Document ID: FDA-2014-D-0329-0003
Agency: fda
Document Type: Notice
Title: Agency Information Collection Activities; Submission for Office of
Management and Budget Review; Comment Request; Guidance for
Industry on Fees for Human Drug Compounding Outsourcing Facilities
Under the Federal Food, Drug, and Cosmetic Act
Posted Date: 2014-09-02T04:00Z

[Federal Register Volume 79, Number 169 (Tuesday, September 2, 2014)]
[Notices]
[Pages 52012-52016]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-20719]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2014-D-0329]

Agency Information Collection Activities; Submission for Office 
of Management and Budget Review; Comment Request; Guidance for Industry 
on Fees for Human Drug Compounding Outsourcing Facilities Under the 
Federal Food, Drug, and Cosmetic Act

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is announcing that a 
proposed collection of information has been submitted to the Office of 
Management and Budget (OMB) for review and clearance under the 
Paperwork Reduction Act of 1995 (the PRA).

DATES: Fax written comments on the collection of information by October 
2, 2014.

ADDRESSES: To ensure that comments on the information collection are 
received, OMB recommends that written comments be faxed to the Office 
of Information and Regulatory Affairs,

[[Page 52013]]

OMB, Attn: FDA Desk Officer, FAX: 202-395-7285, or emailed to 
oirasubmission@omb.eop.gov. All comments should be identified 
with the title. Also include the FDA docket number found in brackets in 
the heading of this document.

FOR FURTHER INFORMATION CONTACT: FDA PRA Staff, Office of Operations, 
Food and Drug Administration, 8455 Colesville Rd., COLE-14526, Silver 
Spring, MD 20993-0002, PRAStaff@fda.hhs.gov.

SUPPLEMENTARY INFORMATION: In compliance with 44 U.S.C. 3507, FDA has 
submitted the following proposed collection of information to OMB for 
review and clearance.

Guidance for Industry on Fees for Human Drug Compounding Outsourcing 
Facilities Under the Federal Food, Drug, and Cosmetic Act

