83 FR 37500 - Outsourcing Facility Fee Rates for Fiscal Year 2019
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration Federal Register Volume 83, Issue 148 (August 1, 2018)
Food and Drug Administration
Federal Register Volume 83, Issue 148 (August 1, 2018)
| Page Range | 37500-37504 | |
| FR Document | 2018-16416 |
[Federal Register Volume 83, Number 148 (Wednesday, August 1, 2018)] [Notices] [Pages 37500-37504] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-16416] ----------------------------------------------------------------------- DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration [Docket No. FDA-2017-N-0007] Outsourcing Facility Fee Rates for Fiscal Year 2019 AGENCY: Food and Drug Administration, HHS. ACTION: Notice. ----------------------------------------------------------------------- SUMMARY: The Food and Drug Administration (FDA) is announcing the fiscal year (FY) 2019 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 2019 rates for the small business establishment fee ($5,461), the non-small business establishment fee ($18,375), and the re-inspection fee ($16,382) for outsourcing facilities; provides information on how the fees for FY 2019 were determined; and describes the payment procedures outsourcing facilities should follow. These fee rates are effective October 1, 2018, and will remain in effect through September 30, 2019. FOR FURTHER INFORMATION CONTACT: For more information on human drug compounding and outsourcing facility fees: Visit FDAs website at: https://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/PharmacyCompounding/default.htm. [[Page 37501]] For questions relating to this notice: Melissa Hurley, Office of Financial Management, Food and Drug Administration, 8455 Colesville Rd., COLE-14202J, Silver Spring, MD 20993-0002, 240-402-4585. 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 website at: https://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM391102.pdf. II. Fees for FY 2019 A. Methodology for Calculating FY 2019 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 2019. The 3-year average is 2.4152 percent. Table 1--FDA PC&Bs Each Year and Percent Change ---------------------------------------------------------------------------------------------------------------- Fiscal year 2015 2016 2017 3-year average ---------------------------------------------------------------------------------------------------------------- Total PC&B...................... $2,232,304,000 $2,414,728,159 $2,581,551,000 .................. Total FTE....................... 15,484 16,381 17,022 .................. PC&B per FTE.................... $144,168 $147,408 $151,660 .................. Percent change from previous 2.1136% 2.2474% 2.8845% 2.4152% year........................... ---------------------------------------------------------------------------------------------------------------- Section 744K(c)(2)(A)(ii) of the FD&C Act specifies that this 2.4152 percent should be multiplied by the proportion of PC&B to total costs of an average FDA FTE for the same 3 fiscal years. Table 2--FDA PC&Bs as a Percent of FDA Total Costs of an Average FTE ---------------------------------------------------------------------------------------------------------------- Fiscal year 2015 2016 2017 3-year average ---------------------------------------------------------------------------------------------------------------- Total PC&B...................... $2,232,304,000 $2,414,728,159 $2,581,551,000 .................. Total Costs..................... $4,510,565,000 $4,666,236,000 $5,104,580,000 .................. PC&B Percent.................... 49.4906% 51.7490% 50.5732% 50.6043% ---------------------------------------------------------------------------------------------------------------- The payroll adjustment is 2.4152 percent multiplied by 50.6043 percent, or 1.2222 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 2019 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 website: https://data.bls.gov/cgi-bin/surveymost?cu. The data can be viewed by checking the box marked ``U.S. All [[Page 37502]] 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 2015 2016 2017 3-year average ---------------------------------------------------------------------------------------------------------------- Annual CPI...................... 237.017 240.007 245.120 .................. Annual Percent Change........... 0.1187% 1.2615% 2.1304% 1.1702% ---------------------------------------------------------------------------------------------------------------- Section 744K(c)(2)(A)(iii) of the FD&C Act specifies that this 1.1702 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 2015 to 2017 is 49.3957 percent (100 percent - 50.6043 percent = 49.3957 percent). Therefore, the non-pay adjustment is 1.1702 percent times 49.3957 percent, or 0.5780 percent. The PC&B component (1.2222 percent) is added to the non-PC&B component (0.5780 percent), for a total inflation adjustment of 1.8002 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 1.018002. 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 2019 (1.8002 percent) is compounded by adding one to it, and then multiplying it by one plus the inflation adjustment factor for FY 2018 (7.2835 percent), as published in the Federal Register of August 2, 2017 (82 FR 35962 at 35965). The result of this multiplication of the inflation factors for the 4 years since FY 2015 (1.018002 x 1.072835) becomes the inflation adjustment for FY 2019. For FY 2019, the inflation adjustment is 9.2148 percent (rounded). We then add one, making the FY 2019 inflation adjustment factor 1.092148. 