Contains Non-Binding Recommendations 
 
                                                #183 
   
 Guidance for Industry 
 
Animal Drug User Fees:  
Fees Exceed Costs Waiver/Reduction  
 
FINAL GUIDANCE 
 
 
This guidance explains the procedures FDA expects to use to evaluate waiver requests under the fees 
exceed costs waiver/reduction provision.   
 
Comments and suggestions regarding the document should be submitted to Division of Dockets 
Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, 
MD  20852. Submit electronic comments to http://www.regulations.gov/.   All comments should be 
identified with the Docket No. 2006D-0301.   
 
For questions regarding this document, contact Steven Vaughn, Center for Veterinary Medicine (HFV-
100), Food and Drug Administration, 7520 Standish Place, Rockville, MD 20855, 240-276-8300, e-
mail: steven.vaughn@fda.hhs.gov. 
 
Additional copies of this guidance may be requested from the Communications Staff (HFV-12), Center 
for Veterinary Medicine, Food and Drug Administration, 7519 Standish Place, Rockville, MD 20855, 
and may be viewed on the Internet at 
http://www.fda.gov/AnimalVeterinary/GuidanceComplianceEnforcement/GuidanceforIndustry/ucm04
2450.htm. 
 
U.S. Department of Health and Human Services 
Food and Drug Administration 
Center for Veterinary Medicine 
March 9, 2007 
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TABLE OF CONTENTS 
 
 
I.  Introduction..............................................................................................................................3 
II.  Standard Costs.........................................................................................................................3 
A.  Standard Costs Calculation......................................................................................4 
B.  Anticipated Costs.....................................................................................................4 
C.  Applying Standard Costs to the Person Applying for the Waiver...........................4 
D.  Waiver Determination.............................................................................................5 
E.  Special Considerations.............................................................................................5 
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GUIDANCE FOR INDUSTRY 
 
Animal Drug User Fees: Fees Exceed Costs Waiver/Reduction1  
 
This guidance represents the Food and Drug Administrations (FDAs) current thinking on this topic.   It does not 
create or confer any rights for or on any person and does not operate to bind FDA or the public.  You can use an 
alternative approach if the approach satisfies the requirements of the applicable statutes and regulations.  If you want to 
discuss an alternative approach, contact the FDA staff responsible for implementing this guidance.  If you cannot 
identify the appropriate FDA staff, call the appropriate number listed on the title page of this guidance.  
 
 
I.  Introduction 
 
Enacted on November 18, 2003, the Animal Drug User Fee Act (ADUFA) (Public Law 108-130) 
amended the Federal Food, Drug, and Cosmetic Act (the FD&C Act) and requires the FDA to assess 
and collect user fees for certain applications, products, establishments, and sponsors.  It also requires 
the Agency to grant a waiver from or a reduction of those fees in certain circumstances. 
 
FDA issued Guidance for Industry #170 to provide guidance on the types of fees the Food and Drug 
Administration (FDA) is authorized to collect under ADUFA and how to request waivers and 
reductions from these fees.  This guidance further explains the procedures FDA expects to use to 
evaluate waiver requests under the fees exceed costs waiver provision.  Procedures may be updated in 
the future to reflect changes in Agency processes or changes in the law. 
 
Please note that you must submit a written request to the Agency for a waiver/reduction, including 
under the fees exceed costs waiver provision, no later than 180 days after the fee is due (section 740(i) 
of FD&C Act).  See Guidance #170 Section V for additional information about the procedures and 
timing for requesting fee waivers and reductions.   
 
FDAs guidance documents, including this guidance, do not establish legally enforceable 
responsibilities.  Instead, guidance describes the Agencys current thinking on a topic and should be 
viewed only as recommendations, unless specific regulatory or statutory requirements are cited.  The 
use of the word should in Agency guidances means that something is suggested or recommended, 
but not required.   
II.  Standard Costs 
 
To determine eligibility for a fee waiver or reduction under section 740(d)(1)(B) of the FD&C Act,  
FDA must determine the anticipated present and future costs in conducting the process for the review 
of animal drug applications for the person requesting the waiver.  The term process for the review of 
animal drug applications is defined in section 739(8) of the FD&C Act, and includes activities related 
to the review of animal drug applications, supplemental animal drug applications, and investigational 
animal drug submissions.  In determining whether the requestor qualifies for a fees exceed costs 
                                                 
1 This guidance has been prepared by the Office of New Animal Drug Evaluation in the Center for Veterinary Medicine at 
the Food and Drug Administration. 
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waiver or reduction, FDA intends to compare the fees paid with the actual and anticipated costs from 
September 1, 2003 through September 30 of the year for which the request is made.  Section 740(d)(2) 
of the FD&C Act states that in making this finding the Secretary may use standard costs. 
 
