Preliminary Regulatory Impact Analysis

DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration

Investigational New Drug Application
Annual Reporting

Docket No. FDA-2020-N-0258

Preliminary Regulatory Impact Analysis
Initial Regulatory Flexibility Analysis
Unfunded Mandates Reform Act Analysis

Economics Staff
Office of Economics and Analysis
Office of Policy, Legislation, and International Affairs
Office of the Commissioner

Table of Contents
I. Introduction and Summary .............................................................................................. 2
A. Introduction .............................................................................................................. 2
B. Summary of Costs and Benefits .............................................................................. 3
II. Preliminary Regulatory Impact Analysis ....................................................................... 5
A. Background .............................................................................................................. 5
B. Need for Federal Regulatory Action ...................................................................... 7
C. Purpose of the Proposed Rule ................................................................................. 8
D. Baseline Conditions .................................................................................................. 8
E. Benefits of the Proposed Rule ............................................................................... 11
1. Estimated Reduction in Labor Resources ............................................................. 15
2. Summary of Estimated Benefits ........................................................................... 18
F. Costs of the Proposed Rule .................................................................................... 22
1. Estimated Increase in Labor Costs........................................................................ 23
2. Estimated Increase in Printing and Shipping Costs .............................................. 24
3. Costs to Read the Rule .......................................................................................... 25
4. Cost to Government .............................................................................................. 26
5. Summary of Estimated Costs ................................................................................ 27
G. Analysis of Regulatory Alternatives to the Proposed Rule ................................ 28
1. Alternative 1: Extend the Submission Period to 120 Days .................................. 28
2. Alternative 2: Requiring Electronic Submissions of Annual Reports .................. 29
H. Sensitivity Analysis ................................................................................................ 30
1. No Growth Trend in the Submission Rate of Annual Reports ............................. 30
2. Change in the Distribution of Submissions for Multiple Annual Reports ............ 31
I. International Effects ............................................................................................... 32
III. Initial Regulatory Flexibility Analysis........................................................................ 33
A. Description and Number of Affected Small Entities .......................................... 33
B. Description of the Potential Impacts of the Rule on Small Entities .................. 35
C. Alternatives to Minimize the Burden on Small Entities ..................................... 37
IV. References................................................................................................................... 38

1

I. Introduction and Summary
A. Introduction
We have examined the impacts of the proposed rule under Executive Order
12866, Executive Order 13563, the Regulatory Flexibility Act (5 U.S.C. 601-612), and
the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). Executive Orders
12866 and 13563 direct us to assess all costs and benefits of available regulatory
alternatives and, when regulation is necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental, public health and
safety, and other advantages; distributive impacts; and equity). The Office of Information
and Regulatory Affairs has determined that this proposed rule is an economically
significant regulatory action as defined by Executive Order 12866.
The Regulatory Flexibility Act requires us to analyze regulatory options that
would minimize any significant impact of a rule on small entities. Because the proposed
requirements are unlikely to impose a substantial burden on the affected small entities,
we propose to certify that the proposed rule is unlikely to have a significant economic
impact on a substantial number of small entities.
The Unfunded Mandates Reform Act of 1995 (section 202(a)) requires us to
prepare a written statement, which includes an assessment of anticipated costs and
benefits, before proposing "any rule that includes any Federal mandate that may result in
the expenditure by State, local, and tribal governments, in the aggregate, or by the private
sector, of $100,000,000 or more (adjusted annually for inflation) in any one year." The
current threshold after adjustment for inflation is $165 million, using the most current
(2021) Implicit Price Deflator for the Gross Domestic Product. This proposed rule would
not result in an expenditure in any year that meets or exceeds this amount.

2

B. Summary of Costs and Benefits
The proposed rule seeks to revise FDA’s regulations for investigational new drug
application (IND) annual reporting. The proposed rule would modify the format and
content of the IND annual report to be generally consistent with those of the development
safety update report (DSUR) standards devised by the International Council for
Harmonisation of Technical Requirements for Human Use (ICH), which is described in
FDA’s guidance for industry entitled “E2F Development Safety Update Report” (E2F
DSUR). The proposed harmonization would result in savings in labor costs for sponsors
who may no longer have to prepare a different type of periodic safety report for
submission to certain other countries or regions in which a drug might be studied.
Moreover, FDA would receive safety data on investigational new drugs that is more
comprehensive, which would enhance our ability to oversee the progress and safety of
clinical investigations. The estimate of annualized benefits over 10 years ranges from
$47.86 million to $117.99 million with a primary value of $86.46 million at a 7 percent
discount rate and from $49.24 million to $121.01 million with a primary value of $88.79
million at a 3 percent discount rate. The primary estimate of the present value of benefits
over 10 years is $607.29 million at a 7 percent discount rate and $757.38 million at a 3
percent discount rate.
Costs to industry would arise from increased labor associated with preparing and
submitting a periodic safety report that is more comprehensive to meet the proposed
requirements. Costs to government would arise from increased FDA resources being used
to review the more comprehensive report. The estimate of annualized costs over 10 years
ranges from $40.43 million to $101.34 million at a 7 percent discount rate with a primary

3

value of $61.11 million. Using a 3 percent discount rate, the annualized costs range from
$40.89 million to $102.48 million with a primary value of $61.81 million. The primary
estimate of the present value of costs over 10 years is $429.20 million at a 7 percent
discount rate and $527.21 million at a 3 percent discount rate.
Table 1. Summary of Benefits and Costs in Millions of 2020 Dollars Over a 10 Year
Time Horizon
Primary
Estimate

Category

Annualized
Monetized
$/year
Benefits

Low
Estimate

High
Estimate

Units
Year
Dollars

Discount
Rate

Period
Covered

$86.46

$47.86

$117.99

2020

7%

10 years

$88.79

$49.24

$121.01

2020

3%

10 years

Notes

Benefits are
estimates in
terms of cost
savings.

7%

Annualized
Quantified

3%

Qualitative
Annualized
Monetized
$/year
Costs

Transfers

Effects

$61.11

$40.43

$101.34

2020

7%

10 years

$61.81

$40.89

$102.48

2020

3%

10 years

7%

Annualized
Quantified
Qualitative
Federal
Annualized
Monetized
$/year
From/ To
Other
Annualized
Monetized
$/year
From/To

3%
7%
3%
From:

To:
7%
3%

From:

To:

State, Local or Tribal Government: None
Small Business: Annual costs per affected small entity represent a maximum of 0.61 percent of
average receipts.
Wages: None
Growth: None

4

II. Preliminary Regulatory Impact Analysis
A. Background
The IND regulations in part 312 (21 CFR part 312) contain procedures and
requirements governing the use of investigational drugs, including biological products
that do not also meet the definition of device under the Federal Food, Drug, and Cosmetic
Act, 1 and contain procedures and requirements for the submission of INDs to FDA and
for FDA’s review of those INDs. The IND regulations provide various mechanisms for
continued FDA oversight of clinical investigations conducted under an IND. FDA
regulations currently require sponsors to submit a brief report of the progress of
investigations in an annual report (§ 312.33). The IND annual report currently required
under § 312.33 is intended to serve as the means for reporting the status of studies being
conducted under the IND and for providing the general investigational plan and safetyrelated changes to the investigational plan for the coming year.
Because of the increasing complexity of clinical studies, having periodic reporting
and consistent information reported are of increased importance for protecting human
subjects from unnecessary risks. The increasing size and scope of trials underpin the
need for information and analyses that are more comprehensive to further assist FDA in
evaluating the evolving safety and efficacy profile of a drug during development and, in
particular, identifying safety signals during the conduct of clinical trials. Additionally,
1

See 21 U.S.C. 201(g)-(h), 42 U.S.C. 262(i)-(j); see also 21 C.F.R. 601.21.

