FDA Releases Draft Guidance on Section 503B Fees for Outsourcing Facilities.

Section 503B of the Federal Food, Drug and Cosmetic Act (FDCA) created a new Food and Drug Administration (FDA) regulated entity called an ‘outsourcing facility.’ As discussed previously on the Baer Law Blog, a registered outsourcing facility is permitted to compound sterile drugs for human use with or without a prescription after voluntarily registering with the FDA. Additionally, the outsourcing facilities must:

  • Comply with Current Good Manufacturing Practices (cGMPs),
  • Report adverse events to the FDA,
  • Make semiannual reports to the FDA of the drugs the outsourcing facility compounds,
  • Be subject to FDA inspections on a risk-based schedule, and
  • Pay annual establishment fee and re-inspection fees.

Recently, the United States Food and Drug Administration (FDA) published notice of its Draft Guidance for Industry on Fees for Human Drug Compounding Outsourcing Facilities Under the Federal Food, Drug and Cosmetic Act (Draft). The Draft sets forth the FDA’s nonbonding recommendations on the annual establishment and re-inspection fees under Section 503B.

The FDA fees under Section 503B are summarized below:

Annual Establishment Fee

  1. Beginning in 2015, outsourcing facilities must pay annual establishment fees. The outsourcing facilities will not be considered registered outsourcing facilities until the fee is paid in full. The proposed registration for 503B facilities will be from October 1st through December 31st of the year preceding registration.
  2. The FDA recommends that all outsourcing facilities submit their registration information no later than December 10 of each year to ensure the FDA has enough time to review and invoice fees prior to the end of the registration period.
  3. The annual establishment fee is calculated to be $15,000, with inflation and small business factor adjustments.

Re-inspection Fees.

The FDA may charge a re-inspection fee of $15,000 (multiplied by an inflation adjustment factor) if the FDA has to visit a facility more than one time due to address noncompliance issues identified during prior inspections.

Failing to Pay Fees.

Outsourcing facilities that fail to pay required fees will not be considered outsourcing facilities and thus will not be eligible for specific Section 503B exemptions. Additionally, any drugs compounded by an outsourcing facility that has not paid the required registration fees will likely be deemed misbranded and subject to the strict interstate commerce shipping requirements and fines.

The FDA is accepting comments regarding the Draft through June 2, 2014, either electronically or in writing.