2024-16894. Animal Drug User Fee Rates and Payment Procedures for Fiscal Year 2025

Table 1—FDA Personnel Compensation and Benefits (PC&B) Each Year and Percentage Change

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

Section 740(c)(2)(A)(ii) of the FD&C Act specifies that this 3.8539 percent should be multiplied by the proportion of PC&B costs to total FDA costs for the first 3 of the preceding 4 fiscal years for which data are available. Table 2 shows the amount of PC&B and the total amount obligated by FDA for the same 3 fiscal years.

Table 2—PC&B as a Percent of Total Cost at FDA

Fiscal year	2021	2022	2023	3-Year average
Total PC&B	$3,039,513,000	$3,165,477,000	$3,436,513,000
Total Costs	$6,049,798,000	$6,251,981,000	$6,654,058,000
PC&B percent	50.2416%	50.6316%	51.6454%	50.8395%

The portion of the inflation adjustment relating to payroll costs is 3.8539 percent multiplied by 50.8359 percent, or 1.9593 percent.

Section 740(c)(2)(A)(iii) of the FD&C Act specifies that the portion of the inflation adjustment for non-payroll costs is the average annual percent change that occurred in the Consumer Price Index (CPI) (Washington-Arlington-Alexandria, DC-VA-MD-WV; not seasonally adjusted; all items less food and energy; annual index) for the first 3 years of the preceding 4 years of available data multiplied by the average proportion of all costs other than PC&B costs to total FDA costs for the first 3 years of the preceding 4 fiscal years. Table 3 provides the summary data for the percent change in the specified CPI for the Washington-Arlington-Alexandria area. The data from the Bureau of Labor Statistics are shown in table 3.^[1]

Table 3—Annual and 3-Year Average Percentage Change in CPI (Less Food and Energy) for Washington-Arlington-Alexandria Area

Fiscal year	2021	2022	2023	3-Year average
Annual CPI	287.144	302.608	313.315
Annual Percent Change	3.1271%	5.3855%	3.5382%	4.0169%

Section 740(c)(2)(A)(iii) of the FD&C Act specifies to calculate the inflation adjustment for non-payroll costs, we multiply 4.0169 percent by the average proportion of all costs other than PC&B to total FDA costs for the first 3 years of the preceding 4 fiscal years. Since 50.8395 percent was obligated for PC&B as shown in table 2, 49.1605 percent is the portion of costs other than PC&B (100 percent minus the PC&B percentage of 50.8395). The portion of the inflation adjustment relating to non-payroll costs is 4.0169 percent multiplied by 49.1605 percent, or 1.9747 percent.

Next, we add the payroll component (1.9593 percent) to the non-payroll component (1.9747 percent), for an inflation adjustment of 3.9340 percent for FY 2025.

Section 740(c)(2)(B) of the FD&C Act provides for the inflation adjustment to be compounded each fiscal year after FY 2025. The inflation adjustment for FY 2025 (3.9340 percent) is compounded by adding 1 and then multiplying by 1 plus the inflation adjustment factor for FY 2024 (zero percent), which equals 1.0393 (rounded) (1.0393 multiplied 1.0). We then multiply the base revenue amount for FY 2025 ($33,500,000) by 1.0393, yielding an inflation adjusted amount of $34,817,890.

C. Workload Adjustment to Inflation Adjusted Fee Revenue Amount

Section 740(c)(3)(A) of the FD&C Act specifies that the annual fee revenue amounts in ADUFA V for FY 2025 and subsequent fiscal years are subject to adjustment to account for changes in FDA's review workload. The workload adjustment will be applied to the inflation adjusted fee revenue amount.

To determine whether a workload adjustment applies, per ADUFA V commitments FDA calculates the weighted average of the change in the total number of each of the five types of applications and submissions specified in the workload adjustment provision (animal drug applications, supplemental animal drug applications for which data with respect to safety or efficacy are required, manufacturing supplemental animal drug applications, investigational animal drug study submissions, and investigational animal drug protocol submissions) received over the 5-year period that ended on September 30, 2023 (the base years; 2019 through 2023), and the average number of each of these types of applications and submissions over the most recent 5-year period that ended April 30, 2024.

The results of these calculations are presented in the first two columns of table 4. Column 3 reflects the percent change in workload over the two 5-year periods. Column 4 shows the weighting factor for each type of application/submissions, reflecting how much of the total FDA animal drug review workload was accounted for by each type of application or submission in the table during the most recent 5 years. Column 5 is the weighted percent change in each category of workload and was derived by multiplying the weighting factor in each line in column 4 by the percent change from the base years in column 3. At the bottom right of the table, the sum of the values in column 5 is calculated, reflecting a total change in workload of negative 4.4338 percent for FY 2025. This is the workload adjuster for FY 2025.

