Assesses annual fees on animal drug products, establishments, and sponsors.
Establishes a fee schedule for FY 2003 through 2007, including total fee revenues for animal drug products, establishments, and sponsors. Adjusts fees to reflect inflation, review workload, operating reserves of carryover user fees (in the final year), and to maintain an equal balance of revenue from applications, products, establishments, and sponsors. Reduces or waives fees: (1) in excess of administrative costs; (2) that present a significant barrier to innovation; (3) to promote availability of drugs intended solely for minor uses or use in minor species; or (4) for first applications by a small business.
Makes fees available for obligation only to the extent provided in advance in appropriations Acts. Offsets any excess fees against subsequent appropriations.
[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 2665 Introduced in Senate (IS)]
107th CONGRESS
2d Session
S. 2665
To amend the Federal Food, Drug and Cosmetic Act to establish a program
of fees relating to animal drugs.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 20, 2002
Mr. Hutchinson (for himself, Mr. Harkin, and Mr. Gregg) introduced the
following bill; which was read twice and referred to the Committee on
Health, Education, Labor, and Pensions
_______________________________________________________________________
A BILL
To amend the Federal Food, Drug and Cosmetic Act to establish a program
of fees relating to animal drugs.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Animal Drug User Fee Act of 2002.''
SEC. 2. FINDINGS.
The Congress finds as follows:
(1) Prompt approval of safe and effective new animal drugs
is critical to the improvement of animal health and the public
health;
(2) Animal health and the public health will be served by
making additional funds available for the purpose of augmenting
the resources of the Food and Drug Administration that are
devoted to the process for review of new animal drug
applications; and
(3) The fees authorized by this title will be dedicated
toward expediting the animal drug development process and the
review of new and supplemental animal drug applications and
investigational animal drug submissions as set forth in the
goals identified, for purposes of part 3 of subchapter C of
chapter VII of the Federal Food, Drug, and Cosmetic Act, in the
letters from the Secretary of Health and Human Services to the
Chairman of the Committee on Energy and Commerce of the House
of Representatives and the Chairman of the Committee on Health,
Education, Labor, and Pensions of the Senate as set forth in
the Congressional Record.
SEC. 3. FEES RELATING TO ANIMAL DRUGS.
Subchapter C of chapter VII of the Federal Food, Drug and Cosmetic
Act (21 U.S.C. 379f et seq.) is amended by adding at the end the
following part:
``Part 3--Fees Relating To Animal Drugs
``SEC. 738. DEFINITIONS.
``For purposes of this subchapter:
``(1) The term ``animal drug application'' means an
application for approval of any new animal drug submitted under
section 512(b)(1). Such term does not include either a new
animal drug application submitted under section 512(b)(2) or a
supplemental animal drug application.
``(2) The term ``supplemental animal drug application''
means--
``(A) a request to the Secretary to approve a
change in an animal drug application which has been
approved; or
``(B) a request to the Secretary to approve a
change to an application approved under section
512(c)(2) for which data with respect to safety or
effectiveness are required.
``(3) The term ``animal drug product'' means each specific
strength or potency of a particular active ingredient or
ingredients in final dosage form marketed by a particular
manufacturer or distributor, which is uniquely identified by
the labeler code and product code portions of the national drug
code, and for which an animal drug application or a
supplemental animal drug application has been approved.
``(4) The term ``animal drug establishment'' means a
foreign or domestic place of business which is at one general
physical location consisting of one or more buildings all of
which are within 5 miles of each other, at which one or more
animal drug products are manufactured in final dosage form.
``(5) The term ``investigational animal drug submission''
means--
``(A) the filing of a claim for an investigational
exemption under section 512(j) for a new animal drug
intended to be the subject of an animal drug
application or a supplemental animal drug application,
or
``(B) the submission of information for the purpose
of enabling the Secretary to evaluate the safety or
effectiveness of an animal drug application or
supplemental animal drug application in the event of
their filing.
