[Federal Register Volume 82, Number 166 (Tuesday, August 29, 2017)]
[Notices]
[Pages 41026-41029]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-18377]


-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2016-N-0007]


Generic Drug User Fee Rates for Fiscal Year 2018

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The Federal Food, Drug, and Cosmetic Act (the FD&C Act), as 
amended by the Generic Drug User Fee Amendments of 2017 (GDUFA II), 
authorizes FDA to assess and collect fees for abbreviated new drug 
applications (ANDAs), drug master files (DMFs), generic drug active 
pharmaceutical ingredient (API) facilities, finished dosage form (FDF) 
facilities, contract manufacturing organization (CMO) facilities, and 
generic drug applicant program user fees. In this document the Food and 
Drug Administration (FDA or Agency) is announcing fiscal year (FY) 2018 
rates for GDUFA fees.

FOR FURTHER INFORMATION CONTACT: David Haas, Office of Financial 
Management, Food and Drug Administration, 8455 Colesville Rd., COLE-
14202I, Silver Spring, MD 20993-0002, 240-402-9845.

SUPPLEMENTARY INFORMATION:

I. Background

    Sections 744A and 744B of the FD&C Act (21 U.S.C. 379j-41 and 379j-
42) establish fees associated with human generic drug products. Fees 
are assessed on: (1) Certain types of applications for human generic 
drug products; (2) certain facilities where APIs and FDFs are produced; 
(3) certain DMFs associated with human generic drug products; and (4) 
the generic drug applicant program (see section 744B(a)(1)-(5) of the 
FD&C Act).
    GDUFA II fees vary greatly from those in GDUFA I because of two 
fundamental adjustments to the fee structure:
    (1) The revenue base for GDUFA II is $493.6 million versus $323 
million in the final year of GDUFA I--ANDAs are the primary workload 
driver of the program. GDUFA I was built on the assumption that FDA 
would receive 750 ANDAs per year. Over the first 4 years of GDUFA I, 
ANDA receipts have averaged approximately 1,000 per year. To address 
the increased workload, FDA hired additional staff and is projected to 
spend about $430 million in the final year of GDUFA I. To maintain 
FDA's current productivity and implement negotiated improvements, GDUFA 
II stipulates that user fees should total $493.6 million annually 
adjusted each year for inflation.
    (2) GDUFA II will for the first time rely on annual program fees--
GDUFA II shifts the fee burden somewhat from facility fees.
    For FY 2018, the generic drug fee rates are: ANDA ($171,823), DMF 
($47,829), domestic API facility ($45,367), foreign API facility 
($60,367), domestic FDF facility ($211,087), foreign FDF facility 
($226,087), domestic CMO facility ($70,362), foreign CMO facility 
($85,362), large size operation generic drug applicant program 
($1,590,792), medium size operation drug applicant program ($636,317), 
and small business generic drug applicant program ($159,079). These 
fees are effective on October 1, 2017, and will remain in effect 
through September 30, 2018.

II. Fee Revenue Amount for FY 2018

    The base revenue amount for FY 2018 is $493,600,000, as set in the 
statute (see section 744B(b)(1) of the FD&C Act). GDUFA II directs FDA 
to use the yearly revenue amount as a starting point to set the fee 
rates for each fee type. For more information about GDUFA II, please 
refer to the FDA Web site (http://www.fda.gov/gdufa). The ANDA, DMF, 
API facility, FDF facility, CMO facility, and generic drug applicant 
program fee (GDUFA Program Fee) calculations for FY 2018 are described 
in this document.
    GDUFA II specifies that the $493,600,000 is to be adjusted for 
inflation increases for FY 2019 through FY 2022 using two separate 
adjustments--one for personnel compensation and benefits (PC&B) and one 
for non-PC&B costs (see section 744B(c)(1) of the FD&C Act). Because 
the adjustment for inflation does not take effect until FY 2019, FDA 
will not adjust the base revenue amount for inflation in FY 2018.

