Document ID: FDA-2014-N-0007-0005
Agency: fda
Document Type: Notice
Title: Generic Drug User Fee—Abbreviated New Drug Application, Prior Approval Supplement, Drug Master File, Final Dosage Form Facility, and Active Pharmaceutical Ingredient Facility Fee Rates for Fiscal Year 2015
Posted Date: 2014-08-01T04:00Z

[Federal Register Volume 79, Number 148 (Friday, August 1, 2014)]
[Notices]
[Pages 44797-44800]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-18108]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2014-N-0007]

Generic Drug User Fee--Abbreviated New Drug Application, Prior 
Approval Supplement, Drug Master File, Final Dosage Form Facility, and 
Active Pharmaceutical Ingredient Facility Fee Rates for Fiscal Year 
2015

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is announcing the rates 
for abbreviated new drug applications (ANDAs), prior approval 
supplements to an approved ANDA (PASs), drug master files (DMFs), 
generic drug active pharmaceutical ingredient (API) facilities, and 
finished dosage form (FDF) facilities user fees related to the Generic 
Drug User Fee Program for fiscal year (FY) 2015. The Federal Food, 
Drug, and Cosmetic Act (the FD&C Act), as amended by the Generic Drug 
User Fee Amendments of 2012 (GDUFA), authorizes FDA to assess and 
collect user fees for certain applications and supplements for human 
generic drug products, on applications in the backlog as of October 1, 
2012 (only applicable to FY 2013), on FDF and API facilities, and on 
type II active pharmaceutical ingredient DMFs to be made available for 
reference. This document establishes the fee rates for FY 2015.

FOR FURTHER INFORMATION CONTACT: Rachel Richter, Office of Financial 
Management, Food and Drug Administration, 8455 Colesville Rd., COLE-
14216, Silver Spring, MD 20993-0002, 301-796-7111.

SUPPLEMENTARY INFORMATION: 

I. Background

    Sections 744A and 744B of the FD&C Act (21 U.S.C. 379j-41 and 379j-
42) establish fees associated with human generic drug products. Fees 
are assessed on: (1) Certain applications in the backlog as of October 
1, 2012 (only applicable to FY 2013); (2) certain types of applications 
and supplements for human generic drug products; (3) certain facilities 
where APIs and FDFs are produced; and (4) certain DMFs associated with 
human generic drug products. (See section 744B(a)(1)-(4) of the FD&C 
Act).
    For FY 2015, the generic drug fee rates are: ANDA ($58,730), PAS 
($29,370), DMF ($26,720), domestic API facility ($41,926), foreign API 
facility ($56,926), domestic FDF facility ($247,717), and foreign FDF 
facility ($262,717). These fees are effective on October 1, 2014, and 
will remain in effect through September 30, 2015.

II. Fee Revenue Amount for FY 2015

    The base revenue amount for FY 2015 is $299 million, as set in the 
statute prior to the inflation adjustment. GDUFA directs FDA to use the 
yearly revenue amount as a starting point to set the fee rates for each 
fee type. For more information about GDUFA, please refer to the FDA Web 
site (http://www.fda.gov/gdufa). The ANDA, PAS, DMF, API facility, and 
FDF facility fee calculations for FY 2015 are described in this 
document.

Inflation Adjustment

    GDUFA specifies that the $299 million is to be adjusted for 
inflation increases for FY 2015 using two separate adjustments--one for 
personnel compensation and benefits (PC&B) and one for non-PC&B costs 
(see section 744B(c)(1) of the FD&C Act).
    The component of the inflation adjustment for PC&B costs shall be 
one plus the average annual percent change in the cost of all PC&B paid 
per full-time equivalent position (FTE) at FDA for the first three of 
the four preceding fiscal years, multiplied by the proportion of PC&B 
costs to total FDA costs of the review of human generic drug activities 
for the first three of the preceding four fiscal years (see section 
744B(c)(1)(A)-(B) of the FD&C Act). The data on total

[[Page 44798]]

PC&B 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 summarizes the actual cost and total FTE for the specified 
FYs, and provides the percent change from the previous fiscal year and 
the average percent change over the first three of the four fiscal 
years preceding FY 2015. The 3-year average is 1.8829 percent.

