FDA issues Guidance for Industry: “Fees for Human Drug Compounding Outsourcing Facilities Under Sections 503B and 744K of the FD&C Act, April 2020”.
With all that’s going on with Covid-19, FDA is diligently executing their priorities for this fiscal year. In FY19, FDA’s priorities for Compounding (human drugs) were to: maintain quality manufacturing and compliance; regulating compounding from bulk drug substances; finalizing memorandums of understanding with States; and addressing compounding by hospitals and health systems. These priorities are carried forward to FY20.
In addition to this Guidance, FDA, in response to the current crisis and potential drug shortages, recently promoted hydroxychloroquine sulfate to Category 1 at the end of March 2020 (previous post here), which means traditional and outsourcing compounders can legally compound finished preparations using this bulk drug substance). In FY20, FDA has also issued a Guidance on compounding veterinary drugs (see previous Lachman post here); institutionalized the regulatory program for compounding in the Office of Compliance; conducted inspections; issued several Warning Letters and Untitled Letters and executed other legal and regulatory matters regarding the 76 (as of April 2020) registered 503B Outsourcing Facilities.
The Guidance on fees covers entities that elected to register as outsourcing facilities as required by section 503B of the FD&C Act. The guidance details the types and amounts of fees, equations for any adjustments to fees required by law, how to submit payment to FDA, the consequences of failure to pay fees, and how an outsourcing facility may qualify as a small business to obtain a reduction in fees. FDA has issued separate guidances on registration and reporting requirements for outsourcing facilities.
The required annual registration period for outsourcing facilities begins on October 1 and ends on December 31 each year, and the annual establishment fee of $15,000 (adjusted for inflation and any small business reductions) is to be paid at the time of registration. FDA will publish a notice in the Federal Register announcing the amount of the establishment fee to be collected in each FY no later than 60 calendar days before the start of that FY. FDA recommends paying the annual fee by
December 10 to allow enough time for their reviews, invoicing and payment of fees before the end of the registration period. Upon receiving registration information from a facility, FDA will send an invoice via email to the entity or via regular mail if email is not an option. Registration is encouraged and can be done at any time during the year. Registration, regardless of when completed, will last until the end of the official registration period for the year of registration (December 31). An entity that does not pay its annual establishment fee will not be considered registered as an outsourcing facility for that FY.
Note that all drugs manufactured, prepared, propagated, compounded, or processed by an outsourcing facility that has not paid the full amount of the required establishment fee or any applicable reinspection fee, will be deemed misbranded under section 502 of the FD&C Act.
Under Section 744K of the FD&C Act, an outsourcing facility subject to one or more inspections conducted under Section 704, which identified noncompliance with DQSA, will be assessed a reinspection fee each time it is subject to a reinspection. Any reinspection fee is designed to reimburse FDA for expenses incurred and a reinspection fee will be incurred for each reinspection that occurs until FDA finds that the noncompliant conditions have been adequately addressed. The inflation-adjusted $15,000 reinspection will be published in the Federal Register not later than 60 calendar days before the start of each FY and any outsourcing facility that is subject to reinspection will be charged the full inflation-adjusted reinspection fee for each reinspection even if the facility qualifies as a small business.
FDA will issue an invoice for the reinspection fee within 14 calendar days of the close of the reinspection and the reinspection fee is to be paid within 30 calendar days. If FDA does not receive the reinspection fee within 30 calendar days after it is due, the fee obligation will be treated as a claim of the United States Government, subject to the provisions of subchapter II of Chapter 37 of Title 31, United States Code.45 Interest and fees will accrue until the obligation is satisfied.
No refunds – Section 744K of the FD&C Act has no provision for any refunds of the registration or reinspection fees in any case (withdrawal of registration/closure of business). Remember an obligation to the government must be paid and once it is, at least in the case of this provision of the law, there will be no “compounded” interest to obtain!