Originally Published MDDI January 2005

Regulatory Outlook

FDA Third-Party Programs—Myth or Reality?

Two experts take a hard look at FDA's third-party review and inspection programs.

Harvey Rudolph and John Stigi
Underwriters Laboratories Inc. and CDRH

In the last several years, FDA has implemented several third-party programs, which provide new options to accomplish its mission. The driving forces behind FDA's change in direction are twofold. First, manufacturers have lobbied both FDA and Congress since the early 1990s for the establishment of third-party programs.

As manufacturers have expanded globally during the past decade, they have faced a plethora of regulatory schemes worldwide. Manufacturers believe that having to meet the requirements of each system has increased costs and inhibited global marketing of their products. At the same time, they have been under considerable pressure to cut these costs as well as to minimize time to market. Consistent regulatory requirements and the use of third parties to assess conformity to those requirements is one way to achieve both.

The second driving force behind the use of third parties has come from FDA itself. In the 1990s, FDA's device budget declined significantly. Resources were stretched thin, and device review times (along with the time between FDA inspections of a typical device firm) increased. To help relieve the resource crunch, FDA began a pilot program in 1996 to test the feasibility of allowing manufacturers to submit 510(k)s for certain low- and moderate-risk devices to FDA-recognized third parties rather than to FDA.

This discussion examines these third-party programs from two sides. CDRH's John Stigi describes the programs and presents the agency's perspective, while UL's Harvey Rudolph critiques the programs from the third-party point of view. In a point-counterpoint format, they review each program to determine whether they have been successful, including whether manufacturers have been taking adequate advantage of them. The two experts also look at the obstacles that may be preventing FDA's third-party programs from being more successful.

The 510(k) Accredited Persons Review Program

Stigi: Nearly two-thirds of the 510(k)s we typically receive each year are eligible for accredited person (AP) review. Although industry use of the program started out slowly, it has increased significantly (see Figure 1). FDA receives almost 4000 510(k)s per year. In FY 2002, APs reviewed less than 3% of all 510(k)s received by FDA, but by FY 2004 this figure had grown to almost 7%.

Manufacturers of radiological devices, in particular, have embraced the program. Radiological devices accounted for 36% of all third-party 510(k)s we received in FY 2003 (see Figure 2). During the past fiscal year, approximately 25% of all 510(k) substantially equivalent decisions for radiological devices have involved third-party review.

FDA believes that the APR program, after eight years of nurturing, has reached a level of industry utilization such that it has the potential to save more resources than FDA expends to support it. The realization of any significant resource savings depends, of course, on the acceptability of third-party reviews—that is, the degree to which we can rely upon a third party's review in place of our own.

The program also provides real benefits to manufacturers. The 510(k)s reviewed by third parties typically receive FDA marketing clearance decisions more quickly than comparable 510(k)s submitted directly to FDA—an average of 38 days faster in total review time in FY 2003. This advantage is consistent even for devices for which no device-specific review guidance is available (see Figure 3).

Rudolph: I agree that the AP review program has finally taken off, but there are still a few problems. In particular, FDA's own data show that the fraction of the time that AP reviews are accepted on the first cycle is on a downward trend (see Figure 4). What are we to make of that?

Also, even though the expansion pilot devices are getting to decisions faster than direct submissions to FDA, we and other APs have some difficulty knowing what FDA really wants in the 510(k). We also have difficulty understanding what FDA feels are the really important points to cover in our reviews. This seems to vary from branch to branch, which makes it difficult for AP reviewers to get a review right on the first try.

Stigi: We realize that AP reviewers do not have access to 510(k) files for previously marketed devices and, unlike an FDA reviewer, can rarely converse with a coworker who has historical knowledge of a specific type of review. We are, however, taking a number of steps to improve communication and to strengthen the program. We hold quarterly audioconferences with all APs to brief them on particular topics and to allow them to discuss issues that they have identified. We revised the APR guidance to address the issues you've raised, and we've provided additional training for AP reviewers in what we generally expect in a review. We are also conducting additional internal training for FDA staff on the APR program.

The Accredited Persons Inspection Program

Stigi: With lessons learned from the implementation of the APR program, FDA has gotten off to a good start on the API Program. The Medical Device User Fee and Modernization Act (MDUFMA) gave us a very short time frame to get the program started, and FDA has met all MDUFMA deadlines. Guidance on the program was published on April 28, 2003.