5

there have been concerns about differences in the content and objectives between the
current IND annual report and the annual safety report that is being used in other
countries, as well as concerns about the burden associated with preparing different
periodic safety reports for different regulatory authorities. These concerns led to an
international effort to develop a common periodic safety report that could be used
globally to satisfy reporting requirements. In June 2008, the draft International Council
for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH)
guideline for the E2F DSUR was approved by the ICH steering committee (Ref. 6). In
the Federal Register of August 5, 2008 (73 FR 45462), FDA announced the availability
of the draft guidance for industry entitled “E2F Development Safety Update Report” for
public comment, which was the guideline prepared with the support and approval of the
ICH (Ref. 7). After consideration of the comments received on the draft guidance for
industry, the ICH steering committee approved a final draft of the guideline to be adopted
by the United States, Japan, and participating European countries entitled “Development
Safety Update Report, E2F,” dated August 17, 2010 (Ref. 6). In the Federal Register of
August 23, 2011 (76 FR 52667)), FDA issued this guideline as a final guidance for
industry entitled “E2F Development Safety Update Report.” This guidance discusses the
format, content, and timing of submission of a DSUR as developed by the ICH (referred
to as the E2F DSUR in this document) (Ref. 1).
The proposed FDA DSUR is intended to be consistent with the format and
content of the E2F DSUR supported by ICH for annual reporting in certain other
countries and regions.

6

B. Need for Federal Regulatory Action
The current IND annual report differs from the E2F DSUR in: (1) the filing date
and (2) the format and content (Refs. 2 and 3). 2 Another difference is that the E2F
DSUR recommends inclusion of detailed information on safety for individual clinical
trials. These differences can lead to inconsistent information being provided to
regulatory Agencies and inefficiencies such as higher preparation costs. The greater
harmonization of the format, content, and timing of the submission of annual safety
reports will help ensure that annual safety reports are of high quality and are uniform and
comprehensive (Ref. 3).
The proposed rule would replace the existing IND annual report with an annual
safety report that is generally consistent with the format and content of the DSUR devised
by the ICH and described in the E2F. The proposed FDA DSUR would reflect the
current state of drug development, and it would be generally consistent with
internationally recommended standards. The proposed changes would require
submission of more comprehensive data analyses and safety information that are
important for the ongoing assessment of the safety of the drug under development. The
new information would further enhance the means by which FDA can (1) monitor the
quality and progress of an investigation, (2) assess the safety and efficacy of a potential
new drug, and (3) ensure the protection of human subjects. Besides greater

2

In June 2008, the International Conference on Harmonisation issued a draft guidance (73 FR 45462 at
45463) that described the format, content, and timing of the submission of the DSUR for an investigational
drug. The objective of the DSUR is to present an annual review and evaluation of safety information on an
investigational drug, which would be standard among the EU, Japan, and the United States (at that time, the
ICH regions). As of June 11, 2011, the EU Clinical Directive 2001/20EC incorporated the format and
content of the ICH DSUR

7

harmonization of regulatory requirements and enhancing FDA’s ability to oversee the
conduct of clinical trials and the safety of human subjects, the proposed rule could
potentially lead to more efficient use of resources.
C. Purpose of the Proposed Rule
FDA is proposing to replace the current annual report with a new report entitled
“Development Safety Update Report” that is generally consistent with the format and
content of the DSUR devised by the ICH. FDA is proposing this action because of the
advantages that the proposed FDA DSUR would provide over the current IND annual
report in helping to protect the public health, including helping to ensure subject safety,
providing more useful, comprehensive information, and creating some of the efficiencies
associated with a report that is more similar to those required by multiple regulatory
authorities.
D. Baseline Conditions
The effects of the proposed rule are estimated relative to a baseline. The baseline
represents the state of the world in the absence of the proposed regulatory action. In our
analysis, we describe baseline conditions in terms of the number of annual safety reports
submitted and clinical trials conducted. We assume that preparing an IND annual report
that meets the current regulatory requirements would take 360 hours and that these labor
hours are allocated among clerical (25 percent), statistical (25 percent), and regulatory
affairs activities (50 percent) (76 FR 4914 at 4916 and 75 FR 59935 at 59958). That is,
to prepare the current IND annual report, the estimated number of hours among clerical,
statistical, and regulatory affairs activities are, respectively, 90 (360 x 0.25), 90
(360 x 0.25), and 180 (360 x 0.50).

8

To estimate the baseline costs to prepare the current IND annual report we use
2020 median wages plus benefits and other indirect costs as reported by the U.S.
Department of Labor’s Bureau of Labor Statistics (Ref. 11) for Pharmaceutical and
Medicine Manufacturing (North American Industry Classification System (NAICS) code
325400). 3 The hourly labor costs equal $44.54 for clerical staff, $100.32 for statisticians,
and $134.30 for regulatory affairs managers. Thus, the current baseline costs for an IND
annual report total about $37,211 (= ($44.54 per hour x 90 hours) + ($100.32 per hour x
90 hours) + ($134.30 per hour x 180 hours)).
Current regulations for IND annual reporting were finalized at a time when
clinical investigations were generally smaller than current trials and did not often include
foreign sites (Ref. 5). However, since the regulations for IND annual reporting were
finalized, clinical studies have grown in size and complexity and have grown in the
number of procedures per patient and the number of countries involved (Refs. 6 through
9).
Table 2 demonstrates an increasing trend in the number of IND annual reports
submitted to FDA’s Center for Drug Evaluation and Research (CDER) and Center for
Biologics Evaluation and Research (CBER). There were 8,664 total annual reports
submitted in 2010. The total number of annual reports submitted to FDA has increased
by 53 percent since 2010. In 2020, there were 11,091 annual reports submitted to CDER
and 2,207 reports submitted to CBER, for a total of 13,298 reports.

3

We multiple wages by 2 to account or benefits and other indirect costs (Ref. 20).

9

Table 2. Annual Reports received by FDA
for 2010–2020
Annual Reports
Year
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020

CDER
7,826
8,220
7,892
8,138
8,545
9,027
9,397
9,891
10,470
10,992
11,091

CBER
1,258
1,508
1,470
1,593
1,618
1,688
1,789
1,856
2,043
2,174
2,207

Total
8,664
9,728
9,362
9,731
10,163
10,715
11,186
11,747
12,513
13,166
13,298

Source: Internal FDA data gov as of August 2021.

This analysis assumes that the increasing trend in IND annual reports experienced
between 2010 and 2020 continues into the future. The number of IND annual reports
received over the period of 2010 to 2020 experienced an average annual growth of
approximately 4.4 percent (see Table 2). Table 3 displays the counts of annual reports
that would be received under the assumption that the 4.4 percent growth rate continues
between 2021 and 2030. By 2030, FDA would receive a total of 20,455 IND annual
reports.

