[Federal Register Volume 87, Number 144 (Thursday, July 28, 2022)]
[Notices]
[Pages 45339-45345]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-16176]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2022-N-1607]


Animal Drug User Fee Rates and Payment Procedures for Fiscal Year 
2023

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA or Agency) is announcing 
the fee rates and payment procedures for fiscal year (FY) 2023 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 supplemental animal drug applications, 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 2023.

DATES: The application fee rates are effective for applications 
submitted on or after October 1, 2022, and will remain in effect 
through September 30, 2023.

FOR FURTHER INFORMATION CONTACT: Visit FDA's website at https://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, [email protected]. For general questions, you may also 
email FDA's Center for Veterinary Medicine (CVM) at: 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    Section 740 of the FD&C Act (21 U.S.C. 379j-12), as amended by 
ADUFA IV, establishes four different types of user fees: (1) fees for 
certain types of animal drug applications and supplemental animal drug 
applications; (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 FYs 2019 through 2023, the FD&C Act establishes the base 
revenue amount for each fiscal year (21 U.S.C. 379j-12(b)(1)). Base 
revenue amounts are subject to adjustment for inflation and workload 
(21 U.S.C. 379j-12(c)(2) and (3)). Beginning with FY 2021, the annual 
fee revenue amounts are also subject to adjustment to reduce workload-
based increases by the amount of certain excess collections or to 
account for certain collection shortfalls (21 U.S.C. 379j-12(c)(3) and 
(g)(5)). Fees for applications, products, establishments, 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: (1) revenue from application fees shall be 20 percent of total 
fee revenue; (2) revenue from product fees shall be 27 percent of total 
fee revenue; (3) revenue from establishment fees shall be 26 percent of 
total fee revenue; and (4) revenue from sponsor fees shall be 27 
percent of total fee revenue (21 U.S.C. 379j-12(b)(2)). The target 
revenue amounts for each fee category for FY 2023, are as follows: for 
application fees, the target revenue amount is $6,428,800; for product 
fees, the target revenue amount is $8,678,880; for establishment fees, 
the target revenue amount is $8,357,440 and for sponsor fees, the 
target revenue amount is $8,678,880.
    For FY 2023, the animal drug user fee rates are: $659,364 for an 
animal drug application; $329,682 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)); $11,375 for the 
annual product fee; $167,149 for the annual establishment fee; and 
$149,636 for an annual sponsor fee. FDA will issue invoices for FY 2023 
product, establishment, and sponsor fees by December 31, 2022, and 
payment will be due by January 31, 2023. The application fee rates are 
effective for applications submitted on or after October 1, 2022, and 
will remain in effect through September 30, 2023. 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 
ADUFA program.

II. Revenue Amount for FY 2023

A. Statutory Fee Revenue Amounts

    ADUFA IV, Title I of Public Law 115-234, specifies that the 
aggregate base fee revenue amount for FY 2023 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

    ADUFA IV specifies that the annual fee revenue amount is to be 
adjusted for inflation increases for FY 2020 and subsequent fiscal 
years, 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 position (FTE) at 
FDA for the first 3 of the 4 preceding fiscal years of available data, 
multiplied by the average proportion of PC&B costs to total FDA costs 
for the first 3 of the 4 preceding fiscal years of available data. 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 the actual cost and FTE data for the specified 
fiscal years, provides the percent change from the previous fiscal 
year, and provides the average percent change over the first 3 of the 4 
fiscal years preceding FY 2023. The 3-year average is 1.3918 percent.

                                 Table 1--FDA PC&B Each Year and Percent Change
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                                                                                                      3-Year
                                                 FY 2019           FY 2020           FY 2021          average
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Total PC&B................................    $2,620,052,000    $2,875,592,000    $3,039,513,000  ..............
Total FTE.................................            17,144            17,535            18,501  ..............
PC&B per FTE..............................           152,826           163,992           164,289  ..............

[[Page 45340]]

 
Percent Change From Previous Year.........          -3.3120%           7.3063%           0.1811%         1.3918%
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    The statute specifies that this 1.3918 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 
fiscal years.

