Fees for Human Drug 
Compounding  Outsourcing 
Facilities Under Sections 503B 
and 744K of the FD&C Act 
 
 
Guidance for Industry 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Department of Health and Human Services 
Food and Drug Administration 
Center for Drug Evaluation and Research (CDER) 
User Fees 
November 2014 
 
OMB Control Number 0910-0776 
Expiration Date: 12/31/2020 
See additional PRA statement in Section VI of this guidance 
(Note: Expiration date updated 04/02/2020)
   
Fees for Human Drug 
Compounding  Outsourcing 
Facilities Under Sections 503B 
and 744K of the FD&C Act 
Guidance for Industry 
Additional copies are available from: 
 
Office of Communications, Division of Drug Information  
Center for Drug Evaluation and Research 
Food and Drug Administration 
10001 New Hampshire Ave., Hillandale Bldg., 4th Floor  
Silver Spring, MD 20993  
Phone: 855-543-3784 or 301-796-3400; Fax: 301-431-6353 
Email: druginfo@fda.hhs.gov  
http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/default.htm 
 
or 
 
Office of Policy 
Office of the Commissionner 
Food and Drug Administration 
10903 New Hampshire Avenue 
Silver Spring, MD 20993 
Phone : 301-796-4830 
 
 
 
 
 
 
 
U.S. Department of Health and Human Services 
Food and Drug Administration 
Center for Drug Evaluation and Research (CDER) 
User Fees 
 
November 2014 
 
   
TABLE OF CONTENTS 
 
I.  INTRODUCTION ........................................................................................... 1 
II.  BACKGROUND.............................................................................................. 2 
III.  FEES................................................................................................................ 2 
A.  Annual Establishment Fee .................................................................................. 2 
1. Entities that Registered Before October 1, 2014........................................................ 3 
2. Entities that Register Outside of the Annual Registration Period ................................. 3 
B.  Adjustment Factors ............................................................................................ 4 
1. Inflation Adjustment Factor................................................................................... 4 
2. Small Business Adjustment Factor .......................................................................... 4 
C.  Reinspection Fee ................................................................................................ 5 
1. In General .......................................................................................................... 5 
2. Small Business Reinspection Fees .......................................................................... 6 
D.  How to Qualify for a Small Business Reduction .................................................... 6 
1. Which Entities Qualify for a Small Business Reduction? ............................................ 6 
2. Content and Format of Request .............................................................................. 6 
3. Timing of Requests ............................................................................................... 7 
E.  How and When to Pay ........................................................................................ 7 
1. Annual Establishment Fees.................................................................................... 7 
2. Reinspection Fees ................................................................................................ 8 
IV.  EFFECT OF FAILURE TO PAY FEES .......................................................... 8 
V.  REFUNDS AND DISPUTE RESOLUTION .................................................... 9 
A.  Refunds ............................................................................................................. 9 
B.  Dispute Resolution ........................................................................................... 10 
1. Reconsideration Requests.................................................................................... 10 
2. Appeal Request.................................................................................................. 10 
VI.  PAPERWORK REDUCTION ACT OF 1995 ................................................ 11 
APPENDIX 1:  FORM 3908 ...................................................................................... 12 
 
 
 
 
 
  Contains Nonbinding Recommendations 
 
Guidance for Industry1 
Fees for Human  Drug Compounding 
Outsourcing  Facilities Under 
Sections 503B and 744K of the FD&C Act 
 
 
 
This guidance represents the Food and Drug Administrations (FDA or the Agency) 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  
 
This guidance is intended for entities that compound human drugs and elect to register as 
outsourcing  facilities under section 503B of the Federal Food, Drug, and Cosmetic Act (FD&C 
Act), which was added by the Drug Quality and Security Act (DQSA).2  Once an entity has 
elected to register as an outsourcing facility,  it must pay certain fees to be registered as an 
outsourcing  facility.3  
 
