81 FR 50525 - Food Safety Modernization Act Domestic and Foreign Facility Reinspection, Recall, and Importer Reinspection Fee Rates for Fiscal Year 2017
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration Federal Register Volume 81, Issue 147 (August 1, 2016)
Food and Drug Administration
Federal Register Volume 81, Issue 147 (August 1, 2016)
| Page Range | 50525-50528 | |
| FR Document | 2016-18089 |
[Federal Register Volume 81, Number 147 (Monday, August 1, 2016)] [Notices] [Pages 50525-50528] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-18089] ----------------------------------------------------------------------- DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration [Docket No. FDA-2016-N-0007] Food Safety Modernization Act Domestic and Foreign Facility Reinspection, Recall, and Importer Reinspection Fee Rates for Fiscal Year 2017 AGENCY: Food and Drug Administration, HHS. ACTION: Notice. ----------------------------------------------------------------------- SUMMARY: The Food and Drug Administration (FDA) is announcing the fiscal year (FY) 2017 fee rates for certain domestic and foreign facility reinspections, failures to comply with a recall order, and importer reinspections that are authorized by the Federal Food, Drug, and Cosmetic Act (the FD&C Act), as amended by the FDA Food Safety Modernization Act (FSMA). These fees are effective on October 1, 2016, and will remain in effect through September 30, 2017. FOR FURTHER INFORMATION CONTACT: Jason Lewis, Office of Resource Management, Office of Regulatory Affairs, Food and Drug Administration, 12420 Parklawn Dr., Rm. 2046, Rockville, MD 20857, 301-796-5957, email: [email protected]. SUPPLEMENTARY INFORMATION: I. Background Section 107 of FSMA (Pub. L. 111-353) added section 743 to the FD&C Act (21 U.S.C. 379j-31) to provide FDA with the authority to assess and collect fees from, in part: (1) The responsible party for each domestic facility and the U.S. agent for each foreign facility subject to a reinspection, to cover reinspection-related costs; (2) the responsible party for a domestic facility and an importer who does not comply with a recall order, to cover food \1\ recall activities associated with such order; and (3) each importer subject to a reinspection to cover reinspection-related costs (sections 743(a)(1)(A), (B), and (D) of the FD&C Act). Section 743 of the FD&C Act directs FDA to establish fees for each of these activities based on an estimate of 100 percent of the costs of each activity for each year (sections 743(b)(2)(A)(i), (ii), and (iv)), and these fees must be made available solely to pay for the costs of each activity for which the fee was incurred (section 743(b)(3)). These fees are effective on October 1, 2016, and will remain in effect through September 30, 2017. Section 743(b)(2)(B)(iii) of the FD&C Act directs FDA to develop a proposed set of guidelines in consideration of the burden of fee amounts on small businesses. As a first step in developing these guidelines, FDA invited public comment on the potential impact of the fees authorized by section 743 of the FD&C Act on small businesses (76 FR 45818, August 1, 2011). The comment period for this request ended November 30, 2011. As stated in FDA's September 2011 ``Guidance for Industry: Implementation of the Fee Provisions of Section 107 of the FDA Food Safety Modernization Act,'' (http://www.fda.gov/Food/GuidanceRegulation/GuidanceDocumentsRegulatoryInformation/FoodDefense/ucm274176.htm), because FDA recognizes that for small businesses the full cost recovery of FDA reinspection or recall oversight could impose severe economic hardship, FDA intends to consider reducing certain fees for those firms. FDA does not intend to issue invoices for reinspection or recall order fees until FDA publishes a guidance document outlining the process through which firms may request a reduction in fees. --------------------------------------------------------------------------- \1\ The term ``food'' for purposes of this document has the same meaning as such term in section 201(f) of the FD&C Act (21 U.S.C. 321(f)). --------------------------------------------------------------------------- In addition, as stated in the September 2011 Guidance, FDA is in the process of considering various issues associated with the assessment and collection of importer reinspection fees. The fee rates set forth in this notice will be used to determine any importer reinspection fees assessed in FY 2017. II. Estimating the Average Cost of a Supported Direct FDA Work Hour for FY 2017 FDA is required to estimate 100 percent of its costs for each activity in order to establish fee rates for FY 2017. [[Page 50526]] In each year, the costs of salary (or personnel compensation) and benefits for FDA employees account for between 50 and 60 percent of the funds available to, and used by, FDA. Almost all of the remaining funds (operating funds) available to FDA are used to support FDA employees for paying rent, travel, utility, information technology, and other operating costs. A. Estimating the Full Cost per Direct Work Hour in FY 2015 In general, the starting point for estimating the full cost per direct work hour is to estimate the cost of a full-time equivalent (FTE) or paid staff year for the relevant activity. This is done by dividing the total funds allocated to the elements of FDA primarily responsible for carrying out the activities for which fees are being collected by the total FTEs allocated to those activities. For the purposes of the reinspection and recall order fees authorized by section 743 of the FD&C Act (the fees