                                Table 2--PC&B as a Percent of Total Costs at FDA
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                                                                                                      3-Year
                                                 FY 2019           FY 2020           FY 2021          average
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Total PC&B................................    $2,620,052,000    $2,875,592,000    $3,039,513,000  ..............
Total Costs...............................     5,663,389,000     6,039,321,000     6,049,798,000  ..............
PC&B Percent..............................          46.2630%          47.6145%          50.2416%        48.0397%
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    The portion of the inflation adjustment relating to payroll costs 
is 1.3918 percent multiplied by 48.0397 percent, or 0.6686 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 average proportion of all 
costs other than PC&B costs to total FDA costs for the first 3 of the 4 
preceding fiscal years. 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''). To 
continue applying a CPI that best reflects the geographic region in 
which FDA is headquartered and that provides the most current data 
available, FDA is using the Washington-Arlington-Alexandria less food 
and energy index when 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 are 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
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                                                                                                      3-Year
                                                 FY 2019           FY 2020           FY 2021          average
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Annual CPI................................            275.84            278.44            287.14  ..............
Annual Percent Change.....................           1.2580%           0.9411%           3.1271%         1.7754%
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    To calculate the inflation adjustment for non-payroll costs, we 
multiply 1.7754 percent by the proportion of all costs other than PC&B 
to total FDA costs. Since 48.0397 percent was obligated for PC&B as 
shown in table 2, 51.9603 percent is the portion of costs other than 
PC&B (100 percent minus 48.0397 percent equals 51.9603 percent). The 
portion of the inflation adjustment relating to non-payroll costs is 
1.7754 percent times 51.9603 percent, or 0.9225 percent.
    Next, we add the payroll component (0.6686 percent) to the non-
payroll component (0.9225 percent), for an inflation adjustment of 
1.5911 percent for FY 2023.
    ADUFA IV provides for the inflation adjustment to be compounded 
each fiscal year after FY 2020 (see 21 U.S.C. 379j-12(c)(2)(B)). The 
inflation adjustment for FY 2023 (1.5911 percent) is compounded by 
adding 1 and then multiplying by 1 plus the inflation adjustment factor 
for FY 2022 (5.7121 percent), as published in the Federal Register on 
July 28, 2021 (86 FR 40595), which equals 1.0739 (rounded) (1.0159 x 
1.0571) for FY 2023. We then multiply the base revenue amount for FY 
2023 ($29,931,240) by 1.0739, yielding an inflation adjusted amount of 
$32,144,386.

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, 2022.

[[Page 45341]]

    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/submissions, 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. At the 
bottom right of the table, the sum of the values in column 5 is 
calculated, reflecting a total change in workload of negative 4.5044 
percent for FY 2023. This is the workload adjuster for FY 2023.

                                     Table 4--Workload Adjuster Calculation
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                                   Column 1        Column 2        Column 3        Column 4         Column 5
                               ---------------------------------------------------------------------------------
       Application type          Year average    Latest 5-year                     Weighting        Weighted
                                 (base years)       average     Percent change      factor       percent change
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New Animal Drug Application              16.40           12.80        -21.9512            0.04           -0.9235
 (NADAs)......................
Supplemental NADAs With Safety           11.60            9.00        -22.4138            0.03           -0.5627
 or Efficacy Data.............
Manufacturing Supplements.....          353.20          367.80          4.1336            0.19            0.7751
Investigational Study                   183.20          170.40         -6.9869            0.57           -3.9856
 Submissions..................
Investigational Protocol                236.40          239.00          1.0998            0.17            0.1923
 Submissions..................
FY 2023 ADUFA IV Workload       ..............  ..............  ..............  ..............           -4.5044
 Adjuster.....................
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    Under no circumstances shall 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 2023 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.
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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 FYs 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 for workload. Since there is no 
workload-based increase in FY 2023, this provision does not apply.

