The U.S. House of Representative’s proposed increase in the Food and Drug Administration’s 2010 budget isn’t likely to result in any savings for medical device companies.
That’s because the Medical Device User Fee Amendments of 2007 that former President George W. Bush signed into law lock in until at least 2012 the fees medical device companies must pay to have their products approved for market in the United States.
“Locked in” in the sense that they aren’t going down any time soon, despite a 24 percent budget boost the House proposed for the Center for Devices and Radiological Health.
“I wouldn’t count on it,” said Pam Weagraff, VP of regulatory and quality at T2 Biosystems, when asked if the increase would mean savings for medical device makers.
The 2007 act allows the watchdog agency to increase fees each October, an option it’s used almost every year since the fees were introduced at the start of the decade.
Weagraff told MassDevice that the agency is so used to receiving certain revenue benchmarks, and has been so underfunded over recent years, that it’ll hard to wean it off of those fees — even if the Senate approves the increased funding.
“The FDA assumes it’s going to get certain level of funding from Congress and the user fee piece is the other part they factor in every year,” she told us.
Medical device firms must pay fees ranging from $1,800 to $200,000 to have their products considered for approval. Although the FDA has some revenue benchmarks designed to give small businesses a break, the process is a dauntingly expensive proposition — with no guarantee that the device will even make it to market.
According to the FDA’s 2009 fee schedule, all medical device companies must pay an annual establishment registration fee of $1,851 if they plan to market a medical device in the U.S.
And companies must pay fees to get their products through the agency’s review process. The device review fee for 510(k) approval is $3,693 for a company with sales of over $100 million and $1,847 for smaller firms.
For a 513(g), used when a company can’t determine whether it needs 510(k) or pre-market approval, the FDA charges large companies $2,710 and smaller firms $1,355 to determine which process applies.
The big-ticket item is PMA clearance, with a price tag of up to $200,725 for larger firms and $50,181 for a smaller operations (the fee is waived for small firms in their first PMA go-around).
Sticker shock is the likely reason for the discrepancy between the number of 510(k)s and PMAs. There were 249 devices granted 510(k) approval in May, compared to just two that received PMA and 71 granted supplemental notifications (the fees for supplemental notifications range from $3,500 to $150,000).
There’s always a rush to get products into the regulatory process in the late summer, Weagraff noted, because of the annual October fee hike.
Meanwhile, she cautioned, the FDA budget still has to make it through the Senate.
“It ain’t over yet,” Weagraff said.