This guidance describes the types and amounts of fees that outsourcing facilities  must pay, the 
adjustments to fees required by law, how outsourcing  facilities can submit payment to FDA, the 
consequences of outsourcing  facilities failure to pay fees, and how an outsourcing facility can 
qualify as a small business to obtain a reduction in fees.  FDA has issued separate guidances on 
registration and reporting requirements for outsourcing  facilities.4   
 
FDAs guidance documents, including  this guidance, do not establish legally  enforceable 
responsibilities.   Instead, guidances describe the Agencys current thinking  on a topic and should 
be viewed only as recommendations,  unless specific regulatory or statutory requirements are 
cited or otherwise applicable   The use of the word should in FDA guidances means that 
something is suggested or recommended, but not required. 
 
 
                                              
1 This guidance was prepared by the Office of Management in the Center for Drug Evaluation and Research at the 
Food and Drug Administration. 
2 Public Law 113-54, Title I.  
3 See section 744K(g)(3) of the FD&C Act. 
4 FDA guidances are available on FDAs guidance website at 
http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/default.htm.  FDA revises and 
updates guidances regularly.  To make sure you have the most recent version, check this website. 
1  Contains Nonbinding Recommendations 
 
II.  BACKGROUND 
 
On November 27, 2013, the President signed the DQSA into law.  The DQSA added a new 
section 503B to the FD&C Act, creating a category of entities called outsourcing facilities.5 
Outsourcing facilities,  as defined in section 503B(d)(4) of the FD&C Act, are facilities that meet 
all of the requirements described in section 503B, including  registering with FDA as an 
outsourcing  facility and paying an annual establishment  fee.  If the conditions  outlined  in section 
503B(a) of the FD&C Act are satisfied, a drug compounded  by or under the direct supervision of 
a licensed pharmacist in an outsourcing  facility is exempt from certain sections of the FD&C 
Act, including  section 502(f)(1) (21 U.S.C. 352(f)(1)) (concerning the labeling  of drugs with 
adequate directions for use) and section 505 (21 U.S.C. 355) (concerning the approval of human 
drug products under new drug applications  (NDAs) or abbreviated new drug applications 
(ANDAs)).   
 
Drugs compounded  in outsourcing  facilities are not exempt from the requirements of section 
501(a)(2)(B) of the FD&C Act (21 U.S.C. 351(a)(2)(B)) (concerning current good manufacturing 
practice for drugs).  The fee provisions  for outsourcing facilities  in the FD&C Act, as enacted by 
the DQSA, are described in more detail below. 
 
 
III.  FEES 
 
A.  Annual Establishment Fee 
 
Beginning  in fiscal year (FY) 2015, facilities that elect to register with FDA under section 503B 
of the FD&C Act must pay an annual establishment  fee.6  Each year, the registration period for 
outsourcing  facilities begins on October 1 and ends on December 31.7  The annual establishment 
fee is paid at the time of registration and is equal to the sum of $15,000,  multiplied  by the 
inflation  adjustment factor (described in Section III.B.1), plus the small business adjustment 
factor (described in Section III.B.2).8  The fee calculation  is reflected in the following  equation: 
 
Establishment  fee = $15,000  x inflation  adjustment factor + small business adjustment 
factor 
 
FDA will publish  a notice in the Federal Register announcing the amount of the establishment 
fee to be collected in a given FY (based on the calculation set forth above) no later than 60 
calendar days before the start of that FY.9  
 
Upon receiving registration information  from a facility  that elects to register as an outsourcing 
facility,  FDA will send an invoice for the fee (see Section III.E.1 for information  on invoicing 
                                              
5 The DQSA also removes from section 503A of the FD&C Act the provisions on solicitation of prescriptions and 
advertising that had been held unconstitutional by the U.S. Supreme Court in 2002.  See Thompson v. Western States 
Med. Ctr., 535 U.S. 357 (2002). 
6 See sections 744K(a)(1) and 744K(g)(3)(A) of the FD&C Act. 
7 See section 503B(b)(1)(A) of the FD&C Act.   
8 See section 744K(c)(1)(A) of the FD&C Act. 
9 See section 744K(b)(2) of the FD&C Act. 
2  Contains Nonbinding Recommendations 
 
and instructions  for submitting  payments).  For a given FY, an outsourcing facility  will not be 
considered registered for purposes of section 503B(b) until the annual establishment fee is paid.10  
 
