AUTHORITY TO ASSESS AND USE DRUG FEES.

SEC. 103. AUTHORITY TO ASSESS AND USE DRUG FEES.(a) Types of Fees.—Section 736(a) (21 U.S.C. 379h(a)) is amended—(1) in the matter preceding paragraph (1), by striking “2003” and inserting “2008”;(2) in paragraph (1)—(A) in subparagraph (D)—(i) in the heading, by inserting “or withdrawn before filing” after “refused for filing”; and(ii) by inserting before the period at the end the following: “or withdrawn without a waiver before filing”;121 STAT. 827(B) by redesignating subparagraphs (E) and (F) as subparagraphs (F) and (G), respectively; and(C) by inserting after subparagraph (D) the following:“(E) Fees for applications previously refused for filing or withdrawn before filing.—A human drug application or supplement that was submitted but was refused for filing, or was withdrawn before being accepted or refused for filing, shall be subject to the full fee under subparagraph (A) upon being resubmitted or filed over protest, unless the fee is waived or reduced under subsection (d).”; and(3) in paragraph (2)—(A) in subparagraph (A), by striking “subparagraph (B)” and inserting “subparagraphs (B) and (C)”; and(B) by adding at the end the following:“(C) Special rules for positron emission tomography drugs.—“(i) In general.—Except as provided in clause (ii), each person who is named as the applicant in an approved human drug application for a positron emission tomography drug shall be subject under subparagraph (A) to one-sixth of an annual establishment fee with respect to each such establishment identified in the application as producing positron emission tomography drugs under the approved application.“(ii) Exception from annual establishment fee.—Each person who is named as the applicant in an application described in clause (i) shall not be assessed an annual establishment fee for a fiscal year if the person certifies to the Secretary, at a time specified by the Secretary and using procedures specified by the Secretary, that—“(I) the person is a not-for-profit medical center that has only 1 establishment for the production of positron emission tomography drugs; and“(II) at least 95 percent of the total number of doses of each positron emission tomography drug produced by such establishment during such fiscal year will be used within the medical center.“(iii) Definition.—For purposes of this subparagraph, the term ‘positron emission tomography drug’ has the meaning given to the term ‘compounded positron emission tomography drug’ in section 201(ii), except that paragraph (1)(B) of such section shall not apply.”.(b) Fee Revenue Amounts.—Section 736(b) (21 U.S.C. 379h(b)) is amended to read as follows:“(b) Fee Revenue Amounts.—“(1) In general.—For each of the fiscal years 2008 through 2012, 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) $392,783,000; and121 STAT. 828“(B) an amount equal to the modified workload adjustment factor for fiscal year 2007 (as determined under paragraph (3)).“(2) Types of fees.—Of the total revenue amount determined for a fiscal year under paragraph (1)—“(A) one-third shall be derived from fees under subsection (a)(1) (relating to human drug applications and supplements);“(B) one-third shall be derived from fees under subsection (a)(2) (relating to prescription drug establishments); and“(C) one-third shall be derived from fees under subsection (a)(3) (relating to prescription drug products).“(3) Modified workload adjustment factor for fiscal year 2007.—For purposes of paragraph (1)(B), the Secretary shall determine the modified workload adjustment factor by determining the dollar amount that results from applying the methodology that was in effect under subsection (c)(2) for fiscal year 2007 to the amount $354,893,000, except that, with respect to the portion of such determination that is based on the change in the total number of commercial investigational new drug applications, the Secretary shall count the number of such applications that were active during the most recent 12-month period for which data on such submissions is available.“(4) Additional fee revenues for drug safety.—“(A) In general.—For each of the fiscal years 2008 through 2012, paragraph (1)(A) shall be applied by substituting the amount determined under subparagraph (B) for ‘$392,783,000’.“(B) Amount determined.—For each of the fiscal years 2008 through 2012, the amount determined under this subparagraph is the sum of—“(i) $392,783,000; plus“(ii)(I) for fiscal year 2008, $25,000,000;“(II) for fiscal year 2009, $35,000,000;“(III) for fiscal year 2010, $45,000,000;“(IV) for fiscal year 2011, $55,000,000; and“(V) for fiscal year 2012, $65,000,000.”.(c) Adjustments to Fees.—(1) Inflation adjustment.