21 U.S.C. § 379j–42 — Authority to assess and use human generic drug fees

(a) Types of fees. Starting in fiscal year 2023, the FDA (called "the Secretary" here) must charge and collect several kinds of fees for generic drugs. (1) One-time backlog fee. Anyone who owned an abbreviated new drug application (ANDA) that was still pending on October 1, 2012, and hadn't gotten tentative approval by then, owes a one-time backlog fee. The fee is calculated by dividing $50,000,000 by the total number of such pending, not-yet-tentatively-approved applications. By October 31, 2012, the Secretary had to publish that fee amount in the Federal Register, and it was due within 30 days after that. This backlog fee stopped applying after October 1, 2022. (2) Drug master file fee. Anyone who owns a "Type II" active pharmaceutical ingredient (API) drug master file that is referenced on or after October 1, 2012, in a generic drug submission owes a drug master file fee — but only once per file; once it's paid, later submissions referencing the same file don't trigger the fee again. The Secretary must publish the fee amount at least 60 days before each of fiscal years 2023 through 2027. A generic drug submission can reference a drug master file only if the file is "available for reference," meaning the owner paid the fee within 20 days of the due date and the file didn't fail the Secretary's initial completeness check. FDA must post online a list of drug master files that passed that check and are available for reference. The fee itself is due on the earlier of the date the first generic submission referencing the file is submitted, or the date the file's owner asks for the initial completeness check — except no fee for a given year is due until 30 days after the fee notice is published, or 30 days after Congress enacts the law funding fee collection for that year, whichever is later. (3) ANDA filing fee. Anyone submitting an ANDA on or after October 1, 2012, owes a filing fee, with the amount set under subsection (d). The Secretary must publish the amount at least 60 days before each of fiscal years 2023 through 2027. The fee is due by the date the ANDA (or a prior-approval supplement) is submitted. If the FDA decides an ANDA was never legally "received" for a reason other than not paying fees, or it's withdrawn before being received, 75 percent of the fee is refunded. If the FDA did receive an application but later realizes another drug's exclusivity period should have blocked it from being received, the whole fee is refunded. An ANDA submitted on or after October 1, 2012, that is treated as never received, or that is withdrawn, owes the full fee again if it's resubmitted or refiled as a new application. Starting October 1, 2017, an applicant who describes how an API is manufactured without simply pointing to a paid drug master file must pay an extra fee, set under subsection (d)(2), unless a fee equal to the drug master file fee was already paid for that same information. (4) Generic drug facility fee and API facility fee. Facilities named in at least one approved generic drug submission owe annual fees: a facility that makes finished dosage forms of a generic drug owes a "generic drug facility fee"; a facility that makes an API, or is named in a referenced Type II drug master file, owes an "API facility fee"; and a facility that does both only pays the finished-dosage-form fee, not both. Amounts are set under subsection (d) and published on the schedule set by subsection (d)(1). For fiscal years 2023 through 2027, the fee is due on the later of the first business day on or after October 1, or the first business day after Congress enacts the appropriations law funding fee collection for that year. (5) Generic drug applicant program fee. This annual fee is assessed as described in subsection (b)(2)(E), with the amount set under subsection (d) and published on the same schedule. For fiscal years 2023 through 2027 it's due on the later of the first business day on or after October 1, or the first business day after the relevant appropriations law is enacted. (6) Date of submission. A submission counts as "submitted" either on the day it finishes transmitting through an FDA electronic gateway — or, if that day is a weekend, federal holiday, or a day the reviewing office is closed, the next open business day — or, if submitted on paper, the day it arrives at FDA's document room. (b) Fee revenue amounts. For fiscal year 2023, the fees must be set to raise about $582,500,000 total. For fiscal years 2024 through 2027, the fees under paragraphs (2) through (5) of subsection (a) must raise the same amount as the prior year's base revenue, not counting that prior year's subsection (c) adjustments, further adjusted under subsection (c). That total revenue is split among fee types by fixed shares: 5 percent from drug master file fees, 33 percent from ANDA filing fees, 20 percent from generic drug facility fees, and 6 percent from API facility fees. A contract manufacturing facility pays only 24 percent of what a non-contract facility pays, and a facility outside the U.S. and its territories pays $15,000 more than one inside. The remaining 36 percent comes from the generic drug applicant program fee. For that fee, a company and its affiliates are billed once as a single unit: owning 1 to 5 approved ANDAs means a "small business" fee equal to one-tenth of the large-business fee; owning 6 to 19 means a "medium" fee equal to two-fifths of the large fee; owning 20 or more means the full large-business fee. An ANDA doesn't count toward this tally if the applicant asked in writing to withdraw its approval by April 1 of the previous fiscal year. (c) Adjustments. Inflation adjustment: starting in fiscal year 2024, the Secretary raises the base revenue amount each year by multiplying it by one, plus the average yearly percent change in FDA personnel costs per employee over the first three of the preceding four years, weighted by how much of total program costs is personnel cost, plus the average yearly percent change in the Washington, D.C.