1.  Entities that Registered Before October 1, 2014 
 
Outsourcing facilities that registered before October 1, 2014, do not have to pay a fee for FY 
2014.  To maintain their status as outsourcing  facilities in FY 2015, however, those entities will 
have to register during the FY 2015 registration period (October 1 - December 31, 2014) and pay 
the relevant fees in accordance with the instructions  in Section III.E.1 of this guidance.  Failure 
to pay the fee by December 31, 2014, will result in an entity losing  its status as an outsourcing 
facility.  FDA will  remove the entity from the list of registered outsourcing  facilities,11  and drugs 
compounded at the facility will no longer qualify for the exemptions under section 503B(a), 
unless and until the firm re-registers and pays all required fees.12  Registration and payment of 
the annual fee must be repeated every FY.13  
 
2.  Entities that Register Outside of the Annual Registration Period 
 
Entities that elect to register as outsourcing  facilities can register outside of the annual 
registration period (October 1 to December 31 of each year).  Registration is encouraged and can 
be done at any time during the year.  Registration,  regardless of when completed, will last until 
the end of the official registration period for the year of registration (December 31).  For 
example, if an outsourcing  facility registers on May 1, 2015, which is within FY 2015 but after 
the registration period for that fiscal year, its registration will expire on December 31, 2015, and 
the outsourcing  facility will need to register for the following  FY during the annual registration 
period of that year (October 1, 2015  December 31, 2015). 14 
 
Registration,  whether within or outside of the annual registration period, will incur a full 
establishment fee, including  relevant adjustments.  An entity must complete payment of the 
establishment fee before it will  be considered registered for purposes of section 503B(b),15 and 
drugs compounded in that facility before registration and payment of fees will not qualify  for the 
exemptions for products compounded by registered outsourcing  facilities under section 
503B(a).16  See Section IV of this guidance for additional  discussion on the consequences of an 
entitys failure to register and pay fees. 
                                              
10 See section 744K(g)(3)(A) of the FD&C Act. 
11 See sections 503B(b)(1)(B)(ii) and 744K(g)(3)(A) of the FD&C Act. 
12 See section 503B(a)(9) of the FD&C Act. 
13 See sections 503B(b)(1)(A)(i) and 744K(g)(3)(A) of the FD&C Act. 
14 In this example, the entity would have to pay an establishment fee for FY 2015 when it registers in May 2015 and 
an establishment fee for FY 2016 when it registers between October and December of 2015.  For this reason, entities 
are encouraged to register and pay all related fees as early in the FY as possible. 
15 See section 744K(g)(3)(A) of the FD&C Act (stating that an outsourcing facility shall not be considered 
registered until the date that the facility remits the establishment fee) and section 503B(d)(4) of the FD&C Act 
(defining outsourcing facility, in part, as a facility that has elected to register as an outsourcing facility and complies 
with all requirements in 503B, including payment of fees). 
16 See section 503B(a) of the FD&C Act (stating that sections 502(f)(1) and 505 of the FD&C Act will not apply to 
drugs compounded by or under the supervision of a licensed pharmacist in a facility that elects to register as an 
outsourcing facility and meets the conditions of 503B(a)) and section 503B(a)(9) of the FD&C Act (stating that a 
condition of 503B(a) is the payment of relevant fees).   
3  Contains Nonbinding Recommendations 
 
 
B.  Adjustment Factors  
 
1.  Inflation Adjustment Factor 
 
The inflation  adjustment factor is a statutorily  mandated increase of the annual establishment fee. 
The inflation  adjustment factor is equal to the sum of 
 