    In the Federal Register of April 1, 2014 (79 FR 18297), FDA 
announced the availability of the draft guidance for industry entitled 
``Fees for Human Drug Compounding Outsourcing Facilities Under Sections 
503B and 744K of the FD&C Act.'' On November 27, 2013, President Obama 
signed the Drug Quality and Security Act (DQSA) (Pub. L. 113-54) into 
law. The DQSA added a new section 503B to the FD&C Act (21 U.S.C. 353B) 
that created a category of entities called ``outsourcing facilities.'' 
Outsourcing facilities, as defined in section 503B(d)(4) of the FD&C 
Act, are facilities that meet certain requirements described in section 
503B, including, registering with FDA as an outsourcing facility and 
paying associated fees. Drug products compounded in an outsourcing 
facility can qualify for exemptions from the FDA approval requirements 
in section 505 of the FD&C Act (21 U.S.C. 355) and the requirement to 
label products with adequate directions for use under section 502(f)(1) 
of the FD&C Act (21 U.S.C. 352(f)(1)) if the requirements in section 
503B of the FD&C Act are met.
    This guidance describes in detail the fee types and amounts an 
entity must pay to satisfy the fee requirements of sections 503B and 
744K of the FD&C Act (21 U.S.C. 379j-62) to be deemed an outsourcing 
facility and maintain its status as an outsourcing facility, the 
adjustments to the fees required by law, how to qualify as a small 
business to obtain a reduction of the annual establishment fee, how and 
when to submit payment to FDA, the effect of failure to pay fees, and 
fee-related dispute resolution.
    In response to the April 1, 2014, Federal Register notice, FDA 
received one comment on the draft guidance, which raised several issues 
pertaining to the information collection provisions in the draft 
guidance. These issues are discussed below.
    (Issue 1) The comment asserted that placement of facilities on a 
list of registered outsourcing facilities in fiscal year (FY) 2014 
(before any registered outsourcing facilities had paid the required 
establishment fee) is contrary to the language of the DQSA, because 
those entities had not yet paid the requisite establishment fee and, 
therefore, could not qualify as outsourcing facilities. The comment 
recommended that FDA interpret the DQSA to require that a facility be 
required to pay the establishment fee in full to be deemed a 
``registered outsourcing facility.''
    (Response) As the comment points out, section 744K(g)(3)(A) of the 
FD&C Act provides that ``[a]n outsourcing facility shall not be 
considered registered under section 503B(b) in a fiscal year until the 
date that the outsourcing facility remits the establishment fee under 
this subsection for such fiscal year.'' Section 744K(a)(1), however, 
provides that ``[f]or fiscal year 2015 and each subsequent fiscal year, 
the Secretary shall, in accordance with this subsection, assess and 
collect--(A) an annual establishment fee from each outsourcing 
facility.'' The plain language of the statute makes clear that FDA is 
not to assess and collect the annual establishment fee for human drug 
outsourcing facilities until FY 2015. Because the fee provisions of the 
DQSA, under section 744K, do not become effective until FY 2015, no 
fees are due in 2014, and payment of the establishment fee is not a 
prerequisite to registration in FY 2014. Therefore, failure to pay a 
fee was not a bar to registration as an outsourcing facility or to FDA 
placing such facilities on its list of registered outsourcing 
facilities on its Web site in FY 2014. Accordingly, FDA will not revise 
the proposed guidance to reflect the points addressed in the comment on 
issue one.
    (Issue 2) The comment expressed concern regarding FDA's estimation 
in the notice accompanying the guidance that only 20 of the current (at 
the time the notice was published) 43 facilities that registered in FY 
2014 will pay the required establishment fee and be deemed registered 
outsourcing facilities for FY 2015.
    (Response) FDA's estimates at the time the guidance was published, 
just a few months after the legislation was enacted, were its best 
estimates of how many firms were likely to register as outsourcing 
facilities. Registration as an outsourcing facility is a voluntary 
process, and FDA cannot predict with any certainty how many firms will 
register. As of July 18, 2014, 51 firms were registered. However, since 
registration began in December 2013, some firms have registered and 
then de-registered. Estimates of how many facilities will register in 
FY 2015 and beyond when establishment fees take effect are highly 
uncertain. Thus, for purposes of calculating the information collection 
burden in the final guidance, in tables 1-3, FDA is estimating that 
approximately 50 outsourcing facilities will register and pay 
establishment fees, and we have adjusted the other estimates (except 
for the ``Average Burden per Response'') accordingly.
    (Issue 3) The comment noted that FDA failed to correlate the 
deadline to submit a request for a small business fee reduction with 
the deadline to comment on the small business reduction program in 
general. The comment noted that the deadline to submit a request for a 
small business reduction preceded the deadline for submitting comments 
to the public docket on the draft guidance. The comment suggested that 
this failure preempted stakeholders from submitting comments on the 
small business reduction program prior to the deadline for submitting 
their request to receive the small business reduction. The commenter 
expressed concern that FDA is not soliciting adequate input from 
interested parties. The commenter recommended that FDA provide more 
opportunities for stakeholder input. Moreover, the comment suggested 
that FDA extend the deadline for submitting small business reduction 
requests to such time as FDA has reviewed all comments.
    (Response) FDA notes that section 744K(c)(4)(B) states that ``[t]o 
qualify for the exception under this paragraph, a small business shall 
submit to the Secretary a written request for such exception . . . to 
the Secretary not later than April 30 of such immediately preceding 
fiscal year.'' The annual April 30 deadline for requesting a small 
business reduction is not a creation of FDA and the draft guidance; it 
is a statutory requirement mandated by Congress. FDA cannot to revise 
the deadline enacted by Congress. Accordingly, FDA will not revise the 
draft guidance to permit entities to submit FY 2015 small business 
reduction requests after April 30, 2014. In addition, notwithstanding 
the fact that the deadline to submit a small business reduction request 
preceded the deadline to submit comments on the draft guidance, the 
public had a full and meaningful opportunity to submit

