[Federal Register Volume 83, Number 145 (Friday, July 27, 2018)]
[Notices]
[Pages 35649-35653]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-16067]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2016-N-0007]


Generic Drug User Fee Rates for Fiscal Year 2019

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Federal Food, Drug, and Cosmetic Act (FD&C Act), as 
amended by the Generic Drug User Fee Amendments of 2017 (GDUFA II), 
authorizes the Food and Drug Administration (FDA, Agency, or we) to 
assess and collect fees for abbreviated new drug applications (ANDAs), 
drug master files (DMFs), generic drug active pharmaceutical ingredient 
(API) facilities, finished dosage form (FDF) facilities, contract 
manufacturing organization (CMO) facilities, and generic drug applicant 
program user fees. In this document, FDA is announcing fiscal year (FY) 
2019 rates for GDUFA II fees.

FOR FURTHER INFORMATION CONTACT: Melissa Hurley, Office of Financial 
Management, Food and Drug Administration, 8455 Colesville Rd., COLE-
14202J, Silver Spring, MD 20993-0002, 240-402-4585.

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 types of applications for human generic 
drug products; (2) certain facilities where APIs and FDFs are produced; 
(3) certain DMFs associated with human generic drug products; and (4) 
generic drug applicants who have approved ANDAs (the program fee) (see 
section 744B(a)(2)-(5) of the FD&C Act).
    GDUFA II stipulates that user fees should total $493,600,000 
annually adjusted each year for inflation. For FY 2019, the generic 
drug fee rates are: ANDA ($178,799), DMF ($55,013), domestic API 
facility ($44,226), foreign API facility ($59,226), domestic FDF 
facility ($211,305), foreign FDF facility ($226,305), domestic CMO 
facility ($70,435), foreign CMO facility ($85,435), large size 
operation generic drug applicant program ($1,862,167), medium size 
operation generic drug applicant program ($744,867), and small business 
generic drug applicant program ($186,217). These fees are effective on 
October 1, 2018, and will remain in effect through September 30, 2019.

II. Fee Revenue Amount for FY 2019

    The base revenue amount for FY 2019 is $493,600,000, as set in the 
statute (see section 744B(b)(1) of the FD&C Act). GDUFA II 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 II, please 
refer to the FDA website (https://www.fda.gov/gdufa). The ANDA, DMF, 
API facility, FDF facility, CMO facility, and generic drug applicant 
program fee (GDUFA program fee) calculations for FY 2019 are described 
in this document.
    GDUFA II specifies that the $493,600,000 is to be adjusted for 
inflation increases for FY 2019 using two separate adjustments--one for 
personnel compensation and benefits (PC&B) and one for non-PC&B costs 
(see sections 744B(c)(1)(B) and (C) 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 3 of the 4 
preceding fiscal years, multiplied by the proportion of PC&B costs to 
total FDA costs of human generic drug activities for the first 3 of the 
preceding 4 fiscal years (see section 744B(c)(1)(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 3 of the 4 fiscal 
years preceding FY 2019. The 3-year average is 2.4152 percent.

              Table 1--FDA Personnel Compensation and Benefits (PC&B) Each Year and Percent Change
----------------------------------------------------------------------------------------------------------------
             Fiscal year                     2015               2016               2017          3-Year average
----------------------------------------------------------------------------------------------------------------
Total PC&B..........................     $2,232,304,000     $2,414,728,159     $2,581,551,000  .................
Total FTE...........................             15,484             16,381             17,022  .................
PC&B per FTE........................           $144,168           $147,408           $151,660  .................
Percent Change from Previous Year...             2.1136             2.2474             2.8845             2.4152
----------------------------------------------------------------------------------------------------------------

    The statute specifies that this 2.4152 percent should be multiplied 
by the proportion of PC&B expended for human generic drug activities 
for the first 3 of the preceding 4 fiscal years. Table 2 shows the 
amount of PC&B and the total amount obligated for human generic drug 
activities from FY 2015 through FY 2017.

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                     2015               2016               2017          3-Year average
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PC&B................................       $201,116,305       $242,963,571       $271,748,229  .................
Non-PC&B............................       $251,589,013       $250,987,599       $262,058,852  .................
Total Costs.........................       $452,705,318       $493,951,170       $533,807,081  .................

