Animal Drug User Fee Rates and Payment Procedures for Fiscal Year 2025, 61459-61465 [2024-16894]

Agencies

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

[Federal Register Volume 89, Number 147 (Wednesday, July 31, 2024)]
[Notices]
[Pages 61459-61465]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-16894]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2024-N-3480]


Animal Drug User Fee Rates and Payment Procedures for Fiscal Year 
2025

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA or the Agency) is 
announcing the fee rates and payment procedures for fiscal year (FY) 
2025 animal drug user fees. The Federal Food, Drug, and Cosmetic Act 
(FD&C Act), as amended by the Animal Drug User Fee Amendments of 2023 
(ADUFA V), authorizes FDA to collect user fees for certain animal drug 
applications and supplemental animal drug applications, for certain 
animal drug products, for certain establishments where such products 
are made, and for certain sponsors of such animal drug applications 
and/or investigational animal drug submissions. This notice establishes 
the fee rates for FY 2025.

DATES: The application fee rates apply to applications submitted on or 
after October 1, 2024, and will remain in effect through September 30, 
2025.

FOR FURTHER INFORMATION CONTACT: Visit FDA's website at: https://www.fda.gov/industry/fda-user-fee-programs/animal-drug-user-fee-act-adufa or contact Lisa Kable, Center for Veterinary Medicine (HFV-10), 
Food and Drug Administration, 7500 Standish Pl., Rockville, MD 20855, 
240-402-6888, [email protected]. For general questions, you may 
also email FDA's Center for Veterinary Medicine (CVM) at: 
[email protected].
    For questions relating to this notice: Olufunmilayo Ariyo, Office 
of Financial Management, Food and Drug Administration, 10903 New 
Hampshire Ave., Silver Spring, MD 20903, 240-402-4989; or the User Fee 
Support Staff at [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    Section 740(a) of the FD&C Act (21 U.S.C. 379j-12), as amended by 
ADUFA V, establishes four different types of user fees: (1) fees for 
certain animal drug applications and supplemental animal drug 
applications; (2) annual fees for certain animal drug products; (3) 
annual fees for certain establishments where such products are made; 
and (4) annual fees for certain sponsors of animal drug applications 
and/or investigational animal drug submissions. When certain conditions 
are met, FDA will waive or reduce fees per section 740(d) of the FD&C 
Act.
    For FYs 2024 through 2028, section 740(b)(1) of the FD&C Act 
establishes the base revenue amount for each fiscal year. Per section 
740(c)(2) and (3) of the FD&C Act, the base revenue amounts established 
for fiscal years after FY 2024 are subject to adjustment for inflation 
and workload. Beginning in FY 2025, the annual fee revenue amount is 
also subject to an operating reserve adjustment to allow FDA to adjust 
the fee revenue amount to maintain a specified operating reserve of 
carryover user fees, per section 740(c)(4) of the FD&C Act. FDA may 
increase the fee revenue amount to maintain a 12-week minimum. If FDA 
has an excess operating reserve, FDA will decrease the fee revenue 
amount so that FDA has 22 weeks of operating reserve for FY 2025, 20 
weeks for FY 2026, 18 weeks for FY 2027, and 16 weeks for FY 2028.
    Per section 740(b)(2) of the FD&C Act, fees for applications, 
establishments, products, and sponsors are to be established each year 
by FDA so that the percentages of the total revenue that are derived 
from each type of user fee will be as follows: (1) revenue from 
application fees shall be 20 percent of total fee revenue; (2) revenue 
from product fees shall be 27 percent of total fee revenue; (3) revenue 
from establishment fees shall be 26 percent of total fee revenue; and 
(4) revenue from sponsor fees shall be 27 percent of total fee revenue. 
The target revenue amounts for each fee category for FY 2025 are as 
follows: for application fees, the target revenue amount is $5,701,000; 
for product fees, the target revenue amount is $7,697,000; for 
establishment fees, the target revenue amount is $7,412,000; and for 
sponsor fees, the target revenue amount is $7,697,000.
    For FY 2025, the animal drug user fee rates are: (1) $581,735 for 
an animal drug application; (2) $290,867 for a supplemental animal drug 
application for which safety or effectiveness data are required, for an 
animal drug application subject to the criteria set forth in section 
512(d)(4) of the FD&C Act (21 U.S.C. 360b), and for an application for 
conditional approval under section 571 of the FD&C Act (21 U.S.C. 
360ccc) for which an animal drug application submitted under section 
512(b)(1) of the FD&C Act has been previously approved under section 
512(d)(1) of the FD&C Act for another intended use; (3) $10,705 for the 
annual product fee; $157,702 for the annual establishment fee; and (4) 
$137,446 for the annual sponsor fee. FDA will issue invoices for FY 
2025 product, establishment, and sponsor fees by December 31, 2024, and 
payment will be due by January 31, 2025. The application fee rates are 
effective for applications submitted on or after October 1, 2024, and 
will remain in effect through September 30, 2025. Applications will not 
be accepted for review until FDA has received full payment of 
application fees and any other animal drug user fees owed under the 
ADUFA program.

