82 FR 35962 - Outsourcing Facility Fee Rates for Fiscal Year 2018
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration Federal Register Volume 82, Issue 147 (August 2, 2017)
Food and Drug Administration
Federal Register Volume 82, Issue 147 (August 2, 2017)
| Page Range | 35962-35965 | |
| FR Document | 2017-16185 |
[Federal Register Volume 82, Number 147 (Wednesday, August 2, 2017)] [Notices] [Pages 35962-35965] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-16185] ----------------------------------------------------------------------- DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration [Docket No. FDA-2017-N-0007] Outsourcing Facility Fee Rates for Fiscal Year 2018 AGENCY: Food and Drug Administration, HHS. ACTION: Notice. ----------------------------------------------------------------------- SUMMARY: The Food and Drug Administration (FDA) is announcing the fiscal year (FY) 2018 rates for the establishment and re-inspection fees related to entities that compound human drugs and elect to register as outsourcing facilities under the Federal Food, Drug, and Cosmetic Act (the FD&C Act). The FD&C Act authorizes FDA to assess and collect an annual establishment fee from outsourcing facilities, as well as a re-inspection fee for each re-inspection of an outsourcing facility. This document establishes the FY 2018 rates for the small business establishment fee ($5,364), the non-small business establishment fee ($17,364), and the re-inspection fee ($16,093) for outsourcing facilities; provides information on how the fees for FY 2018 were determined; and describes the payment procedures outsourcing facilities should follow. These fee rates are effective October 1, 2017, and will remain in effect through September 30, 2018. FOR FURTHER INFORMATION CONTACT: For more information on human drug compounding and outsourcing facility fees, visit FDA's Web site at: http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/PharmacyCompounding/default.htm. For questions relating to this notice: Rachel Richter, Office of Financial Management, Food and Drug Administration, 8455 Colesville Rd., COLE-14216, Silver Spring, MD 20993-0002, 301-796-7111. SUPPLEMENTARY INFORMATION: I. Background The Drug Quality and Security Act (DQSA) contains important provisions relating to the oversight of compounding human drugs. Title I of this law, the Compounding Quality Act, created a new section 503B in the FD&C Act (21 U.S.C. 353b). Under section 503B of the FD&C Act, a human drug compounder can become an ``outsourcing facility.'' Outsourcing facilities, as defined in section 503B(d)(4) of the FD&C Act, are facilities that meet all of the conditions described in section 503B(a), including registering with FDA as an outsourcing facility and paying an annual establishment fee. If the conditions of section 503B are met, a drug compounded by or under the direct supervision of a licensed pharmacist in an outsourcing facility is exempt from three sections of the FD&C Act: (1) Section 502(f)(1) (21 U.S.C. 352(f)(1)) concerning the labeling of drugs with adequate directions for use; (2) section 505 (21 U.S.C. 355) concerning the approval of human drug products under new drug applications (NDAs) or abbreviated new drug applications (ANDAs); and (3) section 582 (21 U.S.C. 360eee-1) concerning drug supply chain security requirements. Drugs compounded in outsourcing facilities are not exempt from the requirements of section 501(a)(2)(B) of the FD&C Act (21 U.S.C. 351(a)(2)(B)) concerning current good manufacturing practice requirements for drugs. Section 744K of the FD&C Act (21 U.S.C. 379j-62) authorizes FDA to assess and collect the following fees associated with outsourcing facilities: (1) An annual establishment fee from each outsourcing facility and (2) a re-inspection fee from each outsourcing facility subject to a re-inspection (see section 744K(a)(1) of the FD&C Act). Under statutorily defined conditions, a qualified applicant may pay a reduced small business establishment fee (see section 744K(c)(4) of the FD&C Act). FDA announced in the Federal Register of November 24, 2014 (79 FR 69856), the availability of a final guidance for industry entitled ``Fees for Human Drug Compounding Outsourcing Facilities Under Sections 503B and 744K of the FD&C Act.'' The guidance provides additional information on the annual fees for outsourcing facilities and adjustments required by law, re-inspection fees, how to submit payment, the effect of failure to pay fees, and how to qualify as a small business to obtain a reduction of the annual establishment fee. This guidance can be accessed on FDA's Web site at: https://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM391102.pdf. II. Fees for FY 2018 A. Methodology for Calculating FY 2018 Adjustment Factors 1. Inflation Adjustment Factor Section 744K(c)(2) of the FD&C Act specifies the annual inflation adjustment for outsourcing facility fees. The inflation adjustment has two components: One based on FDA's payroll costs and one based on FDA's non-payroll costs for the first 3 of the 4 previous fiscal years. The payroll component of the annual inflation adjustment is calculated by taking the average change in FDA's per-full time equivalent (FTE) personnel compensation and benefits (PC&B) in the first 3 of the 4 previous fiscal years (see section 744K(c)(2)(A)(ii) of the FD&C Act). FDA's total annual spending on PC&B is divided by the total number of FTEs per fiscal year to determine the average PC&B per FTE. Table 1 summarizes the actual cost and FTE data for the specified fiscal years, and provides the percent change from the previous fiscal year and the average percent change over the first 3 of the 4 fiscal years preceding FY 2018. The 3-year average is 2.2354 percent. Table 1--FDA PC&Bs Each Year and Percent Change ---------------------------------------------------------------------------------------------------------------- Fiscal year 2014 2015 2016 3-Year average ---------------------------------------------------------------------------------------------------------------- Total PC&B.......................... $2,054,937,000 $2,232,304,000 $2,414,728,159 ................. Total FTE........................... 14,555 15,484 16,381 ................. PC&B per FTE........................ $141,184 $144,168 $147,408 ................. Percent change from previous year... 2.3451% 2.1136% 2.2474% 2.2354% ---------------------------------------------------------------------------------------------------------------- Section 744K(c)(2)(A)(ii) of the FD&C Act specifies that this 2.2354 percent should be multiplied by the proportion of PC&B to total costs of an average FDA FTE for the same 3 fiscal years. [[Page 35963]] Table 2--FDA PC&Bs as a Percent of FDA Total Costs of an Average FTE ---------------------------------------------------------------------------------------------------------------- Fiscal year 2014 2015 2016 3-Year average ---------------------------------------------------------------------------------------------------------------- Total PC&B.......................... $2,054,937,000 $2,232,304,000 $2,414,728,159 ................. Total Costs......................... $4,298,476,000 $4,510,565,000 $4,666,236,000 ................. PC&B Percent........................ 47.8062% 49.4906% 51.7490% 49.6819% ---------------------------------------------------------------------------------------------------------------- The payroll adjustment is 2.2354 percent multiplied by 49.6819 percent, or 1.1106 percent. Section 744K(c)(2)(A)(iii) of the FD&C Act specifies that the portion of the inflation adjustment for non-payroll costs for FY 2018 is equal to the average annual percent change in the Consumer Price Index (CPI) for urban consumers (U.S. City Average; Not Seasonally Adjusted; All items; Annual Index) for the first 3 years of the preceding 4 years of available data, multiplied by the proportion of all non-PC&B costs to total costs of an average FDA FTE for the same period. Table 2 provides the summary data for the percent change in the specified CPI for U.S. cities. These data are published by the Bureau of Labor Statistics and can be found on its Web site: http://data.bls.gov/cgi-bin/surveymost?cu. The data can be viewed by checking the box marked ``U.S. All items, 1982-84 = 100--CUUR0000SA0'' and then selecting ``Retrieve Data''. Table 3--Annual and 3-Year Average Percent Change in U.S. City Average CPI ---------------------------------------------------------------------------------------------------------------- Year 2014 2015 2016 3-Year average ---------------------------------------------------------------------------------------------------------------- Annual CPI.......................... 236.736 237.017 240.007 ................. Annual Percent Change............... 1.6222% 0.1187% 1.2615% 1.0008% ---------------------------------------------------------------------------------------------------------------- Section 744K(c)(2)(A)(iii) of the FD&C Act specifies that this 1.0008 percent should be multiplied by the proportion of all non-PC&B costs to total costs of an average FTE for the same 3 fiscal years. The proportion of all non-PC&B costs to total costs of an average FDA FTE for FYs 2014 to 2016 is 50.3181 percent (100 percent-49.6819 percent = 50.3181 percent). Therefore, the non-pay adjustment is 1.0008 percent times 50.3181 percent, or 0.5036 percent. The PC&B component (1.1106 percent) is added to the non-PC&B component (0.5036 percent), for a total inflation adjustment of 1.6142 percent (rounded). Section 744K(c)(2)(A)(i) of the FD&C Act specifies that one is added to that figure, making the inflation adjustment 1.016142. Section 744K(c)(2)(B) of the FD&C Act provides for this inflation adjustment to be compounded after FY 2015. This factor for FY 2018 (1.6142 percent) is compounded by adding one to it, and then multiplying it by one plus the inflation adjustment factor for FY 2017 (5.5792 percent), as published in the Federal Register of August 1, 2016 (81 FR 50528 at 50529). The result of this multiplication of the inflation factors for the 3 years since FY 2015 (1.016142 x 1.055792) becomes the inflation adjustment for FY 2018. For FY 2018, the inflation adjustment is 7.2835 percent (rounded). We then add one, making the FY 2018 inflation adjustment factor 1.072835. 2. Small Business Adjustment Factor Section 744K(c)(3) of the FD&C Act specifies that in addition to the inflation adjustment factor, the establishment fee for non-small businesses is to be further adjusted for a small business adjustment factor. Section 744K(c)(3)(B) of the FD&C Act provides that the small business adjustment factor is the adjustment to the establishment fee for non-small businesses that is necessary to achieve total fees equaling the amount that FDA would have collected if no entity qualified for the small business exception in section 744K(c)(4) of the FD&C Act. Additionally, section 744K(c)(5)(A) states that in establishing the small business adjustment factor for a fiscal year, FDA shall provide for the crediting of fees from the previous year to the next year if FDA overestimated the amount of the small business adjustment factor for such previous fiscal year. Therefore, to calculate the small business adjustment to the establishment fee for non-small businesses for FY 2018, FDA must estimate: (1) The number of outsourcing facilities that will pay the reduced fee for small businesses for FY 2018 and (2) the total fee revenue it would have collected if no entity had qualified for the small business exception (i.e., if each entity that registers as an outsourcing facility for FY 2018 were to pay the inflation-adjusted fee amount of $16,093). With respect to (1), FDA estimates that 12 entities will qualify for small business exceptions and will pay the reduced fee for FY 2018. With respect to (2), to estimate