Biosimilar User Fee Collections Rise, But Little Spent On Program Costs

FDA attributes large carryover balance to uncertainty in knowing when it has reached statutory funding threshold that triggers access to fees.

FDA spent more overall on the Biosimilar User Fee Act program in fiscal year 2015 but relied less on user fees.

In 2015, the agency had net fee collections of $22.8m under BsUFA but spent only $2.3m in fees to support the program, according to the agency's FY 2015 BsUFA Financial Report.

The fees represented 7% of the total spent by the agency on BsUFA in 2015, with the remaining 93% coming from appropriations (see chart).

BsUFA Program: Historical Trend Of Total Costs By Funding Source
Fiscal Year	Total Spent	Spent From Appropriations	Appropriations Percent	Spent From BsUFA Fees	BsUFA Fee Percent
2013	$28,040,547	$28,040,547	100%	$0	0%
2014	$23,391,649	$21,074,247	90%	$2,317,402	10%
2015	$34,817,217	$32,550,420	93%	$2,266,797	7%
Source: FDA's FY 2015 BsUFA Financial Report

The agency has carried over most of the user fees it collected in the early years of BsUFA. Through 2015, it had net fee collections of $43.4m but spent only $4.6m of that amount. The user fee carryover balance at the end of FY 2015 was $38.4m, an amount that takes into account a reserve for refunds.

Total BsUFA program costs increased by approximately 49% in 2015, reaching $34.8m. The Center for Drug Evaluation and Research paid the lion's share of the bill, $30.6m, representing 88% of the total.

The financial report states FDA has spent a total of $86.2m on the user fee program in its first three years. This figure comes in slightly above the $81.7m estimated by Eastern Research Group in a recent report (Also see "Biosimilar User Fee Talks Reach Starting Line As Report Shows Growing FDA Workload" - Pink Sheet, 14 Mar, 2016.).

Uncertainty About Statutory Trigger

In 2015, the agency allocated and obligated $32.5m in appropriated funds for the BsUFA program. This amount easily surpassed the minimum level of $20.8m in appropriated funds that it had to allocate so that user fees could be spent for the program.

In response to questions from the Pink Sheet, FDA attributed the large carryover in user fees to delays in knowing whether it has reached the statutory minimum in appropriated funds that would trigger access to user fees.

"Each year, the agency must meet the statutory trigger before it can spend biosimilar user fees to support the BsUFA program. Though the agency satisfied the trigger, it may not be clear until the end of the fiscal year," FDA said.

"If the agency were to spend user fee funds from previous years and then find out after the fact that it had not satisfied the trigger for this year, the user fee funds from this year would not be available to support biosimilar process activities," the agency said. "This will have a great impact as the BsUFA program grows."

The financial report states the agency "will continue to be challenged by the need to hire and train additional staff to support this program."

However, the large amount of carryover fees, and the small percentage of fees that has gone toward supporting the BSUFA program to date, could make it difficult for the agency to argue that user fee funding should be stepped up in the next BsUFA reauthorization (Also see "Biosimilar User Fees Could Be Raised Significantly In Renewal Talks" - Pink Sheet, 2 Nov, 2015.).

Collections Up 66%

There are four types of user fees under BsUFA: application, establishment, product and Biosimilar Biological Product Development (BPD) fees.

BPD fees are annual payments made by sponsors once an IND for a biosimilar is filed or FDA grants a request for the first BPD meeting for a product. The BPD fee equals 10% of the fee for a full application with clinical data. All BPD fees are ultimately subtracted from the application fee due if and when a biosimilar is submitted for FDA approval.

This type of pre-approval, pay-as-you-go fee distinguishes the biosimilar program from the prescription drug and generic drug user fee programs, which assess levies for applications, approved products and manufacturing facilities. The Generic Drug User Fee Program also assesses fees for Drug Master Files.

The approach of paying fees throughout a product's development was intended to provide start-up funding for FDA's biosimilar functions ahead of the submission of fee-paying applications. Nevertheless, agency officials have said the biosimilar functions would likely be under-resourced initially until the biosimilar industry expands and more products are approved (Also see "Biosimilars Program Will Be “Under-Resourced” In Early Years As Industry Grows" - Pink Sheet, 12 Sep, 2012.).

Overall BsUFA fee collections increased by 66% in FY 2015 from the prior year (see chart).

Biosimilar Product User Fee Collections By Source
Fees Collected	FY 2014	FY 2015
BPD Fees	$11,041,380	$14,478,240
Application Fees	$2,866,256	$8,598,790
Establishment Fees	$0	$0
Product Fees	$0	$0
Total Collections ^1	$13,907,636	$23,077,030
^1Amounts do not include any refunds or other adjustments. Source: FDA's FY 2015 BsUFA Financial Report

The financial report states that in FY 2016 BsUFA fees will be used to help the agency "meet challenging performance goals for the review of submissions in connection with biosimilar biological product development, biosimilar biological product applications, and supplements, as the agency continues to implement new BsUFA program initiatives and develop the scientific, regulatory, and policy infrastructure necessary for the BsUFA program."

FDA met the review timeline goals for all three applications with user fee dates that came due in FY 2015 but struggled with many of the meeting management goals (see related story, (Also see "FDA Met Biosimilar Review Timelines But Missed Meeting Goals In 2015" - Pink Sheet, 25 Apr, 2016.)).