Document ID: FDA-2017-N-0007-0014
Agency: fda
Document Type: Notice
Title: Outsourcing Facility Fee Rates for Fiscal Year 2019
Posted Date: 2018-08-01T04:00Z

[Federal Register Volume 83, Number 148 (Wednesday, August 1, 2018)]
[Notices]
[Pages 37504-37507]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-16387]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2017-N-0007]

Prescription Drug User Fee Rates for Fiscal Year 2019

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is announcing the rates 
for prescription drug user fees for fiscal year (FY) 2019. The Federal 
Food, Drug, and Cosmetic Act (FD&C Act), as amended by the Prescription 
Drug User Fee Amendments of 2017 (PDUFA VI), authorizes FDA to collect 
application fees for certain applications for the review of human drug 
and biological products, and prescription drug program fees for certain 
approved products. This notice establishes the fee rates for FY 2019.

FOR FURTHER INFORMATION CONTACT: Lola Olajide, Office of Financial 
Management, Food and Drug Administration, 8455 Colesville Rd., COLE-
14541B, Silver Spring, MD 20993-0002, 240-402-4244.

SUPPLEMENTARY INFORMATION: 

I. Background

    Sections 735 and 736 of the FD&C Act (21 U.S.C. 379g and 379h, 
respectively) establish two different kinds of user fees. Fees are 
assessed as follows: (1) Application fees are assessed on certain types 
of applications for the review of human drug and biological products; 
and (2) prescription drug program fees are assessed on certain approved 
products (section 736(a) of the FD&C Act). When specific conditions are 
met, FDA may waive or reduce fees (section 736(d) of the FD&C Act).
    For FY 2018 through FY 2022, the base revenue amounts for the total 
revenues from all PDUFA fees are established by PDUFA VI. The base 
revenue amount for FY 2019 is $935,903,507. The FY 2019 base revenue 
amount is adjusted for inflation and for the resource capacity needs 
for the process for the review of human drug applications (the capacity 
planning adjustment). An additional dollar amount specified in the 
statute (see section 736(b)(1)(F) of the FD&C Act) is then added to 
provide for additional full-time equivalent (FTE) positions to support 
PDUFA VI initiatives. The FY 2019 revenue amount may be adjusted 
further, if necessary, to provide for sufficient operating reserves of 
carryover user fees. Finally, the amount is adjusted to provide for 
additional direct costs to fund PDUFA VI initiatives. Fee amounts are 
to be established each year so that revenues from application fees 
provide 20 percent of the total revenue, and prescription drug program 
fees provide 80 percent of the total revenue.
    This document provides fee rates for FY 2019 for an application 
requiring clinical data ($2,588,478), for an application not requiring 
clinical data ($1,294,239), and for the prescription drug program fee 
($309,915). These fees are effective on October 1, 2018, and will 
remain in effect through September 30, 2019. For applications that are 
submitted on or after October 1, 2018, the new fee schedule must be 
used.

II. Fee Revenue Amount for FY 2019

    The base revenue amount for FY 2019 is $935,903,507 prior to 
adjustments for inflation, capacity planning, additional FTE, operating 
reserve, and additional direct costs (see section 736(b)(1) of the FD&C 
Act).

A. FY 2018 Statutory Fee Revenue Adjustments for Inflation

    PDUFA VI specifies that the $935,903,507 is to be adjusted for 
inflation increases for FY 2019 using two separate adjustments--one for 
personnel compensation and benefits (PC&B) and one for non-PC&B costs 
(see section 736(c)(1) of the FD&C Act).
    The component of the inflation adjustment for payroll costs shall 
be one plus the average annual percent change in the cost of all PC&B 
paid per FTE positions at FDA for the first 3 of the preceding 4 FYs, 
multiplied by the proportion of PC&B costs to total FDA costs of the 
process for the review of human drug applications for the first 3 of 
the preceding 4 FYs (see section 736(c)(1)(A) and (c)(1)(B) of the FD&C 
Act).
    Table 1 summarizes the actual cost and FTE data for the specified 
FYs and provides the percent changes from the previous FYs and the 
average percent changes over the first three of the four FYs preceding 
FY 2019. The 3-year average is 2.4152 percent.

