FEDERAL FOOD, DRUG, AND COSMETIC ACT
CHAPTER VII - GENERAL AUTHORITY
SUBCHAPTER C - FEES (Part 2 only)
PART 2 - FEES RELATING TO DRUGS¹
§ 735. [379g] Definitions.
For purposes of this subchapter:
- (1) The term ''human drug application'' means an application for -
Such term does not include a supplement to such an application, does not
include an application with respect to whole blood or a blood component
for transfusion, does not include an application with respect to a bovine
blood product for topical application licensed before September 1, 1992,
an allergenic extract product, or an in vitro diagnostic biologic product
licensed under section 351 of the Public Health Service Act, and does not
include an application with respect to a large volume parenteral drug product
approved before September 1, 1992, does not include an application for a
licensure of a biological product for further manufacturing use only, and
does not include an application or supplement submitted by a State or Federal
Government entity for a drug that is not distributed commercially. Such
term does an application for Licensure, as described in subparagraph (D),
of a large volume biological product intended for single dose injection
for intravenous use or infusion.
- (2) The term ''supplement'' means a request to the Secretary to approve
a change in a human drug application which has been approved.
- (3) The term ''prescription drug product'' means a specific strength or
potency of a drug in final dosage form -
- (A) for which a human drug application has been approved, and
- (B) which may be dispensed only under prescription pursuant to section
503(b).
Such term does not include whole blood or a blood component for transfusion,
does not include a bovine blood product for topical application licensed
before September 1, 1992, an allergenic extract product, or an in vitro
diagnostic biologic product licensed under section 351 of the Public Health
Service Act, and does not include a large volume parenteral drug product
approved before September 1, 1992, does not include an application for a
licensure of a biological product for further manufacturing use only, and
does not include an application or supplement submitted by a State or Federal
Government entity for a drug that is not distributed commercially. Such
term does an application for Licensure, as described in subparagraph (D),
of a large volume biological product intended for single dose injection
for intravenous use or infusion.
- (4) The term ''final dosage form'' means, with respect to a prescription
drug product, a finished dosage form which is approved for administration
to a patient without substantial further manufacturing.
- (5) The term ''prescription drug establishment'' means a foreign or domestic
place of business which is at one general physical location consisting of
one or more buildings all of which are within 5 miles of each other, at which
one or more prescription drug products are manufactured in final dosage form.
For purposes of this paragraph, the term ''manufactured'' does not include
packaging.
- (6) The term ''process for the review of human drug applications'' means
the following activities of the Secretary with respect to the review of human
drug applications and supplements:
- (A) The activities necessary for the review of human drug applications
and supplements.
- (B) The issuance of action letters which approve human drug applications
or which set forth in detail the specific deficiencies in such applications
and, where appropriate, the actions necessary to place such applications
in condition for approval.
- (C) The inspection of prescription drug establishments and other facilities
undertaken as part of the Secretary's review of pending human drug applications
and supplements.
- (D) Activities necessary for the review of applications for licensure
of establishments subject to section 351 of the Public Health Service
Act, and for the release of lots of biologics under such section.
- (E) Monitoring of research conducted in connection with the review of
human drug applications.
- (7) The term ''costs of resources allocated for the process for the review
of human drug applications'' means the expenses incurred in connection with
the process for the review of human drug applications for -
- (A) officers and employees of the Food and Drug Administration, contractors
with the Food and Drug Administration, advisory committees, and costs
related to such officers, employees, and committees and to contracts with
such contractors.
- (B) management of information, and the acquisition, maintenance, and
repair of computer resources,
- (C) leasing, maintenance, renovation, and repair of facilities and acquisition,
maintenance, and repair of fixtures, furniture, scientific equipment,
and other necessary materials and supplies, and
- (D) collecting fees under section 736 and accounting for resources allocated
for the review of human drug applications and supplements.
- (8) The term ''adjustment factor'' applicable to a fiscal year is the lower
of -
- (A) the Consumer Price Index for all urban consumers (all items; United
States city average) for April of the preceding fiscal year divided by
such Index for April 1997or
- (B) the total of discretionary budget authority provided for programs
in the domestic category for the immediately preceding fiscal year (as
reported in the Office of Management and Budget sequestration preview
report, if available, required under section 254(c) of the Balanced Budget
and Emergency Deficit Control Act of 1985) divided by such budget authority
for fiscal year 1997 (as reported in the Office of Management and Budget
final sequestration report submitted after the end of the 105th Congress,
1st Session). The terms ''budget authority'' and ''category'' in subparagraph
(B) are as defined in the Balanced Budget and Emergency Deficit Control
Act of 1985, as in effect as of September 1, 1992.