the total number of entities that will register as outsourcing facilities for FY 2018, FDA used data submitted by outsourcing facilities through the voluntary registration process, which began in December 2013. Accordingly, FDA estimates that 76 outsourcing facilities, including 12 small businesses, will be registered with FDA in FY 2018. If the projected 76 outsourcing facilities paid the full inflation- adjusted fee of $16,093, this would result in total revenue of $1,223,068 in FY 2018 ($16,093 x 76). However, 12 of the entities that are expected to register as outsourcing facilities for FY 2018 are projected to qualify for the small business exception and to pay one- third of the full fee ($5,364 x 12), totaling $64,368 instead of paying the full fee ($16,093 x 12), which would total $193,116. This would leave a potential shortfall of $128,748 ($193,116-$64,368). Additionally, section 744K(c)(5)(A) of the FD&C Act states that in establishing the small business adjustment factor for a fiscal year, FDA shall provide for the crediting of fees from the previous year to the next year if FDA overestimated the amount of the small business adjustment factor for such previous fiscal year. FDA has determined that it is appropriate to credit excess fees collected from the last completed fiscal year, due to the inability to conclusively determine the amount of excess fees from the fiscal year that is in progress at the time this calculation is made. This crediting is done by comparing the small business adjustment factor for the last completed fiscal year, FY 2016 ($1,771), to what would have been the small business adjustment factor for FY [[Page 35964]] 2016 ($1,007) if FDA had estimated perfectly. The calculation for what the small business adjustment would have been if FDA had estimated perfectly begins by determining the total target collections (15,000 x [inflation adjustment factor] x [number of registrants]). For the most recent complete fiscal year, FY 2016, this was $1,061,480 ($15,610 x 68). The actual FY 2016 revenue from the 68 total registrants (i.e., 62 registrants paying FY 2016 non-small business establishment fee and six small business registrants) paying establishment fees is $999,038. $999,038 is calculated as follows: [FY 2016 Non-Small Business Establishment Fee adjusted for inflation only] x [total number of registrants in FY 2016 paying Non-Small Business Establishment Fee] + [FY 2016 Small Business Establishment Fee] x [total number of small business registrants in FY 2016 paying Small Business Establishment Fee]. $15,610 x 62 + $5,203 x 6 = $999,038. This left a shortfall of $62,442 from the estimated total target collection amount ($1,061,480-$999,038). $62,442 divided by the total number of registrants in FY 2016 paying Standard Establishment Fee (62) equals $1,007. The difference between the small business adjustment factor used in FY 2016 and the small business adjustment factor that would have been used had FDA estimated perfectly, is $764 ($1,771-$1,007). The $764 is then multiplied by the number of actual registrants who paid the standard fee for FY 2016 (62), which provides us a total excess collection of $47,385 in FY 2016.\1\ --------------------------------------------------------------------------- \1\ The small business adjustment credit in place for FY 2017 fee setting is not relevant to setting fees for FY 2018 due to having more complete collection information. --------------------------------------------------------------------------- Therefore, to calculate the small business adjustment factor for FY 2018, FDA subtracts $47,385 from the projected shortfall of $128,748 for FY 2018 to arrive at the numerator for the small business adjustment amount, which equals $81,363. This number divided by 64 (the number of expected non-small businesses for FY 2018) is the small business adjustment amount for FY 2018, which is $1,271. B. FY 2018 Rates for Small Business Establishment Fee, Non-Small Business Establishment Fee, and Re-Inspection Fee 1. Establishment Fee for Qualified Small Businesses \2\ --------------------------------------------------------------------------- \2\ To qualify for a small business reduction of the FY 2018 establishment fee, entities had to submit their exception requests by April 30, 2017. See section 744K(c)(4)(B) of the FD&C Act. Although the time for requesting a small business exception for FY 2018 has now passed, an entity that wishes to request a small business exception for FY 2019 should consult section 744K(c)(4) of the FD&C Act and section III.D of FDA's guidance for industry entitled ``Fees for Human Drug Compounding Outsourcing Facilities Under Sections 503B and 744K of the FD&C Act,'' which can be accessed on FDA's Web site at https://www.fda.gov/downloads/drugs/ guidancecomplianceregulatoryinformation/guidances/ucm391102.pdf. --------------------------------------------------------------------------- The amount of the establishment fee for a qualified small business is equal to $15,000 multiplied by the inflation adjustment factor for that fiscal year, divided by three (see section 744K(c)(4)(A) and (c)(1)(A) of the FD&C Act). The inflation adjustment factor for FY 2018 is 1.072835. See section II.A.1 for the methodology used to calculate the FY 2018 inflation adjustment factor. Therefore, the establishment fee for a qualified small business for FY 2018 is one third of $16,093, which equals $5,364 (rounded to the nearest dollar). 2. Establishment Fee for Non-Small Businesses Under section 744K(c) of the FD&C Act, the amount of the establishment fee for a non-small business is equal to $15,000 multiplied by the inflation adjustment factor for that fiscal year, plus the small business adjustment factor for that fiscal year, and plus or minus an adjustment factor to account for over- or under- collections due to the small business adjustment factor in the prior year. The inflation adjustment factor for FY 2018 is 1.072835. The small business adjustment amount for FY 2018 is $1,271. See section II.A.2 for the methodology used to calculate the small business adjustment factor for FY 2018. Therefore, the establishment fee for a non-small business for FY 2018 is $15,000 multiplied by 1.072835 plus $1,271, which equals $17,364 (rounded to the nearest dollar). 