that are the subject of this notice), primary responsibility for the activities for which fees will be collected rests with FDA's Office of Regulatory Affairs (ORA). ORA carries out inspections and other field-based activities on behalf of FDA's product centers, including the Center for Food Safety and Applied Nutrition (CFSAN) and the Center for Veterinary Medicine (CVM). Thus, as the starting point for estimating the full cost per direct work hour, FDA will use the total funds allocated to ORA for CFSAN and CVM related field activities. The most recent FY with available data was FY 2015. In that year, FDA obligated a total of $666,722,326 for ORA in carrying out the CFSAN and CVM related field activities work, excluding the cost of inspection travel. In that same year, the number of ORA staff primarily conducting the CFSAN and CVM related field activities was 3,022 FTEs or paid staff years. Dividing $666,722,326 by 3,022 FTEs results in an average cost of $220,623 per paid staff year, excluding travel costs. Not all of the FTEs required to support the activities for which fees will be collected are conducting direct work such as inspecting or reinspecting facilities, examining imports, or monitoring recalls. Data collected over a number of years and used consistently in other FDA user fee programs (e.g., under the Prescription Drug User Fee Act (PDUFA) and the Medical Device User Fee and Modernization Act (MDUFA)) show that every seven FTEs who perform direct FDA work require three indirect and supporting FTEs. These indirect and supporting FTEs function in budget, facility, human resource, information technology, planning, security, administrative support, legislative liaison, legal counsel, program management, and other essential program areas. On average, two of these indirect and supporting FTEs are located in ORA or the FDA center where the direct work is being conducted, and one of them is located in the Office of the Commissioner. To get the fully supported cost of an FTE, FDA needs to multiply the average cost of an FTE by 1.43, to take into account the indirect and supporting functions. The 1.43 factor is derived by dividing the 10 fully supported FTEs by 7 direct FTEs. In FY 2015, the average cost of an FTE was $220,623. Multiplying this amount by 1.43 results in an average fully supported cost of $315,491 per FTE, excluding the cost of inspection travel. To calculate an hourly rate, FDA must divide the average fully supported cost of $315,491 per FTE by the average number of supported direct FDA work hours. See table 1. Table 1--Supported Direct FDA Work Hours in a Paid Staff Year ------------------------------------------------------------------------ ------------------------------------------------------------------------ Total number of hours in a paid staff year...................... 2,080 Less: 10 paid holidays.............................................. 80 20 days of annual leave....................................... 160 10 days of sick leave......................................... 80 10 days of training........................................... 80 2 hours of meetings per week.................................. 80 ------- Net Supported Direct FDA Work Hours Available for 1,600 Assignments................................................ ------------------------------------------------------------------------ Dividing the average fully supported cost of an FTE in FY 2015 ($315,491) by the total number of supported direct work hours available for assignment (1,600) results in an average fully supported cost of $197 (rounded to the nearest dollar), excluding inspection travel costs, per supported direct work hour in FY 2015--the last FY for which data are available. B. Adjusting FY 2015 Costs for Inflation To Estimate FY 2017 Costs To adjust the hourly rate for FY 2017, FDA must estimate the cost of inflation in each year for FY 2016 and FY 2017. FDA uses the method prescribed for estimating inflationary costs under the PDUFA provisions of the FD&C Act (section 736(c)(1) (21 U.S.C. 379h(c)(1)), the statutory method for inflation adjustment in the FD&C Act that FDA has used consistently. FDA previously determined the FY 2016 inflation rate to be 2.0266; this rate was published in the FY 2016 PDUFA user fee rates notice in the Federal Register of August 3, 2015 (80 FR 46028). Utilizing the method set forth in section 736(c)(1) of the FD&C Act, FDA has calculated an inflation rate of 1.5468 percent for FY 2017 and FDA intends to use this inflation rate to make inflation adjustments for FY 2017 for several of its user fee programs; the derivation of this rate is published in the Federal Register in the FY 2017 notice for the PDUFA user fee rates. The compounded inflation rate for FYs 2016 and 2017, therefore, is 3.6047 percent (1 plus 2.0266 percent times 1 plus 1.5468 percent). Increasing the FY 2015 average fully supported cost per supported direct FDA work hour of $197 (excluding inspection travel costs) by 3.6047 percent yields an inflationary adjusted estimated cost of $204 per a supported direct work hour in FY 2017, excluding inspection travel costs. FDA will use this base unit fee in determining the hourly fee rate for reinspection and recall order fees for FY 2017 prior to including domestic or foreign travel costs as applicable for the activity. In FY 2015, ORA spent a total of $4,497,078 for domestic regulatory inspection travel costs and General Services Administration Vehicle costs related to FDA's CFSAN and CVM field activities programs. The total ORA domestic travel costs spent is then divided by the 8,987 CFSAN