              Table 1--FDA Personnel Compensation and Benefits (PC&B) Each Year and Percent Change
----------------------------------------------------------------------------------------------------------------
                                                                                                 3-Year average
             Fiscal year                     2011               2012               2013            (percent)
----------------------------------------------------------------------------------------------------------------
Total PC&B..........................     $1,761,655,000     $1,824,703,000     $1,927,703,000
Total FTE...........................             13,331             13,382             13,974
PC&B per FTE........................           $132,147           $136,355           $137,949
% Change from Previous Year.........            1.2954%            3.1843%            1.1690%             1.8829
----------------------------------------------------------------------------------------------------------------

    The statute specifies that this 1.8829 percent should be multiplied 
by the proportion of PC&B expended for the review of human generic drug 
activities for the first three of the preceding four fiscal years. When 
FDA set fees in FY 2014, the 3-year average of PC&B costs for the 
entire Agency was used because information for GDUFA was not available. 
Now that the first year of GDUFA has been completed, FDA will use the 
data from FY 2013 to calculate the PC&B and non-PC&B proportions. Table 
2 shows the amount of PC&B and the total amount obligated for the 
review of generic drug activities in FY 2013.

      Table 2--PC&B as a Percent of Fee Revenues Spent on the Process for the Review of Human Generic Drug
                                       Applications Over the Last 3 Years
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                                                                                                 3-Year average
             Fiscal year                     2011               2012               2013            (percent)
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PC&B................................                 NA                 NA       $117,576,760  .................
Non-PC&B............................                 NA                 NA       $149,307,336  .................
Total Costs.........................                 NA                 NA       $266,884,096  .................
PC&B Percent........................  .................  .................           44.0554%           44.0554%
Non-PC&B Percent....................  .................  .................            55.9446            55.9446
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    The payroll adjustment is 1.8829 percent multiplied by 44.0554 
percent (or 0.8295 percent).
    The statute specifies that the portion of the inflation adjustment 
for non-PC&B costs for FY 2015 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 of the preceding 4 years of available 
data multiplied by the proportion of all costs of the process for the 
review of human generic drug activities other than PC&B (see section 
744B(c)(1)(C) of the FD&C Act). Table 3 provides the summary data for 
the percent change in the specified CPI for the Baltimore-Washington 
area. The data are published by the Bureau of Labor Statistics and can 
be found on its Web site at http://data.bls.gov/cgi-bin/surveymost?cu 
by checking the box marked ``Washington-Baltimore All Items, November 
1996=100-CUURA311SA0'' and then clicking on the ``Retrieve Data'' 
button.

               Table 3--Annual and 3-Year Average Percent Change in Baltimore-Washington Area CPI
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                                                                                                 3-Year average
                Year                         2011               2012               2013            (percent)
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Annual CPI..........................            146.975            150.212            152.500
Annual Percent Change...............            3.3449%            2.2024%            1.5232%             2.3568
----------------------------------------------------------------------------------------------------------------

    To calculate the inflation adjustment for non-pay costs, we 
multiply the 3-year average percent change in the CPI (2.3568 percent) 
by the proportion of costs FDA obligated for costs other than PC&B. 
Since 44.0554 percent was obligated for PC&B as shown in table 2, 
55.9446 percent is the portion of costs other than PC&B. The non-pay 
adjustment is 2.3568 percent times 55.9446 percent, or 1.3185 percent.
    To complete the inflation adjustment for FY 2015, we add the PC&B 
component (0.8295 percent) to the non-PC&B component (1.3185 percent) 
for a total inflation adjustment of 2.148 percent (rounded) for FY 
2015.
    GDUFA provides for this inflation adjustment to be compounded after 
FY 2013 (see section 744B(c)(1) of the FD&C Act). This factor for FY 
2015 (2.148 percent) is compounded by adding one to it, and then 
multiplying it by one plus the inflation adjustment factor for FY 2014 
(2.227 percent), as published in the Federal Register of August 2, 2013 
(78 FR 46977 at 46979). The result of this multiplication of the 
inflation factors for the 2 years since FY 2013 (1.02148 times 1.02227 
percent) becomes the inflation adjustment for FY 2015. For FY 2015, the 
inflation adjustment is 4.4228 percent (rounded). We then add one, 
making 1.044228. Finally, we multiply the FY 2015 base revenue amount 
($299 million) by 1.044228, yielding an inflation-adjusted target 
revenue of $312,224,000 (rounded to the nearest thousand dollars).

