FDA Sets FY2008 DTC Television Ad User Fee Rate; Adequate Funding Seems Likely

Earlier today, FDA issued a Federal Register notice announcing the Fiscal Year 2008 user fee rate for advisory review of Direct-to-Consumer (“DTC”) Television advertisements for prescription drug and biological products. The advisory review fee for FY2008 will be $41,390 for each proposed television advertisement voluntarily submitted to FDA for advisory review.  It was widely anticipated that the FY2008 fee would be set somewhere between $40,000 and $60,000.  The fees will be used to hire approximately 27 new employees to meet the new PDUFA IV performance goals for DTC television ad review.

The new voluntary DTC television ad user fee program was established by the recently-enacted FDA Amendments Act (“FDAAA”).  The December 11, 2007 notice follows an October 25, 2007 Federal Register notice in which FDA requested companies to notify the Agency within 30 calendar days whether they intend to participate in the DTC user fee program during FY 2008 – and if so to identify the number of planned DTC television ads in that period. 

Companies responding to the October notice indicated that they planned to submit 151 DTC television ads to FDA for advisory review in FY2008.  FDA calculated the FY2008 fee rate by dividing the number of planned DTC television ads by $6.25 million – the target revenue level set in the new law for FY2008.  Participating companies must pay the advisory review fee identified in invoices FDA will send to them by a specified date, or be subject to a 50% penalty (i.e., $62,085 for each advisory review).  In addition, participating companies must pay a one-time operating reserve fee.  The operating reserve fee is based on the number of advisory review submissions a participant identifies for their first year in the new user fee program.  Therefore, if a participating company indicated that it plans to submit four DTC television ads to FDA for advisory review in FY2008, the company must pay $41,390 for each advisory review and a one-time $165,560 operating reserve fee. 

The FDAAA provides that the new DTC user fee program will not commence if FDA fails to receive at least $11.25 million within 120 days after enactment of FDAAA (i.e., January 25, 2008).  Such funding consists of a combined total of the advisory review and operating reserve fees.  Provided all participants pay the fees FDA invoices them for by January 25, 2008, the program should launch.