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[House Report 110-804]
[From the U.S. Government Publishing Office]

110th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     110-804

======================================================================

 
                ANIMAL DRUG USER FEE AMENDMENTS OF 2008

                                _______
                                

 July 30, 2008.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Dingell, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 6432]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 6432) to amend the Federal Food, Drug, and 
Cosmetic Act to revise and extend the animal drug user fee 
program, and for other purposes, having considered the same, 
report favorably thereon with an amendment and recommend that 
the bill as amended do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     1
Purpose and Summary..............................................     5
Background and Need for Legislation..............................     6
Hearings.........................................................     6
Committee Consideration..........................................     6
Committee Votes..................................................     7
Committee Oversight Findings.....................................     7
Statement of General Performance Goals and Objectives............     7
New Budget Authority, Entitlement Authority, and Tax Expenditures     7
Earmarks and Tax and Tariff Benefits.............................     7
Committee Cost Estimate..........................................     7
Congressional Budget Office Estimate.............................     7
Federal Mandates Statement.......................................    11
Advisory Committee Statement.....................................    11
Constitutional Authority Statement...............................    11
Applicability to Legislative Branch..............................    11
Section-by-Section Analysis of the Legislation...................    11
Changes in Existing Law Made by the Bill, as Reported............    16

                               Amendment

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; REFERENCES; FINDING.

  (a) Short Title.--This Act may be cited as the ``Animal Drug User Fee 
Amendments of 2008''.
  (b) References in Act.--Except as otherwise specified, amendments 
made by this Act to a section or other provision of law are amendments 
to such section or other provision of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 301 et seq.).
  (c) Finding.--Congress finds that the fees authorized by the 
amendments made in this Act will be dedicated toward expediting the 
animal drug development process and the review of new and supplemental 
animal drug applications and investigational animal drug submissions as 
set forth in the goals identified, for purposes of part 4 of subchapter 
C of chapter VII of the Federal Food, Drug, and Cosmetic Act, in the 
letters from the Secretary of Health and Human Services to the Chairman 
of the Committee on Energy and Commerce of the House of Representatives 
and the Chairman of the Committee on Health, Education, Labor, and 
Pensions of the Senate as set forth in the Congressional Record.

SEC. 2. DEFINITIONS.

  Section 739 (21 U.S.C. 379j-11) is amended--
          (1) in paragraph (6), by striking ``, except for an approved 
        application for which all subject products have been removed 
        from listing under section 510'' and inserting ``that has not 
        been withdrawn by the applicant and for which approval has not 
        been withdrawn by the Secretary'';
          (2) in paragraph (8)(H), by striking ``but not such 
        activities after an animal drug has been approved'' and 
        inserting ``but not after such application has been approved'';
          (3) in paragraph (10), by striking ``year being 2003'' and 
        inserting ``month being October 2002'';
          (4) by redesignating paragraph (11) as paragraph (12); and
          (5) by inserting after paragraph (10) the following:
          ``(11) The term `person' includes an affiliate thereof.''.

SEC. 3. AUTHORITY TO ASSESS AND USE ANIMAL DRUG FEES.

  (a) Types of Fees.--Section 740(a) (21 U.S.C. 379j-12(a)) is 
amended--
          (1) in paragraph (1)(A)(i), by inserting after ``for an 
        animal drug application'' the following: ``, except an animal 
        drug application subject to the criteria set forth in section 
        512(d)(4)''; and
          (2) by amending paragraph (1)(A)(ii) to read as follows:
                          ``(ii) A fee established in subsection (b), 
                        in an amount that is equal to 50 percent of the 
                        amount of the fee under clause (i), for--
                                  ``(I) a supplemental animal drug 
                                application for which safety or 
                                effectiveness data are required; and
                                  ``(II) an animal drug application 
                                subject to the criteria set forth in 
                                section 512(d)(4).''.
  (b) Fee Amounts.--
          (1) Total fee revenues for application and supplement fees.--
        Section 740(b)(1) (21 U.S.C. 379j-12(b)(1)) is amended--
                  (A) by striking ``and supplemental animal drug 
                application fees'' and inserting ``and supplemental and 
                other animal drug application fees''; and
                  (B) by striking ``$1,250,000'' and all that follows 
                through the period at the end and inserting 
                ``$3,815,000 for fiscal year 2009, $4,320,000 for 
                fiscal year 2010, $4,862,000 for fiscal year 2011, 
                $5,442,000 for fiscal year 2012, and $6,061,000 for 
                fiscal year 2013.''.
          (2) Total fee revenues for product fees.--Section 740(b)(2) 
        (21 U.S.C. 379j-12(b)(2)) is amended by striking ``$1,250,000'' 
        and all that follows through the period at the end and 
        inserting ``$3,815,000 for fiscal year 2009, $4,320,000 for 
        fiscal year 2010, $4,862,000 for fiscal year 2011, $5,442,000 
        for fiscal year 2012, and $6,061,000 for fiscal year 2013.''.
          (3) Total fee revenues for establishment fees.--Section 
        740(b)(3) (21 U.S.C. 379j-12(b)(3)) is amended by striking 
        ``$1,250,000'' and all that follows through the period at the 
        end and inserting ``$3,815,000 for fiscal year 2009, $4,320,000 
        for fiscal year 2010, $4,862,000 for fiscal year 2011, 
        $5,442,000 for fiscal year 2012, and $6,061,000 for fiscal year 
        2013.''.
          (4) Total fee revenues for sponsor fees.--Section 740(b)(4) 
        (21 U.S.C. 379j-12(b)(4)) is amended by striking ``$1,250,000'' 
        and all that follows through the period at the end and 
        inserting ``$3,815,000 for fiscal year 2009, $4,320,000 for 
        fiscal year 2010, $4,862,000 for fiscal year 2011, $5,442,000 
        for fiscal year 2012, and $6,061,000 for fiscal year 2013.''.
  (c) Adjustments to Fees.--Section 740(c) (21 U.S.C. 379j-12(c)) is 
amended--
          (1) by striking paragraph (1);
          (2) by redesignating paragraphs (2) through (5) as paragraphs 
        (1) through (4), respectively;
          (3) in paragraph (1), as so redesignated--
                  (A) in the matter preceding subparagraph (A), by 
                striking ``After the fee revenues are adjusted for 
                inflation in accordance with paragraph (1), the fee 
                revenues shall be further adjusted each fiscal year 
                after fiscal year 2004'' and inserting ``The fee 
                revenues shall be adjusted each fiscal year after 
                fiscal year 2009''; and
                  (B) in subparagraph (B), by striking ``, as adjusted 
                for inflation under paragraph (1)''; and
          (4) in paragraph (2), as so redesignated--
                  (A) by striking ``2008'' each place it appears and 
                inserting ``2013''; and
                  (B) by striking ``2009'' and inserting ``2014''.
  (d) Authorization of Appropriations.--Subparagraphs (A) through (E) 
of section 740(g)(3) (21 U.S.C. 379j-12(g)(3)) are amended to read as 
follows:
                  ``(A) $15,260,000 for fiscal year 2009;
                  ``(B) $17,280,000 for fiscal year 2010;
                  ``(C) $19,448,000 for fiscal year 2011;
                  ``(D) $21,768,000 for fiscal year 2012; and
                  ``(E) $24,244,000 for fiscal year 2013;''.
  (e) Offset.--Section 740(g)(4) (21 U.S.C. 379j-12(g)(4)) is amended 
to read as follows:
          ``(4) Offset.--If the sum of the cumulative amount of fees 
        collected under this section for fiscal years 2009 through 2011 
        and the amount of fees estimated to be collected under this 
        section for fiscal year 2012 exceeds the cumulative amount 
        appropriated under paragraph (3) for the fiscal years 2009 
        through 2012, the excess amount shall be credited to the 
        appropriation account of the Food and Drug Administration as 
        provided in paragraph (1), and shall be subtracted from the 
        amount of fees that would otherwise be authorized to be 
        collected under this section pursuant to appropriation Acts for 
        fiscal year 2013.''.

