[Federal Register Volume 78, Number 149 (Friday, August 2, 2013)]
[Notices]
[Pages 46980-46984]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-18624]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA-2013-N-0007]
Prescription Drug User Fee Rates for Fiscal Year 2014
AGENCY: Food and Drug Administration, HHS.
ACTION: Notice.
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SUMMARY: The Food and Drug Administration (FDA) is announcing the rates
for prescription drug user fees for
[[Page 46981]]
fiscal year (FY) 2014. The Federal Food, Drug, and Cosmetic Act (the
FD&C Act), as amended by the Prescription Drug User Fee Amendments of
2012, which was signed by the President on July 9, 2012 (PDUFA V),
authorizes FDA to collect user fees for certain applications for
approval of drug and biological products, on establishments where the
products are made, and on such products. Base revenue amounts to be
generated from PDUFA fees were established by PDUFA V, with provisions
for certain adjustments. Fee revenue amounts for applications,
establishments, and products are to be established each year by FDA so
that one-third of the PDUFA fee revenues FDA collects each year will be
generated from each of these categories. This document establishes fee
rates for FY 2014 for application fees for an application requiring
clinical data ($2,169,100), for an application not requiring clinical
data or a supplement requiring clinical data ($1,084,550), for
establishment fees ($554,600), and for product fees ($104,060). These
fees are effective on October 1, 2013, and will remain in effect
through September 30, 2014. For applications and supplements that are
submitted on or after October 1, 2013, the new fee schedule must be
used. Invoices for establishment and product fees for FY 2014 will be
issued in August 2013 using the new fee schedule.
FOR FURTHER INFORMATION CONTACT: David Miller, Office of Financial
Management (HFA-100), Food and Drug Administration, 1350 Piccard Dr.,
PI50, Rm. 210J, Rockville, MD 20850, 301-796-7103.
SUPPLEMENTARY INFORMATION:
I. Background
Sections 735 and 736 of the FD&C Act (21 U.S.C. 379g and 379h,
respectively) establish three different kinds of user fees. Fees are
assessed on the following: (1) Certain types of applications and
supplements for approval of drug and biological products; (2) certain
establishments where such products are made; and (3) certain products
(section 736(a) of the FD&C Act). When certain conditions are met, FDA
may waive or reduce fees (section 736(d) of the FD&C Act).
For FY 2013 through FY 2017, the base revenue amounts for the total
revenues from all PDUFA fees are established by PDUFA V. The base
revenue amount for FY 2013, which becomes the base amount for the
remaining 4 FYs of PDUFA V, is $718,699,000, as published in the
Federal Register of August 1, 2012 (77 FR 45639). That FY 2013 base
revenue amount is further adjusted each year after FY 2013 for
inflation and workload. Fees for applications, establishments, and
products are to be established each year by FDA so that revenues from
each category will provide one-third of the total revenue to be
collected each year.
II. Fee Revenue Amount for FY 2014
The base revenue amount for FY 2014 is $718,699,000, prior to
adjustment for inflation and workload (see section 736(c)(1) of the
FD&C Act).
A. FY 2014 Statutory Fee Revenue Adjustments for Inflation
PDUFA V specifies that the $718,699,000 is to be further adjusted
for inflation increases for FY 2014 using 2 separate adjustments--one
for payroll costs and one for non-pay costs (see section 736(c)(1) of
the FD&C Act).
The component of the inflation adjustment for payroll costs shall
be 1 plus the average annual percent change in the cost of all
personnel compensation and benefits (PC&B) paid per full-time
equivalent position (FTE) at FDA for the first 3 of the 4 preceding
FYs, multiplied by the proportion of PC&B costs to total FDA costs of
the review of human drug applications for the first 3 of the preceding
4 FYs (see section 736(c)(1)(B) of the FD&C Act). 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 of this document summarizes that actual cost and FTE data
for the specified FYs, and provides the percent change from the
previous FY and the average percent change over the first 3 of the 4
FYs preceding FY 2014. The 3-year average is 2.05 percent.
