I
107TH CONGRESS
2D SESSION
H. R. 4955
To amend the Federal Food, Drug, and Cosmetic Act to establish a program
of fees relating to animal drugs.
IN THE HOUSE OF REPRESENTATIVES
JUNE 18, 2002
Mr. GANSKE (for himself, Mr. NORWOOD, Mr. WHITFIELD, Mr. PICKERING,
and Mr. BILIRAKIS) introduced the following bill; which was referred to
the Committee on Energy and Commerce
A BILL
To amend the Federal Food, Drug, and Cosmetic Act to
establish a program of fees relating to animal drugs.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Animal Drug User Fee
Act of 2002’’.
SEC. 2. FINDINGS.
The Congress finds as follows:
(1) Prompt approval of safe and effective new
animal drugs is critical to the improvement of ani-
mal health and the public health.
(2) Animal health and the public health will be
served by making additional funds available for the
purpose of augmenting the resources of the Food
and Drug Administration that are devoted to the
process for review of new animal drug applications.
(3) The fees authorized by this Act will be dedi-
cated toward expediting the animal drug develop-
ment process and the review of new and supple-
mental animal drug applications and investigational
animal drug submissions as set forth in the goals
identified, for purposes of part 3 of subchapter C of
chapter VII of the Federal Food, Drug, and Cos-
metic Act, in the letters from the Secretary of
Health and Human Services to the Chairman of the
Committee on Energy and Commerce of the House
of Representatives and the Chairman of the Com-
mittee on Health, Education, Labor, and Pensions
of the Senate as set forth in the Congressional
Record.
SEC. 3. FEES RELATING TO ANIMAL DRUGS.
Subchapter C of chapter VII of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 379f et seq.) is
amended by adding at the end the following part:
‘‘PART 3—FEES RELATING TO ANIMAL DRUGS
‘‘SEC. 738. DEFINITIONS.
‘‘For purposes of this subchapter:
‘‘(1) The term ‘animal drug application’ means
an application for approval of any new animal drug
submitted under section 512(b)(1). Such term does
not include a supplemental animal drug application.
‘‘(2) The term ‘supplemental animal drug appli-
cation’ means—
‘‘(A) a request to the Secretary to approve
a change in an animal drug application which
has been approved; or
‘‘(B) a request to the Secretary to approve
a change to an application approved under sec-
tion 512(c)(2) for which data with respect to
safety or effectiveness are required.
‘‘(3) The term ‘animal drug product’ means
each specific strength or potency of a particular ac-
tive ingredient or ingredients in final dosage form
marketed by a particular manufacturer or dis-
tributor, 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 ap-
proved.
‘‘(4) The term ‘animal drug establishment’
means a foreign or domestic place of business which
is 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 prod-
ucts are manufactured in final dosage form.
‘‘(5) The term ‘investigational animal drug sub-
mission’ means—
‘‘(A) the filing of a claim for an investiga-
tional exemption under section 512(j) for a new
animal drug intended to be the subject of an
animal drug application or a supplemental ani-
mal drug application; or
‘‘(B) the submission of information for the
purpose of enabling the Secretary to evaluate
the safety or effectiveness of an animal drug
application or supplemental animal drug appli-
cation in the event of their filing.
‘‘(6) The term ‘animal drug sponsor’ means ei-
ther an applicant named in an animal drug applica-
tion, except for an approved application for which all
subject products have been removed from listing
under section 510, or a person who has submitted
an investigational animal drug submission that has
not been terminated or otherwise rendered inactive
by the Secretary.
‘‘(7) The term ‘final dosage form’ means, with
respect to an animal drug product, a finished dosage
form which is approved for administration to an ani-
mal without substantial further manufacturing. Such
term includes animal drug products intended for
mixing in animal feeds.
‘‘(8) The term ‘process for the review of animal
drug applications’ means the following activities of
the Secretary with respect to the review of animal
drug applications, supplemental animal drug applica-
tions, and investigational animal drug submissions:
‘‘(A) The activities necessary for the re-
view of animal drug applications, supplemental
animal drug applications, and investigational
animal drug submissions.