10

Table 3. Expected Annual Reports for
Drug and Biologic Products for 2021–
2030 with a 4.4 Percent Growth Rate
Annual Reports
Year
CDER
CBER
Total
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030

11,579
12,088
12,620
13,176
13,755
14,361
14,993
15,652
16,341
17,060

2,304
2,405
2,511
2,622
2,737
2,858
2,983
3,115
3,252
3,395

13,883
14,494
15,132
15,797
16,493
17,218
17,976
18,767
19,593
20,455

E. Benefits of the Proposed Rule
We estimate the quantifiable benefits of this proposed rule as the cost savings
brought about by harmonization resulting from a reduction in labor hours needed by
certain sponsors to prepare and submit periodic safety reports to varying regulatory
authorities. FDA began accepting voluntary DSUR submissions in place of the IND
annual report following the 2011 final guidance (76 FR 52667). FDA estimates the
quantifiable benefits by determining the number of labor hours that it would take to
produce the proposed FDA DSUR and by determining the number of sponsors who
currently submit more than one periodic safety report less any sponsors voluntarily
submitting the annual report in DSUR format.

11

Under the proposed requirements of the rule, FDA would receive information that
is more comprehensive, such as the requirement for an integrated overall safety analysis
and a summary of cumulative pertinent safety information. Receiving information that is
more comprehensive would further enhance FDA’s ability to monitor the quality and
progress of an investigation. However, because we are unable to measure the value of
this information, FDA is unable to quantify the expected benefits that would come from
receiving reports that are more comprehensive and informative, that would strengthen
FDA’s ability to assess the safety and efficacy of investigational drugs, and would further
help protect participants of clinical investigations.
FDA assumes the beneficiaries of harmonization are sponsors that have an IND
with FDA and conduct clinical trials in a member or observer country of the ICH. 4 This
analysis assumes that all ICH countries require submission in DSUR format. Any study
with an IND with FDA must submit an annual report to FDA under § 312.33. We assume
that sponsors conducting a clinical trial in a country outside of US are submitting a safety
report to that country’s respective regulatory authority. For trials located in countries
under the European Medicines Agency’s jurisdiction, we assume the sponsor is
submitting one report to the EMA that covers all EMA countries that the study is located
in. 5

Refer to https://www.ich.org/page/members-observers for a comprehensive list of ICH countries.
Under the Clinical Trials Directive, sponsors are currently required to submit a copy of the DSUR to
national competent authorities of the EU Member States / European Economic Area (EEA) countries and
ethics committees via national processes (see https://www.ema.europa.eu/en/human-regulatory/researchdevelopment/clinical-trials/reporting-safety-information-clinical-trials). With full implementation of the
Clinical Trial Regulation, sponsors will be able to submit the DSUR centrally to the Clinical Trials
Information System (CTIS). Until January 31, 2023, clinical trial sponsors can choose whether to apply to
start a clinical trial via the CTIS or under the Clinical Trials Directive.
4
5

12

We use data collected by the National Institutes of Health (NIH) to find the
location of registered trials conducted under an IND with FDA. The public data can be
accessed at www.clinicaltrials.gov. We use the non-public data, which includes a variable
indicating whether or not a trial is conducted under an IND with FDA. Table 4 shows the
distribution of registered clinicals trials under an IND with FDA for drug and biological
products by location. There has been a steady increase in the number of clinical trials
registered in US and at least one other ICH country between 2010 and 2020. For
example, 25.1% of registered clinical trials on ClinicalTrials.gov were dual registered in
the United States and at least one other ICH country in 2010 and rose to 31% by 2020.
Overall, about a third of registered IND drug and biological trials were located in at least
one ICH country by 2020.

Table 4: Distribution of Registered Clinical Trials for Drug
or Biologic Products by Location (IND SUBSET), 20102020
Year
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020

US
US and at
NonOnly least one ICH US ICH
61.3%
25.1%
4.7%
60.7%
27.4%
3.6%
60.6%
27.7%
3.1%
63.6%
25.8%
3.5%
61.9%
26.6%
3.2%
60.7%
27.9%
2.6%
61.8%
27.8%
2.7%
63.1%
29.5%
2.9%
61.4%
30.4%
4.0%
59.7%
31.2%
3.8%
59.1%
31.0%
3.5%

Non-ICH
8.8%
8.2%
8.6%
7.1%
8.3%
8.8%
7.7%
4.5%
4.3%
5.3%
6.3%

Total
2,918
2,868
2,760
2,778
2,965
2,994
2,910
3,055
3,198
3,087
3,138

13

We capture the trend in locations of registered IND studies and project it forward
for 2021 to 2030. We calculate the trend by taking the sum of the percent of studies
located in US and at least one ICH country and non-US ICH countries to compute the
annualized growth rate between 2010 and 2020. We find there to be a 1.3% annualized
increase in studies located in this area. We assume the location of these studies remains
proportional to 2020 and attribute the increase accordingly (89.8% located in US and at
least one ICH country and 10.2% located outside of the US in at least one ICH country).
Table 5 shows the expected location of registered IND studies for 2021 to 2030. By 2030,
39.5% of studies are assumed to be located in the US and at least one ICH country or
located outside of the US in at least one ICH country.
Table 5. Expected Location of IND studies for Drug and Biologic
Products in 2021–2030 with a 1.3 Percent Growth Rate
Year
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030

US only or Non-ICH
Country
65.0%
64.5%
64.1%
63.6%
63.1%
62.6%
62.1%
61.6%
61.1%
60.5%

US and at least one
ICH Country
31.4%
31.8%
32.3%
32.7%
33.1%
33.6%
34.0%
34.5%
34.9%
35.4%

Non-US ICH
Country
3.6%
3.6%
3.7%
3.7%
3.8%
3.8%
3.9%
3.9%
4.0%
4.0%

Using this approach, the implied assumption is that the number of IND registered
studies that were conducted in the United States and at least one other ICH country or in
at least one ICH country outside the United States is a proxy for the number of sponsors
that submit reports to multiple regulatory authorities and will benefit from the DSUR. If

14

this assumption is an underestimate, then the benefits of this rule will be underestimated,
and costs will be overestimated. If this assumption is an overestimate, then the benefits of
this rule will be overestimated, and costs will be underestimated. We request comment on
this assumption.

1. Estimated Reduction in Labor Resources
To estimate the reduction in labor resources, we first assume that preparing an
IND annual report that meets the current regulatory requirements would take 360 hours
and that these labor hours are allocated among clerical (25 percent), statistical
(25 percent), and regulatory affairs activities (50 percent) (76 FR 4914 at 4916 and 75 FR
59935 at 59958). That is, to prepare the current IND annual report, the estimated number
of hours among clerical, statistical, and regulatory affairs activities are, respectively, 90
(360 x 0.25), 90 (360 x 0.25), and 180 (360 x 0.50). Compared to the baseline, FDA
assumes that preparing the proposed FDA DSUR would require an additional 5 to 20
percent of the time (or 18 to 72 hours) currently allocated to these activities. FDA seeks
comments on this assumption. Thus, the estimated total number of hours required to
prepare the proposed FDA DSUR would range from 378 hours (360 x 1.05) to 432 hours
(360 x 1.20). Table 6 presents the hours allocated by activity for an existing report as
well as the estimated number of labor hours that may be incurred to prepare the proposed
FDA DSUR.

15

Table 6. Estimated Labor Hours to Prepare the IND Annual Report and the Proposed
FDA DSUR
Labor Hours to Prepare Proposed
Baseline
FDA DSUR
Labor Hours
Small Moderate
Large
Time
to Prepare
Consumed
IND Annual
Cost Factor
(Percent)
Report
5%
10%
20%
Clerical
25%
90
95
99
108
Statistician
25%
90
95
99
108
Regulatory Affairs
50%
180
189
198
216
Total
100%
360
378
396
432
Note: Totals may not sum up because of rounding.
Sources: 75 FR 59935 at 59958 and 75 FR 4914 at 4916.