Table 1--FDA Personnel Compensation and Benefits (PC&B) Each Year and Percent Change
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Fiscal year 2010 2011 2012 3-Year average
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Total PC&B.......................... $1,634,108,000 $1,761,655,000 $1,824,703,000 .................
Total FTE........................... 12,526 13,331 13,382 .................
PC&B per FTE........................ $130,457 $132,147 $136,355 .................
Percent Change from Previous Year... 1.67% 1.30% 3.18% 2.05%
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The statute specifies that this 2.05 percent should be multiplied
by the proportion of PC&B for the review of human drug applications.
Table 2 of this document shows the amount of PC&B and the total amount
obligated for the process for the review of human drug applications for
the same 3 FYs.
Table 2--PC&B as a Percent of Fee Revenues Spent on the Process for the Review of Human Drug Applications
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Fiscal year 2010 2011 2012 3-Year average
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Total PC&B.......................... $573,603,582 $596,627,595 $592,642,252 .................
Total Costs......................... $931,845,581 $1,025,621,707 $1,032,419,218 .................
PC&B Percent........................ 62% 58% 57% 59%
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The payroll adjustment is 2.05 percent multiplied by 59 percent (or
1.21 percent).
The statute specifies that the portion of the inflation adjustment
for non-payroll costs for FY 2014 is the average annual percent change
that occurred in the Consumer Price Index (CPI) for urban consumers
(Washington-Baltimore, DC-MD-VA-WV; not seasonally adjusted; all items;
annual
[[Page 46982]]
index) for the first 3 of the preceding 4 years of available data
multiplied by the proportion of all costs of the process for the review
of human drug applications other than PC&B (see section 736(c)(1)(C) of
the FD&C Act). Table 3 of this document provides the summary data for
the percent change in the specified CPI for the Baltimore-Washington
area. The data is published by the Bureau of Labor Statistics and can
be found on their Web site at http://data.bls.gov/cgi-bin/surveymost?cu
by checking the box marked ``Washington-Baltimore All Items, November
1996=100--CUURA311SA0'' and then clicking on the ``Retrieve Data''
button.
Table 3--Annual and 3-Year Average Percent Change in Baltimore-Washington Area CPI
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Year 2010 2011 2012 3-Year average
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Annual CPI.......................... 142.218 146.975 150.212 .................
Annual Percent Change............... 1.72% 3.34% 2.20% 2.42%
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To calculate the inflation adjustment for non-pay costs, we
multiply the 2.42 percent by the proportion of costs of the process for
the review of human drug applications obligated for costs other than
PC&B. Since 59 percent was obligated for PC&B as shown in table 2 of
this document, 41 percent is the portion of costs other than PC&B (100
percent minus 59 percent equals 41 percent). The non-payroll adjustment
is 2.42 percent times 41 percent, or 0.99 percent.
To complete the inflation adjustment, we add the payroll component
(1.21 percent) to the non-pay component (0.99 percent), for a total
inflation adjustment of 2.20 percent (rounded), and then add one,
making 1.0220. We then multiply the amount base revenue amount for FY
2014 ($718,669,000) by 1.0220, yielding an inflation adjusted amount of
$734,479,718.