3. Re-Inspection Fee Section 744K(c)(1)(B) of the FD&C Act provides that the amount of the FY 2018 re-inspection fee is equal to $15,000, multiplied by the inflation adjustment factor for that fiscal year. The inflation adjustment factor for FY 2018 is 1.072835. Therefore, the re-inspection fee for FY 2018 is $15,000 multiplied by 1.072835, which equals $16,093 (rounded to the nearest dollar). There is no reduction in this fee for small businesses. C. Summary of FY 2018 Fee Rates Table 4--Outsourcing Facility Fees ------------------------------------------------------------------------ ------------------------------------------------------------------------ Qualified Small Business Establishment Fee.............. $5,364 Non-Small Business Establishment Fee.................... 17,364 Re-inspection Fee....................................... 16,093 ------------------------------------------------------------------------ III. Fee Payment Options and Procedures A. Establishment Fee Once an entity submits registration information and FDA has determined that the information is complete, the entity will incur the annual establishment fee. FDA will send an invoice to the entity, via email to the email address indicated in the registration file, or via regular mail if email is not an option. The invoice will contain information regarding the obligation incurred, the amount owed, and payment procedures. A facility will not be registered as an outsourcing facility until it has paid the annual establishment fee under section 744K of the FD&C Act. Accordingly, it is important that facilities seeking to operate as outsourcing facilities pay all fees immediately upon receiving an invoice. If an entity does not pay the full invoiced amount within 15 calendar days after FDA issues the invoice, FDA will consider the submission of registration information to have been withdrawn and adjust the invoice to reflect that no fee is due. Outsourcing facilities that registered in FY 2017 and wish to maintain their status as an outsourcing facility in FY 2018 must register during the annual registration period that lasts from October 1, 2017, to December 31, 2017. Failure to register and complete payment by December 31, 2017, will result in a loss of status as an outsourcing facility on January 1, 2018. Entities should submit their registration information no later than December 10, 2017, to allow enough time for review of the registration information, invoicing, and payment of fees before the end of the registration period. B. Re-Inspection Fee FDA will issue invoices for each re-inspection after the conclusion of the re-inspection, via email to the email address indicated in the registration file or via regular mail if email is not an option. Invoices must be paid within 30 days. [[Page 35965]] C. Fee Payment Procedures 1. The preferred payment method is online using electronic check (Automated Clearing House (ACH) also known as eCheck) or credit card (Discover, VISA, MasterCard, American Express). Secure electronic payments can be submitted using the User Fees Payment Portal at https://userfees.fda.gov/pay. (Note: Only full payments are accepted. No partial payments can be made online.) Once you search for your invoice, click ``Pay Now'' to be redirected to Pay.gov. Electronic payment options are based on the balance due. Payment by credit card is available for balances less than $25,000. If the balance exceeds this amount, only the ACH option is available. Payments must be made using U.S bank accounts as well as U.S. credit cards. 2. If paying with a paper check: Checks must be in U.S. currency from a U.S. bank and made payable to the Food and Drug Administration. Payments can be mailed to: Food and Drug Administration, P.O. Box 979033, St. Louis, MO 63197-9000. If a check is sent by a courier that requests a street address, the courier can deliver the check to: U.S. Bank, Attn: Government Lockbox 979033, 1005 Convention Plaza, St. Louis, MO 63101. (Note: This U.S. Bank address is for courier delivery only. If you have any questions concerning courier delivery, contact the U.S. Bank at 314-418-4013). 3. When paying by wire transfer, the invoice number must be included. Without the invoice number the payment may not be applied. Regarding re-inspection fees, if the payment amount is not applied, the invoice amount will be referred to collections. The originating financial institution may charge a wire transfer fee. If the financial institution charges a wire transfer fee, it is required that the outsourcing facility add that amount to the payment to ensure that the invoice is paid in full. Use the following account information when sending a wire transfer: New York Federal Reserve Bank, U.S. Dept of Treasury, TREAS NYC, 33 Liberty St., New York, NY 10045, Acct. No. 75060099, Routing No. 021030004, SWIFT: FRNYUS33, Beneficiary: FDA, 8455 Colesville Rd., 14th Floor, Silver Spring, MD 20993-0002. If needed, FDA's tax identification number is 53-0196965. Dated: July 25, 2017. Leslie Kux, Associate Commissioner for Policy. [FR Doc. 2017-16185 Filed 8-1-17; 8:45 am] BILLING CODE 4164-01-P
![35962 Federal Register / Vol. 82, No. 147 / Wednesday, August 2, 2017 / Notices
FY 2018 that qualify for fees after the For questions relating to this notice: Under statutorily defined conditions, a
December 2017 billing. Rachel Richter, Office of Financial qualified applicant may pay a reduced
Dated: July 26, 2017. Management, Food and Drug small business establishment fee (see
Leslie Kux, Administration, 8455 Colesville Rd., section 744K(c)(4) of the FD&C Act).
