AUTHORITY TO ASSESS AND USE DRUG FEES.

SEC. 504. AUTHORITY TO ASSESS AND USE DRUG FEES. (a) Types of Fees.—Section 736(a) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379h(a)) is amended— (1) in the matter preceding paragraph (1), by striking “fiscal year 1998” and inserting “fiscal year 2003”; (2) in paragraph (1)(A)— (A) in each of clauses (i) and (ii), by striking “in subsection (b)” and inserting “under subsection (c)(4)”; and (B) in clause (ii), by adding at the end the following sentence: “Such fee shall be half of the amount of the fee established under clause (i).”; (3) in paragraph (2)(A), in the matter after and below clause (ii)— (A) by striking “in subsection (b)” and inserting “under subsection (c)(4)”; and (B) by striking “payable on or before January 31” and inserting “payable on or before October 1”; and (4) in paragraph (3)— (A) by amending subparagraph (A) to read as follows: “(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)(4). 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.”; and (B) in subparagraph (B), by striking “The listing” and all that follows through “filed under section 505(b)(2)” and inserting the following: “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)”. (b) Fee Amounts.—Section 736(b) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379h(b)) is amended to read as follows: “(b) Fee Revenue Amounts.—Except as provided in subsections (c), (d), (f), and (g), fees under subsection (a) shall be established to generate the following revenue amounts: 116 STAT. 690 “Type of Fee Revenue Fiscal Year 2003 Fiscal Year 2004 Fiscal Year 2005 Fiscal Year 2006 Fiscal Year 2007 Application/Supplement $74,300,000 $77,000,000 $84,000,000 $86,434,000 $86,434,000 Establishment $74,300,000 $77,000,000 $84,000,000 $86,433,000 $86,433,000 Product $74,300,000 $77,000,000 $84,000,000 $86,433,000 $86,433,000 Total Fee Revenue $222,900,000 $231,000,000 $252,000,000 $259,300,000 $259,300,000 If, after the date of the enactment of the Prescription Drug User Fee Amendments of 2002, legislation is enacted requiring the Secretary to fund additional costs of the retirement of Federal personnel, fee revenue amounts shall be increased in each year by the amount necessary to fully fund the portion of such additional costs that are attributable to the process for the review of human drug applications.”. (c) Adjustments.—Section 736(c) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379h(c)) is amended— (1) in paragraph (1)— (A) in the matter preceding subparagraph (A), by striking “fees and total fee revenues” and inserting “revenues”; (B) in subparagraph (A)— (i) by striking “during the preceding fiscal year”; and (ii) by striking “, or” and inserting the following: “for the 12 month period ending June 30 preceding the fiscal year for which fees are being established, or”; (C) in subparagraph (B), by striking “for such fiscal year” and inserting “for the previous fiscal year”; and (D) in the matter after and below subparagraph (B), by striking “fiscal year 1997”; and inserting “fiscal year 2003”; (2) by redesignating paragraphs (2) and (3) as paragraphs (4) and (5), respectively; (3) by inserting after paragraph (1) the following paragraphs: “(2) Workload adjustment.—Beginning with fiscal year 2004, 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, commercial investigational new drug applications, 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. “(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).116 STAT. 691 “(3) Final year adjustment.—For fiscal year 2007, the Secretary may, in addition to adjustments under paragraphs (1) and (2), further increase the fee revenues and fees established in subsection (b) if such an adjustment is necessary to provide for not more than three months of operating reserves of carryover user fees for the process for the review of human drug applications for the first three months of fiscal year 2008. 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 2007. If the Secretary has carryover balances for such process in excess of three months of such operating reserves, the adjustment under this paragraph shall not be made.”; and (4) in paragraph (4) (as redesignated by paragraph (2) of this subsection), by amending such paragraph to read as follows: “(4) Annual fee setting.—The Secretary shall, 60 days before the start of each fiscal year that begins after September 30, 2002, 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.”. (d) Fee Waiver or Reduction.—Section 736(d)) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379h(d)) is amended— (1) in paragraph (1)— (A) in subparagraph (C), by inserting “or” after the comma at the end; (B) by striking subparagraph (D); and (C) by redesignating subparagraph (E) as subparagraph (D); and (2) in paragraph (3), in each of subparagraphs (A) and (B), by striking “paragraph (1)(E)” each place such term appears and inserting “paragraph (1)(D)”. (e) Assessment of Fees.—Section 736(f) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379h(f)) is amended— (1) in the heading for the subsection, by striking “Assessment of Fees.—” and inserting “Limitations.—”; and (2) in paragraph (1), by striking the heading for the paragraph and all that follows through “fiscal year beginning” and inserting the following: “In general.—Fees under subsection (a) shall be refunded for a fiscal year beginning”. (f) Crediting and Availability of Fees.— (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.”. (2) Collections and appropriation acts.—Section 736(g)(2) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379h(g)(2)) is amended— (A) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively;116 STAT. 692 (B) by striking “(2) Collections” and all that follows through “the amount specified” in clause (i) (as so redesignated) and inserting the following: “(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”; (C) by moving clause (ii) (as so redesignated) two ems to the right; and (D) by adding at the end the following subparagraph: “(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.—Section 736(g)(3) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379h(g)(3)) is amended by striking subparagraphs (A) through (E) and inserting the following: “(A) $222,900,000 for fiscal year 2003; “(B) $231,000,000 for fiscal year 2004; “(C) $252,000,000 for fiscal year 2005; “(D) $259,300,000 for fiscal year 2006; and “(E) $259,300,000 for fiscal year 2007;”.