                                  Table 1--FDA Personnel Compensation and Benefits (PC&B) Each Year and Percent Changes
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                     Fiscal year                                2015                     2016                     2017                3-year average
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Total PC&B..........................................           $2,232,304,000           $2,414,728,159           $2,581,551,000  .......................
Total FTE...........................................                   15,484                   16,381                   17,022  .......................
PC&B per FTE........................................                 $144,168                 $147,408                 $151,660  .......................
Percent Change From Previous Year...................                   2.1136                   2.2474                   2.8845                   2.4152
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    The statute specifies that this 2.4152 percent be multiplied by the 
proportion of PC&B costs to the total FDA costs of the process for the 
review of human drug applications. Table 2 shows the PC&B and the total 
obligations for the process for the review of human drug applications 
for the first three of the preceding four FYs.

                            Table 2--PC&B as a Percent of Total Cost of the Process for the Review of Human Drug Applications
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                     Fiscal year                                2015                     2016                     2017                3-year average
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Total PC&B..........................................             $615,483,892             $652,508,273             $711,016,627  .......................
Total Costs.........................................           $1,127,664,528           $1,157,817,695           $1,206,657,269  .......................
PC&B Percent........................................                  54.5804                  56.3567                  58.9245                  56.6205
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[[Page 37505]]

    The payroll adjustment is 2.4152 percent from table 1 multiplied by 
56.6205 percent (or 1.3675 percent).
    The statute specifies that the portion of the inflation adjustment 
for non-payroll costs is the average annual percent change that 
occurred in the Consumer Price Index (CPI) for urban consumers 
(Washington-Baltimore, DC-MD-VA-WV; not seasonally adjusted; all items; 
annual index) for the first 3 years of the preceding 4 years of 
available data multiplied by the proportion of all costs other than 
PC&B costs to total costs of the process for the review of human drug 
applications for the first 3 years of the preceding 4 FYs (see section 
736(c)(1)(B) of the FD&C Act). Table 3 provides the summary data for 
the percent changes in the specified CPI for the Washington-Baltimore 
area. The data are published by the Bureau of Labor Statistics and can 
be found on its website at: https://data.bls.gov/pdq/SurveyOutputServlet?data_tool=dropmap&series_id=CUURA311SA0,CUUSA311SA0.

           Table 3--Annual and Three-Year Average Percent Change in CPI for Washington-Baltimore Area
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                                                                                                      3-year
                      Year                             2015            2016            2017           average
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Annual CPI......................................         155.353         157.180         159.202  ..............
Annual Percent Change...........................          0.3268          1.1760          1.2864          0.9297
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    The statute specifies that this 0.9297 percent be multiplied by the 
proportion of all costs other than PC&B to total costs of the process 
for the review of human drug applications obligated. Since 56.6205 
percent was obligated for PC&B (as shown in table 2), 43.3795 percent 
is the portion of costs other than PC&B (100 percent minus 56.6205 
percent equals 43.3795 percent). The non-payroll adjustment is 0.9297 
percent times 43.3795 percent, or 0.4033 percent.
    Next, we add the payroll adjustment (1.3675 percent) to the non-
payroll adjustment (0.4033 percent), for a total inflation adjustment 
of 1.7708 percent (rounded) for FY 2019.
    We then multiply the base revenue amount for FY 2019 ($935,903,507) 
by 1.017708, yielding an inflation-adjusted amount of $952,476,486.