  1; plus  
  the average annual percentage change in the cost, per full-time  equivalent  (FTE) 
position  at FDA, of all personnel compensation and benefits paid for those FTE 
positions  for the first three years of the preceding four fiscal years, multiplied  by the 
proportion  of personnel compensation and benefits costs to total costs of an average 
FTE position  at FDA for the first three years of the preceding four fiscal years; plus 
  the average annual percentage change in the Consumer Price Index for urban 
consumers for the first three years of the preceding four years of available data 
multiplied  by the proportion  of all costs other than personnel compensation and 
benefit costs to total costs of an average FTE position  at FDA for the first three of the 
preceding four fiscal years.17   
 
The inflation  adjustment will compound every year.18  In other words, the inflation  adjustment 
factor determined in one FY will be added to the total inflation-adjusted  fee from the preceding 
FY.  FDA will calculate the inflation  adjustment factor before each FY, and the adjusted fee will 
be published  in the Federal Register.19  
 
2.  Small Business Adjustment Factor 
 
Certain small businesses (see Section III.D.1) can qualify for a reduction of the annual 
establishment fee.20  Entities that qualify as small businesses under section 744K(c)(4) of the 
FD&C Act are required to pay only one-third of the annual establishment fee, or $5,000 
multiplied  by the inflation  adjustment factor.21  This is referred to as a small business reduction. 
Entities that do not qualify  for a small business reduction will pay a small business adjustment 
                                              
17 See section 744K(c)(2)(A) of the FD&C Ac t.  For an overview of how a user fee-related inflation adjustment 
factor has been implemented in the past, see FDAs overview of the Prescription Drug User Fee Act (PDUFA) 
adjustment factor (21 U.S.C. 379h(c)(1)), available at https://www.fda.gov/industry/fda-user-fee-
programs/prescription-drug-user-fee-amendments.  The inflation adjustment factor for outsourcing facility fees is 
similar to the PDUFA inflation adjustment factor, except with respect to the provision for review of the percentage 
change in the Consumer Price Index.  PDUFA compares the percentage change in the Consumer Price Index for 
urban consumers in the Washington-Baltimore region while section 744K of the FD&C Act compares the 
percentage change in the Consumer Price Index for urban consumers nation-wide.  Notwithstanding this difference, 
the inflation adjustment factor calculated under PDUFA provides insight into the FDAs implementation of similar 
statutory language and past adjustment amounts.  
18 See section 744K(c)(2)(B) of the FD&C Act. 
19 See section 744K(c)(2)(A) of the FD&C Act. 
20 See section 744K(c)(4) of the FD&C Act. 
21 Id. 
4  Contains Nonbinding Recommendations 
 
factor, equal to the total amount lost from each outsourcing facility  that was granted a small 
business reduction divided  among all outsourcing  facilities not granted such a reduction.22  
 
FDA will establish the small business adjustment factor every FY based on its best estimate of 
the number of small businesses that will  pay a reduced fee for that year and the positive 
adjustment to the establishment fee of the remaining entities needed to achieve total fees 
equaling the amount FDA would have collected if no entity qualified  for the small business 
reduction.  The estimate of the number of small businesses and the amount of the small business 
adjustment factor will be published  in the Federal Register at least 60 days before the start of 
each FY.23 
 
C.  Reinspection Fee 
 
1.  In General 
 
Under section 744K of the FD&C Act, beginning  in FY 2015, an outsourcing  facility will be 
assessed a reinspection fee each time it is subject to a reinspection.24  Reinspection is defined as:  
 
one or more inspections conducted under section 704 subsequent to an inspection 
conducted under such provision which identified noncompliance materially related 
to an applicable requirement of this Act, specifically to determine whether 
compliance has been achieved to the Secretarys satisfaction.25 
 
The reinspection fee is designed to reimburse FDA when it must visit a particular outsourcing 
facility more than once because of noncompliance  identified  during a previous inspection.  The 
reinspection fee assessed will be the reinspection fee for the fiscal year in which the reinspection 
takes place.26  Moreover, a reinspection fee will be incurred for each reinspection that occurs 
until FDA finds that the noncompliant  conditions  have been adequately addressed.27  
 
