President Signs User Fee Legislation

President Bush has signed legislation to perpetuate the 2003 Medical Device User Fee and Modernization Act (MDUFMA) after years of funding shortages activated a clause in the law that would have killed the program at the end of September. The new legislation, entitled “The Medical Device User Fee Stabilization Act (MDUFSA) of 2005,” also caps user fees companies must pay when submitting  premarket approval applications as well as address other industry concerns.
    The new legislation, which was signed by President Bush on August 1, allowed the user fee program to continue until 2007, when Congress and the President would have to reauthorize the act. MDUFSA was needed because the original legislation enacted in 2003 called for the program to sunset at the end of this September if Congress failed to provide full funding. Since the program began, Congressional funding has fallen short by more than $40 million.
    Industry groups hailed the stopgap legislation because it provides several important measures:
—Capped fee rate increases over the next two years to 8.5% annually. This was an important victory, the groups contend, because increases in the program’s first two years were by double digits. In the first year alone, increases in fees were as high as 59%, with most categories rising 34%.
—A revenue threshold for determining whether companies receive a small-business user fee reduction was raised from $30 million to $100 million, providing relief to a greater number of medical device manufacturers. Under the revision, the FDA would not be allowed to revise the threshold.
—Eliminated workload and compensating adjustments which the Medical Device Manufacturers Association (MDMA) said was responsible for 55-60 of the fee increases to date.
—Requires mandatory labeling for reprocessed devices only.