and CVM domestic inspections, which averages a total of $500 per inspection. These inspections average 32.14 hours per inspection. Dividing $500 per inspection by 32.14 hours per inspection results in a total and an additional cost of $16 per hour spent for domestic inspection travel costs in FY 2015. To adjust $16 for inflationary increases in FY 2016 and FY 2017, FDA must multiply it by the same inflation factor mentioned previously in this document (1.036047), which results in an estimated cost of $17 dollars per paid hour in addition to $204 for a total of $221 per paid hour ($204 plus $17) for each direct hour of work requiring domestic inspection travel. FDA will use these rates in charging fees in FY 2017 when domestic travel is required. In FY 2015, ORA spent a total of $2,521,216 on 269 foreign inspection trips related to FDA's CFSAN and CVM field activities programs, which averaged a total of $9,373 per foreign inspection trip. These trips averaged 3 weeks (or 120 paid hours) per trip. Dividing $9,373 per trip by 120 hours per trip results in a total and an additional cost of $78 per paid hour spent for foreign inspection travel costs in FY 2015. To adjust $78 for inflationary increases in FY 2016 and [[Page 50527]] FY 2017, FDA must multiply it by the same inflation factor mentioned previously in this document (1.036047), which results in an estimated cost of $81 dollars per paid hour in addition to $204 for a total of $285 per paid hour ($204 plus $81) for each direct hour of work requiring foreign inspection travel. FDA will use these rates in charging fees in FY 2017 when foreign travel is required. Table 2--FSMA Fee Schedule for FY 2017 ------------------------------------------------------------------------ Fee rates Fee category for FY 2017 ------------------------------------------------------------------------ Hourly rate if domestic travel is required.................. $221 Hourly rate if foreign travel is required................... 285 ------------------------------------------------------------------------ III. Fees for Reinspections of Domestic or Foreign Facilities Under Section 743(a)(1)(A) A. What will cause this fee to be assessed? The fee will be assessed for a reinspection conducted under section 704 of the FD&C Act (21 U.S.C. 374) to determine whether corrective actions have been implemented and are effective and compliance has been achieved to the Secretary of Health and Human Services' (the Secretary) (and, by delegation, FDA's) satisfaction at a facility that manufactures, processes, packs, or holds food for consumption necessitated as a result of a previous inspection (also conducted under section 704) of this facility, which had a final classification of Official Action Indicated (OAI) conducted by or on behalf of FDA, when FDA determined the non-compliance was materially related to food safety requirements of the FD&C Act. FDA considers such non-compliance to include non-compliance with a statutory or regulatory requirement under section 402 of the FD&C Act (21 U.S.C. 342) and section 403(w) of the FD&C Act (21 U.S.C. 343(w)). However, FDA does not consider non- compliance that is materially related to a food safety requirement to include circumstances where the non-compliance is of a technical nature and not food safety related (e.g., failure to comply with a food standard or incorrect font size on a food label). Determining when non- compliance, other than under sections 402 and 403(w) of the FD&C Act, is materially related to a food safety requirement of the FD&C Act may depend on the facts of a particular situation. FDA intends to issue guidance to provide additional information about the circumstances under which FDA would consider non-compliance to be materially related to a food safety requirement of the FD&C Act. Under section 743(a)(1)(A) of the FD&C Act, FDA is directed to assess and collect fees from ``the responsible party for each domestic facility (as defined in section 415(b) (21 U.S.C. 350d(b))) and the United States agent for each foreign facility subject to a reinspection'' to cover reinspection-related costs. Section 743(a)(2)(A)(i) of the FD&C Act defines the term ``reinspection'' with respect to domestic facilities as ``1 or more inspections conducted under section 704 subsequent to an inspection conducted under such provision which identified non-compliance materially related to a food safety requirement of th[e] Act, specifically to determine whether compliance has been achieved to the Secretary's satisfaction.'' The FD&C Act does not contain a definition of ``reinspection'' specific to foreign facilities. In order to give meaning to the language in section 743(a)(1)(A) of the FD&C Act to collect fees from the U.S. agent of a foreign facility subject to a reinspection, the Agency is using the following definition of ``reinspection'' for purposes of assessing and collecting fees under section 743(a)(1)(A), with respect to a foreign facility, ``1 or more inspections conducted by officers or employees duly designated by the Secretary subsequent to such an inspection which identified non-compliance materially related to a food safety requirement of the FD&C Act, specifically to determine whether compliance has been achieved to the Secretary's (and, by delegation, FDA's) satisfaction.'' This definition allows FDA to fulfill the mandate to assess and collect fees from the U.S. agent of a foreign facility in the event that an inspection reveals non-compliance materially related to a food safety requirement of the FD&C Act, causing one or more subsequent inspections to determine whether