[[Page 52014]]

comments on the draft guidance. The draft guidance was made available 
on April 1, 2014, and the period to provide comments lasted 60 days, 
closing on June 2, 2014. FDA reviewed all comments submitted and 
considered each of them carefully. Having considered all comments 
received, FDA will not revise the draft guidance in response to 
comments on Issue 3. Furthermore, FDA has recently held a series of 
meetings with stakeholders to hear their views and concerns on any 
aspects of FDA's implementation of the DQSA they wanted to discuss. 
Over 40 organizations participated, including the commenter, and there 
was a robust discussion of the issues and concerns associated with many 
aspects of the implementation effort. FDA will consider the input 
provided during these meetings as it moves forward to implement the 
DQSA.
    (Issue 4) The comment noted that FDA has not provided adequate 
guidance on the standards to which section 503B and 503A facilities 
will be held. This lack of guidance, the comment argues, creates 
uncertainty and confusion in the compounding industry about standards 
of practice expected by FDA. The comment further noted that 
notwithstanding the lack of guidance and the confusion within the 
industry, FDA has not provided an opportunity for facilities to decline 
to operate as outsourcing facilities under section 503B and instead 
identify themselves as section 503A pharmacies. Instead, the comment 
notes, FDA has dictated that all of these facilities will be deemed in 
violation of the new drug requirements of the FD&C Act and in 
possession of misbranded drugs until they pay the establishment fee. 
The comment recommends that FDA outline a clear process for outsourcing 
facilities interested in withdrawing their section 503B registration 
packets and instead identifying and operating as section 503A regulated 
pharmacies.
    (Response) FDA notes that the comments focus primarily on matters 
not covered by the draft guidance, i.e., the standards for satisfying 
the conditions necessary to qualify for the exemptions under sections 
503A and 503B of the FD&C Act. These standards will be addressed in 
other guidance and regulations, such as the recently issued final 
guidance entitled ``Pharmacy Compounding of Human Drug Products Under 
Section 503A of the Federal Food, Drug, and Cosmetic Act,'' (79 FR 
37742, July 2, 2014) and the draft guidance entitled, ``Current Good 
Manufacturing Practice--Interim Guidance for Human Drug Compounding 
Outsourcing Facilities Under Section 503B of the FD&C Act.'' (79 FR 
37743, July 2, 2014). Because the draft fees guidance does not discuss 
the substantive provisions of section 503A or 503B of the FD&C Act--
focusing instead on sections 744J (21 U.S.C. 379j-61) and 744K of the 
FD&C Act--the response to this issue cannot be addressed in the context 
of this draft guidance. Accordingly, FDA will not incorporate the 
recommendations suggested in the comments on this issue into the final 
version of this draft guidance.
    With regard to providing a process for registered outsourcing 
facilities to de-register and identify themselves as section 503A 
pharmacies, the final guidance describes how a registered outsourcing 
facility can de-register. With regard to the substantive effect of de-
registering, the law, the guidance, and information on FDA's Web site 
make it clear that a facility has three choices: (1) Comply with the 
FDA approval requirements in section 505 of the FD&C Act, the 
requirement to label products with adequate directions for use under 
section 502(f)(1) of the FD&C Act, and the requirements for current 
good manufacturing practices under section 501(a)(2)(B)) of the FD&C 
Act; (2) meet the conditions to qualify for the exemptions from these 