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 2019, FDA must estimate: (1) The number of outsourcing facilities that will pay the reduced fee for small businesses for FY 2019 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 2019 were to pay the inflation-adjusted fee amount of $16,382). With respect to (1), FDA estimates that 14 entities will qualify for small business exceptions and will pay the reduced fee for FY 2019. With respect to (2), to estimate the total number of entities that will register as outsourcing facilities for FY 2019, FDA used data submitted by outsourcing facilities through the voluntary registration process, which began in December 2013. Accordingly, FDA estimates that 82 outsourcing facilities, including 14 small businesses, will be registered with FDA in FY 2019. If the projected 82 outsourcing facilities paid the full inflation- adjusted fee of $16,382, this would result in total revenue of $1,343,324 in FY 2019 ($16,382 x 82). However, 14 of the entities that are expected to register as outsourcing facilities for FY 2019 are projected to qualify for the small business exception and to pay one- third of the full fee ($5,461 x 14), totaling $76,454 instead of paying the full fee ($16,382 x 14), which would total $229,348. This would leave a potential shortfall of $152,894 ($229,348 - $76,454). 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 2017 ($1,137), to what would have been the small business adjustment factor for FY 2017 ($892) 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 2017, this was $1,219,449 ($15,837 x 77). The actual FY 2017 revenue from the 77 total registrants (i.e., 71 registrants paying FY 2017 non-small business establishment fee and six small business registrants) paying establishment fees is $1,156,101. $1,156,101 is calculated as follows: (FY 2017 Non-Small Business Establishment Fee adjusted for inflation only) x (total number of registrants in FY 2017 paying Non-Small Business Establishment Fee) + (FY 2017 Small Business Establishment Fee) x (total number of small business registrants in FY 2017 paying Small Business Establishment Fee). $15,837 x 71 + $5,279 x 6 = $1,156,101. This left a shortfall of $63,348 from the estimated total target collection amount ($1,219,449 - $1,156,101). $63,348 divided by the total number of registrants in FY 2017 paying Standard Establishment Fee (71) equals $892. The difference between the small business adjustment factor used in FY 2017 and the small business adjustment factor that would have been used had FDA estimated perfectly; is $245 ($1,137 - $892). The $245 (rounded to the nearest dollar) is then multiplied by the number of actual registrants who paid the standard fee for FY 2017 (71), which provides us a total excess collection of $17,380 in FY 2017. Therefore, to calculate the small business adjustment factor for FY 2019, FDA subtracts $17,380 from the projected shortfall of $152,894 for FY 2019 to arrive at the numerator for the [[Page 37503]] small business adjustment amount, which equals $135,514. This number divided by 68 (the number of expected non-small businesses for FY 2019) is the small business adjustment amount for FY 2019, which is $1,993 (rounded to the nearest dollar). B. FY 2019 Rates for Small Business Establishment Fee, Non-Small Business Establishment Fee, and Re-Inspection Fee 1. Establishment Fee for Qualified Small Businesses \1\ --------------------------------------------------------------------------- \1\ To qualify for a small business reduction of the FY 2019 establishment fee, entities had to submit their exception requests by April 30, 2018. See section 744K(c)(4)(B) of the FD&C Act. The time for requesting a small business exception for FY 2019 has now passed. An entity that wishes to request a small business exception for FY 2020 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 website 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 2019 is 1.092148. See section II.A.1 for the methodology used to calculate the FY 2019 inflation adjustment factor. Therefore, the establishment fee for a qualified small business for FY 2019 is one third of $16,382, which equals $5,461 (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 2019 is 1.092148. The small business adjustment amount for FY 2019 is $1,993. See section II.A.2 for the methodology used to calculate the small business adjustment factor for FY 2019. Therefore, the establishment fee for a non-small business for FY 2019 is $15,000 multiplied by 1.092148 plus $1,993, which equals $18,375 (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 2019 re-inspection fee is equal to $15,000, multiplied by the inflation adjustment factor for that fiscal year. The inflation adjustment factor for FY 2019 is 1.092148. Therefore, the re-inspection fee for FY 2019 is $15,000 multiplied by 1.092148, which equals $16,382 (rounded to the nearest dollar). There is no reduction in this fee for small businesses. C. Summary of FY 2019 Fee Rates Table 4--Outsourcing Facility Fees ------------------------------------------------------------------------ ------------------------------------------------------------------------ Qualified Small Business Establishment Fee..................... $5,461 Non-Small Business Establishment Fee........................... 18,375 Re-inspection Fee.............................................. 16,382 ------------------------------------------------------------------------ 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 2018 and wish to maintain their status as an outsourcing facility in FY 2019 must register during the annual registration period that lasts from October 1, 2018, to December 31, 2018. Failure to register and complete payment by December 31, 2018, will result in a loss of status as an outsourcing facility on January 1, 2019. Entities should submit their registration information no later than December 10, 2018, 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. 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. If [[Page 37504]] needed, FDA's tax identification number is 53-0196965. Dated: July 26, 2018. Leslie Kux, Associate Commissioner for Policy. [FR Doc. 2018-16416 Filed 7-31-18; 8:45 am] BILLING CODE 4164-01-P