compliance has been achieved to the Secretary's (and, by delegation, FDA's) satisfaction. By requiring the initial inspection to be conducted by officers or employees duly designated by the Secretary, the definition ensures that a foreign facility would be subject to fees only in the event that FDA, or an entity designated to act on its behalf, has made the requisite identification at an initial inspection of non-compliance materially related to a food safety requirement of the FD&C Act. The definition of ``reinspection-related costs'' in section 743(a)(2)(B) of the FD&C Act relates to both a domestic facility reinspection and a foreign facility reinspection, as described in section 743(a)(1)(A). B. Who will be responsible for paying this fee? The FD&C Act states that this fee is to be paid by the responsible party for each domestic facility (as defined in section 415(b) of the FD&C Act) and by the U.S. agent for each foreign facility (section 743(a)(1)(A) of the FD&C Act). This is the party to whom FDA will send the invoice for any fees that are assessed under this section. C. How much will this fee be? The fee is based on the number of direct hours spent on such reinspections, including time spent conducting the physical surveillance and/or compliance reinspection at the facility, or whatever components of such an inspection are deemed necessary, making preparations and arrangements for the reinspection, traveling to and from the facility, preparing any reports, analyzing any samples or examining any labels if required, and performing other activities as part of the OAI reinspection until the facility is again determined to be in compliance. The direct hours spent on each such reinspection will be billed at the appropriate hourly rate shown in table 2 of this document. IV. Fees for Non-Compliance With a Recall Order Under Section 743(a)(1)(B) A. What will cause this fee to be assessed? The fee will be assessed for not complying with a recall order under section 423(d) (21 U.S.C. 350l(d)) or section 412(f) of the FD&C Act (21 U.S.C. 350a(f)) to cover food recall activities associated with such order performed by the Secretary (and by delegation, FDA) (section 743(a)(1)(B) of the FD&C Act). Non-compliance may include the following: (1) Not initiating a recall as ordered by FDA; (2) not conducting the recall in the manner specified by FDA in the recall order; or (3) not providing FDA with requested information regarding the recall, as ordered by FDA. B. Who will be responsible for paying this fee? Section 743(a)(1)(B) of the FD&C Act states that the fee is to be paid by the responsible party for a domestic facility (as defined in section 415(b) of the FD&C Act) and an importer who does not comply with a recall order under section 423 or under section 412(f) of the FD&C Act. In other words, the party [[Page 50528]] paying the fee would be the party that received the recall order. C. How much will this fee be? The fee is based on the number of direct hours spent on taking action in response to the firm's failure to comply with a recall order. Types of activities could include conducting recall audit checks, reviewing periodic status reports, analyzing the status reports and the results of the audit checks, conducting inspections, traveling to and from locations, and monitoring product disposition. The direct hours spent on each such recall will be billed at the appropriate hourly rate shown in table 2 of this document. V. How must the fees be paid? An invoice will be sent to the responsible party for paying the fee after FDA completes the work on which the invoice is based. Payment must be made within 90 days of the invoice date in U.S. currency by check, bank draft, or U.S. postal money order payable to the order of the Food and Drug Administration. Detailed payment information will be included with the invoice when it is issued. VI. What are the consequences of not paying these fees? Under section 743(e)(2) of the FD&C Act, any fee that is not paid within 30 days after it is due shall be treated as a claim of the U.S. Government subject to provisions of subchapter II of chapter 37 of title 31, United States Code. Dated: July 27, 2016. Leslie Kux, Associate Commissioner for Policy. [FR Doc. 2016-18089 Filed 7-29-16; 8:45 am] BILLING CODE 4164-01-P
![Federal Register / Vol. 81, No. 147 / Monday, August 1, 2016 / Notices 50525
TABLE 1—ESTIMATED INITIAL REPORTING BURDEN 1
Number of Average
Number of Total annual
Information collection activity responses per burden per Total hours
respondents responses
respondent response
Submission of Initial Product Report ................................... 55 220 12,100 2 24,200
Waiver Request From Electronic Submission of Initial
Product Report ................................................................. 1 1 1 1 1
Total .............................................................................. ........................ ........................ ........................ ........................ 24,201
1 There are no capital costs or operating and maintenance costs associated with the information collection.
TABLE 2—ESTIMATED ANNUAL REPORTING BURDEN 1
Number of Average
Number of Total annual
Information collection activity responses per burden per Total hours
respondents responses
respondent response
Submission for June Product Report ........................... 55 220 12,100 0.5 (30 minutes) .... 6,050
Submission for December Product Report .................. 55 220 12,100 0.5 (30 minutes) .... 6,050
Waiver Request From Electronic Submission of Prod- 1 1 1 1 ............................ 1
uct Reports.
