Document ID: FDA-2011-N-0559-0001
Agency: fda
Document Type: Notice
Title: Prescription Drug User Fee Rates for Fiscal Year 2012
Posted Date: 2011-08-01T04:00Z

[Federal Register Volume 76, Number 147 (Monday, August 1, 2011)]
[Notices]
[Pages 45831-45838]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-19332]

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

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2011-N-0559]

Prescription Drug User Fee Rates for Fiscal Year 2012

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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

SUMMARY: The Food and Drug Administration (FDA) is announcing the rates 
for prescription drug user fees for fiscal year (FY) 2012. The Federal 
Food, Drug, and Cosmetic Act (the FD&C 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 document establishes fee 
rates for FY 2012 for application fees for an application requiring 
clinical data ($1,841,500), for an application not requiring clinical 
data or a supplement requiring clinical data ($920,750), for 
establishment fees ($520,100), and for product fees ($98,970). These 
fees are effective on October 1, 2011, and will remain in effect 
through September 30, 2012. For applications and supplements that are 
submitted on or after October 1, 2011, the new fee schedule must be 
used. Invoices for establishment and product fees for FY 2012 will be 
issued in August 2011, using the new fee schedule.

FOR FURTHER INFORMATION CONTACT: David Miller, Office of Financial 
Management (HFA-100), Food and Drug Administration, 1350 Picard Dr., 
PI50, Rm. 210J, Rockville, MD 20850, 301-796-7103.

SUPPLEMENTARY INFORMATION: 

I. Background

    Sections 735 and 736 of the FD&C Act (21 U.S.C. 379g and 379h, 
respectively), 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 
(section 736(a) of the FD&C Act). When certain conditions are met, FDA 
may waive or reduce fees (section 736(d) of the FD&C Act).
    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 increased for drug safety enhancements 
by $10,000,000 in each of the subsequent 4 FYs, and the increased total 
is further adjusted each year for inflation and workload. Fees for

[[Page 45832]]

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 document uses the fee base revenue amount for FY 2008 
published in the Federal Register of October 12, 2007 (72 FR 58103) 
(the October 2007 notice); adjusts it for the FY 2009, FY 2010, FY 
2011, and FY 2012 drug safety increases (see section 736(b)(4) of the 
FD&C Act), for inflation, and for workload, for excess collections 
through FY 2011, and for a final year adjustment; and then establishes 
the application, establishment, and product fees for FY 2012. These 
fees are effective on October 1, 2011, and will remain in effect 
through September 30, 2012.

II. Fee Revenue Amount for FY 2012

    The total fee revenue amount for FY 2012 is $702,172,000, based on 
the fee revenue amount specified in the statute, including additional 
fee funding for drug safety and adjustments for inflation, changes in 
workload, offset for excess collections and the final year adjustment. 
The statutory amount and a one-time base adjustment are described in 
sections II.A and II.B of this document. The adjustment for inflation 
is described in section II.C of this document, and the adjustment for 
changes in workload in section II.D of this document. The adjustment 
for estimated excess collections through FY 2012 is described in 
section III of this document, and the final year adjustment is 
described in section IV of this document.

A. FY 2012 Statutory Fee Revenue Amounts Before Adjustments

    PDUFA IV specifies that the fee revenue amount before adjustments 
for FY 2012 for all fees is $457,783,000 ($392,783,000 specified in 
section 736(b)(1) of the FD&C Act plus an additional $65,000,000 for 
drug safety in FY 2012 specified in section 736(b)(4)).

B. Base Adjustment to Statutory Fee Revenue Amount

    The statute also specifies that $354,893,000 of the base amount is 
to be further adjusted for workload increases through FY 2007 (see 
section 736(b)(1)(B) of the FD&C Act). 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. 
This adjustment was explained in detail in the October 2007 notice. 
Increasing the 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 
$457,783,000 statutorily specified amount from section II.A of this 
document, results in a total adjusted PDUFA IV base revenue amount of 
$499,412,000, before further adjustment for inflation and changes in 
workload after FY 2007.

