What is the annual establishment fee?
Beginning in fiscal year (FY) 2015, entities that elect to register with FDA as outsourcing facilities must pay an annual establishment fee. Each year, the registration period for outsourcing facilities begins on October 1^st and ends on December 31^st. The annual establishment fee is payable upon receipt of an invoice which will be sent after FDA has determined that the registration information submitted by the entity is complete.

What is the inflation adjustment factor?
The inflation adjustment factor is a statutorily mandated increase of the annual establishment fee designed to adjust compounding fees for inflation.

How much is the annual establishment fee?
The annual establishment fee is equal to the sum of $15,000, multiplied by the inflation adjustment factor, plus the small business adjustment factor. The fee calculation is reflected in the following equation: Establishment fee = $15,000 x inflation adjustment factor + small business adjustment factor.

Will the annual establishment fee be the same each year?
The establishment fee for each fiscal year will be adjusted annually, using the inflation adjustment factor and the small business adjustment factor applicable to that fiscal year. The fee amount will be published in a Federal Register no later than 60 calendar days before the start of each fiscal year.

When is the annual establishment fee paid?
The annual establishment fee is payable upon receipt of an invoice which will be sent after FDA has determined that the registration information submitted by the entity is complete.

When do I submit payment?
Once an entity submits its registration information and FDA has reviewed the information and determined that it is complete, FDA will send an invoice to the entity via email, to the email address indicated in the registration file, or via regular mail if email is not an option. Because FDA links the payment to an invoice, payment should not be made until the invoice is received. The invoice will contain information about the obligations incurred; the amount owed, including the small business reduction if the entity has qualified for that reduction; and instructions for paying the fee. Because entities will not be considered to be registered as outsourcing facilities until payment is received, entities should pay the invoiced amount immediately upon receiving the invoice. If payment is not received by the date it is due, the submission of registration information will be considered to have been withdrawn and the invoice will be reduced to zero. To be registered, the facility would need to resubmit registration information, starting the process again from the beginning.

What are the effects of failure to pay the annual establishment fee?
An entity that does not pay its annual establishment fee for a given fiscal year will not be considered registered as an outsourcing facility under section 503B of the FD&C Act for that fiscal year. As a result, drugs compounded by the entity would not qualify for the exemptions under section 503B of the FD&C Act for outsourcing facilities, including the exemption from the premarket approval requirement for new drugs in section 505 of the FD&C Act. Moreover, all drugs manufactured, prepared, propagated, compounded, or processed by a facility that has not paid the full amount of the required annual establishment fee will be deemed misbranded under section 502 of the FD&C Act. Such drugs will continue to be deemed misbranded until the fees owed by that facility have been paid in full. Among other prohibitions, a facility cannot distribute in interstate commerce either misbranded or unapproved new drug products.