![37500 Federal Register / Vol. 83, No. 148 / Wednesday, August 1, 2018 / Notices
Subject standard Standard and summary
Summary—Transportation Standards ................ The proposed transportation standards focus broadly on the applicant having a reliable, legal,
and safe mode of transportation for a child in foster care to attend appointments, visitation,
and meetings. We also propose that only adults in the home be permitted to transport chil-
dren in foster care and only those having a driving record in good standing. We specifically
avoid proposing standards that could impact a foster parent based on geographic location
and income. For example, some states require foster parents to have their own vehicle.
However, applicants in states with a high urban population may not have access to or need
a vehicle. Rather, they rely upon public transportation.
Training ............................................................... G. Training: a. Applicants must complete pre-licensing training on the following topics: legal
rights, roles, responsibilities and expectations of foster parents; agency structure, purpose,
policies, and services; laws and regulations; the impact of childhood trauma; managing child
behaviors; first aid (including cardiopulmonary resuscitation (CPR) for the ages of the chil-
dren in placement) and medication administration; and the importance of maintaining mean-
ingful connections between the child and parents, including regular visitation. Foster parents
must participate in ongoing training to receive instruction to support their parental roles and
ensure the parent is up to date with agency requirements. Further, this training may also in-
clude child-specific training and/or may address issues relevant to the general population of
children in foster care.
Summary—Training ............................................ The proposed training standards include both pre-licensing and ongoing training and include
mandatory training topics. The purpose of the pre-licensing training standards is to provide
information to applicants so they can make an informed decision about their commitment to
foster a child. In addition, the pre-service training is to prepare the applicant to be licensed
as a foster parent. This includes training on the reasonable and prudent parent standard per
section 471(a)(24) of the Act. The ongoing training is to ensure the parent receives ongoing
instruction to support their parental roles and remain up to date on policies, requirements,
and services. Therefore, there are no mandatory topics, as these depend on agency prior-
ities and specific individual needs.
Foster Parent Assurances .................................. H. Foster Parent Assurances: Applicants must agree to comply with their roles and respon-
sibilities as discussed with the title IV–E agency once a child is placed in their care. The title
IV–E agency must require assurances including:
a. Applicants will not use corporal or degrading punishment
b. Applicants will not use any illegal substances, abuse alcohol by consuming it in excess
amounts, or abuse legal prescription and/or nonprescription drugs by consuming them
in excess amounts or using them contrary to as indicated.
b. Applicants and their guests will not smoke in the family foster home, in any vehicle
used to transport the child, or in the presence of the child in foster care.
c. Applicants will adhere to the title IV–E agency’s reasonable and prudent parent stand-
ard per section 472(c)(1)(A)(ii)(I) of the Act.
Summary—Foster Parent Assurances ............... There are four proposed foster parent assurances are broadly written to apply across title IV–
E jurisdictions which cover corporal punishment, alcohol and drug use, the reasonable and
prudent parent standard and smoking. Assurances help potential foster family to have a
clear understanding of expectations prior to approval as a foster home, cover behaviors
which cannot be verified as part of the home study and typically are expectations after a
home is licensed. Title IV–E agencies may wish to develop additional assurances as appro-
priate to their jurisdiction.
Dated: July 24, 2018. DEPARTMENT OF HEALTH AND facilities, as well as a re-inspection fee
Steven Wagner, HUMAN SERVICES for each re-inspection of an outsourcing
Acting Assistant Secretary for Children and facility. This document establishes the
Families. Food and Drug Administration FY 2019 rates for the small business
[FR Doc. 2018–16380 Filed 7–31–18; 8:45 am] [Docket No. FDA–2017–N–0007] establishment fee ($5,461), the non-
BILLING CODE 4148–25–P small business establishment fee
Outsourcing Facility Fee Rates for ($18,375), and the re-inspection fee
Fiscal Year 2019 ($16,382) for outsourcing facilities;
AGENCY: Food and Drug Administration, provides information on how the fees
HHS. for FY 2019 were determined; and
ACTION: Notice. describes the payment procedures
outsourcing facilities should follow.