SEC. 4. REAUTHORIZATION; REPORTING REQUIREMENTS.

  Part 4 of subchapter C of chapter VII (21 U.S.C. 379j-11 et seq.) is 
amended by inserting after section 740 the following:

``SEC. 740A. REAUTHORIZATION; REPORTING REQUIREMENTS.

  ``(a) Performance Report.--Beginning with fiscal year 2009, not later 
than 60 days after the end of each fiscal year during which fees are 
collected under this part, the Secretary shall prepare and submit to 
the Committee on Energy and Commerce of the House of Representatives 
and the Committee on Health, Education, Labor, and Pensions of the 
Senate a report concerning the progress of the Food and Drug 
Administration in achieving the goals identified in the letters 
described in section 1(c) of the Animal Drug User Fee Amendments of 
2008 toward expediting the animal drug development process and the 
review of the new and supplemental animal drug applications and 
investigational animal drug submissions during such fiscal year, the 
future plans of the Food and Drug Administration for meeting the goals, 
the review times for abbreviated new animal drug applications, and the 
administrative procedures adopted by the Food and Drug Administration 
to ensure that review times for abbreviated new animal drug 
applications are not increased from their current level due to 
activities under the user fee program.
  ``(b) Fiscal Report.--Beginning with fiscal year 2009, not later than 
120 days after the end of each fiscal year during which fees are 
collected under this part, the Secretary shall prepare and submit to 
the Committee on Energy and Commerce of the House of Representatives 
and the Committee on Health, Education, Labor, and Pensions of the 
Senate a report on the implementation of the authority for such fees 
during such fiscal year and the use, by the Food and Drug 
Administration, of the fees collected during such fiscal year for which 
the report is made.
  ``(c) Public Availability.--The Secretary shall make the reports 
required under subsections (a) and (b) available to the public on the 
Internet Web site of the Food and Drug Administration.
  ``(d) Reauthorization.--
          ``(1) Consultation.--In developing recommendations to present 
        to the Congress with respect to the goals, and plans for 
        meeting the goals, for the process for the review of animal 
        drug applications for the first 5 fiscal years after fiscal 
        year 2013, and for the reauthorization of this part for such 
        fiscal years, the Secretary shall consult with--
                  ``(A) the Committee on Energy and Commerce of the 
                House of Representatives;
                  ``(B) the Committee on Health, Education, Labor, and 
                Pensions of the Senate;
                  ``(C) scientific and academic experts;
                  ``(D) veterinary professionals;
                  ``(E) representatives of patient and consumer 
                advocacy groups; and
                  ``(F) the regulated industry.
          ``(2) Prior public input.--Prior to beginning negotiations 
        with the regulated industry on the reauthorization of this 
        part, the Secretary shall--
                  ``(A) publish a notice in the Federal Register 
                requesting public input on the reauthorization;
                  ``(B) hold a public meeting at which the public may 
                present its views on the reauthorization, including 
                specific suggestions for changes to the goals referred 
                to in subsection (a);
                  ``(C) provide a period of 30 days after the public 
                meeting to obtain written comments from the public 
                suggesting changes to this part; and
                  ``(D) publish the comments on the Food and Drug 
                Administration's Internet Web site.
          ``(3) Periodic consultation.--Not less frequently than once 
        every 4 months during negotiations with the regulated industry, 
        the Secretary shall hold discussions with representatives of 
        veterinary, patient, and consumer advocacy groups to continue 
        discussions of their views on the reauthorization and their 
        suggestions for changes to this part as expressed under 
        paragraph (2).
          ``(4) Public review of recommendations.--After negotiations 
        with the regulated industry, the Secretary shall--
                  ``(A) present the recommendations developed under 
                paragraph (1) to the Congressional committees specified 
                in such paragraph;
                  ``(B) publish such recommendations in the Federal 
                Register;
                  ``(C) provide for a period of 30 days for the public 
                to provide written comments on such recommendations;
                  ``(D) hold a meeting at which the public may present 
                its views on such recommendations; and
                  ``(E) after consideration of such public views and 
                comments, revise such recommendations as necessary.
          ``(5) Transmittal of recommendations.--Not later than January 
        15, 2013, the Secretary shall transmit to the Congress the 
        revised recommendations under paragraph (4), a summary of the 
        views and comments received under such paragraph, and any 
        changes made to the recommendations in response to such views 
        and comments.
          ``(6) Minutes of negotiation meetings.--
                  ``(A) Public availability.--Before presenting the 
                recommendations developed under paragraphs (1) through 
                (5) to the Congress, the Secretary shall make publicly 
                available, on the Internet Web site of the Food and 
                Drug Administration, minutes of all negotiation 
                meetings conducted under this subsection between the 
                Food and Drug Administration and the regulated 
                industry.
                  ``(B) Content.--The minutes described under 
                subparagraph (A) shall summarize any substantive 
                proposal made by any party to the negotiations as well 
                as significant controversies or differences of opinion 
                during the negotiations and their resolution.''.

SEC. 5. ANTIMICROBIAL ANIMAL DRUG DISTRIBUTION REPORTS.

  (a) Reports.--Section 512(l) (21 U.S.C. 360b(l)) is amended by adding 
at the end the following:
  ``(3)(A) In the case of each new animal drug described in paragraph 
(1) that contains an antimicrobial active ingredient, the sponsor of 
the drug shall submit an annual report to the Secretary on the amount 
of each antimicrobial active ingredient in the drug that is sold or 
distributed for use in food-producing animals, including information on 
any distributor-labeled product.
  ``(B) Each report under this paragraph shall specify the amount of 
each antimicrobial active ingredient--
          ``(i) by container size, strength, and dosage form;
          ``(ii) by quantities distributed domestically and quantities 
        exported; and
          ``(iii) by dosage form, including, for each such dosage form, 
        a listing of the target animals, indications, and production 
        classes that are specified on the approved label of the 
        product.
  ``(C) Each report under this paragraph shall--
          ``(i) be submitted not later than March 31 each year;
          ``(ii) cover the period of the preceding calendar year; and
          ``(iii) include separate information for each month of such 
        calendar year.
  ``(D) The Secretary may share information reported under this 
paragraph with the Antimicrobial Resistance Task Force established 
under section 319E of the Public Health Service Act.
  ``(E) The Secretary shall make summaries of the information reported 
under this paragraph publicly available, except that--
          ``(i) the summary data shall be reported by antimicrobial 
        class, and no class with fewer than 3 distinct sponsors of 
        approved applications shall be independently reported; and
          ``(ii) the data shall be reported in a manner consistent with 
        protecting both national security and confidential business 
        information.''.
  (b) First Report.--For each new animal drug that is subject to the 
reporting requirement under section 512(l)(3) of the Federal Food, 
Drug, and Cosmetic Act, as added by subsection (a), and for which an 
approval of an application filed pursuant to section 512(b) or 571 of 
such Act is in effect on the date of the enactment of this Act, the 
Secretary of Health and Human Services shall require the sponsor of the 
drug to submit the first report under such section 512(l)(3) for the 
drug not later than March 31, 2010.
  (c) Separate Report.--The reports required under section 512(l)(3) of 
the Federal Food, Drug, and Cosmetic Act, as added by subsection (a), 
shall be separate from periodic drug experience reports that are 
required under section 514.80(b)(4) of title 21, Code of Federal 
Regulations (as in effect on the date of the enactment of this Act).

SEC. 6. DESTRUCTION OF COUNTERFEIT ANIMAL DRUGS OFFERED FOR IMPORT.