Total ...................................................................... ........................ ........................ ........................ ............................... 12,101
1 There are no capital costs or operating and maintenance costs associated with the information collection.
Dated: July 26, 2016. Rockville, MD 20857, 301–796–5957, these guidelines, FDA invited public
Jeremy Sharp, email: Jason.Lewis@fda.hhs.gov. comment on the potential impact of the
Deputy Commissioner for Policy, Planning, SUPPLEMENTARY INFORMATION: fees authorized by section 743 of the
Legislation, and Analysis. FD&C Act on small businesses (76 FR
[FR Doc. 2016–18048 Filed 7–29–16; 8:45 am] I. Background 45818, August 1, 2011). The comment
BILLING CODE 4164–01–P Section 107 of FSMA (Pub. L. 111– period for this request ended November
353) added section 743 to the FD&C Act 30, 2011. As stated in FDA’s September
(21 U.S.C. 379j–31) to provide FDA with 2011 ‘‘Guidance for Industry:
DEPARTMENT OF HEALTH AND the authority to assess and collect fees Implementation of the Fee Provisions of
HUMAN SERVICES from, in part: (1) The responsible party Section 107 of the FDA Food Safety
for each domestic facility and the U.S. Modernization Act,’’ (http://
Food and Drug Administration agent for each foreign facility subject to www.fda.gov/Food/
[Docket No. FDA–2016–N–0007] a reinspection, to cover reinspection- GuidanceRegulation/
related costs; (2) the responsible party GuidanceDocuments
Food Safety Modernization Act for a domestic facility and an importer RegulatoryInformation/FoodDefense/
Domestic and Foreign Facility who does not comply with a recall ucm274176.htm), because FDA
Reinspection, Recall, and Importer order, to cover food 1 recall activities recognizes that for small businesses the
Reinspection Fee Rates for Fiscal Year associated with such order; and (3) each full cost recovery of FDA reinspection
2017 importer subject to a reinspection to or recall oversight could impose severe
cover reinspection-related costs economic hardship, FDA intends to
AGENCY: Food and Drug Administration, (sections 743(a)(1)(A), (B), and (D) of the consider reducing certain fees for those
HHS. FD&C Act). Section 743 of the FD&C Act firms. FDA does not intend to issue
ACTION: Notice. directs FDA to establish fees for each of invoices for reinspection or recall order
these activities based on an estimate of fees until FDA publishes a guidance
SUMMARY: The Food and Drug document outlining the process through
100 percent of the costs of each activity
Administration (FDA) is announcing the which firms may request a reduction in
for each year (sections 743(b)(2)(A)(i),
fiscal year (FY) 2017 fee rates for certain fees.
(ii), and (iv)), and these fees must be
domestic and foreign facility In addition, as stated in the
made available solely to pay for the
reinspections, failures to comply with a September 2011 Guidance, FDA is in
costs of each activity for which the fee
recall order, and importer reinspections the process of considering various
was incurred (section 743(b)(3)). These
that are authorized by the Federal Food, issues associated with the assessment
fees are effective on October 1, 2016,
Drug, and Cosmetic Act (the FD&C Act), and collection of importer reinspection
and will remain in effect through
as amended by the FDA Food Safety fees. The fee rates set forth in this notice
September 30, 2017. Section
Modernization Act (FSMA). These fees will be used to determine any importer
743(b)(2)(B)(iii) of the FD&C Act directs
are effective on October 1, 2016, and
sradovich on DSK3GMQ082PROD with NOTICES
FDA to develop a proposed set of reinspection fees assessed in FY 2017.
will remain in effect through September
guidelines in consideration of the II. Estimating the Average Cost of a
30, 2017.
burden of fee amounts on small Supported Direct FDA Work Hour for
FOR FURTHER INFORMATION CONTACT: businesses. As a first step in developing
Jason Lewis, Office of Resource FY 2017
Management, Office of Regulatory 1 The term ‘‘food’’ for purposes of this document FDA is required to estimate 100
Affairs, Food and Drug Administration, has the same meaning as such term in section 201(f) percent of its costs for each activity in
12420 Parklawn Dr., Rm. 2046, of the FD&C Act (21 U.S.C. 321(f)). order to establish fee rates for FY 2017.
VerDate Sep<11>2014 20:16 Jul 29, 2016 Jkt 238001 PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 E:\FR\FM\01AUN1.SGM 01AUN1](https://thefederalregister.org/doc/81_FR_50672/page/1.svg)
![Federal Register / Vol. 81, No. 147 / Monday, August 1, 2016 / Notices 50527
FY 2017, FDA must multiply it by the situation. FDA intends to issue guidance both a domestic facility reinspection
same inflation factor mentioned to provide additional information about and a foreign facility reinspection, as
previously in this document (1.036047), the circumstances under which FDA described in section 743(a)(1)(A).