three requirements by meeting the conditions to qualify for the 
exemptions under section 503A of the FD&C Act; or (3) register as an 
outsourcing facility and meet the conditions under section 503B of the 
FD&C Act to qualify for the exemptions from the FDA approval 
requirements and adequate directions for use. A firm's compliance 
status will be determined by whether they have registered as an 
outsourcing facility and are meeting the conditions of section 503B 
(including payment of the required fee if they register on or after 
October 1, 2014), or if they have not registered, whether they are 
meeting the conditions of section 503A of the FD&C Act. If they are not 
meeting the conditions necessary to qualify for the exemptions under 
either section 503A or 503B, they may be held to be in violation of any 
applicable provisions of the FD&C Act.
    Burden estimates: As discussed previously, the guidance pertains to 
entities that compound human drugs and elect to register as outsourcing 
facilities. These outsourcing facilities must pay certain fees to FDA. 
The guidance describes the fee types and amounts, the adjustments to 
fees required by law, how to submit payment, the effect of failure to 
pay fees, and how to qualify as a small business to obtain a reduction 
of the annual establishment fee. The guidance contains the following 
collections of information:
    As described in section III.A of the guidance, upon receiving 
registration information from a facility seeking to register as an 
outsourcing facility, FDA will send an invoice for an establishment fee 
to the outsourcing facility. The invoice contains instructions for 
paying the establishment fee, as discussed in section III.E of the 
guidance. This process would be repeated annually under the timeframes 
described in the guidance. An outsourcing facility is not considered 
registered until the required establishment fee is paid for that fiscal 
year.
    We estimate that annually a total of 50 outsourcing facilities 
(``No. of Respondents'' in table 1, row 1) will pay to FDA 50 
establishment fees (``Total Annual Responses'' in table 1, row 1) as 
described in the guidance. We also estimate that it will take an 
outsourcing facility 0.50 hours to prepare and submit to FDA each 
establishment fee (``Average Burden per Response'' in table 1, row 1).
    As described in section III.C of the guidance, outsourcing 
facilities that are reinspected will be assessed a reinspection fee for 
each reinspection. The reinspection fee is designed to reimburse FDA 
when it must visit a particular outsourcing facility more than once 
because of noncompliance identified during a previous inspection. A 
reinspection fee will be incurred for each reinspection that occurs. 
After FDA conducts a reinspection, we will send an invoice to the email 
address indicated in the facility's registration file. The invoice 
contains instructions for paying the reinspection fee, as discussed in 
section III.E of the guidance.
    We estimate that annually a total of 15 outsourcing facilities 
(``No. of Respondents'' in table 2, row 1) will pay to FDA 15 
reinspection fees (``Total Annual Responses'' in table 2, row 1) as 
described in the guidance. We also estimate that it will take an 
outsourcing facility 0.50 hours to prepare and submit to FDA each 
reinspection fee (``Average Burden per Response'' in table 2, row 1).
    As described in section III.D of the guidance, certain outsourcing 
facilities may qualify for a small business reduction in the amount of 
the annual establishment fee. To qualify for this reduction, an 
outsourcing facility must submit to FDA a written request certifying 
that the entity meets the requirements for the reduction. For every 
fiscal year that the firm seeks to