[[Page 35650]]

 
PC&B Percent........................            44.4254            49.1878            50.9076            48.1736
Non-PC&B Percent....................            55.5746            50.8122            49.0924            51.8264
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    The payroll adjustment is 2.4152 percent multiplied by 48.1736 
percent (or 1.1635 percent).
    The statute specifies that the portion of the inflation adjustment 
for non-PC&B costs for FY 2019 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 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. The data are published by the Bureau of 
Labor Statistics and can be found on its website at: https://data.bls.gov/pdq/SurveyOutputServlet?data_tool=dropmap&series_id=CUURA311SA0,CUUSA311SA0.


             Table 3--Annual and 3-Year Average Percent Change in CPI for Baltimore-Washington Area
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                Year                         2015               2016               2017          3-Year average
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Annual CPI..........................            155.353            157.180            159.202  .................
Annual Percent Change...............             0.3268             1.1760             1.2864             0.9297
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    To calculate the inflation adjustment for non-pay costs, we 
multiply the 3-year average percent change in the CPI (0.9297 percent) 
by the proportion of all costs other than PC&B to total costs of human 
generic drug activities obligated. Because 48.1736 percent was 
obligated for PC&B as shown in table 2, 51.8264 percent is the portion 
of costs other than PC&B. The non-pay adjustment is 0.9297 percent 
times 51.8264 percent, or 0.4818 percent.
    To complete the inflation adjustment for FY 2019, we add the PC&B 
component (1.1635 percent) to the non-PC&B component (0.4818 percent) 
for a total inflation adjustment of 1.6453 percent (rounded), making 
1.016453. We then multiply the base revenue amount for FY 2019 
($493,600,000) by 1.016453, yielding an inflation-adjusted amount of 
$501,721,000 (rounded to the nearest thousand dollars).

III. ANDA Filing Fee

    Under GDUFA II, the FY 2019 ANDA filing fee is owed by each 
applicant that submits an ANDA on or after October 1, 2018. This fee is 
due on the submission date of the ANDA. Section 744B(b)(2)(B) of the 
FD&C Act specifies that the ANDA fee will make up 33 percent of the 
$501,721,000, which is $165,567,930.
    To calculate the ANDA fee, FDA estimated the number of full 
application equivalents (FAEs) that will be submitted in FY 2019. The 
submissions are broken down into three categories: New originals 
(submissions that have not been received by FDA previously); 
submissions that have been refused to receive (RTR) for reasons other 
than failure to pay fees; and applications that are resubmitted after 
having been RTR for reasons other than failure to pay fees. An ANDA 
counts as one FAE; however, 75 percent of the fee paid for an ANDA that 
has been RTR shall be refunded according to GDUFA II if (1) the ANDA is 
refused for a cause other than failure to pay fees, or (2) the ANDA has 
been withdrawn prior to receipt (section 744B(a)(2)(D)(i) of the FD&C 
Act). Therefore, an ANDA that is considered not to have been received 
by FDA due to reasons other than failure to pay fees or withdrawn prior 
to receipt counts as one-fourth of an FAE. After an ANDA has been RTR, 
the applicant has the option of resubmitting. For user fee purposes, 
these resubmissions are equivalent to new original submissions--ANDA 
resubmissions are charged the full amount for an application (one FAE).
    FDA utilized data from ANDAs submitted from October 1, 2013, to 
April 30, 2018, to estimate the number of new original ANDAs that will 
incur filing fees in FY 2019. For FY 2019, the Agency estimates that 
approximately 918 new original ANDAs will be submitted and incur filing 
fees. Not all of the new original ANDAs 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 will 
be 926 for FY 2019.
    The FY 2019 application fee is estimated by dividing the number of 
FAEs that will pay the fee in FY 2019 (926) into the fee revenue amount 
to be derived from ANDA application fees in FY 2019 ($165,567,930). The 
result, rounded to the nearest dollar, is a fee of $178,799 per ANDA.
    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.

