2024-16884. Biosimilar User Fee Rates for Fiscal Year 2025

Table 1—FDA PC&B Each Year and Percent Changes

	FY 2021	FY 2022	FY 2023	3-Year average
Total PC&B	$3,039,513,000	$3,165,477,000	$3,436,513,000	3.8539%
Total FTE	18,501	18,474	18,729
PC&B per FTE	$164,289	$171,348	$183,486
Percent Change from Previous Year	0.1811%	4.2967%	7.0838%

The statute specifies that this 3.8539 percent be multiplied by the proportion of PC&B costs to the total FDA costs of the process for the review of biosimilar biological product applications. Table 2 shows the PC&B and the total obligations for the process for the review of biosimilar biological product applications for the first 3 of the preceding 4 fiscal years.

Table 2—PC&B as a Percent of Total Cost of the Process for the Review of Biosimilar Biological Product Applications

	2021	2022	2023	3-Year average
Total PC&B (proportion of costs)	$30,932,267	$34,065,826	$45,893,774
Total Costs	$55,928,075	$68,521,689	$86,101,288
PC&B percent	55.3072%	49.7154%	53.3021%	52.7749%

The payroll adjustment is 3.8539 percent from table 1 multiplied by 52.7749 percent (or 2.0339 percent).

The statute specifies that the portion of the inflation adjustment for nonpayroll costs is the average annual percent change that occurred in the Consumer Price Index (CPI) 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 PC&B costs to total costs of the process for the review of biosimilar biological product applications for the first 3 years of the preceding 4 fiscal years (see section 744H(c)(1)(B) of the FD&C Act). Table 3 provides the summary data for the percent changes in the specified CPI for the Washington-Arlington-Alexandria area.^[2]

Table 3—Annual and 3-Year Average Percent Change in CPI for Washington-Arlington-Alexandria Area

Fiscal year	2021	2022	2023	3-Year average
Annual CPI	277.728	296.117	305.317
Annual Percent Change	3.9568%	6.6212%	3.1069%	4.5616%

The statute specifies that this 4.5616 percent be multiplied by the proportion of all costs other than PC&B to total costs of the process for the review of biosimilar biological product applications obligated. Since 52.7749 percent was obligated for PC&B (as shown in table 2), 47.2251 percent is the portion of costs other than PC&B (100 percent minus 52.7749 percent equals 47.2251 percent). The non-payroll adjustment is 4.5616 percent times 47.2251 percent, 2.1542 percent.

Next, we add the payroll adjustment (2.0339 percent) to the nonpayroll adjustment (2.1542 percent), for a total inflation adjustment of 4.1881 percent (rounded) for FY 2025.

We then multiply the base revenue amount for FY 2025 ($51,058,823) by the inflation adjustment percentage (4.1881 percent), yielding an inflation adjustment of $2,138,395. Adding this amount yields an inflation-adjusted amount of $53,197,218.

B. Strategic Hiring and Retention Adjustment

The statute specifies that for each fiscal year, after the annual base revenue is adjusted for inflation, FDA shall further increase the fee revenue and fees by the strategic hiring and retention adjustment, which is $150,000 for FY 2025 (see section 744H(c)(2) of the FD&C Act).

C. FY 2025 Statutory Fee Revenue Adjustments for Capacity Planning

The statute specifies that the fee revenue and fees shall be further adjusted to reflect changes in the resource capacity needs for the process for the review of biosimilar biological product applications (see section 744H(c)(3) of the FD&C Act). Following a process agreed upon by FDA and industry during BsUFA II reauthorization discussions and subsequently required in statute, FDA established the capacity planning adjustment methodology and first applied it in the setting of FY 2021 fees. The establishment of this methodology is described in the Federal Register at 85 FR 47220. This methodology includes a continuous, iterative improvement approach, under which the Agency intends to refine its data and estimates for the core review activities to improve their accuracy over time.