The cost savings brought about by harmonization result from a reduction in labor
hours used to prepare multiple reports to different regulatory authorities. Prior to the
implementation of the proposed FDA DSUR, FDA assumes that sponsors who write
multiple reports incur an additional 75 percent of the number of hours required to submit
an IND annual report. In other words, writing multiple periodic safety reports involves
630 hours (1.75 x 360). The proposed FDA DSUR would contain similar content as what
would be required in reports to other authorities, but the information required will not be
entirely the same. Therefore, sponsors may still need to prepare multiple reports to
submit to other regions, although the time required to prepare the reports may be reduced
since there will be greater overlap in the content of the reports. As a result of this
proposed regulation, we assume that sponsors who write multiple reports would incur an
additional 25 percent of the number of hours required to submit the proposed FDA
DSUR. The reduction in labor hours would be the difference between the hours incurred
in preparing multiple reports prior to and after the implementation of the proposed FDA
DSUR, accounting for the additional cost to prepare the DSUR relative to the IND annual
report. Table 7 presents the estimated decrease in the number of labor hours arising from
16

harmonization by activity. We note that “Small,” “Moderate,” and “Large” denote the
additional time burden of 5, 10, and 20 percent, respectively.
Table 7. Estimated Labor Hours to Prepare Multiple Periodic Safety Reports

Activity

Clerical
Statistician
Regulatory
Affairs
Total
(hours)

Labor Hours to Prepare Multiple Reports to
Different Regulatory Authorities
Multiple
Multiple Safety Reports
Safety
After Proposed FDA DSUR
Reports Prior
Modera
to Proposed
Small
Large
te
FDA DSUR
158
118
124
135
158
118
124
135

Range of Reduction in Labor
Hours from Harmonization
Small

Moderate

Large

39
39

34
34

23
23

315

236

248

270

79

68

45

630

473

495

540

158

135

90

Note: “Small,” “Moderate,” and “Large” denote the additional time burden of 5, 10, and 20 percent
required to prepare the Proposed FDA DSUR relative to the baseline IND Annual Report.

To determine the estimated savings in reduced labor, activities related to the
preparation and the submission of the proposed FDA DSUR are valued using 2020
median wages plus benefits and other indirect costs as reported by the U.S. Department
of Labor’s Bureau of Labor Statistics (Ref. 11) for Pharmaceutical and Medicine
Manufacturing (North American Industry Classification System (NAICS) code 325400).
Specifically, FDA uses wage information from the standard occupational classification
(SOC) system as follows: office and administrative support (SOC 43-0000) for clerical
activities, computer mathematical occupations (SOC 15-2041) for statisticians, and
management occupations (SOC 11-0000) for activities related to regulatory affairs.
Accounting for benefits and other indirect costs, the wage rate is $44.54 for clerical staff,
$100.32 for statisticians, and $134.30 for regulatory affairs managers. FDA further
assumes that labor hours required for other non-FDA periodic safety reports are valued in
U.S. wages. If reports submitted to other regulatory authorities are prepared at a lower

17

cost, benefits would be overestimated. Likewise, costs would be overestimated if reports
are submitted to other regulatory authorities at a higher cost.
Using the labor hour allocations under current regulations presented in Table 7,
we estimate that the total cost to sponsors submitting multiple and varying periodic safety
reports is $65,120 ([$44.54 x 158] + [$100.32 x 158] + [$134.30 x 315]). The
preparation cost of preparing multiple safety reports under the proposed regulation ranges
from $48,840 ([$44.54 x 118] + [$100.32 x 118] + [$134.30 x 236]) to $55,817 ([$44.54
x 135] + [$100.32 x 135] + [$134.30 x 270]). These costs are summarized in Table 8.
Table 8. Unit Costs of Preparing Multiple Periodic Safety Reports

Estimated Preparation Costs

Activity

Clerical
Statistician
Regulatory
Affairs
Total

Wage Rate
(per hour)

Multiple Safety
Reports Prior to
Proposed FDA
DSUR

Multiple Safety Reports After
Proposed FDA DSUR

$44.54
$100.32

$7,037
$15,851

Small
$5,261
$11,850

Moderate
$5,512
$12,415

Large
$6,013
$13,543

$134.30

$42,305

$31,728

$33,239

$36,261

$65,192

$48,840

$51,166

$55,817

Note: “Small,” “Moderate,” and “Large” denote the additional time burden (e.g., 5, 10, and 20 percent)
required to prepare the Proposed FDA DSUR relative to the baseline IND Annual Report.

2. Summary of Estimated Benefits
In estimating the annual benefits associated with a decrease in labor hours for
multiple reports to regulatory authorities, FDA assumes that sponsors submit periodic
safety reports to multiple regulatory authorities for an increasing proportion of the total
IND annual reports received each year as previously discussed and displayed in Table 5.
FDA tracks annual report submissions in the DSUR format. Using internal data, we
estimate that 24 percent of sponsors are voluntarily submitting in DSUR format. Thus,

18

we subtract 24 percentage points from the percent of sponsors assumed to be submitting
to multiple regulatory bodies in each of the low, primary, and high estimates.
We use ClinicalTrials.gov data to calculate the number of countries that registered
IND clinical trials are located in. We include only studies located in ICH countries, count
only countries that are in ICH, exclude studies located only in the United States, and
exclude the US from the total count of countries. We exclude United states because we
assume sponsors are already submitted safety reports to the FDA if they have an IND for
the trial and include only ICH countries in the total count because we assume they accept
DSUR. Table 9 shows the number of country distribution for clinical trials located in ICH
countries, excluding the US. The majority of studies are located in one country (35.3%).
We calculate the weighted average number of countries that trials are located in to be
3.34 countries. We then use this weighted average to scale the per report harmonization
benefit received by sponsors submitting reports to multiple regulatory authorities.

19

Table 9: Number of Country Distribution for
Clinical Trials Located in ICH Countries
(Excluding US)
Number
of
Cumulative
Countries
Count
Percent Distribution
1
3,688
35.3%
35.3%
2
1,748
16.8%
52.1%
3
1,361
13.0%
65.1%
4
883
8.5%
73.6%
5
689
6.6%
80.2%
6
478
4.6%
84.8%
7
367
3.5%
88.3%
8
324
3.1%
91.4%
9
231
2.2%
93.6%
10
193
1.8%
95.5%
11
132
1.3%
96.7%
12
115
1.1%
97.8%
13
67
0.6%
98.5%
14
61
0.6%
99.1%
15+
98
0.9%
100.0%
Total
10,435
100.0%
100.0%

Note: The ‘Number of Countries’ count is truncated at 15.
Any trial with countries beyond 15 is included in the count
of ‘15+’.

Table 10 shows the expected number of report submissions from 2021 to 2030
under the assumption of an increasing trend in reports submitted of 4.4 percent per year
and an increasing trend in studies located in the US and at least one other ICH country or
outside of the US in an ICH country of 1.3 percent per year. Thus, we estimate that 1,279
reports are submitted to multiple regulatory authorities in 2021 and 2,747 reports are
submitted to multiple regulatory authorities in 2030 (as our primary estimate). We
estimate the savings from greater harmonization as a result of reduced labor hours for
each year by multiplying the number of reports submitted to multiple regulatory
authorities in that year by the weighted average of regulatory authorities the reports are

20

submitted to by the difference in total unit costs of preparing multiple periodic safety
reports before and after the FDA Proposed DSUR, as shown in Table 8. For example, in
2021, we estimate the cost savings to range from $83.09 million (1,528 reports x 3.34
regulatory authorities x [$65,120 - $48,840]) in the high estimate to $32.00 million
(1,030 reports x 3.34 regulatory authorities x [$65,120 - $55,817]) in the low estimate. In
2030, we estimate the cost savings to range from $171.83 million (3,160 reports x 3.34
regulatory authorities x [$65,120 - $48,840]) to $72.52 million (2,334 reports x 3.34
regulatory authorities x [$65,120 - $55,817]).

