
[Federal Register Volume 81, Number 144 (Wednesday, July 27, 2016)]
[Notices]
[Pages 49225-49228]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-17801]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2016-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 
2017

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) 2017. 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 2017.

FOR FURTHER INFORMATION CONTACT: David Haas, Office of Financial 
Management, Food and Drug Administration, 8455 Colesville Rd., COLE-
14202I, Silver Spring, MD 20993-0002, 240-402-9845.

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 2017, the generic drug fee rates are: ANDA ($70,480), PAS 
($35,240), DMF ($51,140), domestic API facility ($44,234), foreign API 
facility ($59,234), domestic FDF facility ($258,646), and foreign FDF 
facility ($273,646). These fees are effective on October 1, 2016, and 
will remain in effect through September 30, 2017.
    Fees for ANDA and PAS will decrease in FY 2017 compared to the FY 
2016 fees due to an increase in the number of submissions estimated to 
be submitted in FY 2017 compared to the estimated number of submissions 
to be submitted in FY 2016. Fees for DMFs will increase in FY 2017 
compared to the FY 2016 fee due to a decrease in the number of 
submissions estimated to be submitted in FY 2017 compared to the 
estimated number of submissions to be submitted in 2016. The fees for 
all types of facilities will increase in FY 2017 compared to the FY 
2016 fees in due to a decrease in the number of facilities that self-
identified for FY 2017.

II. Fee Revenue Amount for FY 2017

    The base revenue amount for FY 2017 is $299 million, as set in the 
statute prior to the inflation and final year adjustments (see section 
744B(c)(2) of the FD&C Act). 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 2017 are described in this 
document.

A. Inflation Adjustment

    GDUFA specifies that the $299 million is to be adjusted for 
inflation increases for FY 2017 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

[[Page 49226]]

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 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).
    Table 1 summarizes the actual cost and total FTE for the specified 
fiscal years, 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 2017. The 3-year average is 1.8759 percent.

              Table 1--FDA Personnel Compensation and Benefits (PC&B) Each Year and Percent Change
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             Fiscal year                     2013               2014               2015          3-Year average
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Total PC&B..........................     $1,927,703,000     $2,054,937,000     $2,232,304,000  .................
Total FTE...........................             13,974             14,555             15,484  .................
PC&B per FTE........................           $137,949           $141,184           $144,168  .................
% Change from Previous Year.........            1.1690%            2.3451%            2.1136%            1.8759%
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    The statute specifies that this 1.8759 percent should be multiplied 
by the proportion of PC&B expended for human generic drug activities 
for the first three of the preceding four fiscal years. Table 2 shows 
the amount of PC&B and the total amount obligated for human generic 
drug activities from FY 2013 through FY 2015.

Table 2--PC&B as a Percent of Fee Revenues Spent on the Process of Human Generic Drug Applications Over the Last
                                                     3 Years
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             Fiscal year                     2013               2014               2015          3-Year average
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PC&B................................       $117,576,760       $171,612,147       $201,116,305  .................
Non-PC&B............................       $149,307,336       $215,469,132       $251,589,013  .................
Total Costs.........................       $266,884,096       $387,081,279       $452,705,318  .................
PC&B percent........................           44.0554%           44.3349%           44.4254%           44.2719%
Non-PC&B percent....................           55.9446%           55.6651%           55.5746%           55.7281%
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    The payroll adjustment is 1.8759 percent multiplied by 44.2719 
percent (or 0.8305 percent).
    The statute specifies that the portion of the inflation adjustment 
for non-PC&B costs for FY 2017 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 three of the preceding four years of 
available data multiplied by the proportion of all costs other than 
PC&B costs to total costs of human generic drug activities (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 their 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 CPI for Baltimore-Washington Area
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                Year                         2013               2014               2015          3-Year average
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Annual CPI..........................            152.500            154.847            155.353  .................
Annual Percent Change...............            1.5232%            1.5390%            0.3268%            1.1297%
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    To calculate the inflation adjustment for non-pay costs, we 
multiply the 3-year average percent change in the CPI (1.1297 percent) 
by the proportion of all costs other than PC&B to total costs of human 
generic drug activities obligated. Since 44.2719 percent was obligated 
for PC&B as shown in Table 2, 55.7281 percent is the portion of costs 
other than PC&B. The non-pay adjustment is 1.1297 percent times 55.7281 
percent, or 0.6296 percent.
    To complete the inflation adjustment for FY 2017, we add the PC&B 
component (0.8305 percent) to the non-PC&B component (0.6296 percent) 
for a total inflation adjustment of 1.4601 percent (rounded) for FY 
2017.
    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 
2017 (1.4601 percent) is compounded by adding one to it, and then 
multiplying it by the compounded inflation adjustment factor for FY 
2016 (1.064759), as published in the Federal Register of August 3, 2015 
(80 FR 46015). The result of this multiplication of the inflation 
factors for the four years since FY 2013 (1.014601 times 1.064759 
percent) becomes the inflation adjustment for FY 2017. For FY 2017, the 
inflation adjustment is 8.0306 percent (rounded). We then add one, 
making 1.080306. Finally, we multiply the FY 2017 base revenue amount 
($299 million) by 1.080306, yielding inflation-adjusted target revenue 
of $323,011,000 (rounded to the nearest thousand dollars).

