Document ID: FDA-2019-N-3523-0002
Agency: fda
Document Type: Notice
Title: Animal Drug User Fee Rates and Payment Procedures for Fiscal Year 2020
Posted Date: 2019-08-02T04:00Z

[Federal Register Volume 84, Number 149 (Friday, August 2, 2019)]
[Notices]
[Pages 37896-37901]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-16434]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2019-N-3523]

Animal Drug User Fee Rates and Payment Procedures for Fiscal Year 
2020

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA, Agency, or we) is 
announcing the fee rates and payment procedures for fiscal year (FY) 
2020 animal drug user fees. The Federal Food, Drug, and Cosmetic Act 
(FD&C Act), as amended by the Animal Drug User Fee Amendments of 2018 
(ADUFA IV), authorizes FDA to collect user fees for certain animal drug 
applications and supplements, for certain animal drug products, for 
certain establishments where such products are made, and for certain 
sponsors of such animal drug applications and/or investigational animal 
drug submissions. This notice establishes the fee rates for FY 2020.

FOR FURTHER INFORMATION CONTACT: Visit FDA's website at http://www.fda.gov/ForIndustry/UserFees/AnimalDrugUserFeeActADUFA/default.htm 
or contact Lisa Kable, Center for Veterinary Medicine (HFV-10), Food 
and Drug Administration, 7500 Standish Pl., Rockville, MD 20855, 240-
402-6888, Lisa.Kable@fda.hhs.gov. For general questions, you may also 
email the Center for Veterinary Medicine (CVM) at: 
cvmadufa@fda.hhs.gov.

SUPPLEMENTARY INFORMATION: 

I. Background

    Section 740 of the FD&C Act (21 U.S.C. 379j-12) establishes four 
different types of user fees: (1) Fees for certain types of animal drug 
applications and supplements; (2) annual fees for certain animal drug 
products; (3) annual fees for certain establishments where such 
products are made; and (4) annual fees for certain sponsors of animal 
drug applications and/or investigational animal drug submissions (21 
U.S.C. 379j-12(a)). When certain conditions are met, FDA will waive or 
reduce fees (21 U.S.C. 379j-12(d)).
    For FY 2019 through FY 2023, the FD&C Act establishes aggregate 
yearly base revenue amounts for each fiscal year (21 U.S.C. 379j-
12(b)(1)). Base revenue amounts are subject to adjustment for inflation 
and workload, and for excess collections to reduce workload-based 
increases or collection shortfalls after FY 2020 (21 U.S.C. 379j-12(c) 
and (g)). Fees for applications, establishments, products, and sponsors 
are to be established each year by FDA so that the percentages of the 
total revenue that are derived from each type of user fee will be as 
follows: Revenue from application fees shall be 20 percent of total fee 
revenue; revenue from product fees shall be 27 percent of total fee 
revenue; revenue from establishment fees shall be 26 percent of total 
fee revenue; and revenue from sponsor fees shall be 27 percent of total 
fee revenue (21 U.S.C. 379j-12(b)(2)).
    For FY 2020, the animal drug user fee rates are: $440,446 for an 
animal drug application; $220,223 for a supplemental animal drug 
application for which safety or effectiveness data are required and for 
an animal drug application subject to the criteria set forth in section 
512(d)(4) of the FD&C Act (21 U.S.C. 360b(d)(4)); $11,353 for an annual 
product fee; $159,177 for an annual establishment fee; and $144,999 for 
an annual sponsor fee. FDA will issue invoices for FY 2020 product, 
establishment, and sponsor fees by December 31, 2019, and payment will 
be due by January 31, 2020. The application fee rates are effective for 
applications submitted on or after October 1, 2019, and will remain in 
effect through September 30, 2020. Applications will not be accepted 
for review until FDA has received full payment of application fees and 
any other animal drug user fees owed under the Animal Drug User Fee Act 
program (ADUFA program).

II. Revenue Amount for FY 2020

A. Statutory Fee Revenue Amounts

    ADUFA IV, Title I of Public Law 115-234, specifies that the 
aggregate fee revenue amount for FY 2020 for all animal drug user fee 
categories is $29,931,240 (21 U.S.C. 379j-12(b)(1)(B)).