``(6) The term ``animal drug sponsor'' means either an
applicant named in an animal drug application, except for an
approved application for which all subject products have been
removed from listing under Section 510, or a person who has
submitted an investigational animal drug submission that has
not been terminated or otherwise rendered inactive by the
Secretary.
``(7) The term ``final dosage form'' means, with respect to
an animal drug product, a finished dosage form which is
approved for administration to an animal without substantial
further manufacturing. Such term includes animal drug products
intended for mixing in animal feeds.
``(8) The term ``process for the review of animal drug
applications'' means the following activities of the Secretary
with respect to the review of animal drug applications,
supplemental animal drug applications, and investigational
animal drug submissions:
``(A) The activities necessary for the review of
animal drug applications, supplemental animal drug
applications, and investigational animal drug
submissions.
``(B) The issuance of action letters which approve
animal drug applications or supplemental animal drug
applications or which set forth in detail the specific
deficiencies in animal drug applications, supplemental
animal drug applications, and investigational animal
drug submissions and, where appropriate, the
actions necessary to place such applications, supplements or
submissions in condition for approval.
``(C) The inspection of animal drug establishments
and other facilities undertaken as part of the
Secretary's review of pending animal drug applications,
supplemental animal drug applications, and
investigational animal drug submissions.
``(D) Monitoring of research conducted in
connection with the review of animal drug applications,
supplemental animal drug applications, and
investigational animal drug submissions.
``(E) The development of regulations and policy
related to the review of animal drug applications,
supplemental animal drug applications, and
investigational animal drug submissions.
``(F) Development of standards for products subject
to review.
``(G) Meetings between the agency and the animal
drug sponsor.
``(H) Review of advertising and labeling prior to
approval of an animal drug application or supplemental
animal drug application, but not such activities after
an animal drug has been approved.
``(9) The term ``costs of resources allocated for the
process for the review of animal drug applications'' means the
expenses incurred in connection with the process for the review
of animal drug applications for--
``(A) officers and employees of the Food and Drug
Administration, contractors of the Food and Drug
Administration, advisory committees consulted with
respect to the review of specific animal drug
applications, supplemental animal drug applications, or
investigational animal drug submissions, and costs
related to such officers, employees, committees, and
contractors, including costs for travel, education, and
recruitment and other personnel activities,
``(B) management of information, and the
acquisition, maintenance, and repair of computer
resources,
``(C) leasing, maintenance, renovation, and repair
of facilities and acquisition, maintenance, and repair
of fixtures, furniture, scientific equipment, and other
necessary materials and supplies, and
``(D) collecting fees under section 739 and
accounting for resources allocated for the review of
animal drug applications, supplemental animal drug
applications, and investigational animal drug
submissions.
``(10) The term ``adjustment factor'' applicable to a
fiscal year refers to the formula set forth in section 735(8)
with the base or comparator year being 2002.
``(11) The term ``affiliate'' refers to the definition set
forth in section 735(9).
``SEC. 739. AUTHORITY TO ASSESS AND USE ANIMAL DRUG FEES.
``(a) Types of Fees.--Beginning in fiscal year 2003, the Secretary
shall assess and collect fees in accordance with this section as
follows:
``(1) Animal drug application and supplement fee.--
``(A) In general.--Each person that submits, on or
after September 1, 2002, an animal drug application or
a supplemental animal drug application shall be subject
to a fee as follows:
``(i) A fee established in subsection (b)
for an animal drug application; and
``(ii) A fee established in subsection (b)
for a supplemental animal drug application for
which safety or effectiveness data are
required.
``(B) Payment.--The fee required by subparagraph
(A) shall be due upon submission of the animal drug
application or supplemental animal drug application.
``(C) Exception for previously filed application or
supplement.--If an animal drug application or a
supplemental animal drug application was submitted by a
person that paid the fee for such application or
supplement, was accepted for filing, and was not
approved or was withdrawn (without a waiver or refund),
the submission of an animal drug application or a
supplemental animal drug application for the same
product by the same person (or the person's licensee,
assignee, or successor) shall not be subject to a fee
under subparagraph (A).