  Section 801(a) (21 U.S.C. 381(a)) is amended--
          (1) in the third sentence, by inserting ``or (4) such article 
        is a counterfeit drug intended for use for animals other than 
        man,'' before ``then such article shall be refused admission''; 
        and
          (2) by striking ``Clause (2) of the third sentence of this 
        paragraph'' and inserting ``Notwithstanding the preceding 
        sentence, the Secretary of the Treasury shall cause the 
        destruction of any such article refused admission if (1) the 
        article is a drug intended for use for animals other than man, 
        the article appears to be adulterated, misbranded, or in 
        violation of section 505, and the article has a value less than 
        $2,000 or such amount as the Secretary of Health and Human 
        Services may determine by regulation; or (2) the article 
        appears to be a counterfeit drug intended for use for animals 
        other than man. Clause (2) of the third sentence of this 
        subsection''.

SEC. 7. SAVINGS CLAUSE.

  Notwithstanding section 5 of the Animal Drug User Fee Act of 2003 (21 
U.S.C. 379j-11 note), and notwithstanding the amendments made by this 
Act, part 4 of subchapter C of chapter VII of the Federal Food, Drug, 
and Cosmetic Act (21 U.S.C. 379j-11 et seq.), as in effect on the day 
before the date of the enactment of this Act, shall continue to be in 
effect with respect to animal drug applications and supplemental animal 
drug applications (as defined in such part as of such day) that on or 
after September 1, 2003, but before October 1, 2008, were accepted by 
the Food and Drug Administration for filing with respect to assessing 
and collecting any fee required by such part for a fiscal year prior to 
fiscal year 2009.

SEC. 8. EFFECTIVE DATE.

  The amendments made by sections 2, 3, and 4 shall take effect on 
October 1, 2008, and fees under part 4 of subchapter C of chapter VII 
of the Federal Food, Drug, and Cosmetic Act, as amended by this Act, 
shall be assessed for all animal drug applications and supplemental 
animal drug applications received on or after such date, regardless of 
the date of the enactment of this Act.

SEC. 9. SUNSET DATES.

  (a) Authorization.--The amendments made by sections 2 and 3 cease to 
be effective October 1, 2013.
  (b) Reporting Requirements.--The amendment made by section 4 ceases 
to be effective January 31, 2014.

                          Purpose and Summary

    H.R. 6432, the Animal Drug User Fee Amendments of 2008, 
amends the Federal Food, Drug, and Cosmetic Act (FFDCA) to 
revise and extend the animal drug user fee program, and for 
other purposes.

                  Background and Need for Legislation

    The Animal Drug User Fee Act of 2003 (ADUFA) established 
the animal drug user fee program. The program provides an 
additional revenue source for the Food and Drug Administration 
(FDA) to supplement appropriations from Congress for the 
purpose of expediting the review of animal drug applications. 
Before ADUFA was enacted, there were reports from FDA detailing 
inadequate resources for review, growing workloads, and low 
quality applications submitted by the industry. These problems 
combined were responsible for slowing down the animal drug 
approval process to an unacceptable rate.
    In response to these problems, ADUFA was enacted. The 
program requires that manufacturers of new animal drugs pay 
application fees for each new product, annual manufacturing 
establishment fees, annual product fees, and sponsor fees in an 
effort to expedite the animal drug review process. FDA sets 
performance goals, mutually agreed upon by FDA and the 
regulated industry. The fees are used to meet the performance 
goals. The Secretary of Health and Human Services (HHS) is 
required to send a letter identifying these goals to the 
Chairman of the House Committee on Energy and Commerce and the 
Chairman of the Senate Committee on Health, Education, Labor, 
and Pensions (HELP), and this letter is included in the 
Congressional Record. Fees currently represent about 13 percent 
of the agency's budget for animal drug review and for 60 full-
time equivalent employees.
    There is general agreement that ADUFA has been successful 
in eliminating the review backlog and has improved the 
timeliness and predictability of reviews. ADUFA expires on 
October 1, 2008, prompting congressional action for its 
reauthorization.

                                Hearings

    On June 5, 2008, the Subcommittee on Health held a hearing 
on ``Committee Prints on Administration Legislative Proposals 
on the Animal Drug User Fee Act Amendments of 2008 and the 
Animal Generic Drug User Fee Act of 2008.'' The Subcommittee 
received testimony from Bernadette Dunham, D.V.M., Ph.D., 
Director, Center for Veterinary Medicine, Food and Drug 
Administration. Dr. Dunham was accompanied by Steven Vaughn, 
D.V.M., Director, Office of New Animal Drug Evaluation, and 
David Wardrop, Jr., Director, Office of Management. The 
Subcommittee also received testimony from Richard A. Carnevale, 
V.M.D., Vice President of Regulatory, Scientific, and 
International Affairs, Animal Health Institute; Ms. Stephanie 
Batliner, Chairperson, Generic Animal Drug Alliance, Director, 
Pre-Market Regulatory Affairs, IVX Animal Health, Inc.; and Mr. 
Robert Martin, Executive Director, Pew Commission on Industrial 
Farm Animal Production.

                        Committee Consideration

    On Wednesday, July 9, 2008, the Subcommittee on Health met 
in open markup session and favorably forwarded H.R. 6432 to the 
full Committee for consideration, by a voice vote. On 
Wednesday, July 16, 2008, the full Committee met in open markup 
session and ordered H.R. 6432 favorably reported to the House, 
amended, by a voice vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. No 
record votes were taken on amendments or in connection with 
ordering H.R. 6432 reported to the House. A motion by Mr. 
Dingell to order H.R. 6432 favorably reported to the House, 
amended, was agreed to by a voice vote.

                      Committee Oversight Findings

    Regarding clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the oversight findings of the 
Committee regarding H.R. 6432 are reflected in this report.

         Statement of General Performance Goals and Objectives

    The objective of H.R. 6432 is to reauthorize the animal 
drug user fee program, which provides resources for expediting 
the animal drug development process and the review of new and 
supplemental animal drug applications and investigational 
animal drug submissions.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    Regarding compliance with clause 3(c)(2) of rule XIII of 
the Rules of the House of Representatives, the Committee finds 
that H.R. 6432 would result in no new or increased budget 
authority, entitlement authority, or tax expenditures or 
revenues.

                  Earmarks and Tax and Tariff Benefits

    Regarding compliance with clause 9 of rule XXI of the Rules 
of the House of Representatives, H.R. 6432 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(d), 9(e), or 9(f) of rule XXI.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate on H.R. 
6432 prepared by the Director of the Congressional Budget 
Office pursuant to section 402 of the Congressional Budget Act 
of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate on 
H.R. 6432 provided by the Congressional Budget Office pursuant 
to section 402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 28, 2008.
Hon. John D. Dingell,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 6432, the Animal 
Drug User Fee Amendments of 2008.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Julia 
Christensen.
            Sincerely,
                                         Robert A. Sunshine
                                   (For Peter R. Orszag, Director).
    Enclosure.

H.R. 6432--Animal Drug User Fee Amendments of 2008

    Summary: H.R. 6432 would authorize the collection and 
spending of user fees by the Food and Drug Administration (FDA) 
for certain activities to expedite the development and 
marketing approval of drugs for use in animals. Fees would 
supplement appropriated funds to cover FDA's cost associated 
with reviewing certain applications and investigational 
submissions for animal drugs. Such fees could be collected and 
made available for obligation only to the extent and in the 
amounts provided in advance in appropriation acts. The 
legislation would extend through fiscal year 2013 and make 
several technical changes to the existing user fee program for 
animal drugs, which expires at the end of fiscal year 2008.
    H.R. 6432 would also require sponsors of new animal drugs 
to submit annual reports to FDA on certain products that 
contain antimicrobial active ingredients, and it would require 
FDA to make summaries of such information publicly available.
    CBO estimates that implementing H.R. 6432 would reduce 
discretionary outlays, on net, by $6 million over the 2009-2013 
period, assuming the necessary authorities are provided in 
appropriation acts. The bill would not affect direct spending 
or revenues.
    H.R. 6432 contains no intergovernmental mandates as defined 
in the Unfunded Mandates Reform Act (UMRA).
    The bill would impose private-sector mandates, as defined 
in UMRA, because it would require manufacturers of drugs for 
use in animals to pay specified fees to FDA and to submit 
reports to the agency for certain products. CBO estimates that 
the direct cost of complying with these requirements would not 
exceed the annual threshold established by UMRA for private-
sector mandates ($136 million in 2008, adjusted annually for 
inflation).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 6432 is shown in the following table. 
The costs of this legislation fall primarily within budget 
function 550 (health).