III. ANDA Fee

    Under GDUFA II, the FY 2018 ANDA fee is owed by each applicant that 
submits an ANDA on or after October 1, 2017. This fee is due on the 
receipt date of the ANDA. Section 744B(b)(2)(B) specifies that the ANDA 
fee will make up 33 percent of the $493,600,000, which is $162,888,000.
    To calculate the ANDA fee, FDA estimated the number of full 
application equivalents (FAEs) that will be submitted in FY 2018. An 
ANDA counts as one FAE; however, 75 percent of the

[[Page 41027]]

fee paid for an ANDA shall be refunded according to GDUFA II if (1) the 
ANDA is refused for a cause other than failure to pay fees or (2) the 
ANDA has been withdrawn prior to receipt (section 744B(a)(2)(D)(i) of 
the FD&C Act). Therefore, an ANDA that is considered not to have been 
received by FDA due to reasons other than failure to pay fees or 
withdrawn prior to receipt counts as one-fourth of an FAE if the 
applicant initially paid a full application fee. One hundred percent of 
the fee paid for an ANDA shall be refunded if FDA initially receives 
the ANDA and subsequent to initial receipt, FDA determines that 
exclusivity should have prevented receipt of the ANDA, and thus FDA 
determines that the ANDA is no longer received (section 
744B(a)(2)(D))(ii) of the FD&C Act).
    FDA utilized data from ANDAs submitted from October 1, 2013, to 
April 30, 2017, to estimate the number of new original ANDAs that will 
incur filing fees in FY 2018. For FY 2018, the Agency estimates that 
approximately 938 new original ANDAs will be submitted and incur filing 
fees. Not all of the new original ANDAs will be received by the Agency 
and some of those not received will be resubmitted in the same fiscal 
year. Therefore, the Agency expects that the FAE count for ANDAs will 
be 948 for FY 2018.
    The FY 2018 application fee is estimated by dividing the number of 
FAEs that will pay the fee in FY 2018 (948) into the fee revenue amount 
to be derived from ANDA application fees in FY 2018 ($162,888,000). The 
result, rounded to the nearest dollar, is a fee of $171,823 per ANDA.
    The statute provides that those ANDAs that include information 
about the production of active pharmaceutical ingredients other than by 
reference to a DMF will pay an additional fee that is based on the 
number of such active pharmaceutical ingredients and the number of 
facilities proposed to produce those ingredients (see section 
744B(a)(3)(F) of the FD&C Act). FDA considers that this additional fee 
is unlikely to be assessed often; therefore, FDA has not included 
projections concerning the amount of this fee in calculating the fees 
for ANDAs.

IV. DMF Fee

    Under GDUFA II, the DMF fee is owed by each person that owns a type 
II active pharmaceutical ingredient DMF that is referenced, on or after 
October 1, 2012, in a generic drug submission by an initial letter of 
authorization. This is a one-time fee for each DMF. This fee is due on 
the earlier of the date on which the first generic drug submission is 
submitted that references the associated DMF or the date on which the 
drug master file holder requests the initial completeness assessment. 
Under section 744B(a)(2)(D)(iii) of the FD&C Act, if a DMF has 
successfully undergone an initial completeness assessment and the fee 
is paid, the DMF will be placed on a publicly available list 
documenting DMFs available for reference.
    To calculate the DMF fee, FDA assessed the volume of DMF 
submissions over time. The Agency assessed DMFs from October 1, 2015, 
to April 30, 2017, and concluded that averaging the number of fee-
paying DMFs provided the most accurate model for predicting fee-paying 
DMFs for FY 2018. FDA is estimating 516 fee-paying DMFs for FY 2018.
    The FY 2018 DMF fee is determined by dividing the DMF target 
revenue by the estimated number of fee-paying DMFs in FY 2018. Section 
744B(b)(2)(A) specifies that the DMF fees will make up five percent of 
the $493,600,000, which is $24,680,000. Dividing the DMF revenue amount 
($24,680,000) by the estimated fee-paying DMFs (516), and rounding to 
the nearest dollar, yields a DMF fee of $47,829 for FY 2018.

V. Foreign Facility Fee Differential

    Under GDUFA II, the fee for a facility located outside the United 
States and its territories and possessions shall be $15,000 higher than 
the amount of the fee for a facility located in the United States and 
its territories and possessions. The basis for this differential is the 
extra cost incurred by conducting an inspection outside the United 
States and its territories and possessions.