—Section 736(c)(1) (21 U.S.C. 379h(c)(1)) is amended—(A) in the matter preceding subparagraph (A), by striking “The revenues established in subsection (b)” and inserting “For fiscal year 2009 and subsequent fiscal years, the revenues established in subsection (b)”;(B) in subparagraph (A), by striking “or” at the end;(C) in subparagraph (B), by striking the period at the end and inserting “, or”;(D) by inserting after subparagraph (B) the following:“(C) the average annual 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 5 years of the preceding 6 fiscal years.”; and(E) in the matter following subparagraph (C) (as added by subparagraph (D)), by striking “fiscal year 2003” and inserting “fiscal year 2008”.121 STAT. 829(2) Workload adjustment.—Section 736(c)(2) (21 U.S.C. 379h(c)(2)) is amended—(A) in the matter preceding subparagraph (A), by striking “Beginning with fiscal year 2004,” and inserting “For fiscal year 2009 and subsequent fiscal years,”;(B) in subparagraph (A), in the first sentence—(i) by striking “human drug applications,” and inserting “human drug applications (adjusted for changes in review activities, as described in the notice that the Secretary is required to publish in the Federal Register under this subparagraph),”;(ii) by striking “commercial investigational new drug applications,”; and(iii) by inserting before the period the following: “, and the change in the total number of active commercial investigational new drug applications (adjusted for changes in review activities, as so described) during the most recent 12-month period for which data on such submissions is available”;(C) in subparagraph (B), by adding at the end the following: “Any adjustment for changes in review activities made in setting fees and revenue amounts for fiscal year 2009 may not result in the total workload adjustment being more than 2 percentage points higher than it would have been in the absence of the adjustment for changes in review activities.”; and(D) by adding at the end the following:“(C) The Secretary shall contract with an independent accounting firm to study the adjustment for changes in review activities applied in setting fees and revenue amounts for fiscal year 2009 and to make recommendations, if warranted, for future changes in the methodology for calculating the adjustment. After review of the recommendations, the Secretary shall, if warranted, make appropriate changes to the methodology, and the changes shall be effective for each of the fiscal years 2010 through 2012. The Secretary shall not make any adjustment for changes in review activities for any fiscal year after 2009 unless such study has been completed.”.(3) Rent and rent-related cost adjustment.—Section 736(c) (21 U.S.C. 379h(c)) is amended—(A) by redesignating paragraphs (3), (4), and (5) as paragraphs (4), (5), and (6), respectively; and(B) by inserting after paragraph (2) the following:“(3) Rent and rent-related cost adjustment.—For fiscal year 2010 and each subsequent fiscal year, the Secretary shall, before making adjustments under paragraphs (1) and (2), decrease the fee revenue amount established in subsection (b) if actual costs paid for rent and rent-related expenses for the preceding fiscal year are less than estimates made for such year in fiscal year 2006. Any reduction made under this paragraph shall not exceed the amount by which such costs fall below the estimates made in fiscal year 2006 for such fiscal year, and shall not exceed $11,721,000 for any fiscal year.”.(4) Final year adjustment.—Paragraph (4) of section 736(c) (21 U.S.C. 379h(c)), as redesignated by paragraph (3)(A), is amended to read as follows:121 STAT. 830 “(4) Final year adjustment.—“(A) Increase in fees.—For fiscal year 2012, the Secretary may, in addition to adjustments under this paragraph and paragraphs (1), (2), and (3), further increase the fee revenues and fees established in subsection (b) if such an adjustment is necessary to provide for not more than 3 months of operating reserves of carryover user fees for the process for the review of human drug applications for the first 3 months of fiscal year 2013. 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 2012. If the Secretary has carryover balances for such process in excess of 3 months of such operating reserves, the adjustment under this subparagraph shall not be made.“(B) Decrease in fees.—“(i) In general.—For fiscal year 2012, the Secretary may, in addition to adjustments under this paragraph and paragraphs (1), (2), and (3), decrease the fee revenues and fees established in subsection (b) by the amount determined in clause (ii), if, for fiscal year 2009 or 2010—“(I) the amount of the total appropriations for the Food and Drug Administration for such fiscal year (excluding the amount of fees appropriated for such fiscal year) exceeds the amount of the total appropriations for the Food and Drug Administration for fiscal year 2008 (excluding the amount of fees appropriated for such fiscal year), adjusted as provided under paragraph (1); and“(II) the amount of the total appropriations expended for the process for the review of human drug applications at the Food and Drug Administration for such fiscal year (excluding the amount of fees appropriated for such fiscal year) exceeds the amount of appropriations expended for the process for the review of human drug applications at the Food and Drug Administration for fiscal year 2008 (excluding the amount of fees appropriated for such fiscal year), adjusted as provided under paragraph (1).