----------------------------------------------------------------------------------------------------------------
                                                                   By fiscal year, in millions of dollars--
                                                             ---------------------------------------------------
                                                               2009    2010    2011    2012    2013    2009-2013
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Food and Drug Administration (FDA):
    Collection of User Fees:
        Estimated Authorization Level.......................     -15     -17     -19     -22     -27        -101
        Estimated Outlays...................................     -15     -17     -19     -22     -27        -101
    Spending of User Fees:
        Estimated Authorization Level.......................      15      17      19      22      27         101
        Estimated Outlays...................................      11      17      19      22      24          93
    Administrative Expenses:
        Estimated Authorization Level.......................       1       *       *       *       *           2
        Estimated Outlays...................................       1       *       *       *       *           2
        Net Effect on Spending by FDA:
            Estimated Authorization Level...................       1       *       *       *       *           2
            Estimated Outlays...............................      -3       *       *       *      -3         -6
----------------------------------------------------------------------------------------------------------------
Note: * = between -$500,000 and $500,000. Components may not sum to totals because of rounding.

    Basis of estimate: For this estimate, CBO assumes that H.R. 
6432 will be enacted near the start of fiscal year 2009, that 
the full amounts authorized will be collected and appropriated 
for each year, and that outlays will follow historical patterns 
for the program. Assuming appropriation action consistent with 
the bill, CBO estimates that implementing H.R. 6432 would 
reduce discretionary outlays, on net, by $6 million over the 
2009-2013 period, primarily because the spending of authorized 
fees lags slightly behind their collection.

User fees for animal drugs

    H.R. 6432 would authorize FDA to assess and collect certain 
fees from manufacturers of drugs for use in animals to help 
defray FDA's costs of expediting the regulatory review process 
for such drugs. Under current law, the user fee program for 
animal drugs will expire at the end of fiscal year 2008.
    Similar to the existing fee structure, four categories of 
user fees would be authorized by the bill: (1) animal drug 
application and supplement fees, (2) animal drug product fees, 
(3) animal drug establishment fees, and (4) animal drug sponsor 
fees. The bill would authorize the appropriation of specific 
aggregate amounts of collections for each fiscal year 2009 
through 2013. Collections could be modified each year based on 
certain workload estimates, when applicable. The legislation 
also would make several technical changes to the existing user 
fee program.
    Fees authorized by H.R. 6432 could be collected and made 
available for obligation only to the extent and in the amounts 
provided in advance in appropriation acts. CBO estimates that 
FDA would assess and collect the amounts specified in the bill 
without any additional adjustment for workload. (No such 
adjustments have occurred over the last 5 years of the existing 
program and we expect that they would not occur in the future.) 
For fiscal year 2013, the bill would authorize the assessment 
and collection of up to three months of operating reserves for 
the first three months of fiscal year 2014. In total, we 
estimate aggregate collections from fees authorized by the bill 
would amount to $101 million over the 2009-2013 period.
    The legislation would retain the existing statutory 
limitation that user fees cannot be assessed in a given year 
unless appropriations for salaries and expenses of FDA 
(excluding the amount of user fees appropriated for such fiscal 
year) in that year satisfy a maintenance-of-effort requirement. 
The fees could be assessed if the amount appropriated exceeded 
the amount appropriated for 2003 increased by an adjustment 
factor that reflects the percentage increase in the consumer 
price index for all urban consumers. In addition, fees could be 
collected and made available to defray increases in the cost of 
resources allocated to reviewing animal drug applications only 
to the extent that the percentage increase in those costs 
(excluding fees) exceeds the costs for fiscal year 2003 
adjusted by the adjustment factor. This estimate assumes that 
such conditions would be met.
    Before accounting for costs associated with additional 
administrative activities not covered by the user fees and 
other activities required by the bill, CBO estimates that 
authorizing the user fee program for the 2009-2013 period would 
reduce discretionary outlays, on net, by $8 million over the 
2009-2013 period, assuming appropriation action consistent with 
the bill.
    The estimated authorization levels for collections and 
spending offset each other exactly from 2009 through 2013. 
However, spending of authorized fees lags somewhat behind their 
collection, thereby generating savings over the period. In 
addition, amounts available for obligation and spending for 
fiscal year 2013 would not include additional special reserve 
funds collected in that year. CBO estimates that difference 
would result in savings of $3 million for fiscal year 2013.

Other administrative expenses

    Funding for certain administrative activities associated 
with the new user fee program would not be fully covered by 
fees. The bill would require that FDA report annually to the 
Congress on its performance under the user fee program and on 
the fiscal status of the program. H.R. 6432 would require that 
FDA consult with the Congressional committees of jurisdiction 
and outside experts, including industry and consumer groups, 
and publish its recommendations concerning reauthorization of 
the user fee program on a specified schedule. In addition, H.R. 
6432 would also require sponsors of animal drugs to submit 
annual reports to FDA on certain new products that contain 
antimicrobial active ingredients, and it would require FDA to 
make summaries of such information publicly available. CBO 
estimates that the administrative activities associated with 
implementing the user fee program that are not covered by the 
user fees and other activities required by the bill would cost 
between $1 million and $2 million over the 2009-2013 period.
    Estimated impact on state, local, and tribal governments: 
H.R. 6432 contains no intergovernmental mandates as defined in 
UMRA.
    Estimated impact on the private sector: H.R. 6432 would 
require sponsors of drugs intended for use in animals to pay 
application, product, establishment, and other related fees to 
FDA. The bill also would require sponsors of new animal drugs 
containing active antimicrobial ingredients to submit an annual 
report to FDA regarding the amount of these ingredients and 
additional information specified by the bill.
    Both of these requirements would be considered private-
sector mandates as defined in UMRA. CBO estimates that the fees 
collected over the 2009-2013 period would total $101 million. 
CBO also estimates that the direct cost of complying with both 
of these requirements would not exceed the annual threshold 
specified in UMRA ($136 million in 2008, adjusted annually for 
inflation) in any of the five years that the mandates would be 
effective.
    Estimate prepared by: Federal Costs: Julia Christensen; 
Impact on State, Local, and Tribal Governments: Lisa Ramirez-
Branum; Impact on the Private Sector: Paul Jacobs.
    Estimate approved by: Keith J. Fontenot, Deputy Assistant 
Director for Health and Human Resources, Budget Analysis 
Division.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates regarding H.R. 6432 prepared by the Director of the 
Congressional Budget Office pursuant to section 423 of the 
Unfunded Mandates Reform Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act would be created by H.R. 
6432.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional authority for H.R. 6432 is provided in Article 
I, section 8, clause 3, which grants Congress the power to 
regulate commerce with foreign nations, among the several 
States, and with the Indian Tribes.

                  Applicability to Legislative Branch

    The Committee finds that H.R. 6432 does not relate to the 
terms and conditions of employment or access to public services 
or accommodations within the meaning of section 102(b)(3) of 
the Congressional Accountability Act of 1995.

             Section-by-Section Analysis of the Legislation

Section 1. Short title; references; finding

    Section 1 designates the short title of the bill as the 
``Animal Drug User Fee Amendments of 2008''; states that 
amendments made by this Act to a section or other provision of 
law are amendments to such section or other provision of the 
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.); 
and states that the fees authorized by this Act will be 
dedicated toward expediting the animal drug development process 
and the review of new and supplemental animal drug applications 
and investigational animal drug submissions.