C. Inflation Adjustment to FY 2012 Fee Revenue Amount

    PDUFA IV provides that fee revenue amounts for each FY after FY 
2008 shall be adjusted for inflation. The adjustment must reflect the 
greater of the following amounts: (1) The total percentage change that 
occurred in the Consumer Price Index (CPI) (all items; U.S. city 
average) during the 12-month period ending June 30 preceding the FY for 
which fees are being set; (2) the total percentage pay change for the 
previous FY for Federal employees stationed in the Washington, DC 
metropolitan area; or (3) the average annual change in cost, per FDA 
full time equivalent (FTE), of all personnel compensation and benefits 
paid for the first 5 of the previous 6 FYs. PDUFA IV provides for this 
annual adjustment to be cumulative and compounded annually after FY 
2008 (see section 736(c)(1) of the FD&C Act).
    The first factor is the CPI increase for the 12-month period ending 
in June 2011. The CPI for June 2011 was 225.722 and the CPI for June 
2010 was 217.965. (These CPI figures are available on the Bureau of 
Labor Statistics (BLS) Web site at http://data.bls.gov/cgi-bin/surveymost?bls by checking the first box under ``Price Indexes'' and 
then clicking ``Retrieve Data'' at the bottom of the page. FDA has 
verified the Web site address, but FDA is not responsible for any 
subsequent changes to the Web site after this document publishes in the 
Federal Register.) The CPI for June 2011 is 3.559 percent higher than 
the CPI for the previous 12-month period.
    The second factor is the increase in pay for the previous FY (FY 
2011 in this case) for Federal employees stationed in the Washington, 
DC metropolitan area. This figure is published by the Office of 
Personnel Management (OPM), and found on their Web site at http://www.opm.gov/oca/11tables/html/dcb.asp above the salary table. (FDA has 
verified the Web site address, but FDA is not responsible for any 
subsequent changes to the Web site after this document publishes in the 
Federal Register.) For FY 2011 it was 0.00 percent.
    The third factor is the average change in FDA cost for compensation 
and benefits per FTE over the previous 5 of the most recent 6 FYs (FY 
2006 through FY 2010). The data on total compensation paid and numbers 
of FTE paid, from which the average cost per FTE can be derived, are 
published in FDA's Justification of Estimates for Appropriations 
Committees. Table 1 of this document summarizes that actual cost and 
FTE use data for the specified FYs, and provides the percent change 
from the previous FY and the average percent change over the most 5 
recent FYs, which is 3.72 percent.

                                  Table 1--FDA Personnel Compensation and Benefits (PC&B) Each Year and Percent Change
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                         Annual average
                                                   FY2006            FY2007            FY2008            FY2009            FY2010         increase for
                                                                                                                                         latest 5 years
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total PC&B..................................    $1,114,704,000    $1,144,369,000    $1,215,627,000    $1,464,445,000    $1,634,108,000  ................
Total FTE...................................             9,698             9,569             9,811            11,413            12,256  ................
PC&B per FTE................................          $114,942          $119,591          $123,905          $128,314          $130,457  ................
Percent Change from Previous Year...........              5.70              4.05              3.61              3.56              1.67              3.72
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The inflation increase for FY 2012 is 3.72 percent. This is the 
greater of the CPI change during the 12-month period ending June 30 
preceding the FY for which fees are being set (3.559 percent), the 
increase in pay for the previous FY (FY 2011 in this case) for Federal 
employees stationed in the Washington, DC metropolitan area (0.00 
percent), and

[[Page 45833]]

the average annual change in cost, per FDA FTE, of all personnel 
compensation and benefits paid for the first 5 of the previous 6 FYs 
(3.72 percent). Because the average change in pay per FTE (3.72 
percent) is the highest of the three factors, it becomes the inflation 
adjustment for total fee revenue for FY 2012.
    The inflation adjustment for FY 2009 was 5.64 percent. This is the 
greater of the CPI increase during the 12-month period ending June 30 
preceding the FY for which fees were being set (June 30, 2008, which 
was 5.05 percent), the increase in pay for FY 2008 for Federal 
employees stationed in Washington, DC (4.49 percent), or the average 
annual change in cost, per FDA FTE, of all personnel compensation and 
benefits paid for the first 5 of the previous 6 FYs (5.64 percent).
    The inflation adjustment for FY 2010 was 5.54 percent. This is the 
greater of the CPI increase during the 12-month period ending June 30 
preceding the FY for which fees were being set (June 30, 2009) 
(negative 1.43 percent), the increase in pay for FY 2009 for Federal 
employees stationed in Washington, DC (4.78 percent), or the average 
annual change in cost, per FDA FTE, of all personnel compensation and 
benefits paid for the first 5 of the previous 6 FYs (5.54 percent).
    The inflation adjustment for FY 2011 was 4.53 percent. This is the 
greater of the CPI increase during the 12-month period ending June 30 
preceding the FY for which fees were being set (June 30, 2010) (1.053 
percent), the increase in pay for FY 2010 for Federal employees 
stationed in Washington, DC (2.42 percent), or the average annual 
change in cost, per FDA FTE, of all personnel compensation and benefits 
paid for the first 5 of the previous 6 FYs (4.53 percent).
    PDUFA IV provides for this inflation adjustment to be cumulative 
and compounded annually after FY 2008 (see section 736(c)(1) of the 
FD&C Act). This factor for FY 2012 (3.72 percent) is compounded by 
adding one to it and then multiplying it by one plus the inflation 
adjustment factor for FY 2011 (4.53 percent) and by one plus the 
inflation adjustment factor for FY 2010 (5.54 percent) and by one plus 
the inflation adjustment factor for FY 2009 (5.64 percent). The result 
of this multiplication of the inflation factors for the 4 years since 
FY 2008 (1.0372 times 1.0453 times 1.0554 times 1.0564 percent) becomes 
the inflation adjustment for FY 2012. This inflation adjustment for FY 
2012 is 20.88 percent.
    Increasing the FY 2012 fee revenue base of $499,412,000, by 20.88 
percent yields an inflation-adjusted fee revenue amount for FY 2012 of 
$603,689,000, rounded to the nearest thousand dollars, before the 
application of the FY 2012 workload adjustment.

