[Federal Register Volume 72, Number 197 (Friday, October 12, 2007)]
[Notices]
[Pages 58103-58106]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-5052]



[[Page 58103]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration


Prescription Drug User Fee Rates for Fiscal Year 2008

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is announcing the rates 
for prescription drug user fees for fiscal year (FY) 2008. The Federal 
Food, Drug, and Cosmetic Act (the act), as amended by the Prescription 
Drug User Fee Amendments of 2007 (Title 1 of the Food and Drug 
Administration Amendments Act of 2007 (FDAAA)) (PDUFA IV), authorizes 
FDA to collect user fees for certain applications for approval of drug 
and biological products, on establishments where the products are made, 
and on such products. Base revenue amounts to be generated from PDUFA 
fees were established by PDUFA IV, with provisions for certain 
adjustments. Fee revenue amounts for applications, establishments, and 
products are to be established each year by FDA so that one-third of 
the PDUFA fee revenues FDA collects each year will be generated from 
each of these categories. This notice establishes fee rates for FY 2008 
for application fees for an application requiring clinical data 
($1,178,000), for an application not requiring clinical data or a 
supplement requiring clinical data ($589,000), for establishment fees 
($392,700), and for product fees ($65,030). These fees are effective on 
October 1, 2007, and will remain in effect through September 30, 2008. 
For applications and supplements that are submitted on or after October 
1, 2007, the new fee schedule must be used. Invoices for establishment 
and product fees for FY 2008 will be issued in October 2007, using the 
new fee schedule.

FOR FURTHER INFORMATION CONTACT: Yanming Chae, Office of Financial 
Management (HFA-120), Food and Drug Administration, 5600 Fishers Lane, 
Rockville, MD 20857, 301-827-5042.

SUPPLEMENTARY INFORMATION:

I. Background

    Sections 735 and 736 of the act (21 U.S.C. 379g and h), establish 
three different kinds of user fees. Fees are assessed on the following: 
(1) Certain types of applications and supplements for approval of drug 
and biological products, (2) certain establishments where such products 
are made, and (3) certain products (21 U.S.C. 379h(a)). When certain 
conditions are met, FDA may waive or reduce fees (21 U.S.C. 379h(d)).
    For FY 2008 through FY 2012, the base revenue amounts for the total 
revenues from all PDUFA fees are established by PDUFA IV. The base 
revenue amount for FY 2008 is to be adjusted for workload, and that 
adjusted amount becomes the base amount for the remaining 4 FYs. That 
adjusted base revenue amount is subject to further adjustments for 
inflation and workload each year. Fees for applications, 
establishments, and products are to be established each year by FDA so 
that revenues from each category will provide one-third of the total 
revenue to be collected each year.
    This notice establishes the fee base revenue amount for FY 2008 
after adjustment for workload, and then establishes the application, 
establishment, and product fees for FY 2008. These fees are effective 
on October 1, 2007, and will remain in effect through September 30, 
2008.

II. Fee Revenue Amount for FY 2008, Including Adjustments for Workload

    The total fee revenue amount for FY 2008 is $459,412,000, based on 
the fee revenue amount specified in the statute, including additional 
fee funding for drug safety and adjusted for inflation and changes in 
workload. The statutory amounts and these adjustments are described in 
the following paragraphs. Section II.A of this document provides the 
fee amounts specified in the statute. Section II.B of this document 
describes the one-time base adjustment to the statutory fee revenue 
amount under the FY 2007 method. Section II.C of this document 
describes the inflation adjustment to the adjusted fee revenue base 
amount. Section II.D of this document describes the workload adjustment 
to the inflation-adjusted fee revenue amount.

A. Statutory Fee Revenue Amounts

    PDUFA IV specifies that the fee revenue amount for FY 2008 for all 
fees is $417,783,000 ($392,783,000 specified in 21 U.S.C. 379h(b)(1) 
plus an additional $25,000,000 for drug safety specified in 21 U.S.C. 
379h(b)(4)).
    The statute specifies that $354,893,000 of the amount specified in 
21 U.S.C. 379h(b)(1) is to be further adjusted for workload. The 
workload adjustment on this amount is to be made in accordance with the 
workload adjustment provisions that were in effect for FY 2007, except 
that the adjustment for investigational new drug (IND) workload is 
based on the number of INDs with a submission in the previous 12 months 
rather than on the number of new commercial INDs submitted in the same 
12-month period.