SUMMARY: The Food and Drug These fee rates are effective October 1,
Administration (FDA) is announcing the 2018, and will remain in effect through
fiscal year (FY) 2019 rates for the September 30, 2019.
establishment and re-inspection fees
sradovich on DSK3GMQ082PROD with NOTICES
related to entities that compound FOR FURTHER INFORMATION CONTACT: For
2 Task Force on Sudden Infant Death Syndrome.
human drugs and elect to register as more information on human drug
‘‘SIDS and Other Sleep-Related Infant Deaths: compounding and outsourcing facility
Updated 2016 Recommendations for a Safe Infant
outsourcing facilities under the Federal
Sleeping Environment.’’ Pediatrics, 138, no. 5 Food, Drug, and Cosmetic Act (the fees: Visit FDAs website at: https://
(2016): 1, http://pediatrics.aappublications.org/ FD&C Act). The FD&C Act authorizes www.fda.gov/Drugs/Guidance
content/138/5/e20162938. FDA to assess and collect an annual ComplianceRegulatoryInformation/
3 Ibid., 2–4. establishment fee from outsourcing PharmacyCompounding/default.htm.
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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 2015 2016 2017 3-year average
Annual CPI ....................................................................... 237.017 240.007 245.120 ................................
Annual Percent Change .................................................. 0.1187% 1.2615% 2.1304% 1.1702%
Section 744K(c)(2)(A)(iii) of the FD&C crediting of fees from the previous year collected from the last completed fiscal
Act specifies that this 1.1702 percent to the next year if FDA overestimated year, due to the inability to conclusively
should be multiplied by the proportion the amount of the small business determine the amount of excess fees
of all non-PC&B costs to total costs of an adjustment factor for such previous from the fiscal year that is in progress
average FTE for the same 3 fiscal years. fiscal year. at the time this calculation is made.
The proportion of all non-PC&B costs to Therefore, to calculate the small This crediting is done by comparing the
total costs of an average FDA FTE for business adjustment to the small business adjustment factor for the
FYs 2015 to 2017 is 49.3957 percent establishment fee for non-small last completed fiscal year, FY 2017
(100 percent ¥ 50.6043 percent = businesses for FY 2019, FDA must ($1,137), to what would have been the
49.3957 percent). Therefore, the non- estimate: (1) The number of outsourcing small business adjustment factor for FY
pay adjustment is 1.1702 percent times facilities that will pay the reduced fee 2017 ($892) if FDA had estimated
49.3957 percent, or 0.5780 percent. for small businesses for FY 2019 and (2) perfectly.
The PC&B component (1.2222 the total fee revenue it would have The calculation for what the small
percent) is added to the non-PC&B collected if no entity had qualified for business adjustment would have been if
component (0.5780 percent), for a total the small business exception (i.e., if FDA had estimated perfectly begins by
inflation adjustment of 1.8002 percent each entity that registers as an determining the total target collections
(rounded). Section 744K(c)(2)(A)(i) of outsourcing facility for FY 2019 were to (15,000 × [inflation adjustment factor] ×
the FD&C Act specifies that one is pay the inflation-adjusted fee amount of [number of registrants]). For the most
added to that figure, making the $16,382). recent complete fiscal year, FY 2017,
inflation adjustment 1.018002. With respect to (1), FDA estimates this was $1,219,449 ($15,837 × 77). The
Section 744K(c)(2)(B) of the FD&C Act that 14 entities will qualify for small actual FY 2017 revenue from the 77
provides for this inflation adjustment to business exceptions and will pay the total registrants (i.e., 71 registrants
be compounded after FY 2015. This reduced fee for FY 2019. With respect paying FY 2017 non-small business
factor for FY 2019 (1.8002 percent) is to (2), to estimate the total number of establishment fee and six small business
compounded by adding one to it, and entities that will register as outsourcing registrants) paying establishment fees is
then multiplying it by one plus the facilities for FY 2019, FDA used data $1,156,101. $1,156,101 is calculated as
inflation adjustment factor for FY 2018 submitted by outsourcing facilities follows: (FY 2017 Non-Small Business
(7.2835 percent), as published in the through the voluntary registration Establishment Fee adjusted for inflation
Federal Register of August 2, 2017 (82 process, which began in December 2013. only) × (total number of registrants in