IV. DMF Fee

    Under GDUFA II, 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 DMF. This fee is due on 
the earlier of the date on which the first generic drug submission is 
submitted that references the associated DMF or the date on which the 
drug master file holder requests the initial completeness assessment. 
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.
    To calculate the DMF fee, FDA assessed the volume of DMF

[[Page 35651]]

submissions over time. The Agency assessed DMFs from October 1, 2016, 
to April 30, 2018, and concluded that averaging the number of fee-
paying DMFs provided the most accurate model for predicting fee-paying 
DMFs for FY 2019. The monthly average of paid DMF submissions the 
Agency received in FY 2017 and FY 2018 is 38. To determine the FY 2019 
projected number of fee-paying DMFs, the average of 38 DMF submissions 
is multiplied by 12 months, which results in 456 estimated FY 2019 fee-
paying DMFs. FDA is estimating 456 fee-paying DMFs for FY 2019.
    The FY 2019 DMF fee is determined by dividing the DMF target 
revenue by the estimated number of fee-paying DMFs in FY 2019. Section 
744B(b)(2)(A) of the FD&C Act specifies that the DMF fees will make up 
5 percent of the $501,721,000, which is $25,086,050. Dividing the DMF 
revenue amount ($25,086,050) by the estimated fee-paying DMFs (456), 
and rounding to the nearest dollar, yields a DMF fee of $55,013 for FY 
2019.

V. Foreign Facility Fee Differential

    Under GDUFA II, the fee for a facility located outside the United 
States and its territories and possessions shall be $15,000 higher than 
the amount of the fee for a facility located in the United States and 
its territories and possessions. The basis for this differential is the 
extra cost incurred by conducting an inspection outside the United 
States and its territories and possessions.

VI. FDF and CMO Facility Fees

    Under GDUFA II, the annual FDF facility fee is owed by each person 
who owns an FDF facility that is identified in at least one approved 
generic drug submission owned by that person or his affiliates. The CMO 
facility fee is owed by each person who owns an FDF facility that is 
identified in at least one approved ANDA but is not identified in an 
approved ANDA held by the owner of that facility or its affiliates. 
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 and CMO facility fee revenue will make up 20 
percent of the $501,721,000, which is $100,344,200.
    To calculate the fees, data from FDA's Integrity Services (IS) were 
utilized as the primary source of facility information for determining 
the denominators of each facility fee type. IS is the master data 
steward for all facility information provided in generic drug 
submissions received by FDA. A facility's reference status in an 
approved generic drug submission is extracted directly from submission 
data rather than relying on data from self-identification. This 
information provided the number of facilities referenced as FDF 
manufacturers in at least one approved generic drug submission. Based 
on FDA's IS data, the FDF and CMO facility denominators are 180 FDF 
domestic, 216 FDF foreign, 73 CMO domestic, and 97 CMO foreign 
facilities for FY 2019.
    GDUFA II specifies that the CMO facility fee is to be equal to one-
third the amount of the FDF facility fee. Therefore, to generate the 
target collection revenue amount from FDF and CMO facility fees 
($100,344,200), FDA must weight a CMO facility as one-third of an FDF 
facility. FDA set fees based on the estimate of 180 FDF domestic, 216 
FDF foreign, 24.33 CMO domestic (73 multiplied by one-third), and 32.33 
CMO foreign facilities (97 multiplied by one-third), which equals 
452.66 total weighted FDF and CMO facilities for FY 2019.
    To calculate the fee for domestic facilities, FDA first determines 
the total fee revenue that will result from the foreign facility 
differential by subtracting the fee revenue resulting from the foreign 
facility fee differential from the target collection revenue amount 
($100,344,200) as follows. The foreign facility fee differential 
revenue equals the foreign facility fee differential ($15,000) 
multiplied by the number of FDF foreign facilities (216) plus the 
foreign facility fee differential ($15,000) multiplied by the number of 
CMO foreign facilities (97), totaling $4,695,000. This results in 
foreign fee differential revenue of $4,695,000 from the total FDF and 
CMO facility fee target collection revenue. Subtracting the foreign 
facility differential fee revenue ($4,695,000) from the total FDF and 
CMO facility target collection revenue ($100,344,200) results in a 
remaining facility fee revenue balance of $95,649,200. To determine the 
domestic FDF facility fee, FDA divides the $95,649,200 by the total 
weighted number of FDF and CMO facilities (452.66), which results in a 
domestic FDF facility fee of $211,305. The foreign FDF facility fee is 
$15,000 more than the domestic FDF facility fee, or $226,305.
    According to GDUFA II, the domestic CMO fee is calculated as one-
third the amount of the domestic FDF facility fee. Therefore, the 
domestic CMO fee is $70,435, rounded to the nearest dollar. The foreign 
CMO fee is calculated as the domestic CMO fee plus the foreign fee 
differential of $15,000. Therefore, the foreign CMO fee is $85,435.