- (9) The term "affiliate" means a business entity that has
a relationship with a second business entity if, directly or indirectly--
- (A) one business entity controls, or has the power to control, the
other business entity; or
- (B) a third party controls, or has power to control, both of the
business entities.
§ 736. [379h] AUTHORITY TO ASSESS AND USE DRUG FEES.
- (a) TYPES OF FEES. -- Beginning in fiscal year 1998, the Secretary shall
assess and collect fees in accordance with this section as follows:
- (1) Human drug application and supplement fee
- (A) IN GENERAL. -- Each person that submits, on or after September 1,
1992, a human drug application or a supplement shall be subject to a fee
as follows:
- (i) A fee established in subsection (b) for a human drug application
for which clinical data (other than bioavailability or bioequivalence
studies) with respect to safety or effectiveness are required for
approval.
- (ii) A fee established in subsection (b) for a human drug application
for which clinical data with respect to safety or effectiveness are
not required or a supplement for which clinical data (other than bioavailability
or bioequivalence studies) with respect to safety or effectiveness
are required.
- (B) PAYMENT. -- The fee required by subparagraph (A) shall be due upon
submission of the application or supplement.
- (C) EXCEPTION FOR PREVIOUSLY FILED APPLICATION OR SUPPLEMENT. -- If
a human drug application or supplement was submitted by a person that
paid the fee for such application or supplement, was accepted for filing,
and was not approved or was withdrawn (without a waiver), the submission
of a human drug application or a supplement for the same product by the
same person (or the person's licensee, assignee, or successor) shall not
be subject to a fee under subparagraph (A).
- (D) REFUND OF FEE IF APPLICATION REFUSED FOR FILING. -- The Secretary
shall refund 75 percent of the fee paid under subparagraph (B) for any
application or supplement which is refused for filing.
- (E) EXCEPTION FOR DESIGNATED ORPHAN DRUG OR INDICATION.-- A human drug
application for a prescription drug product that has been designated as
a drug for a rare disease or condition pursuant to section 526 shall not
be subject to a fee under subparagraph (A), unless the human drug application
includes an indication for other than a rare disease or condition. A supplement
proposing to include a new indication for a rare disease or condition
in a human drug application shall not be subject to a fee under subparagraph
(A), if the drug has been designated pursuant to section 526 as a drug
for a rare disease or condition with regard to the indication proposed
in such supplement.
- (F) EXCEPTION FOR SUPPLEMENTS FOR PEDIATRIC INDICATIONS. -- A supplement
to a human drug application proposing to include a new indication for
use in pediatric populations shall not be assessed a fee under subparagraph
(A).
- (G) REFUND OF FEE IF APPLICATION WITHDRAWN.-- If an application or supplement
is withdrawn after the application or supplement was filed, the Secretary
may refund the fee or a portion of the fee if no substantial work was
performed on the application or supplement after the application or supplement
was filed. The Secretary shall have the sole discretion to refund a fee
or a portion of the fee under this subparagraph. A determination by the
Secretary concerning a refund under this paragraph shall not be reviewable.
- (2) PRESCRIPTION DRUG ESTABLISHMENT FEE
- (A) IN GENERAL. -- Except as provided in subparagraph (B)each person
that --
- (i) is named as the applicant in a human drug application; and
- (ii) after September 1, 1992, had pending before the Secretary
a human drug application or supplement,
shall be assessed an annual fee in subsection (b) for each prescription
drug establishment listed in its approved human drug application as
an establishment that manufactures the prescription drug product named
in the application. The annual establishment fee shall be assessed in
each fiscal year in which the prescription drug product named in the
application is assessed a fee under paragraph (3) unless the prescription
drug establishment listed in the application does not engage in the
manufacture of the prescription drug product during the fiscal year.
The establishment fee shall be payable on or before January 31 of each
year. Each such establishment shall be assessed only one fee per establishment,
notwithstanding the number of prescription drug products manufactured
at the establishment. In the event an establishment is listed in a human
drug application by more than one applicant, the establishment fee for
the fiscal year shall be divided equally and assessed among the applicants
whose prescription drug products are manufactured by the establishment
during the fiscal year and assessed product fees under paragraph (3).
- (B) EXCEPTION.-- If, during the fiscal year, an applicant initiates
or causes to be initiated the manufacture of a prescription drug product
at an establishment listed in its human drug application--
- (i) that did not manufacture the product in the previous fiscal
year; and
- (ii) for which the full establishment fee has been assessed in the
fiscal year at a time before manufacture of the prescription drug
product was begun;
the applicant will not be assessed a share of the establishment fee for
the fiscal year in which the manufacture of the product began.