Table 10 Expected Report Submissions to FDA Only and FDA and Another Regulatory
Authority for 2021–2030
Number of Periodic Safety Reports
Year

2021
2022
2023
2024
2025
2026
2027
2028
2029
2030

FDA Only

Total

13,883
14,494
15,132
15,797
16,493
17,218
17,976
18,767
19,593
20,455

Low
9,521
9,879
10,249
10,632
11,028
11,437
11,859
12,296
12,746
13,211

Primary
9,272
9,616
9,971
10,337
10,716
11,107
11,510
11,926
12,356
12,798

FDA and Another Regulatory
Authority

High
9,023
9,352
9,692
10,043
10,404
10,777
11,161
11,557
11,965
12,385

Low
1,030
1,137
1,251
1,374
1,507
1,649
1,803
1,967
2,144
2,334

Primary
1,279
1,400
1,529
1,669
1,818
1,979
2,151
2,336
2,535
2,747

High
1,528
1,663
1,808
1,963
2,130
2,309
2,500
2,706
2,925
3,160

Present value and annualized benefits are presented in Table 11. Over a 10 year
period, present discounted value of total benefits ranges from $336.15 million to $828.74
million at a 7 percent discount rate, and $420.00 million and $1,032.24 million at a 3
21

percent discount rate. Our primary estimates are $607.29 million at a 7 percent discount
rate and $757.38 million at a 3 percent discount rate. The annualized value of benefits at
a 7 percent discount rate ranges from $47.86 million to $117.99 million with a primary
estimate of $86.46 million. The annualized value of benefits at a 3 percent discount rate
ranges from $49.24 million to $121.01 million with a primary estimate of $88.79 million.
Table 11. Present Value and Annualized Benefits over 10 Years 1
Discount
Low
Primary
Rate
Present Discounted
Value of Total Benefits
Annualized Value of
Total Benefits
1

High

7%
3%

$336.15

$607.29

$828.74

$420.00

$757.38

$1,032.24

7%
3%

$47.86

$86.46

$117.99

$49.24

$88.79

$121.01

Values are shown in millions of dollars using 2020 dollar values

Additionally, as shown in Table 4, it is estimated that the inventory of clinical
trials registered and conducted under an IND in an ICH country has steadily increased
since 2010. Thus, as sponsors increasingly conduct clinical trials abroad and are required
to submit different periodic safety reports to FDA and other regulatory authorities that
accept the ICH DSUR, we estimate that the savings for sponsors from the greater
harmonization of periodic safety reports may also increase.
F. Costs of the Proposed Rule
Costs would arise from the additional labor needed to generate additional
information that is not contained in the current annual report. The proposed rule would
require all sponsors to submit an annual report including, among other things, a
cumulative summary of pertinent safety information as well as safety information from
all studies conducted on behalf of the sponsor evaluating any dosage form of the drug or
its drug substance, whether conducted under an IND or not, information from studies not
22

conducted by the sponsor, information from other relevant sources (including safety
findings from published literature), and integrated analyses of safety information.
Additionally, sponsors of INDs who submit hard copies of the proposed annual report
would also incur additional printing and shipping costs.
1. Estimated Increase in Labor Costs
Above, we estimate the expected total sponsors submitting annual reports to FDA
only each year (See Table 10). These sponsors would incur additional labor costs to
develop the added content required by the proposed FDA DSUR. It is possible that the
required additional labor would decline as sponsors implemented the processes necessary
to create the proposed FDA DSUR and became more efficient in doing so. However, in
this analysis, we assume that the additional labor required to prepare the proposed FDA
DSUR does not change from year to year, thus possibly overstating these costs over time.
The proposed requirements for reporting would involve more labor for data and
statistical analyses and more report-writing activities. As discussed in the baseline
section, we estimate that the existing IND annual report takes 360 hours to prepare. With
the proposed rule, if finalized, sponsors would incur between 18 hours (378 minus 360)
and 72 hours (432 minus 360) of additional labor to prepare the proposed FDA DSUR.
Valuing additional labor hours by using 2020 median wages plus benefits and other
indirect costs (Ref. 14), we estimate that sponsors would incur an additional cost per
report ranging from $1,933 ([$44.54 x 5] + [$100.32 x 5] + [$134.30 x 9]) to $7,442
([$44.54 x 18] + [$100.32 x 18] + [$134.30 x 36]) (see Table 12). The additional cost of
labor for the annual estimated reports affected by the proposed rule is calculated by
multiplying the number of reports submitted to FDA only in that year (see Table 10) by

23

the additional cost per report as shown in Table 12. For example, in 2021, the primary
estimate for the additional labor cost ranges from $17.92 million ($1,933 x 9,272) to
$69.00 million ($7,442 x 9,272). In 2030, the primary estimate for the additional labor
cost ranges from $24.74 million ($1,933 x 12,798) to $95.24 million ($7,442 x 12,798).
We include the incremental costs for the reports submitted to multiple regulatory
authorities in the benefits section.
Table 12. Estimated Additional Industry Labor Hours and Costs Per Proposed FDA
DSUR
Additional Labor Hours
Additional Cost (per
(per proposed FDA
Cost
Wage Rate
proposed FDA DSUR)
DSUR)
Factor
(per hour)
Low Primary High
Low
Primary High
Clerical
$44.54
5
9
18
$223
$401
$802
Statistician
$100.32
5
9
18
$502
$903 $1,806
Regulatory
$134.30
9
18
36
$1,209 $2,417 $4,835
Affairs
Labor Cost
18
36
72
$1,933 $3,721 $7,442
Per Report
2. Estimated Increase in Printing and Shipping Costs
The costs associated with printing and shipping reports to FDA would depend on
the number of additional pages printed and mailed and whether sponsors choose to
submit the annual reports electronically via the electronic common technical document
(eCTD) system. We note that once a sponsor files the report electronically, subsequent
submissions must also be filed electronically. FDA’s CDER reported that, as of the end
of the 2020 calendar year, 85 percent of annual reports were submitted electronically.
Thus, FDA estimates printing and shipping costs under the assumption that 85 percent of
the expected annually submitted reports will be filed electronically. For example, in
2021, printing and shipping costs are estimated for 2,082 reports (13,883 x 0.15). In

24

2030, printing and shipping costs are estimated for 3,068 reports (20,455 x 0.15) This
estimated cost may be overstated, because it assumes that the electronic submission rate
does not increase over time.
FDA further assumes that the proposed FDA DSUR would require up to
475 additional pages, or weigh approximately 5 additional pounds. 6 These numbers are
based on estimates on the number of pages for the current IND annual report and under
the assumption that a typical 500-page ream of paper weighs approximately 5 pounds
(namely, that 1 pound of paper would include about 100 pages).
The estimated printing cost per report ($14.25) is calculated as the number of
additional pages multiplied by the cost per page of $0.03 (Ref. 12). An additional
mailing cost of $44.25 is determined by calculating the difference between mailing an
overnight package weighing 6 pounds at a cost of $154.20 and mailing another package
weighing 1 pound at a cost of $109.95 through a standard express courier and shipping it
to a destination that is at least 1,800 miles from the original location (Ref. 13). Printing
and mailing costs per report are estimated at $58.50 ($14.25 + $44.25). We calculate the
total printing and shipping costs in each year from 2021 to 2030 by summing over the
expected annual number of reports that we estimate would be submitted in paper form
each year and would thereby incur printing and mailing costs.
3. Costs to Read the Rule
Individuals from affected entities will need to devote time to reading and
understanding this proposed rule. We assume an average of one manager for each
sponsor facility will read the rule. At an adult average reading speed of 200-250 words
The periodic safety update report (PSUR), which is the periodic safety report filed for marketed products,
could have from 125−150 pages to 60−1800 pages for products with a long approval history.