‘‘(B) The issuance of action letters which
approve animal drug applications or supple-
mental animal drug applications or which set
forth in detail the specific deficiencies in animal
drug applications, supplemental animal drug
applications, and investigational animal drug
submissions and, where appropriate, the actions
necessary to place such applications, supple-
ments or submissions in condition for approval.
‘‘(C) The inspection of animal drug estab-
lishments and other facilities undertaken as
part of the Secretary’s review of pending animal
drug applications, supplemental animal drug
applications, and investigational animal drug
submissions.
‘‘(D) Monitoring of research conducted in
connection with the review of animal drug ap-
plications, supplemental animal drug applica-
tions, and investigational animal drug submis-
sions.
‘‘(E) The development of regulations and
policy related to the review of animal drug ap-
plications, supplemental animal drug applica-
tions, and investigational animal drug submis-
sions.
‘‘(F) Development of standards for prod-
ucts subject to review.
‘‘(G) Meetings between the agency and the
animal drug sponsor.
‘‘(H) Review of advertising and labeling
prior to approval of an animal drug application
or supplemental animal drug application, but
not such activities after an animal drug has
been approved.
‘‘(9) The term ‘costs of resources allocated for
the process for the review of animal drug applica-
tions’ means the expenses incurred in connection
with the process for the review of animal drug appli-
cations for—
‘‘(A) officers and employees of the Food
and Drug Administration, contractors of the
Food and Drug Administration, advisory com-
mittees consulted with respect to the review of
specific animal drug applications, supplemental
animal drug applications, or investigational ani-
mal drug submissions, and costs related to such
officers, employees, committees, and contrac-
tors, including costs for travel, education, and
recruitment and other personnel activities;
‘‘(B) management of information, and the
acquisition, maintenance, and repair of com-
puter resources;
‘‘(C) leasing, maintenance, renovation, and
repair of facilities and acquisition, maintenance,
and repair of fixtures, furniture, scientific
equipment, and other necessary materials and
supplies; and
‘‘(D) collecting fees under section 739 and
accounting for resources allocated for the re-
view of animal drug applications, supplemental
animal drug applications, and investigational
animal drug submissions.
‘‘(10) The term ‘adjustment factor’ applicable
to a fiscal year refers to the formula set forth in sec-
tion 735(8) with the base or comparator year being
2002.
‘‘(11) The term ‘affiliate’ refers to the defini-
tion set forth in section 735(9).
‘‘SEC. 739. AUTHORITY TO ASSESS AND USE ANIMAL DRUG
FEES.
‘‘(a) TYPES
OF FEES.—Beginning in fiscal year
2003, the Secretary shall assess and collect fees in accord-
ance with this section as follows:
‘‘(1) ANIMAL DRUG APPLICATION AND SUPPLE-
MENT FEE.—
‘‘(A) IN GENERAL.—Each person that sub-
mits, on or after September 1, 2002, an animal
drug application or a supplemental animal drug
application shall be subject to a fee as follows:
‘‘(i) A fee established in subsection
(b) for an animal drug application; and
‘‘(ii) A fee established in subsection
(b) for a supplemental animal drug appli-
cation for which safety or effectiveness
data are required.
‘‘(B) PAYMENT.—The fee required by sub-
paragraph (A) shall be due upon submission of
the animal drug application or supplemental
animal drug application.
‘‘(C) EXCEPTION FOR PREVIOUSLY FILED
APPLICATION OR SUPPLEMENT.—If an animal
drug application or a supplemental animal drug
application was submitted by a person that paid
the fee for such application or supplement, was
accepted for filing, and was not approved or
was withdrawn (without a waiver or refund),
the submission of an animal drug application or
a supplemental animal drug application for the
same product by the same person (or the per-
son’s licensee, assignee, or successor) shall not
be subject to a fee under subparagraph (A).
‘‘(D) REFUND OF FEE IF APPLICATION RE-
FUSED FOR FILING.—The Secretary shall re-
fund 75 percent of the fee paid under subpara-
graph (B) for any animal drug application or
supplemental animal drug application which is
refused for filing.