B. Final Year Adjustment

    For FY 2017, the Secretary may, in addition to the inflation 
adjustment, further increase the fee revenues and fees established if 
such an adjustment is necessary to provide for not more than 3 months 
of operating reserves of carryover user fees for human generic drug 
activities for the first 3 months of FY 2018. Such fees may only be 
used in FY 2018. If such an adjustment is necessary, the rationale for 
the amount of the increase shall be contained in the

[[Page 49227]]

annual notice establishing fee revenues and fees for FY 2017. If the 
Secretary has carryover balances for such activities in excess of 3 
months of such operating reserves, the adjustment shall not be made 
(see section 744B(c)(2) of the FD&C Act).
    After running analyses on the status of GDUFA's operating reserves 
and its estimated balance as of the beginning of FY 2018, FDA estimates 
that the GDUFA program will have carryover balances for such activities 
in excess of 3 months of such operating reserves, thus FDA will not be 
performing a final year adjustment.

III. ANDA and PAS Fees

    Under GDUFA, the FY 2017 ANDA and PAS fees are owed by each 
applicant that submits an ANDA or a PAS, on or after October 1, 2016. 
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 $323,011,000, which is $77,523,000 (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 2017. 
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).
    FDA utilized data from ANDAs and PASs submitted from October 1, 
2013, to May 31, 2016, to estimate the number of new original ANDAs and 
PASs that will incur filing fees in FY 2017. For FY 2017, the Agency 
estimates that approximately 891 new original ANDAs and 439 PASs will 
be submitted and incur filing fees. Not all of the new original ANDAs 
and PASs will be received by the Agency, and some of those not received 
will be resubmitted in the same fiscal year. Therefore, the Agency 
expects that the FAE count for ANDAs and PASs will be 1,100 for FY 
2017.
    The FY 2017 application fee is estimated by dividing the number of 
FAEs that will pay the fee in FY 2017 (1,100) into the fee revenue 
amount to be derived from application fees in FY 2017 ($77,523,000). 
The result, rounded to the nearest $10, is a fee of $70,480 per ANDA. 
The PAS fee is one-half that amount, or $35,240, 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 2013 to May 2016 and 
projecting a 5-year timeline (October 2013 to September 2018), FDA is 
estimating 379 fee-paying DMFs for FY 2017.
    The FY 2017 DMF fee is determined by dividing the DMF target 
revenue by the estimated number of fee-paying DMFs in FY 2017. Section 
744B(b)(2)(A) specifies that the DMF fees will make up six percent of 
the $323,011,000, which is $19,381,000 (rounded to the nearest thousand 
dollars). Dividing the DMF revenue amount ($19,381,000) by the 
estimated fee-paying DMFs (379), and rounding to the nearest $10, 
yields a DMF fee of $51,140 for FY 2017.

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 
2017, FDA has determined that the differential for foreign facilities 
will be $15,000.

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 
$323,011,000, which is $180,886,000 (rounded to the nearest thousand 
dollars).
    In order to calculate the FDF fee, FDA used 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 (77 FR 60125). The total number of FDF 
facilities identified through self-identification was 675. Of the total 
facilities identified as FDF, there were 255 domestic facilities and 
420 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 (420) 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 $6,300,000 of the total FDF fee revenue. 
Subtracting the foreign facility differential fee revenue ($6,300,000), 
from the total FDF facility target revenue ($180,886,000) results in a 
remaining fee revenue balance of $174,586,000. To determine the

[[Page 49228]]

domestic FDF facility fee, we divide the $174,586,000 by the total 
number of facilities (675) which results in a domestic FDF facility fee 
of $258,646. The foreign FDF facility fee is $15,000 more than the 
domestic FDF facility fee, or $273,646.

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 $323,011,000 in fee 
revenue, which is $45,221,000 (rounded down to the nearest thousand 
dollars).
    In order to calculate the API fee, FDA used 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 789. Of the total facilities 
identified as API facilities, there were 101 domestic facilities and 
688 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 (688) 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 
$10,320,000 of the total API fee revenue. Subtracting the foreign 
facility differential fee revenue ($10,320,000) from the total API 
facility target revenue ($45,221,000) results in a remaining balance of 
$34,901,000. To determine the domestic API facility fee, we divide the 
$34,901,000 by the total number of facilities (789) which gives us a 
domestic API facility fee of $44,234. The foreign API facility fee is 
$15,000 more than the domestic API facility fee, or $59,234.

VIII. Fee Schedule for FY 2017

    The fee rates for FY 2017 are set out in Table 4.

                    Table 4--Fee Schedule for FY 2017
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                                                           Fee rates for
                      Fee category                            FY 2017
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Applications:
  Abbreviated New Drug Application (ANDA)...............         $70,480
  Prior Approval Supplement (PAS) to an ANDA............          35,240
Drug Master File (DMF)..................................          51,140
Facilities:
  Active Pharmaceutical Ingredient (API)--Domestic......          44,234
  API--Foreign..........................................          59,234
  Finished Dosage Form (FDF)--Domestic..................         258,646
  FDF--Foreign..........................................         273,646
------------------------------------------------------------------------

IX. Fee Payment Options and Procedures

    The new fee rates are effective October 1, 2016. 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. 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. Once you search for your invoice, click ``Pay 
Now'' to be redirected to Pay.gov. Note that electronic payment options 
are based on the balance due. Payment by credit card is available for 
balances less than $25,000. If the balance exceeds this amount, only 
the ACH option is available. Payments must be drawn on U.S. bank 
accounts as well as U.S. credit cards.
    FDA has partnered with the U.S. Department of the Treasury to 
utilize Pay.gov, a Web-based payment application, for online electronic 
payment. The 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. 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 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: 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., 14th 
Floor, Silver Spring, MD 20993-0002. The tax identification number of 
FDA is 53-0196965.

    Dated: July 22, 2016.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2016-17801 Filed 7-26-16; 8:45 am]
 BILLING CODE 4164-01-P