B. One-time Base Adjustment to Statutory Fee Revenue Amount Under FY 
2007 Method

    For each FY beginning in FY 2004, the Prescription Drug User Fee 
Amendments of 2002 (PDUFA III) provided that fee revenue amounts, after 
they had been adjusted for inflation, should be further adjusted to 
reflect changes in workload for the process for the review of human 
drug applications (see 21 U.S.C. 379h(c)(2)).
    The conference report accompanying PDUFA III, House of 
Representatives Report number 107-481, provides guidance on how the 
workload adjustment provision of PDUFA III is to be implemented. 
Following that guidance, FDA calculated the average number of each of 
the four types of applications specified in the workload adjustment 
provision (human drug applications, commercial IND applications, 
efficacy supplements, and manufacturing supplements) received over the 
5-year period that ended on June 30, 2002 (base years), and the average 
number of each of these types of applications over the most recent 5-
year period that ended June 30, 2007. PDUFA IV directs that this same 
method be used in making the workload adjustment apply to the 2008 
statutory revenue amount, except that for this calculation the number 
of commercial IND applications with a submission in the previous 12 
months is used for each 12-month period rather than the number of 
commercial IND applications submitted (see 21 U.S.C. 379h(b), as 
amended by PDUFA IV).
    The results of these calculations are presented in the first two 
columns of table 1 of this document. Column 3 reflects the percent 
change in workload over the two 5-year periods. Column 4 shows the 
weighting factor for each type of application, estimating how much of 
the total FDA drug review workload was accounted for by each type of 
application in the table during the most recent 5 years. Column 5 of 
table 1 of this document is the weighted percent change in each 
category of workload. This was derived by multiplying the weighting 
factor in each line in column 4 by the percent change from the base 
years in column 3. At the bottom right of the table the sum of the 
values in column 5 is added, reflecting a total increase in workload of 
11.73 percent when compared to the base years.

[[Page 58104]]



                  Table 1.--Summary Base Workload Adjuster Calculation to be Applied in FY 2008
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                         Column 1  5-       Column 2                            Column 4
   Application Type      Year Average    Latest 5-Year   Column 3  Percent     Weighting      Column 5  Weighted
                          Base Years        Average            Change            Factor         Percent Change
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New drug applications            119.6            123.8              3.5%            35.2%                1.24%
 (NDAs)/biologics
 license applications
 (BLAs)
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Active INDs                    4,751.8          5,528.2             16.3%            44.2%                7.22%
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Efficacy supplements             159.2            163.4              2.6%             7.4%                0.20%
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Manufacturing                  2,100.6          2,589.2             23.3%            13.2%                3.07%
 supplements
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FY 2008 workload adjuster                                                                                11.73%
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    Increasing the PDUFA IV statutorily-specified amount of 
$354,893,000 by the specified workload adjuster (11.73 percent) results 
in an increase of $41,629,000, rounded to the nearest thousand. Adding 
this amount to the $417,783,000 statutorily-specified amount, before 
adjustment, results in a total adjusted PDUFA IV base revenue amount of 
$459,412,000. This figure is the adjusted PDUFA IV base revenue amount 
that will be adjusted in future years for inflation and workload.

C. Inflation Adjustment to Adjusted Fee Revenue Base Amount

    PDUFA IV provides that fee revenue amounts for each FY after 2008 
shall be adjusted for inflation. Since no inflation adjustment is 
applicable in FY 2008, no further adjustment is made to the revenue 
amount derived in section II.B of this document.

D. Workload Adjustment to Inflation-Adjusted Fee Revenue Amount

    For each FY beginning in FY 2009, PDUFA IV provides that fee 
revenue amounts, after they have been adjusted for inflation, shall be 
further adjusted to reflect changes in workload for the process for the 
review of human drug applications (see 21 U.S.C. 379h(c)(2)). Because 
no further workload adjustment, other than the adjustment to the base 
amount in section II.B of this document, is applicable in FY 2008, no 
further adjustment is made to the revenue amount derived in section 
II.B of this document.

III. Application Fee Calculations

    PDUFA IV provides that the rates for application, product, and 
establishment fees be established so that they will generate the fee 
revenue amounts specified in the statute, as adjusted for inflation and 
workload.