VI. FDF and CMO Facility Fees

    Under GDUFA II, the annual FDF facility fee is owed by each person 
who owns an FDF facility that is identified in at least one approved 
generic drug submission owned by that person or his affiliates. The CMO 
facility fee is owed by each person who owns an FDF facility that is 
identified in at least one approved ANDA but is not identified in an 
approved ANDA held by the owner of that facility or its affiliates. 
These fees are due no later than the first business day on or after 
October 1 of each such year. Section 744B(b)(2)(C) of the FD&C Act 
specifies that the FDF and CMO facility fee revenue will make up 20 
percent of the $493,600,000, which is $98,720,000.
    To calculate the fees, data from FDA's Integrity Services (IS) were 
utilized as the primary source of facility information for determining 
the denominators of each facility fee type. IS is the master data 
steward for all facility information provided in generic drug 
submissions received by FDA. A facility's reference status in an 
approved generic drug submission is extracted directly from submission 
data rather than relying on data from self-identification. This 
information provided the number of facilities referenced as FDF 
manufacturers in at least one approved generic drug submission. Based 
on FDA's IS data for FY 2018, the FDF and CMO facility denominators are 
182 FDF domestic, 208 FDF foreign, 71 CMO domestic, and 97 CMO foreign 
facilities.
    GDUFA II specifies that the CMO facility fee is to be equal to one-
third the amount of the FDF facility fee. Therefore, to generate the 
target collection revenue amount from FDF and CMO facility fees 
($98,720,000), FDA must weight a CMO facility as one-third of an FDF 
facility. FDA set fees based on the estimate of 182 FDF domestic, 208 
FDF foreign, 23.67 CMO domestic (71 multiplied by one-third), and 32.33 
CMO foreign facilities (97 multiplied by one-third), which equals 446 
total weighted FDF and CMO facilities for FY 2018.
    To calculate the fee for domestic facilities, FDA first determines 
the total fee revenue that will result from the foreign facility 
differential by subtracting the fee revenue resulting from the foreign 
facility fee differential from the target collection revenue amount 
($98,720,000) as follows. The foreign facility fee differential revenue 
equals the foreign facility fee differential ($15,000) multiplied by 
the number of FDF foreign facilities (208) plus the foreign facility 
fee differential ($15,000) multiplied by the number of CMO foreign 
facilities (97), totaling $4,575,000. This results in foreign fee 
differential revenue of $4,575,000 from the total FDF and CMO facility 
fee target collection revenue. Subtracting the foreign facility 
differential fee revenue ($4,575,000) from the total FDF and CMO 
facility target collection revenue ($98,720,000) results in a remaining 
facility fee revenue balance of $94,145,000. To determine the domestic 
FDF facility fee, FDA divides the $94,145,000 by the total weighted 
number of FDF and CMO facilities (446), which results in a domestic FDF 
facility fee of $211,087. The foreign FDF facility fee is $15,000 more 
than the domestic FDF facility fee, or $226,087.
    CMO fees are as follows. According to GDUFA II, the domestic CMO 
fee is calculated as one-third the amount of the domestic FDF facility 
fee. Therefore, the domestic CMO fee is $70,362, rounded to the nearest 
dollar. The

[[Page 41028]]

foreign CMO fee is calculated as the domestic CMO fee plus the foreign 
fee differential of $15,000. Therefore, the foreign CMO fee is $85,362.

VII. API Facility Fee

    Under GDUFA II, the annual API facility fee is owed by each person 
who owns a facility that is identified in (1) at least one approved 
generic drug submission or (2) in a Type II API DMF referenced in at 
least one approved generic drug submission. These fees are due no later 
than the first business day on or after October 1 of each such year. 
Section 744B(b)(2)(D) of the FD&C Act specifies the API facility fee 
will make up seven percent of $493,600,000 in fee revenue, which is 
$34,552,000.
    To calculate the API facility fee, data from FDA's IS were utilized 
as the primary source of facility information for determining the 
denominator. As stated above, IS is the master data steward for all 
facility information provided in generic drug submissions received by 
FDA. A facility's reference status in an approved generic drug 
submission is extracted directly from submission data rather than 
relying on data from self-identification. This information provided the 
number of facilities referenced as API manufacturers in at least one 
approved generic drug submission.
    The total number of API facilities identified was 592. Of the total 
facilities identified as API facilities, there were 79 domestic 
facilities and 513 foreign facilities. The foreign facility 
differential is $15,000. To calculate the fee for domestic facilities, 
FDA must first subtract the fee revenue that will result from the 
foreign facility fee differential. FDA takes the foreign facility 
differential ($15,000) and multiplies it by the number of foreign 
facilities (513) to determine the total fee revenue that will result 
from the foreign facility differential. As a result of that 
calculation, the foreign fee differential revenue will make up 
$7,695,000 of the total API fee revenue. Subtracting the foreign 
facility differential fee revenue ($7,695,000) from the total API 
facility target revenue ($34,552,000) results in a remaining balance of 
$26,857,000. To determine the domestic API facility fee, we divide the 
$26,857,000 by the total number of facilities (592), which gives us a 
domestic API facility fee of $45,367. The foreign API facility fee is 
$15,000 more than the domestic API facility fee, or $60,367.