- (3) PRESCRIPTION DRUG PRODUCT FEE. --
- (A) IN GENERAL. -- Except as provided in subparagraph (B), each person
-
- (i) who is named as the applicant in a human drug application for
a prescription drug product which is listed under section 510, and
- (ii) who, after September 1, 1992, had pending before the Secretary
a human drug application or supplement,
shall pay for each such prescription drug product the annual fee established
in subsection (b) of this section. Such fee shall be payable for the
fiscal year in which the product is first submitted for listing under
section 510, or is submitted for relisting under section 510 if the
product has been withdrawn from listing and relisted. After such fee
is paid for that fiscal year, such fee shall be payable on or before
January 31 of each year. Such fee shall be paid only once for each product
for a fiscal year in which the fee is payable.
- (B) EXCEPTION. -- The listing of a prescription drug product under section
510 shall not require the person who listed such product to pay the fee
prescribed by subparagraph (A) if such product is the same product as
a product approved under an application filed under section 505(b)(2)
or 505(j), under an abbreviated application filed under section 507 (as
in effect on the day before the date of enact:ment of the Food and Drug
Administration Modernization Act of 1997), or under an abbreviated new
drug application pursuant to regulations in effect prior to the implementation
of the Drug Price Competition and Patent Term Restoration Act of 1984.
- FEE AMOUNTS. -- Except as provided in subsections (c), (d), (f), and (g),
the fees required under subsection (a) shall be deter- mined and assessed
as follows:
- (1) APPLICATION AND SUPPLEMENT FEES. --
- (A) FULL FEES. -- The application fee under subsection (a)(l)(A)(i)
shall be $250,704 in fiscal year 1998, $256,338 in each of fiscal
years 1999 and 2000, $267,606 in fiscal year 2001, and $258,451 in
fiscal year 2002.
- (B) OTHER FEES. -- The fee under subsection (a)(l)(A)(ii) shall
be $125,352 in fiscal year 1998, $128,169 in each of fiscal years
1999 and 2000, $133,803 in fiscal year 2001, and $129,226 in fiscal
year 2002.
- (2) TOTAL FEE REVENUES FOR ESTABLISHMENT FEES. -- The total fee revenues
to be collected in establishment fees under subsection (a)(2) shall be
$35,600,000 in fiscal year 1998, $36,400,000 in each of fiscal years 1999
and 2000, $38,000,000 in fiscal year 2001, and $36,700,000 in fiscal year
2002.
- (3) TOTAL FEE REVENUES FOR PRODUCT FEES. -- The total fee revenues
to be collected in product fees under subsection (a)(3) in a fiscal year
shall be equal to the total fee revenues collected in establishment fees
under subsection (a)(2) in that fiscal year.
- (c) ADJUSTMENTS. --
- (d) FEE WAIVER OR REDUCTION.--
- (1) IN GENERAL.--The Secretary shall grant a waiver from or a reduction
of one or more fees assessed under subsection (a) where the Secretary
finds that --
- (A) such waiver or reduction is necessary to protect the public
health,
- (B) the assessment of the fee would present a significant barrier
to innovation because of limited resources available to such person
or other circumstances,
- (C) the fees to be paid by such person will exceed the anticipated
present and future costs incurred by the Secretary in conducting the
process for the review of human drug applications for such person,
- (D) assessment of the fee for an application or a supplement filed
under section 505(b)(l) pertaining to a drug containing an active
ingredient would be inequitable because an application for a product
containing the same active ingredient filed by another person under
section 505(b)(2) could not be assessed fees under subsection (a)(1),
or
- (E) the applicant involved is a small business submitting its first
human drug application to the Secretary for review.
- (2) USE OF STANDARD COSTS. -- In making the finding in paragraph (1)(C),
the Secretary may use standard costs.
- (3) RULES RELATING TO SMALL BUSINESSES. --
- (A) DEFINITION. -- In paragraph (1)(E), the term "small business"
means an entity that has fewer than 500 em- ployees, including employees
of affiliates.
- (B) WAIVER OF APPLICATION FEE. -- The Secretary shall waive under
paragraph (1)(E) the application fee for the first human drug application
that a small business or its affiliate submits to the Secretary for
review. After a small business or its affiliate is granted such a
waiver, the small business or its affiliate shall pay --
- (i) application fees for all subsequent human drug applications
submitted to the Secretary for review in the same manner as an
entity that does not qualify as a small business; and
- (ii) all -supplement fees-for all supplements to human drug
applications submitted to the Secretary for review in the same
manner as an entity that does not qualify as a small business.
