Medical Device & Diagnostic Industry Magazine
MDDI Article Index

An MD&DI June 1997 Column

WASHINGTON WRAP-UP

Anticipating budget cuts, CDRH dodges the question of device user fees but suggests streamlined procedural changes, third-party reviewers.

The medical device industry and its primary federal regulators are at a political crossroads. Will the two bury their differences and move forward together? Or will they follow separate, fractious, and diverging paths? These questions will be decided this year when Congress passes the first serious FDA-downsizing federal budget and, possibly, makes its final move on separate FDA-reform legislation--which may well include medical device user fees.

At press time, there were strengthening signals that omnibus FDA reform would be tied to renewal of the Prescription Drug User Fee Act (PDUFA). This strategy is rooted in the pragmatic realization that, if addressed separately, FDA reform would be more likely to fade away, as it did last year. Both FDA and the drug industry are demanding renewal of PDUFA, which has been an outstanding success at expediting product approvals. And as long as overall FDA reform (including medical device reforms) is linked to PDUFA legislation, the temptation to permit the agency to charge user fees for devices will be strong.

In March, Bruce Burlington, director of FDA's Center for Devices and Radiological Health (CDRH), sent the medical device community (industry, professional groups, and interested consumer organizations) a 14-page report that combined a plea for help with unusual frankness. Its bottom line: Everything is on the table (which is not the same as saying that every wish will be granted).

Facing budgetary cuts that in any previous year would have been called disastrous (30% is often mentioned), FDA is clearly running scared. Burlington's pitch to the device community is rooted in his desire to preserve what he can while yielding as much as is reasonable to the agency's critics.

His appeal is built on the credibility CDRH has gained through its internal reforms. In three years, he points out, 510(k) submissions have moved from a backlog of over 2000 to "essentially zero." The proportion of investigational device exemptions approved within the required 30 days has doubled. For premarket approval (PMA) supplements, "we have reduced the number overdue by a factor of 10," and the number of new-technology devices approved in 1996 was "double the average number that had been approved during each of the previous 15 years."

All this was accomplished during a time of dwindling resources and rising workload. Clearly, industry was right in 1994 to reject device user fees with the argument that FDA should trim its own fat and get on a fitness program. Burlington's letter says FDA has done so and will continue to do more.

Burlington's report does not address the still politically incorrect issue of device user fees. However, close observers of his center wonder how many more cuts it can absorb before review times start to creep upward again.

Burlington believes more cuts can be had by adopting "a risk-based approach to restructuring our workload." His proposals for achieving this, as follows, are little short of radical:

Not only is CDRH considering these procedural economies, but Burlington says it is also trying to reengineer the way it does business "to afford greater efficiency while retaining a high level of consumer protection."

In a speech to the annual meeting of the Health Industry Manufacturers Association in March in St. Petersburg, FL, Burlington alluded to the magnitude of the impending change. He acknowledged that "our program at the center in the past has been driven by volume, not by public health--we've had thousands of 510(k)s, thousands of biennial inspections, tens of thousands of MDR reports."

That volume has tended to focus FDA's attention on assessing conformance--a function that has few public health benefits and that FDA now would prefer to shift to the private sector (i.e., to third parties).

Burlington said this shift would free FDA resources to permit increased effort in PMA reviews, pre-1976 Class III devices, for-cause inspections, and analysis of critical MDR reports. But this would not mean that FDA is going to stop assessing conformance, Burlington emphasized. The agency will simply focus on matters with a high health impact or "high potential for public outrage when we have done something wrong."

Burlington cited 510(k)s as an example. "In order to fit this new model, we are going to have to have increased activity in developing guidances, test methods, and standards, as well as increased activity in training and auditing third parties. But when we move from setting criteria to conformance assessment, we don't think we need increased activity. We need increased activity in looking at clinical data and labeling where it exists in 510(k)s, not because we are going to get more clinical data, but because when we do get clinical data we need to be there."

Although the device industry continues to resist user fees, such fees are still considered viable on Capitol Hill. Burlington's new approach offers an alternative to both user fees and congressional tinkering with FDA procedures. It embodies a startling degree of privatization--third-party review of many 510(k)s, adoption of non-FDA device standards, and third-party regulatory inspections.

Significantly, just after Burlington's letter was distributed, he and other agency leaders appeared before the Senate Labor and Human Resources Committee without making even one suggestion for legislative reform. Committee chair James Jeffords (R­VT) had specifically asked the agency to bring a list of legislative fixes, inviting the agency to make its own mark on the changes that are surely coming from Capitol Hill. The agency, no doubt in close consultation with the White House, elected to bring nothing but its past accomplishments and a friendly demeanor.

This is a high-stakes game. The administration--knowing that FDA's budget faces draconian cuts--appears to be gambling that legislative FDA reform will fail again. Thus the agency is aggressively seeking to accommodate its constituencies. Burlington's letter is one manifestation of this strategy.

But the risks are great. If industry continues to demand legislative reform, there is a good chance that its sympathizers on Capitol Hill will be angered by FDA's unwillingness to join the party (there were signs of such anger during the Jeffords hearing in March). If that occurs, the agency may be punished with a tougher budget.

On the other hand, if industry accepts Burlington's overtures, it must do so knowing that no matter how generous Congress is with FDA's budget this year, its generosity is not guaranteed for the future. In addition, Burlington's letter clearly anticipates shifting some of the cost of FDA functions to industry in the form of third-party reviewers and inspectors.

Industry stands at a crossroads. Should it pay user fees or their equivalent under other names? Or should it help FDA salvage as much as possible of the current funding basis (100% congressional appropriations) while cooperating with Burlington's administrative proposals? Or some mixture of these?

Whatever route is chosen, and what-ever compromises are made, FDA needs industry's help in the form of ideas and contributions to a constructive Capitol Hill attitude.

James Dickinson is a veteran reporter on regulatory affairs in the medical device industry.

Copyright ©1997 Medical Device & Diagnostic Industry