VIII. Generic Drug Applicant Program Fee

    Under GDUFA II, if a person and its affiliates own at least one but 
not more than five approved ANDAs on October 1, 2017, the person and 
its affiliates shall owe a small business GDUFA Program Fee. If a 
person and its affiliates own at least 6 but not more than 19 approved 
ANDAs, the person and its affiliates shall owe a medium size operation 
GDUFA Program Fee. If a person and its affiliates own at least 20 
approved ANDAs, the person and its affiliates shall owe a large size 
operation GDUFA Program Fee. These fees are due no later than the first 
business day on or after October 1 of each such year. Section 
744B(b)(2)(E) of the FD&C Act specifies the GDUFA Program Fee will make 
up 35 percent of $493,600,000 in fee revenue, which is $172,760,000.
    To determine the appropriate number of applicants for each tier, 
the Agency has posted lists of approved ANDAs on the FDA Web site 
(http://www.fda.gov/gdufa) and asked applicants on the list to claim 
which ANDAs and affiliates belong to the parent company. The original 
list of approved ANDAs came from the Agency's Document Archiving, 
Reporting, and Regulatory Tracking System (DARRTS), which included all 
ANDAs with the status of ``approved'' as of April 30, 2017.
    In determining the appropriate number of approved ANDAs, the Agency 
has factored in a number of variables that could affect the collection 
of the target revenue: (1) Inactive ANDAs--applicants who have not 
submitted an annual report for one or more of their approved 
applications within the past 2 years; (2) unclaimed affiliations--a 
risk of undercollecting the target revenue if companies do not claim 
their ANDAs and their affiliates before the Program Fee is calculated; 
and (3) potential portfolio adjustment--applicants may choose to 
withdraw some of their approved ANDAs in order to move to a lower tier 
and reduce their fee exposure. The list of original approved ANDAs from 
the DARRTS database as of April 30, 2017, shows 339 applicants in the 
small business tier, 74 applicants in the medium size tier, and 65 
applicants in the large size tier. This list also takes into account 
all the withdrawals, consolidations, and transfer of ownerships from 
industry as of April 30, 2017. Factoring in all the variables for the 
first year of GDUFA II, the Agency estimates there will be 258 
applicants in the small business tier, 52 applicants in the medium size 
tier, and 62 applicants in the large size tier for FY 2018.
    To calculate the GDUFA Program Fee, GDUFA II provides that large 
size operation generic drug applicants pay the full fee, medium size 
operation applicants pay two-fifths of the full fee, and small business 
applicants pay one-tenth of the full fee. To generate the target 
collection revenue amount from GDUFA Program Fees ($172,760,000), we 
must weigh medium and small tiered applicants as a subset of a large 
size operation generic drug applicant. FDA will set fees based on the 
weighted estimate of 25.8 applicants in the small business tier (258 
multiplied by 10 percent), 20.8 applicants in the medium size tier (52 
multiplied by 40 percent), and 62 applicants in the large size tier, 
arriving at 108.6 total weighted applicants for FY 2018.
    To generate the large size operation GDUFA Program Fee, FDA divides 
the target revenue amount of $172,760,000 by 108.6, which equals 
$1,590,792. The medium size operation GDUFA Program Fee is 40 percent 
of the full fee ($636,317), and the small business operation GDUFA 
Program Fee is 10 percent of the full fee ($159,079).

IX. Fee Schedule for FY 2018

    The fee rates for FY 2018 are set out in table 1.