Standard costs for various components of the animal drug review process for each fiscal year are 
developed by FDA.  
A.  Standard Costs Calculation 
 
FDA developed standard costs to represent anticipated present and future costs to complete a review of 
an application or phased review of an application. Three general categories of review of animal drug 
applications/submissions exist:  Investigational New Animal Drug Submission, New Animal Drug 
Application, and Supplemental New Animal Drug Application.  FDAs cost analysis, however, clearly 
showed great variation within these categories in certain cases.  Therefore, standard costs per unit were 
developed for eight categories.  These eight categories are outlined below: 
 
 
Submission Type 
Investigational New Animal Drug (INAD) - Environmental 
INAD - Non-Food Animal Safety and Efficacy 
INAD  Food Animal Safety and Efficacy 
INAD  Manufacturing 
INAD  Human Food Safety 
Administrative New Animal Drug Application (NADA)*  
Supplemental NADA  with Safety and/or Efficacy Review 
Supplemental NADA  Other without Safety and/or Efficacy Review 
 * Administrative NADA  this includes NADAs with minor review work.   
 
B.  Anticipated Costs 
 
Investigational New Animal Drug Submissions (INADs) - INAD submissions included in each of the 
sub-processes above represent technical sections that normally would be completed prior to the 
submission of an NADA.  When the sponsor submits an investigational animal drug submission after 
September 1, 2003, FDA intends to anticipate that all required technical sections will be submitted in 
the future as well as the NADA, thus the standard costs is the total costs for review of all the technical 
sections expected to be submitted and the NADA itself.  For information on what constitutes an 
investigational animal drug submission, please refer to Guidance for Industry #173, Animal Drug 
Sponsor Fees under the Animal Drug User Fee Act (ADUFA).   
C.  Applying Standard Costs to the Person Applying for the Waiver 
 
After receiving a timely-submitted fees exceed costs waiver request, which is due no later than 180 
days after the fee is due, FDA compiles a complete list of the submissions pending on or received since 
September 1, 2003 that meet the definition of animal drug application, investigational animal drug 
submission or supplemental new animal drug application as contained in the Act.  
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Applications/submissions not meeting this definition are not included in the list.  Then FDA assigns a 
standard cost to each qualifying submission.  FDA intends to include costs for reviewing applications 
submitted by affiliates of the waiver requestor (see Guidance #170, section IV.B.).  As explained in the 
previous section, if FDA receives an INAD submission, it intends to use this as a basis for anticipating 
that other required components have been/will be submitted, culminating in the submission of a new 
animal drug application for either a food-producing or a non-food-producing animal.  The sum of all of 
these standard costs for each separate INAD/NADA represent FDAs estimate of its cost associated 
with reviewing applications submitted by the waiver requestor and its affiliates.  An example of this 
calculation is provided in Attachment 1 (Some special considerations apply to applications pending 
[received prior to September 1, 2003] on September 1, 2003, and to investigational new drug 
submissions submitted prior to September 1, 2003.  These are explained separately below.) 
 
As stated in Guidance #170, section IV.B. a request for a fee waiver or reduction on the basis of fees 
exceeding costs should include a list of affiliates, as defined in section 735(9) of the FD&C Act.   
Without this affiliate information a firms request for a waiver of fees under the fees exceeds the costs 
provision of the Animal Drug User Fee Act will likely be denied because we will not have complete 
information in order to process the request. 
    