Improvements adopted for the FY 2025 CPA include the incorporation of hiring plans and attrition estimates within the capacity calculation. In prior years, the impacts of expected hiring on the review capacity of the program were considered a step within the managerial adjustment process. The FY 2025 resource capacity number includes an estimate of the onboard capacity for direct review-related work, as well as an estimate of the additional capacity that would be provided from any additional positions expected to be added through the course of FY 2024. No additional deduction for positions planned to be added prior to the end of FY 2024 then needs to be deducted within the managerial adjustment moving forward. Because of this change, the resource capacity numbers presented in this Federal Register Notice cannot be directly compared to those provided in prior years' fee-setting notices.

The CPA methodology consists of four steps:

1. Forecast workload volumes: predictive models estimate the volume of workload for the upcoming fiscal year.

2. Forecast the resource needs: forecast algorithms are generated utilizing time reporting data. These algorithms estimate the required demand in FTEs for direct review-related effort. This is then compared to current available resources for the direct review-related workload.

The current available resources for the direct review-related workload (presented as current resource capacity below) is a measure of the percentage of time onboard staff report to direct review-related workload activities, plus a percentage of the additional positions that are targeted to be hired within the remainder of FY 2024. Of note, the current resource capacity is not directly a function of the change in submission volume from one year to the next, but rather a summation of the percent of total staff time plus vacancies estimated to be available for direct review work. As time reporting is a direct input into the current review capacity calculations, the current review capacity may be impacted by factors such as shifts in the level of effort required for review work, staff reporting time exceeding their tour of duty, or other shifts impacting the workload of the program.

3. A managerial adjustment to assess the resource forecast in the context of additional internal factors: program leadership examines operational, financial, and resourcing data to assess whether FDA will be able to utilize additional funds during the fiscal year and whether the funds are required to support additional review capacity. FTE amounts are adjusted, if needed. The managerial adjustment process includes consideration of prior years' forecast performance, future year considerations, hiring capacity considerations, and other relevant considerations.

4. Convert the FTE need to dollars: utilizing FDA's fully loaded FTE cost model, the final feasible FTEs are converted to an equivalent dollar amount. The fully loaded FTE cost model is higher in FY 2025 than in prior years primarily due to the impact of inflation.

The following section outlines the major components of the FY 2025 BsUFA III CPA. Table 4 summarizes the forecasted workload volumes for BsUFA III in FY 2025 based on predictive models, as well as historical actuals from FY 2023 for comparison.

Table 4—BsUFA III Actual FY 2023 Workload Volumes & Predicted FY 2025 Workload Volumes

Workload category	FY 2023 actuals	FY 2025 predictions
Original Biosimilar Supplements 1	40	48
Manufacturing Supplements	92	95
Biosimilar Biological Product Applications	19	17
BsUFA Industry Meetings (BIA, BPD Type 1-4)	130	150
Participating BPD Programs 2	114	111
Annual Reports 3	48	52
PMR/PMC-Related Documents 3	23	31
Active REMS Programs  2 3	0	1
1  Includes Supplements with Clinical Data and Labeling Supplements.
2  Represents activities related to the review of materials submitted to the application file after approval.
3  Represents the number of Active REMS Programs proportional to Center and User Fee by total number of qualifying products with the exclusion of the Opioid Shared System.

Utilizing the resource forecast algorithms, the forecasted workload volumes for FY 2025 were then converted into estimated FTE needs for FDA's BsUFA III direct review-related work. The resulting expected FY 2025 FTE need for BsUFA III was compared to current onboard capacity for BsUFA III direct review-related work to determine the FY 2025 resource delta, as summarized in table 5.

Table 5—FY 2025 BsUFA III Resource Delta

Current resource capacity	FY 2025 resource forecast	Predicted FY 2025 FTE delta
84	96	12

The projected 12 FTE delta was then assessed by FDA in the context of additional operational and internal factors to ensure that a fee adjustment is only made for resources which can be utilized in the fiscal year and for which funds are required to support additional review capacity. In prior years, FDA adjusted the BsUFA FTE delta to 0 FTEs as there were additional funds available to support the needed FTEs. Due to large downward operating reserve adjustments in prior years, additional funds are needed to sustain additional FTE positions. BsUFA has also experienced sustained growth in review workload over recent years which is expected to continue. As such, FDA is adjusting the FTE delta to 7 FTE to provide a modest adjustment to support the sustained increases in review workload.

