21 USC 379h - Authority to assess and use drug fees

U.S Code last checked for updates: May 03, 2024

§ 379h.

Authority to assess and use drug fees

(a)

Types of fees

Beginning in fiscal year 2023, the Secretary shall assess and collect fees in accordance with this section as follows:

(1)

Human drug application fee

(A)

In general

Each person that submits, on or after September 1, 1992, a human drug application shall be subject to a fee as follows:

(i)

A fee established under subsection (c)(6) 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)

(B)

Payment

(C)

Exception for previously filed application

(D)

Refund of fee if application refused for filing or withdrawn before filing

(E)

Fees for applications previously refused for filing or withdrawn before filing

(F)

Exception for designated orphan drug

(G)

Refund of fee if application withdrawn

(H)

Exception for skin-test diagnostic products

(2)

Prescription drug program fee

(A)

In general

(i)

Payment of fees

(ii)

Special rule for previously discontinued drug products

(B)

Exception for certain prescription drug products

A prescription drug program fee shall not be assessed for a prescription drug product under subparagraph (A) if such product is—

(i)

a large volume parenteral product (a sterile aqueous drug product packaged in a single-dose container with a volume greater than or equal to 100 mL, not including powders for reconstitution or pharmacy bulk packages) identified on the list compiled under section 355(j)(7) of this title;

(ii)

pharmaceutically equivalent (as defined in section 314.3 of title 21, Code of Federal Regulations (or any successor regulation)) to another product on the list of products compiled under section 355(j)(7) of this title (not including the discontinued section of such list); or

(iii)

a skin-test diagnostic product.

(C)

Limitation

(b)

Fee revenue amounts

(1)

In general

For each of the fiscal years 2023 through 2027, fees under subsection (a) shall, except as provided in subsections (c), (d), (f), and (g), be established to generate a total revenue amount under such subsection that is equal to the sum of—

(A)

the annual base revenue for the fiscal year (as determined under paragraph (3));

(B)

the dollar amount equal to the inflation adjustment for the fiscal year (as determined under subsection (c)(1));

(C)

the dollar amount equal to the strategic hiring and retention adjustment for the fiscal year (as determined under subsection (c)(2));

(D)

the dollar amount equal to the capacity planning adjustment for the fiscal year (as determined under subsection (c)(3));

(E)

the dollar amount equal to the operating reserve adjustment for the fiscal year, if applicable (as determined under subsection (c)(4));

(F)

the dollar amount equal to the additional direct cost adjustment for the fiscal year (as determined under subsection (c)(5)); and

(G)

additional dollar amounts for each fiscal year as follows:

(i)

$65,773,693 for fiscal year 2023.

(ii)

$25,097,671 for fiscal year 2024.

(iii)

$14,154,169 for fiscal year 2025.

(iv)

$4,864,860 for fiscal year 2026.

(v)

$1,314,620 for fiscal year 2027.

(2)

Types of fees

Of the total revenue amount determined for a fiscal year under paragraph (1)—

(A)

20 percent shall be derived from human drug application fees under subsection (a)(1); and

(B)

80 percent shall be derived from prescription drug program fees under subsection (a)(2).

(3)

Annual base revenue

For purposes of paragraph (1), the dollar amount of the annual base revenue for a fiscal year shall be—

(A)

for fiscal year 2023, $1,151,522,958; and

(B)

for fiscal years 2024 through 2027, the dollar amount of the total revenue amount established under paragraph (1) for the previous fiscal year, not including any adjustments made under subsection (c)(4) or (c)(5).

(c)

Adjustments; annual fee setting

(1)

Inflation adjustment

(A)

In general

For purposes of subsection (b)(1)(B), the dollar amount of the inflation adjustment to the annual base revenue for each fiscal year shall be equal to the product of—

(i)

such annual base revenue for the fiscal year under subsection (b)(1)(A); and

(ii)

the inflation adjustment percentage under subparagraph (B).

(B)

Inflation adjustment percentage

The inflation adjustment percentage under this subparagraph for a fiscal year is equal to the sum of—

(i)

the average annual percent 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 3 years of the preceding 4 fiscal years, multiplied by the proportion of personnel compensation and benefits costs to total costs of the process for the review of human drug applications (as defined in section 379g(6) of this title) for the first 3 years of the preceding 4 fiscal years; and

(ii)

the average annual percent change that occurred in the Consumer Price Index for urban consumers (Washington-Arlington-Alexandria, DC–VA–MD–WV; Not Seasonally Adjusted; All items; Annual Index) for the first 3 years of the preceding 4 years of available data multiplied by the proportion of all costs other than personnel compensation and benefits costs to total costs of the process for the review of human drug applications (as defined in section 379g(6) of this title) for the first 3 years of the preceding 4 fiscal years.

(2)

Strategic hiring and retention adjustment

For each fiscal year, after the annual base revenue established in subsection (b)(1)(A) is adjusted for inflation in accordance with paragraph (1), the Secretary shall further increase the fee revenue and fees by the following amounts:

(A)

For fiscal year 2023, $9,000,000.

(B)

For each of fiscal years 2024 through 2027, $4,000,000.

(3)

Capacity planning adjustment

(A)

In general

(B)

Methodology

(C)

Limitation

(D)

Publication in Federal Register

(4)

Operating reserve adjustment

(A)

Increase

For fiscal year 2023 and subsequent fiscal years, the Secretary shall, in addition to adjustments under paragraphs (1), (2), and (3), further increase the fee revenue and fees if such an adjustment is necessary to provide for operating reserves of carryover user fees for the process for the review of human drug applications for each fiscal year in at least the following amounts:

(i)

For fiscal year 2023, at least 8 weeks of operating reserves.