6

25

per minute, we estimate that each reader will spend about 1 hour. We value the
opportunity cost of one hour using the mean hourly wage of a regulatory affairs manager,
which is doubled to account for benefits and other indirect costs as described above. We
estimate the time spent learning about the rule at a cost of $134.30 per facility. We
assume this is a one-time cost incurred in the first year. Thus, multiplying this estimate
by the 13,883 expected reports from sponsors in 2021 yields a total one-time cost for
reading the rule of $1,864,502.
4. Cost to Government
FDA will incur incremental costs to review the additional information in the
proposed FDA DSUR. As previously referenced above, FDA assumes that the proposed
FDA DSUR would require up to 475 additional pages. We assume that these pages are
double spaced and contain an average of 250 words per page. Using FDA’s central
estimate of reading speed of 225 words per minute, this is an additional 8.8 hours per
report. To value FDA employee time, we use internal data from our Fully Loaded Full
Time Employee Cost Model. We value FDA employee time at $142.20 per hour and
estimate a primary value for the additional cost to government to be $1,251 per report.
Table 13 shows FDA cost per report using a range of reading speeds from 200 to 250
words per minute. The government cost per report ranges from $1,126 to $1,407.

26

Table 13. Estimated Additional Government Labor
Hours and Costs Per Proposed FDA DSUR
Low

Primary

High

Additional Page
Count

475

475

475

Words per page

250

250

250

Total words

118,750

118,750

118,750

200

225

250

9.90

8.80

7.92

$142.20

$142.20

$142.20

Reading Speed
(words per min)
Labor Hours per
report
FDA Time
Value
FDA Cost per
Report

$1,407.19 $1,250.83 $1,125.75

The additional cost to government for the annual estimated reports affected by the
proposed rule is calculated by multiplying the total number of reports submitted to FDA
in that year (see Table 10) by the additional cost per report as shown in Table 13. For
example, using the primary government cost value in 2021, we estimate the additional
government cost to range from $15.63 million ($1,126 x 13,883) to $19.54 million
($1,407 x 13,883). In 2030, we estimate the additional government cost to range from
$23.03 million ($1,126 x 20,455) to $28.78 million ($1,407 x 20,455).

5. Summary of Estimated Costs
As shown in Table 12, we estimate that it will cost an additional $1,933 to $7,442 per
report for a sponsor to create and submit the proposed FDA DSUR to FDA. We estimate
that sponsors will incur a cost of $134.30 on time spent learning about the rule. For the
15 percent of sponsors assumed to be submitting their reports in paper form, we estimate

27

that it will cost a sponsor an additional $14.25 to print the proposed FDA DSUR and an
additional $44.25 to ship the report. Finally, we estimate that FDA will incur a cost of
$1,125 to $1,407 per report to review the additional pages of the FDA DSUR (see Table
13). Present value and annualized costs are presented in Table 14. Present value costs
over a 10 year period range from $283.96 million to $711.77 million at a 7 percent
discount rate, and $348.83 million and $874.18 million at a 3 percent discount rate. Our
primary estimates are $429.20 million at a 7 percent discount rate and $527.21 million at
a 3 percent discount rate. The annualized cost values of the primary estimates are $61.11
million at a 7 percent discount rate and $61.81 million at a 3 percent discount rate.
Table 14. Present Value and Annualized Costs over 10 Years in Millions of 2020 Dollars
Present Discounted
Value of Total Costs
Annualized Value of
Total Costs

Discount Rate
7%
3%
7%
3%

Low
$283.96
$348.83
$40.43
$40.89

Primary
$429.20
$527.21
$61.11
$61.81

High
$711.77
$874.18
$101.34
$102.48

G. Analysis of Regulatory Alternatives to the Proposed Rule
The proposed rule seeks to change the format and content of the IND annual
report, which would be required to be submitted no later than 60 days from the data lock
point. FDA identified the following alternatives to the proposed rule: (1) extend the
submission period under the proposed rule to 120 days and (2) require electronic
submission of annual reports.
1. Alternative 1: Extend the Submission Period to 120 Days
Under the alternative to submit the FDA DSUR within 120 days of the data lock
point, sponsors may be able to improve on their allocation of resources, which could
result in savings and reducing labor costs. However, extending the time for submission
28

would postpone the benefits of having access to information that is crucial to assess the
risks associated with clinical trials and the safety of the human subjects. FDA does not
have data from which to estimate potential reductions in costs or savings and asks for
detailed comments and data on this issue.

2. Alternative 2: Requiring Electronic Submissions of Annual Reports
Electronic submission of IND annual reports has increased as a fraction of all
submissions. As of the end of the 2020 calendar year, 85 percent of annual reports were
submitted electronically. Under this alternative, we would require electronic submissions
for all IND annual reports. As a result, printing and mailing costs would be zero, and
benefits would remain unchanged. Because this scenario eliminates shipping and mailing
costs, which are a small portion of the overall costs and experienced by only the 15% of
annual reports not currently electronically submitted, the estimated benefits and costs
remain relatively unchanged from the main analysis.

Table 15. Present Value and Annualized Benefits and Costs Assuming a 100% Electronic
Submission Rate in Millions of 2020 Dollars
Costs
Present Discounted
Value of Total Costs
Annualized Value of
Total Costs
Benefits
Present Discounted
Value of Total
Benefits
Annualized Value of
Total Benefits

Discount
Rate
7%
3%
7%
3%

Low

Primary

High

$282.98
$347.62
$40.29
$40.75

$428.21
$526.00
$60.97
$61.66

$710.79
$872.97
$101.20
$102.34

7%

$336.15

$607.29

$828.74

3%

$420.00
$47.86
$49.24

$757.38
$86.46
$88.79

$1,032.24
$117.99
$121.01

7%
3%

29

H. Sensitivity Analysis
1. No Growth Trend in the Submission Rate of Annual Reports
The annual benefits and costs summarized in section II.C are estimated under the
assumption that the number of annual reports increases at a rate of 4.4 percent each year.
In this section, FDA estimates the benefits and costs under the assumption that the
number of reports remains unchanged over time, with everything else being constant.
We use the reported 13,298 annual reports from 2020. Relative to the main analysis,
annualized benefits and annualized costs are less because there are fewer reports being
submitted overall. Thus, there are less harmonization benefits realized as well as less
additional preparation costs for submitting to FDA only and FDA employee time to
review additional reports. Table 16 presents the present value and annualized benefits and
costs under this scenario assuming a 7-percent and a 3-percent discount rate over
10 years.
Table 16. Present Value and Annualized Benefits and Costs Assuming No Growth Trend
in IND Annual Reports in Millions of 2020 Dollars
Costs
Present Discounted
Value of Total Costs
Annualized Value of
Total Costs
Benefits
Present Discounted
Value of Total
Benefits
Annualized Value of
Total Benefits