Table 4—Workload Adjuster Calculation

Application type	Column 1	Column 2	Column 3	Column 4	Column 5
	5-Year average (base years)	Latest 5-year average	Percent change	Weighting factor	Weighted percent change
New Animal Drug Application (NADAs)	11.60	12.40	6.8966	0.0355	0.2447
Supplemental NADAs With Safety or Efficacy Data	8.20	7.60	−7.3171	0.0276	−0.2021
Manufacturing Supplements	367.20	359.20	−2.1786	0.2065	−0.4499
Investigational Study Submissions	164.20	159.00	−3.1669	0.5887	−1.8644
Investigational Protocol Submissions	216.20	183.20	−15.2636	0.1416	−2.1621
FY 2025 ADUFA V Workload Adjuster					−4.4338

Section 740(c)(3)(B) of the FD&C Act specifies that under no circumstances shall the workload adjustment result in fee revenues that are less than the base fee revenues for that fiscal year as adjusted for inflation. Additionally, section 740(c)(3)(A)(ii) states that the workload adjuster must be greater than 3 percent for a second fiscal year within ADUFA V before FDA can add the adjustment to the target revenue. For FY 2025 the workload adjuster is below the 3 percent statute threshold, therefore no workload adjustment shall be applied.

D. Operating Reserve Adjustment to Inflation and Workload Adjusted Fee Revenue Amount

Section 740(c)(4)(A) of the FD&C Act specifies that for FY 2025, after the fee revenue amount established under section 740(b) of the FD&C Act is adjusted for inflation and workload, the Secretary shall increase the fee revenue amount for such fiscal year, if necessary to provide an operating reserve of not less than 12 weeks or decrease the fee revenue amount for such fiscal year, if necessary to provide for not more than 22 weeks of operating reserves.

To determine the dollar amounts for the 12-week and 22-week operating reserve thresholds, we divide the adjusted annual fee revenue amount (rounded) ($34,818,000) by 52 weeks to generate a 1-week operating reserve amount of $669,577. The 1-week operating reserve amount is then multiplied by 12 and 22. This results in a 12-week minimum threshold of $8,034,923 and a 22-week maximum threshold of $14,730,692.

To estimate the FY 2024 end-of-year operating reserve of carryover user fees, the Agency projected the user fee carryover amount at the end of July 2024 using forecasted obligations, collections, and estimated recoveries but not including carryover use fees that have not been appropriated. The operating reserve of carryover user fees is projected to be $21,041,545 or 31.43 weeks ($21,041,545 divided by $669,577).

Because the estimated FY 2024 end-of-year operating reserve of carryover user fees is not below the 12-week threshold amount of $8,034,923, FDA will not increase the fee revenue amount and fees for FY 2025.

However, because the estimated FY 2024 end-of-year operating reserve of carryover user fees of $21,041,545 exceeds the 22-week threshold of $14,730,692, FDA will apply an operating reserve adjustment of $6,310,853 to decrease the fee revenue and fees for FY 2025.

With respect to target revenue for FY 2025, subtracting the operating reserve adjustment amount of $6,310,853 from the adjusted fee revenue amount of $34,817,890 results in a total target revenue amount of $28,507,037 for FY 2025.

E. FY 2025 Fee Revenue Amounts

The fee revenue amount (rounded) for FY 2025 is $28,507,000. Section 740(b)(2) of the FD&C Act specifies that this revenue amount is to be divided as follows: 20 percent, or a total of $5,701,000 is to come from application fees; 27 percent, or a total of $7,697,000, is to come from product fees; 26 percent, or a total of $7,412,000 is to come from establishment fees; and 27 percent, or a total of $7,697,000 is to come from sponsor fees.

III. Animal Drug Application Fee Calculations for FY 2025

A. Application Fee Revenues and Numbers of Fee-Paying Applications

Section 740(a)(1)(A) of the FD&C Act states that each person that submits an animal drug application or a supplemental animal drug application shall be subject to an application fee, with limited exceptions. The term “animal drug application” means an application for approval of any new animal drug submitted under section 512(b)(1) of the FD&C Act or an application for conditional approval of a new animal drug submitted under section 571 of the FD&C Act. A “supplemental animal drug application” is defined as a request to FDA to approve a change in an approved animal drug application, or a request to FDA to approve a change to an application approved under section 512(c)(2) of the FD&C Act for which data with respect to safety or effectiveness are required. Such applications are subject to ADUFA fees, except those fees may be waived under the circumstances described in section 740(d)(1)(D) and 740(i) of the FD&C Act.