II. Fee Revenue Amount for FY 2025

A. Statutory Fee Revenue Amounts

    Section 740(b)(1) of the FD&C Act specifies that the base fee 
revenue amount for FY 2025 for all animal drug user fee categories 
totals $33,500,000.

B. Inflation Adjustment to Fee Revenue Amount

    Section 740(c)(2)(A)(ii) and (iii) of the FD&C Act specifies that 
the annual fee revenue amount is to be adjusted for inflation increases 
for FY 2025 and subsequent fiscal years using two separate adjustments: 
one for personnel compensation and benefits (PC&B) and one for non-PC&B 
costs. Section 740(c)(2)(A)(ii) of the FD&C Act specifies the component 
of the inflation adjustment for payroll costs shall be one plus the 
average annual percent change in the cost of all PC&B paid per full-
time equivalent position (FTE) at FDA for the

[[Page 61460]]

first 3 of the 4 preceding fiscal years of available data, multiplied 
by the average proportion of PC&B costs to total FDA costs for the 
first 3 of the 4 preceding fiscal years of available data. The data on 
total PC&B paid and numbers of FTE paid, from which the average cost 
per FTE can be derived, are published in FDA's Justification of 
Estimates for Appropriations Committees.
    Table 1 summarizes the total PC&B cost per FTE for the specified 
fiscal years, provides the percent change from the previous fiscal 
year, and provides the average percent change 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 Percentage Change
----------------------------------------------------------------------------------------------------------------
                Fiscal year                       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  ..............
Percentage Change From Previous Year......           0.1811%           4.2967%           7.0838%         3.8539%
----------------------------------------------------------------------------------------------------------------

    Section 740(c)(2)(A)(ii) of the FD&C Act specifies that this 3.8539 
percent should be multiplied by the proportion of PC&B costs to total 
FDA costs for the first 3 of the preceding 4 fiscal years for which 
data are available. Table 2 shows the amount of PC&B and the total 
amount obligated by FDA for the same 3 fiscal years.

                                 Table 2--PC&B as a Percent of Total Cost at FDA
----------------------------------------------------------------------------------------------------------------
                Fiscal year                       2021              2022              2023        3-Year average
----------------------------------------------------------------------------------------------------------------
Total PC&B................................    $3,039,513,000    $3,165,477,000    $3,436,513,000  ..............
Total Costs...............................    $6,049,798,000    $6,251,981,000    $6,654,058,000  ..............
PC&B percent..............................          50.2416%          50.6316%          51.6454%        50.8395%
----------------------------------------------------------------------------------------------------------------

    The portion of the inflation adjustment relating to payroll costs 
is 3.8539 percent multiplied by 50.8359 percent, or 1.9593 percent.
    Section 740(c)(2)(A)(iii) of the FD&C Act specifies that the 
portion of the inflation adjustment for non-payroll costs is the 
average annual percent change that occurred in the Consumer Price Index 
(CPI) (Washington-Arlington-Alexandria, DC-VA-MD-WV; not seasonally 
adjusted; all items less food and energy; annual index) for the first 3 
years of the preceding 4 years of available data multiplied by the 
average proportion of all costs other than PC&B costs to total FDA 
costs for the first 3 years of the preceding 4 fiscal years. Table 3 
provides the summary data for the percent change in the specified CPI 
for the Washington-Arlington-Alexandria area. The data from the Bureau 
of Labor Statistics are shown in table 3.\1\
---------------------------------------------------------------------------

    \1\ The data is published by the Bureau of Labor Statistics and 
can be found on its website at: https://data.bls.gov/timeseries/CUURS35ASA0L1E.