D. Workload Adjustment to the FY 2012 Inflation Adjusted Fee Revenue 
Amount

    PDUFA IV does not allow FDA to adjust the total revenue amount for 
workload beginning in FY 2010, unless an independent accounting firm 
study is complete (see section 736(c)(2)(C) of the FD&C Act). That 
study, conducted by Deloitte Touche, LLP, was completed on March 31, 
2009, and is available online at http://www.fda.gov/ForIndustry/UserFees/PrescriptionDrugUserFee/ucm164339.htm. The study found that 
the adjustment methodology used by FDA reasonably captures changes in 
workload for reviewing human drug applications under PDUFA IV. 
Accordingly, FDA continues to use the workload adjustment methodology 
prescribed in PDUFA IV.
    For each fiscal year 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 section 736(c)(2) of the 
FD&C Act). PDUFA IV continues the Prescription Drug User Fee Amendments 
of 2002 (PDUFA III) workload adjustment with modifications, and 
provides for a new additional adjustment for changes in review 
activity.
    FDA calculated the average number of each of the four types of 
applications specified in the workload adjustment provision: (1) Human 
drug applications, (2) active commercial INDs (applications that have 
at least one submission during the previous 12 months), (3) efficacy 
supplements, and (4) manufacturing supplements received over the 5-year 
period that ended on June 30, 2007 (base years), and the average number 
of each of these types of applications over the most recent 5-year 
period that ended June 30, 2011.
    The calculations are summarized in table 2 of this document. The 5-
year averages for each application category are provided in Column 1 
(``5-Year Average Base Years 2002-2007'') and Column 2a (``5-Year 
Average 2007-2011'').
    PDUFA IV specifies that FDA make additional adjustments for changes 
in review activities to human drug applications and active commercial 
INDs. These adjustments, specified under PDUFA IV, are summarized in 
columns 2b and 2c in table 2 of this document. The number in the new 
drug applications/biologics license applications (NDAs/BLAs) line of 
column 2b of table 2 of this document is the percent by which the 
average workload for meetings, annual reports, and labeling supplements 
for NDAs and BLAs has changed from the 5-year period 2002 through 2007, 
to the 5-year period 2007 through 2011. Likewise, the number in the 
``Active commercial INDs'' line of column 2b of table 2 of this 
document is the percent by which the workload for meetings and special 
protocol assessments for active commercial INDs has changed from the 5-
year period 2002 through 2007, to the 5-year period 2007 through 2011. 
There is no entry in the last two lines of column 2b because the 
adjustment for changes in review workload does not apply to the 
workload for efficacy supplements and manufacturing supplements.
    Column 3 of table 2 of this document reflects the percent change in 
workload from column 1 to column 2c. Column 4 of table 2 of this 
document 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 2 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 table 2 of this 
document is the sum of the values in column 5 that are added, 
reflecting an increase in workload of 8.12 percent for FY 2012 when 
compared to the base years.