VII. API Facility Fee

    Under GDUFA II, the annual API facility fee is owed by each person 
who owns a facility that is identified in (1) at least one approved 
generic drug submission or (2) in a Type II API DMF referenced in at 
least one approved 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 the API facility fee 
will make up 7 percent of $501,721,000 in fee revenue, which is 
$35,120,470.
    To calculate the API facility fee, data from FDA's IS were utilized 
as the primary source of facility information for determining the 
denominator. As stated above, IS is the master data steward for all 
facility information provided in generic drug submissions received by 
FDA. A facility's reference status in an approved generic drug 
submission is extracted directly from submission data rather than 
relying on data from self-identification. This information provided the 
number of facilities referenced as API manufacturers in at least one 
approved generic drug submission.
    The total number of API facilities identified was 613; of that 
number, 79 were domestic and 534 were foreign facilities. The foreign 
facility differential is $15,000. To calculate the fee for domestic 
facilities, FDA must first subtract the fee revenue that will result 
from the foreign facility fee differential. FDA takes the foreign 
facility differential ($15,000) and multiplies it by the number of 
foreign facilities (534) to determine the total fee revenue that will 
result from the foreign facility differential. As a result of that 
calculation, the foreign fee differential revenue will make up 
$8,010,000 of the total API fee revenue. Subtracting the foreign 
facility differential fee revenue ($8,010,000) from the total API 
facility target revenue ($35,120,470) results in a remaining balance of 
$27,110,470. To determine the domestic API facility fee, we divide the 
$27,110,470 by the total number of facilities (613), which gives us a 
domestic API facility fee of $44,226. The foreign API facility fee is 
$15,000 more than the domestic API facility fee, or $59,226.

VIII. Generic Drug Applicant Program Fee

    Under GDUFA II, if a person and its affiliates own at least one but 
not more than five approved ANDAs on October 1, 2018, the person and 
its affiliates shall owe a small business GDUFA program fee. If a 
person and its affiliates own at least 6 but not more than 19

[[Page 35652]]

approved ANDAs, the person and its affiliates shall owe a medium size 
operation GDUFA program fee. If a person and its affiliates own at 
least 20 approved ANDAs, the person and its affiliates shall owe a 
large size operation GDUFA program fee. These fees are due no later 
than the first business day on or after October 1 of each such year. 
Section 744B(b)(2)(E) of the FD&C Act specifies the GDUFA program fee 
will make up 35 percent of $501,721,000 in fee revenue, which is 
$175,602,350.
    To determine the appropriate number of applicants for each tier, 
the Agency has posted lists of approved ANDAs on the FDA website 
(https://www.fda.gov/gdufa) and asked applicants on the list to claim 
which ANDAs and affiliates belong to the parent company. The original 
list of approved ANDAs came from the Agency's Document Archiving, 
Reporting, and Regulatory Tracking System (DARRTS), which included all 
ANDAs with the status of ``approved'' as of April 30, 2018.
    In determining the appropriate number of approved ANDAs, the Agency 
has factored in a number of variables that could affect the collection 
of the target revenue: (1) Inactive ANDAs--applicants who have not 
submitted an annual report for one or more of their approved 
applications within the past 2 years; (2) FY 2018 Program Fee Arrears 
List--applicants who failed to satisfy the FY 2018 program fee and were 
unresponsive to attempts to collect; and (3) Prediction of Approvals 
Due to Goal Dates and Office of Generic Drugs Approval Rate--Due to the 
low percentage of additional approved ANDAs for a specified time period 
and the difficulties in determining how this population would affect 
the program fee tier of each company, this variable was not included in 
the determination of the FY 2019 GDUFA program fee. The list of 
original approved ANDAs from the DARRTS database as of April 30, 2018, 
shows 259 applicants in the small business tier, 62 applicants in the 
medium size tier, and 58 applicants in the large size tier. This list 
also takes into account all the withdrawals, consolidations, and 
transfer of ownerships from industry as of April 30, 2018. Factoring in 
all the variables for the second year of GDUFA II, the Agency estimates 
there will be 177 applicants in the small business tier, 49 applicants 
in the medium size tier, and 57 applicants in the large size tier for 
FY 2019.
    To calculate the GDUFA program fee, GDUFA II provides that large 
size operation generic drug applicants pay the full fee, medium size 
operation applicants pay two-fifths of the full fee, and small business 
applicants pay one-tenth of the full fee. To generate the target 
collection revenue amount from GDUFA program fees ($175,602,350), we 
must weigh medium and small tiered applicants as a subset of a large 
size operation generic drug applicant. FDA will set fees based on the 
weighted estimate of 17.70 applicants in the small business tier (177 
multiplied by 10 percent), 19.60 applicants in the medium size tier (49 
multiplied by 40 percent), and 57 applicants in the large size tier, 
arriving at 94.30 total weighted applicants for FY 2019.
    To generate the large size operation GDUFA program fee, FDA divides 
the target revenue amount of $175,602,350 by 94.30, which equals 
$1,862,167. The medium size operation GDUFA program fee is 40 percent 
of the full fee ($744,867), and the small business operation GDUFA 
program fee is 10 percent of the full fee ($186,217).