  Table 3--Annual and 3-Year Average Percentage Change in CPI (Less Food and Energy) for Washington-Arlington-
                                                 Alexandria Area
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                Fiscal year                       2021              2022              2023        3-Year average
----------------------------------------------------------------------------------------------------------------
Annual CPI................................           287.144           302.608           313.315  ..............
Annual Percent Change.....................           3.1271%           5.3855%           3.5382%         4.0169%
----------------------------------------------------------------------------------------------------------------

    Section 740(c)(2)(A)(iii) of the FD&C Act specifies to calculate 
the inflation adjustment for non-payroll costs, we multiply 4.0169 
percent by the average proportion of all costs other than PC&B to total 
FDA costs for the first 3 years of the preceding 4 fiscal years. Since 
50.8395 percent was obligated for PC&B as shown in table 2, 49.1605 
percent is the portion of costs other than PC&B (100 percent minus the 
PC&B percentage of 50.8395). The portion of the inflation adjustment 
relating to non-payroll costs is 4.0169 percent multiplied by 49.1605 
percent, or 1.9747 percent.
    Next, we add the payroll component (1.9593 percent) to the non-
payroll component (1.9747 percent), for an inflation adjustment of 
3.9340 percent for FY 2025.
    Section 740(c)(2)(B) of the FD&C Act provides for the inflation 
adjustment to be compounded each fiscal year after FY 2025. The 
inflation adjustment for FY 2025 (3.9340 percent) is compounded by 
adding 1 and then multiplying by 1 plus the inflation adjustment factor 
for FY 2024 (zero percent), which equals 1.0393 (rounded) (1.0393 
multiplied 1.0). We then multiply the base revenue amount for FY 2025 
($33,500,000) by 1.0393, yielding an inflation adjusted amount of 
$34,817,890.

C. Workload Adjustment to Inflation Adjusted Fee Revenue Amount

    Section 740(c)(3)(A) of the FD&C Act specifies that the annual fee 
revenue amounts in ADUFA V for FY 2025 and subsequent fiscal years are 
subject to adjustment to account for changes in FDA's review workload. 
The workload

[[Page 61461]]

adjustment will be applied to the inflation adjusted fee revenue 
amount.
    To determine whether a workload adjustment applies, per ADUFA V 
commitments FDA calculates the weighted average of the change in the 
total number of each of the five types of applications and submissions 
specified in the workload adjustment provision (animal drug 
applications, supplemental animal drug applications for which data with 
respect to safety or efficacy are required, manufacturing supplemental 
animal drug applications, investigational animal drug study 
submissions, and investigational animal drug protocol submissions) 
received over the 5-year period that ended on September 30, 2023 (the 
base years; 2019 through 2023), and the average number of each of these 
types of applications and submissions over the most recent 5-year 
period that ended April 30, 2024.
    The results of these calculations are presented in the first two 
columns of table 4. Column 3 reflects the percent change in workload 
over the two 5-year periods. Column 4 shows the weighting factor for 
each type of application/submissions, reflecting how much of the total 
FDA animal drug review workload was accounted for by each type of 
application or submission in the table during the most recent 5 years. 
Column 5 is the weighted percent change in each category of workload 
and was derived by multiplying the weighting factor in each line in 
column 4 by the percent change from the base years in column 3. At the 
bottom right of the table, the sum of the values in column 5 is 
calculated, reflecting a total change in workload of negative 4.4338 
percent for FY 2025. This is the workload adjuster for FY 2025.

                                     Table 4--Workload Adjuster Calculation
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                                     Column 1        Column 2        Column 3        Column 4        Column 5
                                 -------------------------------------------------------------------------------
        Application type          5-Year average   Latest 5-year                     Weighting       Weighted
                                   (base years)       average     Percent change      factor      percent change
----------------------------------------------------------------------------------------------------------------
New Animal Drug Application                11.60           12.40          6.8966          0.0355          0.2447
 (NADAs)........................
Supplemental NADAs With Safety              8.20            7.60         -7.3171          0.0276         -0.2021
 or Efficacy Data...............
Manufacturing Supplements.......          367.20          359.20         -2.1786          0.2065         -0.4499
Investigational Study                     164.20          159.00         -3.1669          0.5887         -1.8644
 Submissions....................
Investigational Protocol                  216.20          183.20        -15.2636          0.1416         -2.1621
 Submissions....................
                                 -------------------------------------------------------------------------------
    FY 2025 ADUFA V Workload      ..............  ..............  ..............  ..............         -4.4338
     Adjuster...................
----------------------------------------------------------------------------------------------------------------

    Section 740(c)(3)(B) of the FD&C Act specifies that under no 
circumstances shall the workload adjustment result in fee revenues that 
are less than the base fee revenues for that fiscal year as adjusted 
for inflation. Additionally, section 740(c)(3)(A)(ii) states that the 
workload adjuster must be greater than 3 percent for a second fiscal 
year within ADUFA V before FDA can add the adjustment to the target 
revenue. For FY 2025 the workload adjuster is below the 3 percent 
statute threshold, therefore no workload adjustment shall be applied.