B. Inflation Adjustment to Fee Revenue Amount

    The fee revenue amounts established in ADUFA IV for FY 2020 and 
subsequent fiscal years are subject to an inflation adjustment (21 
U.S.C. 379j-12(c)(2)).
    ADUFA IV specifies that the annual fee revenue amount is to be 
adjusted using two separate adjustments--one for personnel compensation 
and benefits (PC&B) and one for non-PC&B costs (21 U.S.C. 379j-
12(c)(2)(A)(ii) and (iii)). 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 full-time equivalent (FTE) position at 
FDA for the first 3 of the 4 preceding fiscal years, multiplied by the 
average proportion of PC&B costs to total FDA costs for the first 3 of 
the 4 preceding fiscal years. The data on total 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 that actual cost and FTE data for the specified 
fiscal years and provides the percent change from the previous fiscal 
year and the average percent change over the first 3 of the 4 fiscal 
years preceding FY 2020. The 3-year average is 3.1175 percent.

              Table 1--FDA Personnel Compensation and Benefits (PC&B) Each Year and Percent Change
----------------------------------------------------------------------------------------------------------------
             Fiscal year                     2016               2017               2018          3-Year average
----------------------------------------------------------------------------------------------------------------
Total PC&B..........................     $2,414,728,159     $2,581,551,000     $2,690,678,000  .................
Total FTE...........................             16,381             17,022             17,023  .................

[[Page 37897]]

 
PC&B per FTE........................           $147,408           $151,660           $158,061  .................
Percent Change from Previous Year...            2.2474%            2.8845%            4.2206%            3.1175%
----------------------------------------------------------------------------------------------------------------

    The statute specifies that this 3.1175 percent should be multiplied 
by the proportion of PC&B costs to total FDA costs. Table 2 shows the 
amount of PC&B and the total amount obligated by FDA for the same 3 
years.

                                Table 2--PC&B as a Percent of Total Costs at FDA
----------------------------------------------------------------------------------------------------------------
             Fiscal year                     2016               2017               2018          3-Year average
----------------------------------------------------------------------------------------------------------------
Total PC&B..........................     $2,414,728,159     $2,581,551,000     $2,690,678,000  .................
Total Costs.........................     $4,666,236,000     $5,104,580,000     $5,370,935,000  .................
PC&B Percent........................           51.7490%           50.5732%           50.0970%           50.8064%
----------------------------------------------------------------------------------------------------------------

    The portion of the inflation adjustment relating to payroll costs 
is 3.1175 percent multiplied by 50.8064 percent (or 1.5839 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 
less food and energy; annual index) for the first 3 of the preceding 4 
years of available data multiplied by the proportion of all costs other 
than PC&B costs to total FDA costs. As a result of a geographical 
revision made by the Bureau of Labor and Statistics in January 2018,\1\ 
the ``Washington-Baltimore, DC-MD-VA-WV'' index was discontinued and 
replaced with two separate indices (i.e., ``Washington-Arlington-
Alexandria, DC-VA-MD-WV'' and ``Baltimore-Columbia-Towson, MD''). In 
order to continue applying a CPI that best reflects the geographic 
region in which FDA is headquartered and which provides the most 
current data available, the Washington-Arlington-Alexandria less food 
and energy index will be used in calculating the relevant adjustment 
factors for FY 2020 and subsequent years. Table 3 provides the summary 
data for the percent change in the specified CPI for the Washington-
Arlington-Alexandria area. The data from the Bureau of Labor Statistics 
is shown in table 3.
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    \1\ https://www.bls.gov/cpi/additional-resources/geographic-revision-2018.htm.

   Table 3--Annual and 3-Year Average Percent Change in Washington-Arlington-Alexandria Area CPI Less Food and
                                                     Energy
----------------------------------------------------------------------------------------------------------------
                Year                         2016               2017               2018          3-Year average
----------------------------------------------------------------------------------------------------------------
Annual CPI..........................            265.333            266.897            272.414  .................
Annual Percent Change...............            1.5306%            0.5894%            2.0671%            1.3957%
----------------------------------------------------------------------------------------------------------------

    To calculate the inflation adjustment for non-payroll costs, we 
multiply the 1.3957 percent by the proportion of all costs other than 
PC&B to total FDA costs. Since 50.8064 percent was obligated for PC&B 
as shown in table 2, 49.1936 percent is the portion of costs other than 
PC&B (100 percent - 50.8064 percent = 49.1936 percent). The portion of 
the inflation adjustment relating to non-payroll costs is 1.3957 
percent times 49.1936 percent, or 0.6866 percent.
    Next, we add the payroll component (1.5839 percent) to the non-
payroll component (0.6866 percent), for a total inflation adjustment of 
2.2705 percent, and then add one, making 1.022705. We then multiply the 
base revenue amount for FY 2020 ($29,931,240) by 1.022705, yielding an 
inflation adjusted amount of $30,611,000 (rounded to the nearest 
thousand dollars) for FY 2020.