‘‘(E) REFUND
OF
FEE
IF
APPLICATION
WITHDRAWN.—If an animal drug application or
a supplemental animal drug application is with-
drawn after the application or supplement was
filed, the Secretary may refund the fee or por-
tion of the fee paid under subparagraph B if no
substantial work was performed on the applica-
tion or supplement after the application or sup-
plement was filed. The Secretary shall have the
sole discretion to refund the fee under this
paragraph. A determination by the Secretary
concerning a refund under this paragraph shall
not be reviewable.
‘‘(2) ANIMAL
DRUG
PRODUCT
FEE.—Each
person—
‘‘(A) who is named as the applicant in an
animal drug application or supplemental animal
drug application for an animal drug product
which has been submitted for listing under sec-
tion 510; and
‘‘(B) who, after September 1, 2002, had
pending before the Secretary an animal drug
application or supplemental animal drug appli-
cation;
shall pay for each such animal drug product the an-
nual fee established in subsection (b). Such fee shall
be payable for the fiscal year in which the animal
drug product is first submitted for listing under Sec-
tion 510, or is submitted for relisting under section
510 if the animal drug product has been withdrawn
from listing and relisted. After such fee is paid for
that fiscal year, such fee shall be payable on or be-
fore January 31 of each year. Such fee shall be paid
only once for each animal drug product for a fiscal
year in which the fee is payable.
‘‘(3) ANIMAL
DRUG
ESTABLISHMENT
FEE.—
Each person—
‘‘(A) who owns or operates, directly or
through an affiliate, an animal drug establish-
ment;
‘‘(B) who is named as the applicant in an
animal drug application or supplemental animal
drug application for an animal drug product
which has been submitted for listing under Sec-
tion 510; and
‘‘(C) who, after September 1, 2002, had
pending before the Secretary an animal drug
application or supplemental animal drug appli-
cation;
shall be assessed an annual fee established in sub-
section (b) for each animal drug establishment listed
in its approved animal drug application as an estab-
lishment that manufactures the animal drug product
named in the application. The annual establishment
fee shall be assessed in each fiscal year in which the
animal drug product named in the application is as-
sessed a fee under paragraph (2) unless the animal
drug establishment listed in the application does not
engage in the manufacture of the animal drug prod-
uct during the fiscal year. The fee shall be paid on
or before January 31 of each year. The establish-
ment shall be assessed only one fee per fiscal year
under this section, provided, however, that where a
single establishment manufactures both animal drug
products and prescription drug products, as defined
in section 735(3), such establishment shall be as-
sessed both the animal drug establishment fee and
the prescription drug establishment fee, as set forth
in section 736(a)(2), within a single fiscal year.
‘‘(4) ANIMAL
DRUG
SPONSOR
FEE.—Each
person—
‘‘(A) who meets the definition of an animal
drug sponsor within a fiscal year; and
‘‘(B) who, after September 1, 2002, had
pending before the Secretary an animal drug
application, a supplemental animal drug appli-
cation, or an investigational animal drug sub-
mission, shall be assessed an annual fee estab-
lished under subsection (b). The fee shall be
paid on or before January 31 of each year.
Each animal drug sponsor shall pay only one
such fee each fiscal year.
‘‘(b) FEE AMOUNTS.—Except as provided in sub-
section (a)(1) and subsections (c), (d), (f), and (g), the
fees required under subsection (a) shall be determined and
assessed as follows:
‘‘(1) APPLICATION AND SUPPLEMENT FEES.—
‘‘(A) The animal drug application fee
under subsection (a)(1)(A)(i) shall be $35,750
in fiscal year 2003, $57,150 in fiscal year
2004, and $71,500 in fiscal years 2005, 2006,
and 2007.
‘‘(B) The supplemental animal drug appli-
cation fee under subsection (a)(1)(A)(ii) shall
be $17,850 in fiscal year 2003, $28,575 in fis-
cal year 2004, and $35,700 in fiscal years
2005, 2006, and 2007.
‘‘(2) TOTAL
FEE
REVENUES
FOR
PRODUCT
FEES.—The total fee revenues to be collected in
product fees under subsection (a)(2) shall be
$1,250,000 in fiscal year 2003, $2,000,000 in fiscal
year 2004, and $2,500,000 in fiscal years 2005,
2006, and 2007.