“(ii) Amount of decrease.—The amount determined in this clause is the lesser of—“(I) the amount equal to the sum of the amounts that, for each of fiscal years 2009 and 2010, is the lesser of—“(aa) the excess amount described in clause (i)(II) for such fiscal year; or“(bb) the amount specified in subsection (b)(4)(B)(ii) for such fiscal year; or“(II) $65,000,000.“(iii) Limitations.—“(I) Fiscal year condition.—In making the determination under clause (ii), an amount described in subclause (I) of such clause for fiscal year 2009 or 2010 shall be taken into account 121 STAT. 831 only if subclauses (I) and (II) of clause (i) apply to such fiscal year.“(II) Relation to subparagraph (A).—The Secretary shall limit any decrease under this paragraph if such a limitation is necessary to provide for the 3 months of operating reserves described in subparagraph (A).”.(5) Limit.—Paragraph (5) of section 736(c) (21 U.S.C. 379h(c)), as redesignated by paragraph (3)(A), is amended by striking “2002” and inserting “2007”.(d) Fee Waiver or Reduction.—Section 736(d) (21 U.S.C. 379h(d)) is amended—(1) in paragraph (1), in the matter preceding subparagraph (A)—(A) by inserting after “The Secretary shall grant” the following: “to a person who is named as the applicant in a human drug application”; and(B) by inserting “to that person” after “one or more fees assessed”;(2) by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively;(3) by inserting after paragraph (1) the following:“(2) Considerations.—In determining whether to grant a waiver or reduction of a fee under paragraph (1), the Secretary shall consider only the circumstances and assets of the applicant involved and any affiliate of the applicant.”; and(4) in paragraph (4) (as redesignated by paragraph (2)), in subparagraph (A), by inserting before the period the following: “, and that does not have a drug product that has been approved under a human drug application and introduced or delivered for introduction into interstate commerce”.(e) Crediting and Availability of Fees.—(1) Authorization of appropriations.—Section 736(g)(3) (21 U.S.C. 379h(g)(3)) is amended to read as follows:“(3) Authorization of appropriations.—For each of the fiscal years 2008 through 2012, there is authorized to be appropriated for fees under this section an amount equal to the total revenue amount determined under subsection (b) for the fiscal year, as adjusted or otherwise affected under subsection (c) and paragraph (4) of this subsection.”.(2) Offset.—Section 736(g)(4) (21 U.S.C. 379h(g)(4)) is amended to read as follows:“(4) Offset.—If the sum of the cumulative amount of fees collected under this section for the fiscal years 2008 through 2010 and the amount of fees estimated to be collected under this section for fiscal year 2011 exceeds the cumulative amount appropriated under paragraph (3) for the fiscal years 2008 through 2011, the excess shall be credited to the appropriation account of the Food and Drug Administration as provided in paragraph (1), and shall be subtracted from the amount of fees that would otherwise be authorized to be collected under this section pursuant to appropriation Acts for fiscal year 2012.”.(f) Exemption for Orphan Drugs.—Section 736 (21 U.S.C. 379h) is further amended by adding at the end the following:“(k) Orphan Drugs.—121 STAT. 832“(1) Exemption.—A drug designated under section 526 for a rare disease or condition and approved under section 505 or under section 351 of the Public Health Service Act shall be exempt from product and establishment fees under this section, if the drug meets all of the following conditions:“(A) The drug meets the public health requirements contained in this Act as such requirements are applied to requests for waivers for product and establishment 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 during the previous year.“(2) Evidence of qualification.—An exemption under paragraph (1) applies with respect to a drug only if the applicant involved submits a certification that its gross annual revenues did not exceed $50,000,000 for the preceding 12 months before the exemption was requested.”.(g) Conforming Amendment.—Section 736(a) (21 U.S.C. 379h(a)) is amended in paragraphs (1)(A)(i), (1)(A)(ii), (2)(A), and (3)(A) by striking “(c)(4)” each place such term appears and inserting “(c)(5)”.(h) Technical Amendment.—(1) Amendment.—Section 736(g)(1) (21 U.S.C. 379h(g)(1)) is amended by striking the first sentence 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) Effective date.—Paragraph (1) shall take effect as if included in section 504 of the Prescription Drug User Fee Amendments of 2002 (Public Law 107–188; 116 Stat. 687).