C. Workload Adjustment to Inflation Adjusted Fee Revenue Amount

    The fee revenue amounts established in ADUFA IV for FY 2020 and 
subsequent fiscal years are also subject to adjustment to account for 
changes in FDA's review workload. A workload adjustment will be applied 
to the inflation adjusted fee revenue amount (21 U.S.C. 379j-12(c)(3)).
    To determine whether a workload adjustment applies, FDA calculates 
the weighted average of the change in the total number of each of the 
five types of applications and submissions specified in the workload 
adjustment provision (animal drug applications, supplemental animal 
drug applications for which data with respect to safety or efficacy are 
required, manufacturing supplemental animal drug applications, 
investigational animal drug study submissions, and investigational 
animal drug protocol submissions) received over the 5-year period that 
ended on September 30, 2018 (the base years), and the average number of 
each of these types of applications and submissions over the most 
recent 5-year period that ended May 31, 2019.
    The results of these calculations are presented in the first two 
columns of table 4. Column 3 reflects the percent change in workload 
over the two 5-year periods. Column 4 shows the weighting factor for 
each type of application, reflecting how much of the total FDA animal 
drug review workload was accounted for by each type of application or 
submission in the table during the most recent 5 years. Column 5 is the 
weighted percent change in each category of workload, and was derived 
by multiplying the weighting factor in each line in column 4 by the 
percent change from the base years in column 3.

[[Page 37898]]

At the bottom right of the table the sum of the values in column 5 is 
added, reflecting a total change in workload of 0.99 percent for FY 
2020. This is the workload adjuster for FY 2020.

                                     Table 4--Workload Adjuster Calculation
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                                    Column 1 5-      Column 2                        Column 4        Column 5
        Application type           Year average    latest 5-Year     Column 3        weighting       weighted
                                   (base years)       average     percent change      factor      percent change
----------------------------------------------------------------------------------------------------------------
New Animal Drug Applications                16.4            15.4        -6.0976%          0.0444        -0.2705%
 (NADAs)........................
Supplemental NADAs with Safety              11.6            11.0        -5.1724%          0.0224        -0.1161%
 or Efficacy Data...............
Manufacturing Supplements.......           353.2           355.6         0.6795%          0.1556         0.1057%
Investigational Study                      183.2           177.8        -2.9476%          0.5612        -1.6542%
 Submissions....................
Investigational Protocol                   236.4           268.4        13.5364%          0.2164         2.9297%
 Submissions....................
FY 2020 ADUFA IV Workload         ..............  ..............  ..............  ..............         0.9946%
 Adjuster.......................
----------------------------------------------------------------------------------------------------------------

    Under no circumstances will the workload adjustment result in fee 
revenues that are less than the base fee revenues for that fiscal year 
as adjusted for inflation (21 U.S.C. 379j-12(c)(3)). FDA will not 
adjust the FY 2020 fee revenue amount for workload changes because the 
workload adjuster was less than 1 percent.\2\
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    \2\ CVM increases the fee revenue amount established for the 
fiscal year to reflect changes in workload only if the workload 
adjuster is equal to or greater than 1 percent (1%).
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D. Reduction of Workload-Based Increase by Amount of Certain Excess 
Collections

    Under section 740(c)(3)(B) of the FD&C Act, for fiscal years 2021 
through 2023, if application of the workload adjustment increases the 
amount of fee revenues established for the fiscal year, as adjusted for 
inflation, the fee revenue increase will be reduced by the amount of 
any excess collections for the second preceding fiscal year, up to the 
amount of the fee revenue increase. This provision will not take effect 
until FY 2021.