D. Operating Reserve Adjustment to Inflation and Workload Adjusted Fee 
Revenue Amount

    Section 740(c)(4)(A) of the FD&C Act specifies that for FY 2025, 
after the fee revenue amount established under section 740(b) of the 
FD&C Act is adjusted for inflation and workload, the Secretary shall 
increase the fee revenue amount for such fiscal year, if necessary to 
provide an operating reserve of not less than 12 weeks or decrease the 
fee revenue amount for such fiscal year, if necessary to provide for 
not more than 22 weeks of operating reserves.
    To determine the dollar amounts for the 12-week and 22-week 
operating reserve thresholds, we divide the adjusted annual fee revenue 
amount (rounded) ($34,818,000) by 52 weeks to generate a 1-week 
operating reserve amount of $669,577. The 1-week operating reserve 
amount is then multiplied by 12 and 22. This results in a 12-week 
minimum threshold of $8,034,923 and a 22-week maximum threshold of 
$14,730,692.
    To estimate the FY 2024 end-of-year operating reserve of carryover 
user fees, the Agency projected the user fee carryover amount at the 
end of July 2024 using forecasted obligations, collections, and 
estimated recoveries but not including carryover use fees that have not 
been appropriated. The operating reserve of carryover user fees is 
projected to be $21,041,545 or 31.43 weeks ($21,041,545 divided by 
$669,577).
    Because the estimated FY 2024 end-of-year operating reserve of 
carryover user fees is not below the 12-week threshold amount of 
$8,034,923, FDA will not increase the fee revenue amount and fees for 
FY 2025.
    However, because the estimated FY 2024 end-of-year operating 
reserve of carryover user fees of $21,041,545 exceeds the 22-week 
threshold of $14,730,692, FDA will apply an operating reserve 
adjustment of $6,310,853 to decrease the fee revenue and fees for FY 
2025.
    With respect to target revenue for FY 2025, subtracting the 
operating reserve adjustment amount of $6,310,853 from the adjusted fee 
revenue amount of $34,817,890 results in a total target revenue amount 
of $28,507,037 for FY 2025.

E. FY 2025 Fee Revenue Amounts

    The fee revenue amount (rounded) for FY 2025 is $28,507,000. 
Section 740(b)(2) of the FD&C Act specifies that this revenue amount is 
to be divided as follows: 20 percent, or a total of $5,701,000 is to 
come from application fees; 27 percent, or a total of $7,697,000, is to 
come from product fees; 26 percent, or a total of $7,412,000 is to come 
from establishment fees; and 27 percent, or a total of $7,697,000 is to 
come from sponsor fees.

III. Animal Drug Application Fee Calculations for FY 2025

A. Application Fee Revenues and Numbers of Fee-Paying Applications

    Section 740(a)(1)(A) of the FD&C Act states that each person that 
submits an animal drug application or a supplemental animal drug 
application shall be subject to an application fee, with limited 
exceptions. The term ``animal drug application'' means an application 
for approval of any new animal drug submitted under section 512(b)(1) 
of the FD&C Act or an application for conditional approval of a new 
animal drug submitted under section 571 of the FD&C Act. A 
``supplemental animal drug

[[Page 61462]]

application'' is defined as a request to FDA to approve a change in an 
approved animal drug application, or a request to FDA to approve a 
change to an application approved under section 512(c)(2) of the FD&C 
Act for which data with respect to safety or effectiveness are 
required. Such applications are subject to ADUFA fees, except those 
fees may be waived under the circumstances described in section 
740(d)(1)(D) and 740(i) of the FD&C Act.
    Furthermore, ADUFA V continues to provide an exception from 
application fees for animal drug applications submitted under section 
512(b)(1) of the FD&C Act by a sponsor who previously applied for 
conditional approval under section 571 of the FD&C Act for the same 
product and paid an application fee at the time they applied for 
conditional approval. The purpose of this exception is to prevent 
sponsors of conditionally approved products from having to pay a second 
application fee at the time they apply for full approval of their 
products under section 512(b)(1) of the FD&C Act, provided the 
sponsor's application for full approval is filed consistent with the 
timeframes established in section 571(h) of the FD&C Act.
    The application fees are to be set so that they will generate 
$5,701,000 in fee revenue for FY 2025. The fee for a supplemental 
animal drug application for which safety or effectiveness data are 
required, for an animal drug application subject to criteria set forth 
in section 512(d)(4) of the FD&C Act, and for an application for 
conditional approval under section 571 of the FD&C Act of a new animal 
drug for which an animal drug application submitted under section 
512(b)(1) of the FD&C Act has been previously approved under section 
512(d)(1) for another intended use is to be set at 50 percent of the 
animal drug application fee.
    To set animal drug application fees and supplemental animal drug 
application fees to realize $5,701,000 FDA must first make some 
assumptions about the number of fee-paying applications and 
supplemental applications the Agency will receive in FY 2025.
    The Agency knows the number of applications that have been 
submitted in previous fiscal years. That number fluctuates annually. In 
estimating the fee revenue to be generated by animal drug application 
fees in FY 2025, FDA is assuming that the number of applications for 
which fees will be paid in FY 2025 will equal the average number of 
applications over the five most recently completed fiscal years of the 
ADUFA program (FY 2019 to FY 2023).
    Over the 5 most recently completed fiscal years, the average number 
of animal drug applications subject to the full fee was 5.60. Over this 
same period, the average number of supplemental applications for which 
safety or effectiveness data are required, applications subject to the 
criteria set forth in section 512(d)(4) of the FD&C Act, and 
applications for conditional approval of a new animal drug for which a 
section 512(b)(1) application has been previously approved for another 
intended use subject to half of the full fee was 8.40.
    Based on the previous assumptions, FDA is estimating that it will 
receive a total of 9.80 fee-paying animal drug applications in FY 2025 
(5.60 applications paying a full fee and 8.40 applications paying a 
half fee).