which results in an estimated cost of would consider non-compliance to be
B. Who will be responsible for paying
$81 dollars per paid hour in addition to materially related to a food safety
this fee?
$204 for a total of $285 per paid hour requirement of the FD&C Act.
($204 plus $81) for each direct hour of Under section 743(a)(1)(A) of the The FD&C Act states that this fee is to
work requiring foreign inspection travel. FD&C Act, FDA is directed to assess and be paid by the responsible party for each
FDA will use these rates in charging fees collect fees from ‘‘the responsible party domestic facility (as defined in section
in FY 2017 when foreign travel is for each domestic facility (as defined in 415(b) of the FD&C Act) and by the U.S.
required. section 415(b) (21 U.S.C. 350d(b))) and agent for each foreign facility (section
the United States agent for each foreign 743(a)(1)(A) of the FD&C Act). This is
TABLE 2—FSMA FEE SCHEDULE FOR facility subject to a reinspection’’ to the party to whom FDA will send the
FY 2017 cover reinspection-related costs. invoice for any fees that are assessed
Section 743(a)(2)(A)(i) of the FD&C under this section.
Fee rates Act defines the term ‘‘reinspection’’
Fee category for FY with respect to domestic facilities as ‘‘1 C. How much will this fee be?
2017 or more inspections conducted under The fee is based on the number of
section 704 subsequent to an inspection direct hours spent on such
Hourly rate if domestic travel is conducted under such provision which
required ................................... $221 reinspections, including time spent
identified non-compliance materially conducting the physical surveillance
Hourly rate if foreign travel is re-
quired ...................................... 285 related to a food safety requirement of and/or compliance reinspection at the
th[e] Act, specifically to determine facility, or whatever components of
whether compliance has been achieved such an inspection are deemed
III. Fees for Reinspections of Domestic
to the Secretary’s satisfaction.’’ necessary, making preparations and
or Foreign Facilities Under Section
The FD&C Act does not contain a arrangements for the reinspection,
743(a)(1)(A) definition of ‘‘reinspection’’ specific to traveling to and from the facility,
A. What will cause this fee to be foreign facilities. In order to give preparing any reports, analyzing any
assessed? meaning to the language in section samples or examining any labels if
743(a)(1)(A) of the FD&C Act to collect required, and performing other activities
The fee will be assessed for a fees from the U.S. agent of a foreign
reinspection conducted under section as part of the OAI reinspection until the
facility subject to a reinspection, the facility is again determined to be in
704 of the FD&C Act (21 U.S.C. 374) to Agency is using the following definition
determine whether corrective actions compliance. The direct hours spent on
of ‘‘reinspection’’ for purposes of each such reinspection will be billed at
have been implemented and are assessing and collecting fees under
effective and compliance has been the appropriate hourly rate shown in
section 743(a)(1)(A), with respect to a table 2 of this document.
achieved to the Secretary of Health and foreign facility, ‘‘1 or more inspections
Human Services’ (the Secretary) (and, conducted by officers or employees duly IV. Fees for Non-Compliance With a
by delegation, FDA’s) satisfaction at a designated by the Secretary subsequent Recall Order Under Section 743(a)(1)(B)
facility that manufactures, processes, to such an inspection which identified
packs, or holds food for consumption A. What will cause this fee to be
non-compliance materially related to a
necessitated as a result of a previous assessed?
food safety requirement of the FD&C
inspection (also conducted under Act, specifically to determine whether The fee will be assessed for not
section 704) of this facility, which had compliance has been achieved to the complying with a recall order under
a final classification of Official Action Secretary’s (and, by delegation, FDA’s) section 423(d) (21 U.S.C. 350l(d)) or
Indicated (OAI) conducted by or on satisfaction.’’ section 412(f) of the FD&C Act (21
behalf of FDA, when FDA determined This definition allows FDA to fulfill U.S.C. 350a(f)) to cover food recall
the non-compliance was materially the mandate to assess and collect fees activities associated with such order
related to food safety requirements of from the U.S. agent of a foreign facility performed by the Secretary (and by
the FD&C Act. FDA considers such non- in the event that an inspection reveals delegation, FDA) (section 743(a)(1)(B) of
compliance to include non-compliance non-compliance materially related to a the FD&C Act). Non-compliance may
with a statutory or regulatory food safety requirement of the FD&C include the following: (1) Not initiating
requirement under section 402 of the Act, causing one or more subsequent a recall as ordered by FDA; (2) not
FD&C Act (21 U.S.C. 342) and section inspections to determine whether conducting the recall in the manner
403(w) of the FD&C Act (21 U.S.C. compliance has been achieved to the specified by FDA in the recall order; or
343(w)). However, FDA does not Secretary’s (and, by delegation, FDA’s) (3) not providing FDA with requested
consider non-compliance that is satisfaction. By requiring the initial information regarding the recall, as
materially related to a food safety inspection to be conducted by officers ordered by FDA.