A. Application Fee Revenues and Application Fees

    The application fee revenue amount that PDUFA IV establishes for 
each year is one third of the total adjusted fee revenue amount. The 
total fee revenue amount for FY 2008 is $459,412,000, as calculated in 
section II.B of this document. Application fees will be set to generate 
one-third of this amount, or $153,137,000, rounded to the nearest 
$1,000, in FY 2008.

B. Estimate of Number of Fee-Paying Applications and Establishment of 
Application Fees

    For FY 2008 through FY 2012, FDA will estimate the total number of 
fee-paying full application equivalents (FAEs) it expects to receive 
the next FY by averaging the number of fee-paying FAEs received in the 
5 most recent FYs. This use of the rolling average of the 5 most recent 
FYs is the same method that was applied during PDUFA III.
    In estimating the number of fee-paying FAEs that FDA will receive 
in FY 2008, the 5-year rolling average for the most recent 5 years will 
be based on actual counts of fee-paying FAEs received for FY 2003 
through FY 2007. For FY 2007, FDA is estimating the number of fee-
paying FAEs for the full year based on the actual count for the first 9 
months and estimating the number for the final 3 months, as we have 
done for the past 5 years.
    Table 2 of this document shows in column 1 the total number of each 
type of FAE received in the first 9 months of FY 2007, whether fees 
were paid or not. Column 2 shows the number of FAEs for which fees were 
waived or exempted during this period, and column 3 shows the number of 
fee-paying FAEs received through June 30, 2007. Column 4 estimates the 
12-month total fee-paying FAEs for FY 2007 based on the applications 
received through June 30, 2007. All of the counts are in FAEs. A full 
application requiring clinical data counts as one FAE. An application 
not requiring clinical data counts as one-half an FAE, as does a 
supplement requiring clinical data. An application that is withdrawn, 
or refused for filing, counts as one-fourth of an FAE if the applicant 
initially paid a full application fee, or one-eighth of an FAE if the 
applicant initially paid one-half of the full application fee amount.

         Table 2.--FY 2007 FAEs Received Through June 30, 2007, and Projected Through September 30, 2007
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                       Column 1  Total      Column 2  Fee Exempt     Column 3  Total Fee
  Application or    Received Through June  or Waived Through June    Paying Through June     Column 4  12-Month
      Action              30, 2007                30, 2007                30, 2007         Fee-Paying Projection
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Applications                         71.8                    18.8                    53                     70.7
 requiring
 clinical data
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Applications not                      7                       3.5                     3.5                    4.7
 requiring
 clinical data
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Supplements                          43.5                     5                      38.5                   51.3
 requiring
 clinical data
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[[Page 58105]]

 
Withdrawn or                           .4                     0                       0.4                    0.5
 refused to file
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Total                               122.7                    27.3                    95.4                  127.2
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    In the first 9 months of FY 2007, FDA received 122.7 FAEs, of which 
95.4 were fee-paying. Based on data from the last 8 FYs, on average, 25 
percent of the applications submitted each year come in the final 3 
months. Dividing 95.4 by 3 and multiplying by 4 extrapolates the amount 
to the full 12 months of the FY and projects the number of fee-paying 
FAEs in FY 2007 at 127.2.
    As table 3 of this document shows, the average number of fee-paying 
FAEs received annually in the most recent 5-year period, and including 
our estimate for FY 2007, is 130 FAEs. FDA will set fees for FY 2008 
based on this estimate as the number of FAEs that will pay fees.

                                    Table 3.--Fee-Paying FAEs--5-Year Average
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         Fiscal Year              2003         2004         2005         2006         2007       5-Year Average
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Fee-paying FAEs                     119.5        145.1        121.5        136.7        127.2                130
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    The FY 2008 application fee is estimated by dividing the average 
number of full applications that paid fees over the latest 5 years, 
130, into the fee revenue amount to be derived from application fees in 
FY 2008, $153,137,000. The result, rounded to the nearest $100, is a 
fee of $1,178,000 per full application requiring clinical data, and 
$589,000 per application not requiring clinical data or per supplement 
requiring clinical data.

