Prescription Drug User Fee Amendments of 2002Subtitle <<NOTE: Prescription Drug User Fee Amendments of 2002.>> A-- Prescription Drug User Fees SEC. 501. <<NOTE: 21 USC 301 note.>> SHORT TITLE. This subtitle may be cited as the ``Prescription Drug User Fee Amendments of 2002''. SEC. 502. <<NOTE: 21 USC 379g note.>> FINDINGS. The Congress finds that-- (1) prompt approval of safe and effective new drugs and other therapies is critical to the improvement of the public health so that patients may enjoy the benefits provided by these therapies to treat and prevent illness and disease; (2) 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 the review of human drug applications and the assurance of drug safety; (3) the provisions added by the Prescription Drug User Fee Act of 1992, as amended by the Food and Drug Administration Modernization Act of 1997, have been successful in substantially reducing review times for human drug applications and should be-- (A) reauthorized for an additional 5 years, with certain technical improvements; and (B) carried out by the Food and Drug Administration with new commitments to implement more ambitious and comprehensive improvements in regulatory processes of the Food and Drug Administration, including-- (i) strengthening and improving the review and monitoring of drug safety; (ii) considering greater interaction between the agency and sponsors during the review of drugs and biologics intended to treat serious diseases and life-threatening diseases; and (iii) developing principles for improving first-cycle reviews; and (4) the fees authorized by amendments made in this subtitle will be dedicated towards expediting the drug development process and the process for the review of human drug applications as set forth in the goals identified for purposes of part 2 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. 503. DEFINITIONS. Section 735 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379g) is amended-- (1) in paragraph (1), in the matter after and below subparagraph (C), by striking ``licensure, as described in subparagraph (D)'' and inserting ``licensure, as described in subparagraph (C)''; (2) in paragraph (3)-- (A) in subparagraph (A), by striking ``and'' at the end; (B) in subparagraph (B), by striking the period and inserting ``, and''; (C) by inserting after subparagraph (B) the following subparagraph: ``(C) which is on the list of products described in section 505(j)(7)(A) or is on a list created and maintained by the Secretary of products approved under human drug applications under section 351 of the Public Health Service Act.''; and (D) in the matter after and below subparagraph (C) (as added by subparagraph (C) of this paragraph), by striking ``Service Act,'' and all that follows through ``biological product'' and inserting the following: ``Service Act. Such term does not include a biological product''; (3) in paragraph (6), by adding at the end the following subparagraph: ``(F) In the case of drugs approved after October 1, 2002, under human drug applications or supplements: collecting, developing, and reviewing safety information on the drugs, including adverse event reports, during a period [[Page 116 STAT. 689]] of time after approval of such applications or supplements, not to exceed three years.''; and (4) in paragraph (8)-- (A) by striking the matter after and below subparagraph (B); (B) by striking subparagraph (B); (C) by striking ``is the lower of'' and all that follows through ``Consumer Price Index'' and inserting ``is the Consumer Price Index''; and (D) by striking ``1997, or'' and inserting ``1997.''. SEC. 504. AUTHORITY TO ASSESS AND USE DRUG FEES. (a) Types of Fees.--Section 736(a) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379h(a)) is amended-- (1) in the matter preceding paragraph (1), by striking ``fiscal year 1998'' and inserting ``fiscal year 2003''; (2) in paragraph (1)(A)-- (A) in each of clauses (i) and (ii), by striking ``in subsection (b)'' and inserting ``under subsection (c)(4)''; and (B) in clause (ii), by adding at the end the following sentence: ``Such fee shall be half of the amount of the fee established under clause (i).''; (3) in paragraph (2)(A), in the matter after and below clause (ii)-- (A) by striking ``in subsection (b)'' and inserting ``under subsection (c)(4)''; and (B) by striking ``payable on or before January 31'' and inserting ``payable on or before October 1''; and (4) in paragraph (3)-- (A) by amending subparagraph (A) to read as follows: ``(A) In general.--Except as provided in subparagraph (B), each person who is named as the applicant in a human drug application, and who, after September 1, 1992, had pending before the Secretary a human drug application or supplement, shall pay for each such prescription drug product the annual fee established under subsection (c)(4). Such fee shall be payable on or before October 1 of each year. Such fee shall be paid only once for each product for a fiscal year in which the fee is payable.''; and (B) in subparagraph (B), by striking ``The listing'' and all that follows through ``filed under section 505(b)(2)'' and inserting the following: ``A prescription drug product shall not be assessed a fee under subparagraph (A) if such product is identified on the list compiled under section 505(j)(7)(A) with a potency described in terms of per 100 mL, or if such product is the same product as another product approved under an application filed under section 505(b)''. (b) Fee Amounts.--Section 736(b) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379h(b)) is amended to read as follows: ``(b) Fee Revenue Amounts.