-area Consumer Price Index over the same period, weighted by how much of costs is not personnel cost. Capacity planning adjustment: starting in fiscal year 2024, the Secretary further raises fee revenue to match changes in FDA's resource needs, following a methodology built on a 2020 evaluation report and using specified workload categories. This adjustment can never push revenue below the base amount plus the inflation adjustment, and normally can't exceed 3 percent of that combined figure — except the cap rises to 4 percent for a given year if, during a specified two-year lookback window, either a set number of ANDAs were submitted (2,000 for fiscal year 2024; 2,300 for fiscal years 2025 through 2027) or at least 35 percent of submitted ANDAs involved "complex products." The Secretary must publish the resulting fees and methodology in the Federal Register. Operating reserve adjustment: from fiscal year 2024 on, the Secretary may raise fees further to build an operating reserve of carryover fees, capped at 8 weeks of costs for fiscal year 2024, 9 weeks for 2025, and 10 weeks for 2026 and 2027. If the reserve ever exceeds 12 weeks of costs, the Secretary must lower fees to bring it back to no more than 12 weeks. Any such increase or decrease, and the reasoning behind it, must be explained in the annual Federal Register fee notice. (d) Annual fee setting. At least 60 days before each of fiscal years 2023 through 2027 begins, the Secretary must set the fees in paragraphs (2) through (5) of subsection (a), based on the revenue targets in (b) and the adjustments in (c). The extra API-information fee from (a)(3)(F) is figured by adding the number of APIs covered by the submission plus, for any API made at more than one facility, the number of those extra facilities, then multiplying that total by the drug master file fee amount. (e) Limitations. Total fees collected for a fiscal year can't exceed FDA's actual costs that year for generic-drug-program resources. Starting October 1, 2023, the kinds of equipment leases the fees can pay for are limited to leasing and necessary scientific equipment. (f) Identification of facilities. Anyone owning a facility covered by subsection (a)(4), or a site or organization covered by paragraph (3), must report required information every year, submitted or updated by June 1 before the fiscal year starts. For each facility, the report must say: which approved or pending generic submission names it; whether it makes APIs, finished drug forms, or both; whether it's inside the U.S. and its territories; whether it makes only PET drugs or also other drugs; whether it makes non-generic drugs too; and whether it's a contract manufacturing organization. Anyone who owns or runs a site or organization named in a generic drug submission that is a bioanalytical-study site, a clinical research organization, a contract analytical testing site, or a contract repackager must also report its ownership, name, and address. The Secretary can specify by Federal Register notice how and in what format this must be submitted, and can require more information as needed. FDA's existing facility-inspection authority under section 374(a)(1) covers all these sites and organizations too. (g) Effect of failure to pay fees. Missing the backlog fee (through October 1, 2022) puts the owner on a public arrears list, and no new ANDA or supplement from that person or its affiliates counts as "received" until it's paid. Missing the drug master file fee within 20 days of the due date means the file isn't "available for reference"; a generic submission referencing such a file won't count as received unless the fee is paid within 20 days after FDA notifies the sponsor of the missing payment. Missing the ANDA filing fee, or the extra API-information fee, within 20 days of its due date means the ANDA or supplement isn't "received" until it's paid. Missing a facility fee within 20 days of its due date means the facility goes on a public arrears list, no new ANDA or supplement from its owner or an affiliate counts as received, any new submission referencing that facility won't be received unless the fee is paid within 20 days after FDA notifies the sponsor, and every drug or ingredient made there is treated as "misbranded" — these penalties last until the fee is paid or the facility is dropped from every submission referencing it. Missing the generic drug applicant program fee within 20 days of its due date puts the person on a public arrears list, blocks any ANDA from that applicant or its affiliates from being received, and makes every drug marketed under those ANDAs "misbranded" until the fee is paid. (h) Limitations. Fees collected for any fiscal year after 2012 must be refunded unless Congress's non-fee FDA salary-and-expenses funding for that year is at least as large as the inflation-adjusted fiscal year 2009 level. If the Secretary skips assessing fees for part of a year but becomes able to later that same year, the fees can still be collected at the normal rate at any point that year, notwithstanding the usual due-date rules. (i) Crediting and availability of fees. Fees can only be collected and spent to the extent Congress has appropriated for them in advance; once appropriated, they stay available until spent, and money can move from FDA's general account into the fee-funded account, but only for generic-drug-program work. Fees are capped each year at the amount specified in that year's appropriations law, and are usable only if the Secretary also funds generic-drug work from other sources at set minimums — at least $97,000,000 for fiscal year 2023 (inflation-adjusted), and the same minimum for combined non-fee program spending in fiscal year 2024 and later. The Secretary is considered compliant even if actual spending falls up to 10 percent short. Early fee payments may be accepted if a prior year's appropriations law allows it. For fiscal years 2023 through 2027, Congress is authorized to appropriate the full adjusted revenue amount set under subsection (b), as adjusted under (c). (j) Collection of unpaid fees. Any fee not paid within 30 days of its due date becomes a debt owed to the U.S. government, collectible under the federal debt-collection law. (k) Construction. This section doesn't require FDA to cut staff who don't work on generic-drug activities just to make room for staff who do. (l) Positron emission tomography (PET) drugs. Submitting an application for a PET drug or its API doesn't require paying any fee under this section, and a facility that makes only PET drugs doesn't owe a facility fee — though such facilities still must be identified as required by subsection (f). (m) Disputes concerning fees. To get back a fee paid in error, a person must send the Secretary a written request explaining why, within 180 days of paying it. (n) Substantially complete applications. If an ANDA isn't treated as "received" solely because a fee wasn't paid on time, it's also treated as not "substantially complete" when submitted — but once that fee is later paid, the application is deemed both substantially complete and received as of the payment date. (o) Information on ANDAs owned by applicants and affiliates. By April 1 each year, every ANDA owner, or a designated affiliate, must send the Secretary a list of all its approved ANDAs, and, if any affiliate also owns ANDAs, a list of those affiliates and their approved ANDAs too. The Secretary will specify the required format and submission method in guidance.