‘‘(3) TOTAL FEE REVENUES FOR ESTABLISH-
MENT FEES.—The total fee revenues to be collected
in establishment fees under subsection (a)(3) shall
be $1,250,000 in fiscal year 2003, $2,000,000 in fis-
cal year 2004, and $2,500,000 in fiscal years 2005,
2006, and 2007.
‘‘(4) TOTAL
FEE
REVENUES
FOR
SPONSOR
FEES.—The total fee revenues to be collected in
sponsor fees under subsection (a)(4) shall be
$1,250,000 in fiscal year 2003, $2,000,000 in fiscal
year 2004, and $2,500,000 in fiscal years 2005,
2006, and 2007.
‘‘(c) ADJUSTMENTS.—
‘‘(1) INFLATION ADJUSTMENT.—The fees and
total fee revenues established in subsection (b) shall
be adjusted by the Secretary by notice, published in
the Federal Register, for a fiscal year according to
the formula set forth in section 736(c)(1).
‘‘(2) WORKLOAD ADJUSTMENT.—After the fee
revenues are adjusted for inflation in accordance
with paragraph (1), the fee revenues shall be further
adjusted each fiscal year after fiscal year 2003 to re-
flect changes in review workload. With respect to
such adjustment:
‘‘(A) The adjustment shall be determined
by the Secretary based on a weighted average
of the change in the total number of animal
drug applications, supplemental animal drug
applications for which data with respect to safe-
ty or effectiveness are required, manufacturing
supplemental animal drug applications, inves-
tigational animal drug study submissions, and
investigational animal drug protocol submis-
sions submitted to the Secretary. The Secretary
shall publish in the Federal Register the fees
resulting from this adjustment and the sup-
porting methodologies.
‘‘(B) Under no circumstances shall this
workload adjustment result in fee revenues for
a fiscal year that are less than the fee revenues
for that fiscal year established in subsection
(b), as adjusted for inflation under subpara-
graph (c)(1).
‘‘(3) FINAL
YEAR
ADJUSTMENT.—For fiscal
year 2007, the Secretary may further increase the
fees to provide for up to 3 months of operating re-
serves of carryover user fees for the process for the
review of animal drug applications for the first three
months of fiscal year 2008. If the Food and Drug
Administration has carryover balances for the proc-
ess for the review of animal drug applications in ex-
cess of three months of such operating reserves, then
this adjustment will not be made. If this adjustment
is necessary, then the rationale for the amount of
the increase shall be contained in the annual notice
setting fees for fiscal year 2007.
‘‘(4) ANNUAL FEE ADJUSTMENT.—Subject to
the amount appropriated for a fiscal year under sub-
section (g), the Secretary shall, within 60 days after
the end of each fiscal year beginning after Sep-
tember 30, 2002, adjust the fees established by the
schedule in subsection (b) for the fiscal year in
which the adjustment occurs so that the revenues
collected from each of the categories of fees de-
scribed in paragraphs (1), (2), (3), and (4) of sub-
section (b) shall be set to be equal to 25 percent
of the total fees appropriated under subsection (g).
‘‘(5) LIMIT.—The total amount of fees charged,
as adjusted under this subsection, for a fiscal year
may not exceed the total costs for such fiscal year
for the resources allocated for the process for the re-
view of animal drug applications.
‘‘(d) FEE WAIVER OR REDUCTION.—
‘‘(1) IN GENERAL.—The Secretary shall grant a
waiver from or a reduction of one or more fees as-
sessed under subsection (a) where the Secretary
finds that—
‘‘(A) the assessment of the fee would
present a significant barrier to innovation be-
cause of limited resources available to such per-
son or other circumstances;
‘‘(B) the fees to be paid by such person
will exceed the anticipated present and future
costs incurred by the Secretary in conducting
the process for the review of animal drug appli-
cations for such person;
‘‘(C) such waiver or reduction is necessary
to promote the availability of animal drug prod-
ucts for minor uses or for use in minor species;
or
‘‘(D) the sponsor involved is a small busi-
ness submitting its first animal drug applica-
tion to the Secretary for review.