The reinspection fee will be equal to $15,000 multiplied  by the inflation  adjustment factor.28  
The inflation-adjusted  reinspection fee for each FY will be published  in the Federal Register not 
later than 60 calendar days before the start of each FY.29  
 
                                              
22 See section 744K(c)(3) of the FD&C Act. 
23 See sections 744K(c)(3) and 744K(b)(2) of the FD&C Act. 
24 See section 744(a)(1)(B). 
25 See section 744J(4) of the FD&C Act. 
26 See section 744K(a)(1)(B). 
27 See section 744K(a)(2). 
28 See section 744K(c)(1)(B) of the FD&C Act. 
29 See section 744K(b)(2) of the FD&C Act. 
5  Contains Nonbinding Recommendations 
 
2.  Small Business Reinspection Fees 
 
Section 744K of the FD&C Act provides a small business reduction for only the annual 
establishment fee, not for the reinspection fee.30  Therefore, an outsourcing  facility that is subject 
to reinspection will  be charged the full inflation-adjusted  reinspection fee for each reinspection 
even if the facility qualifies  as a small business.  
 
D.  How to Qualify for a Small Business Reduction 
 
1.  Which Entities Qualify for a Small Business Reduction? 
 
An entity with gross annual sales totaling  $1,000,000  or less in the 12 months ending on April 1 
of the FY immediately  preceding the FY in which the annual establishment  fee is assessed may 
qualify for a small business reduction.31  Gross annual sales is defined as the total worldwide 
gross annual sales, in United States dollars,  for an outsourcing facility,  including  the sales of all 
of the affiliates of the outsourcing facility.32  Sales include sales of all products, whether they 
are compounding-related  or not.  Sales are not limited  to sales of drugs.  Affiliate is defined as 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 power to control, both of the business entities.33 
 
Entities that seek a small business reduction  of the annual establishment fee must make a request 
for such a reduction by April 30 of the year preceding the fiscal year for which the entity is 
seeking a reduced fee.34  
 
2.  Content and Format of Request 
 
To qualify  for a small business reduction of the annual establishment fee, an entity must submit 
to FDA a written request for such a reduction and a certification that the entity meets the 
requirements for the reduction.35  The request must be submitted in a format specified by FDA in 
this guidance, and it must be submitted every year that the firm seeks to qualify  as a small 
business.36  The format for submitting  requests for a small business reduction of the annual 
establishment fee is Form 3908, attached as Appendix 1.37  The completed form should be 
submitted via email to CDERCollections@FDA.HHS.GOV,  with the subject line containing 
Outsourcing  Facility Small Business Reduction Request. 
 
If an outsourcing facility does not have email access, it can mail a request to FDA via the carrier 
of its choice.  For the most updated physical mailing  address, visit this website: 
                                              
30 See sections 744K(c)(1), 744K(c)(3), 744K(c)(4)(A) of the FD&C Act. 
31 See section 744K(c)(4)(A) of the FD&C Act.  
32 See section 744J(2) of the FD&C Act. 
33 See sections744J(1) and 735(11) of the FD&C Act. 
34 See section 744K(c)(4)(B) of the FD&C Act. 
35 Id. 
36 Id. 
37 Id. 
6  Contains Nonbinding Recommendations 
 
http://www.fda.gov/aboutfda/centersoffices/officeofmedicalproductsandtobacco/cder/ucm38284
6.htm. 
3.  Timing of Requests 
 
Pursuant to section 744K(c)(4)(B) of the FD&C Act, an entity seeking a small business reduction 
must submit to FDA a written request for such a reduction no later than April 30 of the year 
immediately  preceding the FY for which the fee reduction is sought,38 even if the entity has 
qualified  for the small business reduction for the previous FY.  For example, an entity seeking a 
small business reduction for FY 201639 must submit its complete written small business 
reduction request no later than April 30, 2015.  
 