COLE–14216, Silver Spring, MD 20993– FDA announced in the Federal
Associate Commissioner for Policy.
0002, 301–796–7111. Register of November 24, 2014 (79 FR
[FR Doc. 2017–16181 Filed 8–1–17; 8:45 am]
SUPPLEMENTARY INFORMATION: 69856), the availability of a final
BILLING CODE 4164–01–P
I. Background guidance for industry entitled ‘‘Fees for
Human Drug Compounding Outsourcing
The Drug Quality and Security Act Facilities Under Sections 503B and
DEPARTMENT OF HEALTH AND (DQSA) contains important provisions
HUMAN SERVICES 744K of the FD&C Act.’’ The guidance
relating to the oversight of provides additional information on the
Food and Drug Administration compounding human drugs. Title I of annual fees for outsourcing facilities
this law, the Compounding Quality Act, and adjustments required by law, re-
[Docket No. FDA–2017–N–0007] created a new section 503B in the FD&C inspection fees, how to submit payment,
Act (21 U.S.C. 353b). Under section the effect of failure to pay fees, and how
Outsourcing Facility Fee Rates for 503B of the FD&C Act, a human drug
Fiscal Year 2018 to qualify as a small business to obtain
compounder can become an a reduction of the annual establishment
AGENCY: Food and Drug Administration, ‘‘outsourcing facility.’’ fee. This guidance can be accessed on
HHS. Outsourcing facilities, as defined in
FDA’s Web site at: https://www.fda.gov/
ACTION: Notice. section 503B(d)(4) of the FD&C Act, are
downloads/Drugs/GuidanceCompliance
facilities that meet all of the conditions
SUMMARY: The Food and Drug RegulatoryInformation/Guidances/
described in section 503B(a), including
Administration (FDA) is announcing the UCM391102.pdf.
registering with FDA as an outsourcing
fiscal year (FY) 2018 rates for the facility and paying an annual II. Fees for FY 2018
establishment and re-inspection fees establishment fee. If the conditions of
related to entities that compound A. Methodology for Calculating FY 2018
section 503B are met, a drug
human drugs and elect to register as Adjustment Factors
compounded by or under the direct
outsourcing facilities under the Federal supervision of a licensed pharmacist in 1. Inflation Adjustment Factor
Food, Drug, and Cosmetic Act (the an outsourcing facility is exempt from
FD&C Act). The FD&C Act authorizes three sections of the FD&C Act: (1) Section 744K(c)(2) of the FD&C Act
FDA to assess and collect an annual Section 502(f)(1) (21 U.S.C. 352(f)(1)) specifies the annual inflation
establishment fee from outsourcing concerning the labeling of drugs with adjustment for outsourcing facility fees.
facilities, as well as a re-inspection fee adequate directions for use; (2) section The inflation adjustment has two
for each re-inspection of an outsourcing 505 (21 U.S.C. 355) concerning the components: One based on FDA’s
facility. This document establishes the approval of human drug products under payroll costs and one based on FDA’s
FY 2018 rates for the small business new drug applications (NDAs) or non-payroll costs for the first 3 of the 4
establishment fee ($5,364), the non- abbreviated new drug applications previous fiscal years. The payroll
small business establishment fee (ANDAs); and (3) section 582 (21 U.S.C. component of the annual inflation
($17,364), and the re-inspection fee 360eee-1) concerning drug supply chain adjustment is calculated by taking the
($16,093) for outsourcing facilities; security requirements. Drugs average change in FDA’s per-full time
provides information on how the fees compounded in outsourcing facilities equivalent (FTE) personnel
for FY 2018 were determined; and are not exempt from the requirements of compensation and benefits (PC&B) in
describes the payment procedures section 501(a)(2)(B) of the FD&C Act (21 the first 3 of the 4 previous fiscal years
outsourcing facilities should follow. U.S.C. 351(a)(2)(B)) concerning current (see section 744K(c)(2)(A)(ii) of the
These fee rates are effective October 1, good manufacturing practice FD&C Act). FDA’s total annual spending
2017, and will remain in effect through requirements for drugs. on PC&B is divided by the total number
September 30, 2018. Section 744K of the FD&C Act (21 of FTEs per fiscal year to determine the
FOR FURTHER INFORMATION CONTACT: For U.S.C. 379j–62) authorizes FDA to average PC&B per FTE.