Furthermore, ADUFA V continues to provide an exception from application fees for animal drug applications submitted under section 512(b)(1) of the FD&C Act by a sponsor who previously applied for conditional approval under section 571 of the FD&C Act for the same product and paid an application fee at the time they applied for conditional approval. The purpose of this exception is to prevent sponsors of conditionally approved products from having to pay a second application fee at the time they apply for full approval of their products under section 512(b)(1) of the FD&C Act, provided the sponsor's application for full approval is filed consistent with the timeframes established in section 571(h) of the FD&C Act.

The application fees are to be set so that they will generate $5,701,000 in fee revenue for FY 2025. The fee for a supplemental animal drug application for which safety or effectiveness data are required, for an animal drug application subject to criteria set forth in section 512(d)(4) of the FD&C Act, and for an application for conditional approval under section 571 of the FD&C Act of a new animal drug for which an animal drug application submitted under section 512(b)(1) of the FD&C Act has been previously approved under section 512(d)(1) for another intended use is to be set at 50 percent of the animal drug application fee.

To set animal drug application fees and supplemental animal drug application fees to realize $5,701,000 FDA must first make some assumptions about the number of fee-paying applications and supplemental applications the Agency will receive in FY 2025.

The Agency knows the number of applications that have been submitted in previous fiscal years. That number fluctuates annually. In estimating the fee revenue to be generated by animal drug application fees in FY 2025, FDA is assuming that the number of applications for which fees will be paid in FY 2025 will equal the average number of applications over the five most recently completed fiscal years of the ADUFA program (FY 2019 to FY 2023).

Over the 5 most recently completed fiscal years, the average number of animal drug applications subject to the full fee was 5.60. Over this same period, the average number of supplemental applications for which safety or effectiveness data are required, applications subject to the criteria set forth in section 512(d)(4) of the FD&C Act, and applications for conditional approval of a new animal drug for which a section 512(b)(1) application has been previously approved for another intended use subject to half of the full fee was 8.40.

Based on the previous assumptions, FDA is estimating that it will receive a total of 9.80 fee-paying animal drug applications in FY 2025 (5.60 applications paying a full fee and 8.40 applications paying a half fee).

B. Application Fee Rates for FY 2025

FDA must set the fee rates for FY 2025 so that the estimated 9.80 applications that pay the fee will generate a total of $5,701,000. To generate this amount, the fee for an animal drug application, rounded to the nearest dollar, will have to be $581,735, and the fee for a supplemental animal drug application for which safety or effectiveness data are required, for applications subject to the criteria set forth in section 512(d)(4) of the FD&C Act, and for an application for conditional approval under section 571 of the FD&C Act of a new animal drug for which an animal drug application submitted under section 512(b)(1) of the FD&C Act has been previously approved under section 512(d)(1) for another intended use will have to be $290,867.

IV. Animal Drug Product Fee Calculations for FY 2025

A. Product Fee Revenues and Numbers of Fee-Paying Products

Section 740(a)(2) of the FD&C Act specifies that the animal drug product fee must be paid annually by the person named as the applicant in a new animal drug application or supplemental new animal drug application for an animal drug product submitted for listing under section 510 of the FD&C Act (21 U.S.C. 360) and who had an animal drug application or supplemental animal drug application pending at FDA after September 1, 2003. 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 (see section 739(3) of the FD&C Act). The product fees are to be set so that they will generate $7,697,000 in fee revenue for FY 2025.

To set animal drug product fees to realize $7,697,000, FDA must make some assumptions about the number of products for which these fees will be paid in FY 2025. FDA developed data on all animal drug products that have been submitted for listing under section 510 of the FD&C Act and matched this to the list of all persons who had an animal drug application or a supplemental animal drug application pending after September 1, 2003. As of May 2024, FDA estimates that there are 734 products submitted for listing by persons who had an animal drug application or supplemental animal drug application pending after September 1, 2003. Based on this, FDA estimates that a total of 734 products will be subject to this fee in FY 2025.

In estimating the fee revenue to be generated by animal drug product fees in FY 2025, FDA is assuming that 2 percent of the products invoiced, or 15, will not pay fees in FY 2025, due to fee waivers and reductions. FDA has made this estimate at 2 percent this year, based on historical data over the past 5 completed fiscal years of the ADUFA program.

Accordingly, the Agency estimates that a total of 719 (734 minus 15) products will be subject to product fees in FY 2025.

B. Product Fee Rates for FY 2025

FDA must set the fee rates for FY 2025 so that the estimated 719 products for which fees are paid will generate a total of $7,697,000. To generate this amount will require the fee for an animal drug product, rounded to the nearest dollar, to be $10,705.