E. Recovery of Collection Shortfalls

    Under section 740(g)(5)(A) of the FD&C Act, for FY 2021, the amount 
of fees otherwise authorized to be collected shall be increased by the 
amount, if any, by which the amount collected and appropriated for FY 
2019 falls below the amount of fees authorized for FY 2019. For FY 
2022, the amount of fees otherwise authorized to be collected shall be 
increased by the amount, if any, by which the amount collected and 
appropriated for FY 2020 falls below the amount of fees authorized for 
FY 2020. For FY 2023, the amount of fees otherwise authorized to be 
collected shall be increased by the cumulative amount, if any, by which 
the amount collected and appropriated for fiscal years 2021 and 2022 
(including estimated collections for FY 2022) falls below the 
cumulative amount of fees authorized for those 2 fiscal years. Because 
the recovery of collection shortfalls does not take effect until FY 
2021, FDA will not adjust the FY 2020 fee revenue amount for the 
recovery of collection shortfalls.

F. Reduction of Shortfall-Based Fee Increase by Prior Year Excess 
Collections

    Under section 740(g)(5)(B) of the FD&C Act, where FDA's 
calculations under section 740(g)(5)(A) result in an increase for that 
fiscal year to recover a collection shortfall, FDA must reduce the 
increase by the amount of any excess collections for preceding fiscal 
years (after fiscal year 2018) that have not already been applied for 
purposes of reducing workload-based fee increases. Because the recovery 
of collection shortfalls does not take effect until FY 2021, FDA will 
not adjust the FY 2020 fee revenue amount for the reduction of 
shortfall-based fee increases by prior year excess collections.

G. FY 2020 Fee Revenue Amounts

    ADUFA IV specifies that the revenue amount of $30,611,000 (rounded 
to the nearest thousand dollars) for FY 2020 is to be divided as 
follows: 20 percent, or a total of $6,122,200, is to come from 
application fees; 27 percent, or a total of $8,264,970, is to come from 
product fees; 26 percent, or a total of $7,958,860, is to come from 
establishment fees; and 27 percent, or a total of $8,264,970, is to 
come from sponsor fees (21 U.S.C. 379j-12(b)).

III. Application Fee Calculations for FY2020

A. Application Fee Revenues and Numbers of Fee-Paying Applications

    Each person who submits an animal drug application or a 
supplemental animal drug application shall be subject to an application 
fee, with limited exceptions (see 21 U.S.C. 379j-12(a)(1)). The term 
``animal drug application'' means an application for approval of any 
new animal drug submitted under section 512(b)(1) of the FD&C Act or an 
application for conditional approval of a new animal drug submitted 
under section 571 of the FD&C Act (21 U.S.C. 360ccc) (see section 
739(1) of the FD&C Act (21 U.S.C. 379j-11(1))). As the expanded 
definition of ``animal drug application'' includes applications for 
conditional approval submitted under section 571 of the FD&C Act, such 
applications are now subject to ADUFA fees, except that fees may be 
waived if the drug is intended solely to provide for a minor use or 
minor species (MUMS) indication (see 21 U.S.C. 379j-12(d)(1)(D)).
    Prior to ADUFA IV, FDA only had authority to grant conditional 
approval for drugs intended for a MUMS indication. Under amendments 
made to section 571 of the FD&C Act by ADUFA IV, FDA retains authority 
to grant conditional approval for drugs intended for MUMS indications 
but also will be able to grant conditional approval for certain drugs 
not intended for a MUMS indication provided certain criteria are met. 
Beginning with FY 2019, ADUFA IV provides an exception from application 
fees for animal drug applications submitted under section 512(b)(1) of 
the FD&C Act if the application is submitted by a sponsor who 
previously applied for conditional approval under section 571 of the 
FD&C Act for the same product and paid an application fee at the time 
they applied for conditional approval. The purpose of this exception is 
to prevent sponsors of conditionally approved products from having to 
pay a second application fee at the time they apply for full approval 
of their products under section 512(b)(1) of the FD&C Act, provided the 
sponsor's application for full approval is filed consistent with the 
timeframes established in section 571(h) of the FD&C Act.