FR 35962 at 35965). The result of this Accordingly, FDA estimates that 82 FY 2017 paying Non-Small Business
multiplication of the inflation factors for outsourcing facilities, including 14 Establishment Fee) + (FY 2017 Small
the 4 years since FY 2015 (1.018002 × small businesses, will be registered with Business Establishment Fee) × (total
1.072835) becomes the inflation FDA in FY 2019. number of small business registrants in
adjustment for FY 2019. For FY 2019, If the projected 82 outsourcing FY 2017 paying Small Business
the inflation adjustment is 9.2148 facilities paid the full inflation-adjusted Establishment Fee). $15,837 × 71 +
percent (rounded). We then add one, fee of $16,382, this would result in total $5,279 × 6 = $1,156,101. This left a
making the FY 2019 inflation revenue of $1,343,324 in FY 2019 shortfall of $63,348 from the estimated
adjustment factor 1.092148. ($16,382 × 82). However, 14 of the total target collection amount
entities that are expected to register as ($1,219,449 ¥ $1,156,101). $63,348
2. Small Business Adjustment Factor outsourcing facilities for FY 2019 are divided by the total number of
Section 744K(c)(3) of the FD&C Act projected to qualify for the small registrants in FY 2017 paying Standard
specifies that in addition to the inflation business exception and to pay one-third Establishment Fee (71) equals $892.
adjustment factor, the establishment fee of the full fee ($5,461 × 14), totaling The difference between the small
for non-small businesses is to be further $76,454 instead of paying the full fee business adjustment factor used in FY
adjusted for a small business adjustment ($16,382 × 14), which would total 2017 and the small business adjustment
factor. Section 744K(c)(3)(B) of the $229,348. This would leave a potential factor that would have been used had
FD&C Act provides that the small shortfall of $152,894 ($229,348 ¥ FDA estimated perfectly; is $245 ($1,137
business adjustment factor is the $76,454). ¥ $892). The $245 (rounded to the
adjustment to the establishment fee for Additionally, section 744K(c)(5)(A) of nearest dollar) is then multiplied by the
non-small businesses that is necessary the FD&C Act states that in establishing number of actual registrants who paid
to achieve total fees equaling the the small business adjustment factor for
sradovich on DSK3GMQ082PROD with NOTICES
the standard fee for FY 2017 (71), which
amount that FDA would have collected a fiscal year, FDA shall provide for the provides us a total excess collection of
if no entity qualified for the small crediting of fees from the previous year $17,380 in FY 2017.
business exception in section 744K(c)(4) to the next year if FDA overestimated Therefore, to calculate the small
of the FD&C Act. Additionally, section the amount of the small business business adjustment factor for FY 2019,
744K(c)(5)(A) states that in establishing adjustment factor for such previous FDA subtracts $17,380 from the
the small business adjustment factor for fiscal year. FDA has determined that it projected shortfall of $152,894 for FY
a fiscal year, FDA shall provide for the is appropriate to credit excess fees 2019 to arrive at the numerator for the
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![37504 Federal Register / Vol. 83, No. 148 / Wednesday, August 1, 2018 / Notices
needed, FDA’s tax identification I. Background application not requiring clinical data
number is 53–0196965. Sections 735 and 736 of the FD&C Act ($1,294,239), and for the prescription
Dated: July 26, 2018. (21 U.S.C. 379g and 379h, respectively) drug program fee ($309,915). These fees
Leslie Kux, establish two different kinds of user are effective on October 1, 2018, and
fees. Fees are assessed as follows: (1) will remain in effect through September
Associate Commissioner for Policy.
Application fees are assessed on certain 30, 2019. For applications that are
[FR Doc. 2018–16416 Filed 7–31–18; 8:45 am]
types of applications for the review of submitted on or after October 1, 2018,
BILLING CODE 4164–01–P the new fee schedule must be used.
human drug and biological products;
and (2) prescription drug program fees II. Fee Revenue Amount for FY 2019
DEPARTMENT OF HEALTH AND are assessed on certain approved
products (section 736(a) of the FD&C The base revenue amount for FY 2019
HUMAN SERVICES is $935,903,507 prior to adjustments for
Act). When specific conditions are met,
Food and Drug Administration FDA may waive or reduce fees (section inflation, capacity planning, additional
736(d) of the FD&C Act). FTE, operating reserve, and additional
For FY 2018 through FY 2022, the direct costs (see section 736(b)(1) of the
[Docket No. FDA–2017–N–0007] FD&C Act).
