FAQ's

The annual registration fee is calculated as: $15,000 x inflation adjustment factor + small business adjustment factor.

The inflation adjustment factor is a statutorily mandated increase of the annual establishment fee. The inflation adjustment factor is based on a formula including personnel compensation for a full-time equivalent (FTE) position at the FDA and the annual change in the Consumer Price Index over several years.

The inflation adjustment will compound every year. In other words, the inflation adjustment factor determined in one fiscal year (FY) will be added to the total inflation-adjusted fee from the preceding FY. The FDA will calculate the inflation adjustment factor before each FY, and the adjusted fee will be published in the Federal Register.

Certain small businesses can qualify for a reduction of the annual establishment fee. Entities that qualify as small businesses under section 744K(c)(4) of the FD&C Act are required to pay only one-third of the annual establishment fee, or $5,000 multiplied by the inflation adjustment factor. This is referred to as a small business reduction.

Entities that do not qualify for a small business reduction will pay a small business adjustment factor, equal to the total amount lost from each outsourcing facility that was granted a small business reduction divided among all outsourcing facilities not granted such a reduction. The FDA will establish the small business adjustment factor every FY based on its best estimate of the number of small businesses that will pay a reduced fee for that year and the positive adjustment to the establishment fee of the remaining entities needed to achieve total fees equaling the amount the FDA would have collected if no entity qualified for the small business reduction.

The estimate of the number of small businesses and the amount of the small business adjustment factor will be published in the Federal Register at least 60 days before the start of each FY.

An entity with gross annual sales totaling $1,000,000 or less in the 12 months ending on April 1 of the FY immediately preceding the FY in which the annual establishment fee is assessed may qualify for a small business reduction. Gross annual sales is defined as the “total worldwide gross annual sales, in United States dollars, for an outsourcing facility, including the sales of all of the affiliates of the outsourcing facility.”

A 503B Outsourcing Facility must comply with cGMP standards. Many pharmacies have little knowledge of these standards. Pharmacies interested in becoming registered often find hiring a consultant to facilitate this process beneficial. The total cost of cGMP compliance and bringing in an outside consultant is typically $100,000 to $300,000 and can vary based upon needs of the pharmacy. One factor influencing the total cost is potential construction expenses for required physical revisions to the facility

If the facility doesn’t require a redesign, Standard Operating Procedures can typically be written and implemented within three to four months.

Each state has different licensing requirements. Some states do not have an additional licensing requirement and others do. For example, Texas requires an additional manufacturing license through DSHS, while California requires a separate outsourcing license through the State Board of Pharmacy and does not allow a facility to have both a pharmacy license and an outsourcing license (facility can only ship either “office-use” or “patient-specific” but not both.)

Due to the initial registration fee and cost for consultants as well as construction revisions, I would suggest at least a commitment for a book of business.

Office-use orders shipped directly to a physician’s office should only be labeled as office-use. Patient-specific prescriptions should only be labeled as such if the prescription is being shipped directly to the patient or picked up by the patient