``(D) Refund of fee if application refused for
filing.--The Secretary shall refund 75 percent of the
fee paid under subparagraph (B) for any animal drug
application or supplemental animal drug application
which is refused for filing.
``(E) Refund of fee if application withdrawn.--If
an animal drug application or a supplemental animal
drug application is withdrawn after the application or
supplement was filed, the Secretary may refund the fee
or portion of the fee paid under subparagraph B if no
substantial work was performed on the application or
supplement after the application or supplement was
filed. The Secretary shall have the sole discretion to
refund the fee under this paragraph. A determination by
the Secretary concerning a refund under this paragraph
shall not be reviewable.
``(2) Animal drug product fee.--Each person--
``(A) who is named as the applicant in an animal
drug application or supplemental animal drug
application for an animal drug product which has been
submitted for listing under Section 510, and
``(B) who, after September 1, 2002, had pending
before the Secretary an animal drug application or
supplemental animal drug application;
shall pay for each such animal drug product the annual fee
established in subsection (b). Such fee shall be payable for
the fiscal year in which the animal drug product is first
submitted for listing under Section 510, or is submitted for
relisting under section 510 if the animal drug product has been
withdrawn from listing and relisted. After such fee is paid for
that fiscal year, such fee shall be payable on or before
January 31 of each year. Such fee shall be paid only once for
each animal drug product for a fiscal year in which the fee is
payable.
``(3) Animal drug establishment fee.--Each person--
``(A) who owns or operates, directly or through an
affiliate, an animal drug establishment, and
``(B) who is named as the applicant in an animal
drug application or supplemental animal drug
application for an animal drug product which has been
submitted for listing under Section 510, and
``(C) who, after September 1, 2002, had pending
before the Secretary an animal drug application or
supplemental animal drug application,
shall be assessed an annual fee established in subsection (b)
for each animal drug establishment listed in its approved
animal drug application as an establishment that manufactures
the animal drug product named in the application. The annual
establishment fee shall be assessed in each fiscal year in
which the animal drug product named in the application is
assessed a fee under paragraph (2) unless the animal drug
establishment listed in the application does not engage in the
manufacture of the animal drug product during the fiscal year.
The fee shall be paid on or before January 31 of each year. The
establishment shall be assessed only one fee per fiscal year
under this section, provided, however, that where a single
establishment manufactures both animal drug products and
prescription drug products, as defined in section 735(3), such
establishment shall be assessed both the animal drug
establishment fee and the prescription drug establishment fee,
as set forth in section 736(a)(2), within a single fiscal year.
``(4) Animal drug sponsor fee.--Each person--
``(A) who meets the definition of an animal drug
sponsor within a fiscal year; and
``(B) who, after September 1, 2002, had pending
before the Secretary an animal drug application, a
supplemental animal drug application, or an
investigational animal drug submission,
shall be assessed an annual fee established under subsection
(b). The fee shall be paid on or before January 31 of each
year. Each animal drug sponsor shall pay only one such fee each
fiscal year.
``(b) Fee Amounts.--Except as provided in subsection (a)(1) and
subsections (c), (d), (f), and (g) below, the fees required under
subsection (a) shall be determined and assessed as follows:
``(1) Application and supplement fees.--
``(A) The animal drug application fee under
subsection (a)(1)(A)(i) shall be $35,750 in fiscal year
2003, $57,150 in fiscal year 2004, and $71,500 in
fiscal years 2005, 2006, and 2007.
``(B) The supplemental animal drug application fee
under subsection (a)(1)(A)(ii) shall be $17,850 in
fiscal year 2003, $28,575 in fiscal year 2004, and
$35,700 in fiscal years 2005, 2006, and 2007.