base revenue amounts for the total
Prescription Drug User Fee Rates for revenues from all PDUFA fees are A. FY 2018 Statutory Fee Revenue
Fiscal Year 2019 established by PDUFA VI. The base Adjustments for Inflation
revenue amount for FY 2019 is
AGENCY: Food and Drug Administration, $935,903,507. The FY 2019 base PDUFA VI specifies that the
HHS. revenue amount is adjusted for inflation $935,903,507 is to be adjusted for
and for the resource capacity needs for inflation increases for FY 2019 using
ACTION: Notice. two separate adjustments—one for
the process for the review of human
SUMMARY: The Food and Drug drug applications (the capacity planning personnel compensation and benefits
Administration (FDA) is announcing the adjustment). An additional dollar (PC&B) and one for non-PC&B costs (see
rates for prescription drug user fees for amount specified in the statute (see section 736(c)(1) of the FD&C Act).
fiscal year (FY) 2019. The Federal Food, section 736(b)(1)(F) of the FD&C Act) is The component of the inflation
Drug, and Cosmetic Act (FD&C Act), as then added to provide for additional adjustment for payroll costs shall be one
amended by the Prescription Drug User full-time equivalent (FTE) positions to plus the average annual percent change
Fee Amendments of 2017 (PDUFA VI), support PDUFA VI initiatives. The FY in the cost of all PC&B paid per FTE
authorizes FDA to collect application 2019 revenue amount may be adjusted positions at FDA for the first 3 of the
fees for certain applications for the further, if necessary, to provide for preceding 4 FYs, multiplied by the
review of human drug and biological sufficient operating reserves of proportion of PC&B costs to total FDA
products, and prescription drug carryover user fees. Finally, the amount costs of the process for the review of
program fees for certain approved is adjusted to provide for additional human drug applications for the first 3
products. This notice establishes the fee direct costs to fund PDUFA VI of the preceding 4 FYs (see section
rates for FY 2019. initiatives. Fee amounts are to be 736(c)(1)(A) and (c)(1)(B) of the FD&C
established each year so that revenues Act).
FOR FURTHER INFORMATION CONTACT: Lola Table 1 summarizes the actual cost
from application fees provide 20 percent
Olajide, Office of Financial of the total revenue, and prescription and FTE data for the specified FYs and
Management, Food and Drug drug program fees provide 80 percent of provides the percent changes from the
Administration, 8455 Colesville Rd., the total revenue. previous FYs and the average percent
COLE–14541B, Silver Spring, MD This document provides fee rates for changes over the first three of the four
20993–0002, 240–402–4244. FY 2019 for an application requiring FYs preceding FY 2019. The 3-year
SUPPLEMENTARY INFORMATION: clinical data ($2,588,478), for an average is 2.4152 percent.
TABLE 1—FDA PERSONNEL COMPENSATION AND BENEFITS (PC&B) EACH YEAR AND PERCENT CHANGES
Fiscal year 2015 2016 2017 3-year average
Total PC&B ...................................... $2,232,304,000 $2,414,728,159 $2,581,551,000 ........................................
Total FTE ......................................... 15,484 16,381 17,022 ........................................
PC&B per FTE ................................. $144,168 $147,408 $151,660 ........................................
Percent Change From Previous
Year .............................................. 2.1136 2.2474 2.8845 2.4152
The statute specifies that this 2.4152 the process for the review of human process for the review of human drug
percent be multiplied by the proportion drug applications. Table 2 shows the applications for the first three of the
of PC&B costs to the total FDA costs of PC&B and the total obligations for the preceding four FYs.
TABLE 2—PC&B AS A PERCENT OF TOTAL COST OF THE PROCESS FOR THE REVIEW OF HUMAN DRUG APPLICATIONS
sradovich on DSK3GMQ082PROD with NOTICES
Fiscal year 2015 2016 2017 3-year average
Total PC&B ...................................... $615,483,892 $652,508,273 $711,016,627 ........................................
Total Costs ....................................... $1,127,664,528 $1,157,817,695 $1,206,657,269 ........................................
PC&B Percent .................................. 54.5804 56.3567 58.9245 56.6205
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Document Created: 2018-08-01 01:22:32
Document Modified: 2018-08-01 01:22:32
| 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 FDAs website at: https://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/ PharmacyCompounding/default.htm. | |
| FR Citation | 83 FR 37500 |
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