[[Page 45834]]

                                                   Table 2--Workload Adjuster Calculation for FY 2012
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                     Column 3
                                                            Column 1  5-  Column 2a  5-  Column 2b     Column 2c     Percent                   Column 5
                                                           year  average      year       Adjustment   (Column 2a      change      Column 4     Weighted
                     Application type                        base years      average    for changes  increased by   (column 1    Weighting     percent
                                                             2002-2007      2007-2011    in review    column 2b)    to column      factor       change
                                                                                          activity                     2c)
--------------------------------------------------------------------------------------------------------------------------------------------------------
NDAs/BLAs................................................         123.8          130.8       -0.01%         130.8         5.6%        35.3%        1.99%
Active commercial INDs...................................       5,528.2         6520.6        -2.41        6363.2         15.1         42.4         6.40
Efficacy supplements.....................................         163.4          157.4           NA         157.4         -3.7          9.9        -0.36
Manufacturing supplements................................        2589.2         2606.8           NA        2606.8          0.7         12.4         0.08
                                                          ----------------------------------------------------------------------------------------------
    FY 2012 Workload Adjuster............................  .............  ............  ...........  ............  ...........  ...........         8.12
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The FY 2012 workload adjuster reflected in the calculations in 
table 3 of this document is 8.12 percent. Therefore the inflation-
adjusted revenue amount of $603,689,000 from section II.C of this 
document will be increased by the FY 2012 workload adjuster of 8.12 
percent, resulting in a total adjusted revenue amount in FY 2012 of 
$652,709,000, rounded to the nearest thousand dollars.

E. Rent and Rent-Related Adjustment to the FY 2011 Adjusted Fee Revenue 
Amount

    PDUFA specifies that for FY 2010 and each subsequent FY, the 
revenue amount will be decreased if the actual cost paid for rent and 
rent-related expenses for preceding FYs are less than estimates made 
for such FYs in FY 2006 (see section 736(c)(3) of the FD&C Act). Table 
3 of this document shows the estimates of rent and rent-related costs 
for FY 2008 through FY 2010 made in 2006 and the actual costs for these 
3 FYs, the only FYs for which complete data are available at this time.

  Table 3--Comparison of Actual and Estimated Rent and Rent-Related Expenses for the Center for Drug Evaluation and Research (CDER) and the Center for
                                                        Biologics Evaluation and Research (CBER)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       Estimates made in 2006                                      Actual amounts paid
                                     -------------------------------------------------------------------------------------------------------------------
                                         FY 2008       FY 2009       FY 2010         Total         FY 2008       FY 2009       FY 2010         Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
CDER................................   $46,732,000   $40,415,000   $41,589,000    $128,736,000   $51,619,000   $64,687,250   $58,049,000    $174,355,250
CBER................................    22,295,000    23,067,000    25,652,000      71,014,000    26,715,000    26,966,750    27,815,000      81,496,750
                                     -------------------------------------------------------------------------------------------------------------------
    Total...........................    69,027,000    63,482,000    67,241,000     199,750,000    78,334,000    91,654,000    85,864,000     255,852,000
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Because FY 2008 through FY 2010 costs for rent and rent-related 
items in total ($255,852,000) exceeded the estimates of these costs 
made in FY 2006 ($199,750,000), no decrease in the FY 2012 estimated 
PDUFA revenues is required under this provision of PDUFA.

III. Offset for Excess Collections Through FY 2011

    Under the provisions of PDUFA III, which applies to user fees 
collected for FY 2002 through FY 2007, if the amount of fees collected 
for a FY exceeds the amount of fees specified in appropriation acts for 
that FY, the excess amount shall be credited to FDA's appropriation 
account and shall be subtracted from the amount of fees that would 
otherwise be authorized to be collected in a subsequent FY (See 21 
U.S.C. 379h(g)(4) as amended by PDUFA III). In setting PDUFA fees for 
FY 2007 in August of 2006, some offsets were made under these 
provisions, but some offsets still need to be made based on final 
collection data for that period. Table 4 shows the amount of fees 
specified in FDA's annual appropriation for each year from FY 2003 
through FY 2007; the amounts FDA has collected for each year; the 
amount of offset previously taken; and the cumulative difference. FDA 
will take this difference as an offset against FY 2012 fee collections.

                       Table 4--Offsets Remaining To Be Taken for PDUFA III, FY 2003-2007
----------------------------------------------------------------------------------------------------------------
                                                                                      Excess
                                                                                    collections
                                                                                   offset under      Remaining
                                                       Fees                           section         excess
                   Fiscal year                     appropriated   Fees collected   736(g)(4) of     collections
                                                                                   the FD&C Act    to be offset
                                                                                  when 2007 fees
                                                                                     were set
----------------------------------------------------------------------------------------------------------------
2003............................................    $222,900,000    $218,302,684  ..............  ..............
2004............................................     249,825,000     258,333,700      $7,230,906      $1,277,794
2005............................................     284,394,000     287,178,231  ..............       2,784,231
2006............................................     305,332,000     313,514,278  ..............       8,209,278
2007............................................     352,200,000     370,934,966  ..............      18,734,966
                                                 ---------------------------------------------------------------
    Cumulative difference to be offset against    ..............  ..............  ..............      30,974,959
     FY 2012 collections........................
----------------------------------------------------------------------------------------------------------------