[[Page 37899]]

    A ``supplemental animal drug application'' is defined as a request 
to the Secretary of Health and Human Services (Secretary) to approve a 
change in an animal drug application that has been approved, or a 
request to the Secretary to approve a change to an application approved 
under section 512(c)(2) of the FD&C Act for which data with respect to 
safety or effectiveness are required (21 U.S.C. 379j-11(2)). The 
application fees are to be set so that they will generate $6,122,200 in 
fee revenue for FY 2020. The fee for a supplemental animal drug 
application for which safety or effectiveness data are required and for 
an animal drug application subject to criteria set forth in section 
512(d)(4) of the FD&C Act is to be set at 50 percent of the animal drug 
application fee (21 U.S.C. 379j-12(a)(1)(A)(ii)).
    To set animal drug application fees and supplemental animal drug 
application fees to realize $6,122,200, FDA must first make some 
assumptions about the number of fee-paying applications and supplements 
the Agency will receive in FY 2020.
    The Agency knows the number of applications that have been 
submitted in previous years, which fluctuates annually. In estimating 
the fee revenue to be generated by animal drug application fees in FY 
2020, FDA is assuming that the number of applications for which fees 
will be paid in FY 2020 will equal the average number of submissions 
over the 5 most recent completed fiscal years of the ADUFA program (FY 
2014 to FY 2018).
    Over the 5 most recent completed fiscal years, the average number 
of animal drug applications that would have been subject to the full 
fee was 7.6. Over this same period, the average number of supplemental 
applications for which safety or effectiveness data are required and 
applications subject to the criteria set forth in section 512(d)(4) of 
the FD&C Act that would have been subject to half of the full fee was 
12.6.

B. Application Fee Rates for FY 2020

    FDA must set the fee rates for FY 2020 so that the estimated 7.6 
applications for which the full fee will be paid and the estimated 12.6 
supplemental applications for which safety or effectiveness data are 
required and applications subject to the criteria set forth in section 
512(d)(4) of the FD&C Act for which half of the full fee will be paid 
will generate a total of $6,122,200. To generate this amount, the fee 
for an animal drug application, rounded to the nearest dollar, will 
have to be $440,446, and the fee for a supplemental animal drug 
application for which safety or effectiveness data are required and for 
applications subject to the criteria set forth in section 512(d)(4) of 
the FD&C Act will have to be $220,223.

IV. Product Fee Calculations for FY 2020

A. Product Fee Revenues and Numbers of Fee-Paying Products

    The animal drug product fee must be paid annually by the person 
named as the applicant in a new animal drug application or supplemental 
new animal drug application for an animal drug product submitted for 
listing under section 510 of the FD&C Act (21 U.S.C. 360) and who had 
an animal drug application or supplemental animal drug application 
pending at FDA after September 1, 2003 (21 U.S.C. 379j-12(a)(2)). The 
term ``animal drug product'' means each specific strength or potency of 
a particular active ingredient or ingredients in final dosage form 
marketed by a particular manufacturer or distributor, which is uniquely 
identified by the labeler code and product code portions of the 
national drug code, and for which an animal drug application or a 
supplemental animal drug application has been approved (21 U.S.C. 379j-
11(3)). The product fees are to be set so that they will generate 
$8,264,970 in fee revenue for FY 2020.
    To set animal drug product fees to realize $8,264,970, FDA must 
make some assumptions about the number of products for which these fees 
will be paid in FY 2020. FDA developed data on all animal drug products 
that have been submitted for listing under section 510 of the FD&C Act 
and matched this to the list of all persons who had an animal drug 
application or supplement pending after September 1, 2003. As of June 
2019, FDA estimates that there are a total of 743 products submitted 
for listing by persons who had an animal drug application or 
supplemental animal drug application pending after September 1, 2003. 
Based on this, FDA estimates that a total of 743 products will be 
subject to this fee in FY 2020.
    In estimating the fee revenue to be generated by animal drug 
product fees in FY 2020, FDA is assuming that 2 percent of the products 
invoiced, or 15, will not pay fees in FY 2020 due to fee waivers and 
reductions. FDA has made this estimate at 2 percent this year, based on 
historical data over the past 5 completed fiscal years of the ADUFA 
program.
    Accordingly, the Agency estimates that a total of 728 (743 minus 
15) products will be subject to product fees in FY 2020.

B. Product Fee Rates for FY 2020

    FDA must set the fee rates for FY 2020 so that the estimated 728 
products that pay fees will generate a total of $8,264,970. To generate 
this amount will require the fee for an animal drug product, rounded to 
the nearest dollar, to be $11,353.