``(2) Total fee revenues for product fees.--The total fee
revenues to be collected in product fees under subsection
(a)(2) shall be $1,250,000 in fiscal year 2003, $2,000,000 in
fiscal year 2004, and $2,500,000 in fiscal years 2005, 2006,
and 2007.
``(3) Total fee revenues for establishment fees.--The total
fee revenues to be collected in establishment fees under
subsection (a)(3) shall be $1,250,000 in fiscal year 2003,
$2,000,000 in fiscal year 2004, and $2,500,000 in fiscal years
2005, 2006, and 2007.
``(4) Total fee revenues for sponsor fees.--The total fee
revenues to be collected in sponsor fees under subsection
(a)(4) shall be $1,250,000 in fiscal year 2003, $2,000,000 in
fiscal year 2004, and $2,500,000 in fiscal years 2005, 2006,
and 2007.
``(c) Adjustments.--
``(1) Inflation adjustment.--The fees and total fee
revenues established in subsection (b) shall be adjusted by the
Secretary by notice, published in the Federal Register, for a
fiscal year according to the formula set forth in section
736(c)(1).
``(2) Workload adjustment.--After the fee revenues are
adjusted for inflation in accordance with subparagraph (1), the
fee revenues shall be further adjusted each fiscal year after
fiscal year 2003 to reflect changes in review workload. With
respect to such adjustment:
``(A) This adjustment shall be determined by the
Secretary based on a weighted average of the change in
the total number of animal drug applications,
supplemental animal drug applications for which data
with respect to safety or effectiveness are required,
manufacturing supplemental animal drug applications,
investigational animal drug study submissions, and
investigational animal drug protocol submissions
submitted to the Secretary. The Secretary shall publish
in the Federal Register the fees resulting from this
adjustment and the supporting methodologies.
``(B) Under no circumstances shall this workload
adjustment result in fee revenues for a fiscal year
that are less than the fee revenues for that fiscal
year established in subsection (b), as adjusted for
inflation under subparagraph (c)(1).
``(3) Final year adjustment.--For FY 2007, the Secretary
may further increase the fees to provide for up to 3 months of
operating reserves of carryover user fees for the process for
the review of animal drug applications for the first three
months of FY 2008. If the Food and Drug Administration has
carryover balances for the process for the review of animal
drug applications in excess of three months of such operating
reserves, then this adjustment will not be made. If this
adjustment is necessary, then the rationale for the amount of
the increase shall be contained in the annual notice setting
fees for FY 2007.
``(4) Annual fee adjustment.--Subject to the amount
appropriated for a fiscal year under subsection (g), the
Secretary shall, within 60 days after the end of each fiscal
year beginning after September 30, 2002, adjust the fees
established by the schedule in subsection (b) for the fiscal
year in which the adjustment occurs so that the revenues
collected from each of the categories of fees described in
paragraphs (1), (2), (3), and (4) of subsection (b) shall be
set to be equal to 25 percent of the total fees appropriated
under subsection (g).
``(5) Limit.--The total amount of fees charged, as adjusted
under this subsection, for a fiscal year may not exceed the
total costs for such fiscal year for the resources allocated
for the process for the review of animal drug applications.
``(d) Fee Waiver or Reduction.--
``(1) In general.--The Secretary shall grant a waiver from
fees assessed under subsection (a) where the Secretary finds
that--
``(A) the assessment of the fee would present a
significant barrier to innovation because of limited
resources available to such person or other
circumstances,
``(B) the fees to be paid by such person will
exceed the anticipated present and future costs
incurred by the Secretary in conducting the process for
the review of animal drug applications for such person,
``(C) the animal drug application is intended
solely to provide for a minor use or minor species
indication, or
``(D) the sponsor involved is a small business
submitting its first animal drug application to the
Secretary for review.
``(2) Use of standard costs.--In making the finding in
paragraph (1)(B), the Secretary may use standard costs.
