a written request 
justifying such waiver, reduction, exemption or return not later than 
180 days after such fee is due (section 736(i) of the FD&C Act). A 
request submitted under this paragraph must include any legal 
authorities under which the request is made.

    Dated: July 26, 2024.
Lauren K. Roth,
Associate Commissioner for Policy.
[FR Doc. 2024-16875 Filed 7-30-24; 8:45 am]
BILLING CODE 4164-01-P