--Except as provided in subsections (c), (d), (f), and (g), fees under subsection (a) shall be established to generate the following revenue amounts: ---------------------------------------------------------------------------------------------------------------- Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year ``Type of Fee Revenue 2003 2004 2005 2006 2007 ---------------------------------------------------------------------------------------------------------------- Application/Supplement.................... $74,300,000 $77,000,000 $84,000,000 $86,434,000 $86,434,000 Establishment............................. $74,300,000 $77,000,000 $84,000,000 $86,433,000 $86,433,000 Product................................... $74,300,000 $77,000,000 $84,000,000 $86,433,000 $86,433,000 Total Fee Revenue......................... $222,900,000 $231,000,000 $252,000,000 $259,300,000 $259,300,000 ---------------------------------------------------------------------------------------------------------------- If, after the date of the enactment of the Prescription Drug User Fee Amendments of 2002, legislation is enacted requiring the Secretary to fund additional costs of the retirement of Federal personnel, fee revenue amounts shall be increased in each year by the amount necessary to fully fund the portion of such additional costs that are attributable to the process for the review of human drug applications.''. (c) Adjustments.--Section 736(c) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379h(c)) is amended-- (1) in paragraph (1)-- (A) in the matter preceding subparagraph (A), by striking ``fees and total fee revenues'' and inserting ``revenues''; (B) in subparagraph (A)-- (i) by striking ``during the preceding fiscal year''; and (ii) by striking ``, or'' and inserting the following: ``for the 12 month period ending June 30 preceding the fiscal year for which fees are being established, or''; (C) in subparagraph (B), by striking ``for such fiscal year'' and inserting ``for the previous fiscal year''; and (D) in the matter after and below subparagraph (B), by striking ``fiscal year 1997''; and inserting ``fiscal year 2003''; (2) by redesignating paragraphs (2) and (3) as paragraphs (4) and (5), respectively; (3) by inserting after paragraph (1) the following paragraphs: ``(2) <<NOTE: Effective date.>> Workload adjustment.-- Beginning with fiscal year 2004, after the fee revenues established in subsection (b) are adjusted for a fiscal year for inflation in accordance with paragraph (1), the fee revenues shall be adjusted further for such fiscal year to reflect changes in the workload of the Secretary for the process for the review of human drug applications. With respect to such adjustment: ``(A) The adjustment shall be determined by the Secretary based on a weighted average of the change in the total number of human drug applications, commercial investigational new drug applications, efficacy supplements, and manufacturing supplements submitted to the Secretary. <<NOTE: Federal Register, publication.>> The Secretary shall publish in the Federal Register the fee revenues and fees resulting from the adjustment and the supporting methodologies. ``(B) Under no circumstances shall the adjustment result in fee revenues for a fiscal year that are less than the fee revenues for the fiscal year established in subsection (b), as adjusted for inflation under paragraph (1). ``(3) Final year adjustment.--For fiscal year 2007, the Secretary may, in addition to adjustments under paragraphs (1) and (2), further increase the fee revenues and fees established in subsection (b) if such an adjustment is necessary to provide for not more than three months of operating reserves of carryover user fees for the process for the review of human drug applications for the first three months of fiscal year 2008. If such an adjustment is necessary, the rationale for the amount of the increase shall be contained in the annual notice establishing fee revenues and fees for fiscal year 2007. If the Secretary has carryover balances for such process in excess of three months of such operating reserves, the adjustment under this paragraph shall not be made.''; and (4) in paragraph (4) (as redesignated by paragraph (2) of this subsection), by amending such paragraph to read as follows: ``(4) <<NOTE: Effective date.>> Annual fee setting.--The Secretary shall, 60 days before the start of each fiscal year that begins after September 30, 2002, establish, for the next fiscal year, application, product, and establishment fees under subsection (a), based on the revenue amounts established under subsection (b) and the adjustments provided under this subsection.''. (d) Fee Waiver or Reduction.--Section 736(d)) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379h(d)) is amended-- (1) in paragraph (1)-- (A) in subparagraph (C), by inserting ``or'' after the comma at the end; (B) by striking subparagraph (D); and (C) by redesignating subparagraph (E) as subparagraph (D); and (2) in paragraph (3), in each of subparagraphs (A) and (B), by striking ``paragraph (1)(E)'' each place such term appears and inserting ``paragraph (1)(D)''. (e) Assessment of Fees.--Section 736(f) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379h(f)) is amended-- (1) in the heading for the subsection, by striking ``Assessment of Fees.--'' and inserting ``Limitations.--''; and (2) in paragraph (1), by striking the heading for the paragraph and all that follows through ``fiscal year beginning'' and inserting the following: ``In general.--Fees under subsection (a) shall be refunded for a fiscal year beginning''. (f) Crediting and Availability of Fees.-- (1) In general.--Section 736(g)(1) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379h(g)(1)) is amended by striking ``Fees collected for a fiscal year'' and all that follows through ``fiscal year limitation.'' and inserting the following: ``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 remain available until expended.''. (2) Collections and appropriation acts.--Section 736(g)(2) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379h(g)(2)) is amended-- (A) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively; (B) by striking ``(2) Collections'' and all that follows through ``the amount specified'' in clause (i) (as so redesignated) and inserting the following: ``(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''; (C) by moving clause (ii) (as so redesignated) two ems to the right; and (D) by adding at the end the following subparagraph: ``(B) Compliance.