FDA will accept small business reduction requests until April 30 of each year.  FDA will review 
reduction requests, consulting with relevant Agency officials as appropriate.  FDA may request 
additional  information from applicants during the review period.  FDA will respond to reduction 
requests in a timely fashion, based on available  resources and collection time for additional 
information, though, in general, intends to advise the requesting entity of its decision within 60 
calendar days of receipt of the request.  FDA intends to send a letter to the entity, via email (or 
regular mail if the request was by regular mail), notifying  it of FDAs decision.  Entities granted 
a reduction should maintain a copy of the letter for their records. 
 
E.  How and When to Pay 
 
1.  Annual Establishment Fees  
 
Once an entity submits its registration information  and FDA has reviewed the information  and 
determined that it is complete, the entity will incur the annual establishment fee.40  FDA will 
send an invoice to the entity via email, to the email address indicated in the registration file, or 
via regular mail if email is not an option.  The invoice will contain information  about the 
obligations  incurred; the amount owed, including  the small business reduction if the entity has 
qualified  for that reduction; and instructions for paying the fee.  Because entities will not be 
considered to be registered as outsourcing  facilities until payment is received, FDA suggests that 
entities pay the invoiced amount immediately  upon receiving the invoice.  If an entity does not 
pay the full invoiced amount within 15 calendar days after FDA issues the invoice,  FDA will 
consider the submission  of registration information  to have been withdrawn and adjust the 
invoice to reflect that no fee is due. 
 
Entities that intend to submit registrations during the annual registration period that lasts from 
October 1 to December 31 should submit their registration information  no later than December 
10 of each year to allow enough time for review of the registration information,  invoicing,  and 
payment of fees before the end of the registration period.  As discussed in Section IV, an entity 
that does not pay its annual establishment  fee will not be considered registered as an outsourcing 
facility for that FY.  Entities that have submitted registration information,  but have not 
                                              
38 Id. 
39 FY 2015 runs from October 1, 2014, through September 30, 2015. 
40 See section 744K(g)(1) of the FD&C Act (An outsourcing facility shall remit the establishment fee due under 
this section in a fiscal year when submitting a registration pursuant to section 503B(b) for such fiscal year.) 
7  Contains Nonbinding Recommendations 
 
completed the payment process by December 31, the end of the registration period, will not be 
included on the list of registered outsourcing  facilities as of January 1 of that FY41, and drugs 
compounded at the facility will not qualify for the exemptions under section 503B(a),42 unless 
and until  the firm has re-registered and paid the fee.   
 
2.  Reinspection Fees43 
 
After FDA conducts a reinspection, it will send an invoice to the entity via email, to the email 
address indicated in the registration file, or via regular mail if email is not an option.  FDA 
intends to issue an invoice for the reinspection fee within  14 calendar days of the close of the 
reinspection.  The reinspection fee must be paid within 30 calendar days of the date of the 
invoice.  The invoice will contain information  about the obligation  incurred, the amount owed, 
and instructions  for paying the fee.  The invoiced amount should be paid immediately  to avoid 
statutory penalties.44 (See Section IV).  Once an entity has incurred a reinspection fee, the 
obligation  to pay the fee cannot be discharged except through payment of the fee, unless FDA 
adjusts the invoice to reflect that no fee is due as a result of a reconsideration  decision or 
successful appeal (see Section V).  If FDA does not receive the reinspection fee within 30 
calendar days after it is due, the fee obligation  will be treated as a claim of the United States 
Government, subject to the provisions  of subchapter II of Chapter 37 of Title 31, United States 
Code.45  Interest and fees will accrue until the obligation  is satisfied.  
 
 
IV.  EFFECT OF FAILURE TO PAY FEES 
 
An entity that does not pay its adjusted annual establishment fee for a given FY will not be 
considered registered as an outsourcing facility  under section 503B of the FD&C Act for that 
FY.46  The facility  will be considered registered, for purposes of section 503B(b), when it pays 
the total adjusted annual establishment fee for that FY.47  
 
Outsourcing facilities that registered in FY 2014 and wish to maintain  their status as outsourcing 
facilities in FY 2015 must register during the FY 2015 registration period, which lasts from 
October 1, 2014, to December 31, 2014.  Failure to register and complete payment by December 
31, 2014, will result in the loss of status as an outsourcing  facility on January 1, 2015.48  
 