B. Application Fee Rates for FY 2025

    FDA must set the fee rates for FY 2025 so that the estimated 9.80 
applications that pay the fee will generate a total of $5,701,000. To 
generate this amount, the fee for an animal drug application, rounded 
to the nearest dollar, will have to be $581,735, and the fee for a 
supplemental animal drug application for which safety or effectiveness 
data are required, for applications subject to the criteria set forth 
in section 512(d)(4) of the FD&C Act, and for an application for 
conditional approval under section 571 of the FD&C Act of a new animal 
drug for which an animal drug application submitted under section 
512(b)(1) of the FD&C Act has been previously approved under section 
512(d)(1) for another intended use will have to be $290,867.

IV. Animal Drug Product Fee Calculations for FY 2025

A. Product Fee Revenues and Numbers of Fee-Paying Products

    Section 740(a)(2) of the FD&C Act specifies that the animal drug 
product fee must be paid annually by the person named as the applicant 
in a new animal drug application or supplemental new animal drug 
application for an animal drug product submitted for listing under 
section 510 of the FD&C Act (21 U.S.C. 360) and who had an animal drug 
application or supplemental animal drug application pending at FDA 
after September 1, 2003. The term ``animal drug product'' means each 
specific strength or potency of a particular active ingredient or 
ingredients in final dosage form marketed by a particular manufacturer 
or distributor, which is uniquely identified by the labeler code and 
product code portions of the National Drug Code, and for which an 
animal drug application or a supplemental animal drug application has 
been approved (see section 739(3) of the FD&C Act). The product fees 
are to be set so that they will generate $7,697,000 in fee revenue for 
FY 2025.
    To set animal drug product fees to realize $7,697,000, FDA must 
make some assumptions about the number of products for which these fees 
will be paid in FY 2025. FDA developed data on all animal drug products 
that have been submitted for listing under section 510 of the FD&C Act 
and matched this to the list of all persons who had an animal drug 
application or a supplemental animal drug application pending after 
September 1, 2003. As of May 2024, FDA estimates that there are 734 
products submitted for listing by persons who had an animal drug 
application or supplemental animal drug application pending after 
September 1, 2003. Based on this, FDA estimates that a total of 734 
products will be subject to this fee in FY 2025.
    In estimating the fee revenue to be generated by animal drug 
product fees in FY 2025, FDA is assuming that 2 percent of the products 
invoiced, or 15, will not pay fees in FY 2025, due to fee waivers and 
reductions. FDA has made this estimate at 2 percent this year, based on 
historical data over the past 5 completed fiscal years of the ADUFA 
program.
    Accordingly, the Agency estimates that a total of 719 (734 minus 
15) products will be subject to product fees in FY 2025.

B. Product Fee Rates for FY 2025

    FDA must set the fee rates for FY 2025 so that the estimated 719 
products for which fees are paid will generate a total of $7,697,000. 
To generate this amount will require the fee for an animal drug 
product, rounded to the nearest dollar, to be $10,705.

