President Donald Trump last week signed a bill to re-up the agreement between the FDA and the medical device and pharmaceutical industries, putting medical device companies in line for a collective $1 billion in user fees.
Companies pay user fees to help cover the cost of the safety watchdog’s reviews of their products. The bill to renew the agreement, the “FDA Reauthorization Act of 2017,” also calls for pharma firms to put up $8 billion for drug reviews.
The Congressional Budget Office in June estimated that the measure would add $740 million to the budget and a negligible amount to the deficit. The CBO also predicted that the FDARA would raise direct spending by $13 million and lower revenues by $2 million from 2017 to 2022, but raise the total deficit by only $15 million from 2017 to 2027.
The Trump administration’s proposed user fee deal would have doubled medical device user fees to $2.4 billion in a bid to lower taxpayer funding of the FDA.
The medical device portion of the FDARA requires the agency to set up electronic submission of 510(k) clearance and pre-market approval bids, modify how the agency evaluates and approves those applications and tracks device safety.
The CBO estimated that those provisions would require more than 200 full-time equivalent employees at an average of $300,000 annually, or $60 million a year, plus another $7 million for IT and other expenses. In all, over 2018 to 2022, those provisions would raise the FDA’s costs by $243 million, the CBO estimated, including:
- $152 million to revise inspection standards
- $32 million to update procedures including the way the FDA receives data and the evaluation of some clinical data
- $20 million to increase communication with device makers on export certificates
- $20 million for pilot programs on collecting and evaluating post-market data
- $11 million for a risk-based inspection schedule and to reauthorize inspections by accredited bodies
- $8 million for new regulations creating a path for over-the-counter hearing aids