V. Animal Drug Establishment Fee Calculations for FY 2025

A. Establishment Fee Revenues and Numbers of Fee-Paying Establishments

Section 740(a)(3) of the FD&C Act states that the animal drug establishment fee must be paid annually by the person who: (1) owns or operates, directly or through an affiliate, an animal drug establishment; (2) is named as the applicant in an animal drug application or supplemental animal drug application for an animal drug product submitted for listing under section 510 of the FD&C Act; (3) had an animal drug application or supplemental animal drug application pending at FDA after September 1, 2003; and (4) whose establishment engaged in the manufacture of the animal drug product during the fiscal year. An establishment subject to animal drug establishment fees is assessed only one such fee per fiscal year. The term “animal drug establishment” is defined as a foreign or domestic place of business 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 (see section 739(4) of the FD&C Act). The establishment fees are to be set so that they will generate $7,412,000 in fee revenue for FY 2025.

To set animal drug establishment fees to realize $7,412,000, FDA must make some assumptions about the number of establishments for which these fees will be paid in FY 2025. FDA developed data on all animal drug establishments and matched this to the list of all persons who had an animal drug application or supplemental animal drug application pending after September 1, 2003. As of May 2024, FDA estimates that there are a total of 50 establishments owned or operated by persons who had an animal drug application or supplemental animal drug application pending after September 1, 2003. Based on this, FDA believes that 50 establishments will be subject to this fee in FY 2025.

In estimating the fee revenue to be generated by animal drug establishment fees in FY 2025, FDA is assuming that 6 percent of the establishments invoiced, or three, will not pay fees in FY 2025 due to fee waivers and reductions. FDA has made this estimate at 6 percent this year, based on historical data over the past 5 completed fiscal years.

Accordingly, the Agency estimates that a total of 47 establishments (50 minus 3) will be subject to establishment fees in FY 2025.

B. Establishment Fee Rates for FY 2025

FDA must set the fee rates for FY 2025 so that the fees paid for the estimated 47 establishments will generate a total of $7,412,000. To generate this amount will require the fee for an animal drug establishment, rounded to the nearest dollar, to be $157,702.

VI. Animal Drug Sponsor Fee Calculations for FY 2025

A. Sponsor Fee Revenues and Numbers of Fee-Paying Sponsors

The animal drug sponsor fee must be paid annually by each person who: (1) is named as the applicant in an animal drug application, except for an approved application for which all subject products have been removed from listing under section 510 of the FD&C Act, or has submitted an investigational animal drug submission that has not been terminated or otherwise rendered inactive and (2) had an animal drug application, supplemental animal drug application, or investigational animal drug submission pending at FDA after September 1, 2003 (see sections 739(6) and 740(a)(4) of the FD&C Act). An animal drug sponsor is subject to only one such fee each fiscal year (see § 740(a)(4) of the FD&C Act). The sponsor fees are to be set so that they will generate $7,697,000 in fee revenue for FY 2025.

To set animal drug sponsor fees to realize $7,697,000, FDA must make some assumptions about the number of sponsors who will pay these fees in FY 2025. FDA developed data on all animal drug sponsors and matched this to the list of all sponsors who had pending submissions and applications after September 1, 2003. As of May 2024, FDA estimates that a total of 176 sponsors will meet this definition in FY 2025.

In estimating the fee revenue to be generated by animal drug sponsor fees in FY 2025, FDA is assuming that 68 percent of the sponsors invoiced, or 120, will not pay sponsor fees in FY 2025 due to fee waivers and reductions. FDA has made this estimate at 68 percent this year, based on historical data over the past 5 completed fiscal years of the ADUFA program.

Accordingly, the Agency estimates that a total of 56 sponsors (176 minus 120) will be subject to and pay sponsor fees in FY 2025.

B. Sponsor Fee Rates for FY 2025

FDA must set the fee rates for FY 2025 so that the estimated 56 sponsors that pay fees will generate a total of $7,697,000. To generate this amount will require the fee for an animal drug sponsor, rounded to the nearest dollar, to be $137,446.

VII. Fee Schedule for FY 2025

The fee rates for FY 2025 are summarized in table 5.

Table 5—FY 2025 Fee Rates

Animal drug user fee category	Fee rate for FY 2025
Animal Drug Application Fees:
Animal Drug Application	$581,735
Supplemental Animal Drug Application for Which Safety or Effectiveness Data are Required,	290,867
Animal Drug Application Subject to the Criteria Set Forth in Section 512(d)(4) of the FD&C Act, or
Application for Conditional Approval Under Section 571 of the FD&C Act for Which an Animal Drug Application Submitted Under Section 512(b)(1) of the FD&C Act Has Been Previously Approved Under Section 512(d)(1) for Another Intended Use
Animal Drug Product Fee	10,705
Animal Drug Establishment Fee 1	157,702
Animal Drug Sponsor Fee 2	137,446
1  An animal drug establishment is subject to only one such fee each fiscal year.
2  An animal drug sponsor is subject to only one such fee each fiscal year.