                    Table 1--Fee Schedule for FY 2018
------------------------------------------------------------------------
                                                              Fee rates
                        Fee category                         for FY 2018
------------------------------------------------------------------------
Applications:
  Abbreviated New Drug Application (ANDA)..................     $171,823
  Drug Master File (DMF)...................................       47,829
Facilities:
  Active Pharmaceutical Ingredient (API)--Domestic.........       45,367
  API--Foreign.............................................       60,367
  Finished Dosage Form (FDF)--Domestic.....................      211,087
  FDF--Foreign.............................................      226,087
  Contract Manufacturing Organization (CMO)--Domestic......       70,362
  CMO--Foreign.............................................       85,362
GDUFA Program:
  Large size operation generic drug applicant..............    1,590,792
  Medium size operation generic drug applicant.............      636,317
  Small business operation generic drug applicant..........      159,079
------------------------------------------------------------------------

X. Fee Payment Options and Procedures

    The new fee rates are effective October 1, 2017. To pay the ANDA, 
DMF, API facility, FDF facility, CMO facility, and GDUFA Program Fee, 
you must complete a Generic Drug User Fee Cover Sheet, available 
through https://www.fda.gov/gdufa and at https://userfees.fda.gov/OA_HTML/gdufaCAcdLogin.jsp, and generate a user fee identification (ID) 
number. Payment must be made in U.S. currency drawn on a U.S. bank by 
electronic check, check, bank draft, U.S. postal money order, credit 
card, or wire transfer. The

[[Page 41029]]

preferred payment method is online using electronic check (Automated 
Clearing House (ACH) also known as eCheck) or credit card (Discover, 
VISA, MasterCard, American Express). Secure electronic payments can be 
submitted using the User Fees Payment Portal at https://userfees.fda.gov/pay (Note: Only full payments are accepted. No partial 
payments can be made online.) Once you search for your invoice, select 
``Pay Now'' to be redirected to Pay.gov. Note that electronic payment 
options are based on the balance due. Payment by credit card is 
available for balances less than $25,000. If the balance exceeds this 
amount, only the ACH option is available. Payments must be made using 
U.S. bank accounts as well as U.S. credit cards.
    FDA has partnered with the U.S. Department of the Treasury to 
utilize Pay.gov, a web-based payment application, for online electronic 
payment. The Pay.gov feature is available on the FDA Web site after 
completing the Generic Drug User Fee Cover Sheet and generating the 
user fee ID number.
    Please include the user fee ID number on your check, bank draft, or 
postal money order and make payable to the order of the Food and Drug 
Administration. Your payment can be mailed to: Food and Drug 
Administration, P.O. Box 979108, St. Louis, MO 63197-9000. If checks 
are to be sent by a courier that requests a street address, the courier 
can deliver checks to: U.S. Bank, Attention: Government Lockbox 979108, 
1005 Convention Plaza, St. Louis, MO 63101. (Note: This U.S. Bank 
address is for courier delivery only. If you have any questions 
concerning courier delivery, contact the U.S. Bank at 314-418-4013. 
This telephone number is only for questions about courier delivery). 
Please make sure that the FDA post office box number (P.O. Box 979108) 
is written on the check, bank draft, or postal money order.
    If paying by wire transfer, please reference your unique user fee 
ID number when completing your transfer. Without your unique user fee 
ID number, the payment may not be applied. If the payment amount is not 
applied, the invoice amount would be referred to collections. The 
originating financial institution may charge a wire transfer fee. 
Please ask your financial institution about the wire transfer fee and 
include it with your payment to ensure that your fee is fully paid. Use 
the following account information when sending a payment by wire 
transfer: U.S. Department of Treasury, TREAS NYC, 33 Liberty St., New 
York, NY 10045, account number: 75060099, routing number: 021030004, 
SWIFT: FRNYUS33, Beneficiary: FDA, 8455 Colesville Rd., 14th Floor, 
Silver Spring, MD 20993-0002. If needed, FDA's tax identification 
number is 53-0196965.

    Dated: August 24, 2017.
Anna K. Abram,
Deputy Commissioner for Policy, Planning, Legislation, and Analysis.
[FR Doc. 2017-18377 Filed 8-28-17; 8:45 am]
 BILLING CODE 4164-01-P