Section 2. Definitions

    Section 2 amends three definitions found in section 739 of 
the Federal Food, Drug, and Cosmetic Act (FFDCA). This section 
modifies the definition of the term ``animal drug sponsor'' to 
mean either an applicant named in an animal drug application 
that has not been withdrawn by the applicant and for which 
approval has not been withdrawn by the Secretary, or a person 
who has submitted an investigational animal drug submission 
that has not been terminated or otherwise rendered inactive by 
the Secretary. This section also modifies the definition of the 
term ``adjustment factor'' so that the base or comparator month 
is October 2002. Finally, this section modifies the definition 
of the term ``process for the review of animal drug 
applications'' to clarify that FDA is allowed to use animal 
drug user fees to review advertising and labeling for purposes 
of a supplemental abbreviated application.
    Additionally, section 2 includes a new term for ``person.'' 
The term ``person'' is defined to include an affiliate thereof.

Section 3. Authority to assess and use animal drug fees

    Section 3 amends section 740(a) of the FFDCA. This section 
states that each person that submits an animal drug application 
shall be subject to application and supplement fees, product 
fees, establishment fees, and sponsor fees unless the animal 
drug application is subject to the criteria set forth in 
section 512(d)(4). Additionally, this section clarifies that 
each person that submits a supplemental animal drug 
application, for which safety or effectiveness data are 
required, or an animal drug application, subject to the 
criteria set forth in section 512(d)(4), shall be subject to 
application and supplement fees, product fees, establishment 
fees, and sponsor fees. This fee amount shall equal 50 percent 
of the amount of the fee for animal drug applications not 
subject to section 512(d)(4).
    Section 3 amends section 740(b) of the FFDCA. This section 
increases total fee revenues for application and supplement 
fees, product fees, establishment fees, and sponsor fees.
    Section 3 amends section 740(c) of the FFDCA. This section 
requires that fee revenues shall be adjusted each fiscal year 
(FY) after FY 2009. In addition, this section modifies the 
existing final year adjustment provision. For FY 2013, the 
Secretary may further increase the fees to provide for up to 
three months of operating reserves of carryover user fees for 
the review of animal drug applications for the first three 
months of FY 2014. If this adjustment is necessary, then the 
rationale for the amount of the increase shall be contained in 
the annual notice setting fees for FY 2013. This one-time 
increase in fees in FY 2013, if necessary, assures that the 
agency will have up to three months of operating reserves on 
hand at the end of FY 2013, when this legislation will sunset.
    Section 3 amends section 740(g)(3) of the FFDCA. This 
section authorizes to be appropriated for fees under this 
section: $15,260,000 for FY 2009; $17,280,000 for FY 2010; 
$19,448,000 for FY 2011; $21,768,000 for FY 2012; and 
$24,244,000 for FY 2013.
    Section 3 amends section 740(g)(4) of the FFDCA. This 
section clarifies that if the sum of the cumulative amount of 
fees collected under this section for fiscal years 2009 through 
2011 and the amount of fees estimated to be collected under 
this section for FY 2012 exceeds the cumulative amount 
appropriated under paragraph (3) for the fiscal years 2009 
through 2012, the excess amount shall be credited to FDA's 
appropriation account. It shall then be subtracted from the 
amount of fees that would otherwise be authorized to be 
collected under this section pursuant to Appropriation Acts for 
FY 2013.

Section 4. Reauthorization; reporting requirements

    New section 740A requires that, beginning with FY 2009, not 
later than 60 days after the end of each fiscal year during 
which fees are collected under this part, the Secretary shall 
prepare and submit a report to the Committee on Energy and 
Commerce of the House of Representatives and the Committee on 
HELP of the Senate. This report shall discuss the progress of 
FDA in achieving the goals of the Animal Drug User Fee 
Amendments of 2008, as identified in a letter from the 
Secretary of HHS to Congress. These goals include expediting 
the animal drug development process and the review of the new 
and supplemental animal drug applications and investigational 
animal drug submissions during each fiscal year; the future 
plans of FDA for meeting the goals; the review times for 
abbreviated new animal drug applications; and the 
administrative procedures adopted by FDA to ensure that review 
times for abbreviated new animal drug applications are not 
increased from their current level due to activities under the 
user fee program.
    New section 740A also requires that, beginning with FY 
2009, not later than 120 days after the end of each fiscal year 
during which fees are collected under this part, the Secretary 
shall prepare and submit a report to the Committee on Energy 
and Commerce of the House of Representatives and the Committee 
on HELP of the Senate. The report must include information 
about (1) whether each of the three funding triggers has been 
met for each fiscal year; (2) total costs for the process of 
review of animal drug applications, as defined in ADUFA I; and 
(3) the amounts paid from user fee revenues and appropriations.
    New section 740A requires that the Secretary make these 
reports available to the public on FDA's Web site.
    In addition, new section 740A requires that, in developing 
recommendations to present to Congress with respect to the 
goals, and plans for meeting the goals, for the review of 
animal drug applications for the first five fiscal years after 
FY 2013, and for the reauthorization of this part for such 
fiscal years, the Secretary shall consult with the following: 
the Committee on Energy and Commerce of the House of 
Representatives; the Committee on HELP of the Senate; 
scientific and academic experts; veterinary professionals; 
representatives of patient and consumer advocacy groups; and 
the regulated industry.
    New section 740A states that, prior to beginning 
negotiations with the regulated industry on the reauthorization 
of this part, the Secretary shall publish a notice in the 
Federal Register requesting public input on the 
reauthorization; hold a public meeting at which the public may 
present its views on the reauthorization, including specific 
suggestions for changes to the goals; provide a period of 30 
days after the public meeting to obtain written comments from 
the public suggesting changes to this part; and publish the 
comments on FDA's Web site.
    New section 740A requires that, not less frequently than 
once every four months during negotiations with the regulated 
industry, the Secretary shall hold discussions with 
representatives of veterinary, patient, and consumer advocacy 
groups to solicit their views on the reauthorization and their 
suggestions for changes to this part. This language is based on 
the latest Prescription Drug User Fee Act (PDUFA) 
reauthorization, which became Public Law 110-85 on September 
27, 2007, and which requires monthly meetings between FDA and 
patient and consumer groups during negotiations with the 
regulated industry. This Act requires less frequent meeting 
because, to date, fewer patient and consumer groups have 
attended the ADUFA meetings than have attended the PDUFA 
meetings. If, however, it becomes apparent that more 
veterinary, patient, and consumer groups are interested in 
participating in these discussions with FDA, it may be 
appropriate for FDA to increase the frequency of these 
discussions.
    New section 740A requires that, after negotiation with the 
regulated industry, the Secretary shall present the 
recommendations to the Committee on Energy and Commerce of the 
House of Representatives and the Committee on HELP of the 
Senate; publish such recommendations in the Federal Register; 
provide for a period of 30 days for the public to provide 
written comments on such recommendations; hold a meeting at 
which the public may present its views on such recommendations; 
and after consideration of such public views and comments, 
revise such recommendations as necessary. Not later than 
January 15, 2013, the Secretary shall then transmit to Congress 
the revised recommendations, a summary of the views and 
comments received, and any changes made to the recommendations 
in response to such views and comments.
    New section 740A states that, prior to presenting 
recommendations to Congress, the Secretary shall make publicly 
available on FDA's Web site minutes of all negotiation meetings 
conducted under this subsection between FDA and the regulated 
industry. The minutes shall summarize any substantive proposal 
made by any party to the negotiations as well as significant 
controversies or differences of opinion during the negotiations 
and their resolution.