more information on human drug assess and collect the following fees Table 1 summarizes the actual cost
compounding and outsourcing facility associated with outsourcing facilities: and FTE data for the specified fiscal
fees, visit FDA’s Web site at: http:// (1) An annual establishment fee from years, and provides the percent change
www.fda.gov/Drugs/ each outsourcing facility and (2) a re- from the previous fiscal year and the
GuidanceCompliance inspection fee from each outsourcing average percent change over the first 3
RegulatoryInformation/ facility subject to a re-inspection (see of the 4 fiscal years preceding FY 2018.
PharmacyCompounding/default.htm. section 744K(a)(1) of the FD&C Act). The 3-year average is 2.2354 percent.
TABLE 1—FDA PC&BS EACH YEAR AND PERCENT CHANGE
Fiscal year 2014 2015 2016 3-Year average
Total PC&B .............................................................................. $2,054,937,000 $2,232,304,000 $2,414,728,159 ..............................
sradovich on DSKBCFCHB2PROD with NOTICES
Total FTE ................................................................................. 14,555 15,484 16,381 ..............................
PC&B per FTE ......................................................................... $141,184 $144,168 $147,408 ..............................
Percent change from previous year ........................................ 2.3451% 2.1136% 2.2474% 2.2354%
Section 744K(c)(2)(A)(ii) of the FD&C of PC&B to total costs of an average FDA
Act specifies that this 2.2354 percent FTE for the same 3 fiscal years.
should be multiplied by the proportion
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2016 ($1,007) if FDA had estimated B. FY 2018 Rates for Small Business (rounded to the nearest dollar). There is
perfectly. Establishment Fee, Non-Small Business no reduction in this fee for small
The calculation for what the small Establishment Fee, and Re-Inspection businesses.
business adjustment would have been if Fee
C. Summary of FY 2018 Fee Rates
FDA had estimated perfectly begins by 1. Establishment Fee for Qualified Small
determining the total target collections Businesses 2 TABLE 4—OUTSOURCING FACILITY
(15,000 × [inflation adjustment factor] × The amount of the establishment fee FEES
[number of registrants]). For the most for a qualified small business is equal to
recent complete fiscal year, FY 2016, $15,000 multiplied by the inflation Qualified Small Business Es-
this was $1,061,480 ($15,610 × 68). The adjustment factor for that fiscal year, tablishment Fee ................ $5,364
actual FY 2016 revenue from the 68 Non-Small Business Estab-
divided by three (see section
lishment Fee ..................... 17,364
total registrants (i.e., 62 registrants 744K(c)(4)(A) and (c)(1)(A) of the FD&C Re-inspection Fee ................ 16,093
paying FY 2016 non-small business Act). The inflation adjustment factor for
establishment fee and six small business FY 2018 is 1.072835. See section II.A.1 III. Fee Payment Options and
registrants) paying establishment fees is for the methodology used to calculate Procedures
$999,038. $999,038 is calculated as the FY 2018 inflation adjustment factor.
follows: [FY 2016 Non-Small Business Therefore, the establishment fee for a A. Establishment Fee
Establishment Fee adjusted for inflation qualified small business for FY 2018 is Once an entity submits registration
only] × [total number of registrants in one third of $16,093, which equals information and FDA has determined
FY 2016 paying Non-Small Business $5,364 (rounded to the nearest dollar). that the information is complete, the
Establishment Fee] + [FY 2016 Small 2. Establishment Fee for Non-Small entity will incur the annual
Business Establishment Fee] × [total Businesses establishment fee. FDA will send an
number of small business registrants in invoice to the entity, via email to the
Under section 744K(c) of the FD&C email address indicated in the
FY 2016 paying Small Business Act, the amount of the establishment fee
Establishment Fee]. $15,610 × 62 + registration file, or via regular mail if
for a non-small business is equal to email is not an option. The invoice will
$5,203 × 6 = $999,038. This left a $15,000 multiplied by the inflation contain information regarding the
shortfall of $62,442 from the estimated adjustment factor for that fiscal year, obligation incurred, the amount owed,
total target collection amount plus the small business adjustment and payment procedures. A facility will
($1,061,480¥$999,038). $62,442 factor for that fiscal year, and plus or not be registered as an outsourcing
divided by the total number of minus an adjustment factor to account facility until it has paid the annual
registrants in FY 2016 paying Standard for over- or under-collections due to the establishment fee under section 744K of
Establishment Fee (62) equals $1,007. small business adjustment factor in the the FD&C Act. Accordingly, it is
prior year. The inflation adjustment important that facilities seeking to
The difference between the small
factor for FY 2018 is 1.072835. The operate as outsourcing facilities pay all
business adjustment factor used in FY small business adjustment amount for
2016 and the small business adjustment fees immediately upon receiving an
FY 2018 is $1,271. See section II.A.2 for invoice. If an entity does not pay the full
factor that would have been used had the methodology used to calculate the
FDA estimated perfectly, is $764 invoiced amount within 15 calendar
small business adjustment factor for FY days after FDA issues the invoice, FDA
($1,771¥$1,007). The $764 is then 2018. Therefore, the establishment fee
multiplied by the number of actual will consider the submission of
for a non-small business for FY 2018 is registration information to have been
registrants who paid the standard fee for $15,000 multiplied by 1.072835 plus withdrawn and adjust the invoice to
FY 2016 (62), which provides us a total $1,271, which equals $17,364 (rounded reflect that no fee is due.