V. Establishment Fee Calculations for FY 2020

A. Establishment Fee Revenues and Numbers of Fee-Paying Establishments

    The animal drug establishment fee must be paid annually by the 
person who: (1) Owns or operates, directly or through an affiliate, an 
animal drug establishment; (2) is named as the applicant in an animal 
drug application or supplemental animal drug application for an animal 
drug product submitted for listing under section 510 of the FD&C Act; 
(3) had an animal drug application or supplemental animal drug 
application pending at FDA after September 1, 2003; and (4) whose 
establishment engaged in the manufacture of the animal drug product 
during the fiscal year (see 21 U.S.C. 379j-12(a)(3)). An establishment 
subject to animal drug establishment fees is assessed only one such fee 
per fiscal year. The term ``animal drug establishment'' is defined as a 
foreign or domestic place of business at one general physical location, 
consisting of one or more buildings, all of which are within 5 miles of 
each other, at which one or more animal drug products are manufactured 
in final dosage form (21 U.S.C. 379j-11(4)). The establishment fees are 
to be set so that they will generate $7,958,860 in fee revenue for FY 
2020.
    To set animal drug establishment fees to realize $7,958,860, FDA 
must make some assumptions about the number of establishments for which 
these fees will be paid in FY 2020. FDA developed data on all animal 
drug establishments and matched this to the list of all persons who had 
an animal drug application or supplement pending after September 1, 
2003. As of June 2019, FDA estimates that there are a total of 55 
establishments owned or operated by persons who had an animal drug 
application or supplemental animal drug application pending after 
September 1, 2003. Based on this, FDA believes that 55 establishments 
will be subject to this fee in FY 2020.
    In estimating the fee revenue to be generated by animal drug 
establishment fees in FY 2020, FDA is assuming that 9 percent of the 
establishments invoiced, or 5, will not pay fees in FY 2020 due to fee 
waivers and reductions.

[[Page 37900]]

FDA has made this estimate at 9 percent this year, based on historical 
data over the past 5 completed fiscal years.
    Accordingly, the Agency estimates that a total of 50 establishments 
(55 minus 5) will be subject to establishment fees in FY 2020.

B. Establishment Fee Rates for FY 2020

    FDA must set the fee rates for FY 2020 so that the fees paid for 
the estimated 50 establishments will generate a total of $7,958,860. To 
generate this amount will require the fee for an animal drug 
establishment, rounded to the nearest dollar, to be $159,177.

VI. Sponsor Fee Calculations for FY 2020

A. Sponsor Fee Revenues and Numbers of Fee-Paying Sponsors

    The animal drug sponsor fee must be paid annually by each person 
who: (1) Is named as the applicant in an animal drug application, 
except for an approved application for which all subject products have 
been removed from listing under section 510 of the FD&C Act, or has 
submitted an investigational animal drug submission that has not been 
terminated or otherwise rendered inactive and (2) had an animal drug 
application, supplemental animal drug application, or investigational 
animal drug submission pending at FDA after September 1, 2003 (see 21 
U.S.C. 379j-11(6) and 379j-12(a)(4)). An animal drug sponsor is subject 
to only one such fee each fiscal year (see 21 U.S.C. 379j-12(a)(4)). 
The sponsor fees are to be set so that they will generate $8,264,970 in 
fee revenue for FY 2020.
    To set animal drug sponsor fees to realize $8,264,970, FDA must 
make some assumptions about the number of sponsors who will pay these 
fees in FY 2020. FDA estimates that a total of 177 sponsors will meet 
this definition in FY 2020.
    In estimating the fee revenue to be generated by animal drug 
sponsor fees in FY 2020, FDA is assuming that 68 percent of the 
sponsors invoiced, or 120, will not pay sponsor fees in FY 2020 due to 
fee waivers and reductions. FDA has made this estimate at 68 percent 
this year, based on historical data over the past 5 completed fiscal 
years of the ADUFA program.
    Accordingly, the Agency estimates that a total of 57 sponsors (177 
minus 120) will be subject to and pay sponsor fees in FY 2020.

B. Sponsor Fee Rates for FY 2020

    FDA must set the fee rates for FY 2020 so that the estimated 57 
sponsors that pay fees will generate a total of $8,264,970. To generate 
this amount will require the fee for an animal drug sponsor, rounded to 
the nearest dollar, to be $144,999.

VII. Fee Schedule for FY 2020

    The fee rates for FY 2020 are summarized in table 5.