Discount
Rate

Low

Primary

High

7%
3%
7%
3%

$227.60
$275.82
$32.41

$344.39
$417.35
$49.03

$571.67
$692.71
$81.39

$32.33

$48.93

$81.21

7%
3%

$265.12

$479.96

$655.95

7%
3%

$326.84

$590.59

$806.09

$37.75
$38.32

$68.34
$69.24

$93.39
$94.50

30

2. Change in the Distribution of Submissions for Multiple Annual Reports
In this section, we estimate the sensitivity of benefits and costs to changes in the
distribution of annual reports that are currently submitted to FDA and to other regulatory
authorities. There is uncertainty regarding the number of reports that are submitted to
both FDA and to other regulatory Agencies by the same sponsor for the same drug. In
this section, we are using an alternative assumption that the percentage of research and
development (R&D) spending in the United States and other countries is a proxy for the
percentage of reports submitted to FDA and to multiple Agencies by the same sponsor for
the same drug. Specifically, we estimate the percentage of DSURs that are submitted to
FDA only and to FDA plus other regulatory authorities to be 41 percent and 59 percent of
total DSURs submissions, respectively. We assume that 35 percent of sponsors benefit
from harmonization (59% submitting to FDA and multiple agencies minus 24% of
reports that are voluntarily submitted in DSUR format). These estimates are based on
R&D expenditures reported in 2008 by pharmaceutical companies in the United States
(41 percent) and in Europe and Japan (59 percent) (Ref. 14). The implied assumption is
that the percentage of R&D expenditures in the United States, Japan, and Europe
parallels the distribution of sponsors developing drugs subject to the annual reporting
requirements of FDA only or also of other regulatory authorities. We request comment on
this assumption.
Under this scenario, the distribution of reports that are submitted to multiple
regulatory authorities is greater than the distribution in the baseline. We further assumed
that the distribution of reports that are submitted to multiple regulatory authorities does

31

not change over time. Hence, we would expect the benefits to be noticeably higher than
the baseline estimates. Moreover, we would expect costs to decrease, because the
number of FDA DSURs that would incur additional costs would be less than the baseline.
Table 17 presents the estimated annual benefits and costs under the new distribution. As
expected, the results show that, if a larger share of the reports is submitted to multiple
regulatory authorities, benefits could be larger, and costs could be smaller.
Table 17. Present Value and Annualized Benefits and Costs When Changing the Initial
Distribution of Multiple Safety Reports in Millions of 2020 Dollars
Costs
Present
Discounted
Value of Total
Costs
Annualized
Value of Total
Costs
Benefits
Present
Discounted
Value of Total
Benefits
Annualized
Value of Total
Benefits

Discount
Rate

7%
3%
7%
3%
7%
3%
7%
3%

Low

Primary

High

$280.12

$430.02

$729.87

$344.48
$39.88

$529.01
$61.23

$898.12
$103.92

$40.38

$62.02

$105.29

$1,266.32

$1,899.47

$2,216.05

$1,558.80
$180.30

$2,338.21
$270.44

$2,727.91
$315.52

$182.74

$274.11

$319.79

I. International Effects
The requirements of this proposed rule, if finalized, would apply to both
sponsors who conduct clinical trials domestically and abroad. The benefits of labor cost
savings due to harmonization would apply to both groups. The costs of this proposed rule
would be borne by any sponsor; this includes both foreign and domestic firms. The total
and net costs estimated in this Preliminary Regulatory Impact Analysis would be shared
32

by all affected entities, both foreign and domestic. As of 2020, 40.9% of registered
clinical trials with an IND were conducted in at least one country outside of the United
States. FDA does not have data to separately assess the likely impacts to U.S. and nonU.S. individuals and entities and asks for detailed comments and data on this issue.

III. Initial Regulatory Flexibility Analysis
The Regulatory Flexibility Act requires Agencies to analyze regulatory options
that would minimize any significant impact of a rule on small entities. Because the
proposed requirements are unlikely to impose a substantial burden on the affected small
entities, we propose to certify that the proposed rule is unlikely to have a significant
economic impact on a substantial number of small entities. This analysis, as well as other
sections in this document, serves as the Initial Regulatory Flexibility Analysis as required
under the Regulatory Flexibility Act.
A. Description and Number of Affected Small Entities
The Small Business Administration (SBA) uses different definitions of what a
small entity is for different industries. Using the most recent (2022) SBA size standard
definitions, a firm categorized in NAICS code 325412 (Pharmaceutical Preparations) or
NAICS code 325414 (Biological Products) is considered small if it employs fewer than
1,250 people (Ref. 15). The most current data on the number of establishments by
employee size is available from the 2017 Economic Census (Ref. 16). Table 18 shows
that the majority of the establishments have employee sizes by which they would be
considered small. Using data at the establishment level implicitly assumes that the

33

typical manufacturing establishment is roughly equivalent to the typical small
manufacturing firm.
When an individual both initiates and conducts an investigation, and the
investigational drug is administered or dispensed under their immediate direction, the role
is termed sponsor-investigator. 7 Sponsor-investigators would generally be considered
small entities under the SBA standards. Sponsor-investigator clinical trials are generally
simpler than industry-sponsored, commercial single-product development trials and
generally involve academic researchers (who act as clinical investigators for purposes of
FDA regulations). Although academic investigators may be experts in their field, they
may often lack funding and knowledge of the complex and evolving area of the clinical
trial process and regulatory requirements. By contrast, staff of industry-sponsored
clinical trials often have access to knowledge regarding regulatory aspects of product
development (Refs. 17 through 19). In the current analysis, we assume that costs and
benefits will flow to firms independent of firm size. We request comment from the public
on this assumption.
Table 18. Number of Establishments by Employee Size
Pharmaceutica
Biological
Description
l Preparation
Products
NAICS
325412
325414
< 1,250
< 1,250
Small by SBA
Employees
Employees
Number of Employees
All
1274 100% 331
100%
0-999
976
77% 228
69%
1,000-1,499
23
2%
17
5%
1,500+
275
22%
86
26%

7

See 21 CFR § 312.3.

34

B. Description of the Potential Impacts of the Rule on Small Entities
To determine the unit cost as a percentage of the total value of receipts for a
typical manufacturer, FDA used data on the total value of receipts, which measure the
dollar value of products sold by manufacturing establishments 8, by employment size
from the 2017 Economic Census (Ref. 16). The analysis of the effect on small versus
large entities is limited by data restrictions imposed by the Census Bureau to safeguard
the confidentiality of some establishments. Consequently, the average value of receipts is
only presented for all establishments and by employment size for establishments for
which data were made available by the Census Bureau.
Table 19 presents the average value of receipts for establishments in NAICS
code 325412 by employment size. The average value of receipts for entities that employ
0 to 4 is nearly $1.25 million; for entities with 5 to 9 employees, it is about $3 million. 9
We estimate that the average annual cost of about $4,000 per IND annual report as a
percentage of average value of receipts for small entities in pharmaceutical preparation
may be between 0.00 percent and 0.31 percent. Using the high cost estimate of $7,500
per IND annual report, we estimate the average annual cost as a percentage of the value
of receipts for small entities to be between 0.00 percent and 0.61 percent.

This estimate may overstate the impact on investigators that are not manufacturers.
These estimates from the 2017 Economic Census are adjusted for inflation to 2020 dollars using the GDP
Deflator.