excess collection of $47,385 in FY to the nearest dollar). Outsourcing facilities that registered
2016.1 in FY 2017 and wish to maintain their
3. Re-Inspection Fee
Therefore, to calculate the small status as an outsourcing facility in FY
Section 744K(c)(1)(B) of the FD&C Act
business adjustment factor for FY 2018, 2018 must register during the annual
provides that the amount of the FY 2018
FDA subtracts $47,385 from the registration period that lasts from
re-inspection fee is equal to $15,000,
projected shortfall of $128,748 for FY October 1, 2017, to December 31, 2017.
multiplied by the inflation adjustment
2018 to arrive at the numerator for the Failure to register and complete
factor for that fiscal year. The inflation payment by December 31, 2017, will
small business adjustment amount, adjustment factor for FY 2018 is
which equals $81,363. This number result in a loss of status as an
1.072835. Therefore, the re-inspection outsourcing facility on January 1, 2018.
divided by 64 (the number of expected fee for FY 2018 is $15,000 multiplied by
non-small businesses for FY 2018) is the Entities should submit their registration
1.072835, which equals $16,093 information no later than December 10,
small business adjustment amount for
2017, to allow enough time for review
FY 2018, which is $1,271. 2 To qualify for a small business reduction of the
FY 2018 establishment fee, entities had to submit
of the registration information,
their exception requests by April 30, 2017. See invoicing, and payment of fees before
section 744K(c)(4)(B) of the FD&C Act. Although the the end of the registration period.
time for requesting a small business exception for
FY 2018 has now passed, an entity that wishes to B. Re-Inspection Fee
sradovich on DSKBCFCHB2PROD with NOTICES
request a small business exception for FY 2019
should consult section 744K(c)(4) of the FD&C Act
FDA will issue invoices for each re-
and section III.D of FDA’s guidance for industry inspection after the conclusion of the re-
entitled ‘‘Fees for Human Drug Compounding inspection, via email to the email
Outsourcing Facilities Under Sections 503B and address indicated in the registration file
1 The small business adjustment credit in place
744K of the FD&C Act,’’ which can be accessed on
for FY 2017 fee setting is not relevant to setting fees FDA’s Web site at https://www.fda.gov/downloads/
or via regular mail if email is not an
for FY 2018 due to having more complete collection drugs/guidancecomplianceregulatoryinformation/ option. Invoices must be paid within 30
information. guidances/ucm391102.pdf. days.
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![Federal Register / Vol. 82, No. 147 / Wednesday, August 2, 2017 / Notices 35965
C. Fee Payment Procedures DEPARTMENT OF HEALTH AND invited public comments and interested
HUMAN SERVICES parties were given until October 6, 2016,
1. The preferred payment method is
to submit comments.
online using electronic check Food and Drug Administration FDA will hold a webinar for
(Automated Clearing House (ACH) also stakeholders on August 23, 2017, to
known as eCheck) or credit card Over-the-Counter Monograph User provide stakeholders with a status
(Discover, VISA, MasterCard, American Fees: Stakeholder Meeting update on the process of FDA and
Express). Secure electronic payments industry discussions on an OTC
can be submitted using the User Fees AGENCY: Food and Drug Administration,
HHS. Monograph user fee program that began
Payment Portal at https:// in July 2016. FDA will also provide an
userfees.fda.gov/pay. (Note: Only full ACTION: Notice of public meeting.
overview of proposed performance goals
payments are accepted. No partial and procedures related to a potential
SUMMARY: The Food and Drug
payments can be made online.) Once new OTC monograph user fee program.
Administration (FDA) will hold a
you search for your invoice, click ‘‘Pay webinar for stakeholders on August 23, This webinar is intended to be a
Now’’ to be redirected to Pay.gov. 2017, to provide stakeholders with a followup to the June 10, 2016, public
Electronic payment options are based on status update on the process of FDA and meeting and the September 6, 2016,
the balance due. Payment by credit card industry discussions on an Over-the- stakeholder webinar on a potential new
is available for balances less than Counter (OTC) Monograph user fee OTC monograph user fee program.
$25,000. If the balance exceeds this program that began in July 2016. FDA
amount, only the ACH option is II. Background
will also provide an overview of
available. Payments must be made using proposed performance goals and Meeting minutes from FDA and
U.S bank accounts as well as U.S. credit procedures related to a potential new industry discussions on a new OTC
cards. OTC monograph user fee program. This monograph user fee program can be
2. If paying with a paper check: webinar is intended to be a followup to found at: https://www.fda.gov/
Checks must be in U.S. currency from the June 10, 2016, public meeting and ForIndustry/UserFees/
a U.S. bank and made payable to the the September 6, 2016, stakeholder OTCMonographUserFee/default.htm.