--The Secretary shall be considered to have met the requirements of subparagraph (A)(ii) in any fiscal year if the costs funded by appropriations and allocated for the process for the review of human drug applications-- ``(i) are not more than 3 percent below the level specified in subparagraph (A)(ii); or ``(ii)(I) are more than 3 percent below the level specified in subparagraph (A)(ii), and fees assessed for the fiscal year following the subsequent fiscal year are decreased by the amount in excess of 3 percent by which such costs fell below the level specified in such subparagraph; and ``(II) such costs are not more than 5 percent below the level specified in such subparagraph.''. (3) Authorization of appropriations.--Section 736(g)(3) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379h(g)(3)) is amended by striking subparagraphs (A) through (E) and inserting the following: ``(A) $222,900,000 for fiscal year 2003; ``(B) $231,000,000 for fiscal year 2004; ``(C) $252,000,000 for fiscal year 2005; ``(D) $259,300,000 for fiscal year 2006; and ``(E) $259,300,000 for fiscal year 2007;''. SEC. 505. <<NOTE: Effective dates. Deadlines. 21 USC 379g note.>> ACCOUNTABILITY AND REPORTS. (a) Public Accountability.-- (1) Consultation.--In developing recommendations to the Congress for the goals and plans for meeting the goals for the process for the review of human drug applications for the fiscal years after fiscal year 2007, and for the reauthorization of sections 735 and 736 of the Federal Food, Drug, and Cosmetic Act, the Secretary of Health and Human Services (referred to in this section as the ``Secretary'') shall consult with the Committee on Energy and Commerce of the House of Representatives, the Committee on Health, Education, Labor, and Pensions of the Senate, appropriate scientific and academic experts, health care professionals, representatives of patient and consumer advocacy groups, and the regulated industry. (2) <<NOTE: Federal Register, publication.>> Recommendations.--The Secretary shall publish in the Federal Register recommendations under paragraph (1), after negotiations with the regulated industry; shall present such recommendations to the congressional committees specified in such paragraph; shall hold a meeting at which the public may present its views on such recommendations; and shall provide for a period of 30 days for the public to provide written comments on such recommendations. (b) 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 (21 U.S.C. 379g et seq.), the Secretary of Health and Human Services shall prepare and submit to the President, 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 502(4) during such fiscal year and the future plans of the Food and Drug Administration for meeting the goals. (c) 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 (b), 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. 506. REPORTS OF POSTMARKETING STUDIES. Section 506B of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 356b) is amended by adding at the end the following subsections: ``(d) Disclosure.--If a sponsor fails to complete an agreed upon study required by this section by its original or otherwise negotiated deadline, the Secretary shall publish a statement on the Internet site of the Food and Drug Administration stating that the study was not completed and, if the reasons for such failure to complete the study were not satisfactory to the Secretary, a statement that such reasons were not satisfactory to the Secretary. ``(e) Notification.--With respect to studies of the type required under section 506(b)(2)(A) or under section 314.510 or 601.41 of title 21, Code of Federal Regulations, as each of such sections was in effect on the day before the effective date of this subsection, the Secretary may require that a sponsor who, for reasons not satisfactory to the Secretary, fails to complete by its deadline a study under any of such sections of such type for a drug or biological product (including such a study conducted after such effective date) notify practitioners who prescribe such drug or biological product of the failure to complete such study and the questions of clinical benefit, and, where appropriate, questions of safety, that remain unanswered as a result of the failure to complete such study. Nothing in this subsection shall be construed as altering the requirements of the types of studies required under section 506(b)(2)(A) or under section 314.510 or 601.41 of title 21, Code of Federal Regulations, as so in effect, or as prohibiting the Secretary from modifying such sections of title 21 of such Code to provide for studies in addition to those of such type.''. SEC. 507. <<NOTE: 21 USC 379g note.>> SAVINGS CLAUSE. Notwithstanding section 107 of the Food and Drug Administration Modernization Act of 1997, and notwithstanding the amendments made by this subtitle, part 2 of subchapter C of chapter VII of the Federal Food, Drug, and Cosmetic Act, as in effect on the day before the date of the enactment of this Act, continues to be in effect with respect to human drug applications and supplements (as defined in such part as of such day) that, on or after October 1, 1997, but before October 1, 2002, were accepted by the Food and Drug Administration for filing and with respect to assessing and collecting any fee required by such Act for a fiscal year prior to fiscal year 2003. SEC. 508. <<NOTE: 21 USC 356b note.>> EFFECTIVE DATE. The amendments made by this subtitle shall take effect October 1, 2002. SEC. 509. <<NOTE: 21 USC 379g note.>> SUNSET CLAUSE. The amendments made by sections 503 and 504 cease to be effective October 1, 2007, and section 505 ceases to be effective 120 days after such date. 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