requirement to include circumstances or employees duly designated by the
where the non-compliance is of a Secretary, the definition ensures that a B. Who will be responsible for paying
technical nature and not food safety foreign facility would be subject to fees this fee?
related (e.g., failure to comply with a only in the event that FDA, or an entity Section 743(a)(1)(B) of the FD&C Act
sradovich on DSK3GMQ082PROD with NOTICES
food standard or incorrect font size on designated to act on its behalf, has made states that the fee is to be paid by the
a food label). Determining when non- the requisite identification at an initial responsible party for a domestic facility
compliance, other than under sections inspection of non-compliance materially (as defined in section 415(b) of the
402 and 403(w) of the FD&C Act, is related to a food safety requirement of FD&C Act) and an importer who does
materially related to a food safety the FD&C Act. The definition of not comply with a recall order under
requirement of the FD&C Act may ‘‘reinspection-related costs’’ in section section 423 or under section 412(f) of
depend on the facts of a particular 743(a)(2)(B) of the FD&C Act relates to the FD&C Act. In other words, the party
VerDate Sep<11>2014 20:16 Jul 29, 2016 Jkt 238001 PO 00000 Frm 00068 Fmt 4703 Sfmt 4703 E:\FR\FM\01AUN1.SGM 01AUN1](https://thefederalregister.org/doc/81_FR_50672/page/3.svg)
![50528 Federal Register / Vol. 81, No. 147 / Monday, August 1, 2016 / Notices
paying the fee would be the party that FDA to assess and collect an annual section 501(a)(2)(B) of the FD&C Act (21
received the recall order. establishment fee from outsourcing U.S.C. 351(a)(2)(B)) concerning current
facilities, as well as a re-inspection fee good manufacturing practice
C. How much will this fee be?
for each re-inspection of an outsourcing requirements for drugs.
The fee is based on the number of facility. This document establishes the Section 744K of the FD&C Act (21
direct hours spent on taking action in FY 2017 rates for the small business U.S.C. 379j–62) authorizes FDA to
response to the firm’s failure to comply establishment fee ($5,279), the non- assess and collect the following fees
with a recall order. Types of activities small business establishment fee associated with outsourcing facilities:
could include conducting recall audit ($16,852), and the re-inspection fee (1) An annual establishment fee from
checks, reviewing periodic status ($15,837) for outsourcing facilities; each outsourcing facility and (2) a re-
reports, analyzing the status reports and provides information on how the fees inspection fee from each outsourcing
the results of the audit checks, for FY 2017 were determined; and facility subject to a re-inspection (see
conducting inspections, traveling to and describes the payment procedures section 744K(a)(1) of the FD&C Act).
from locations, and monitoring product outsourcing facilities should follow. Under statutorily defined conditions, a
disposition. The direct hours spent on These fee rates are effective October 1, qualified applicant may pay a reduced
each such recall will be billed at the 2016, and will remain in effect through small business establishment fee (see
appropriate hourly rate shown in table September 30, 2017. section 744K(c)(4) of the FD&C Act).
2 of this document. FDA announced in the Federal
FOR FURTHER INFORMATION CONTACT: For
Register of November 24, 2014 (79 FR
V. How must the fees be paid? more information on human drug
69856), the availability of a final
An invoice will be sent to the compounding and outsourcing facility
guidance for industry entitled ‘‘Fees for
responsible party for paying the fee after fees, visit FDA’s Web site at: http://
Human Drug Compounding Outsourcing
FDA completes the work on which the www.fda.gov/Drugs/Guidance
Facilities Under Sections 503B and
invoice is based. Payment must be made ComplianceRegulatoryInformation/ 744K of the FD&C Act.’’ The guidance
within 90 days of the invoice date in PharmacyCompounding/default.htm. provides additional information on the
U.S. currency by check, bank draft, or For questions relating to this notice: annual fees for outsourcing facilities
U.S. postal money order payable to the Monica R. Vega, Office of Financial and adjustments required by law, re-
order of the Food and Drug Management, Food and Drug inspection fees, how to submit payment,
Administration. Detailed payment Administration, 8455 Colesville Rd., the effect of failure to pay fees, and how
information will be included with the COLE–14202J, Silver Spring, MD to qualify as a small business to obtain
invoice when it is issued. 20993–0002, 301–796–2127. a reduction of the annual establishment
SUPPLEMENTARY INFORMATION: fee. This guidance can be accessed on
VI. What are the consequences of not FDA’s Web site at: http://www.fda.gov/
paying these fees? I. Background
downloads/Drugs/GuidanceCompliance
Under section 743(e)(2) of the FD&C On November 27, 2013, President RegulatoryInformation/Guidances/
Act, any fee that is not paid within 30 Obama signed the Drug Quality and UCM391102.pdf.