8
9

35

Table 19. Estimated Costs for a Typical Small Entity: Pharmaceutical Preparation
(NAICS 325412)
OneAnnual
time
Cost as
OneCost as Primary a % of
time
Annual Average
Number of
Number of
Average Value
a % of
Employees Establishments
of Receipts
Cost Receipts Costs Receipts
All
1,274
$127,979,795
$134
0.000% $3,780 0.003%
0-4
334
$1,237,303
$134
0.011% $3,780 0.305%
5-9
137
$2,932,232
$134
0.005% $3,780 0.129%
10-19
113
$9,469,779
$134
0.001% $3,780 0.040%
20-49
126
$12,621,381
$134
0.001% $3,780 0.030%
50-99
68
$29,518,816
$134
0.000% $3,780 0.013%
100-199
74
$45,256,933
$134
0.000% $3,780 0.008%
200-499
74
$74,442,234
$134
0.000% $3,780 0.005%
500-999
50
$123,445,600
$134
0.000% $3,780 0.003%
1,000-1,499
23
$85,824,212
$134
0.000% $3,780 0.004%
2,500+
275
$505,383,649
$134
0.000% $3,780 0.001%
Table 20 presents the average value of receipts for establishments in NAICS
code 325414 by employment size. The average value of receipts for entities that employ
0 to 4 employees is about $1.6 million; for entities with 5 to 9 employees is about $6
million. We estimate that the average annual cost of about $4,000 per IND annual report,
as a percent of the average value of receipts for these entities, is between 0.00 and
0.24 percent. Using the high cost estimate of $7500 per IND annual report, we estimate
the average annual cost as a percentage of the value of receipts for small entities to be
between 0.00 percent and 0.47 percent.
The Agency tentatively concludes that this rule is unlikely to have a significant
impact on a substantial number of small entities. We request comment on this conclusion
and the potential impacts on small sponsors not represented in this Census data.

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Table 20. Estimated Cost for a Typical Small Entity: Biological Products (NAICS
325414)
OneAnnual
time
Cost as
OneCost as Primary a % of
time
Annual Average
Number of
Number of
Average Value
a % of
Employees Establishments
of Receipts
Cost Receipts Costs Receipts
All
331
$105,464,336
$134
0.000% $3,780 0.004%
0-4
72
$1,603,630
$134
0.008% $3,780 0.236%
5-9
37
$5,991,960
$134
0.002% $3,780 0.063%
10-19
27
$9,008,025
$134
0.001% $3,780 0.042%
20-49
32
$12,600,444
$134
0.001% $3,780 0.030%
50-99
25
$21,909,442
$134
0.001% $3,780 0.017%
100-199
20
$40,670,671
$134
0.000% $3,780 0.009%
200-499
5
$84,461,364
$134
0.000% $3,780 0.004%
500-999
10
$123,500,435
$134
0.000% $3,780 0.003%
1,000-1,499
17
$78,775,944
$134
0.000% $3,780 0.005%
1,500+
86
$328,315,440
$134
0.000% $3,780 0.001%
C. Alternatives to Minimize the Burden on Small Entities
An alternative that would present possible reductions in costs, besides those
discussed in section II.G, would be to exempt small entities. Exempting small entities
from reporting requirements would result in an estimated annual savings of less than
1 percent of the unit cost of the value of receipts for small-sized firms. However, these
reporting requirements enable FDA to assess the status of studies being conducted under
the IND and, for example, to learn of updates to the general investigational plan for the
coming year.

37

IV. References
1. EU Enterprise and Industry Directorate-General, “Detailed Guidance on the
Collection, Verification, and Presentation of Adverse Reaction Reports Arising
From Clinical Trials on Medicinal Products for Human Use,” Revision3, June
2010, https://ec.europa.eu/health/sites/health/files/files/clinicaltrials/pc_final_062010_en.pdf, accessed on June 21, 2019.
2. Geary, S., 2010, “The Development Safety Update Report, A Critical Review,”
Pharmaceutical Medicine, 24(5): 271−279.
3. International Conference on Harmonisation of Technical Requirements for
Registration of Pharmaceuticals for Human Use, “Overview of ICH E2F-Development Safety Update Report (DSUR),” 2010,
http://www.ich.org/fileadmin/Public_Web_Site/ICH_Products/Guidelines/Efficac
y/E2F/Presentation/ICH_E2F_step_4_October_2010.pdf, accessed on August 22,
2016.
4. European Commission, “Communication from the Commission - Detailed
Guidance on the Collection, Verification, and Presentation of Adverse Reaction
Reports Arising From Clinical Trials on Medicinal Products for Human Use
(‘CT-3’),” June 2011, http://ec.europa.eu/health/files/eudralex/vol10/2011_c172_01/2011_c172_01_en.pdf, accessed on September 9, 2016.
5. Department of Health and Human Services, Office of Inspector General, “The
Food and Drug Administration’s Oversight of Clinical Trials,” September 2007,
http://oig.hhs.gov/oei/reports/oei-01-06-00160.pdf, accessed on August 22, 2016.
6. The CenterWatch Monthly, March 2008, http://www.centerwatch.com/newsonline/2008/03/17/centerwatch-monthly-march-2008-issue/, accessed on
September 12, 2016.
7. The CenterWatch Monthly, May 2008, http://www.centerwatch.com/newsonline/2008/05/16/centerwatch-monthly-may-2008-issue2/http:/www.centerwatch.com/news-online/2008/05/16/centerwatch-monthlymay-2008-issue-2/, accessed on September 14, 2016.
8. Getz, K.A., “Assessing the Downstream Impact of Protocol Design Complexity,”
Tufts Center for the Study of Drug Development, Tufts University School of
Medicine.
9. Shields, L., 2007, Spotlight on Research Fees: Trends in Cost-Per-Subject
Pricing, Journal of Clinical Research Best Practices, 3(3),
http://firstclinical.com/journal/2007/0703_Spotlight1.pdf, accessed on August 22,
2016.

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10. National Institutes of Health, http://www.clinicaltrials.gov/, accessed on August
12, 2021.
11. U.S. Department of Labor, Bureau of Labor Statistics, “May 2020 National
Industry-Specific Occupational Employment and Wage Estimates Statistics:
NAICS 325400 - Pharmaceutical and Medicine Manufacturing,” May 2020,
http://www.bls.gov/oes/2013/7may/naics4_325400.htm,.
12. Stein, M., “The Coming Onslaught: Cost-Per-Page Selling Models in the Printer
Supply Industry,” www.rechargermagazine.com, September 2004, accessed on
August 22, 2016.
13. Fedex Service Guide, January 2020.
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Sourcebook 2010/2011, Cambridge Healthtech Institute, Barnett International,
LLC, pp. 187−188, 2011.
15. U.S. Small Business Administration, 2022, “Table of Small Business Size
Standards Matched to North American Industry Classification System Code,”
https://www.sba.gov/.
16. U.S. Census Bureau, “The Number of Firms and Establishments, Employment,
Annual Payroll, and Receipts by State, Industry, and Enterprise Employment
Size: 2017,” https://www.census.gov/data/tables/2017/econ/susb/2017-susbannual.html.
17. Tyndall, A., 2008, “Why Do We Need Noncommercial, Investigator-Initiated
Clinical Trials?” Nature Clinical Practice, 4(7):354−355.
18. Berro, M., B. K. Burnett, G. J. Fromell, et al., 2011, Support for InvestigatorInitiated Clinical Research Involving Investigational Drugs or Devices: The
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(2): 217−223.
19. Kehrel, U., 2010, The Costs of Pharmacovigilance in Clinical Research: A
Survey from Germany, International Journal of Risk and Safety in Medicine, 22:
67−70.
20. U.S. Department of Health and Human Services. 2016. “Guidelines for
Regulatory Impact Analysis”, pp. 25-34.

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