FDA User Fees Rise, Fall—Rise Again?

Originally Published MDDI June 2002NEWS & ANALYSIS Jim Dickinson

June 1, 2002

4 Min Read
FDA User Fees Rise, Fall—Rise Again?

Originally Published MDDI June 2002

NEWS & ANALYSIS

Jim Dickinson

Wee-hours efforts (2:30 a.m., actually) by AdvaMed, congressional staffers, and FDA on May 20 to attach medical device user fees—now called medical technology application fees—to bioterrorism legislation speeding through Congress failed at the last minute and now await revival efforts this summer. The measure was fiercely opposed by lobbyists for the Medical Device Manufacturers Association, which contended that the proposed fees could not be afforded by smaller manufacturers.

"Whenever government ups the ante, smaller players have to drop out, leaving the field to larger companies," said MDMA chairman Paul Touhey. From FDA's viewpoint, this evidence of a lack of industry consensus was enough to cause it to back away from its hasty and informal pact with AdvaMed. Last-minute controversies about adding a third-party inspections provision from the Greenwood-Eshoo bill also caused the matter to be dropped from the bioterrorism bill.

FDA and AdvaMed came to terms on a legislative program modeled on the 10-year-old Prescription Drug User Fee Act (PDUFA), which has been hailed as a success in reducing review times and establishing predictability in the drug review process. On May 20, AdvaMed's board approved the Medical Technology Enhancement Act to add about $225 million through user fees and increased appropriations into CDRH's review operations over a five-year period.

Submission

Proposed Year-One Fees

PMAs, panel-track supplements, BLAs, BLA efficacy supplements

$125,000

PMA, BLA supplements

$25,000

Real-time PMA supplements

$10,000

Special PMA supplements

Exempt

30-day PMA supplements

Exempt

5100(k)s

$2500

In a statement to AdvaMed members, Pamela Bailey said the AdvaMed board made this decision because it "recognizes that this step must be taken to address the serious resource challenges faced by FDA's device review program." Commenting on the haste of AdvaMed's announcement, Bailey said, "Congress's timetable on bioterrorism legislation required us to move quickly to seize this unique opportunity."

In a media briefing, AdvaMed said $40 million would be injected into the Center's device-review activities in the first year ($25 million from user fees and $15 million from an increase in appropriations), and performance goals for review decisions and review cycles would be established. Under the proposed measure, PMAs would be charged $125,000 per submission; PMA supplements, $25,000; real-time PMA supplement reviews, $10,000; and 510(k)s, $2500. Key details of the proposal include:

  • Clear decision performance goals that would be phased in over a five-year period. Goals would begin in year three in most cases.

  • Cycle goals would be established to ensure performance is maintained and enhanced.

  • A one-year payment deferral for small companies (with the ability to waive, decrease, or further extend it by petitioning FDA) would be established for PMAs. Small companies are defined as those with annual revenues under $5 million.

  • An annual FDA consultation with industry to assess performance.

  • No product listing, establishment, or other annual fees.

Under the agreement, CDRH would be required to reach a decision on 50% of all PMA applications within 180 days by year five (current performance is 208 days). The center would also provide a 30-day processing goal on responses to 90% of CDRH-issued approvable letters.

For 510(k)s, the agreement sought a 30% improvement by year five in issuing "substantially equivalent" or "not substantially equivalent" decisions, down from the current 125 FDA days to 90 days for 80% of submissions. Firms using a third-party reviewer would be granted a fee waiver.

The program would also impact CDRH-reviewed biologic licensing applications (BLA). By year five, 90% of BLA and BLA efficacy supplements should be acted on within 10 months. In addition, 90% of BLA manufacturing supplements would be reviewed and acted on in four months.

In a May 22 press release, AdvaMed blamed the effort's failure on Congress's "tight timetable" for the bioterrorism bill. Although MDMA opposition caused FDA to rethink the bill, AdvaMed and congressional backers have not given up on it, and are expected to reintroduce it before the July 4 congressional break. "Congress should act promptly to pass these measures," Bailey said, "to ensure FDA can keep up with the increasingly rapid pace of medical innovation."

Copyright ©2002 Medical Device & Diagnostic Industry

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