``(3) Rules for small businesses.--
``(A) Definition.--In paragraph (1)(D), the term
``small business'' means an entity that has fewer than
500 employees, including employees of affiliates.
``(B) Waiver of application fee.--The Secretary
shall waive under paragraph (1)(D) the application fee
for the first animal drug application that a small
business or its affiliate submits to the Secretary for
review. After a small business or its affiliate is
granted such a waiver, the small business or its
affiliate shall pay application fees for all subsequent
animal drug applications and supplemental animal drug
applications for which safety or effectiveness data are
required in the same manner as an entity that does not
qualify as a small business.
``(C) Certification.--The Secretary shall require
any person who applies for a waiver under paragraph
(1)(D) to certify their qualification for the waiver.
The Secretary shall periodically publish in the Federal
Register a list of persons making such certifications.
``(e) Effect of Failure To Pay Fees.--An animal drug application or
supplemental animal drug application submitted by a person subject to
fees under subsection (a) shall be considered incomplete and shall not
be accepted for filing by the Secretary until all fees owed by such
person have been paid. An investigational animal drug submission under
section 738(5)(B) that is submitted by a person subject to fees under
subsection (a) shall be considered incomplete and shall not be accepted
for review by the Secretary until all fees owed by such person have
been paid. The Secretary may discontinue review of any animal drug
application, supplemental animal drug application or investigational
animal drug submission from a person if such person has not submitted
for payment all fees owed under this section by 30 days after the date
upon which they are due.
``(f) Assessment of Fees.--
``(1) Limitation.--Fees may not be assessed under
subsection (a) for a fiscal year beginning after fiscal year
2002 unless appropriations for salaries and expenses of the Food and
Drug Administration for such fiscal year (excluding the amount of fees
appropriated for such fiscal year) are equal to or greater than the
amount of appropriations for the salaries and expenses of the Food and
Drug Administration for the fiscal year 2002 (excluding the amount of
fees appropriated for such fiscal year) multiplied by the adjustment
factor applicable to the fiscal year involved.
``(2) Authority.--If the Secretary does not assess fees
under subsection (a) during any portion of a fiscal year
because of paragraph (1) and if at a later date in such fiscal
year the Secretary may assess such fees, the Secretary may
assess and collect such fees, without any modification in the
rate, for animal drug applications, supplemental animal drug
applications, investigational animal drug submissions,
sponsors, animal drug establishments and animal drug products
at any time in such fiscal year notwithstanding the provisions
of subsection (a) relating to the date fees are to be paid.
``(g) Crediting and Availability of Fees.--
``(1) In general.--Fees authorized under subsection (a)
shall be collected and available for obligation only to the
extent and in the amount provided in advance in appropriations
Acts. Such fees are authorized to be appropriated to remain
available until expended. Such sums as may be necessary may be
transferred from the Food and Drug Administration salaries and
expenses appropriation account without fiscal year limitation
to such appropriation account for salary and expenses with such
fiscal year limitation. The sums transferred shall be available
solely for the process for the review of animal drug
applications.
``(2) Collections and appropriation acts.--
``(A) In general.--The fees authorized by this
section--
``(i) shall be retained in each fiscal year
in an amount not to exceed the amount specified
in appropriation Acts, or otherwise made
available for obligation for such fiscal year,
and
``(ii) shall only be collected and
available to defray increases in the costs of
the resources allocated for the process for the
review of animal drug applications (including
increases in such costs for an additional
number of full-time equivalent positions in the
Department of Health and Human Services to be
engaged in such process) over such costs,
excluding costs paid from fees collected under
this section, for fiscal year 2002 multiplied
by the adjustment factor.