Table 6—FY 2025 BsUFA III CPA

Additional FTEs for FY 2025	Cost for each additional FTE	FY 2024 BsUFA III CPA
7	$380,675	$2,664,725

D. FY 2025 Additional Dollar Amount

For FY 2023 and FY 2024, BsUFA III provided an additional dollar amount for additional FTE for the biosimilar biological product review program to support enhancements outlined in the BsUFA III Commitment Letter. For FY 2024, the statute directed FDA to further increase the fee revenue and fees by the additional dollar amount, which was $320,569 for FY 2024 (see section 744H(b)(1)(G) of the FD&C Act). For FY 2025 no additional amount is specified in statute.

Table 7—Base Revenue Amount and Adjustments Prior to Operative Reserve Adjustment

Fee	Amount
Base Revenue Amount (Section 744H(b)-(c) of the FD&C Act)	$51,058,823
Inflation Adjustment (Section 744H(c)(1) of the FD&C Act)	2,138,395
Strategic Hiring and Retention Adjustment (Section 744H(c)(2) of the FD&C Act)	150,000
Capacity Planning Adjustment (Section 744H(c)(3) of the FD&C Act)	2,664,725
Additional Dollar Amount
Cumulative Revenue Amount Prior to Operative Reserve Adjustment	56,011,943

E. FY 2025 Statutory Fee Revenue Adjustments for Operating Reserve

BsUFA III sets forth an operating reserve adjustment to the fee revenue and fees. Specifically, for FY 2025, the statute directs FDA: (1) to increase the fee revenue and fees if such an adjustment is necessary to provide for at least 10 weeks of operating reserves of carryover user fees for the process for the review of biosimilar biological product applications and (2) if FDA has carryover balances for such process in excess of 21 weeks of such operating reserves, to decrease such fee revenue and fees to provide for not more than 21 weeks of such operating reserves (see section 744H(c)(4) of the FD&C Act).

To calculate the 10-week and 21-week threshold amounts for the FY 2025 operating reserve adjustment, the estimated adjusted revenue amount ( i.e., the base revenue amount and adjustments prior to the operating reserve adjustment), $56,011,943 is divided by 52, resulting in a $1,077,153 cost of operation for 1 week (rounded to the nearest dollar). The 1-week value ($1,077,153) is then multiplied by 10 weeks to generate the 10-week operating reserve threshold amount for FY 2025 of $10,771,528. The 1-week value is multiplied by 21 to generate the 21-week operating reserve threshold amount for FY 2025 of $22,620,208.

To calculate the estimated operating reserve of carryover user fees at the end of FY 2024, FDA estimated the operating reserves of carryover fees at the end of June 2024. The balance of operating reserves of carryover fees at the end of June 2024 is combined with the forecasted collections and obligations for the remainder of FY 2024 to generate a full year estimate for FY 2024. The estimated operating reserve of carryover user fees at the end of FY 2024 is $14,245,046.

The estimated operating reserve of carryover user fees at the end of FY 2024 of $14,245,046 is below the 21-week threshold allowable operating reserve of carryover user fees for FY 2025 of $22,620,208 and above the 10-week minimum operating reserve carryover user fees for FY 2025 of $10,771,528. As such, FDA is not applying a downward or upward operating reserve adjustment at the start of FY 2025, summarized below.

Table 8—Total Estimated Adjusted Revenue Amount

Fee	Amount
Base Revenue Amount (Section 744H(b)-(c) of the FD&C Act)	$51,058,823
Inflation Adjustment (Section 744H(c)(1) of the FD&C Act)	2,138,395
Strategic Hiring and Retention Adjustment (Section 744H(c)(2) of the FD&C Act)	150,000
Capacity Planning Adjustment (Section 744H(c)(3) of the FD&C Act)	2,664,725
Additional Dollar Amount
Operating Reserve Adjustment
Total Revenue Amount in sections 744H(b)-(c), 744H(c)(1), (2), (3) of the FD&C Act	56,011,943
Total Revenue Amount in sections 744H(b)-(c), 744H(c)(1), (2), (3) of the FD&C Act (rounded to the nearest thousand dollars)	56,012,000

III. Fee Amounts for FY 2025

Under section 744H(b)(2)(A) of the FD&C Act, FDA must determine the percentage of the total revenue amount for a fiscal year to be derived from: (1) initial and annual BPD fees, and reactivation fees; (2) biosimilar biological product application fees; and (3) biosimilar biological product program fees. As described above, an operating reserve adjustment is not required for FY 2025.