E. Recovery of Collection Shortfalls

    Under section 740(g)(5)(A)(iii) of the FD&C Act, 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 FY 2021 and FY 2022 (including estimated collections 
for FY 2022) falls below the cumulative amount of fees authorized for 
FYs 2021 and 2022.
    In FY 2021, the total revenue amount authorized was $33,339,000 and 
the total amount of fees collected for FY 2021 as of May 31, 2022, was 
$33,811,815. The total revenue amount authorized for FY 2022 is 
$31,641,000 and the estimated collections for FY 2022 is projected to 
be $30,570,000. The cumulative amount of fees collected and estimated 
for FYs 2021 and 2022 is below the total authorized revenue amount by 
$1,071,000. Therefore, the recovery of collection shortfalls provision 
of section 740(g)(5)(A)(iii) is invoked. The next section details the 
reduction of the shortfall-based fee increase by prior year excess 
collections.

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) would result in a fee increase 
for that fiscal year to recover a collection shortfall in a prior year, 
FDA must reduce the increase by the amount of any excess collections 
for preceding fiscal years (after FY 2018) that have not already been 
applied to reduce workload-based fee increases. FDA's calculations 
under section 740(g)(5)(A) would result in a fee increase for FY 2023 
to recover a collection shortfall of $1,071,000. FDA also calculates 
that it had $795,666 of excess collections in FY 2020 and $329,934 of 
excess collections in FY 2021 that have not previously been applied to 
reduce workload-based fee increases, for a total of $1,125,600 in 
excess collections. Because the FYs 2020 and 2021 excess collections 
not previously applied to a workload-based fee increase exceed the 
projected shortfall in FY 2022, there is a reduction of the shortfall-
based fee increase under section 740(g)(5)(B). Therefore, no recovery 
of collections shortfall will be added to the FY 2023 target revenue.

G. Final Year Adjustment

    For FY 2023, FDA may, in addition to other adjustments under 
section 740(c) of the FD&C Act, further increase the fees, if such an 
adjustment is necessary, to provide for up to 3 months of operating 
reserves of carryover user fees for the process for the review of 
animal drug applications for the first 3 months of FY 2024. If FDA has 
carryover balances for the process for the review of animal drug 
applications in excess of 3 months of such operating reserves, then 
this adjustment will not be made. (See 21 U.S.C. 379j-12(c)(4).) Since 
FDA currently has an excess of 3 months of such operating reserves, 
this adjustment will not be made for FY 2023.

H. FY 2023 Fee Revenue Amounts

    The fee revenue amount for FY 2023, after considering the possible 
adjustments under sections 740(c) and (g)(5) of the FD&C Act, is 
$32,144,000 (rounded to the nearest thousand dollars). ADUFA IV 
specifies that this revenue amount is to be divided as follows: 20 
percent, or a total of $6,428,800, is to come from application fees; 27 
percent, or a total of $8,678,880, is to come from product fees; 26 
percent, or a total of $8,357,440, is to come from establishment fees; 
and 27 percent, or a total of $8,678,880, is to come from sponsor fees 
(21 U.S.C. 379j-12(b)).

III. Application Fee Calculations for FY 2023

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

    Each person who submits an animal drug application or a 
supplemental

[[Page 45342]]

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 those 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 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.
    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 $6,428,800 in 
fee revenue for FY 2023. 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 $6,428,800, FDA must first make some 
assumptions about the number of fee-paying applications and 
supplemental applications the Agency will receive in FY 2023.
    The Agency knows the number of applications that have been 
submitted in previous fiscal years. That number fluctuates annually. In 
estimating the fee revenue to be generated by animal drug application 
fees in FY 2023, FDA is assuming that the number of applications for 
which fees will be paid in FY 2023 will equal the average number of 
applications over the 4 most recent completed fiscal years of the ADUFA 
program (FY 2018 to FY 2021). FDA decided to use a 4-year average for 
the FY 2023 fee rate calculation rather than a 5-year average. FDA made 
this adjustment because in the past 5 FY, 1 FY had an abnormally low 
number of applications. Thus, FDA used a 4-year average to remove this 
outlier from the forecast method, which resulted in a lower application 
fee rate.
    Over the 4 most recent completed fiscal years, the average number 
of animal drug applications that would have been subject to the full 
fee was 5.25. 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 
9.0.
    Based on the previous assumptions, FDA is estimating that it will 
receive a total of 9.75 fee-paying animal drug applications in FY 2023 
(5.25 applications paying a full fee and 9.00 applications paying a 
half fee).