Food and Drug Administration. webinar on a potential new OTC The proposed OTC Monograph User Fee
Payments can be mailed to: Food and monograph user fee program. Program Performance Goals and
Drug Administration, P.O. Box 979033, Procedures—Fiscal Years 2018–2022
DATES: FDA will hold a webinar for
St. Louis, MO 63197–9000. If a check is document can also be found at that
stakeholders on Wednesday, August 23,
sent by a courier that requests a street same Web site.
2017, from 12:30 p.m. to 2 p.m. EDT. Additional background information
address, the courier can deliver the
FOR FURTHER INFORMATION CONTACT: on OTC monograph drugs (such as how
check to: U.S. Bank, Attn: Government
Lockbox 979033, 1005 Convention Mary Vienna, Office of Executive OTC drugs can be marketed, and the
Plaza, St. Louis, MO 63101. (Note: This Programs, Center for Drug Evaluation differences between marketing through
U.S. Bank address is for courier delivery and Research, Food and Drug approved applications and marketing
only. If you have any questions Administration, 10903 New Hampshire under the monographs), factors FDA
concerning courier delivery, contact the Ave., Silver Spring, MD 20903–0002, considers important in developing a
U.S. Bank at 314–418–4013). 301–796–4150, email: user-fee program, and the questions for
3. When paying by wire transfer, the OTCMonographUserFeeProgram@ which FDA asked the public to consider
invoice number must be included. fda.hhs.gov. and provide input, can be found in the
Without the invoice number the SUPPLEMENTARY INFORMATION: Federal Register notice from the June
payment may not be applied. Regarding 10, 2016, public meeting (https://
I. Introduction
re-inspection fees, if the payment www.federalregister.gov/articles/2016/
amount is not applied, the invoice On June 10, 2016, FDA held a public 05/11/2016-11098/over-the-counter-
amount will be referred to collections. meeting on a potential new user fee monograph-user-fees-public-meeting-
The originating financial institution program for nonprescription (over-the- request-for-comments). The meeting
may charge a wire transfer fee. If the counter or OTC) monograph drugs. In transcript, meeting recording, and
financial institution charges a wire the announcement of the public meeting presentations from the June 10, 2016,
transfer fee, it is required that the in the Federal Register (May 11, 2016, public meeting, which can serve as
outsourcing facility add that amount to 81 FR 29275), FDA invited public further background information, can be
the payment to ensure that the invoice comment as the Agency considers a found at: https://www.fda.gov/
is paid in full. Use the following user-fee program for OTC monograph ForIndustry/UserFees/
account information when sending a drugs. A user-fee program would OTCMonographUserFee/default.htm. A
wire transfer: New York Federal Reserve provide funding to supplement summary of the September 6, 2016,
Bank, U.S. Dept of Treasury, TREAS congressional non-user-fee stakeholders’ webinar, can also be found
NYC, 33 Liberty St., New York, NY appropriations, and would support at: https://www.fda.gov/ForIndustry/
10045, Acct. No. 75060099, Routing No. timely and efficient FDA review of the UserFees/OTCMonographUserFee/
021030004, SWIFT: FRNYUS33, efficacy and safety of ingredients default.htm.
Beneficiary: FDA, 8455 Colesville Rd., included in or proposed for inclusion in
a monograph. Interested persons were III. Stakeholder Meeting Participation
14th Floor, Silver Spring, MD 20993–
given until July 11, 2016, to submit FDA is seeking participation at the
sradovich on DSKBCFCHB2PROD with NOTICES
0002. If needed, FDA’s tax identification
number is 53–0196965. comments. A stakeholder webinar was webinar by stakeholders, including
held on September 6, 2016, which scientific and academic experts, health
Dated: July 25, 2017. provided stakeholders with a status care professionals, representatives of
Leslie Kux, update on the process of FDA and patient and consumer advocacy groups,
Associate Commissioner for Policy. industry discussions that began in July and representatives of the OTC
[FR Doc. 2017–16185 Filed 8–1–17; 8:45 am] 2016. In the notice of public meeting monograph industry. Participating in
BILLING CODE 4164–01–P (August 8, 2016, 81 FR 52444), FDA the webinar is free. The webinar format
VerDate Sep<11>2014 19:43 Aug 01, 2017 Jkt 241001 PO 00000 Frm 00040 Fmt 4703 Sfmt 4703 E:\FR\FM\02AUN1.SGM 02AUN1](https://thefederalregister.org/doc/82_FR_36109/page/4.svg)
Document Created: 2017-08-02 07:09:15
Document Modified: 2017-08-02 07:09:15
| 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 | For more information on human drug compounding and outsourcing facility fees, visit FDA's Web site at: http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/ PharmacyCompounding/default.htm. | |
| FR Citation | 82 FR 35962 |
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