[[Page 44799]]

III. ANDA and PAS Fees

    Under GDUFA, the FY 2015 ANDA and PAS fees are owed by each 
applicant that submits an ANDA or a PAS, on or after October 1, 2014. 
These fees are due on the receipt date of the ANDA or PAS. Section 
744B(b)(2)(B) specifies that the ANDA and PAS fees will make up 24 
percent of the $312,224,000, which is $74,934,000 (rounded to the 
nearest thousand dollars), and further specifies that the PAS fee is 
equal to half the ANDA fee.
    In order to calculate the ANDA fee, FDA estimated the number of 
full application equivalents (FAEs) that will be submitted in FY 2015. 
This is done by assuming ANDAs count as one FAE and PASs (supplements) 
count as one-half an FAE, since the fee for a PAS is one half of the 
fee for an ANDA. GDUFA also requires, however, that 75 percent of the 
fee paid for an ANDA or PAS filing fee be refunded if the ANDA or PAS 
is refused due to issues other than failure to pay fees (section 
744B(a)(3)(D) of the FD&C Act). Therefore, an ANDA or PAS that is 
considered not to have been received by the Secretary due to reasons 
other than failure to pay fees 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 paid the supplement fee (one half of the full 
application fee amount).
    Using the methodology that follows, FDA determined that 
approximately 1,065 ANDAs will incur an ANDA filing fee in FY 2015. 
This number is based on 1,775 ANDAs from October 1, 2012, to May 31, 
2014, divided by 20 months and multiplied by 12 months, equaling an 
estimated 1,065 ANDAs that will be submitted in FY 2015, or 1,065 FAEs. 
The estimated number of PASs to be received in FY 2015 is 449. This 
number is based on the 748 PASs from October 1, 2012, to May 31, 2014, 
divided by 20 months and multiplied by 12 months, equaling an estimated 
449 PASs that will be submitted in FY 2015, equivalent to 225 FAEs 
(rounded).
    Adding the 1,065 FAEs with the 225 FAEs yields a total of 1,290 
FAEs. After taking into account estimates of the number of ANDAs and 
PASs that are likely to be refused due to issues other than failure to 
pay fees, and the number that are likely to be resubmitted in the same 
fiscal year, the total number of fee-paying FAEs that will be received 
in FY 2015 is reduced by 14 FAEs to 1,276.
    The FY 2015 application fee is estimated by dividing the number of 
FAEs that will pay the fee in FY 2015 (1,276) into the fee revenue 
amount to be derived from application fees in FY 2015 ($74,934,000). 
The result, rounded to the nearest $10, is a fee of $58,730 per ANDA. 
The PAS fee is one-half that amount, or $29,370, rounded to the nearest 
$10.
    The statute provides that those ANDAs that include information 
about the production of active pharmaceutical ingredients other than by 
reference to a DMF will pay an additional fee that is based on the 
number of such active pharmaceutical ingredients and the number of 
facilities proposed to produce those ingredients. (See section 
744B(a)(3)(F) of the FD&C Act.) FDA considers that this additional fee 
is unlikely to be assessed often; therefore, FDA has not included 
projections concerning the amount of this fee in calculating the fees 
for ANDAs and PASs.