``(B) Compliance with requirement.--The Food and
Drug Administration will be considered to have met the
requirements of subparagraph (A)(ii) in any fiscal year
if--
``(i) the costs funded by appropriations
and allocated for the process for the review of
animal drug applications are not more than 3
percent below the level specified in (B)(i); or
``(ii) the costs funded by appropriations
and allocated for the process for the review of
animal drug applications are more than 3
percent below the level specified in (A)(ii),
and fees assessed for a subsequent fiscal year
are decreased by the amount in excess of 3
percent by which the costs funded by
appropriations and allocated for the process
for the review of animal drug applications fell
below the level specified in (A)(ii), provided that the costs funded by
appropriations and allocated for the process for the review of animal
drug applications are not more than 5 percent below the level specified
in (B)(i).
``(3) Authorization of appropriations.--There are
authorized to be appropriated for fees under this section--
``(A) $5,000,000 for fiscal year 2003,
``(B) $8,000,000 for fiscal year 2004,
``(C) $10,000,000 for fiscal year 2005,
``(D) $10,000,000 for fiscal year 2006, and
``(E) $ 10,000,000 for fiscal year 2007, as
adjusted to reflect adjustments in the total fee
revenues made under this section and changes in the
total amounts collected by animal drug application
fees, supplemental animal drug application fees, animal
drug sponsor fees, animal drug establishment fees, and
animal drug product fees.
``(4) Offset.--Any amount of fees collected for a fiscal
year under this section that exceeds the amount of fees
specified in appropriations Acts for such fiscal year shall be
credited to the appropriation account of the Food and Drug
Administration as provided in paragraph (1), and shall be
subtracted from the amount of fees that would otherwise be
authorized to be collected under this section pursuant to
appropriation Acts for a subsequent fiscal year.
``(h) Collection of Unpaid Fees.--In any case where the Secretary
does not receive payment of a fee assessed under subsection (a) within
30 days after it is due, such fee shall be treated as a claim of the
United States Government subject to subchapter II of chapter 37 of
title 31, United States Code.
``(i) Written Requests for Waivers, Reductions, and Refunds.--To
qualify for consideration for a waiver or reduction under subsection
(d), or for a refund of any fee collected in accordance with subsection
(a), a person shall submit to the Secretary a written request for such
waiver, reduction, or refund not later than 180 days after such fee is
due.
``(j) Construction.--This section may not be construed to require
that the number of full-time equivalent positions in the Department of
Health and Human Services, for officers, employees, and advisory
committees not engaged in the process of the review of animal drug
applications, be reduced to offset the number of officers, employees,
and advisory committees so engaged.''.
SEC. 4. ANNUAL REPORTS.
(a) Performance Report.--Beginning with fiscal year 2003, not later
than 60 days after the end of each fiscal year during which fees are
collected under part 2 of subchapter C of chapter VII of the Federal
Food, Drug, and Cosmetic Act, the Secretary of Health and Human
Services shall prepare and submit to the Committee on Energy and
Commerce of the House of Representatives and the Committee on Health,
Education, Labor, and Pensions of the Senate a report concerning the
progress of the Food and Drug Administration in achieving the goals
identified in the letters described in section 2(3) of this Act toward
expediting the animal drug development process and the review of the
new and supplemental animal drug applications and investigational
animal drug submissions during such fiscal year and the future plans of
the Food and Drug Administration for meeting the goals.
(b) Fiscal Report.--Beginning with fiscal year 2003, not later than
120 days after the end of each fiscal year during which fees are
collected under the part described in subsection (a), the Secretary of
Health and Human Services shall prepare and submit to the Committee on
Energy and Commerce of the House of Representatives and the Committee
on Health, Education, Labor, and Pensions of the Senate a report on the
implementation of the authority for such fees during such fiscal year
and the use, by the Food and Drug Administration, of the fees collected
during such fiscal year for which the report is made.
SEC. 5. SUNSET.
The amendments made by section 3 shall not be in effect after
October 1, 2007 and section 4 shall not be in effect after 120 days
after such date.
<all>
Introduced in Senate
Sponsor introductory remarks on measure. (CR S5862-5863)
Read twice and referred to the Committee on Health, Education, Labor, and Pensions. (text of measure as introduced: CR S5863-5865)
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