 The Act defines affiliate to mean a business entity that has a relationship with a second business 
entity if, directly or indirectly  (A) one business entity controls, or has the power to control, the other 
business entity; or (B) a third party controls, or has the power to control, both of the business entities.  
See section 735(9) of the FD&C Act.   
D.  Waiver Determination 
 
From its records FDA will calculate the total of all ADUFA fees (application, product, sponsor, 
establishment) paid or payable by the applicant and by each of its affiliates, since the beginning of 
ADUFA on September 1, 2003 (excluding fees previously waived or refunded).  If the anticipated 
present and future costs exceed total fees paid, then the waiver request will be denied.  See section 
740(d)(1)(B) of the FD&C Act.  If fees paid exceed the anticipated present and future costs, then FDA 
intends to refund the amount of fees paid in excess of standard costs.   If a waiver or reduction is also 
requested under other provisions of ADUFA, then FDA intends to evaluate the other waiver or 
reduction requests first.  Only if it denies the other waiver or reduction requests would the Agency 
review the fees exceed costs request.   
E.  Special Considerations 
 
For any submission received after September 1, 2003, the estimated incurred costs associated with the 
submission will be 100 percent of the standard costs for that category of submission in the fiscal year it 
was submitted. By applying 100% of these costs, whether or not action on the application is 
completed, FDA is complying with the statutory direction to include future costs in its cost 
estimation. 
 
For submissions submitted prior to September 1, 2003, some review may still be on-going on or after 
September 1, 2003.  Based on CVMs estimates of the average length of various review processes, 
fractional standard costs have been developed to represent the portion of the review still going on after 
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September 1, 2003. The following table shows the percent of standard costs that FDA intends to apply 
to each submission sub-process, based on the year the initial submission was received.  For example, in 
the chart below, for a waiver request submitted in FY 2004, if an INAD HFS submission was received 
in 1996, an estimated 6.3% of the work still remains to be completed in FY 2004. 
 
Fiscal Year  INAD  INAD  INAD  INAD  INAD  Administrative  Supp.  Supp. 
of Receipt  Envir.  NF  Food  Mfg  HFS  NADA  S&E  Other 
of First  S&E  S&E 
Submission 
of the Sub-
process 
FY 96          6.3%       
FY 97          18.8%       
FY 98          31.3%       
FY 99          43.8%       
FY 00          56.3%       
FY 01    16.7%  16.7%    68.8%       
FY 02    50%  50%  25%  81.3%       
FY 03  50%  83.3%  83.3%  75%  93.4%  50%  50%  50% 
FY 04  100%  100%  100%  100%  100%  100%  100%  100% 
 
For INAD Human Food Safety (HFS), FDA has adopted the assumption that an average INAD HFS 
review spans 8 years; for INAD Safety and Efficacy (S&E) submission (whether Food or Non-Food 
(NF)), FDA has adopted the assumption that on average the review span is 3 years; for INAD 
Manufacturing (Mfg) FDA has adopted the assumption that on average the review span is 2 years; and 
for INAD Environmental, NADAs, and Supplementals FDA has adopted the assumption that the 
average span for review is 1 year.  For submissions submitted prior to these time spans no costs are 
allocated.     
 
In addition, as discussed above, for INAD submissions FDA assumes that the remaining required 
technical sections and the NADA itself will be submitted in the future and thus will incur the full costs 
of them.  For example, under this guidance if prior to September 1, 2003 a firm has submitted for a 
food animal approval the INAD Human Food Safety, INAD Food Animal S&E and INAD 
Manufacturing technical sections, FDA will apply the pro-rata charge based on the year those 
submissions were received (see chart above).  However, FDA also assumes that the remaining required 
technical sections  INAD Environmental and Administrative NADA will be submitted in the future 
thus they would be applied the full costs of those technical sections.  (See example in Attachment 1) 
 
  
See Attachment 1  Sample Cost Calculation Hypothetical Firm A 
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Attachment 1  Sample Cost Calculation 
Hypothetical Firm A 
ADUFA Fees Exceed Cost Summary 
(In thousands) 
INAD-Human Food Safety 
 % of  applications/ 
fiscal  work   submissions  current  standard  standard 
remaini
 year  ng  received  work units  cost/unit  cost 
1996  6.3%     0.00       
1997  18.8%  1  .188       
1998  31.3%    0.00       
1999  43.8%    0.00       
2000  56.3%    0.00       
2001  68.8%    0.00       
2002  81.3%    0.00       
2003  93.4%    0.00       
Prior to FY 04    1  .188  1012.50  190.35 
2004  100.0%    0.00  1012.50  0.00 
Future Cost        0.00  1012.50  0.00 
Cumulative 
Cost              190.35 
 
