User fee reauthorization goes to Capitol Hill

April 17, 2007

Medical device manufacturers could pay less in user fees when applying to market products in the U.S. if an FDA proposal to federal lawmakers goes through. The proposal will carry some added charges, however. One will be a fee to file annual reports associated with premarket approvals. Another will be the assessment of fees on any facility that registers with the FDA as a medical device manufacturer.

Medical device manufacturers could pay less in user fees when applying to market products in the U.S. if an FDA proposal to federal lawmakers goes through. The proposal will carry some added charges, however. One will be a fee to file annual reports associated with premarket approvals. Another will be the assessment of fees on any facility that registers with the FDA as a medical device manufacturer.

The new rate structure is the cornerstone of an agreement between industry and the FDA sent April 16 to Capitol Hill. Congress must decide whether to reauthorize the Medical Device User Fee Program, which expires Sept. 30.

The agreement sent to Congress yesterday has the backing of the Medical Imaging and Technology Alliance (MITA), a division of the National Electrical Manufacturers Association composed of medical imaging manufacturers.

"It is good policy and good sense," said MITA vice president Andrew Whitman. "The FDA needs the resources to review products, and innovators need reasonable fees and predictability so they can keep up the pace of providing innovations in medicine to patients. We hope that Congress will concur in this agreement, and we can make it start working."

The current program, instituted by Congress as part of the Medical Device User Fee and Modernization Act of 2002, allows the FDA to charge manufacturers to review their applications. Although user fees represent less than a quarter of the FDA's overall device budget, they have helped provide the resources the agency needs to quickly conduct premarket reviews.

User fees have helped the agency reach a decision on 90% of 510(k) applications within 90 days of their submission. These lower risk product account for most new medical imaging devices. As part of the agreement sent yesterday to Congress, the agency will strive toward this objective and seek to boost the percentage of devices reviewed to 98% within 150 days of submission.

The FDA further agrees to reach a decision within 180 days on at least 50% of expedited premarket applications and expedited supplement applications that go before an FDA advisory committee. This percentage will rise to 90% within 280 days.

Agency reviewers will also reach a decision within 180 days on 60% of conventional premarket applications and supplement applications that go before an FDA advisory committee, with this percentage rising to 90% within 295 days.

Industry will get a feel for whether the FDA is meeting its obligations through quarterly reports generated by the agency.

Small businesses would see additional benefits under the proposal. These businesses, defined as making $100 million or less in annual sales, currently pay 80% of the full user fee for 510(k) applications. Under the new proposal, they would pay just 50%. The fee they pay for premarket approvals and related supplement fees would also drop from the current 38% of the full fee to 25%. The FDA would continue to waive the fee for all first-time premarket approval applications for businesses with $30 million or less in annual sales or receipts. The proposal would allow a mechanism for foreign businesses to qualify as small businesses.

Other goals written into the proposed statute call for greater transparency of the review process at the FDA by encouraging informal communications with companies, scheduling timely meetings, and enhancing information sharing and industry input. The statute specifically identifies efforts to facilitate the development of guidance that will streamline processes and clarify data requirements for the review of imaging devices that use contrast agents or radiopharmaceuticals.

The third-party inspection program, which allows for the use of accredited private-sector auditors for routine inspections, will also be streamlined to make it easier for manufacturers to participate. Such inspections augment rather than substitute for FDA oversight and facilitate the FDA's ability to allocate its inspection resources based on risk, the agency noted.

The reauthorization would also foster the development of new in vitro diagnostic tests by issuing an industry guidance on emerging issues and reviewing some low-risk devices to determine whether any of them could be exempted from the need for product review. The FDA would conduct a pilot program under which the agency would review simultaneously a company's 510(k) and waiver applications under the Clinical Laboratory Improvement Amendments, the law that governs quality standards for all laboratory testing.