The medical device industry says the FDA is risking becoming overly dependent on user fees for its review budget, according to comments made by industry officials at a recent negotiation meeting over the fees med-tech companies pay to the watchdog agency.
The FDA is proposing that user fees under the Medical Device User Fee Reauthorization or MDUFMA III should make up about 40 percent of the agency’s budget for reviewing medical devices. That’s too much of a burden for industry, which is warning agency officials that they should re-calculate expectations.
“Industry stated that they have always been concerned with user fees becoming too large a percentage of the overall budget,” officials said according to the minutes of the June 27 meeting in Washington, D.C. Officials also expressed their concern about the “FDA relying too much on user fees” and warned the agency not to adopt the same formula it uses for prescription drug user fees, which make up about 60 percent of the agency’s review budget for pharmaceuticals.
The comments came on the heels of the device industry saying they rejected the agencies premise on its financial situation.
“Industry stated that they do not agree with FDA’s initial proposal of $770 million,” officials said. “They do not agree with FDA’s proposed baseline, which could result in an increase of 17 percent from FY 2012 collections to FY2013 collections in order to maintain projected FY 2012 user fee spending levels with 4 percent inflation.”
Further, industry officials said there should be a separate in-depth discussion to “better understand the divergence between authorized collections and spending under FDA’s MDUFMA II spending plan.”
The current medical device user fee act is set to expire in 2012. 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 are 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.
While representatives from both sides have met several times over the year in order to hammer out an agreement, there has been significant tension in trying to come to an arrangement that will please both sides.
For example, the agency has asked for an increase in user fees to continue 2010 levels of operations, which would amount to a roughly 17 percent increase from current levels. The FDA is also requesting more funding to increase its total headcount by another 254 employees in addition to its 1,230 employees. The gulf between the two parties appears to be the agency’s contention that the total workload for the FDA has increased.
For it’s part, the med-tech industry doesn’t believe that to be the case and maintains that workloads have remained at the same levels. Further, industry contends that the FDA has essentially doubled the user fees over the lifetime of the program and has not met performance goals. During an early June meeting, industry proposed a two year stay at current levels (adjusted for inflation) because the agency had “not yet achieved” some of the qualitative and quantitative goals set when the user fee program was reauthorized in 2007.
The FDA said that industry’s proposal would actually amount to an 11 percent cut in user fee resources for fiscal year 2013 and create “even greater uncertainty about long-term program stability which would exacerbate the turnover problem and reduce staff morale,” officials said.
“It does not address Congressional intent for a 5-year reauthorization, increases the cost of the reauthorization process, and creates uncertainty by de-linking MDUFMA reauthorization from PDUFA reauthorization.”
Device industry reps disagreed with the agency’s assertion and said that there was “no support within the industry for the increase in fees” contained in the agencies plan for reauthorization.