Section 5. Antimicrobial animal drug distribution reports

    Section 5 amends section 512(l) of the FFDCA. This section 
requires that for each new animal drug containing an 
antimicrobial active ingredient, for which an approval of an 
application filed pursuant to subsection (b) or section 571 is 
in effect, the sponsor of the drug shall submit an annual 
report to the Secretary on the amount of each antimicrobial 
active ingredient in the drug that is sold or distributed for 
use in food-producing animals, including information on any 
distributor-labeled product. In analyzing this information, FDA 
should take steps to avoid duplication of data that may result 
from receiving both manufacturer-labeled and distributor-
labeled information for a single antimicrobial active 
ingredient.
    The Committee expects FDA to use information garnered from 
these annual reports in its continuing analysis of the 
interactions (including drug resistance), efficacy, and safety 
of antibiotics approved for use in both humans and food-
producing animals.
    Each report shall specify the amount of each antimicrobial 
active ingredient by container size, strength, and dosage form; 
by quantities distributed domestically and quantities exported; 
and by dosage form, including, for each such dosage form, a 
listing of the target animals, indications, and production 
classes that are specified on the approved label of the 
product. Each report shall be submitted not later than March 31 
of each year, shall cover the period of the preceding calendar 
year, and shall include separate information for each month of 
such calendar year. There is precedent for monthly reporting as 
evidenced by the monthly data collection on antibiotic 
resistance that is gathered under the National Antimicrobial 
Resistance Monitoring System (NARMS) operated cooperatively by 
the Food and Drug Administration's Center for Veterinary 
Medicine, U.S. Department of Agriculture, and the Centers for 
Disease Control and Prevention.
    The Secretary may share information reported under this 
section with the Antimicrobial Resistance Task Force 
established under section 319E of the Public Health Service 
Act. As of the date of enactment of this Act, the Antimicrobial 
Resistance Task Force was composed solely of representatives 
from Federal agencies, as determined by the Secretary of Health 
and Human Services. It is the intention of this Committee that 
information reported under this section be available only to 
representatives of Federal agencies. If the membership of the 
Antimicrobial Resistance Task Force is ever expanded to include 
representatives of non-Federal agencies, the appropriate steps 
should be taken to ensure that representatives of non-Federal 
agencies only receive information consistent with what is 
provided publicly under this section.
    The Secretary shall make summaries of the information 
reported in this section publicly available. Summary data shall 
be reported by antimicrobial class, and no class with fewer 
than three distinct sponsors of approved applications shall be 
independently reported. Data shall be reported in a manner 
consistent with protecting both national security and 
confidential business information.
    This section requires that for each new animal drug that is 
subject to this new reporting requirement, and for which an 
approval of an application filed pursuant to section 512(b) or 
571 of such Act is in effect on the date of the enactment of 
this Act, the Secretary of HHS shall require the sponsor of the 
drug to submit the first report for the drug no later than 
March 31, 2010.
    This section clarifies that the new reports required by 
this section are separate from periodic drug experience reports 
that are required under section 514.80(b)(4) of title 21, Code 
of Federal Regulations (as in effect on the date of the 
enactment of this Act).

Section 6. Destruction of counterfeit animal drugs offered for import

    Section 6 amends section 801(a) of the FFDCA. This section 
states that the Secretary of the Treasury may refuse to allow 
the admission of a drug intended for use in animals into the 
United States, if it is deemed to be a counterfeit. In 
addition, this section requires the Secretary of Treasury to 
cause the destruction of any animal drug refused for admission 
if the drug (1) appears to be adulterated, misbranded, or in 
violation of section 505 and the article has a value less than 
$2,000, or such amount as the Secretary of HHS may determine by 
regulation; or (2) the drug appears to be a counterfeit animal 
drug.

Section 7. Savings clause

    Section 7 states that, notwithstanding section 5 of the 
Animal Drug User Fee Act of 2003 and notwithstanding the 
amendments made by this Act, part 4 of subchapter C of chapter 
VII of the Federal Food, Drug, and Cosmetic Act, as in effect 
on the day before the date of the enactment of this Act, shall 
continue to be in effect with respect to animal drug 
applications and supplemental animal drug applications that on 
or after September 1, 2003, but before October 1, 2008, were 
accepted by FDA for filing with respect to assessing and 
collecting any fee required by such part for a fiscal year 
prior to FY 2009.

Section 8. Effective date

    Section 8 states that the amendments made by sections 2, 3, 
and 4 shall take effect on October 1, 2008, and the fees under 
part 4 of subchapter C of chapter VII of the Federal Food, 
Drug, and Cosmetic Act, as amended by this Act, shall be 
assessed for all animal drug applications received on or after 
such date, regardless of the date of the enactment of this Act.

Section 9. Sunset dates

    Section 9 states that the amendments made by sections 2 and 
3 cease to be effective on October 1, 2013. Section 8 further 
states that section 4 ceases to be effective on January 31, 
2014.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

FEDERAL FOOD, DRUG, AND COSMETIC ACT

           *       *       *       *       *       *       *

                      CHAPTER V--DRUGS AND DEVICES

Subchapter A--Drugs and Devices

           *       *       *       *       *       *       *

                            NEW ANIMAL DRUGS

  Sec. 512. (a) * * *

           *       *       *       *       *       *       *

  (l)(1) * * *

           *       *       *       *       *       *       *

  (3)(A) In the case of each new animal drug described in 
paragraph (1) that contains an antimicrobial active ingredient, 
the sponsor of the drug shall submit an annual report to the 
Secretary on the amount of each antimicrobial active ingredient 
in the drug that is sold or distributed for use in food-
producing animals, including information on any distributor-
labeled product.
  (B) Each report under this paragraph shall specify the amount 
of each antimicrobial active ingredient--
          (i) by container size, strength, and dosage form;
          (ii) by quantities distributed domestically and 
        quantities exported; and
          (iii) by dosage form, including, for each such dosage 
        form, a listing of the target animals, indications, and 
        production classes that are specified on the approved 
        label of the product.
  (C) Each report under this paragraph shall--
          (i) be submitted not later than March 31 each year;
          (ii) cover the period of the preceding calendar year; 
        and
          (iii) include separate information for each month of 
        such calendar year.
  (D) The Secretary may share information reported under this 
paragraph with the Antimicrobial Resistance Task Force 
established under section 319E of the Public Health Service 
Act.
  (E) The Secretary shall make summaries of the information 
reported under this paragraph publicly available, except that--
          (i) the summary data shall be reported by 
        antimicrobial class, and no class with fewer than 3 
        distinct sponsors of approved applications shall be 
        independently reported; and
          (ii) the data shall be reported in a manner 
        consistent with protecting both national security and 
        confidential business information.

           *       *       *       *       *       *       *

CHAPTER VII--GENERAL AUTHORITY

           *       *       *       *       *       *       *

Subchapter C--Fees

           *       *       *       *       *       *       *

                 PART 4--FEES RELATING TO ANIMAL DRUGS

SEC. 739. DEFINITIONS.

  For purposes of this part:
          (1) * * *

           *       *       *       *       *       *       *

          (6) The term ``animal drug sponsor'' means either an 
        applicant named in an animal drug application[, except 
        for an approved application for which all subject 
        products have been removed from listing under section 
        510] that has not been withdrawn by the applicant and 
        for which approval has not been withdrawn by the 
        Secretary, or a person who has submitted an 
        investigational animal drug submission that has not 
        been terminated or otherwise rendered inactive by the 
        Secretary.

           *       *       *       *       *       *       *

          (8) The term ``process for the review of animal drug 
        applications'' means the following activities of the 
        Secretary with respect to the review of animal drug 
        applications, supplemental animal drug applications, 
        and investigational animal drug submissions:
                  (A) * * *

           *       *       *       *       *       *       *

                  (H) Review of advertising and labeling prior 
                to approval of an animal drug application or 
                supplemental animal drug application, [but not 
                such activities after an animal drug has been 
                approved] but not after such application has 
                been approved.

           *       *       *       *       *       *       *

          (10) The term ``adjustment factor'' applicable to a 
        fiscal year refers to the formula set forth in section 
        735(8) with the base or comparator [year being 2003] 
        month being October 2002.
          (11) The term ``person'' includes an affiliate 
        thereof.
          [(11)] (12) The term ``affiliate'' refers to the 
        definition set forth in section 735(11).

SEC. 740. AUTHORITY TO ASSESS AND USE ANIMAL DRUG FEES.