B. Application Fee Rates for FY 2023

    FDA must set the fee rates for FY 2023 so that the estimated 9.75 
applications that pay the fee will generate a total of $6,428,800. To 
generate this amount, the fee for an animal drug application, rounded 
to the nearest dollar, will have to be $659,364, 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 $329,682.

IV. Animal Drug Product Fee Calculations for FY 2023

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 
$8,678,880 in fee revenue for FY 2023.
    To set animal drug product fees to realize $8,678,880, FDA must 
make some assumptions about the number of products for which these fees 
will be paid in FY 2023. FDA gathered 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 supplemental animal drug application pending after 
September 1, 2003. As of May 2022, FDA estimates that there is a total 
of 779 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 779 
products will be subject to this fee in FY 2023.
    In estimating the fee revenue to be generated by animal drug 
product fees in FY 2023, FDA is assuming that 2 percent of the products 
invoiced, or 16, will not pay fees in FY 2023 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 763 (779 minus 
16) products will be subject to product fees in FY 2023.

B. Product Fee Rates for FY 2023

    FDA must set the fee rates for FY 2023 so that the estimated 763 
products for

[[Page 45343]]

which fees are paid will generate a total of $8,678,880. To generate 
this amount will require the fee for an animal drug product, rounded to 
the nearest dollar, to be $11,375.

V. Animal Drug Establishment Fee Calculations for FY 2023

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 $8,357,440 in fee revenue for FY 
2023.
    To set animal drug establishment fees to realize $8,357,440, FDA 
must make some assumptions about the number of establishments for which 
these fees will be paid in FY 2023. FDA gathered data on all animal 
drug establishments and matched this to the list of all persons who had 
an animal drug application or supplemental animal drug application 
pending after September 1, 2003. As of May 2022, FDA estimates that 
there is a total of 54 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 54 
establishments will be subject to this fee in FY 2023.
    In estimating the fee revenue to be generated by animal drug 
establishment fees in FY 2023, FDA is assuming that 7 percent of the 
establishments invoiced, or four establishments, will not pay fees in 
FY 2023 due to fee waivers and reductions. FDA has made this estimate 
at 7 percent this year, based on historical data over the past 5 
completed fiscal years.
    Accordingly, the Agency estimates that a total of 50 (54 minus 4) 
establishments will be subject to establishment fees in FY 2023.

B. Establishment Fee Rates for FY 2023

    FDA must set the fee rates for FY 2023 so that the fees paid for 
the estimated 50 establishments will generate a total of $8,357,440. To 
generate this amount will require the fee for an animal drug 
establishment, rounded to the nearest dollar, to be $167,149.

VI. Animal Drug Sponsor Fee Calculations for FY 2023

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 $8,678,880 in 
fee revenue for FY 2023.
    To set animal drug sponsor fees to realize $8,678,880, FDA must 
make some assumptions about the number of sponsors who will pay these 
fees in FY 2023. FDA estimates that a total of 182 sponsors will meet 
this definition in FY 2023.
    In estimating the fee revenue to be generated by animal drug 
sponsor fees in FY 2023, FDA is assuming that 68 percent of the 
sponsors invoiced, or 124, will not pay sponsor fees in FY 2023 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 58 (182 minus 
124) sponsors will be subject to and pay sponsor fees in FY 2023.

B. Sponsor Fee Rates for FY 2023

    FDA must set the fee rates for FY 2023 so that the estimated 58 
sponsors that pay fees will generate a total of $8,678,880. To generate 
this amount will require the fee for an animal drug sponsor, rounded to 
the nearest dollar, to be $149,636.

VII. Fee Schedule for FY 2023
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    \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.
---------------------------------------------------------------------------

    The fee rates for FY 2023 are summarized in table 5.

