Federal Food, Drug and Cosmetic Act

Contents of this page:
Part 1--Freedom of Information Fees
Sec. 731. Recovery and Retention of Fees for Freedom of Information Requests

Part 2--Fees Relating to Drugs
Sec. 735. Definitions
Sec. 736. Authority to Assess and Use Drug Fees
Sec. 736A. Fees relating to advisory review of prescription-drug television advertising
Sec. 736B. Reauthorization; reporting requirements

Part 3--Fees Relating to Devices
Sec. 737. Definitions
Sec. 738. Authority to Assess and Use Device Fees
Sec. 738A. Reauthorization; reporting requirements

Part 4--Fees Relating to Animal Drugs
Sec. 739. Definitions
Sec. 740. Authority to Assess and Use Animal Drug Fees.

Cross-reference of FD&C Act and U.S. Code section numbers

CHAPTER VII GENERAL AUTHORITY
SUBCHAPTER C--FEES

PART 1 FREEDOM OF INFORMATION FEES

SEC. 731. [ 21 U.S.C. 379f] RECOVERY AND RETENTION OF FEES FOR FREEDOM OF INFORMATION REQUESTS.

(a) IN GENERAL. The Secretary, acting through the Commissioner of Food and Drugs, may

(1) set and charge fees, in accordance with section 552(a)(4)(A) of title 5, United States Code, to recover all reasonable costs incurred in processing requests made under section 552 of title 5, United States Code, for records obtained or created under this Act or any other Federal law for which responsibility for administration has been delegated to the Commissioner by the Secretary;

(2) retain all fees charged for such requests; and

(3) establish an accounting system and procedures to control receipts and expenditures of fees received under this section.

(b) USE OF FEES. The Secretary and the Commissioner of Food and Drugs shall not use fees received under this section for any purpose other than funding the processing of requests described in subsection (a)(1). Such fees shall not be used to reduce the amount of funds made to carry out other provisions of this Act.

(c) WAIVER OF FEES. Nothing in this section shall supersede the right of a requester to obtain a waiver of fees pursuant to section 552(a)(4)(A) of title 5, United States Code.

PART 2 FEES RELATING TO DRUGS

SEC. 735. [ 21 U.S.C. 379g] DEFINITIONS. 1

For purposes of this part:

(1) The term "human drug application" means an application for--

(A) approval of a new drug submitted under section 505(b), or

(B) licensure of a biological product under section 351 of the Public Health Service Act.

(C)[Redesignated]

Such term does not include a supplement to such an application, does not include an application with respect to whole blood or a blood component for transfusion, does not include an application with respect to a bovine blood product for topical application licensed before September 1, 1992, an allergenic extract product, or an in vitro diagnostic biologic product licensed under section 351 of the Public Health Service Act, does not include an application with respect to a large volume parenteral drug product approved before September 1, 1992, does not include an application for a licensure of a biological product for further manufacturing use only, and does not include an application or supplement submitted by a State or Federal Government entity for a drug that is not distributed commercially. Such term does include an application for licensure, as described in subparagraph (B), of a large volume biological product intended for single dose injection for intravenous use or infusion.

(2) The term "supplement" means a request to the Secretary to approve a change in a human drug application which has been approved.

(3) The term "prescription drug product" means a specific strength or potency of a drug in final dosage form--

(A) for which a human drug application has been approved,

(B) which may be dispensed only under prescription pursuant to section 503(b) , and

(C) which is on the list of products described in section 505(j)(7)(A) (not including the discontinued section of such list) 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 (not including the discontinued section of such list).

Such term does not include whole blood or a blood component for transfusion, does not include a bovine blood product for topical application licensed before September 1, 1992, an allergenic extract product, or an in vitro diagnostic biologic product licensed under section 351 of the Public Health Service Act. Such term does not include a biological product that is licensed for further manufacturing use only, and does not include a drug that is not distributed commercially and is the subject of an application or supplement submitted by a State or Federal Government entity. Such term does include a large volume biological product intended for single dose injection for intravenous use or infusion.

(4) The term "final dosage form" means, with respect to a prescription drug product, a finished dosage form which is approved for administration to a patient without substantial further manufacturing (such as capsules, tablets, or lyophilized products before reconstitution).

(5) The term "prescription 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 five miles of each other and at which one or more prescription drug products are manufactured in final dosage form. For purposes of this paragraph, the term "manufactured" does not include packaging.

(6) The term "process for the review of human drug applications" means the following activities of the Secretary with respect to the review of human drug applications and supplements:

(A) The activities necessary for the review of human drug applications and supplements.

(B) The issuance of action letters which approve human drug applications or which set forth in detail the specific deficiencies in such applications and, where appropriate, the actions necessary to place such applications in condition for approval.

(C) The inspection of prescription drug establishments and other facilities undertaken as part of the Secretary’s review of pending human drug applications and supplements.

(D) Activities necessary for the review of applications for licensure of establishments subject to section 351 of the Public Health Service Act and for the release of lots of biologics under such section.

(E) Monitoring of research conducted in connection with the review of human drug applications.

(F) Postmarket safety activities with respect to drugs approved under human drug applications or supplements, including the following activities:

(i) Collecting, developing, and reviewing safety information on approved drugs, including adverse event reports.

(ii) Developing and using improved adverse-event data-collection systems, including information technology systems.

(iii) Developing and using improved analytical tools to assess potential safety problems, including access to external data bases

(iv) Implementing and enforcing section 505(o) [21 USC § 355(o)] (relating to postapproval studies and clinical trials and labeling changes) and section 505(p) [21 USC § 355(p)] (relating to risk evaluation and mitigation strategies).

(v) Carrying out section 505(k)(5) [21 USC § 355(k)(5)] (relating to adverse event reports and postmarket safety activities).

(7) The term "costs of resources allocated for the process for the review of human drug applications" means the expenses incurred in connection with the process for the review of human drug applications for

(A) officers and employees of the Food and Drug Administration, contractors of the Food and Drug Administration, advisory committees, and costs related to such officers, employees, and committees and to contracts with such contractors,

(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 736 and accounting for resources allocated for the review of human drug applications and supplements.

(8) The term "adjustment factor" applicable to a fiscal year is the Consumer Price Index for all urban consumers (all items; United States city average) for October of the preceding fiscal year divided by such Index for October 1996.

(9) The term "person" includes an affiliate thereof.
(10) The term "active", with respect to a commercial investigational new drug application, means such an application to which information was submitted during the relevant period.
(11) The term "affiliate" means a business entity that has a relationship with a second business entity if, directly or indirectly--

(A) one business entity controls, or has the power to control, the other business entity; or

(B) a third party controls, or has power to control, both of the business entities.

SEC. 736. [ 21 U.S.C. 379h] Authority to assess and use drug fees. 2

(a) Types of fees. Beginning in fiscal year 2008, the Secretary shall assess and collect fees in accordance with this section as follows:

(1) Human drug application and supplement fee.

(A) In general. Each person that submits, on or after September 1, 1992, a human drug application or a supplement shall be subject to a fee as follows:

(i) A fee established under subsection (c)(5) for a human drug application for which clinical data (other than bioavailability or bioequivalence studies) with respect to safety or effectiveness are required for approval.

(ii) A fee established under subsection (c)(5) for a human drug application for which clinical data with respect to safety or effectiveness are not required or a supplement for which clinical data (other than bioavailability or bioequivalence studies) with respect to safety or effectiveness are required. Such fee shall be half of the amount of the fee established under clause (i).

(B) Payment. The fee required by subparagraph (A) shall be due upon submission of the application or supplement.

(C) Exception for previously filed application or supplement. If a human drug application or supplement 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), the submission of a human drug application or a supplement 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 or withdrawn before filing. The Secretary shall refund 75 percent of the fee paid under subparagraph (B) for any application or supplement which is refused for filingor withdrawn without a waiver before filing.

(E) Fees for applications previously refused for filing or withdrawn before filing. A human drug application or supplement that was submitted but was refused for filing, or was withdrawn before being accepted or refused for filing, shall be subject to the full fee under subparagraph (A) upon being resubmitted or filed over protest, unless the fee is waived or reduced under subsection (d).

(F) Exception for designated orphan drug or indication. . A human drug application for a prescription drug product that has been designated as a drug for a rare disease or condition pursuant to section 526 shall not be subject to a fee under subparagraph (A), unless the human drug application includes an indication for other than a rare disease or condition. A supplement proposing to include a new indication for a rare disease or condition in a human drug application shall not be subject to a fee under subparagraph (A), if the drug has been designated pursuant to section 526 as a drug for a rare disease or condition with regard to the indication proposed in such supplement.

(G) Refund of fee if application withdrawn. If an application or supplement is withdrawn after the application or supplement was filed, the Secretary may refund the fee or a portion of the fee 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 a fee or a portion of the fee under this subparagraph. A determination by the Secretary concerning a refund under this paragraph shall not be reviewable.

(2) Prescription drug establishment fee.