- (e) EFFECT OF FAILURE TO PAY FEES.-A human drug application or supplement
submitted by a person subject to fees under subsection (a) shall be considere;l
incomplete and shall not be accepted for filing by the Secretary until all
fees owed by such person have been paid.
- (f) ASSESSMENT OF FEES.--
- (1) LIMITATION.-- Fees may not be assessed under subsection (a) for
a fiscal year beginning after fiscal year 1997 unless appropriations for
salaries and expenses of the Food and Drug Administration for such fiscal
year (excluding the amount of fees appropriated for such fiscal year)
are equal to or greater than the amount of appropriations for the salaries
and expenses of the Food and Drug Administration for the fiscal year 1997
(excluding the amount of fees appropriated for such fiscal year) multiplied
by the adjustment factor applicable to the fis- cal year involved.
- (2) AUTHORITY-- If the Secretary does not assess fees under subsection
(a) during any portion of a fiscal year because of paragraph (1) and if
at a later date in such fiscal year the Secretary may assess such fees,
the Secretary may assess and collect such fees, without any modification
in rate, for human drug applications and supplements, prescription drug
establishments, and prescription drug products at any time in such fiscal
year notwithstanding the provisions of subsection (a) relating to the
date fees are to be paid.
- (g) CREDITING AND AVAILABILITY OF FEES.--
- (1) IN GENERAL. -- Fees collected for a fiscal year pursuant to subsection
(a) shall be credited to the appropriation account for salaries and expenses
of the Food and Drug Administration and shall be available in accordance
with appropriation Acts until expended without fiscal year limitation.
Such sums as may be necessary may be transferred from the Food and Drug
Administration salaries and expenses appropriation account without fiscal
year limitation to such appropriation account for salaries and expenses
with such fiscal year limitation. The sums transferred shall be available
solely for the process for the review of human drug applications.
- (2) COLLECTIONS AND APPROPRIATION ACTS.--The fees authorized by this
section --
- (A) shall be collected in each fiscal year in an amount equal to
the amount specified in appropriation Acts, or otherwise made available
for obligation, for such fiscal year, and
- (B) shall only be collected and available to defray increases in
the costs of the resources allocated for the process for the review
of human drug applications (including increases in such costs for
an additional number of full-time equivalent positions in the Department
of Health and Human Services to be engaged in such process) over such
costs, excluding costs paid from fees collected under this section,
for fiscal year 1997 multiplied by the adjustment factor.
- (3) AUTHORIZATION OF APPROPRIATIONS. -- There are authorized to be appropriated
for fees under this section--
- (A) $106,800,000 for fiscal year 1998;
- (B) $109,200,000 for fiscal year 1999;
- (C) $109,200,000 for fiscal year 2000;
- (D) $114,000,000 for fiscal year 2001; and
- (E) $110,100,000 for fiscal year 2002,
as adjusted to reflect adjustments in the total fee revenues made under
this section and changes in the total amounts collected by application,
supplement, establishment, and product fees.
- (4) OFFSET.--Any amount of fees collected for a fiscal year under this
section that exceeds the amount of fees specified in appropriation Acts
for such fiscal year shall be credited to the appropriation account of
the Food and Drug Administration as provided in paragraph (1), and shall
be subtracted from the amount of fees that would otherwise be authorized
to be collected under this section pursuant to appropriation Acts for
a subsequent fiscal year.
- (h) COLLECTION OF UNPAID FEES.--In any case where the Secretary does not
receive payment of a fee assessed under subsection (a) within 30 days after
it is due, such fee shall be treated as a claim of the United States Goverunent
subject to subchapter II of chapter 37 of title 31, United States Code.
- (i) WRITTEN REQUESTS FOR WAIVERS, REDUCTIONS, AND REFUNDS. -- To qualify
for consideration for a waiver or reduction under subsection (d), or for a
refund of any fee collected in accordance with subsection (a), a person shall
submit to the Secretary a written request for such waiver, reduction, or refund
not later than 180 days after such fee is due.
- (j) CONSTRUCTION. -- This section may not be construed to require that the
number of full-time equivalent positions in the Department of Health and Human
Services, for officers, employers, and advisory committees not engaged in
the process of the review of human drug applications, be reduced to offset
the number of officers, employees, and advisory committees so engaged.
Footnotes
¹In accordance with section 105 of the Prescription Drug
User Fee Act of 1992 (P.L. 102-571) part 2 shall not be in effect after October
1, 2002.
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