                                              
41 See section 744K(g)(3)(A) and 503B(b)(1)(B)(ii) of the FD&C Act. See also Section IV of this guidance. 
42 See sections 503B(a)(9) of the FD&C Act.  See also Section IV of this guidance. 
43 The information regarding the manner in which reinspection fees will be collected and the timeline for payment of 
the fee, which is outlined here, will also be published in the Federal Register.  See section 744K(g)(2) of the FD&C 
Act. 
44 See section 744K(g)(3)(B) and 744K(g)(4) of the FD&C Act. 
45 See section 744K(g)(4) of the FD&C Act. 
46 See section 744K(g)(3)(A) of the FD&C Act (stating that an outsourcing facility shall not be considered 
registered until the date that the facility remits the establishment fee).  
47 Id. 
48 See section 503B(1)(A) and 744K(g)(3)(A) of the FD&C Act. 
8  Contains Nonbinding Recommendations 
 
Entities that submit registrations outside of the annual registration  period must pay all relevant 
fees to be deemed registered.  Failure to pay fees will result in the facility being deemed not 
registered for purposes of section 503B(b).49 
 
Establishment  and reinspection fees must be paid in their entirety.50  A shortfall in any amount 
will subject the facility  to all relevant penalties. 
 
With respect to establishment  fees, if an entity does not pay the full invoiced  establishment fee 
amount within 15 calendar days after FDA issues the invoice,  FDA will  consider the submission 
of registration information  to have been withdrawn. 
 
With respect to reinspection fees, if an entity does not pay the full invoiced reinspection  fee 
amount by 30 days past the invoice due date, interest will be charged at a rate set by the 
Department of Treasury. 
 
All drugs manufactured, prepared, propagated, compounded,  or processed by an outsourcing 
facility that has not paid the full amount of the required establishment fee or any applicable 
reinspection fee, will be deemed misbranded under section 502 of the FD&C Act.51  Such drugs 
will continue to be deemed misbranded until the fees owed by that outsourcing  facility have been 
paid in full.  The outsourcing  facility cannot distribute misbranded drugs in interstate 
commerce.52  In addition,  because one of the requirements of section 503B(a) of the FD&C Act 
is the payment of fees, drugs compounded in a facility that has failed to pay fees are also 
considered to be unapproved new drugs subject to the premarket approval requirements of 
section 505 of the FD&C Act.53 
 
 
V.  REFUNDS AND DISPUTE RESOLUTION 
 
A.  Refunds 
 
Section 744K of the FD&C Act makes no provision  for the refund of fees associated with 
registration and reinspection  of outsourcing facilities.   Therefore, FDA has determined that fees 
paid pursuant to sections 503B and 744K of the FD&C Act will not be refunded, even if an 
entity that has registered as an outsourcing  facility  subsequently withdraws its registration as an 
outsourcing  facility.  
 
                                              
49 See section 744K(g)(3)(A) of the FD&C Act. 
50 See section 744K(g)(1), 744K(g)(3), and 744K(g)(4) of the FD&C Act. 
51 See section 744K(g)(3)(B) of the FD&C Act. 
52 See section 301(a) of the FD&C Act. 
53 See section 503B(a)(9) and 503B(d)(4) of the FD&C Act. 
9  Contains Nonbinding Recommendations 
 
B.  Dispute Resolution 
 
1.  Reconsideration Requests 
 
Disputes that arise between an outsourcing  facility and FDA about an FDA decision related to 
the fee provisions  of sections 503B and 744K of the FD&C Act will be handled by CDERs 
Division  of User Fee Management and Budget Formulation,  pursuant to 21 CFR 10.75.  For 
example, if an outsourcing  facility maintains that FDA denied its small business reduction 
request in error, it may request a reconsideration of that decision.  Similarly,  if an outsourcing 
facility believes that it was assessed a reinspection fee in error, it may request a reconsideration 
of that decision.  
 