B. FY 2014 Statutory Fee Revenue Adjustments for Workload
Title I of the Food and Drug Administration Safety and Innovation
Act (FDASIA) (Pub. L. 112-144) specifies that after the $718,699,000
has been adjusted for inflation, the inflation adjusted amount
($734,479,718) shall be further adjusted for workload (see section
736(c)(2) of the FD&C Act). Title I also requires an independent
accounting or consulting firm to review the adequacy of the adjustment
for workload in FY 2013 and FY 2015 and publish the results of those
reviews (see section 103(c)(2) of FDASIA). The reports must evaluate
whether the adjustment reasonably represents actual changes in workload
volume and complexity of human drug review and present recommendations
to discontinue, retain, or modify any elements of the adjustment. After
review of the reports and receipt of public comments, FDA may adopt
appropriate changes to the workload adjustment methodology. FDA
contracted with an independent consulting firm in FY 2013 to conduct
the first required assessment of the workload adjuster. This assessment
examined the performance of the workload adjuster and its ability to
effectively measure changes in workload volume and complexity during
the FY 2009-2013 period. The report is available online at http://www.fda.gov/downloads/ForIndustry/UserFees/PrescriptionDrugUserFee/UCM350567.pdf. The report found that the current methodology reasonably
represents workload volume associated with the human drug review
process. However, the report concluded that the methodology is flawed
with respect to measuring workload complexity, known as the adjustment
for changes in review activities (``Complexity Factor''), because it
does not represent the total amount of work per submission. The report
further notes that work complexity increased substantially during the
evaluation period, but the Complexity Factor produced negative
adjustments to the overall Workload Adjuster, indicating that human
drug review became less complex over this period. Accordingly, the
report recommends that FDA consider removing the current Complexity
Factor. The report also found that the statute's use of 5-year rolling
averages to measure changes in workload against the base years was not
as sensitive to recent trends as 3-year rolling averages would be.
After reviewing the report, FDA is removing the Complexity Factor from
the workload adjustment methodology and adopting 3-year averages to
measure changes in workload volume, rather than the 5-year averages
used in prior adjustments. This is consistent with the use of 3-year
averages for inflation adjustment calculations as called for under
PDUFA V (section 736(c)(1) of the FD&C Act). The public comment
received on the report indicated that changes to the workload adjuster
methodology should be considered in the context of other aspects of the
PDUFA financial model, including standard costs and time reporting in
the human drug review process. FDA agrees with this point and will
consider multiple aspects of the PDUFA financial model as the Agency
investigates alternative methods to more accurately account for work
complexity in the workload adjuster.
The statute specifies that changes FDA adopts are effective the
first FY after FDA adopts the changes and each subsequent FY. Since FDA
is adopting the changes in FY 2013, the changes are effective for FY
2014 fees.
To calculate the FY 2014 adjustment factor, FDA calculated the
average number of each of the four types of applications specified in
the workload adjustment provision: (1) Human drug applications; (2)
active commercial investigational new drug applications (INDs)
(applications that have at least one submission during the previous 12
months); (3) efficacy supplements; and (4) manufacturing supplements
received over the 3-year period that ended on June 30, 2012 (base
years), and the average number of each of these types of applications
over the most recent 3 year period that ended June 30, 2013.
The calculations are summarized in table 4 of this document. The 3-
year averages for each application category are provided in column 1
(``3-Year Average Base Years 2010-2012'') and column 2 (``3-Year
Average 2011-2013'').
Column 3 of table 4 of this document reflects the percent change in
workload from column 1 to column 2. Column 4 of table 4 of this
document shows the weighting factor for each type of application,
estimating how much of the total FDA drug review workload was accounted
for by each type of application in the table during the most recent 3
years. Column 5 of table 4 of this document is the weighted percent
change in each category of workload. This 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 table 4 of this
document is the sum of the values in column 5 that are added,
reflecting an increase in workload of 3.07 percent for FY 2014 when
compared to the base years.
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Table 4--Workload Adjuster Calculation for FY 2014
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Application type Column 1 Column 2 Column 3 Column 4 Column 5
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3-year average Percent change
base years 2010- 3-year average (Column 1 to Weighting factor Weighted percent
2012 2011-2013 Column 2) (percent) change
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New Drug Applications/Biologics License Applications..... 124.4 131.0 5.39 38.6 2.08
Active Commercial INDs................................... 6830.0 6965.0 1.98 41.4 0.82
Efficacy Supplements..................................... 136.3 140.3 2.93 9.3 0.27
Manufacturing Supplements................................ 2548.3 2524.7 -0.93 10.7 -0.10
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FY 2014 Workload Adjuster............................ ................. ................. ................. ................. 3.07
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The FY 2014 workload adjustment in the last line of Table 4 of this
document is 3.07 percent.