IV. DMF Fee

    Under GDUFA, the DMF fee is owed by each person that owns a type II 
active pharmaceutical ingredient DMF that is referenced, on or after 
October 1, 2012, in a generic drug submission by an initial letter of 
authorization. This is a one-time fee for each individual DMF. This fee 
is due no later than the date on which the first generic drug 
submission is submitted that references the associated DMF. Under 
section 744B(a)(2)(D)(iii) of the FD&C Act, if a DMF has successfully 
undergone an initial completeness assessment and the fee is paid, the 
DMF will be placed on a publicly available list documenting DMFs 
available for reference. Thus, some DMF holders may choose to pay the 
fee prior to the date that it would otherwise be due in order to have 
the DMF placed on that list.
    In order to calculate the DMF fee, FDA assessed the volume of DMF 
submissions over time. The statistical forecasting methodology of power 
regression analysis was selected because this model showed a very good 
fit to the distribution of DMF submissions over time. Based on data 
representing the total paid DMFs from October 2012 to May 2014 and 
projecting a 5-year timeline (October 2014 to October 2018), FDA is 
estimating 701 fee-paying DMFs for FY 2015.
    The FY 2015 DMF fee is determined by dividing the DMF revenue by 
the estimated number of fee-paying DMFs in FY 2015. Section 
744B(b)(2)(A) specifies that the DMF fees will make up 6 percent of the 
$312,224,000, which is $18,734,000 (rounded up to the nearest thousand 
dollars). Dividing the DMF revenue amount ($18,734,000) by the 
estimated fee-paying DMFs (701), and rounding to the nearest $10, 
yields a DMF fee of $26,720 for FY 2015.

V. Foreign Facility Fee Differential

    Under GDUFA, the fee for a facility located outside the United 
States and its territories and possessions shall be not less than 
$15,000 and not more than $30,000 higher than the amount of the fee for 
a facility located in the United States and its territories and 
possessions, as determined by the Secretary. The basis for this 
differential is the extra cost incurred by conducting an inspection 
outside the United States and its territories and possessions. For FY 
2015 FDA has determined that the differential for foreign facilities 
will be $15,000. The differential may be adjusted in future years.

VI. FDF Facility Fee

    Under GDUFA, the annual FDF facility fee is owed by each person 
that owns a facility which is identified, or intended to be identified, 
in at least one generic drug submission that is pending or approved to 
produce one or more finished dosage forms of a human generic drug. 
These fees are due no later than the first business day on or after 
October 1 of each such year. Section 744B(b)(2)(C) of the FD&C Act 
specifies that the FDF facility fee revenue will make up 56 percent of 
$312,224,000, which is $174,845,000 (rounded to the nearest thousand 
dollars).
    In order to calculate the FDF fee, FDA has used the data submitted 
by generic drug facilities through the self-identification process 
mandated in the GDUFA statute and specified in a Notice of Requirement 
published in the Federal Register of October 2, 2012 (77 FR 60125). The 
total number of FDF facilities identified through self-identification 
was 681. Of the total facilities identified as FDF, there were 271 
domestic facilities and 410 foreign facilities. The foreign facility 
fee differential is $15,000. In order to calculate the fee for domestic 
facilities, we must first subtract the fee revenue that will result 
from the foreign facility fee differential. We take the foreign 
facility differential ($15,000) and multiply it by the number of 
foreign facilities (410) to determine the total fees that will result 
from the foreign facility differential. As a result of that calculation 
the foreign fee differential will make up $6,150,000 of the total FDF 
fee revenue. Subtracting the foreign facility differential fee revenue 
($6,150,000) from the total FDF facility target revenue ($174,845,000) 
results in a remaining fee revenue balance of $168,695,000. To 
determine the domestic FDF facility fee, we divide the $168,695,000 by 
the total number of facilities (681) which gives us a

[[Page 44800]]

domestic FDF facility fee of $247,717. The foreign FDF facility fee is 
$15,000 more than the domestic FDF facility fee, or $262,717.