FDA recommends that requests for reconsideration state the outsourcing  facilitys rationale for 
its position  that the decision was in error and include any additional  information  that is relevant 
to the outsourcing  facilitys argument.  A request for reconsideration should be made within  30 
days of the issuance of FDAs decision.  FDA will issue a reconsideration decision,  affirming or 
denying the outsourcing  facilitys request and setting forth the basis for the decision.  FDA 
expects to issue a decision on most reconsideration requests within four months of receiving the 
request. 
 
All requests for reconsideration should be sent via email to the Director of the Division  of User 
Fee Management and Budget Formulation,  at CDERCollections@FDA.HHS.GOV,  with the 
subject title Request for Reconsideration  of Agency Decision  Outsourcing Facility  Fee 
Determination. 
 
If an outsourcing facility does not have email access, it can mail a request to FDA via the carrier 
of its choice.  For the most updated physical mailing  address, visit this website: 
http://www.fda.gov/aboutfda/centersoffices/officeofmedicalproductsandtobacco/cder/ucm38284
6.htm  
 
2.  Appeal Request 
 
If a request is denied upon reconsideration,  the outsourcing  facility  can choose to appeal the 
denial in accordance with the procedures laid out in 21 CFR 10.75.  Requests for appeal should 
be made within 30 days of the issuance of FDAs decision at the reconsideration  stage.  The 
following  information  should be included  in the appeal request: 
 
  The original  Agency decision 
 
  The request for reconsideration 
 
  The decision on the reconsideration request 
 
  Argument in support of the outsourcing  facilitys belief that the prior conclusions were in 
error 
 
10  Contains Nonbinding Recommendations 
 
The appeal request should also contain particular references to information  or analyses already 
submitted to FDA that the applicant believes is relevant to its position.   No new information 
should be presented in the request for an appeal.  All requests for appeals should be submitted in 
writing to the Director of the Division  of User Fee Management and Budget Formulation,  at 
CDERCollections@FDA.HHS.GOV,  with the subject title Appeal of Agencys Decision at 
Reconsideration  Outsourcing Facility  Fee Determination. 
 
If an outsourcing facility does not have email access, it can mail a request to FDA via the carrier 
of its choice.  For the most updated physical mailing  address, visit this website: 
http://www.fda.gov/aboutfda/centersoffices/officeofmedicalproductsandtobacco/cder/ucm38284
6.htm. 
 
 
VI.  PAPERWORK REDUCTION ACT OF 1995 
 
This guidance contains information  collection  provisions  that are subject to review by the Office 
of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501-3520). 
 
The time required to complete this information  collection  is estimated to average the following: 
  
  0.50 hour (30 minutes) for an annual establishment fee  
  25 hours per response for a request for a small business reduction of the establishment fee 
  0.50 hour (30 minutes) for a reinspection fee 
  1 hour for a request for a reconsideration of a decision related to the respective fee 
  1 hour for a request for an appeal of a reconsideration decision 
  0.50 hour (30 minutes) for maintaining  a copy of the small business designation  letter if a 
small business reduction is granted 
 
These estimates include the time to review instructions,  gather the data needed, and complete and 
review the information  collection.   Send comments regarding this burden estimate or suggestions 
for reducing this burden to:  Office of Regulatory Policy, Center for Drug Evaluation and 
Research, Food and Drug Administration,  10903 New Hampshire Ave., Silver Spring,  MD 
20993-0002. 
 
An agency may not conduct or sponsor, and a person is not required to respond to, a collection  of 
information  unless it displays a currently valid OMB control number.  The OMB control number 
for this information  collection  is 0910-0776  (expires 12/31/2020). 
 
 
 
 
11  Contains Nonbinding Recommendations 
 
APPENDIX 1:  FORM 3908 
 
Form 3908 is available at 
http://www.fda.gov/downloads/AboutFDA/ReportsManualsForms/Forms/UCM435214.pdf.    
 
If you are experiencing difficulties accessing the form, please contact the FDA forms manager at 
FormsManager@OC.FDA.GOV  for assistance. 
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