We received 23 applications to participate and initially approved 15, the statutory limit imposed by MDUFMA, on October 28, 2003. Auditors employed by these firms received further FDA training. They are now participating in observed inspections we require for accrediting individual inspectors. We conducted the FDA training in January 2004, and we've observed 20 inspections from 10 APs through August 2004. Additionally, we trained 12 EU conformity assessment body (CAB) inspectors who were previously qualified to perform FDA inspections in Europe, so they are now qualified to do inspections anywhere in the world for devices produced for the U.S. market under the API program.

Rudolph: That's a good start, but I think that the program has a long way to go. It took eight years for the APR program to gain popularity with manufacturers, such that it pays for itself. If it takes that long for the API program to become self-sufficient, will Congress see any real results when the program needs to be reauthorized in 2007? That is only three years away.

Also, compared with the APR program, the API program is very complicated, and most of these complications are written into the law, so FDA cannot alter them. For example, manufacturers have to seek FDA approval before contracting with an AP. This sometimes means using some fancy footwork in order to coordinate an inspection with their notified body or with a Canadian medical devices conformity assessment system audit.

In addition, the APs are only allowed to do two successive inspections of a particular manufacturer's site. After that, FDA must perform the inspection, unless the manufacturer gets a one-time waiver from FDA. Would the manufacturer then have to choose another AP? Would manufacturers really want to do that? They would lose the advantage of having one visit satisfy both FDA and another regulatory requirement, unless they choose to change their notified body at the same time.

Stigi: The availability of AP auditors to participate in joint inspections, frequently on short notice, has been a problem. However, the newness of the effort, unfamiliarity with the FDA inspection process, and reluctance on the part of industry to volunteer to participate in joint qualifying inspections are the main stumbling blocks. At this point, the success of this program is much more dependent on industry than on FDA. On the industry side, manufacturers should have a strategic plan that includes the use of APs, and they should plan to make their firms available for qualifying inspections. FDA's expectation is to qualify at least one auditor for each of the active APs by spring 2005, but this is contingent on industry's willingness to participate.

There are considerably more safeguards in place under the API program. Industry associations and CABs voiced their concerns, and some requirements in the original legislation were recently amended by Congress.

We were advised that many of the APs, when performing as CABs under other programs, might conduct inspections focusing on a limited area within the quality system against which they are auditing. It could take two or more such inspections to cover the key areas to count as a complete inspection under the FDA scheme.

Under the new amendments, an AP can conduct multiple inspections over a four-year period, accomplishing two complete inspections, each within a two-year period. Then, if not inspected by FDA, the establishment can request a waiver to allow the AP to conduct inspections beyond the four-year period. There is nothing in the legislation that would require the establishment to use a different AP upon receiving the waiver or after an FDA-conducted inspection.

The U.S.-EU Mutual Recognition Agreement

Stigi: The U.S.-EU mutual recognition agreement (MRA) became effective on December 1, 1998. That date initiated a transition period, during which both sides would engage in confidence-building activities such that a significant number of CABs could be named to perform regulatory activities. FDA has trained 34 EU CAB staff from 14 CABs to conduct 510(k) reviews and 46 to perform FDA inspections.

To date, FDA has accredited eight EU CABs and has worked closely with the National Institute of Standards and Technology to designate six U.S. CABs to the Commission of the European Communities.

Rudolph: I'll grant that FDA has put in a lot of effort here, but are there really any results? It's been six years, and the confidence-building period has yet to end. We still don't have any work done under the MRA. Have any U.S. CABs been accredited yet? How many will we need before the real work can start?

Stigi: Like the API program, implementing the MRA sometimes feels like coordinating a banquet and then seeing most of the chairs empty. FDA can't do it alone. The EU CABs and European manufacturers must demonstrate that they will use this program if we are to move forward into the operational period. The U.S. CABs were doing real work for their notified body affiliates before the MRA was ever signed. Participating as U.S. CABs provides them with the flexibility of doing this work for other notified bodies with which they are not affiliated. FDA has advised the European Commission that one U.S. CAB has met all requirements and is capable of entering the operational phase of the MRA, and two other U.S. CABs are close to being similarly confirmed.

Currently, four EU CABs are qualified to do independent inspections and have conducted five independent FDA inspections. EU CABs seeking to perform work under the operational phase of the MRA are expected to submit satisfactory reports for a reasonable number of independent inspections during the confidence-building period. If the industry uses the CABs that are now qualified to do independent inspections, we should have an adequate balance of U.S. and EU CABs as we enter 2005.

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