IV. Fee Calculations for Establishment and Product Fees

A. Establishment Fees

    At the beginning of FY 2007, the establishment fee was based on an 
estimate that 375 establishments would be subject to, and would pay, 
fees. By the end of FY 2007, FDA estimates that 425 establishments will 
have been billed for establishment fees, before all decisions on 
requests for waivers or reductions are made. As in previous years, FDA 
again estimates that a total of 25 establishment fee waivers or 
reductions will be made for FY 2007. In addition to the previous year 
estimates, FDA estimates that another 10 full establishment fees will 
be exempted this year based on the new orphan drug exemption in FDAAA 
(see 21 U.S.C. 379h(k)). Subtracting 35 (25 plus the estimated 10 
establishments under the new orphan exemption) establishments from 425 
leaves a net of 390 fee-paying establishments. FDA will use 390 for its 
FY 2008 estimate of establishments paying fees, after taking waivers 
and reductions into account. The fee per establishment is determined by 
dividing the adjusted total fee revenue to be derived from 
establishments ($153,137,000 by the estimated 390 establishments, for 
an establishment fee rate for FY 2008 of $392,700 (rounded to the 
nearest $100).

B. Product Fees

    At the beginning of FY 2007, the product fee was based on an 
estimate that 2,400 products would be subject to and pay product fees. 
By the end of FY 2007, FDA estimates that 2,425 products will have been 
billed for product fees, before all decisions on requests for waivers 
or reductions are made. FDA assumes that there will be about 40 waivers 
and reductions granted, the same amount estimated last year. In 
addition to the previous year estimates, FDA estimates that another 30 
product fees will be exempted this year based on the new orphan drug 
exemption in FDAAA (see 21 U.S.C. 379h(k)). FDA estimates that 2,355 
products will qualify for product fees in FY 2007, after allowing for 
waivers and reductions, including the orphan drug products eligible 
under the new FDAAA exemption, and will use this number for its FY 2008 
estimate. Accordingly, the FY 2008 product fee rate is determined by 
dividing the adjusted total fee revenue to be derived from product fees 
($153,137,000) by the estimated 2,355 products for a FY 2008 product 
fee of $65,030 (rounded to the nearest $10).

V. Fee Schedule for FY 2008

    The fee rates for FY 2008 are set out in table 4 of this document:

                                Table 4.
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               Fee Category                     Fee Rates for FY 2008
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APPLICATIONS..............................  ............................
  Requiring clinical data.................                    $1,178,000
  Not requiring clinical data.............                      $589,000
  Supplements requiring clinical data.....                      $589,000
ESTABLISHMENTS............................                      $392,700
PRODUCTS..................................                       $65,030
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[[Page 58106]]

VI. Implementation of Adjusted Fee Schedule

A. Application Fees

    The appropriate application fee established in the new fee schedule 
must be paid for any application or supplement subject to fees under 
PDUFA that is received after September 30, 2007. Payment must be made 
in U.S. currency by check, bank draft, or U.S. postal money order 
payable to the order of the Food and Drug Administration. Please 
include the user fee ID number on your check. Your payment can be 
mailed to: Food and Drug Administration, P.O. Box 70963, Charlotte, NC 
28272-0963.
    If checks are to be sent by a courier that requests a street 
address, the courier can deliver the checks to: Wachovia Bank, Attn: 
Food and Drug Administration Lockbox 70963, 1525 West WT Harris Blvd., 
rm. NC0810, Charlotte, NC 28262. (Note: This Wachovia Bank address is 
for courier delivery only.)
    Please make sure that the FDA post office box number (P.O. Box 
70963) is written on the check. The tax identification number of the 
Food and Drug Administration is 53-0196965.
    Wire transfer payment may also be used. The routing and transit 
number is 021030004 and the account number is 75060099. Please include, 
as the reference, the NDA/BLA number and the user fee ID number.
    FDA is in the process of implementing alternate Web-based payment 
methods. For more information on these payment options and when they 
will be available, please visit FDA's Web site at http://www.fda.gov, 
select the appropriate user fee type, and click on ``User Fee Cover 
Sheet.''

B. Establishment and Product Fees

    FDA will issue invoices for establishment and product fees for FY 
2008 under the new fee schedule in October 2007. Payment will be due 30 
days from the date of the invoice. FDA will issue invoices in November 
2008 for any products and establishments subject to fees for FY 2008 
that qualify for fees after the October 2007 billing.

    Dated: October 4, 2007.
Randall W. Lutter,
Deputy Commissioner for Policy.
[FR Doc. 07-5052 Filed 10-9-07; 12:06 pm]
BILLING CODE 4160-01-S