[[Page 52015]]

qualify as a small business and receive the fee reduction, the written 
request must be submitted to FDA by April 30 of the preceding the 
fiscal year. For example, an outsourcing facility must submit a written 
request for the small business reduction by April 30, 2015, to qualify 
for a reduction in the FY 2016 annual establishment fee. As described 
in the guidance, section 744K of the FD&C Act also requires an 
outsourcing facility to submit its written request for a small business 
reduction in a format specified by FDA in the guidance. The guidance 
specifies that Form FDA 3908 is the format for submitting requests for 
a small business fee reduction.
    We estimate that annually a total of 15 outsourcing facilities 
(``No. of Respondents'' in table 1, row 2) will submit to FDA a request 
for a small business reduction in the amount of the annual 
establishment fee. We estimate that 15 outsourcing facilities will 
submit Form FDA 3908 (``Total Annual Responses'' in table 1, row 2) to 
FDA annually, as described in the guidance, and that it will take an 
outsourcing facility 25 hours to prepare and submit to FDA each Form 
FDA 3908 (``Average Burden per Response'' in table 1, row 2).
    As described in section III.D of the guidance, those outsourcing 
facilities that request a small business reduction in the amount of the 
annual establishment fee will receive a small business designation 
letter notifying the facility of FDA's decision. Outsourcing facilities 
eligible to pay a reduced fee should maintain a copy of the small 
business designation letter applicable to that fiscal year for their 
records.
    We estimate that annually a total of 15 outsourcing facilities 
(``No. of Recordkeepers'' in table 3) will keep a copy of their small 
business designation letter (``Total Annual Records'' in table 3), and 
that maintaining each record will take 0.5 hours (``Average Burden Per 
Recordkeeping'' in table 3).
    As described in section V.B of the guidance, an outsourcing 
facility may request a reconsideration under 21 CFR 10.75 of an FDA 
decision related to the fee provisions of section 744K of the FD&C Act. 
As explained in the guidance, the request should state the facility's 
rationale for its position that the decision was in error and include 
any additional information that is relevant to the outsourcing 
facility's argument.
    We estimate that a total of 6 outsourcing facilities (``No. of 
Respondents'' in table 2, row 2) annually will submit to FDA a request 
for reconsideration as described in the guidance. We estimate that it 
will take an outsourcing facility 1 hour to prepare and submit to FDA 
each request for reconsideration (``Average Burden Per Response'' in 
table 2, row 2).
    As described in section V.B of the guidance, an outsourcing 
facility may appeal, as set forth in Sec.  10.75, an FDA denial of a 
request for reconsideration of an FDA decision related to the fee 
provisions of section 744K of the FD&C Act.
    We estimate that a total of 3 outsourcing facilities (``No. of 
Respondents'' in table 2, row 3) annually will submit an appeal of an 
FDA denial of a request for reconsideration. We estimate that it will 
take an outsourcing facility 1 hour to prepare and submit each appeal 
under Sec.  10.75 (``Average Burden Per Response'' in table 2, row 3).
    The estimated reporting and recordkeeping burdens for this 
collection of information are as follows:

                        Table 1--Estimated Annual Reporting Burden--Establishment Fee \1\
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                                                  Number of
      Type of reporting           Number of     responses per   Total annual     Average burden     Total hours
                                 respondents     respondent       responses       per response
----------------------------------------------------------------------------------------------------------------
Payment of annual                          50               1              50  0.5 (30 min.)....              25
 establishment fee.
Request for small business                 15               1              15  25...............             375
 establishment fee reduction
 (FDA Form 3908).
                              ----------------------------------------------------------------------------------
    Total....................  ..............  ..............  ..............  .................            400
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\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.

        Table 2--Estimated Annual Reporting Burden--Reinspection Fee and Dispute Resolution Requests \1\
----------------------------------------------------------------------------------------------------------------
                                                  Number of
      Type of reporting           Number of     responses per   Total annual     Average burden     Total hours
                                 respondents     respondent       responses       per response
----------------------------------------------------------------------------------------------------------------
Payment of re-inspection fee.              15               1              15  0.5 (30 min.)....            7.50
Reconsideration request......               6               1               6  1................            6
Appeal request...............               3               1               3  1................            3
                              ----------------------------------------------------------------------------------
    Total....................  ..............  ..............  ..............  .................           16.50
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\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.

                               Table 3--Estimated Annual Recordkeeping Burden \1\
----------------------------------------------------------------------------------------------------------------
                                                  Number of
    Type of recordkeeping         Number of      records per    Total annual     Average burden     Total hours
                                recordkeepers   recordkeeper       records         per record
----------------------------------------------------------------------------------------------------------------
Copy of small business                     15               1              15  0.5 (30 min.)....            7.50
 designation letter.
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\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.

[[Page 52016]]

    Dated: August 26, 2014.
Leslie Kux,
Assistant Commissioner for Policy.
[FR Doc. 2014-20719 Filed 8-29-14; 8:45 am]
BILLING CODE 4164-01-P