‘‘(2) USE OF STANDARD COSTS.—In making the
finding in paragraph (1)(B), the Secretary may use
standard costs.
‘‘(3) RULES FOR SMALL BUSINESSES.—
‘‘(A) DEFINITION.—In paragraph (1)(D),
the term ‘small business’ means an entity that
has fewer than 500 employees, including em-
ployees of affiliates.
‘‘(B) WAIVER OF APPLICATION FEE.—The
Secretary shall waive under paragraph (1)(D)
the application fee for the first animal drug ap-
plication that a small business or its affiliate
submits to the Secretary for review. After a
small business or its affiliate is granted such a
waiver, the small business or its affiliate shall
pay application fees for all subsequent animal
drug applications and supplemental animal
drug applications for which safety or effective-
ness data are required in the same manner as
an entity that does not qualify as a small busi-
ness.
‘‘(C) CERTIFICATION.—The Secretary shall
require any person who applies for a waiver
under paragraph (1)(D) to certify their quali-
fication for the waiver. The Secretary shall peri-
odically publish in the Federal Register a list of
persons making such certifications.
‘‘(e) EFFECT OF FAILURE TO PAY FEES.—An ani-
mal drug application or supplemental animal drug applica-
tion submitted by a person subject to fees under sub-
section (a) shall be considered incomplete and shall not
be accepted for filing by the Secretary until all fees owed
by such person have been paid. An investigational animal
drug submission under section (5)(B) that is submitted
by a person subject to fees under subsection (a) shall be
considered incomplete and shall not be accepted for review
by the Secretary until all fees owed by such person have
been paid. The Secretary may discontinue review of any
animal drug application, supplemental animal drug appli-
cation or investigational animal drug submission from a
person if such person has not submitted for payment all
fees owed under this section by 30 days after the date
upon which they are due.
‘‘(f) ASSESSMENT OF FEES.—
‘‘(1) LIMITATION.—Fees may not be assessed
under subsection (a) for a fiscal year beginning after
fiscal year 2002 unless appropriations for salaries
and expenses of the Food and Drug Administration
for such fiscal year (excluding the amount of fees
appropriated for such fiscal year) are equal to or
greater than the amount of appropriations for the
salaries and expenses of the Food and Drug Admin-
istration for the fiscal year 2002 (excluding the
amount of fees appropriated for such fiscal year)
multiplied by the adjustment factor applicable to the
fiscal year involved.
‘‘(2) AUTHORITY.—If the Secretary does not
assess fees under subsection (a) during any portion
of a fiscal year because of paragraph (1) and if at
a later date in such fiscal year the Secretary may as-
sess such fees, the Secretary may assess and collect
such fees, without any modification in the rate, for
animal drug applications, supplemental animal drug
applications, investigational animal drug submis-
sions, sponsors, animal drug establishments and ani-
mal drug products at any time in such fiscal year
notwithstanding the provisions of subsection (a) re-
lating to the date fees are to be paid.
‘‘(g) CREDITING AND AVAILABILITY OF FEES.—
‘‘(1) IN GENERAL.—Fees authorized under sub-
section (a) shall be collected and available for obliga-
tion only to the extent and in the amount provided
in advance in appropriations Acts. Such fees are au-
thorized to be appropriated to remain available until
expended. Such sums as may be necessary may be
transferred from the Food and Drug Administration
salaries and expenses appropriation account without
fiscal year limitation to such appropriation account
for salary and expenses with such fiscal year limita-
tion. The sums transferred shall be available solely
for the process for the review of animal drug appli-
cations.
‘‘(2) 
COLLECTIONS
AND
APPROPRIATION
ACTS.—
‘‘(A) IN
GENERAL.—The fees authorized
by this section—
‘‘(i) shall be retained in each fiscal
year in an amount not to exceed the
amount specified in appropriation Acts, or
otherwise made available for obligation for
such fiscal year; and
‘‘(ii) shall only be collected and avail-
able to defray increases in the costs of the
resources allocated for the process for the
review of animal drug applications (includ-
ing increases in such costs for an addi-
tional number of full-time equivalent posi-
tions in the Department of Health and
Human Services to be engaged in such
process) over such costs, excluding costs
paid from fees collected under this section,
for fiscal year 2002 multiplied by the ad-
justment factor.
