Industry and FDA Reach Tentative Agreement on User Fees

Representatives of the medical device industry and the U.S. Food and Drug Administration (FDA) have agreed on the next level of funding for the agency’s user fee program, which was set to expire in September. The industry has agreed to double the fees paid to the FDA provided a more predictable and quicker review process for new device applications is provided in return. The FDA agreed to hire an outside consultant to analyze its review system. The FDA also agreed to meet with device manufacturers halfway through the review process to provide more time to respond to questions.

Industry execs have argued that one of the biggest obstacles to securing funding for new technology—the lifeblood of product development in the device sector—has been slower review times and an increasingly onerous and unpredictable review process.

The industry will pay about $595 million during the next five years, which is an increase from $287 million in the last iteration of the Medical Device User Fee Act. The increased fees are intended to give the FDA the ability to hire additional reviewers, lower the ratio of managers to reviewers and enhance training for reviewers. Fee agreements, which provide only a portion of the FDA’s funding (the rest is appropriated in the yearly federal budget) must be renewed every five years and then authorized by Congress.

According to meeting minutes posted on the agency’s website, personnel from the FDA and its Center for Devices and Radiological Health have met with members of the device industry nearly 30 times in the past year to negotiate fees, review times and other aspects of the program.

At one point, regulators had proposed as much as $805 million in user fees, according to minutes of a Nov. 29 meeting posted on the agency’s website. Industry groups such as the Advanced Medical Technology Association (AdvaMed) and the Medical Device Manufacturers Association countered with a $447 million offer, according to transcripts of a Dec. 6 meeting. Minutes from any subsequent meetings have yet to be posted. The device industry estimated its $447 million offer would account for 26 percent of the agency’s medical device review budget by fiscal 2017, the final year of the next user fee cycle.

“The tentative new user fee agreement puts in place a framework that will benefit FDA and industry, but most importantly patients by accelerating the development and approval of safe and effective treatments and diagnostics,” said Stephen J. Ubl, AdvaMed’s president and CEO. “The improvements in the agreement provide FDA and medical technology companies the tools needed to improve the efficiency and consistency of the review process.”

According to a press release from AdvaMed the fees agreed to by FDA and the trade associations call for the agency to:

• Achieve reductions in total review times, measuring from the time of submission to the time FDA makes a decision on a premarket application (PMA) or a 510(k) submission. The total time is the most meaningful measure of the product approval process;
• Achieve significant performance improvements for premarket approval (PMA) and 510(k) applications relative to a product’s current performance;
• Leave “no submission behind” by requiring the agency to meet with companies if a performance goal on a PMA or 510(k) is missed and work out a plan for completing work on the submission;
• Provide a substantive interaction with applicants halfway through the targeted time for completion of review, thus ensuring that a company can have time to properly respond to appropriate questions; and
• Implement an analysis of FDA’s management of the review process by an independent consulting organization, coupled with an FDA corrective action plan to address opportunities for improvement.

“AdvaMed looks forward to a productive working relationship with FDA under the agreement. The user fee agreement is not self-executing. It requires consistent and efficient administration by FDA leadership,” Ubl said. “It is in the interests of
patients and the American economy that this agreement functions well, and we will work with FDA to help make that happen.”

Ubl thanked FDA Commissioner Margaret Hamburg, CDRH Director Jeffrey Shuren M.D. and other senior FDA leaders for their work on the agreement, and he praised the cooperation among the trade associations involved in the negotiations.

Ubl said his group would work with members of Congress from both parties, FDA and other stakeholders to ensure the agreement wins approval before the Sept. 30 deadline. A hearing in the House is scheduled for Feb. 15.