Table 5 of this document shows the calculation of the revenue
amount for FY 2014. The $718,669,000 subject to adjustment on the first
line is multiplied by the inflation adjustment factor of 1.0220,
resulting in the inflation adjusted amount on the third line,
$734,479,718. That amount is then multiplied by one plus the workload
adjustment of 3.07 percent, resulting in the inflation and workload
adjusted amount of $757,028,000 on the fifth line, rounded to the
nearest thousand dollars.
Table 5--PDUFA Revenue Amount for FY 2014, Summary Calculation
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FY 2013 Revenue Amount and Base Subsequent FYs as $718,669,000
published in the Federal Register of August 1, 2012
(77 FR 45639) (rounded to nearest thousand dollars).
Inflation Adjustment Factor for FY 2014 (1 plus 2.20 1.0220
percent)............................................
Inflation Adjusted Amount............................ $734,479,718
Workload Adjustment Factor for FY 2013 (1 plus 3.07 1.0307
percent)............................................
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Inflation and Workload Adjusted Amount (rounded $757,028,000
to nearest thousand dollars)....................
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PDUFA specifies that one-third of the total fee revenue is to be
derived from application fees, one-third from establishment fees, and
one-third from product fees (see section 736(b)(2) of the FD&C Act).
Accordingly, one third of the total revenue amount ($757,028,000), or a
total of $252,342,667, is the amount of fee revenue that will be
derived from each of these fee categories: Application Fees,
Establishment Fees, and Product Fees.
III. Application Fee Calculations
A. Application Fee Revenues and Application Fees
Application fees will be set to generate one-third of the total fee
revenue amount, or $252,342,667 in FY 2014, as calculated previously in
this document.
B. Estimate of the Number of Fee-Paying Applications and the
Establishment of Application Fees
For FY 2013 through FY 2017, FDA will estimate the total number of
fee-paying full application equivalents (FAEs) it expects to receive
the next FY by averaging the number of fee-paying FAEs received in the
three most recently completed FYs. This will avoid having FDA try to
estimate the number it expects to receive in the current FY.
In estimating the number of fee-paying FAEs, a full application
requiring clinical data counts as one FAE. An application not requiring
clinical data counts as one-half an FAE, as does a supplement requiring
clinical data. An application that is withdrawn, or refused for filing,
counts as one-fourth of an FAE if 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.
As table 6 of this document shows, the average number of fee-paying
FAEs received annually in the most recent 3-year period is 116.333
FAEs. FDA will set fees for FY 2014 based on this estimate as the
number of full application equivalents that will pay fees.
Table 6--Fee-Paying FAE 3-Year Average
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FY 2010 2011 2012 3-year average
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Fee-Paying FAEs............................. 118.375 108.250 122.375 116.333
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The FY 2014 application fee is estimated by dividing the average
number of full applications that paid fees over the latest 3 years,
116.333, into the fee revenue amount to be derived from application
fees in FY 2014, $252,342,667. The result, rounded to the nearest $100,
is a fee of $2,169,100 per full application requiring clinical data,
and $1,084,550 per application not requiring clinical data or per
supplement requiring clinical data.
IV. Fee Calculations for Establishment and Product Fees
A. Establishment Fees
At the beginning of FY 2013, the establishment fee was based on an
estimate that 455 establishments would be subject to and would pay
fees. By the
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end of FY 2013, FDA estimates that 490 establishments will have been
billed for establishment fees, before all decisions on requests for
waivers or reductions are made. FDA estimates that a total of 20
establishment fee waivers or reductions will be made for FY 2013. In
addition, FDA estimates that another 15 full establishment fees will be
exempted this year based on the orphan drug exemption in section 736(k)
of the FD&C Act. Subtracting 35 establishments (20 waivers, plus the
estimated 15 establishments under the orphan exemption) from 490 leaves
a net of 455 fee-paying establishments. FDA will use 455 for its FY
2014 estimate of establishments paying fees, after taking waivers and
reductions into account. The fee per establishment is determined by
dividing the adjusted total fee revenue to be derived from
establishments ($252,342,667) by the estimated 455 establishments, for
an establishment fee rate for FY 2014 of $554,600 (rounded to the
nearest $100).
