USER FEES COULD TOP $200,000 PER APPLICATION IN 1994 IF ALL WAIVERS

USER FEES COULD TOP $200,000 PER APPLICATION IN 1994 IF ALL WAIVERS for orphan products and small businesses are granted, FDA Senior Advisor for Management and Systems Mary Jo Veverka warned Feb. 19 at the Industrial Biotechnology Association annual meeting in Naples, Fla. "If we waived the combination of the small business, which is a 50% waiver and a deferral, [and] add all orphans, you could be assured that the application fee for everyone else is going to approach 136% increase over what you are paying this year," Veverka said. "We are talking about an application fee next year that will be over $200,000, because of the self-correcting mechanism." "Our principle objective is to have the minimum amount of waivers that we possibly can accommodate. There are a lot of lawyers out there trolling for business and coming in and appealing for waivers," Veverka noted. The waiver guidelines are the "area where we are struggling hardest," Veverka added. The user fee statute "started off as very simplistic, and as more special interests got involved in the negotiations, there were more opportunities built into the statute for waivers." The agency has conducted "a series of 'lessons learned' interviews with seven other government agencies that have user fee programs," Veverka noted. "They have all told us [to] minimize the number of waivers." Veverka continued: "Many of you will probably have orphans. If anything, we are hearing a lot [of] lobbying and gearing up of: 'if we are an orphan, we want our fee waived.' Let me tell you, if we waive every orphan, this is a zero-sum game." She explained that "the application fees will self-correct for the shortfall in revenues." Referring to President Clinton's budget proposal that calls for increasing user fee revenues and putting them toward deficit reduction, Veverka said that the agency will have to "expend some energy to ensure that we will be able to collect the funds that we so successfully worked for" with the Pharmaceutical Manufacturers Association and IBA. FDA has not seen documentation that provides details on the Clinton Administration's proposal for user fees. That proposal foresees $1.02 bil. in user fee revenues raised from drugs and probably from other FDA-regulated products during 1994-98 as compared to the current program, which aims to raise $327 mil. in add-on funds earmarked for drug review operations during FY 1993- 97. FDA continues to be open to talking about user fees with all industries that make FDA-regulated products. At a Dec. 8 session of the Food and Drug Law Institute's annual meeting, Veverka said that FDA is "very interested" in having discussions with other industries, including generic drugs and medical devices ("The Pink Sheet" Dec. 14, 1992, p. 16). Before the user fee legislation for drugs and biologics passed Congress in October, FDA had meetings with representatives for generic drugs, medical devices and animal drugs. During those meetings, the generic drug and medical device industries were not supportive of user fees. In its effort to reconcile its lists of pending products, listed products and registered establishments that will be subject to user fees, FDA has been sending out invoice letters to companies. Veverka said that "about two weeks ago we sent letters out to about 150 companies" for listed products and establishments. "We have an additional 150 companies identified that have active submissions in the agency, for which we have no products or establishments. So letters are going out to them this week to make sure we have our data correct of what might be subject to invoicing."