                       Table 5--FY 2023 Fee Rates
------------------------------------------------------------------------
                                                           Fee rate for
              Animal drug user fee category                   FY 2023
------------------------------------------------------------------------
Animal Drug Application Fees:
    Animal Drug Application.............................        $659,364
    Supplemental Animal Drug Application for Which               329,682
     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.................................          11,375
Animal Drug Establishment Fee \1\.......................         167,149
Animal Drug Sponsor Fee \2\.............................         149,636
------------------------------------------------------------------------


[[Page 45344]]

VIII. Fee Waiver or Reduction; Exemption From Fees

A. Barrier to Innovation Waivers or Fee Reductions

    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 other 
circumstances. CVM's guidance for industry (GFI) #170, entitled 
``Animal Drug User Fees and Fee Waivers and Reductions,'' \3\ states 
that the Agency interprets this provision to mean that a waiver or 
reduction is appropriate when: (1) the product for which the waiver is 
being requested is innovative, or the requestor is otherwise pursuing 
innovative animal drug products or technology and (2) the fee would be 
a significant barrier to the applicant's ability to develop, 
manufacture, or market the innovative product or technology. Only those 
applicants that meet both of these criteria will qualify for a waiver 
or reduction in user fees under this provision (see GFI #170 at pp. 6-
8). For purposes of determining whether the second criterion would be 
met on the basis of limited financial resources available to the 
applicant, 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 2023 will be $22,364,520; 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 
2023. Requests for a waiver need to be submitted to FDA each fiscal 
year not later than 180 days from when the fees are due. A waiver 
granted on Barrier to Innovation grounds (or any of the other grounds 
listed in section 740(d)(1) of the FD&C Act) is only valid for 1 fiscal 
year. If a sponsor is not granted a waiver, they are liable for the 
fees.
---------------------------------------------------------------------------

    \3\ CVM's GFI #170 can be accessed at: https://www.fda.gov/media/69918/download.
---------------------------------------------------------------------------

B. Exemptions From Fees

    The types of fee waivers and reductions that applied during ADUFA 
III still exist for FY 2023. In addition, ADUFA IV established two new 
exemptions and one new exception from fees, as described below:
    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 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, 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 (see 
21 U.S.C. 379j-12(a)(1)(C)(ii)).

IX. Procedures for Paying the FY 2023 Fees

A. Application Fees and Payment Instructions

    The FY 2023 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, 2022. The payment 
must be made in U.S. currency from a U.S. bank by one of the following 
methods: wire transfer, electronically, check, bank draft, or U.S. 
postal money order made payable to the Food and Drug Administration. 
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 to 
you 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 
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) and PIN 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. Note: in no 
case should the payment for the fee be submitted to FDA with the 
application.
    When paying by wire transfer, the invoice number or PIN needs to be 
included; without the invoice number or PIN, the payment may not be 
applied, and 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, Account Name: Food and Drug Administration, 
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 FedEx, 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 FDA's CVM. FDA records the 
official application receipt date as the later of the following: the 
date the application was received by

[[Page 45345]]

CVM, or the date U.S. Bank notifies FDA that your payment in the full 
amount has been received, or when the U.S. Department of the Treasury 
notifies FDA of receipt of an electronic or wire transfer payment. U.S. 
Bank and the U.S. Department of the Treasury are required to notify FDA 
within 1 working day, using the PIN described previously.
    The tax identification number of FDA is 53-0196965.

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 on ``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 you 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 your 
username 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.
    Step Four: Submit your application.

C. Product, Establishment, and Sponsor Fees

    By December 31, 2022, FDA will issue invoices and payment 
instructions for product, establishment, and sponsor fees for FY 2023 
using this fee schedule. Payment will be due by January 31, 2023. FDA 
will issue invoices in November 2023 for any products, establishments, 
and sponsors subject to fees for FY 2023 that qualify for fees after 
the December 2022 billing.

    Dated: July 22, 2022.
Lauren K. Roth,
Associate Commissioner for Policy.
[FR Doc. 2022-16176 Filed 7-27-22; 8:45 am]
BILLING CODE 4164-01-P