[[Page 45835]]

    In addition, under the provisions of PDUFA, as amended by PDUFA IV, 
if the sum of the cumulative amount of the fees collected for FY 2008 
through 2010, and the amount of fees estimated to be collected under 
this section III of the document for FY 2011, exceeds the cumulative 
amount appropriated for fees for FYs 2008 through 2011, the excess will 
be credited to FDA's appropriation account and subtracted from the 
amount of fees that FDA would otherwise be authorized to collect for FY 
2012 under the FD&C Act (21 U.S.C. 379h(g)(4) as amended by PDUFA IV).
    Table 5 of this document shows the amounts specified in 
appropriation acts for each year from FY 2008 through FY 2011, and the 
amounts FDA has collected for FYs 2008, 2009, and 2010 as of March 31, 
2011, and the amount that FDA estimated it would collect in FY 2011 
when it published the notice of FY 2011 fees in the Federal Register on 
August 4, 2010 (75 FR 46956). In FY 2011, application fee revenues to 
date are less than anticipated when fees were set in August 2010. The 
bottom line of table 5 of this document shows the estimated cumulative 
difference between fee amounts specified in appropriation acts for FY 
2008 through FY 2011 and PDUFA fee amounts collected.

Table 5--Offsets To Be Taken for the PDUFA IV Period, FY 2008-2011 for FY 2008-2010, Fees Collected Through 3/31/
                                   2011; for FY 2011, Estimate as of 3/31/2011
----------------------------------------------------------------------------------------------------------------
                                                                       Fees
                           Fiscal year                             appropriated   Fees collected    Difference
----------------------------------------------------------------------------------------------------------------
2008............................................................    $459,412,000    $479,582,086     $20,170,086
2009............................................................     510,665,000     521,496,042      10,831,042
2010............................................................     578,162,000     567,877,548    (10,284,452)
2011 estimate...................................................     667,057,000     619,070,000    (47,987,000)
                                                                 -----------------------------------------------
    Cumulative difference.......................................  ..............  ..............    (27,270,324)
----------------------------------------------------------------------------------------------------------------

    The cumulative fees collected for FYs 2008 through 2011 are 
estimated to be more than $27 million less than the cumulative fee 
amounts specified in appropriation acts during this same period. Under 
section 736(g)(4) of the FD&C Act, an offset is only made if the 
cumulative fees collected exceed cumulative fee appropriations for this 
period. Accordingly, there will be no offset of fees attributable to 
the PDUFA IV period of FYs 2008 through 2012. The only offset will be 
for the $30,974,959 for the PDUFA III period. Reducing the inflation 
and workload adjusted estimate of total revenue of $652,709,000 by the 
PDUFA III offset of $30,975,000 (rounded to the nearest thousand 
dollars) results in a revenue estimate of $621,734,000, before the 
final year adjustment.

IV. Final Year Adjustment

    Under the provisions of PDUFA, as amended, the Secretary of Health 
and Human Services may, in addition to the inflation and workload 
adjustments, further increase the fees and fee revenues if such an 
adjustment is necessary to provide for not more than 3 months of 
operating reserves of carryover user fees for the process for the 
review of human drug applications for the first 3 months of FY 2013. 
The rationale for the amount of this increase shall be contained in the 
annual notice establishing fee revenues and fees for FY 2012 (see 21 
U.S.C. 379h(c)(4)).

    Table 6--Estimated Carryover Balance at the End of FY 2012, After
           Deduction of Estimated FY 2011-2012 Operating Costs
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Total carryover balance end of FY 2010..................    $150,611,598
Used for offset in 2012.................................      30,975,000
Used for additional 53 FTE (FDAAA drug safety), FY 2011-      29,771,000
 2012...................................................
Reserve for refunds.....................................       2,500,000
Used for CBER move to White Oak.........................      37,896,000
Used to cover 2011 estimated revenue shortfalls.........       8,382,000
Used to cover 2012 estimated revenue shortfalls.........       8,694,000
Estimated 2012 end of FY carryover balance..............      32,393,598
------------------------------------------------------------------------