(A) In general. Except as provided in subparagraphs (B) and (C), each person that--

(i) is named as the applicant in a human drug application; and

(ii) after September 1, 1992, had pending before the Secretary a human drug application or supplement,

shall be assessed an annual fee established under subsection (c)(5) for each prescription drug establishment listed in its approved human drug application as an establishment that manufactures the prescription drug product named in the application. The annual establishment fee shall be assessed in each fiscal year in which the prescription drug product named in the application is assessed a fee under paragraph (3) unless the prescription drug establishment listed in the application does not engage in the manufacture of the prescription drug product during the fiscal year. The establishment fee shall be payable on or before October 1 of each year. Each such establishment shall be assessed only one fee per establishment, notwithstanding the number of prescription drug products manufactured at the establishment. In the event an establishment is listed in a human drug application by more than one applicant, the establishment fee for the fiscal year shall be divided equally and assessed among the applicants whose prescription drug products are manufactured by the establishment during the fiscal year and assessed product fees under paragraph (3).

(B) Exception. If, during the fiscal year, an applicant initiates or causes to be initiated the manufacture of a prescription drug product at an establishment listed in its human drug application

(i) that did not manufacture the product in the previous fiscal year; and

(ii) for which the full establishment fee has been assessed in the fiscal year at a time before manufacture of the prescription drug product was begun; the applicant will not be assessed a share of the establishment fee for the fiscal year in which the manufacture of the product began.

(i) In general. Except as provided in clause (ii), each person who is named as the applicant in an approved human drug application for a positron emission tomography drug shall be subject under subparagraph (A) to one-sixth of an annual establishment fee with respect to each such establishment identified in the application as producing positron emission tomography drugs under the approved application.

(ii) Exception from annual establishment fee. Each person who is named as the applicant in an application described in clause (i) shall not be assessed an annual establishment fee for a fiscal year if the person certifies to the Secretary, at a time specified by the Secretary and using procedures specified by the Secretary, that--

(I) the person is a not-for-profit medical center that has only 1 establishment for the production of positron emission tomography drugs; and

(II) at least 95 percent of the total number of doses of each positron emission tomography drug produced by such establishment during such fiscal year will be used within the medical center.

(iii) Definition. For purposes of this subparagraph, the term "positron emission tomography drug" has the meaning given to the term "compounded positron emission tomography drug" in section 201(ii)], except that paragraph (1)(B) of such section shall not apply.

(3) Prescription drug product fee.

(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)(5). 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.

(B) Exception. 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) or 505(j), under an abbreviated application filed under section 507 3 (as in effect on the day before the date of enactment of the Food and Drug Administration Modernization Act of 1997 [enacted Nov. 21, 1997]), or under an abbreviated new drug application pursuant to regulations in effect prior to the implementation of the Drug Price Competition and Patent Term Restoration Act of 1984.

(b) Fee revenue amounts.

(1) In general. For each of the fiscal years 2008 through 2012, fees under subsection (a) shall, except as provided in subsections (c), (d), (f), and (g), shall be established to generate a total revenue amount under such subsection that is equal to the sum of--

(A) $ 392,783,000; and

(B) an amount equal to the modified workload adjustment factor for fiscal year 2007 (as determined under paragraph (3)).

(2) Types of fees. Of the total revenue amount determined for a fiscal year under paragraph (1)--

(A) one-third shall be derived from fees under subsection (a)(1) (relating to human drug applications and supplements);

(B) one-third shall be derived from fees under subsection (a)(2) (relating to prescription drug establishments); and

(3) Modified workload adjustment factor for fiscal year 2007. For purposes of paragraph (1)(B), the Secretary shall determine the modified workload adjustment factor by determining the dollar amount that results from applying the methodology that was in effect under subsection (c)(2) for fiscal year 2007 to the amount $ 354,893,000, except that, with respect to the portion of such determination that is based on the change in the total number of commercial investigational new drug applications, the Secretary shall count the number of such applications that were active during the most recent 12-month period for which data on such submissions is available.

(4) Additional fee revenues for drug safety.

(A) In general. For each of the fiscal years 2008 through 2012, paragraph (1)(A) shall be applied by substituting the amount determined under subparagraph (B) for "$ 392,783,000".

(B) Amount determined. For each of the fiscal years 2008 through 2012, the amount determined under this subparagraph is the sum of--

(i) $ 392,783,000; plus

(ii) (I) for fiscal year 2008, $ 25,000,000;

(II) for fiscal year 2009, $ 35,000,000;

(III) for fiscal year 2010, $ 45,000,000;

(IV) for fiscal year 2011, $ 55,000,000; and

(V) for fiscal year 2012, $ 65,000,000.

(1) Inflation adjustment. For fiscal year 2009 and subsequent fiscal years, the revenues established in subsection (b) shall be adjusted by the Secretary by notice, published in the Federal Register, for a fiscal year to reflect the greater of--

(A) the total percentage change that occurred in the Consumer Price Index for all urban consumers (all items; U.S. city average) for the 12 month period ending June 30 preceding the fiscal year for which fees are being established, or

(B) the total percentage change for the previous fiscal year in basic pay under the General Schedule in accordance with section 5332 of title 5, United States Code [5 USC § 5332], as adjusted by any locality-based comparability payment pursuant to section 5304 of such title [5 USC § 5304] for Federal employees stationed in the District of Columbia, or
(C) the average annual change in the cost, per full-time equivalent position of the Food and Drug Administration, of all personnel compensation and benefits paid with respect to such positions for the first 5 years of the preceding 6 fiscal years.

The adjustment made each fiscal year by this subsection will be added on a compounded basis to the sum of all adjustments made each fiscal year after for fiscal year 2008 under this subsection.

(2) Workload adjustment. For fiscal year 2009 and subsequent fiscal years, 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, (adjusted for changes in review activities, as described in the notice that the Secretary is required to publish in the Federal Register under this subparagraph), efficacy supplements, and manufacturing supplements submitted to the Secretary. The Secretary shall publish in the Federal Register the fee revenues and fees resulting from the adjustment and the supporting methodologies and the change in the total number of active commercial investigational new drug applications (adjusted for changes in review activities, as so described) during the most recent 12-month period for which data on such submissions is available.

(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). Any adjustment for changes in review activities made in setting fees and revenue amounts for fiscal year 2009 may not result in the total workload adjustment being more than 2 percentage points higher than it would have been in the absence of the adjustment for changes in review activities.

(C) The Secretary shall contract with an independent accounting firm to study the adjustment for changes in review activities applied in setting fees and revenue amounts for fiscal year 2009 and to make recommendations, if warranted, for future changes in the methodology for calculating the adjustment. After review of the recommendations, the Secretary shall, if warranted, make appropriate changes to the methodology, and the changes shall be effective for each of the fiscal years 2010 through 2012. The Secretary shall not make any adjustment for changes in review activities for any fiscal year after 2009 unless such study has been completed.

(3) Rent and rent-related cost adjustment. For fiscal year 2010 and each subsequent fiscal year, the Secretary shall, before making adjustments under paragraphs (1) and (2), decrease the fee revenue amount established in subsection (b) if actual costs paid for rent and rent-related expenses for the preceding fiscal year are less than estimates made for such year in fiscal year 2006. Any reduction made under this paragraph shall not exceed the amount by which such costs fall below the estimates made in fiscal year 2006 for such fiscal year, and shall not exceed $ 11,721,000 for any fiscal year.

(4) Final year adjustment.

(A) Increase in fees. For fiscal year 2012, the Secretary may, in addition to adjustments under this paragraph and paragraphs (1 ), (2), and (3), further increase the fee revenues and fees established in subsection (b) if such an adjustment is necessary to provide for not more than 3 months of operating reserves of carryover user fees for the process for the review of human drug applications for the first 3 months of fiscal year 2013. 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 2012. If the Secretary has carryover balances for such process in excess of 3 months of such operating reserves, the adjustment under this subparagraph shall not be made.

(B) Decrease in fees.

(i) In general. For fiscal year 2012, the Secretary may, in addition to adjustments under this paragraph and paragraphs (1), (2), and (3), decrease the fee revenues and fees established in subsection (b) by the amount determined in clause (ii), if, for fiscal year 2009 or 2010--

(I) the amount of the total appropriations for the Food and Drug Administration for such fiscal year (excluding the amount of fees appropriated for such fiscal year) exceeds the amount of the total appropriations for the Food and Drug Administration for fiscal year 2008 (excluding the amount of fees appropriated for such fiscal year), adjusted as provided under paragraph (1); and

(II) the amount of the total appropriations expended for the process for the review of human drug applications at the Food and Drug Administration for such fiscal year (excluding the amount of fees appropriated for such fiscal year) exceeds the amount of appropriations expended for the process for the review of human drug applications at the Food and Drug Administration for fiscal year 2008 (excluding the amount of fees appropriated for such fiscal year), adjusted as provided under paragraph (1).

(ii) Amount of decrease. The amount determined in this clause is the lesser of--

(I) the amount equal to the sum of the amounts that, for each of fiscal years 2009 and 2010, is the lesser of--

(aa) the excess amount described in clause (i)(II) for such fiscal year; or

(bb) the amount specified in subsection (b)(4)(B)(ii) for such fiscal year; or

(II) $ 65,000,000.