B. FY 2019 Statutory Fee Revenue Adjustments for Capacity Planning

    The statute specifies that after $935,903,507 has been adjusted for 
inflation, the inflation-adjusted amount shall be further adjusted to 
reflect changes in the resource capacity needs for the process of human 
drug application reviews (see section 736(c)(2) of the FD&C Act). The 
statute prescribes an interim capacity planning adjustment be utilized 
until a new methodology can be developed through a process involving an 
independent evaluation as well as obtaining public comment. The interim 
capacity planning adjustment is applied to FY 2019 fee setting.
    To determine the FY 2019 capacity planning adjustment, FDA 
calculated the average number of each of the five elements specified in 
the capacity planning adjustment provision: (1) Human drug applications 
(new drug applications (NDAs)/biologics license applications (BLAs)); 
(2) active commercial investigational new drug applications (INDs) (IND 
applications that have at least one submission during the previous 12 
months); (3) efficacy supplements; (4) manufacturing supplements; and 
(5) formal meetings, type A, B, B(EoP), C, and written responses only 
(WRO) issued in lieu of such formal meetings, over the 3-year period 
that ended on June 30, 2017, and the average number of each of these 
elements over the most recent three-year period that ended June 30, 
2018.
    The calculations are summarized in table 4. The three-year averages 
for each element are provided in column 1 (``Three-Year Average Ending 
2017'') and column 2 (``Three-Year Average Ending 2018''). Column 3 
reflects the percent change from column 1 to column 2. Column 4 shows 
the weighting factor for each element. The weighting factor methodology 
has been updated for PDUFA VI. The previous methodology relied on the 
relative value of the standard costs for the elements included in the 
adjuster, and summed to 100 percent. The weighting factor now is the 
time invested in activities related to the element expressed as a 
percentage of total time invested in PDUFA activities, and will adjust 
only the costs attributed to the elements included in the model (hence 
the weighting factor does not now sum to 100 percent). Column 5 is the 
weighted percent change in each element. This is calculated by 
multiplying the weighting factor in each line in column 4 by the 
percent change in column 3. The values in column 5 are summed, 
reflecting an adjustment of 2.9067 percent (rounded).

                Table 4--Capacity Planning Adjuster (Interim Methodology) Calculation for FY 2019
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             Element                 Column 1        Column 2        Column 3        Column 4        Column 5
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                                      3-year          3-year      Percent change     Weighting       Weighted
                                      average         average       (column 1 to      factor          percent
                                    ending 2017     ending 2018      column 2)       (percent)        change
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NDAs/BLAs.......................        153.0000        162.0000          5.8824         20.5015          1.2060
Active Commercial INDs..........      7,846.6667      8,057.0000          2.6805         22.2771          0.5971
Efficacy Supplements............        212.3333        234.3333         10.3611          5.2439          0.5433
Manufacturing Supplements.......      2,482.6667      2,561.6667          3.1821          3.7243          0.1185
Meetings Scheduled and WROs.....      2,940.0000      3,136.3333          6.6780          6.6156          0.4418
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    FY 2019 Capacity Planning     ..............  ..............  ..............  ..............          2.9067
     Adjuster...................
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    Table 5 shows the calculation of the inflation and capacity 
planning adjusted amount for FY 2019. The FY 2019 base revenue amount, 
$935,903,507, shown on line 1 is multiplied by the inflation adjustment 
factor of 1.017708, resulting

[[Page 37506]]

in the inflation-adjusted amount of $952,476,486 shown on line 3. That 
amount is then multiplied by one, plus the capacity planning adjustment 
of 2.9067 percent, resulting in the inflation and capacity planning 
adjusted amount of $980,162,120 shown on line 5.

  Table 5--PDUFA Inflation and Capacity Planning Adjusted Amount for FY
                        2019, Summary Calculation
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FY 2019 Revenue Amount...............    $935,903,507  Line 1.
Inflation Adjustment Factor for FY           1.017708  Line 2.
 2019 (1 plus 1.7708 percent).
Inflation Adjusted Amount............     952,476,486  Line 3.
Capacity Planning Adjustment Factor          1.029067  Line 4.
 for FY 2019 (1 plus 2.9067 percent).
Inflation and Capacity Planning           980,162,120  Line 5.
 Adjusted Amount.
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    The capacity planning adjustment adds $27,685,634 to the fee 
revenue amount for FY 2019. This increase is driven by the fact that 
the counts of elements for 2018 (year ending June 30) are at or near 
the highest levels since the first incorporation of the workload 
adjuster in 2003. The NDA/BLA count in 2018 is equal to the highest 
annual number recorded since the advent of the workload adjuster 
methodology in 2003. Active commercial INDs, efficacy supplements, and 
meetings/WROs are higher in 2018 than in any previous year recorded in 
the workload adjuster (note: Meetings/WROs are only counted back to 
2014 while the other elements are counted back to 2003). The 
manufacturing supplement count is approximately 2 percent below the 
highest number recorded in the history of the workload adjuster. 
Comparing 2018 to 2015, the first year included in the average in 
column 1 in the adjustment, NDA/BLAs are 17 percent higher, active 
commercial INDs are 8 percent higher, efficacy supplements are 36 
percent higher, manufacturing supplements are 10 percent higher, and 
meetings scheduled and WROs are 21 percent higher. This significant and 
across the board increase in submission activity is the driver of the 
$27,685,634 upward adjustment to the fee revenue amount.
    Per the commitments made in PDUFA VI, this increase in the revenue 
amount will be allocated and used by organizational review components 
engaged in direct review work to enhance resources and expand staff 
capacity and capability (see II.A.4 on p.37 of the PDUFA VI commitment 
letter \1\).
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    \1\ The PDUFA VI commitment letter can be viewed at https://www.fda.gov/downloads/forindustry/userfees/prescriptiondruguserfee/ucm511438.pdf.
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C. FY 2019 Statutory Fee Revenue Adjustments for Additional Dollar 
Amounts