    As of September 30, 2010, FDA had cash carryover balances of 
$150,611,598. However, of this amount, a total of $30,975,000 will be 
used to cover the cost of the reduction in fee revenue that will result 
from the offset in fees for excess collections during PDUFA III. A 
total of $29,771,000 will be used in FY 2011 and FY 2012 to cover the 
cost of additional FTEs allocated in FY 2009 to address increased PDUFA 
workload associated with new drug safety provisions under FDAAA. A 
total of $2,500,000 is not available to FDA to obligate because it 
represents the minimum amount FDA will need to keep in reserve for 
refunds that will need to be made. A total of $37,896,000 is expected 
to be used for the CBER move to the White Oak campus in FY 2012-2014. 
Based on FDA's experience in FY 2010 when about 17 fewer paid full 
application fees were received by FDA than expected, causing a revenue 
shortfall, FDA is assuming that about 5.5 fewer full applications will 
be received in both FY 2011 and FY 2012, resulting in shortfalls of 
over $8,382,000 and $8,694,000 each year, respectively, that will have 
to be covered from the carryover balances. Thus the amount of carry-
over balance FDA expects to be available for obligation at the end of 
FY 2012 is $32,393,598, as shown in the last line of table 6 of this 
document.

 Table 7--Estimated Fee Revenue Needed To Sustain FY 2012 Operations for
                      the First 3 Months of FY 2013
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Estimated total spending from fees in FY 2012...........    $652,709,000
Estimated FY 2013 inflation costs at 3.72%..............      24,280,775
Estimated FY 2013 funds to sustain FY 2012 operations...     676,989,755
Estimated fees needed for 3 months in FY 2013...........     169,247,444
Estimated end-of-FY 2012 carryover balance..............      32,393,598
Additional revenue needed for 3 months in FY 2013.......     136,854,000
------------------------------------------------------------------------

    In FY 2012, FDA expects to spend a total of $652,709,000, as noted 
at the end of section III of this document. To sustain current 
operations in FY 2012, with an anticipated inflation rate of 3.72 
percent, FDA expects to obligate a total of $676,989,775 in FY 2013--or 
a total of about $169,247,444 during the first 3 months of FY 2013. The 
available

[[Page 45836]]

carryover balance at the beginning of FY 2013 is estimated at 
$32,393,598. Thus FDA would need an additional $136,854,000 
($169,247,444 minus $32,393,598, rounded to the nearest thousand 
dollars) as the final year adjustment to assure sufficient operating 
reserves for the first 3 months of FY 2013.
    FDA recognizes that adding $136,854,000 to the fee revenue costs in 
FY 2012 poses a substantial burden on the regulated industry at a time 
when it is undergoing significant financial strain. In light of this, 
and in light of the fact that the legislative language authorizing the 
final year adjustment allows FDA discretion in whether to make this 
adjustment for a full 3 months of operating reserves or for a shorter 
period, FDA has decided to balance its own risks with the amount of 
burden the final year adjustment will place on the industry. In making 
this decision, FDA has decided to assume more risk, making the final 
year adjustment to allow for only 2 months of operating reserves 
instead of for 3 months of operating reserves. Accordingly FDA will 
make the final year adjustment for a lesser amount, as derived in table 
8 of this document.

 Table 8--Estimated Fee Revenue Needed To Sustain FY 2012 Operations for
                      the First 2 Months of FY 2013
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Estimated total spending from fees in FY 2012........       $652,709,000
Estimated FY 2013 inflation costs at 3.72%...........         24,280,775
Estimated 2013 funds to sustain 2012 operations......        676,989,775
Estimated fees needed for 2 months in FY 2013........        112,831,629
Estimated 2012 end of FY carryover balance...........         32,393,598
Additional revenue needed for 2 months in 2013.......         80,438,031
------------------------------------------------------------------------

