Device industry targeted in FDA user fee proposal

March 10, 1993

Medical device manufacturers will have to pony up their shareof $167 million in Food and Drug Administration user fees nextyear, if President Clinton's budget plan is approved as written. The budget proposal calls for an increase in new revenues tothe

Medical device manufacturers will have to pony up their shareof $167 million in Food and Drug Administration user fees nextyear, if President Clinton's budget plan is approved as written.

The budget proposal calls for an increase in new revenues tothe FDA from drug and device company user fees through fiscal1998. The fees would contribute $220 million to the FDA's budgetby 1995 and $387 million by fiscal year-end 1998, said Robin Wiley,senior assistant for legislative affairs at the National ElectricalManufacturers Association (NEMA) in Washington, DC.

The budget does not specify how much will come from the deviceversus the drug industry, she said. But both will pay.

"The fees are going to come from both," Wiley said."The budget doesn't provide a breakdown of how much fromwhom, but does say that the revenues will come from device aswell as drug manufacturers."

Drug manufacturers already contribute user fees to the agency,under an agreement hammered out by Congress and President Bushlast year. When the program is completely phased in by 1997, companieswill pay a new drug application fee of $150,000, an annual feeof $50,000 and a $5000 fee for each approved drug on the market.According to 1992 estimates, this is expected to contribute $75million to the FDA's budget.

A key reason for the drug industry's cooperation with the userfee program was the promise of faster reviews of new drugs. TheFDA has been lambasted by industry and Congress in the past yearfor its failure to timely process new drug and device applications(SCAN 9/23/92).

For example, in 1992 the FDA approved 4862 510(k) submissionsand only 12 premarket approval submissions, according to an annualreport by the agency's Office of Device Evaluation. The 510(k)approval rate is the lowest since 1984, and the number of PMAsapproved is matched only by 1982 figures. A total of 6509 510(k)submissions were received, averaging 126 days of FDA review, accordingto the report.

Device manufacturers successfully fought against inclusionin the 1992 user fee proposal, and their opposition continues.Last year the Health Industry Manufacturers' Association (HIMA)took the position that user fees tax innovation (SCAN 6/3/92).HIMA has also blasted the FDA for changing approval requirementsas devices are being approved and for imposing clinical testingrequirements used for drug approvals on devices.

The manufacturers' association has also raised concerns thatuser fees will not benefit the FDA but will instead be placedin the government's general fund. These issues, as well as thecost breakdown on the user fee proposal, are expected to surfacewhen Clinton's budget is resubmitted in mid-March, Wiley said.