(ii)

For fiscal year 2024, at least 9 weeks of operating reserves.

(iii)

For fiscal year 2025 and subsequent fiscal years, at least 10 weeks of operating reserves.

(B)

Decrease

(C)

Notice of rationale

(5)

Additional direct cost adjustment

(A)

Increase

The Secretary shall, in addition to adjustments under paragraphs (1), (2), (3), and (4), further increase the fee revenue and fees—

(i)

for fiscal year 2023, by $44,386,150; and

(ii)

for each of fiscal years 2024 through 2027, by the amount set forth in clauses (i) through (iv) of subparagraph (B), as applicable, multiplied by the Consumer Price Index for urban consumers (Washington-Arlington-Alexandria, DC–VA–MD–WV; Not Seasonally Adjusted; All Items; Annual Index) for the most recent year of available data, divided by such Index for 2021.

(B)

Applicable amounts

The amounts referred to in subparagraph (A)(ii) are the following:

(i)

For fiscal year 2024, $60,967,993.

(ii)

For fiscal year 2025, $35,799,314.

(iii)

For fiscal year 2026, $35,799, 314.

(iv)

For fiscal year 2027, $35,799,314.

(6)

Annual fee setting

The Secretary shall, not later than 60 days before the start of each fiscal year that begins after September 30, 2022—

(A)

establish, for each such fiscal year, human drug application fees and prescription drug program fees under subsection (a), based on the revenue amounts established under subsection (b) and the adjustments provided under this subsection; and

(B)

publish such fee revenue and fees in the Federal Register.

(7)

Limit

(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, or

(C)

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

(2)

Considerations

(3)

Rules relating to small businesses

(A)

“Small business” defined

(B)

Waiver of application fee

(e)

Effect of failure to pay fees

(f)

Limitations

(1)

In general

(2)

Authority

(3)

Limitation

(g)

Crediting and availability of fees

(1)

In general

(2)

Collections and appropriation acts

(A)

In general

The fees authorized by this section—

(i)

subject to subparagraph (C), shall be collected and available 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—

(I)

for fiscal year 2023, 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 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 1997 multiplied by the adjustment factor; and

(II)

for fiscal year 2024 and each subsequent fiscal year, to defray the costs of the resources allocated for the process for the review of human drug applications (including 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), only if the sum of the amounts allocated by the Secretary for such costs, excluding costs paid from fees collected under this section, plus other costs for the maintenance, renovation, and repair of facilities and acquisition, maintenance, and repair of fixtures, furniture, and other necessary materials and supplies in connection with the process for the review of human drug applications, is no less than the amount allocated for such costs, excluding any such 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 as described in subclause (I) or (II) of such subparagraph, as applicable—

(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.

(C)

Provision for early payments

(3)

Authorization of appropriations

(h)

Collection of unpaid fees

(i)

Written requests for waivers, reductions, exemptions, and returns; disputes concerning fees

To qualify for consideration for a waiver or reduction under subsection (d), an exemption under subsection (k), or the return of any fee paid under this section, including if the fee is claimed to have been paid in error, a person shall—

(1)

not later than 180 days after such fee is due, submit to the Secretary a written request justifying such waiver, reduction, exemption, or return; and

(2)

include in the request any legal authorities under which the request is made.

(j)

Construction

(k)

Orphan drugs

(1)

Exemption

A drug designated under section 360bb of this title for a rare disease or condition and approved under section 355 of this title or under section 262 of title 42 shall be exempt from prescription drug program fees under this section, if the drug meets all of the following conditions:

(A)

The drug meets the public health requirements contained in this chapter as such requirements are applied to requests for waivers for prescription drug program 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 as determined under paragraph (2).

(2)

Evidence of qualification

An exemption under paragraph (1) applies with respect to a drug only if the applicant involved submits a certification that the applicant’s gross annual revenues did not exceed $50,000,000 for the last calendar year ending prior to the fiscal year for which the exemption is requested. Such certification shall be supported by—

(A)

tax returns submitted to the United States Internal Revenue Service; or

(B)

as necessary, other appropriate financial information.

(June 25, 1938, ch. 675, § 736, as added Pub. L. 102–571, title I, § 103, Oct. 29, 1992, 106 Stat. 4494; amended Pub. L. 105–115, title I, § 103(a)–(g), Nov. 21, 1997, 111 Stat. 2299–2304; Pub. L. 107–109, § 5(a), Jan. 4, 2002, 115 Stat. 1413; Pub. L. 107–188, title V, § 504, June 12, 2002, 116 Stat. 689; Pub. L. 110–85, title I, § 103(a)–(h)(1), Sept. 27, 2007, 121 Stat. 826–832; Pub. L. 112–144, title I, § 103, July 9, 2012, 126 Stat. 996; Pub. L. 115–52, title I, § 102(a)(1), (b)–(h), title IX, § 905(b)(1), Aug. 18, 2017, 131 Stat. 1007–1012, 1090; Pub. L. 117–180, div. F, title I, § 1003, Sept. 30, 2022, 136 Stat. 2142; Pub. L. 117–328, div. FF, title III, § 3625(a), Dec. 29, 2022, 136 Stat. 5880.)

cite as: 21 USC 379h