  (a) Types of Fees.--Beginning in fiscal year 2004, the 
Secretary shall assess and collect fees in accordance with this 
section as follows:
          (1) Animal drug application and supplement fee.--
                  (A) In general.--Each person that submits, on 
                or after September 1, 2003, an animal drug 
                application or a supplemental animal drug 
                application shall be subject to a fee as 
                follows:
                          (i) A fee established in subsection 
                        (b) for an animal drug application, 
                        except an animal drug application 
                        subject to the criteria set forth in 
                        section 512(d)(4); and
                          [(ii) A fee established in subsection 
                        (b) for a supplemental animal drug 
                        application for which safety or 
                        effectiveness data are required, in an 
                        amount that is equal to 50 percent of 
                        the amount of the fee under clause 
                        (i).]
                          (ii) A fee established in subsection 
                        (b), in an amount that is equal to 50 
                        percent of the amount of the fee under 
                        clause (i), for--
                                  (I) a supplemental animal 
                                drug application for which 
                                safety or effectiveness data 
                                are required; and
                                  (II) an animal drug 
                                application subject to the 
                                criteria set forth in section 
                                512(d)(4).

           *       *       *       *       *       *       *

  (b) Fee Amounts.--Except as provided in subsection (a)(1) and 
subsections (c), (d), (f), and (g), the fees required under 
subsection (a) shall be established to generate fee revenue 
amounts as follows:
          (1) Total fee revenues for application and supplement 
        fees.--The total fee revenues to be collected in animal 
        drug application fees under subsection (a)(1)(A)(i) 
        [and supplemental animal drug application fees] and 
        supplemental and other animal drug application fees 
        under subsection (a)(1)(A)(ii) shall be [$1,250,000 in 
        fiscal year 2004, $2,000,000 in fiscal year 2005, and 
        $2,500,000 in fiscal years 2006, 2007, and 2008.] 
        $3,815,000 for fiscal year 2009, $4,320,000 for fiscal 
        year 2010, $4,862,000 for fiscal year 2011, $5,442,000 
        for fiscal year 2012, and $6,061,000 for fiscal year 
        2013.
          (2) Total fee revenues for product fees.--The total 
        fee revenues to be collected in product fees under 
        subsection (a)(2) shall be [$1,250,000 in fiscal year 
        2004, $2,000,000 in fiscal year 2005, and $2,500,000 in 
        fiscal years 2006, 2007, and 2008.] $3,815,000 for 
        fiscal year 2009, $4,320,000 for fiscal year 2010, 
        $4,862,000 for fiscal year 2011, $5,442,000 for fiscal 
        year 2012, and $6,061,000 for fiscal year 2013.
          (3) Total fee revenues for establishment fees.--The 
        total fee revenues to be collected in establishment 
        fees under subsection (a)(3) shall be [$1,250,000 in 
        fiscal year 2004, $2,000,000 in fiscal year 2005, and 
        $2,500,000 in fiscal years 2006, 2007, and 2008.] 
        $3,815,000 for fiscal year 2009, $4,320,000 for fiscal 
        year 2010, $4,862,000 for fiscal year 2011, $5,442,000 
        for fiscal year 2012, and $6,061,000 for fiscal year 
        2013.
          (4) Total fee revenues for sponsor fees.--The total 
        fee revenues to be collected in sponsor fees under 
        subsection (a)(4) shall be [$1,250,000 in fiscal year 
        2004, $2,000,000 in fiscal year 2005, and $2,500,000 in 
        fiscal years 2006, 2007, and 2008.] $3,815,000 for 
        fiscal year 2009, $4,320,000 for fiscal year 2010, 
        $4,862,000 for fiscal year 2011, $5,442,000 for fiscal 
        year 2012, and $6,061,000 for fiscal year 2013.
  (c) Adjustments.--
          [(1) Inflation adjustment.--The revenues established 
        in subsection (b) shall be adjusted by the Secretary by 
        notice, published in the Federal Register, for a fiscal 
        year to reflect the greater of--
                  [(A) the total percentage change that 
                occurred in the Consumer Price Index for all 
                urban consumers (all items; United States city 
                average) for the 12-month period ending June 30 
                preceding the fiscal year for which fees are 
                being established; or
                  [(B) the total percentage change for the 
                previous fiscal year in basic pay under the 
                General Schedule in accordance with section 
                5332 of title 5, United States Code, as 
                adjusted by any locality-based comparability 
                payment pursuant to section 5304 of such title 
                for Federal employees stationed in the District 
                of Columbia.
        The adjustment made each fiscal year by this subsection 
        will be added on a compounded basis to the sum of all 
        adjustments made each fiscal year after fiscal year 
        2004 under this subsection.]
          [(2)] (1) Workload adjustment.--[After the fee 
        revenues are adjusted for inflation in accordance with 
        paragraph (1), the fee revenues shall be further 
        adjusted each fiscal year after fiscal year 2004] The 
        fee revenues shall be adjusted each fiscal year after 
        fiscal year 2009 to reflect changes in review workload. 
        With respect to such adjustment:
                  (A) * * *
                  (B) Under no circumstances shall this 
                workload adjustment result in fee revenues for 
                a fiscal year that are less than the fee 
                revenues for that fiscal year established in 
                subsection (b)[, as adjusted for inflation 
                under paragraph (1)].
          [(3)] (2) Final year adjustment.--For fiscal year 
        [2008] 2013, the Secretary may further increase the 
        fees to provide for up to 3 months of operating 
        reserves of carryover user fees for the process for the 
        review of animal drug applications for the first 3 
        months of fiscal year [2009] 2014. If the Food and Drug 
        Administration has carryover balances for the process 
        for the review of animal drug applications in excess of 
        3 months of such operating reserves, then this 
        adjustment will not be made. If this adjustment is 
        necessary, then the rationale for the amount of the 
        increase shall be contained in the annual notice 
        setting fees for fiscal year [2008] 2013.
          [(4)] (3) Annual fee setting.--The Secretary shall 
        establish, 60 days before the start of each fiscal year 
        beginning after September 30, 2003, for that fiscal 
        year, animal drug application fees, supplemental animal 
        drug application fees, animal drug sponsor fees, animal 
        drug establishment fees, and animal drug product fees 
        based on the revenue amounts established under 
        subsection (b) and the adjustments provided under this 
        subsection.
          [(5)] (4) Limit.--The total amount of fees charged, 
        as adjusted under this subsection, for a fiscal year 
        may not exceed the total costs for such fiscal year for 
        the resources allocated for the process for the review 
        of animal drug applications.

           *       *       *       *       *       *       *

  (g) Crediting and Availability of Fees.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Authorization of appropriations.--There are 
        authorized to be appropriated for fees under this 
        section--
                  [(A) $5,000,000 for fiscal year 2004;
                  [(B) $8,000,000 for fiscal year 2005;
                  [(C) $10,000,000 for fiscal year 2006;
                  [(D) $10,000,000 for fiscal year 2007; and
                  [(E) $10,000,000 for fiscal year 2008;]
                  (A) $15,260,000 for fiscal year 2009;
                  (B) $17,280,000 for fiscal year 2010;
                  (C) $19,448,000 for fiscal year 2011;
                  (D) $21,768,000 for fiscal year 2012; and
                  (E) $24,244,000 for fiscal year 2013;
        as adjusted to reflect adjustments in the total fee 
        revenues made under this section and changes in the 
        total amounts collected by animal drug application 
        fees, supplemental animal drug application fees, animal 
        drug sponsor fees, animal drug establishment fees, and 
        animal drug product fees.
          [(4) Offset.--Any amount of fees collected for a 
        fiscal year under this section that exceeds the amount 
        of fees specified in appropriations Acts for such 
        fiscal year shall be credited to the appropriation 
        account of the Food and Drug Administration as provided 
        in paragraph (1), and shall be subtracted from the 
        amount of fees that would otherwise be authorized to be 
        collected under this section pursuant to appropriation 
        Acts for a subsequent fiscal year.]
          (4) Offset.--If the sum of the cumulative amount of 
        fees collected under this section for fiscal years 2009 
        through 2011 and the amount of fees estimated to be 
        collected under this section for fiscal year 2012 
        exceeds the cumulative amount appropriated under 
        paragraph (3) for the fiscal years 2009 through 2012, 
        the excess amount shall be credited to the 
        appropriation account of the Food and Drug 
        Administration as provided in paragraph (1), and shall 
        be subtracted from the amount of fees that would 
        otherwise be authorized to be collected under this 
        section pursuant to appropriation Acts for fiscal year 
        2013.