V. Animal Drug Establishment Fee Calculations for FY 2025

A. Establishment Fee Revenues and Numbers of Fee-Paying Establishments

    Section 740(a)(3) of the FD&C Act states that the animal drug 
establishment fee must be paid annually by the person who: (1) owns or 
operates, directly or through an affiliate, an animal drug 
establishment; (2) is named as the applicant in an animal drug 
application or supplemental animal drug application for an animal drug 
product submitted for listing under section 510 of the FD&C Act; (3) 
had an animal drug application or supplemental animal drug application

[[Page 61463]]

pending at FDA after September 1, 2003; and (4) whose establishment 
engaged in the manufacture of the animal drug product during the fiscal 
year. An establishment subject to animal drug establishment fees is 
assessed only one such fee per fiscal year. The term ``animal drug 
establishment'' is defined as a foreign or domestic place of business 
at one general physical location, consisting of one or more buildings, 
all of which are within 5 miles of each other, at which one or more 
animal drug products are manufactured in final dosage form (see section 
739(4) of the FD&C Act). The establishment fees are to be set so that 
they will generate $7,412,000 in fee revenue for FY 2025.
    To set animal drug establishment fees to realize $7,412,000, FDA 
must make some assumptions about the number of establishments for which 
these fees will be paid in FY 2025. FDA developed data on all animal 
drug establishments and matched this to the list of all persons who had 
an animal drug application or supplemental animal drug application 
pending after September 1, 2003. As of May 2024, FDA estimates that 
there are a total of 50 establishments owned or operated by persons who 
had an animal drug application or supplemental animal drug application 
pending after September 1, 2003. Based on this, FDA believes that 50 
establishments will be subject to this fee in FY 2025.
    In estimating the fee revenue to be generated by animal drug 
establishment fees in FY 2025, FDA is assuming that 6 percent of the 
establishments invoiced, or three, will not pay fees in FY 2025 due to 
fee waivers and reductions. FDA has made this estimate at 6 percent 
this year, based on historical data over the past 5 completed fiscal 
years.
    Accordingly, the Agency estimates that a total of 47 establishments 
(50 minus 3) will be subject to establishment fees in FY 2025.

B. Establishment Fee Rates for FY 2025

    FDA must set the fee rates for FY 2025 so that the fees paid for 
the estimated 47 establishments will generate a total of $7,412,000. To 
generate this amount will require the fee for an animal drug 
establishment, rounded to the nearest dollar, to be $157,702.

VI. Animal Drug Sponsor Fee Calculations for FY 2025

A. Sponsor Fee Revenues and Numbers of Fee-Paying Sponsors

    The animal drug sponsor fee must be paid annually by each person 
who: (1) is named as the applicant in an animal drug application, 
except for an approved application for which all subject products have 
been removed from listing under section 510 of the FD&C Act, or has 
submitted an investigational animal drug submission that has not been 
terminated or otherwise rendered inactive and (2) had an animal drug 
application, supplemental animal drug application, or investigational 
animal drug submission pending at FDA after September 1, 2003 (see 
sections 739(6) and 740(a)(4) of the FD&C Act). An animal drug sponsor 
is subject to only one such fee each fiscal year (see Sec.  740(a)(4) 
of the FD&C Act). The sponsor fees are to be set so that they will 
generate $7,697,000 in fee revenue for FY 2025.
    To set animal drug sponsor fees to realize $7,697,000, FDA must 
make some assumptions about the number of sponsors who will pay these 
fees in FY 2025. FDA developed data on all animal drug sponsors and 
matched this to the list of all sponsors who had pending submissions 
and applications after September 1, 2003. As of May 2024, FDA estimates 
that a total of 176 sponsors will meet this definition in FY 2025.
    In estimating the fee revenue to be generated by animal drug 
sponsor fees in FY 2025, FDA is assuming that 68 percent of the 
sponsors invoiced, or 120, will not pay sponsor fees in FY 2025 due to 
fee waivers and reductions. FDA has made this estimate at 68 percent 
this year, based on historical data over the past 5 completed fiscal 
years of the ADUFA program.
    Accordingly, the Agency estimates that a total of 56 sponsors (176 
minus 120) will be subject to and pay sponsor fees in FY 2025.

B. Sponsor Fee Rates for FY 2025

    FDA must set the fee rates for FY 2025 so that the estimated 56 
sponsors that pay fees will generate a total of $7,697,000. To generate 
this amount will require the fee for an animal drug sponsor, rounded to 
the nearest dollar, to be $137,446.

VII. Fee Schedule for FY 2025

    The fee rates for FY 2025 are summarized in table 5.

                       Table 5--FY 2025 Fee Rates
------------------------------------------------------------------------
                                                           Fee rate for
              Animal drug user fee category                   FY 2025
------------------------------------------------------------------------
Animal Drug Application Fees:
    Animal Drug Application.............................        $581,735
    Supplemental Animal Drug Application for Which               290,867
     Safety or Effectiveness Data are Required,.........
    Animal Drug Application Subject to the Criteria Set
     Forth in Section 512(d)(4) of the FD&C Act, or
    Application for Conditional Approval Under Section
     571 of the FD&C Act for Which an Animal Drug
     Application Submitted Under Section 512(b)(1) of
     the FD&C Act Has Been Previously Approved Under
     Section 512(d)(1) for Another Intended Use.........
    Animal Drug Product Fee.............................          10,705
    Animal Drug Establishment Fee \1\...................         157,702
Animal Drug Sponsor Fee \2\.............................         137,446
------------------------------------------------------------------------
\1\ An animal drug establishment is subject to only one such fee each
  fiscal year.
\2\ An animal drug sponsor is subject to only one such fee each fiscal
  year.