A. Application Fees

In establishing the biosimilar biological product application fee amount for FY 2025, FDA assessed multiple modeling options. Considering available factors, FDA selected a model that forecasts 17 biosimilar biological product applications requiring clinical data submitted for approval in FY 2025 and zero applications that do not require clinical data. Given recent years' data regarding biosimilar biological product applications that are refused to file and withdrawals before filing, the 17 submissions will be assumed to equate to 16.25 full application equivalents.

For FY 2025 the biosimilar biological product application fee for applications requiring clinical data is $1,471,118. Applications not requiring clinical data pay half that fee, or $735,559. This is estimated to provide a total of $23,905,668 representing 43 percent (rounded to the nearest whole number) of the FY 2025 target revenue amount.

B. Biosimilar Biological Product Program Fee

Under BsUFA III, FDA assesses biosimilar biological product program fees (“program fees”). An applicant in a biosimilar biological product application shall not be assessed more than five program fees for a fiscal year for biosimilar biological products identified in a single biosimilar biological product application (see section 744H(a)(3)(D) of the FD&C Act). Applicants are assessed a program fee for a fiscal year for biosimilar biological products that are identified in a biosimilar biological product application approved as of October 1 of such fiscal year; that may be dispensed only under prescription pursuant to section 503(b) of the FD&C Act; and that, as of October 1 of such fiscal year, do not appear on a list developed and maintained by FDA of discontinued biosimilar biological products. An approved biosimilar biological product that appears on the list of discontinued biosimilar biological products as of October 1 of a fiscal year would also be assessed the program fee if it is removed from the discontinued list during the fiscal year and the other statutory criteria for fee assessment are satisfied (see section 744H(a)(3)(E)(iii) of the FD&C Act).

Based on available information, FDA estimates that 121 program fees will be invoiced for FY 2025. For products invoiced in the FY 2025 regular billing cycle, FDA anticipates that zero program fees will be refunded.

For FY 2025, the biosimilar biological product program fee is $256,168. This is estimated to provide a total of $30,996,328, representing 55 percent (rounded to the nearest whole number) of the FY 2025 target revenue amount.

C. Initial and Annual BPD Fees, and Reactivation Fees

To estimate the number of BPD fees to be paid in FY 2025, FDA must consider the number of new BPD programs, the number of current BPD programs, and the number of BPD programs that will be reactivated. These estimates provide information that, when aggregated, allows FDA to set BPD fees (initial BPD fees, annual BPD fees, reactivation fees).

FDA analyzed available data to estimate the total number of BPD programs for FY 2025. In FY 2025, FDA estimates approximately 23 new BPD programs, no reactivations (a single reactivation is weighted as two BPD fees), and approximately 88 BPD programs to pay the annual BPD fee, yielding a rounded total estimated equivalent of 111 BPD fees to be collected in FY 2025. The remainder of the target revenue of $1,110,000 or 2 percent is to be collected from the BPD fees. Dividing this amount by the estimated 111 BPD fees to be paid equals an initial BPD and annual BPD fee amount of $10,000 (rounded to the nearest dollar). The reactivation fee is set at twice the initial/annual BPD amount at $20,000 (rounded to the nearest dollar).

IV. Fee Schedule for FY 2025

The fee rates for FY 2025 are displayed in table 9.

Table 9—Fee Schedule for FY 2025

Fee category	Fee rates for FY 2025
Initial BPD	$10,000
Annual BPD	10,000
Reactivation	20,000
Applications:
Requiring Clinical Data	1,471,118
Not Requiring Clinical Data	735,559
Program Fee	256,168