    PDUFA VI provides an additional dollar amount for each of the five 
fiscal years covered by PDUFA VI for additional FTE to support PDUFA VI 
enhancements outlined in the PDUFA VI commitment letter. The amount for 
FY 2019 is $21,317,472 (see section 736(b)(1)(F) of the FD&C Act). 
Adding this amount to the inflation and capacity planning adjusted 
revenue amount, $980,162,120, equals $1,001,479,592.

D. FY 2019 Statutory Fee Revenue Adjustments for Operating Reserve

    PDUFA VI provides for an operating reserve adjustment to allow FDA 
to increase the fee revenue and fees for any given fiscal year during 
PDUFA VI to maintain up to 14 weeks of operating reserve of carryover 
user fees. If the carryover balance exceeds 14 weeks of operating 
reserves, FDA is required to decrease fees to provide for not more than 
14 weeks of operating reserves of carryover user fees.
    To determine the 14-week operating reserve amount, the FY 2019 
annual base revenue adjusted for inflation and capacity planning, 
$980,162,120, is divided by 52, and then multiplied by 14. The 14-week 
operating reserve amount for FY 2019 is $263,889,802.
    To determine the end of year operating reserve amount, the Agency 
must assess actual operating reserve at the end of the third quarter of 
FY 2018, and forecast collections and obligations in the fourth quarter 
of FY 2018. The estimated end of year FY 2018 operating reserve is 
$235,128,646.
    Because the estimated end of year FY 2019 PDUFA operating reserve 
does not exceed the 14-week operating reserve for FY 2019, FDA will not 
reduce the FY 2019 PDUFA fee revenue in FY 2019.

E. FY 2019 Statutory Fee Revenue Adjustments for Additional Direct Cost

    PDUFA VI specifies that $8,730,000, adjusted for inflation, be 
added in addition to the operating reserve adjustment to account for 
additional direct costs in FY 2019. This additional direct cost 
adjustment is adjusted for inflation by multiplying $8,730,000 by the 
Consumer Price Index for urban consumers (Washington-Baltimore, DC-MD-
VA-WV; Not Seasonally Adjusted; All Items; Annual Index) for 2017, 
which is 159.202, and then divided by such Index for 2016, 157.180 (see 
section 736(c)(4)(B) of the FD&C Act). This results in an adjustment 
factor of 1.012864, making the additional direct cost adjustment equal 
to $8,842,303.
    The final FY 2019 PDUFA target revenue is $1,010,322,000 (rounded 
to the nearest thousand dollars).

III. Application Fee Calculations

A. Application Fee Revenues and Application Fees

    Application fees will be set to generate 20 percent of the total 
target revenue amount, or $202,064,400 in FY 2019.

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

    FDA will estimate the total number of fee-paying full application 
equivalents (FAEs) it expects to receive during the next FY by 
averaging the number of fee-paying FAEs received in the three most 
recently completed FYs. Prior year FAE totals are updated annually to 
reflect refunds and waivers processed after the close of the FY.
    In estimating the number of fee-paying FAEs, a full application 
requiring clinical data counts as one FAE. An application not requiring 
clinical data counts as one-half of an FAE. An application that is 
withdrawn before filing, 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. Prior to PDUFA VI, the FAE amount also included 
supplements; supplements have been removed from the FAE calculation as 
the supplement fee has been discontinued in PDUFA VI.
    As table 6 shows, the average number of fee-paying FAEs received 
annually in the most recent three-year period is 78.063013 FAEs. FDA 
will set fees for

[[Page 37507]]

FY 2019 based on this estimate as the number of full application 
equivalents that will pay fees.