B. Product Fees
At the beginning of FY 2013, the product fee was based on an
estimate that 2,435 products would be subject to and would pay product
fees. By the end of FY 2013, FDA estimates that 2,510 products will
have been billed for product fees, before all decisions on requests for
waivers, reductions, or exemptions are made. FDA assumes that there
will be 45 waivers and reductions granted. In addition, FDA estimates
that another 40 product fees will be exempted this year based on the
orphan drug exemption in section 736(k) of the FD&C Act. FDA estimates
that 2,425 products will qualify for product fees in FY 2013, after
allowing for waivers and reductions, including the orphan drug
products, and will use this number for its FY 2014 estimate. The FY
2014 product fee rate is determined by dividing the adjusted total fee
revenue to be derived from product fees ($252,342,667) by the estimated
2,425 products for a FY 2014 product fee of $104,060 (rounded to the
nearest $10).
V. Fee Schedule for FY 2014
The fee rates for FY 2014 are set out in table 7 of this document:
Table 7--Fee Schedule for FY 2014
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Fee rates for FY
Fee category 2014
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Applications:
Requiring clinical data.......................... $2,169,100
Not requiring clinical data...................... 1,084,550
Supplements requiring clinical data.............. 1,084,550
Establishments....................................... 554,600
Products............................................. 104,060
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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 or supplement subject to fees under
PDUFA that is received after September 30, 2013. Payment must be made
in U.S. currency by check, bank draft, or U.S. postal money order
payable to the order of the Food and Drug Administration. Please
include the user fee identification (ID) number on your check, bank
draft, or postal money order. Your payment can be mailed to: Food and
Drug Administration, P.O. Box 979107, St. Louis, MO 63197-9000.
If checks are to be sent by a courier that requests a street
address, the courier can deliver the checks to: U.S. Bank, Attention:
Government Lockbox 979107, 1005 Convention Plaza, St. Louis, MO 63101.
(Note: This U.S. Bank address is for courier delivery only. Contact the
U.S. Bank at 314-418-4013 if you have any questions concerning courier
delivery.)
Please make sure that the FDA post office box number (P.O. Box
979107) is written on the check, bank draft, or postal money order.
Wire transfer payment may also be used. Please reference your
unique user fee ID number when completing your transfer. The
originating financial institution may charge a wire transfer fee.
Please ask your financial institution about the fee and add it to your
payment to ensure that your fee is fully paid. The account information
is as follows: New York Federal Reserve Bank, U.S. Department of the
Treasury, TREAS NYC, 33 Liberty St., New York, NY 10045, Acct. No.:
75060099, Routing No.: 021030004, SWIFT: FRNYUS33, Beneficiary: FDA,
1350 Piccard Drive, Rockville, MD.
Application fees can also be paid online with an electronic check
(ACH). 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 the FDA Web site after the
user fee ID number is generated.
The tax identification number of FDA is 53-0196965.
B. Establishment and Product Fees
FDA will issue invoices for establishment and product fees for FY
2014 under the new fee schedule in August 2013. Payment will be due on
October 1, 2013. FDA will issue invoices in November 2014 for any
products and establishments subject to fees for FY 2014 that qualify
for fee assessments after the August 2013 billing.
Dated: July 29, 2013.
Leslie Kux,
Assistant Commissioner for Policy.
[FR Doc. 2013-18624 Filed 8-1-13; 8:45 am]
BILLING CODE 4160-01-P