    Rounding this amount to the nearest thousand dollars results in a 
final year adjustment of $80,438,000. Adding this amount to the total 
of $621,743,000, the total after the offset adjustment at the end of 
section III of this document, results in a total revenue target of 
$702,172,000, rounded to the nearest thousand dollars, for FY 2012.
    PDUFA specifies that one-third of the total fee revenue is to be 
derived from application fees, one-third from establishment fees, and 
one-third from product fees (see section 736(b)(2) of the FD&C Act). 
Accordingly, one-third of the total revenue amount (rounded to the 
nearest thousand dollars), or a total of $234,057,000 is the total 
amount of fee revenue that will be derived from each of these fee 
categories: Application Fees, Establishment Fees, and Product Fees.
    While the fee revenue amount anticipated in FY 2012 is 
$702,172,000, as the previous paragraph shows, FDA assumes that the fee 
appropriation for FY 2012 will be 5 percent higher, or $737,281,000, 
rounded to the nearest thousand dollars. The PDUFA IV 5-Year Financial 
Plan, (which can be found at http://www.fda.gov/ForIndustry/UserFees/PrescriptionDrugUserFee/ucm153456.htm) states in Assumption 14 (Fee 
Revenue and Annual Appropriation Amount) that the PDUFA workload 
adjuster is a lagging adjustment dampened by averages over five years, 
and will not help FDA keep up with workload if there are sudden 
increases in the number of applications to be reviewed in the current 
fiscal year. Appropriated amounts for PDUFA fee revenue each year are 
estimated at 5 percent higher than estimated fee revenues for each 
year, to provide FDA with the ability to cope with surges in 
application review workload should that occur. If FDA collects less 
than the fee estimate at the beginning of the year and less than the 
fee appropriation, then collections rather than appropriations set the 
upper limit on how much FDA may actually keep and spend. If, however, 
FDA collects more than fee estimates at the beginning of the year, due 
to a workload surge, a slightly higher fee appropriation will permit 
FDA to keep and spend the higher collections in order to respond to a 
real surge in review workload that caused the increased collections--an 
unexpected increase in the number of applications that FDA must review 
in accordance with PDUFA goals. For this reason, in most FY since 1993, 
actual appropriations have slightly exceeded PDUFA fee revenue 
estimates made each year.

V. Application Fee Calculations

A. Application Fee Revenues and Application Fees

    Application fees will be set to generate one-third of the total fee 
revenue amount, or $234,057,000, in FY 2012, as calculated previously 
in this document.

B. Estimate of the Number of Fee-Paying Applications and the 
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 fiscal years. Using a rolling average of the 5 most 
recent fiscal years is the same method that has been applied for the 
last 8 years.
    In estimating the number of fee-paying FAEs that FDA will receive 
in FY 2012, the 5-year rolling average for the most recent 5 years will 
be based on actual counts of fee-paying FAEs received for FY 2007 
through FY 2011. For FY 2011, 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 8 years.
    Table 9 of this document shows, in column 1, the total number of 
each type of FAE received in the first 9 months of FY 2011, 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, 2011. Column 4 
estimates the 12-month total fee-paying FAEs for FY 2011 based on the 
applications received through June 30, 2011. 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.

[[Page 45837]]

  Table 9--FY 2011 Full Application Equivalents Received Through June 30, 2011, and Projected Through September
                                                    30, 2011
----------------------------------------------------------------------------------------------------------------
                                                                             Column 2
                                                                Column 1       Fees       Column 3     Column 4
                                                                 Total     exempted or   Total fee     12-Month
                                                                received      waived       paying     fee paying
                                                              through  6/  through  6/  through  6/   projection
                                                                30/2011      30/2011      30/2011
----------------------------------------------------------------------------------------------------------------
Applications requiring clinical data........................       55            18          37            49.33
Applications not requiring clinical data....................        9.5           5.5         4             5.33
Supplements requiring clinical data.........................       44.5           9          35.5          47.88
Withdrawn or refused to file................................        1.625         1.25         .375          .5
                                                             ---------------------------------------------------
    Total...................................................      110.625        33.75       76.875       102.5
----------------------------------------------------------------------------------------------------------------

    In the first 9 months of FY 2011, FDA received 110.625 FAEs, of 
which 76.875 were fee-paying. Based on data from the last 10 FYs, on 
average, 25 percent of the applications submitted each year come in the 
final 3 months. Dividing 76.875 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 2011 at 102.5.
    As table 10 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 2011, is 127.1 FAEs. FDA will set fees 
for FY 2011 based on this estimate as the number of full application 
equivalents that will pay fees.

                                     Table 10--Fee-Paying FAE 5-Year Average
----------------------------------------------------------------------------------------------------------------
                                                                                          2011         5-Year
         Fiscal year              2007          2008          2009          2010        estimate       average
----------------------------------------------------------------------------------------------------------------
Fee-Paying FAEs.............        134.4         140.0         140.3         118.4         102.5         127.1
----------------------------------------------------------------------------------------------------------------

    The FY 2012 application fee is estimated by dividing the average 
number of full applications that paid fees over the latest 5 years, 
127.1, into the fee revenue amount to be derived from application fees 
in FY 2012, $234,057,000. The result, rounded to the nearest $100, is a 
fee of $1,841,500 per full application requiring clinical data, and 
$920,750 per application not requiring clinical data or per supplement 
requiring clinical data.