VII. API Facility Fee

    Under GDUFA, the annual API facility fee is owed by each person 
that owns a facility which produces, or which is pending review to 
produce, one or more active pharmaceutical ingredients identified, or 
intended to be identified, in at least one generic drug submission that 
is pending or approved or in a Type II active pharmaceutical ingredient 
drug master file referenced in such generic drug submission. These fees 
are due no later than the first business day on or after October 1 of 
each such year. Section 744B(b)(2)(D) of the FD&C Act specifies that 
the API facility fee will make up 14 percent of $312,224,000 in fee 
revenue, which is $43,711,000 (rounded to the nearest thousand 
dollars).
    In order to calculate the API fee, FDA has used the data submitted 
by generic drug facilities through the self-identification process 
mandated in the GDUFA statute and specified in a Notice of Requirement 
published on October 2, 2012. The total number of API facilities 
identified through self-identification was 795. Of the total facilities 
identified as API facilities, there were 103 domestic facilities and 
692 foreign facilities. The foreign facility differential is $15,000. 
In order to calculate the fee for domestic facilities, we must first 
subtract the fee revenue that will result from the foreign facility fee 
differential. We take the foreign facility differential ($15,000) and 
multiply it by the number of foreign facilities (692) to determine the 
total fees that will result from the foreign facility differential. As 
a result of that calculation the foreign fee differential will make up 
$10,380,000 of the total API fee revenue. Subtracting the foreign 
facility differential fee revenue ($10,380,000) from the total API 
facility target revenue ($43,711,000) results in a remaining balance of 
$33,331,000. To determine the domestic API facility fee, we divide the 
$33,331,000 by the total number of facilities (795) which gives us a 
domestic API facility fee of $41,926. The foreign API facility fee is 
$15,000 more than the domestic API facility fee, or $56,926.

VIII. Fee Payment Options and Procedures

    The new fee rates are effective October 1, 2014. To pay the ANDA, 
PAS, DMF, API facility, and FDF facility fee, you must complete a 
Generic Drug User Fee cover sheet, available at http://www.fda.gov/gdufa, and generate a user fee identification (ID) number. Payment must 
be made in U.S. currency drawn on a U.S. bank by electronic check, 
check, bank draft, U.S. postal money order, or wire transfer.
    FDA has partnered with the U.S. Department of the Treasury to 
utilize https://www.pay.gov, a Web-based payment application, for 
online electronic payment. The https://www.pay.gov feature is available 
on the FDA Web site after completing the generic drug user fee cover 
sheet and generating the user fee ID number.
    Please include the user fee ID number on your check, bank draft, or 
postal money order and make payable to the order of the Food and Drug 
Administration. Your payment can be mailed to: Food and Drug 
Administration, P.O. Box 979108, St. Louis, MO 63197-9000. If checks 
are to be sent by a courier that requests a street address, the courier 
can deliver checks to: U.S. Bank, Attention: Government Lockbox 979108, 
1005 Convention Plaza, St. Louis, MO 63101. (Note: This U.S. Bank 
address is for courier delivery only.) Please make sure that the FDA 
post office box number (P.O. Box 979108) is written on the check, bank 
draft, or postal money order.
    If paying by wire transfer, please reference your unique user fee 
ID number when completing your transfer. The originating financial 
institution may charge a wire transfer fee. Please ask your financial 
institution about the wire transfer fee and include it with your 
payment to ensure that your fee is fully paid. The account information 
is as follows: New York Federal Reserve Bank, U.S. Department of 
Treasury, TREAS NYC, 33 Liberty St., New York, NY 10045, account 
number: 75060099, routing number: 021030004, SWIFT: FRNYUS33, 
Beneficiary: FDA, 8455 Colesville Rd., Silver Spring, MD 20993-0002. 
The tax identification number of FDA is 53-0196965.

    Dated: July 28, 2014.
Leslie Kux,
Assistant Commissioner for Policy.
[FR Doc. 2014-18108 Filed 7-31-14; 8:45 am]
BILLING CODE 4164-01-P