IX. Fee Schedule for FY 2019

    The fee rates for FY 2019 are set out in table 4.

                    Table 4--Fee Schedule for FY 2019
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                                                          Fees rates for
                      Fee category                            FY 2019
------------------------------------------------------------------------
Applications:                                             ..............
    Abbreviated New Drug Application (ANDA).............        $178,799
    Drug Master File (DMF)..............................          55,013
Facilities:                                               ..............
Active Pharmaceutical Ingredient (API) Domestic.........          44,226
    API--Foreign........................................          59,226
    Finished Dosage Form (FDF)--Domestic................         211,305
    FDF--Foreign........................................         226,305
    Contract Manufacturing Organization (CMO)--Domestic.          70,435
    CMO--Foreign........................................          85,435
GDUFA Program:                                            ..............
    Large size operation generic drug applicant.........       1,862,167
    Medium size operation generic drug applicant........         744,867
    Small business operation generic drug applicant.....         186,217
------------------------------------------------------------------------

X. Fee Payment Options and Procedures

    The new fee rates are effective October 1, 2018. To pay the ANDA, 
DMF, API facility, FDF facility, CMO facility, and GDUFA program fees, 
a Generic Drug User Fee Cover Sheet must be completed, available at 
https://www.fda.gov/gdufa and https://userfees.fda.gov/OA_HTML/gdufaCAcdLogin.jsp, and a user fee identification (ID) number must be 
generated. 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, credit 
card, 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. (Note: IOnly full payments are 
accepted; no partial payments can be made online.) Once an invoice is 
located, ``Pay Now'' should be selected to be redirected to https://www.pay.gov/public/home (Pay.gov). 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 made using U.S. bank accounts as 
well as U.S. credit cards.
    FDA has partnered with the U.S. Department of the Treasury to 
utilize Pay.gov, a web-based payment application, for online electronic 
payment. The Pay.gov feature is available on the FDA website after 
completing the Generic Drug User Fee

[[Page 35653]]

Cover Sheet and generating the user fee ID number.
    The user fee ID number must be included on the check, bank draft, 
or postal money order and must be made payable to the order of the Food 
and Drug Administration. Payments 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. For questions concerning courier 
delivery, U.S. Bank can be contacted at 314-418-4013. This telephone 
number is only for questions about courier delivery.) The FDA post 
office box number (P.O. Box 979108) must be written on the check, bank 
draft, or postal money order.
    For payments made by wire transfer, the unique user fee ID number 
must be referenced. Without the unique user fee ID number, the payment 
may not be applied. If the payment amount is not applied, the invoice 
amount will be referred to collections. The originating financial 
institution may charge a wire transfer fee. Applicable wire transfer 
fees must be included with payment to ensure fees are fully paid. 
Questions about wire transfer fees should be addressed to the financial 
institution. The following account information should be used to send 
payments by wire transfer: U.S. Department of Treasury, TREAS NYC, 33 
Liberty St., New York, NY 10045, account number: 75060099, routing 
number: 021030004, SWIFT: FRNYUS33. FDA's tax identification number is 
53-0196965.

    Dated: July 24, 2018.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2018-16067 Filed 7-26-18; 8:45 am]
 BILLING CODE 4164-01-P


