FDA to examine user fees

Medical device companies, whose user fees have funded an increasing share of Food & Drug Administration’s device review budget, will have a chance to weigh in on how well the program is working at a Sept. 14 public workshop.

The federal watchdog agency will offer its own views and solicit input from consumers, patients, healthcare professionals, scientific and academic experts at the meeting, which is scheduled a full two years ahead of the September 2012 expiration date for the current medical device user fee program.

Several presentations with background on the program will be posted on FDA’s website roughly 10 days ahead of the Sept. 14 meeting.

Before FDA started collecting user fees for devices in fiscal 2003, the agency’s medical device program "suffered a long-term, significant loss of resources that undermined the program’s capacity and performance," according to the announcement of the upcoming workshop.

The agency first won the authority to collect user fees under the 2002 Medical Device User Fee and Modernization Act. The program was reauthorized in 2007 under MDUFMA II.

The user fees were supposed to make up for the FDA’s resource shortfall to help it review device applications more quickly and, ultimately, speed devices to market.

In return for receiving industry funding, the FDA was tasked with meeting performance goals under MDUFMA, which set benchmarks for measuring improvements in the agency’s review times.

The original version of MDUFMA included "cycle goals" — the agency’s interim actions on a submission before its final decision to grant or deny approval — but industry complained that the goals were too complicated and often stalled the review process. Cycle goals were eliminated in the 2007 reauthorization and replaced with more rigorous final approval decision goals.

MDUFMA II also called on the FDA to interact more often with industry during reviews and required the agency to issue a number of guidance documents to help steer companies through the application and review process.

The revamped user fee program allowed the FDA to collect fees in four new categories starting in fiscal 2008, including an annual registration fee for all companies registered with the agency as medical device manufacturers, single-use reprocessors, sterilizers and contract manufacturers; annual reporting for the highest-risk Class III devices; submission of 30-day notices companies use to notify the FDA of modifications to manufacturing procedures or methods that affect the safety and effectiveness of a device; and submission of the 513(g) requests companies use to ask the agency about the most appropriate risk classification for their devices and what approval pathway is best to take.

Small businesses, defined as those with sales of less than $100 million in the most recent tax year, are eligible for certain fee waivers and discounts under the program, but pay the same annual registration fee as larger companies.

In exchange for the new fees, MDUFMA II significantly lowered the amounts companies are required to pay for pre-market approval, 510(k) clearance and biologic applications, although it allowed for yearly increases in each category after fiscal 2008. The FDA has increased fees in each of these categories nearly every year since it started collecting them.

In fiscal 2009, the FDA spent $47.3 million in medical device user fees out of net medical device user fee collections that year of $61.8 million, according to a letter attached to a July financial report (PDF) to Congress on the user fee program signed by Health & Human Services secretary Kathleen Sebelius. Roughly 66 percent was used to pay staff compensation and benefits, while the remaining 34 percent covered "operational expenses."

The agency is pulling in almost three times as much as the $21.6 million it took in during fiscal 2003, the first year it started collecting user fees from device companies, according to an April 20 performance report.

But has FDA sped up its reviews of devices enough to warrant industry’s increasing contributions to the agency?

The July financial report acknowledges that FDA’s performance for meeting the goals set in MDUFMA II has been "mixed."

It is "unlikely" the FDA will meet its PMA and panel-track PMA supplement goals, according to the report, which points to challenges including the incorporation of the new PMA goals, such as PMA modules and PMA real-time supplements, new interactive review goals and maintenance of current performance in other areas.

While the FDA achieved its goals for 510(k), real-time PMAs and 180-day supplements for fiscal 2008, the agency was not able to meet its modular PMA goals in fiscal 2009, which were newly required under MDUFMA II, according to the report.

The modular PMA program allows companies to submit an application in component steps, rather than in a single filing. The FDA’s goal under MDUFMA II is to review 75 percent of PMA modules in 90 days and 90 percent of PMA modules in 120 days.

There is hope, however, that the agency could meet its modular PMA goal in fiscal 2010 through "improved incorporation" of the goal into the business process of premarket review, the report notes.