(iii) Limitations.

(I) Fiscal year condition. In making the determination under clause (ii), an amount described in subclause (I) of such clause for fiscal year 2009 or 2010 shall be taken into account only if subclauses (I) and (II) of clause (i) apply to such fiscal year.

(II) Relation to subparagraph (A). The Secretary shall limit any decrease under this paragraph if such a limitation is necessary to provide for the 3 months of operating reserves described in subparagraph (A).

(5) Annual fee setting. The Secretary shall, 60 days before the start of each fiscal year that begins after September 30, 2007, 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.

(6) 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 human drug applications.

(d) Fee waiver or reduction.

(1) In general. The Secretary shall grant to a person who is named as the applicant in a human drug application a waiver from or a reduction of one or more fees assessed to that person under subsection (a) where the Secretary finds that--

(A) such waiver or reduction is necessary to protect the public health,

(B) the assessment of the fee would present a significant barrier to innovation because of limited resources available to such person or other circumstances,

(C) 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 human drug applications for such person, or

( D) the applicant involved is a small business submitting its first human drug application to the Secretary for review.

(2) Considerations. In determining whether to grant a waiver or reduction of a fee under paragraph (1), the Secretary shall consider only the circumstances and assets of the applicant involved and any affiliate of the applicant.

(3) Use of standard costs. In making the finding in paragraph (1)(C), the Secretary may use standard costs.

(4) Rules relating to 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, and that does not have a drug product that has been approved under a human drug application and introduced or delivered for introduction into interstate commerce.

(B) Waiver of application fee. The Secretary shall waive under paragraph (1) (D) the application fee for the first human 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--

(i) application fees for all subsequent human drug applications submitted to the Secretary for review in the same manner as an entity that does not qualify as a small business; and

(ii) all supplement fees for all supplements to human drug applications submitted to the Secretary for review in the same manner as an entity that does not qualify as a small business.

(e) Effect of failure to pay fees. A human drug application or supplement 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.

(f) Limitations.

(1) In general. Fees under subsection (a) shall be refunded for a fiscal year beginning after fiscal year 1997 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 1997 (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 human drug applications and supplements, prescription drug establishments, and prescription 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 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 salaries and expenses with such fiscal year limitation. The sums transferred shall be available solely for the process for the review of human 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 human drug applications (including increases in such costs for an additional number of fulltime 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 1997 multiplied by the adjustment factor.

(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. For each of the fiscal years 2008 through 2012, there is authorized to be appropriated for fees under this section an amount equal to the total revenue amount determined under subsection (b) for the fiscal year, as adjusted or otherwise affected under subsection (c) and paragraph (4) of this subsection.

(4) Offset. If the sum of the cumulative amount of fees collected under this section for the fiscal years 2008 through 2010 and the amount of fees estimated to be collected under this section for fiscal year 2011 exceeds the cumulative amount appropriated under paragraph (3) for the fiscal years 2008 through 2011, the excess 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 fiscal year 2012.

(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 [31 USC §§ 3711 et seq.]

(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, employers, and advisory committees not engaged in the process of the review of human drug applications, be reduced to offset the number of officers, employees, and advisory committees so engaged.

(k) Orphan drugs.

(1) Exemption. A drug designated under section 526 [21 USC § 360bb] for a rare disease or condition and approved under section 505 [21 USC § 355] or under section 351 of the Public Health Service Act [42 USC § 262] shall be exempt from product and establishment fees under this section, if the drug meets all of the following conditions:

(A) The drug meets the public health requirements contained in this Act [21 USC §§ 301 et seq.] as such requirements are applied to requests for waivers for product and establishment fees.

(B) The drug is owned or licensed and is marketed by a company that had less than $ 50,000,000 in gross worldwide revenue during the previous year.

(2) Evidence of qualification. An exemption under paragraph (1) applies with respect to a drug only if the applicant involved submits a certification that its gross annual revenues did not exceed $ 50,000,000 for the preceding 12 months before the exemption was requested.

SEC. 736A. [21 USC § 379h-1] Fees relating to advisory review of prescription-drug television advertising

(a) Types of direct-to-consumer television advertisement review fees. Beginning in fiscal year 2008, the Secretary shall assess and collect fees in accordance with this section as follows:

(1) Advisory review fee.

(A) In general. With respect to a proposed direct-to-consumer television advertisement (referred to in this section as a "DTC advertisement"), each person that on or after October 1, 2007, submits such an advertisement for advisory review by the Secretary prior to its initial public dissemination shall, except as provided in subparagraph (B), be subject to a fee established under subsection (c)(3).

(B) Exception for required submissions. A DTC advertisement that is required to be submitted to the Secretary prior to initial public dissemination is not subject to a fee under subparagraph (A) unless the sponsor designates the submission as a submission for advisory review.

(C) Notice to Secretary of number of advertisements. Not later than June 1 of each fiscal year, the Secretary shall publish a notice in the Federal Register requesting any person to notify the Secretary within 30 days of the number of DTC advertisements the person intends to submit for advisory review in the next fiscal year. Notwithstanding the preceding sentence, for fiscal year 2008, the Secretary shall publish such a notice in the Federal Register not later than 30 days after the date of the enactment of the Food and Drug Administration Amendments Act of 2007 [enacted Sept. 27, 2007].

(D) Payment.

(i) In general. The fee required by subparagraph (A) (referred to in this section as "an advisory review fee") shall be due not later than October 1 of the fiscal year in which the DTC advertisement involved is intended to be submitted for advisory review, subject to subparagraph (F)(i). Notwithstanding the preceding sentence, the advisory review fee for any DTC advertisement that is intended to be submitted for advisory review during fiscal year 2008 shall be due not later than 120 days after the date of the enactment of the Food and Drug Administration Amendments of 2007 [enacted Sept. 27, 2007] or an earlier date as specified by the Secretary.

(ii) Effect of submission. Notification of the Secretary under subparagraph (C) of the number of DTC advertisements a person intends to submit for advisory review is a legally binding commitment by that person to pay the annual advisory review fee for that number of submissions on or before October 1 of the fiscal year in which the advertisement is intended to be submitted. Notwithstanding the preceding sentence, the commitment shall be a legally binding commitment by that person to pay the annual advisory review fee for that number of submissions for fiscal year 2008 by the date specified in clause (i).

(iii) Notice regarding carryover submissions. In making a notification under subparagraph (C), the person involved shall in addition notify the Secretary if under subparagraph (F)(i) the person intends to submit a DTC advertisement for which the advisory review fee has already been paid. If the person does not so notify the Secretary, each DTC advertisement submitted by the person for advisory review in the fiscal year involved shall be subject to the advisory review fee.

(E) Modification of advisory review fee.

(i) Late payment. If a person has submitted a notification under subparagraph (C) with respect to a fiscal year and has not paid all advisory review fees due under subparagraph (D) not later than November 1 of such fiscal year (or, in the case of such a notification submitted with respect to fiscal year 2008, not later than 150 days after the date of the enactment of the Food and Drug Administration Amendments Act of 2007 [enacted Sept. 27, 2007] or an earlier date specified by the Secretary), the fees shall be regarded as late and an increase in the amount of fees applies in accordance with this clause, notwithstanding any other provision of this section. For such person, all advisory review fees for such fiscal year shall be due and payable 20 days before any direct-to-consumer advertisement is submitted to the Secretary for advisory review, and each such fee shall be equal to 150 percent of the fee that otherwise would have applied pursuant to subsection (c)(3).

(ii) Exceeding identified number of submissions. If a person submits a number of DTC advertisements for advisory review in a fiscal year that exceeds the number identified by the person under subparagraph (C), an increase in the amount of fees applies under this clause for each submission in excess of such number, notwithstanding any other provision of this section. For each such DTC advertisement, the advisory review fee shall be due and payable 20 days before the advertisement is submitted to the Secretary, and the fee shall be equal to 150 percent of the fee that otherwise would have applied pursuant to subsection (c)(3).

(F) Limits.

(i) Submissions. For each advisory review fee paid by a person for a fiscal year, the person is entitled to acceptance for advisory review by the Secretary of one DTC advertisement and acceptance of one resubmission for advisory review of the same advertisement. The advertisement shall be submitted for review in the fiscal year for which the fee was assessed, except that a person may carry over not more than one paid advisory review submission to the next fiscal year. Resubmissions may be submitted without regard to the fiscal year of the initial advisory review submission.

(ii) No refunds. Except as provided by subsections (d)(4) and (f), fees paid under this section shall not be refunded.

(iii) No waivers, exemptions, or reductions. The Secretary shall not grant a waiver, exemption, or reduction of any fees due or payable under this section.

(iv) Right to advisory review not transferable. The right to an advisory review under this paragraph is not transferable, except to a successor in interest.

(2) Operating reserve fee.

(A) In general. Each person that on or after October 1, 2007, is assessed an advisory review fee under paragraph (1) shall be subject to fee established under subsection (d)(2) (referred to in this section as an "operating reserve fee") for the first fiscal year in which an advisory review fee is assessed to such person. The person is not subject to an operating reserve fee for any other fiscal year.

(B) Payment. Except as provided in subparagraph (C), the operating reserve fee shall be due no later than--

(i) October 1 of the first fiscal year in which the person is required to pay an advisory review fee under paragraph (1); or

(ii) for fiscal year 2008, 120 days after the date of the enactment of the Food and Drug Administration Amendments Act of 2007 [enacted Sept. 27, 2007] or an earlier date specified by the Secretary.

(C) Late notice of submission. If, in the first fiscal year of a person's participation in the program under this section, that person submits any DTC advertisements for advisory review that are in excess of the number identified by that person in response to the Federal Register notice described in subsection (a)(1)(C), that person shall pay an operating reserve fee for each of those advisory reviews equal to the advisory review fee for each submission established under paragraph (1)(E)(ii). Fees required by this subparagraph shall be in addition to any fees required by subparagraph (A). Fees under this subparagraph shall be due 20 days before any DTC advertisement is submitted by such person to the Secretary for advisory review.

(D) Late payment.

(i) In general. Notwithstanding subparagraph (B), and subject to clause (ii), an operating reserve fee shall be regarded as late if the person required to pay the fee has not paid the complete operating reserve fee by--

(I) for fiscal year 2008, 150 days after the date of the enactment of the Food and Drug Administration Amendments Act of 2007 [enacted Sept. 27, 2007] or an earlier date specified by the Secretary; or

(II) in any subsequent year, November 1.

(ii) Complete payment. The complete operating reserve fee shall be due and payable 20 days before any DTC advertisement is submitted by such person to the Secretary for advisory review.

(iii) Amount. Notwithstanding any other provision of this section, an operating reserve fee that is regarded as late under this subparagraph shall be equal to 150 percent of the operating reserve fee that otherwise would have applied pursuant to subsection (d).

(b) Advisory review fee revenue amounts. Fees under subsection (a)(1) shall be established to generate revenue amounts of $ 6,250,000 for each of fiscal years 2008 through 2012, as adjusted pursuant to subsections (c) and (g)(4).

(1) Inflation adjustment. Beginning with fiscal year 2009, the revenues established in subsection (b) shall be adjusted by the Secretary by notice, published in the Federal Register, for a fiscal year to reflect the greater of--

(A) the total percentage change that occurred in the Consumer Price Index for all urban consumers (all items; U.S. city average), for the 12-month period ending June 30 preceding the fiscal year for which fees are being established;

(C) the average annual change in the cost, per full-time equivalent position of the Food and Drug Administration, of all personnel compensation and benefits paid with respect to such positions for the first 5 fiscal years of the previous 6 fiscal years.

The adjustment made each fiscal year by this subsection shall be added on a compounded basis to the sum of all adjustments made each fiscal year after fiscal year 2008 under this subsection.

(2) Workload adjustment. Beginning with fiscal year 2009, 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 with respect to the submission of DTC advertisements for advisory review prior to initial dissemination. With respect to such adjustment:

(A) The adjustment shall be determined by the Secretary based upon the number of DTC advertisements identified pursuant to subsection (a)(1)(C) for the upcoming fiscal year, excluding allowable previously paid carry over submissions. The adjustment shall be determined by multiplying the number of such advertisements projected for that fiscal year that exceeds 150 by $ 27,600 (adjusted each year beginning with fiscal year 2009 for inflation in accordance with paragraph (1)). 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 established for the prior fiscal year.

(3) Annual fee setting for advisory review.

(A) In general. Not later than August 1 of each fiscal year (or, with respect to fiscal year 2008, not later than 90 days after the date of the enactment of the Food and Drug Administration Amendments Act of 2007 [enacted Sept. 27, 2007]), the Secretary shall establish for the next fiscal year the DTC advertisement advisory review fee under subsection (a)(1), based on the revenue amounts established under subsection (b), the adjustments provided under paragraphs (1) and (2), and the number of DTC advertisements identified pursuant to subsection (a)(1)(C), excluding allowable previously-paid carry over submissions. The annual advisory review fee shall be established by dividing the fee revenue for a fiscal year (as adjusted pursuant to this subsection) by the number of DTC advertisements so identified, excluding allowable previously-paid carry over submissions under subsection (a)(1)(F)(i).

(B) Fiscal year 2008 fee limit. Notwithstanding subsection (b) and the adjustments pursuant to this subsection, the fee established under subparagraph (A) for fiscal year 2008 may not be more than $ 83,000 per submission for advisory review.

(C) Annual fee limit. Notwithstanding subsection (b) and the adjustments pursuant to this subsection, the fee established under subparagraph (A) for a fiscal year after fiscal year 2008 may not be more than 50 percent more than the fee established for the prior fiscal year.

(D) Limit. The total amount of fees obligated for a fiscal year may not exceed the total costs for such fiscal year for the resources allocated for the process for the advisory review of prescription drug advertising.

(d) Operating reserves.

(1) In general. The Secretary shall establish in the Food and Drug Administration salaries and expenses appropriation account without fiscal year limitation a Direct-to-Consumer Advisory Review Operating Reserve, of at least $ 6,250,000 in fiscal year 2008, to continue the program under this section in the event the fees collected in any subsequent fiscal year pursuant to subsection (a)(1) do not generate the fee revenue amount established for that fiscal year.

(2) Fee setting. The Secretary shall establish the operating reserve fee under subsection (a)(2)(A) for each person required to pay the fee by multiplying the number of DTC advertisements identified by that person pursuant to subsection (a)(1)(C) by the advisory review fee established pursuant to subsection (c)(3) for that fiscal year, except that in no case shall the operating reserve fee assessed be less than the operating reserve fee assessed if the person had first participated in the program under this section in fiscal year 2008.

(3) Use of operating reserve. The Secretary may use funds from the reserves only to the extent necessary in any fiscal year to make up the difference between the fee revenue amount established for that fiscal year under subsections (b) and (c) and the amount of fees actually collected for that fiscal year pursuant to subsection (a)(1), or to pay costs of ending the program under this section if it is terminated pursuant to subsection (f) or not reauthorized beyond fiscal year 2012.

(4) Refund of operating reserves. Within 120 days after the end of fiscal year 2012, or if the program under this section ends early pursuant to subsection (f), the Secretary, after setting aside sufficient operating reserve amounts to terminate the program under this section, shall refund all amounts remaining in the operating reserve on a pro rata basis to each person that paid an operating reserve fee assessment. In no event shall the refund to any person exceed the total amount of operating reserve fees paid by such person pursuant to subsection (a)(2).

(e) Effect of failure to pay fees. Notwithstanding any other requirement, a submission for advisory review of a DTC advertisement 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 under this section have been paid.

(f) Effect of inadequate funding of program.

(1) Initial funding. If on November 1, 2007, or 120 days after the date of the enactment of the Food and Drug Administration Amendments Act of 2007 [enacted Sept. 27, 2007], whichever is later, the Secretary has not received at least $ 11,250,000 in advisory review fees and operating reserve fees combined, the program under this section shall not commence and all collected fees shall be refunded.

(2) Later fiscal years. Beginning in fiscal year 2009, if, on November 1 of the fiscal year, the combination of the operating reserves, annual fee revenues from that fiscal year, and unobligated fee revenues from prior fiscal years falls below $ 9,000,000, adjusted for inflation (as described in subsection (c)(1)), the program under this section shall terminate, and the Secretary shall notify all participants, retain any money from the unused advisory review fees and the operating reserves needed to terminate the program, and refund the remainder of the unused fees and operating reserves. To the extent required to terminate the program, the Secretary shall first use unobligated advisory review fee revenues from prior fiscal years, then the operating reserves, and finally, unused advisory review fees from the relevant fiscal year.

(g) Crediting and availability of fees.

(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 be available for obligation only if the amounts appropriated as budget authority for such fiscal year are sufficient to support a number of full-time equivalent review employees that is not fewer than the number of such employees supported in fiscal year 2007.

(B) Review employees. For purposes of subparagraph (A)(ii), the term "full-time equivalent review employees" means the total combined number of full-time equivalent employees in--

(i) the Center for Drug Evaluation and Research, Division of Drug Marketing, Advertising, and Communications, Food and Drug Administration; and

(ii) the Center for Biologics Evaluation and Research, Advertising and Promotional Labeling Branch, Food and Drug Administration.

(3) Authorization of appropriations. For each of the fiscal years 2008 through 2012, there is authorized to be appropriated for fees under this section an amount equal to the total revenue amount determined under subsection (b) for the fiscal year, as adjusted pursuant to subsection (c) and paragraph (4) of this subsection, plus amounts collected for the reserve fund under subsection (d).

(4) Offset. Any amount of fees collected for a fiscal year under this section that exceeds the amount of fees specified in appropriation 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 collected under this section pursuant to appropriation Acts for a subsequent fiscal year.

(h) Definitions. For purposes of this section:

(1) The term "advisory review" means reviewing and providing advisory comments on DTC advertisements regarding compliance of a proposed advertisement with the requirements of this Act [21 USC §§ 301 et seq.] prior to its initial public dissemination.

(2) The term "advisory review fee" has the meaning indicated for such term in subsection (a)(1)(D).

(3) The term "carry over submission" means a submission for an advisory review for which a fee was paid in one fiscal year that is submitted for review in the following fiscal year.

(4) The term "direct-to-consumer television advertisement" means an advertisement for a prescription drug product (as defined in section 735(3) [21 USC § 379g(3)]) intended to be displayed on any television channel for less than 3 minutes.

(5) The term "DTC advertisement" has the meaning indicated for such term in subsection (a)(1)(A).

(6) The term "operating reserve fee" has the meaning indicated for such term in subsection (a)(2)(A).

(7) The term "person" includes an individual, partnership, corporation, and association, and any affiliate thereof or successor in interest.

(8) The term "process for the advisory review of prescription drug advertising" means the activities necessary to review and provide advisory comments on DTC advertisements prior to public dissemination and, to the extent the Secretary has additional staff resources available under the program under this section that are not necessary for the advisory review of DTC advertisements, the activities necessary to review and provide advisory comments on other proposed advertisements and promotional material prior to public dissemination.

(9) The term "resources allocated for the process for the advisory review of prescription drug advertising" means the expenses incurred in connection with the process for the advisory review of prescription drug advertising for--

(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;

(D) collection of fees under this section and accounting for resources allocated for the advisory review of prescription drug advertising; and

(E) terminating the program under this section pursuant to subsection (f)(2) if that becomes necessary.

(10) The term "resubmission" means a subsequent submission for advisory review of a direct-to-consumer television advertisement that has been revised in response to the Secretary's comments on an original submission. A resubmission may not introduce significant new concepts or creative themes into the television advertisement.

(11) The term "submission for advisory review" means an original submission of a direct-to-consumer television advertisement for which the sponsor voluntarily requests advisory comments before the advertisement is publicly disseminated.

Sec. 736B [21 USC § 379h-2] Reauthorization; reporting requirements

(a) Performance report. Beginning with fiscal year 2008, not later than 120 days after the end of each fiscal year for which fees are collected under this part [21 USC §§ 379g et seq.], the Secretary 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 101(c) of the Food and Drug Administration Amendments Act of 2007 [21 USC § 379g note] during such fiscal year and the future plans of the Food and Drug Administration for meeting the goals. The report for a fiscal year shall include information on all previous cohorts for which the Secretary has not given a complete response on all human drug applications and supplements in the cohort.

(b) Fiscal report. Beginning with fiscal year 2008, not later than 120 days after the end of each fiscal year for which fees are collected under this part [21 USC §§ 379g et seq.], the Secretary 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 for such fiscal year.

(c) Public availability. The Secretary shall make the reports required under subsections (a) and (b) available to the public on the Internet Web site of the Food and Drug Administration.

(d) Reauthorization.

(1) Consultation. In developing recommendations to present to the Congress with respect to the goals, and plans for meeting the goals, for the process for the review of human drug applications for the first 5 fiscal years after fiscal year 2012, and for the reauthorization of this part [21 USC §§ 379g et seq.] for such fiscal years, the Secretary shall consult with--

(A) the Committee on Energy and Commerce of the House of Representatives;

(B) the Committee on Health, Education, Labor, and Pensions of the Senate;

(D) health care professionals;

(E) representatives of patient and consumer advocacy groups; and

(F) the regulated industry.

(2) Prior public input. Prior to beginning negotiations with the regulated industry on the reauthorization of this part [21 USC §§ 379g et seq.], the Secretary shall--

(A) publish a notice in the Federal Register requesting public input on the reauthorization;

(B) hold a public meeting at which the public may present its views on the reauthorization, including specific suggestions for changes to the goals referred to in subsection (a);

(C) provide a period of 30 days after the public meeting to obtain written comments from the public suggesting changes to this part [21 USC §§ 379g et seq.]; and

(D) publish the comments on the Food and Drug Administration's Internet Web site.

(3) Periodic consultation. Not less frequently than once every month during negotiations with the regulated industry, the Secretary shall hold discussions with representatives of patient and consumer advocacy groups to continue discussions of their views on the reauthorization and their suggestions for changes to this part [21 USC §§ 379g et seq.] as expressed under paragraph (2).

(4) Public review of recommendations. After negotiations with the regulated industry, the Secretary shall--

(A) present the recommendations developed under paragraph (1) to the Congressional committees specified in such paragraph;

(B) publish such recommendations in the Federal Register;

(D) hold a meeting at which the public may present its views on such recommendations; and

(E) after consideration of such public views and comments, revise such recommendations as necessary.

(5) Transmittal of recommendations. Not later than January 15, 2012, the Secretary shall transmit to the Congress the revised recommendations under paragraph (4), a summary of the views and comments received under such paragraph, and any changes made to the recommendations in response to such views and comments.

(6) Minutes of negotiation meetings.

(A) Public availability. Before presenting the recommendations developed under paragraphs (1) through (5) to the Congress, the Secretary shall make publicly available, on the public Web site of the Food and Drug Administration, minutes of all negotiation meetings conducted under this subsection between the Food and Drug Administration and the regulated industry.

(B) Content. The minutes described under subparagraph (A) shall summarize any substantive proposal made by any party to the negotiations as well as significant controversies or differences of opinion during the negotiations and their resolution.

PART 3--FEES RELATING TO DEVICES

SEC. 737. [21 U.S.C. 379i] Definitions 6

For purposes of this part:

(1) The term "premarket application" means-- (A) an application for approval of a device submitted under section 515(c) or section 351 of the Public Health Service Act [42 USC § 262]; or (B) a product development protocol described in section 515(f). Such term does not include a supplement, a premarket report, or a premarket notification submission.

(2) The term "premarket report" means a report submitted under section 515(c)(2).

(3) The term "premarket notification submission" means a report submitted under section 510(k).

(4)(A) The term "supplement", with respect to a panel-track supplement, a 180-day supplement, a real-time supplement, or an efficacy supplement, means a request to the Secretary to approve a change in a device for which--

(i) an application or report has been approved under section 515(d), or an application has been approved under section 351 of the Public Health Service Act [42 USC § 262]; or

(ii) a notice of completion has become effective under section 515(f).

(B) The term "panel-track supplement" means a supplement to an approved premarket application or premarket report under section 515 that requests a significant change in design or performance of the device, or a new indication for use of the device, and for which substantial clinical data are necessary to provide a reasonable assurance of safety and effectiveness.

(C) The term "180-day supplement" means a supplement to an approved premarket application or premarket report under section 515 that is not a panel-track supplement and requests a significant change in components, materials, design, specification, software, color additives, or labeling.

(D) The term "real-time supplement" means a supplement to an approved premarket application or premarket report under section 515 that requests a minor change to the device, such as a minor change to the design of the device, software, sterilization, or labeling, and for which the applicant has requested and the agency has granted a meeting or similar forum to jointly review and determine the status of the supplement.

(E) The term "efficacy supplement" means a supplement to an approved premarket application under section 351 of the Public Health Service Act [42 USC § 262] that requires substantive clinical data.

(5) The term "30-day notice" means a notice under section 515(d)(6) that is limited to a request to make modifications to manufacturing procedures or methods of manufacture affecting the safety and effectiveness of the device.

(6) The term "request for classification information" means a request made under section 513(g) for information respecting the class in which a device has been classified or the requirements applicable to a device.

(7) The term "annual fee", for periodic reporting concerning a class III device, means the annual fee associated with periodic reports required by a premarket application approval order.
(8) The term "process for the review of device applications" means the following activities of the Secretary with respect to the review of premarket applications, premarket reports, supplements, and premarket notification submissions:

(A) The activities necessary for the review of premarket applications, premarket reports, supplements, and premarket notification submissions.

(B) The issuance of action letters that allow the marketing of devices or which set forth in detail the specific deficiencies in such applications, reports, supplements, or submissions and, where appropriate, the actions necessary to place them in condition for approval.

(C) The inspection of manufacturing establishments and other facilities undertaken as part of the Secretary's review of pending premarket applications, premarket reports, and supplements.

(D) Monitoring of research conducted in connection with the review of such applications, reports, supplements, and submissions.

(E) Review of device applications subject to section 351 of the Public Health Service Act [42 USC § 262] for an investigational new drug application under section 505(i) or for an investigational device exemption under section 520(g) and activities conducted in anticipation of the submission of such applications under section 505(i) or 520(g).

(F) The development of guidance, policy documents, or regulations to improve the process for the review of premarket applications, premarket reports, supplements, and premarket notification submissions.

(G) The development of voluntary test methods, consensus standards, or mandatory performance standards under section 514 in connection with the review of such applications, reports, supplements, or submissions and related activities.

(H) The provision of technical assistance to device manufacturers in connection with the submission of such applications, reports, supplements, or submissions.

(I) Any activity undertaken under section 513 or 515(i) in connection with the initial classification or reclassification of a device or under section 515(b) in connection with any requirement for approval of a device.

(J) Evaluation of postmarket studies required as a condition of an approval of a premarket application or premarket report under section 515 or a premarket application under section 351 of the Public Health Service Act.

(K) Compiling, developing, and reviewing information on relevant devices to identify safety and effectiveness issues for devices subject to premarket applications, premarket reports, supplements, or premarket notification submissions.

(9) The term "costs of resources allocated for the process for the review of device applications" means the expenses incurred in connection with the process for the review of device applications for--

(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 and accounting for resources allocated for the review of premarket applications, premarket reports, supplements, and submissions.

(10) The term "adjustment factor" applicable to a fiscal year is the Consumer Price Index for all urban consumers (all items; United States city average) for October of the preceding fiscal year divided by such Index for October 2001.

(11) The term "person" includes an affiliate thereof.

(12) The term "affiliate" means a business entity that has a relationship with a second business entity (whether domestic or international) if, directly or indirectly--

(A) one business entity controls, or has the power to control, the other business entity; or

(B) a third party controls, or has power to control, both of the business entities.

(13) The term "establishment subject to a registration fee" means an establishment that is required to register with the Secretary under section 510 and is one of the following types of establishments:

(A) Manufacturer. An establishment that makes by any means any article that is a device, including an establishment that sterilizes or otherwise makes such article for or on behalf of a specification developer or any other person.

(B) Single-use device reprocessor. An establishment that, within the meaning of section 201(ll)(2)(A) [21 USC § 321(ll)(2)(A)], performs additional processing and manufacturing operations on a single-use device that has previously been used on a patient.

(C) Specification developer. An establishment that develops specifications for a device that is distributed under the establishment's name but which performs no manufacturing, including an establishment that, in addition to developing specifications, also arranges for the manufacturing of devices labeled with another establishment's name by a contract manufacturer.

SEC. 738. [21 U.S.C. 379j] Authority to assess and use device fees7

(a) Types of fees.

(1) In general. Beginning in fiscal year 2008, the Secretary shall assess and collect fees in accordance with this section.

(2) Premarket application, premarket report, supplement, and submission fee, and annual fee for periodic reporting concerning a class III device.

(A) In general. Except as provided in subparagraph (B) and subsections (d) and (e), each person who submits any of the following, on or after October 1, 2002, shall be subject to a fee established under subsection (c)(1) for the fiscal year involved in accordance with the following:

(i) A premarket application.

(ii) For a premarket report, a fee equal to the fee that applies under clause (i).

(iii) For a panel track supplement, a fee equal to 75 percent of the fee that applies under clause (i).

(iv) For a 180-day supplement, a fee equal to 15 percent of the fee that applies under clause (i).

(v) For a real-time supplement, a fee equal to 7 percent of the fee that applies under clause (i).

(vi) a 30-day notice, a fee equal to 1.6 percent of the fee that applies under clause (i).

(vii) For an efficacy supplement, a fee equal to the fee that applies under clause (i).

(viii) For a premarket notification submission, a fee equal to 1.84 percent of the fee that applies under clause (i), subject to any adjustment under subsection (e)(2)(C)(ii).

(ix) For a request for classification information, a fee equal to 1.35 percent of the fee that applies under clause (i).
(x) For periodic reporting concerning a class III device, an annual fee equal to 3.5 percent of the fee that applies under clause (i).

(B) Exceptions.

(i) Humanitarian device exemption. An application under section 520(m) is not subject to any fee under subparagraph (A).

(ii) Further manufacturing use. No fee shall be required under subparagraph (A) for the submission of a premarket application under section 351 of the Public Health Service Act [42 USCS § 262] for a product licensed for further manufacturing use only.

(iii) State or Federal Government sponsors. No fee shall be required under subparagraph (A) for a premarket application, premarket report, supplement, or premarket notification submission submitted by a State or Federal Government entity unless the device involved is to be distributed commercially.

(iv) Premarket notifications by third parties. No fee shall be required under subparagraph (A) for a premarket notification submission reviewed by an accredited person pursuant to section 523.

(v) Pediatric conditions of use.

(I) In general. No fee shall be required under subparagraph (A) for a premarket application, premarket report, or premarket notification submission if the proposed conditions of use for the device involved are solely for a pediatric population. No fee shall be required under such subparagraph for a supplement if the sole purpose of the supplement is to propose conditions of use for a pediatric population.

(II) Subsequent proposal of adult conditions of use. In the case of a person who submits a premarket application or premarket report for which, under subclause (I), a fee under subparagraph (A) is not required, any supplement to such application that proposes conditions of use for any adult population is subject to the fee that applies under such subparagraph for a premarket application.

(C) Payment. The fee required by subparagraph (A) shall be due upon submission of the premarket application, premarket report, supplement, premarket notification submission, 30-day notice, request for classification information, or periodic reporting concerning a class III device. Applicants submitting portions of applications pursuant to section 515(c)(4) shall pay such fees upon submission of the first portion of such applications.

(D) Refunds.

(i) Application refused for filing. The Secretary shall refund 75 percent of the fee paid under subparagraph (A) for any application, report, or supplement that is refused for filing.

(ii) Application withdrawn before filing. The Secretary shall refund 75 percent of the fee paid under subparagraph (A) for any application, report, or supplement that is withdrawn prior to the filing decision of the Secretary.

(iii) Application withdrawn before first action. After receipt of a request for a refund of the fee paid under subparagraph (A) for a premarket application, premarket report, or supplement that is withdrawn after filing but before a first action, the Secretary may return some or all of the fee. The amount of refund, if any, shall be based on the level of effort already expended on the review of such application, report, or supplement. The Secretary shall have sole discretion to refund a fee or portion of the fee under this subparagraph. A determination by the Secretary concerning a refund under this paragraph shall not be reviewable.

(iv) Modular applications withdrawn before first action. The Secretary shall refund 75 percent of the application fee paid for an application submitted under section 515(c)(4) [21 USC § 360e(c)(4)] that is withdrawn before a second portion is submitted and before a first action on the first portion.

(v) Later withdrawn modular applications. If an application submitted under section 515(c)(4) [21 USC § 360e(c)(4)] is withdrawn after a second or subsequent portion is submitted but before any first action, the Secretary may return a portion of the fee. The amount of refund, if any, shall be based on the level of effort already expended on the review of the portions submitted.

(vi) Sole discretion to refund. The Secretary shall have sole discretion to refund a fee or portion of the fee under clause (iii) or (v). A determination by the Secretary concerning a refund under clause (iii) or (v) shall not be reviewable.

(3) Annual establishment registration fee.

(A) In general. Except as provided in subparagraph (B), each establishment subject to a registration fee shall be subject to a fee for each initial or annual registration under section 510 beginning with its registration for fiscal year 2008.

(B) Exception. No fee shall be required under subparagraph (A) for an establishment operated by a State or Federal governmental entity or an Indian tribe (as defined in the Indian Self Determination and Educational Assistance Act), unless a device manufactured by the establishment is to be distributed commercially.

(C) Payment. The fee required under subparagraph (A) shall be due once each fiscal year, upon the initial registration of the establishment or upon the annual registration under section 510.

(b) Fee amounts. Except as provided in subsections (c), (d), (e), and (h) the fees under subsection (a) shall be based on the following fee amounts:

Fee Type	Fiscal Year 2008	Fiscal Year 2009	Fiscal Year 2010	Fiscal Year 2011	Fiscal Year 2012
Premarket Application	$185,000	$200,725	$217,787	$236,298	$256,384
Establishment Registration	$1,706	$1,851	$2,008	$2,179	$2,364

(1) In general. The Secretary shall, 60 days before the start of each fiscal year after September 30, 2002, publish in the Federal Register fees under subsection (a). The fees established for fiscal year 2006 shall be based on a premarket application fee of $ 259,600, and the fees established for fiscal year 2007 shall be based on a premarket application fee of $ 281,600.

(2) Adjustment.

(A) In general. When setting fees for fiscal year 2010, the Secretary may increase the fee under subsection (a)(3)(A) (applicable to establishments subject to registration) only if the Secretary estimates that the number of establishments submitting fees for fiscal year 2009 is fewer than 12,250. The percentage increase shall be the percentage by which the estimate of establishments submitting fees in fiscal year 2009 is fewer than 12,750, but in no case may the percentage increase be more than 8.5 percent over that specified in subsection (b) for fiscal year 2010. If the Secretary makes any adjustment to the fee under subsection (a)(3)(A) for fiscal year 2010, then such fee for fiscal years 2011 and 2012 shall be adjusted so that such fee for fiscal year 2011 is equal to the adjusted fee for fiscal year 2010 increased by 8.5 percent, and such fee for fiscal year 2012 is equal to the adjusted fee for fiscal year 2011 increased by 8.5 percent.

(B) Publication. For any adjustment made under subparagraph (A), the Secretary shall publish in the Federal Register the Secretary's determination to make the adjustment and the rationale for the determination.

(3) 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 device applications.

(4) Supplement.

(A) In general. The Secretary may use unobligated carryover balances from fees collected in previous fiscal years to ensure that sufficient fee revenues are available in that fiscal year, so long as the Secretary maintains unobligated carryover balances of not less than 1 month of operating reserves for the first month of the next fiscal year.

(B) Notice to Congress. Not later than 14 days before the Secretary anticipates the use of funds described in subparagraph (A), the Secretary shall provide notice to the Committee on Health, Education, Labor, and Pensions and the Committee on Appropriations of the Senate and the Committee on Energy and Commerce and the Committee on Appropriations of the House of Representatives.

(d) Small businesses; fee waiver and fee reduction regarding premarket approval fees.

(1) In general. The Secretary shall grant a waiver of the fee required under subsection (a) for one premarket application, or one premarket report, where the Secretary finds that the applicant involved is a small business submitting its first premarket application to the Secretary, or its first premarket report, respectively, for review. For the purposes of this paragraph, the term "small business" means an entity that reported $ 30,000,000 or less of gross receipts or sales in its most recent Federal income tax return for a taxable year, including such returns of all of its affiliates, partners, and parent firms. In addition, for subsequent premarket applications, premarket reports, and supplements where the Secretary finds that the applicant involved is a small business, the fees specified in clauses (i) through (vi) and clauses (vii), (ix), and (x) of subsection (a)(2)(A) may be paid at a reduced rate in accordance with paragraph (2)(C).

(2) Rules relating to premarket approval fees.

(A) Definition. For purposes of this paragraph, the term "small business" means an entity that reported $ 100,000,000 or less of gross receipts or sales in its most recent Federal income tax return for a taxable year, including such returns of all of its affiliates.

(B) Evidence of qualification.

(i) In general. An applicant shall pay the higher fees established by the Secretary each year unless the applicant submits evidence that it qualifies for a waiver of the fee or the lower fee rate.

(ii) Firms submitting tax returns to the United States Internal Revenue Service.The applicant shall support its claim that it meets the definition under subparagraph (A) by submission of a copy of its most recent Federal income tax return for a taxable year, and a copy of such returns of its affiliates, which show an amount of gross sales or receipts that is less than the maximum established in subparagraph (A). The applicant, and each of such affiliates, shall certify that the information provided is a true and accurate copy of the actual tax forms they submitted to the Internal Revenue Service. If no tax forms are submitted for any affiliate, the applicant shall certify that the applicant has no affiliates, partners, or parent firms, respectively.

(iii) Firms not submitting tax returns to the United States Internal Revenue Service. In the case of an applicant that has not previously submitted a Federal income tax return, the applicant and each of its affiliates shall demonstrate that it meets the definition under subparagraph (A) by submission of a signed certification, in such form as the Secretary may direct through a notice published in the Federal Register, that the applicant or affiliate meets the criteria for a small business and a certification, in English, from the national taxing authority of the country in which the applicant or, if applicable, affiliate is headquartered. The certification from such taxing authority shall bear the official seal of such taxing authority and shall provide the applicant's or affiliate's gross receipts or sales for the most recent year in both the local currency of such country and in United States dollars, the exchange rate used in converting such local currency to dollars, and the dates during which these receipts or sales were collected. The applicant shall also submit a statement signed by the head of the applicant's firm or by its chief financial officer that the applicant has submitted certifications for all of its affiliates, or that the applicant has no affiliates.

(C) Reduced fees. Where the Secretary finds that the applicant involved meets the definition under subparagraph (A), the fees established under subsection (c)(1) may be paid at a reduced rate of--

(i) 25 percent of the fee established under such subsection for a premarket application, a premarket report, or a supplement.

(ii) 50 percent of the fee established under such subsection for a 30-day notice or a request for classification information.

(D) Request for fee waiver or reduction. An applicant seeking a fee waiver or reduction under this subsection shall submit supporting information to the Secretary at least 60 days before the fee is required pursuant to subsection (a). The decision of the Secretary regarding whether an entity qualifies for such a waiver or reduction is not reviewable.

(e) Small businesses; fee reduction regarding premarket notification submissions.

(1) In general. For fiscal year 2008 and each subsequent fiscal year, where the Secretary finds that the applicant involved is a small business, the fee specified in subsection (a)(2)(A)(vii) may be paid at a reduced rate in accordance with paragraph (2)(C).

(2) Rules relating to premarket notification submissions.

(A) Definition. For purposes of this subsection, the term "small business" means an entity that reported $100,000,000 or less of gross receipts or sales in its most recent Federal income tax return for a taxable year, including such returns of all of its affiliates.

(B) Evidence of qualification.

(i) In general.An applicant shall pay the higher fees established by the Secretary each year unless the applicant submits evidence that it qualifies for the lower fee rate.

(C) Reduced fees. For fiscal year 2008 and each subsequent fiscal year, where the Secretary finds that the applicant involved meets the definition under subparagraph (A), the fee for a premarket notification submission may be paid at 50 percent of the fee
that applies under subsection (a)(2)(A)( viii), and as established under subsection (c)(1).

(D) Request for reduction. An applicant seeking a fee reduction under this subsection shall submit supporting information to the Secretary at least 60 days before the fee is required pursuant to subsection (a). The decision of the Secretary regarding whether an entity qualifies for such a reduction is not reviewable.

(f) Effect of failure to pay fees.

(1) No acceptance of submissions. A premarket application, premarket report, supplement, premarket notification submission, 30-day notice, request for classification information, or periodic reporting concerning a class III device submitted by a person subject to fees under subsections (a)(2) and (a)(3) shall be considered incomplete and shall not be accepted by the Secretary until all fees owed by such person have been paid.

(2) No registration. Registration information submitted under section 510 by an establishment subject to a registration fee shall be considered incomplete and shall not be accepted by the Secretary until the registration fee under subsection (a)(3) owed for the establishment has been paid. Until the fee is paid and the registration is complete, the establishment is deemed to have failed to register in accordance with section 510.

(g) Conditions.

(1) Performance goals; termination of program. With respect to the amount that, under the salaries and expenses account of the Food and Drug Administration, is appropriated for a fiscal year for devices and radiological products , fees may not be assessed under subsection (a) for the fiscal year, and the Secretary is not expected to meet any performance goals identified for the fiscal year, if--

(A) the amount so appropriated for the fiscal year, excluding the amount of fees appropriated for the fiscal year, is more than 1 percent less than $ 205,720,000 multiplied by the adjustment factor applicable to such fiscal year ; or

(B) fees were not assessed under subsection (a) for the previous fiscal year

(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 premarket applications, supplements, premarket reports, premarket notification submissions, 30-day notices, requests for classification information, periodic reporting concerning a class III device, and establishment registrations at any time in such fiscal year, notwithstanding the provisions of subsection (a) relating to the date fees are to be paid.

(h) 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 appropriation 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 salaries and expenses with such fiscal year limitation. The sums transferred shall be available solely for the process for the review of device 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 device 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.

(i) In general. 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 device applications--

(I) are not more than 3 percent below the level specified in subparagraph (A)(ii); or

(II) (aa) are more than 3 percent below the level specified in subparagraph (A)(ii), and fees assessed for a 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

(bb) such costs are not more than 5 percent below the level specified in such subparagraph.

(ii) More than 5 percent. To the extent such costs are more than 5 percent below the specified level in subparagraph (A)(ii), fees may not be collected under this section for that fiscal year.

(3) Authorizations of appropriations. There are authorized to be appropriated for fees under this section--

(A) $ 48,431,000 for fiscal year 2008;

(B) $ 52,547,000 for fiscal year 2009;

(D) $ 61,860,000 for fiscal year 2011; and

(E) $ 67,118,000 for fiscal year 2012.

(4) Offset. If the cumulative amount of fees collected during fiscal years 2008, 2009, and 2010, added to the amount estimated to be collected for fiscal year 2011, which estimate shall be based upon the amount of fees received by the Secretary through June 30, 2011, exceeds the amount of fees specified in aggregate in paragraph (3) for these four fiscal years, the aggregate amount in excess 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 fiscal year 2012.

(i) 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 [31 USC §§ 3711 et seq.].

(j) Written requests for refunds. To qualify for consideration for a refund under subsection (a)(2)(D), a person shall submit to the Secretary a written request for such refund not later than 180 days after such fee is due.

(k) 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 device applications, be reduced to offset the number of officers, employees, and advisory committees so engaged.

SEC. 738A. [21 USC 379j-1 ] Reauthorization; reporting requirements

(a) Reports.

(1) Performance report. For fiscal years 2008 through 2012, not later than 120 days after the end of each fiscal year during which fees are collected under this part, the Secretary shall prepare and submit to the Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Energy and Commerce of the House of Representatives, a report concerning the progress of the Food and Drug Administration in achieving the goals identified in the letters described in section 201(c) of the Food and Drug Administration Amendments Act of 2007 during such fiscal year and the future plans of the Food and Drug Administration for meeting the goals. The report for a fiscal year shall include information on all previous cohorts for which the Secretary has not given a complete response on all device premarket applications and reports, supplements, and premarket notifications in the cohort.

(2) Fiscal report. For fiscal years 2008 through 2012, not later than 120 days after the end of each fiscal year during which fees are collected under this part, the Secretary shall prepare and submit to the Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Energy and Commerce of the House of Representatives, 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.

(3) Public availability. The Secretary shall make the reports required under paragraphs (1) and (2) available to the public on the Internet Web site of the Food and Drug Administration.

(b) Reauthorization.

(1) Consultation. In developing recommendations to present to Congress with respect to the goals, and plans for meeting the goals, for the process for the review of device applications for the first 5 fiscal years after fiscal year 2012, and for the reauthorization of this part for such fiscal years, the Secretary shall consult with--

(A) the Committee on Energy and Commerce of the House of Representatives;

(B) the Committee on Health, Education, Labor, and Pensions of the Senate;

(D) health care professionals;

(E) representatives of patient and consumer advocacy groups; and

(F) the regulated industry.

(2) Prior public input. Prior to beginning negotiations with the regulated industry on the reauthorization of this part [21 USC §§ 379i et seq.], the Secretary shall--

(A) publish a notice in the Federal Register requesting public input on the reauthorization;

(B) hold a public meeting at which the public may present its views on the reauthorization, including specific suggestions for changes to the goals referred to in subsection (a)(1);

(C) provide a period of 30 days after the public meeting to obtain written comments from the public suggesting changes to this part [21 USC §§ 379i et seq.]; and

(D) publish the comments on the Food and Drug Administration's Internet Web site.

(4) Public review of recommendations. After negotiations with the regulated industry, the Secretary shall--

(A) present the recommendations developed under paragraph (1) to the Congressional committees specified in such paragraph;

(B) publish such recommendations in the Federal Register;

(D) hold a meeting at which the public may present its views on such recommendations; and

(E) after consideration of such public views and comments, revise such recommendations as necessary.

(5) Transmittal of recommendations. Not later than January 15, 2012, the Secretary shall transmit to Congress the revised recommendations under paragraph (4), a summary of the views and comments received under such paragraph, and any changes made to the recommendations in response to such views and comments.

(6) Minutes of negotiation meetings.

PART 4 FEES RELATING TO ANIMAL DRUGS

SEC. 739. [21 U.S.C. 379j-11] 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, or 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 740 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 2003.

(11) The term "affiliate" refers to the definition set forth in section 735(9).

SEC. 740. [21 U.S.C. 379j-12] AUTHORITY TO ASSESS AND USE ANIMAL DRUG FEES.

(a) TYPES OF FEES. Beginning in fiscal year 2004, 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, 2003 , 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, in an amount that is equal to 50 percent of the amount of the fee under clause (i).

(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, 2003 , 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, 2003, 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, 2003 , 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), the fees required under subsection (a) shall be established to generate fee revenue amounts as follows:

(1) TOTAL FEE REVENUES FOR APPLICATION AND SUPPLEMENT FEES. The total fee revenues to be collected in animal drug application fees under subsection (a)(1)(A)(i) and supplemental animal drug application fees under subsection (a)(1)(A)(ii) shall be $1,250,000 in fiscal year 2004, $2,000,000 in fiscal year 2005, and $2,500,000 in fiscal years 2006, 2007, and 2008.

(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 2004, $2,000,000 in fiscal year 2005, and $2,500,000 in fiscal years 2006, 2007, and 2008. PUBL130

(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 2004, $2,000,000 in fiscal year 2005, and $2,500,000 in fiscal years 2006, 2007, and 2008.

(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 2004, $2,000,000 in fiscal year 2005, and $2,500,000 in fiscal years 2006, 2007, and 2008.

(1) INFLATION ADJUSTMENT. The revenues established in subsection (b) shall be adjusted by the Secretary by notice, published in the Federal Register, for a fiscal year to reflect the greater of

(A) the total percentage change that occurred in the Consumer Price Index for all urban consumers (all items; United States city average) for the 12-month period ending June 30 preceding the fiscal year for which fees are being established; or

(B) the total percentage change for the previous fiscal year in basic pay under the General Schedule in accordance with section 5332 of title 5, United States Code, as adjusted by any locality-based comparability payment pursuant to section 5304 of such title for Federal employees stationed in the District of Columbia. The adjustment made each fiscal year by this subsection will be added on a compounded basis to the sum of all adjustments made each fiscal year after fiscal year 2004 under this subsection.

(2) WORKLOAD ADJUSTMENT. After the fee revenues are adjusted for inflation in accordance with paragraph (1), the fee revenues shall be further adjusted each fiscal year after fiscal year 2004 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 paragraph (1).

(3) FINAL YEAR ADJUSTMENT. For fiscal year 2008, 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 3 months of fiscal year 2009. If the Food and Drug Administration has carryover balances for the process for the review of animal drug applications in excess of 3 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 fiscal year 2008.

(4) ANNUAL FEE SETTING. The Secretary shall establish, 60 days before the start of each fiscal year beginning after September 30, 2003, for that fiscal year, animal drug application fees, supplemental animal drug application fees, animal drug sponsor fees, animal drug establishment fees, and animal drug product fees based on the revenue amounts established under subsection (b) and the adjustments provided under this subsection.

(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 or a reduction of 1 or more 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 or supplemental animal drug application is intended solely to provide for use of the animal drug in

(i) a Type B medicated feed (as defined in section 558.3(b)(3) of title 21, Code of Federal Regulations (or any successor regulation)) intended for use in the manufacture of Type C free-choice medicated feeds, or

(ii) a Type C free-choice medicated feed (as defined in section 558.3(b)(4) of title 21, Code of Federal Regulations (or any successor regulation)),

(D) the animal drug application or supplemental animal drug application is intended solely to provide for a minor use or minor species indication, or

(E) 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)(E), 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)(E) 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)(E) 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 739(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 2003unless 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 2003 (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, animal drug 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 2003 multiplied by the adjustment factor.

(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 animal drug applications

(i) are not more than 3 percent below the level specified in subparagraph (A)(ii); or

(II) such costs are not more than 5 percent below the level specified in subparagraph (A)(ii).

(3) AUTHORIZATION OF APPROPRIATIONS. There are authorized to be appropriated for fees under this section

(A) $5,000,000 for fiscal year 2004;

(B) $8,000,000 for fiscal year 2005;

(D) $10,000,000 for fiscal year 2007; and

(E) $10,000,000 for fiscal year 2008; 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.

(k) ABBREVIATED NEW ANIMAL DRUG APPLICATIONS. The Secretary shall

(1) to the extent practicable, segregate the review of abbreviated new animal drug applications from the process for the review of animal drug applications, and

(2) adopt other administrative procedures to ensure that review times of abbreviated new animal drug applications do not increase from their current level due to activities under the user fee program.

Footnotes: Chapter VII, Subchapter C

1. Sections 503 and 504 of Public Law 107–188 (116 Stat. 688, 689) amended sections 735 and 736, respectively. Section 509 of such Public Law provides as follows:

SEC. 509. 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.

2. See footnote for the beginning of section 735.

3. Section 507 was repealed by section 125(b)(1) of Public Law 105–115 (111 Stat. 2325).

4. Subtitle A of title V of Public Law 107–188, which was enacted June 12, 2002.

5. The amendment described in section 504(f)(1) of Public Law 107–188 (116 Stat. 691) cannot be executed. The amendment includes language to strike "Fees collected for a fiscal year" and all that follows through "fiscal year limitation.". The latter term appears at the end of the first sentence and at the end of the second sentence, but the amendatory instructions do not identify to which instance of the use of such term the amendment applies.

The probable intent of the Congress is that the second sentence remain in effect, since section 738(h)(1) of this Act, which relates to the crediting and availability of device fees, has language substantially similar to the second sentence and was added after the enactment of Public Law 107–188. (Section 738 was added by section 102 of Public Law 107–250, enacted October 26, 2002. Public Law 107–188 was enacted June 12, 2002.) Section 504(f)(1) of Public Law 107–188 provides as follows:

"(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.' ".

6. Part 3 was added by title I of Public Law 107–250 (116 Stat. 1589). See section 102 of that title. Section 107 of that title provides as follows:

SEC. 107. SUNSET CLAUSE.
The amendments made by this title cease to be effective October 1, 2007, except that section 103 with respect to annual reports ceases to be effective January 31, 2008.

7. See footnote for the beginning of section 737.

9. See footnote for pargraph (1).

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Federal Food, Drug and Cosmetic Act

CHAPTER VII GENERAL AUTHORITY SUBCHAPTER C--FEES

PART 1 FREEDOM OF INFORMATION FEES

PART 2 FEES RELATING TO DRUGS

PART 3--FEES RELATING TO DEVICES

PART 4 FEES RELATING TO ANIMAL DRUGS

Footnotes: Chapter VII, Subchapter C

CHAPTER VII GENERAL AUTHORITY
SUBCHAPTER C--FEES