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SEC. 740A. REAUTHORIZATION; REPORTING REQUIREMENTS.

  (a) Performance Report.--Beginning with fiscal year 2009, not 
later than 60 days after the end of each fiscal year during 
which fees are collected under this part, the Secretary shall 
prepare and submit to the Committee on Energy and Commerce of 
the House of Representatives and the Committee on Health, 
Education, Labor, and Pensions of the Senate a report 
concerning the progress of the Food and Drug Administration in 
achieving the goals identified in the letters described in 
section 1(c) of the Animal Drug User Fee Amendments of 2008 
toward expediting the animal drug development process and the 
review of the new and supplemental animal drug applications and 
investigational animal drug submissions during such fiscal 
year, the future plans of the Food and Drug Administration for 
meeting the goals, the review times for abbreviated new animal 
drug applications, and the administrative procedures adopted by 
the Food and Drug Administration to ensure that review times 
for abbreviated new animal drug applications are not increased 
from their current level due to activities under the user fee 
program.
  (b) Fiscal Report.--Beginning with fiscal year 2009, not 
later than 120 days after the end of each fiscal year during 
which fees are collected under this part, the Secretary shall 
prepare and submit to the Committee on Energy and Commerce of 
the House of Representatives and the Committee on Health, 
Education, Labor, and Pensions of the Senate a report on the 
implementation of the authority for such fees during such 
fiscal year and the use, by the Food and Drug Administration, 
of the fees collected during such fiscal year for which the 
report is made.
  (c) Public Availability.--The Secretary shall make the 
reports required under subsections (a) and (b) available to the 
public on the Internet Web site of the Food and Drug 
Administration.
  (d) Reauthorization.--
          (1) Consultation.--In developing recommendations to 
        present to the Congress with respect to the goals, and 
        plans for meeting the goals, for the process for the 
        review of animal drug applications for the first 5 
        fiscal years after fiscal year 2013, and for the 
        reauthorization of this part for such fiscal years, the 
        Secretary shall consult with--
                  (A) the Committee on Energy and Commerce of 
                the House of Representatives;
                  (B) the Committee on Health, Education, 
                Labor, and Pensions of the Senate;
                  (C) scientific and academic experts;
                  (D) veterinary professionals;
                  (E) representatives of patient and consumer 
                advocacy groups; and
                  (F) the regulated industry.
          (2) Prior public input.--Prior to beginning 
        negotiations with the regulated industry on the 
        reauthorization of this part, the Secretary shall--
                  (A) publish a notice in the Federal Register 
                requesting public input on the reauthorization;
                  (B) hold a public meeting at which the public 
                may present its views on the reauthorization, 
                including specific suggestions for changes to 
                the goals referred to in subsection (a);
                  (C) provide a period of 30 days after the 
                public meeting to obtain written comments from 
                the public suggesting changes to this part; and
                  (D) publish the comments on the Food and Drug 
                Administration's Internet Web site.
          (3) Periodic consultation.--Not less frequently than 
        once every 4 months during negotiations with the 
        regulated industry, the Secretary shall hold 
        discussions with representatives of veterinary, 
        patient, and consumer advocacy groups to continue 
        discussions of their views on the reauthorization and 
        their suggestions for changes to this part as expressed 
        under paragraph (2).
          (4) Public review of recommendations.--After 
        negotiations with the regulated industry, the Secretary 
        shall--
                  (A) present the recommendations developed 
                under paragraph (1) to the Congressional 
                committees specified in such paragraph;
                  (B) publish such recommendations in the 
                Federal Register;
                  (C) provide for a period of 30 days for the 
                public to provide written comments on such 
                recommendations;
                  (D) hold a meeting at which the public may 
                present its views on such recommendations; and
                  (E) after consideration of such public views 
                and comments, revise such recommendations as 
                necessary.
          (5) Transmittal of recommendations.--Not later than 
        January 15, 2013, the Secretary shall transmit to the 
        Congress the revised recommendations under paragraph 
        (4), a summary of the views and comments received under 
        such paragraph, and any changes made to the 
        recommendations in response to such views and comments.
          (6) Minutes of negotiation meetings.--
                  (A) Public availability.--Before presenting 
                the recommendations developed under paragraphs 
                (1) through (5) to the Congress, the Secretary 
                shall make publicly available, on the Internet 
                Web site of the Food and Drug Administration, 
                minutes of all negotiation meetings conducted 
                under this subsection between the Food and Drug 
                Administration and the regulated industry.
                  (B) Content.--The minutes described under 
                subparagraph (A) shall summarize any 
                substantive proposal made by any party to the 
                negotiations as well as significant 
                controversies or differences of opinion during 
                the negotiations and their resolution.

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                   CHAPTER VIII--IMPORTS AND EXPORTS

                          IMPORTS AND EXPORTS

  Sec. 801. (a) The Secretary of the Treasury shall deliver to 
the Secretary of Health and Human Services, upon his request, 
samples of food, drugs, devices, and cosmetics which are being 
imported or offered for import into the United States, giving 
notice thereof to the owner or consignee, who may appear before 
the Secretary of Health and Human Services and have the right 
to introduce testimony. The Secretary of Health and Human 
Services shall furnish to the Secretary of the Treasury a list 
of establishments registered pursuant to subsection (i) of 
section 510 and shall request that if any drugs or devices 
manufactured, prepared, propagated, compounded, or processed in 
an establishment not so registered are imported or offered for 
import into the United States, samples of such drugs or devices 
be delivered to the Secretary of Health and Human Services, 
with notice of such delivery to the owner or consignee, who may 
appear before the Secretary of Health and Human Services and 
have the right to introduce testimony. If it appears from the 
examination of such samples or otherwise that (1) such article 
has been manufactured, processed, or packed under insanitary 
conditions or, in the case of a device, the methods used in, or 
the facilities or controls used for, the manufacture, packing, 
storage, or installation of the device do not conform to the 
requirements of section 520(f), or (2) such article is 
forbidden or restricted in sale in the country in which it was 
produced or from which it was exported, or (3) such article is 
adulterated, misbranded, or in violation of section 505, or 
prohibited from introduction or delivery for introduction into 
interstate commerce under section 301(ll), or (4) such article 
is a counterfeit drug intended for use for animals other than 
man, then such article shall be refused admission, except as 
provided in subsection (b) of this section. If such article is 
subject to a requirement under section 760 or 761 and if the 
Secretary has credible evidence or information indicating that 
the responsible person (as defined in such section 760 or 761) 
has not complied with a requirement of such section 760 or 761 
with respect to any such article, or has not allowed access to 
records described in such section 760 or 761, then such article 
shall be refused admission, except as provided in subsection 
(b) of this section. The Secretary of the Treasury shall cause 
the destruction of any such article refused admission unless 
such article is exported, under regulations prescribed by the 
Secretary of the Treasury, within ninety days of the date of 
notice of such refusal or within such additional time as may be 
permitted pursuant to such regulations. [Clause (2) of the 
third sentence of this paragraph] Notwithstanding the preceding 
sentence, the Secretary of the Treasury shall cause the 
destruction of any such article refused admission if (1) the 
article is a drug intended for use for animals other than man, 
the article appears to be adulterated, misbranded, or in 
violation of section 505, and the article has a value less than 
$2,000 or such amount as the Secretary of Health and Human 
Services may determine by regulation; or (2) the article 
appears to be a counterfeit drug intended for use for animals 
other than man. Clause (2) of the third sentence of this 
subsection shall not be construed to prohibit the admission of 
narcotic drugs the importation of which is permitted under the 
Controlled Substances Import and Export Act.

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