VIII. Fee Waiver or Reduction; Exemption From Fees

    The types of fee waivers, fee reductions, and exemptions from fees 
that applied during ADUFA IV still exist in ADUFA V, with one 
exception. After September 30, 2023, there is no longer an exemption 
for any person who submits to CVM a supplemental animal drug 
application relating to a new animal drug application approved under 
section 512 of the FD&C Act, solely to add the application number to 
the labeling of the drug in the manner specified in section 503(w) of 
the FD&C Act.
    Remaining waivers and reductions apply for the following: barriers 
to innovation; where fees will exceed the cost to review the animal 
drug application; if the application is related

[[Page 61464]]

to certain free-choice medicated feeds; if the application is solely 
for a MUMS indication; or if the sponsor is a small business submitting 
its first animal drug application. See section 740(d)(1) of the FD&C 
Act.

A. Barrier to Innovation Waivers or Fee Reductions

    Under section 740(d)(1)(A) of the FD&C Act, an animal drug 
applicant may qualify for a waiver or reduction of one or more ADUFA 
fees if the fee would present a significant barrier to innovation 
because of limited resources available to the applicant or other 
circumstances. CVM's guidance for industry (GFI) #170, entitled 
``Animal Drug User Fees and Fee Waivers and Reductions,'' \2\ states 
that the Agency interprets this provision to mean that a waiver or 
reduction is appropriate when: (1) the product for which the waiver is 
being requested is innovative, or the requestor is otherwise pursuing 
innovative animal drug products or technology and (2) the fee would be 
a significant barrier to the applicant's ability to develop, 
manufacture, or market the innovative product or technology. Only those 
applicants that meet both criteria will qualify for a waiver or 
reduction in user fees under this provision (see GFI #170 at pp. 6-8). 
For purposes of determining whether the second criterion would be met 
based on limited financial resources available to the applicant, FDA 
has determined an applicant with financial resources of less than 
$20,000,000 (including the financial resources of the applicant's 
affiliates), adjusted annually for inflation, has limited resources 
available. Using the CPI for urban consumers (U.S. city average; not 
seasonally adjusted; all items; annual index), the inflation-adjusted 
level for FY 2025 will be $23,258,600; this level represents the 
financial resource ceiling that will be used to determine if there are 
limited resources available to an applicant requesting a Barrier to 
Innovation waiver on financial grounds for FY 2025. Requests for a 
waiver must be submitted in writing to FDA each fiscal year not later 
than 180 days from when the fees are due. A waiver granted on Barrier 
to Innovation grounds (or any of the other grounds listed in section 
740(d)(1) of the FD&C Act) is only valid for one fiscal year. If a 
sponsor is not granted a waiver, they are liable for the fees.
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    \2\ CVM's GFI #170 is located at: https://www.fda.gov/downloads/AnimalVeterinary/GuidanceComplianceEnforcement/GuidanceforIndustry/UCM052494.pdf.
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B. Exemption or Exception From Fees

    In addition to the waivers and fee reductions described above, one 
fee exemption and two exceptions still apply in ADUFA V.
    If an animal drug application, supplemental animal drug 
application, or investigational submission involves the intentional 
genomic alteration of an animal that is intended to produce a human 
medical product, any person who is the named applicant or sponsor of 
that application or submission will not be subject to sponsor, product, 
or establishment fees under ADUFA based solely on that application or 
submission (see section 740(d)(4) of the FD&C Act).
    There is an exception from application fees for animal drug 
applications submitted under section 512(b)(1) of the FD&C Act by a 
sponsor who previously applied for conditional approval under section 
571 of the FD&C Act for the same product and paid an application fee at 
the time they applied for conditional approval, provided the sponsor 
has submitted the application under section 512(b)(1) of the FD&C Act 
within the timeframe specified in section 571(h) of the FD&C Act. There 
is also an exception from application fees for previously filed 
applications that were not approved or were withdrawn (without waiver 
or refund). Both exceptions are detailed in section 740(a)(1)(C) of the 
FD&C Act.