                                            Table 6--Fee-Paying FAEs
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                                                                                                      3-year
                       FY                              2015            2016            2017           average
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Fee-Paying FAEs.................................       81.955603       70.483437       81.750000       78.063013
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Note: Prior year FAE totals are updated annually to reflect refunds and waivers processed after the close of the
  FY.

    The FY 2019 application fee is estimated by dividing the average 
number of full applications that paid fees over the latest three years, 
78.063013, into the fee revenue amount to be derived from application 
fees in FY 2019, $202,064,400. The result is a fee of $2,588,478 per 
full application requiring clinical data, and $1,294,239 per 
application not requiring clinical data.

IV. Fee Calculations for Prescription Drug Program Fees

    PDUFA VI assesses prescription drug program fees for certain 
prescription drug products; in addition, an applicant will not be 
assessed more than five program fees for a fiscal year for prescription 
drug products identified in a single approved NDA or BLA (see section 
736(a)(2)(C)). Applicants are assessed a program fee for a fiscal year 
only for prescription drug products identified in a human drug 
application approved as of October 1 of such fiscal year.
    FDA estimates 2,683 program fees will be invoiced in FY 2019 before 
factoring in waivers, refunds, and exemptions. FDA approximates that 
there will be 40 waivers and refunds granted. In addition, FDA 
approximates that another 35 program fees will be exempted in FY 2019 
based on the orphan drug exemption in section 736(k) of the FD&C Act. 
FDA estimates 2,608 program fees in FY 2019, after allowing for an 
estimated 75 waivers and reductions, including the orphan drug 
exemptions. The FY 2019 prescription drug program fee rate is 
calculated by dividing the adjusted total revenue from program fees 
($808,257,600) by the estimated 2,608 program fees, for a FY 2019 
program fee of $309,915.

V. Fee Schedule for FY 2019

    The fee rates for FY 2019 are displayed in table 7:

                    Table 7--Fee Schedule for FY 2019
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                                                           Fee rates for
                      Fee category                            FY 2019
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Application:
  Requiring clinical data...............................      $2,588,478
  Not requiring clinical data...........................       1,294,239
Program:                                                         309,915
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VI. Fee Payment Options and Procedures

A. Application Fees

    The appropriate application fee established in the new fee schedule 
must be paid for any application subject to fees under PDUFA that is 
received on or after October 1, 2018. Payment must be made in U.S. 
currency by electronic check, check, bank draft, wire transfer, or U.S. 
postal money order payable to the order of the Food and Drug 
Administration. The 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. Electronic payment 
options are based on the balance due. Payment by credit card is 
available for balances that are 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 use 
Pay.gov, a web-based payment application, for online electronic 
payment. The Pay.gov feature is available on the FDA website after 
completing the Prescription 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. Mail your payment to: Food and Drug 
Administration, P.O. Box 979107, St. Louis, MO 63197-9000. If a check, 
bank draft, or money order is to be sent by a courier that requests a 
street address, the courier should deliver your payment 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. 
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 979107) 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. The originating financial 
institution may charge a wire transfer fee. Please ask your financial 
institution about the fee and add it to your payment to ensure that 
your fee is fully paid. The account information for wire transfers is 
as follows: U.S. Department of the Treasury, TREAS NYC, 33 Liberty St., 
New York, NY 10045, Acct. No.: 75060099, Routing No.: 021030004, SWIFT: 
FRNYUS33. If needed, FDA's tax identification number is 53-0196965.

B. Prescription Drug Program Fees

    FDA will issue invoices and payment instructions for FY 2019 
program fees under the new fee schedule in August 2018. Payment will be 
due on October 1, 2018. FDA will issue invoices in December 2018 for FY 
2019 program fees that qualify for fee assessments after the August 
2018 billing.

    Dated: July 26, 2018.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2018-16387 Filed 7-31-18; 8:45 am]
 BILLING CODE 4164-01-P