‘‘(B) COMPLIANCE WITH REQUIREMENT.—
The Food and Drug Administration will be con-
sidered to have met the requirements of sub-
paragraph (A)(ii) in any fiscal year if—
‘‘(i) the costs funded by appropria-
tions and allocated for the process for the
review of animal drug applications are not
more than 3 percent below the level speci-
fied in (B)(i); or
‘‘(ii) the costs funded by appropria-
tions and allocated for the process for the
review of animal drug applications are
more than 3 percent below the level speci-
fied in (B)(i), and fees assessed for a sub-
sequent fiscal year are decreased by the
amount in excess of 3 percent by which the
costs funded by appropriations and allo-
cated for the process for the review of ani-
mal drug applications fell below the level
specified in (B)(i), provided that the costs
funded by appropriations and allocated for
the process for the review of animal drug
applications are not more than 5 percent
below the level specified in (B)(i).
‘‘(3) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated for fees
under this section—
‘‘(A) $5,000,000 for fiscal year 2003;
‘‘(B) $8,000,000 for fiscal year 2004;
‘‘(C) $10,000,000 for fiscal year 2005;
‘‘(D) $10,000,000 for fiscal year 2006;
and
‘‘(E) $10,000,000 for fiscal year 2007;
as adjusted to reflect adjustments in the total fee
revenues made under this section and changes in the
total amounts collected by animal drug application
fees, supplemental animal drug application fees, ani-
mal drug sponsor fees, animal drug establishment
fees, and animal drug product fees.
‘‘(4) OFFSET.—Any amount of fees collected
for a fiscal year under this section that exceeds the
amount of fees specified in appropriations Acts for
such fiscal year shall be credited to the appropria-
tion account of the Food and Drug Administration
as provided in paragraph (1), and shall be sub-
tracted from the amount of fees that would other-
wise be authorized to be collected under this section
pursuant to appropriation Acts for a subsequent fis-
cal year.
‘‘(h) COLLECTION OF UNPAID FEES.—In any case
where the Secretary does not receive payment of a fee as-
sessed under subsection (a) within 30 days after it is due,
such fee shall be treated as a claim of the United States
Government subject to subchapter II of chapter 37 of title
31, United States Code.
‘‘(i) WRITTEN REQUESTS
FOR WAIVERS, REDUC-
TIONS, AND REFUNDS.—To qualify for consideration for
a waiver or reduction under subsection (d), or for a refund
of any fee collected in accordance with subsection (a), a
person shall submit to the Secretary a written request for
such waiver, reduction, or refund not later than 180 days
after such fee is due.
‘‘(j) CONSTRUCTION.—This section may not be con-
strued to require that the number of full-time equivalent
positions in the Department of Health and Human Serv-
ices, for officers, employees, and advisory committees not
engaged in the process of the review of animal drug appli-
cations, be reduced to offset the number of officers, em-
ployees, and advisory committees so engaged.’’.
SEC. 4. ANNUAL REPORTS.
(a) PERFORMANCE REPORT.—Beginning with fiscal
year 2003, not later than 60 days after the end of each
fiscal year during which fees are collected under part 2
of subchapter C of chapter VII of the Federal Food, Drug,
and Cosmetic Act, the Secretary of Health and Human
Services shall prepare and submit to the Committee on
Energy and Commerce of the House of Representatives
and the Committee on Health, Education, Labor, and
Pensions of the Senate a report concerning the progress
of the Food and Drug Administration in achieving the
goals identified in the letters described in section 2(3) of
this Act toward expediting the animal drug development
process and the review of the new and supplemental ani-
mal drug applications and investigational animal drug
submissions during such fiscal year and the future plans
of the Food and Drug Administration for meeting the
goals.
(b) FISCAL REPORT.—Beginning with fiscal year
2003, not later than 120 days after the end of each fiscal
year during which fees are collected under the part de-
scribed in subsection (a), the Secretary of Health and
Human Services shall prepare and submit to the Com-