VI. Fee Calculations for Establishment and Product Fees

A. Establishment Fees

    At the beginning of FY 2011, the establishment fee was based on an 
estimate that 415 establishments would be subject to, and would pay, 
fees. By the end of FY 2011, FDA estimates that 475 establishments will 
have been billed for establishment fees, before all decisions on 
requests for waivers or reductions are made. FDA estimates that a total 
of 10 establishment fee waivers or reductions will be made for FY 2011. 
In addition, FDA estimates that another 15 full establishment fees will 
be exempted this year based on the orphan drug exemption in FDAAA (see 
section 736(k) of the FD&C Act). Subtracting 25 establishments (10 
waivers, plus the estimated 15 establishments under the orphan 
exemption) from 450 leaves a net of 415 fee-paying establishments. FDA 
will use 450 for its FY 2012 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 ($234,057,000) by the estimated 450 
establishments, for an establishment fee rate for FY 2012 of $520,100 
(rounded to the nearest $100).

B. Product Fees

    At the beginning of FY 2011, the product fee was based on an 
estimate that 2,385 products would be subject to and would pay product 
fees. By the end of FY 2011, FDA estimates that 2,450 products will 
have been billed for product fees, before all decisions on requests for 
waivers, reductions, or exemptions are made. FDA assumes that there 
will be 55 waivers and reductions granted. In addition, FDA estimates 
that another 30 product fees will be exempted this year based on the 
orphan drug exemption in FDAAA (see section 736(k) of the FD&C Act). 
FDA estimates that 2,365 products will qualify for product fees in FY 
2011, after allowing for waivers and reductions, including the orphan 
drug products eligible under the FDAAA exemption, and will use this 
number for its FY 2012 estimate. The FY 2012 product fee rate is 
determined by dividing the adjusted total fee revenue to be derived 
from product fees ($234,057,000) by the estimated 2,365 products for a 
FY 2012 product fee of $98,970 (rounded to the nearest $10).

VII. Fee Schedule for FY 2012

    The fee rates for FY 2012 are set out in table 11 of this document.

                   Table 11--Fee Schedule for FY 2012
------------------------------------------------------------------------
                                                           Fee rates for
                      Fee category                            FY 2012
------------------------------------------------------------------------
Applications............................................  ..............
    Requiring clinical data.............................      $1,841,500
    Not requiring clinical data.........................         920,750
    Supplements requiring clinical data.................         920,750
Establishments..........................................         520,100
Products................................................          98,970
------------------------------------------------------------------------

IX. Fee Payment Options and Procedures

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, 2011. 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

[[Page 45838]]

identification (ID) number on your check, bank draft, or postal money 
order. Your payment can be mailed to: Food and Drug Administration, 
P.O. Box 979107, St. Louis, MO 63197-9000.
    If checks are to be sent by a courier that requests a street 
address, the courier can deliver the checks to: U.S. Bank, Attention: 
Government Lockbox 979107, 1005 Convention Plaza, St. Louis, MO 63101. 
(Note: This U.S. Bank address is for courier delivery only.)
    Please make sure that the FDA post office box number (P.O. Box 
979107) is written on the check, bank draft, or postal money order.
    Wire transfer payment may also be used. Please reference your 
unique user fee ID number when completing your transfer. The 
originating financial institution may charge a wire transfer fee 
between $15.00 and $35.00. Please ask your financial institution about 
the fee and include it with your payment to ensure that your fee is 
fully paid. The account information is as follows: New York Federal 
Reserve Bank, U.S. Dept of Treasury, TREAS NYC, 33 Liberty St., New 
York, NY 10045, Acct. No.: 75060099, Routing No.: 021030004, SWIFT: 
FRNYUS33, Beneficiary: FDA, 1350 Piccard Dr., Rockville, MD, 20850.
    Application fees can also be paid online with an electronic check 
(ACH). 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 the 
user fee ID number is generated.
    The tax identification number of the Food and Drug Administration 
is 53-0196965.

B. Establishment and Product Fees

    FDA will issue invoices for establishment and product fees for FY 
2012 under the new fee schedule in August 2011. Payment will be due on 
October 1, 2011. FDA will issue invoices in November 2012 for any 
products and establishments subject to fees for FY 2012 that qualify 
for fee assessments after the August 2011 billing.

    Dated: July 26, 2011.
Leslie Kux,
Acting Assistant Commissioner for Policy.
[FR Doc. 2011-19332 Filed 7-29-11; 8:45 am]
BILLING CODE 4160-01-P