days after it is due shall be treated as a Security Act (DQSA), legislation that
claim of the U.S. Government subject to contains important provisions relating II. Fees for FY 2017
provisions of subchapter II of chapter 37 to the oversight of compounding of A. Methodology for Calculating FY 2017
of title 31, United States Code. human drugs. Title I of this law, the Adjustment Factors
Compounding Quality Act, created a
Dated: July 27, 2016. 1. Inflation Adjustment Factor
new section 503B in the FD&C Act (21
Leslie Kux,
U.S.C. 353b). Under section 503B of the Section 744K(c)(2) of the FD&C Act
Associate Commissioner for Policy. FD&C Act, a human drug compounder specifies the annual inflation
[FR Doc. 2016–18089 Filed 7–29–16; 8:45 am] can become an ‘‘outsourcing facility.’’ adjustment for outsourcing facility fees.
BILLING CODE 4164–01–P Outsourcing facilities, as defined in The inflation adjustment has two
section 503B(d)(4) of the FD&C Act, are components: One based on FDA’s
facilities that meet all of the conditions payroll costs and one based on FDA’s
DEPARTMENT OF HEALTH AND described in section 503B(a), including non-payroll costs for the first three of
HUMAN SERVICES registering with FDA as an outsourcing the four previous fiscal years. The
facility and paying an annual payroll component of the annual
Food and Drug Administration
establishment fee. If the conditions of inflation adjustment is calculated by
[Docket No. FDA–2016–N–0007] section 503B are met, a drug taking the average change in the FDA’s
compounded by or under the direct per-full time equivalent (FTE) personnel
Outsourcing Facility Fee Rates for supervision of a licensed pharmacist in compensation and benefits (PC&B) in
Fiscal Year 2017 an outsourcing facility is exempt from the first three of the four previous fiscal
AGENCY: Food and Drug Administration, three sections of the FD&C Act: (1) years (see section 744K(c)(2)(A)(ii) of
HHS. Section 502(f)(1) (21 U.S.C. 352(f)(1)) the FD&C Act). FDA’s total annual
ACTION: Notice. concerning the labeling of drugs with spending on PC&B is divided by the
adequate directions for use; (2) section total number of FTEs per fiscal year to
SUMMARY: The Food and Drug 505 (21 U.S.C. 355) concerning the determine the average PC&B per FTE.
Administration (FDA) is announcing the approval of human drug products under Table 1 summarizes the actual cost
sradovich on DSK3GMQ082PROD with NOTICES
fiscal year (FY) 2017 rates for the new drug applications (NDAs) or and FTE data for the specified fiscal
establishment and re-inspection fees abbreviated new drug applications years, and provides the percent change
related to entities that compound (ANDAs); and (3) section 582 (21 U.S.C. from the previous fiscal year and the
human drugs and elect to register as 360eee–1) concerning drug supply chain average percent change over the first
outsourcing facilities under the Federal security requirements. Drugs three of the four fiscal years preceding
Food, Drug, and Cosmetic Act (the compounded in outsourcing facilities FY 2017. The 3-year average is 1.8759
FD&C Act). The FD&C Act authorizes are not exempt from the requirements of percent.
VerDate Sep<11>2014 20:16 Jul 29, 2016 Jkt 238001 PO 00000 Frm 00069 Fmt 4703 Sfmt 4703 E:\FR\FM\01AUN1.SGM 01AUN1](https://thefederalregister.org/doc/81_FR_50672/page/4.svg)
Document Created: 2016-07-30 06:25:44
Document Modified: 2016-07-30 06:25:44
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| Action | Notice. | |
| Contact | Jason Lewis, Office of Resource Management, Office of Regulatory Affairs, Food and Drug Administration, 12420 Parklawn Dr., Rm. 2046, Rockville, MD 20857, 301-796-5957, email: [email protected] | |
| FR Citation | 81 FR 50525 |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR