FY 2004 PDUFA Financial Report
Appendix C
Allowable and Excluded Costs for the Process for the Review of Human Drug Applications
PDUFA and the related House of Representatives Reports 102-895 and 107-481
("House Reports"), defines the process for the review of human drug
applications and the costs that may be included in that process. Using these
definitions (and further refinements identified below) and the methodologies
described in this report, the Agency identified those activities that were applicable
to the process for the review of human drug applications.
Over 96 percent of amounts obligated are expended within two years. Therefore,
obligations represent an accurate measure of costs.
User Fee Related Costs
Section 735(6) of the Act defines in general terms the activities necessary
for the review of human drug applications (the "human drug review process").
In summary, costs related to the following process activities have been attributed
to the process for the review of human drug applications:
- All investigational new drug (IND) review activities,
including amendments
- All review activities for new drug applications
(NDAs), biologic license applications (BLAs), and
product license applications (PLAs), including
supplements and amendments and biologic establishment
license applications (ELAs) and amendments
- Regulation and policy development activities
related to the review of human drug applications
- Development of product standards for products
subject to review and evaluation
- Meetings between the Agency and the sponsor of
a covered application or supplement
- Review of labeling prior to approval of a covered
application or supplement and the review of the
initial pre-launch advertising
- Review of post-marketing studies that have been
agreed to by sponsors as a condition for approval
- Inspections of facilities undertaken as part
of the review of pending applications or supplements
- Lot release activities for covered biological
products
- Assay development and validation to ensure batch-to-batch
consistency and reliability for covered biological
products
- Monitoring of clinical and other research conducted
in connection with the review of human drug applications
- User Fee Act implementation activities
- Research related to the human drug review process--although
under PDUFA II FDA agreed to phase out research
supported by fee revenues, and
- In the case of drugs approved after October 1,
2002, under human drug applications or supplements:
collecting, developing, and reviewing safety information
on the drugs, including adverse event reports,
during a period of time after approval of such
applications or supplements, not to exceed three
years--added under PDUFA III.
All user-fee related costs represented by the above activities are collectively
referred to in this report as costs for the process for the review of human
drug applications.
Section 735(7) of the Act defines the "costs of resources allocated for
the process for the review of human drug applications" as the expenses
incurred in connection with this process for:
- officers and employees of the FDA, contractors
of the FDA, advisory committees, and costs related
to such officers, employees, committees and contracts;
- management of information, and the acquisition,
maintenance, and repair of computer resources;
- leasing, maintenance, renovation, and repair
of facilities and acquisition, maintenance, and
repair of fixtures, furniture, scientific equipment,
and other necessary materials and supplies; and
- collecting user fees under section 736 of the
Act and accounting for resources allocated for
the review of human drug applications and supplements.
User Fee Excluded Costs
The User Fee Act excludes costs related to the following:
Excluded Products
- Generic drugs
- Over-the-counter drugs not associated with an
NDA or NDA supplement
- Large volume parenterals approved before 9/1/92
- Allergenic extract products
- Whole blood or a blood component for transfusion
- In vitro diagnostic biologic products
- Certain drugs derived from bovine blood
Excluded Process Activities
- Enforcement policy development
- Post-approval compliance activities
- Advertising review activities once marketing
of the product has begun
- Inspections unrelated to the review of covered
applications
- Research unrelated to the human drug review process
These inclusions and exclusions required accounting for a newly created subset
of FDA activities after the fact. It was necessary to develop and implement
a methodology that would allow the Agency retrospectively to capture the FY
1992 costs for the newly defined "process for the review of human drug
applications," and apply that same methodology for future years. In 1995,
Arthur Andersen & Company independently reviewed FDA procedures in doing
this and found the methodologies reasonable.