IX. Procedures for Paying the FY 2025 Fees

A. Application Fees and Payment Instructions

    The FY 2025 fee established in the new fee schedule must be paid 
for an animal drug application or supplement subject to fees under 
ADUFA V that is submitted on or after October 1, 2024. The payment must 
be made in U.S. currency from a U.S. bank by one of the following 
methods: wire transfer, electronically, check, bank draft, or U.S. 
postal money order made payable to 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). Electronic payment 
options are based on the balance due. Payment by credit card is 
available only for balances that are less than $25,000. If the balance 
exceeds this amount, only the ACH option is available. Secure 
electronic payments can be submitted using the User Fees Payment Portal 
at https://userfees.fda.gov/pay, or the Pay.gov payment option is 
available to you after you submit a cover sheet. (Note: only full 
payments are accepted. No partial payments can be made online.) Once 
you search for and find your invoice, select ``Pay Now'' to be 
redirected to www.pay.gov. Payments must be made using U.S. bank 
accounts as well as U.S. credit cards.
    When paying by check, bank draft, or U.S. postal money order, 
please write your application's unique Payment Identification Number 
(PIN), beginning with the letters AD, on the upper right-hand corner of 
your completed Animal Drug User Fee Cover Sheet. Also write the FDA's 
post office box number (P.O. Box 979033) and PIN on the enclosed check, 
bank draft, or money order. Mail the payment and a copy of the 
completed Animal Drug User Fee Cover Sheet to: Food and Drug 
Administration, P.O. Box 979033, St. Louis, MO 63197-9000. Note: In no 
case should the payment for the fee be submitted to FDA with the 
application.
    When paying by wire transfer, the invoice number or PIN needs to be 
included. Without the invoice number or PIN, the payment may not be 
applied, and the invoice amount would 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 
to add that amount to the payment to ensure that the invoice is paid in 
full.
    Use the following account information when sending a payment by 
wire transfer: U.S. Department of the Treasury, TREAS NYC, 33 Liberty 
St., New York, NY 10045, Account Name: Food and Drug Administration, 
Account Number: 75060099, U.S. Department of the Treasury routing/
transit number: 021030004, SWIFT Number: FRNYUS33.
    To send a check by a courier such as FedEx, the courier must 
deliver the check and printed copy of the cover sheet to U.S. Bank: 
U.S. Bank, Attn: Government Lockbox 979033, 3180 Rider Trail South, 
Earth City, MO 63045. (Note: This address is for courier delivery only. 
If you have any questions concerning courier delivery, contact U.S. 
Bank at 855-259-3064. This telephone number is only for questions about 
courier delivery.)
    It is important that the fee arrives at the bank at least a day or 
two before the application arrives at FDA's CVM. FDA records the 
official application receipt date as the later of the following: the 
date the application was received by CVM, or the date U.S. Bank 
notifies FDA that your payment in the full amount has been received, or 
when the U.S. Department of the Treasury notifies FDA of receipt of an 
electronic or wire transfer payment. U.S. Bank and the

[[Page 61465]]

U.S. Department of the Treasury are required to notify FDA within 1 
working day, using the PIN described previously. The tax identification 
number of FDA is 53-0196965.

B. Application Cover Sheet Procedures

    Step One: Create a user account and password. Log on to the ADUFA 
website at https://www.fda.gov/industry/animal-drug-user-fee-act-adufa/animal-drug-user-fee-cover-sheet and, under Application Submission 
Information, click on ``Create ADUFA User Fee Cover Sheet.'' For 
security reasons, each firm applying will be assigned an organization 
identification number, and each user will also be required to set up a 
user account and password the first time you use this site. Online 
instructions will walk you through this process.
    Step Two: Create an Animal Drug User Fee Cover Sheet, transmit it 
to the FDA, and print a copy. After logging into your account with your 
username and password, complete the steps required to create an Animal 
Drug User Fee Cover Sheet. One cover sheet is needed for each animal 
drug application or supplement. Once you are satisfied that the data on 
the cover sheet is accurate and you have finalized the cover sheet, you 
will be able to transmit it electronically to the FDA and you will be 
able to print a copy of your cover sheet showing your unique PIN.
    Step Three: Send the payment for your application as described in 
section IX.A above.
    Step Four: Submit your application.

C. Product, Establishment, and Sponsor Fees

    By December 31, 2024, FDA will issue invoices and payment 
instructions for product, establishment, and sponsor fees for FY 2025 
using this fee schedule. Payment will be due by January 31, 2025. FDA 
will issue invoices in November 2025 for any products, establishments, 
and sponsors subject to fees for FY 2025 that qualify for fees after 
the December 2024 billing.

    Dated: July 26, 2024.
Lauren K. Roth,
Associate Commissioner for Policy.
[FR Doc. 2024-16894 Filed 7-30-24; 8:45 am]
BILLING CODE 4164-01-P