                       Table 5--FY 2020 Fee Rates
------------------------------------------------------------------------
                                                           Fee rate for
              Animal drug user fee category                   FY 2020
------------------------------------------------------------------------
Animal Drug Application Fees:
    Animal Drug Application.............................        $440,446
    Supplemental Animal Drug Application for Which               220,223
     Safety or Effectiveness Data are Required or Animal
     Drug Application Subject to the Criteria Set Forth
     in Section 512(d)(4) of the FD&C Act...............
Animal Drug Product Fee.................................          11,353
Animal Drug Establishment Fee \1\.......................         159,177
Animal Drug Sponsor Fee \2\.............................         144,999
------------------------------------------------------------------------
\1\ An animal drug establishment is subject to only one such fee each
  fiscal year.
\2\ An animal drug sponsor is subject to only one such fee each fiscal
  year.

VIII. Fee Waiver or Reduction; Exemption From Fees

A. Barrier to Innovation Waivers

    Under section 740(d)(1)(A) of the FD&C Act, an animal drug 
applicant may qualify for a waiver or reduction of one or more ADUFA 
fees if the fee would present a significant barrier to innovation 
because of limited resources available to the applicant or due to other 
circumstances. FDA CVM's guidance for industry (GFI) #170, entitled 
``Animal Drug User Fees and Fee Waivers and Reductions,'' \3\ states 
that for purposes of determining whether to grant a barrier to 
innovation waiver or reduction of ADUFA fees on financial grounds, FDA 
has determined an applicant with financial resources of less than 
$20,000,000 (including the financial resources of the applicant's 
affiliates), adjusted annually for inflation, has limited resources 
available. Using the CPI for urban consumers (U.S. city average; not 
seasonally adjusted; all items; annual index), the inflation-adjusted 
level for FY 2020 will be $21,265,320; this level represents the 
financial resource ceiling that will be used to determine if there are 
limited resources available to an applicant requesting a barrier to 
innovation waiver on financial grounds for FY 2020 in addition to the 
criteria requiring the product to be innovative.
---------------------------------------------------------------------------

    \3\ \.\CVM's GFI #170 is located at: https://www.fda.gov/downloads/AnimalVeterinary/GuidanceComplianceEnforcement/GuidanceforIndustry/UCM052494.pdf.
---------------------------------------------------------------------------

B. Exemptions From Fees

    The types of fee waivers and reductions that applied in ADUFA III 
still exist for FY 2020. However, two new exemptions and one new 
exception from fees were established by ADUFA IV, as follows:
    If an animal drug application, supplemental animal drug 
application, or investigational submission involves the intentional 
genomic alteration of an animal that is intended to produce a human 
medical product, any person who is the named applicant or sponsor of 
that application or submission will not be subject to sponsor, product, 
or establishment fees under ADUFA based solely on that application or 
submission (21 U.S.C. 379j-12(d)(4)(B)).
    Fees will not apply to any person who not later than September 30, 
2023, submits to CVM a supplemental animal drug application relating to 
a new animal drug application approved under section 512 of the FD&C 
Act, solely to add the application number to the labeling of the drug 
in the manner specified in section 502(w)(3) of the FD&C Act (21 U.S.C. 
352(w)(3)), if that person otherwise would be subject to user fees 
under ADUFA based only on the submission of the supplemental 
application (21 U.S.C. 379j-12(d)(4)(A)).
    There is also an exception from application fees for animal drug 
applications submitted under section 512(b)(1) of the FD&C Act if the 
application is submitted by a sponsor who previously applied for 
conditional

[[Page 37901]]

approval under section 571 of the FD&C Act for the same product and 
paid an application fee at the time they applied for conditional 
approval, provided the sponsor has submitted the application under 
section 512(b)(1) of the FD&C Act within the timeframe specified in 
section 571(h) of the FD&C Act.

