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Manufacturing: New Registration Fees Help Clarify Industry Demographics
December 1, 2008
3 Min Read
2008 MEDTECH SNAPSHOT
Ask any three industry experts how many medical device manufacturers operate in the United States and you'll likely get three very different numbers. How they answer that question depends on how they define the industry; and the numbers cited can vary by thousands.
For years, the authoritative source for such data has been FDA. By law, any facility that makes a medical device must register with FDA every year. Getting an accurate count is simply a matter of querying the database.
Or is it? In fact, FDA's establishment registration database requires companies to identify themselves as device manufacturers making a specific, “listed” device. Being registered does not imply that FDA has identified the company as a device maker (nor, as the agency is quick to point out, does registration imply any kind of FDA approval).
This fact was vividly illustrated following October 1, 2007, when FDA put in place a new law requiring a fee of $1706 to register (the fee has increased to $1851 for FY 2008).
The effect of the new fee on the number of registered facilities has been dramatic. By MD&DI's count, that number decreased by more than 4000 since 2007, to a total of 6122. What accounts for such a striking drop? According to Theresa McDonald, Chief, Regulatory Policy and Systems Branch at FDA's device center, there are several possibilities.
First, a number of firms may have had a more casual attitude toward registration before the fee was put in place. Some companies, she speculated, would simply return their registration forms every year, even if they did not currently make a listed medical device, just to be safe. Similarly, contract manufacturers that do not commercially distribute the devices they make (and therefore should not register) may have felt they should nonetheless be registered.
In addition, McDonald says, some suppliers to device manufacturers may have stretched the definition of medical device to include components. And, she says, some companies may have felt it was advantageous to say that they were registered with FDA, despite strictures against saying so.
Once the fee was imposed, attitudes changed. Now, it appears, facilities that don't need to register are choosing not to. However, this leaves FDA with one nagging question: Have any companies that are required to register failed to do so? McDonald says that FDA is looking closely at this issue and considering doing a risk-based analysis of the companies that did not renew their registrations to see if they should have done so. Whether FDA will penalize such companies is not yet decided, she says.
For industry analysts, the new fee has the benefit of clarifying the statistical picture. Exactly how many device makers there are is still subject to definition, but at least one source of confusion has been eliminated.
For more information on establishment registration, visit www.fda.gov/CDRH/devadvice/341.html.
Click images and tables to enlarge:
FDA-registered medical device establishments, with the number of firms and percentage of U.S. total for each state. Establishments include contract manufacturers, manufacturers, and specification developers. Percentages for each state are rounded to the nearest whole number. Source: CDRH establishment registration database.
Number of U.S. publicly traded companies by segment. Source: Ernst & Young's Pulse of the Industry: U.S. Medical Technology Report 2008.
Copyright ©2008 Medical Device & Diagnostic Industry
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