FDA Law Blog: FDA Publishes Fiscal Year 2017 User Fee Rates: Across-the-Board Decreases in PDUFA/BsUFA Rates; Facilities Get Hit With GDUFA Fee Increases

FDA Law Blog: FDA Publishes Fiscal Year 2017 User Fee Rates: Across-the-Board Decreases in PDUFA/BsUFA Rates; Facilities Get Hit With GDUFA Fee Increases

FDA Publishes Fiscal Year 2017 User Fee Rates: Across-the-Board Decreases in PDUFA/BsUFA Rates; Facilities Get Hit With GDUFA Fee Increases Posted: 01 Aug 2016 09:47 AM PDT By Kurt R. Karst – Like the Running of the Bulls in Pamplona, Spain each Summer, we wait with bated breath each July and August to see how FDA-regulated companies might get gored when FDA releases the user fee rates for the next fiscal year. Over the past week, FDA has released a herd of notices in the Federal Register establishing the Fiscal Year 2017 (“FY 2017”) user fee rates for several programs, including: Prescription Drug User Act (“PDUFA”) Fee Rates Biosimilar User Fee Act (“BsUFA”) Rates Generic Drug User Fee Amendments (“GDUFA”) Rates Medical Device User Fee Rates Animal Drug User Fee Act Rates and Payment Procedures Animal Generic Drug User Fee Act Rates and Payment Procedures Food Safety Modernization Act Domestic and Foreign Facility Reinspection, Recall, and Importer Reinspection Fee Rates Outsourcing Facility Fee Rates For many years now we’ve been tracking the changes in user fees rates FDA sets each fiscal year under PDUFA, and, more recently, under BsUFA and GDUFA (see our previous post here).  Unlike most previous years, many of the user fee rates for FY 2017 will be less – and in some cases far less – than those established for FY 2016.  This is particularly the case under PDUFA and BsUFA, which is keyed to PDUFA user fee rates.  Under GDUFA, while ANDA applicants will be getting a break with reduced application user fees, Drug Master File (“DMF”) filers, and Active Pharmaceutical Ingredient (“API”) and Finished Dosage Form (“FDF”) facility owners will have to deal with moderate increases.  So, instead of a goring, many drug companies will be getting a break in FY 2017, potentially causing them to delay submissions planned for FY 2016 into FY 2017. The FY 2017 PDUFA application user fee rate is set at $2,038,100 for an application requiring “clinical data” (defined here in an FDA guidance document), and one-half of a full application fee ($1,019,050) for an application not requiring “clinical data” and a supplement requiring “clinical data.” These figures reflect FDA’s estimate of 123.405 fee-paying full application equivalents – an average of the number of full applications that paid fees over the latest 3 years – and result in a 14.2% reduction in the fee compared to FY 2016 (i.e., $2,374,200). The 123.405 figure is higher than last year’s estimate of 119.545 fee-paying full application equivalents.  Annual establishment and product fees have been set at $512,200 and $97,750, respectively, and are based on estimates of 491 establishments and 2,573 products.  The FY 2017 establishment and product fees are 12.5% and 14.6% less than those established for FY 2016.  The FY 2017 PDUFA user fee rates become effective on October 1, 2016. The decreases in FY 2017 PDUFA user fee rates are the result of a provision included in PDUFA V (2012), which requires that if user fee revenue collected from FYs 2013-2015, as well as estimated revenue to be collected in FY 2016, “exceeds the cumulative amount appropriated for fees for FYs 2013 through 2016, the excess shall be credited to FDA’s appropriation account and subtracted from the amount of fees that FDA would otherwise be authorized to collect for FY 2017. . . .”  The cumulative difference between PDUFA fee amounts specified in appropriation acts for FYs 2013-2016 and the PDUFA fee amounts collected resulted in a $124,065,726 excess. As noted above, BsUFA user fees – i.e., the initial and annual biosimilar Biological Product Development (“BPD”) fees, the reactivation fee, and the biosimilar biological product application, establishment, and product fees – are keyed to PDUFA user fees.  The FY 2017 rates have thus been set at $203,810 (initial and annual PBD), $407,620 (reactivation), $2,038,100 (application), $512,200 (establishment), and $97,750 (product). The first table below shows the changes in PDUFA user fee rates for the latest iteration of the law – PDUFA V – and the next three tables chart the historical growth of each fee since the initiation of the PDUFA program. Additional historical tables for user fee rates changes since the enactment of PDUFA are available here.    GDUFA establishes several types of user fees that together generated $299 million in funding for FDA in FY 2013 (including $50 million from the one-time ANDA backlog fee). That $299 million base amount is adjusted annually.  The FY 2014 adjusted base figure was $305,659,000; in FY 2015, it was set at $312,224,000; in FY 2016, it was set at $318,363,000; and in FY 2017, it is set at $323,010,000.  Three of the FY 2017 GDUFA user fee rates – applicable to DMFs, and API and FDF facilities – have increased vis-à-vis the FY 2016 user fee rates (by 21.3%, 8.2%, and 6.0%, respectively); however, the application and Prior Approval Supplement (“PAS”) fee rates each dipped by 7.3% compared to the FY 2016 user fee rates. This is somewhat similar to what happened in FY 2015 when FDA hiked the API and DMF fee rates and reduced the application, PAS, and DMF fee rates. The original ANDA and PAS fees, which make up 24% of the $323,010,000 (or $77,523,000 rounded to the nearest thousand dollars), are based on a total number of 1,100 fee-paying full application equivalents expected to be received in FY 2017. Dividing $77,523,000 by the total number of fee-paying full applications expected to be received results in an original ANDA fee of $70,480 and a PAS fee of $35,240 for FY 2017. The 1,100 fee-paying full application equivalents figure FDA identifies for FY 2017 is the second lowest under GDUFA.  FDA estimated 1,160 in FY 2013; 1,148.8 in FY 2014; 1,276 in FY 2015; and 1,005 in FY 2016. The DMF fee, which makes up 6% of the $323,010,000 ($19,381,000 rounded to the nearest thousand dollars), is based on an estimate of 379 fee-paying DMFs in FY 2017. This is a significant decrease over the 453 fee-paying DMFs estimated in FY 2016 (and much less than the 701 fee-paying DMFs estimated in FY 2015), and explains the rise in the DMF fee over the past couple of years.  The resulting fee is $51,140 for FY 2017 (a 21.3% increase over FY 2016). The API and FDF facility fees are based on data submitted by generic drug facilities through the self-identification process. The FDF facility fee revenue makes up 56% of $323,010,000 ($180,886,000 rounded to the nearest thousand dollars), and the API facility fee makes up 14% of $323,010,000 ($45,221,000 rounded to the nearest thousand dollars).  According to FDA, the total number of FDF facilities identified through self-identification was 675 (255 domestic and 420 foreign), and the total number of API facilities identified through self-identification was 789 (101 domestic and 688 foreign).  These numbers translate into FY 2017 FDF facility fee rates of $258,646 for a domestic facility and $273,646 for a foreign facility, and API facility rates of $44,234 for a domestic facility and $59,234 for a foreign facility. The table and chart below show the changes in GDUFA user fee rates for the first iteration of the law.