INAD-Safety and Efficacy Food Animals 
 
applications/ 
 
fiscal   % of work   submissions  current  standard  standard 
 
work 
 
year  remaining  received  units  cost/unit  cost 
 
2001  16.7%  1  .167         
2002  50.0%    0.00         
 
2003  83.3%    0.00         
Prior to FY 04    1  .167  948.70  158.44   
 
2004  100.0%    0.00  948.70  0.00 
 
Future Cost        0.00  948.70  0.00   
Cumulative   
Cost              158.44   
 
 
INAD-Safety and Efficacy Non Food Animals 
fiscal  applications/  current  standard  standard 
 % of work   submissions 
year  remaining  received  work units  cost/unit  cost 
2001    16.7%  0  0.00       
2002    50.0%    0.00       
2003    83.3%    0.00       
Prior to FY    0  0.00  937.90  0.00 
04 
2004  100.0%    0.00  937.90  0.00 
Future Cost        0.00  937.90  0.00 
Cumulative              0.00 
Cost 
 
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INAD-Environmental 
 % of 
fiscal  work   applications/submissions  current  standard  standard 
year  remaining  received  work units  cost/unit  cost 
2003  50.0%    0.00       
 Prior to 
FY 04       0.00   26.80   0.00 
2004  100.0%    0.00  26.80  0.00 
Future 
Cost     1  1.00  26.80  26.80 
Cumulative 
Cost             26.80 
 
INAD-Manufacturing 
applications/ 
fiscal   % of work   submissions  current  standard  Standard 
year  remaining  received  work units  cost/unit  Cost 
2002  25.0%  1  0.25       
2003  75.0%    0.00       
Prior to FY 04    1  0.25  213.80  53.45 
2004  100.0%    0.00  213.80  0.00 
Future Cost       0.00  213.80  0.00 
Cumulative 
Cost              53.45 
 
Administrative NADA (this includes NADAs with minor review work) 
 % of  applications/ 
fiscal  work   submissions  current  standard  standard 
year  remaining  received  work units  cost/unit  cost 
2003  50.0%    0.00       
Prior to FY 04      0.00  170.90  0.00 
2004  100.0%    0.00  170.90  0.00 
Future Cost     1  1.00  170.90  170.90 
Cumulative 
Cost              170.90 
 
 
 
 
Supplement-Safety and Efficacy 
applications/ 
fiscal   % of work   submissions  current  standard  Standard 
year  remaining  received  work units  cost/unit  Cost 
2003  50.0%    0.00       
Prior to FY 04      0.00  93.20  0.00 
2004  100.0%    0.00  93.20  0.00 
Future Cost      0.00  93.20  0.00 
Cumulative Cost              0.00 
 
 
 
 
 
 
 
 
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Supplement-Other 
applications/ 
fiscal   % of work   submissions  current  standard  standard 
year  remaining  received  work units  cost/unit  cost 
2003  50.0%    0.00       
Prior to FY 04      0.00  15.10  0.00 
2004  100.0%    0.00  15.10  0.00 
Future Cost        0.00  15.10  0.00 
Cumulative 
cost              0.00 
 
Fees Paid 
Fiscal Year  Sponsor  Product  Establishment  Application  Total 
2004  15.45  0  23.95  0  39.40 
Cumulative 
Fees Paid  15.45  0  23.95  0  39.40 
 
Total ADUFA 
Fiscal  total  fees  fees less   
Year  cost  paid  cost   
Previous to FY 
2004  402.23        
2004  0  39.40      
Future Cost  197.70         
Cumulative Cost  599.93  39.40  560.53  No Refund 
 
 
In the above example, if the total of all fees paid by Firm A and its affiliates exceeded $599,930 then FDA would refund the amount of fees 
paid in excess of $599,930.  Since in this example the fees paid by Firm A are less than the total cost, Firm's A waiver request will be 
denied.   
 
The standard costs for each year will be published on CVM's web page.  
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