IX. Procedures for Paying the FY 2020 Fees

A. Application Fees and Payment Instructions

    The appropriate application fee established in the new fee schedule 
must be paid for an animal drug application or supplement subject to 
fees under ADUFA IV that is submitted on or after October 1, 2019. The 
payment must be made in U.S. currency by one of the following methods: 
Wire transfer, electronic check, bank draft, or U.S. postal money order 
made payable to FDA. 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, or the Pay.gov payment option is 
available after you submit a cover sheet. (Note: Only full payments are 
accepted. No partial payments can be made online.) Once you search for 
and find your invoice, select ``Pay Now'' to be redirected to https://www.pay.gov/. Electronic payment options are based on the balance due. 
Payment by credit card is available only 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.
    When paying by check, bank draft, or U.S. postal money order, 
please write your application's unique Payment Identification Number 
(PIN), beginning with the letters AD, on the upper right-hand corner of 
your completed Animal Drug User Fee Cover Sheet. Also write the FDA 
post office box number (P.O. Box 979033) on the enclosed check, bank 
draft, or money order. Mail the payment and a copy of the completed 
Animal Drug User Fee Cover Sheet to: Food and Drug Administration, P.O. 
Box 979033, St. Louis, MO 63197-9000. When paying by wire transfer, the 
invoice number needs to be included. Without the invoice number, the 
payment may not be applied. If the payment amount is not applied, the 
invoice amount would be referred to collections. The originating 
financial institution may charge a wire transfer fee. If the financial 
institution charges a wire transfer fee, it is required to add that 
amount to the payment to ensure that the invoice is paid in full.
    Use the following account information when sending a payment by 
wire transfer: U.S. Department of the Treasury, TREAS NYC, 33 Liberty 
St., New York, NY 10045, FDA deposit account number: 75060099, U.S. 
Department of the Treasury routing/transit number: 021030004, SWIFT 
number: FRNYUS33.
    To send a check by a courier such as Federal Express, the courier 
must deliver the check and printed copy of the cover sheet to: U.S. 
Bank, Attn: Government Lockbox 979033, 1005 Convention Plaza, St. 
Louis, MO 63101. (Note: This address is for courier delivery only. If 
you have any questions concerning courier delivery, contact U.S. Bank 
at 314-418-4013. This telephone number is only for questions about 
courier delivery.)
    It is important that the fee arrives at the bank at least a day or 
two before the application arrives at CVM. FDA records the official 
application receipt date as the later of the following: The date the 
application was received by CVM, or the date U.S. Bank notifies FDA 
that your payment in the full amount has been received, or when the 
U.S. Treasury notifies FDA of receipt of an electronic or wire transfer 
payment. U.S. Bank and the U.S. Treasury are required to notify FDA 
within 1 working day, using the PIN described previously.
    FDA's tax identification number is 53-0196965. (Note: In no case 
should the payment for the fee be submitted to FDA with the 
application.)

B. Application Cover Sheet Procedures

    Step One--Create a user account and password. Log on to the ADUFA 
website at https://www.fda.gov/industry/animal-drug-user-fee-act-adufa/animal-drug-user-fee-cover-sheet and, under Application Submission 
Information, click ``Create ADUFA User Fee Cover Sheet.'' For security 
reasons, each firm submitting an application will be assigned an 
organization identification number, and each user will also be required 
to set up a user account and password the first time they use this 
site. Online instructions will walk you through this process.
    Step Two--Create an Animal Drug User Fee Cover Sheet, transmit it 
to FDA, and print a copy. After logging into your account with user 
name and password, complete the steps required to create an Animal Drug 
User Fee Cover Sheet. One cover sheet is needed for each animal drug 
application or supplement. Once you are satisfied that the data on the 
cover sheet are accurate and you have finalized the cover sheet, you 
will be able to transmit it electronically to FDA and you will be able 
to print a copy of your cover sheet showing your unique PIN.
    Step Three--Send the payment for your application as described in 
section IX.A of this document.
    Step Four--Please submit your application and a copy of the 
completed Animal Drug User Fee Cover Sheet to the following address: 
Food and Drug Administration, Center for Veterinary Medicine, Document 
Control Unit (HFV-199), 7500 Standish Pl., Rockville, MD 20855.

C. Product, Establishment, and Sponsor Fees

    By December 31, 2019, FDA will issue invoices and payment 
instructions for product, establishment, and sponsor fees for FY 2020 
using this fee schedule. Payment will be due by January 31, 2020. FDA 
will issue invoices in November 2020 for any products, establishments, 
and sponsors subject to fees for FY 2020 that qualify for fees after 
the December 2019 billing.

    Dated: July 29, 2019.
Lowell J. Schiller,
Principal Associate Commissioner for Policy.
[FR Doc. 2019-16434 Filed 8-1-19; 8:45 am]
 BILLING CODE 4164-01-P