Senate Panel Approves User Fee Bill Based on FDA Deal With Industry Groups

The Senate Health, Education, Labor and Pensions Committee April 18 voted 15-5 to approve legislation (S. 1082) that renews the user fees to be paid by medical device companies to the Food and Drug Administration to help cover the costs of product reviews.

The bill, known as the proposed Food and Drug Administration Revitalization Act, also includes drug industry user fees, legislation addressing drug safety, and pediatric drug testing. The legislation could see action by the full Senate in June or July, HELP Committee Chairman Edward Kennedy (D-Mass.) told reporters. More controversial legislation to make it easier for FDA to approve generic biotech drugs could be added later, Kennedy said.

The bill’s approval by the Senate panel follows the April 16 unveiling by FDA of its recommendations for reauthorization of the Medical Device User Fee and Modernization Act (MDUFMA), including new fees that would provide more stable revenues for FDA than the existing application fees.

MDUFMA is set to expire Sept. 30. Title III of the HELP Committee’s legislation would reauthorize MDUFMA for five more years.

In a statement, Kennedy said, “All of us would prefer that FDA rely less on user fees and more on appropriated funds, and legitimate questions have been raised about the agency’s need for these programs. But if adequate funding is not supplied by Congress, the user fees are essential for effective and timely reviews of drugs and devices.”

Clinical Trials, Pediatric Devices

According to a bill summary from Kennedy’s office, the FDA bill requires pre-disclosure of conflicts of interest of advisory committee members, and greater efforts by FDA to identify non-conflicted members. In addition, according to the summary, a publicly available database will include medical devices clinical trials to support FDA approval or clearance, as well as pediatric postmarket surveillance.

The legislation also has pediatric medical devices legislation that modifies the existing humanitarian device exemption (HDE) for devices to allow profit for HDE-approved devices specifically designed to meet a pediatric need, according to Kennedy’s summary. The bill also would maintain an existing requirement that a humanitarian use device is limited to one that treats and diagnoses diseases or conditions that affect fewer than 4,000 individuals in the United States every year, the summary said.

The Senate panel’s bill grants “explicit authority to the FDA’s Pediatric Advisory Committee to monitor pediatric devices and make recommendations for improving their availability and safety,” the summary said. The bill also incorporates several recommendations of the Institute of Medicine including improving the postmarket surveillance of medical devices used in children, the summary added.

$287 Million Over Five Years

The proposal unveiled by FDA also would reduce application fees and set more aggressive timetables for the agency to finish work on submissions from the device industry. In a broad effort to ensure stable funding for the agency and predictable fees for business, FDA is proposing to recommend to Congress a reduction in existing application fees and the creation of two new annual fees: an establishment registration fee and a fee for filing periodic reports.

Under MDUFMA, fee revenues came only from applications, the number of which varied year to year and “repeatedly fell short of expectations,” according to an FDA notice in the April 18 Federal Register (72 Fed. Reg. 19528). The two proposed fees would account for 50 percent of the total fee revenue and would provide a more stable source of funding than application fees.

Janet Trunzo, associate vice president, technology and regulatory affairs for the industry group AdvaMed, said during an AdvaMed April 16 press conference, “[We’ve] come up with a fee structure that is not so dependent on a very precise number of applications,” and which will create “a predictable fee structure in the industry for planning purposes.” Trunzo led the trade association’s negotiations with the agency.

The establishment fee would be an annual fee of $1,706 for 2008 paid by each device manufacturer, single-use reprocessor, and specification developer. The agency expects these fees to generate $21.8 million, or 45 percent of total fee revenues, if 12,750 establishments pay the fee.

According to the Federal Register notice, total FY 2008 fee revenues would be 31 percent higher than in 2007, and then rise by 8.5 percent per year for subsequent years through 2012. The agency notice estimated the collection of $287 million in fees over the 2008-2012 period; the agency also estimates that the total resources (fees and appropriations) needed for the device review process during that five-year period will be $1.24 billion.

A bill summary from Kennedy’s office said that Title III, the device user fees, “implements the agreement between the Food and Drug Administration and the medical device industry groups,” adding that the legislation reflects the notice published in the Federal Register. “Congress was provided this legislation less than 24 hours prior to the required Committee deadline for filling. The Committee will continue reviewing this proposed legislation. Congressional changes, as required, will be incorporated prior to the floor,” according to the summary from Kennedy’s office.

2002 Amendments

MDUFMA, a 2002 law, amended the Federal Food, Drug, and Cosmetic Act, with the objective of ensuring that FDA had adequate resources for rapid review of medical device applications. Specifically, the act enabled FDA to collect user fees for premarket review of certain device applications, to institute performance goals for improved medical device reviews, and to allow for accredited third parties to conduct inspections.

The user fee program has helped FDA to “meet if not exceed our performance goals,” explained Daniel Schultz, director of the FDA Center for Devices and Radiological Health during the agency’s April 16 press conference. However, the FDA Federal Register notice said that funds from both congressional appropriations and user fees “have not kept up with our increasing costs.”

With MDUFMA set to expire Sept. 30 (the end of fiscal 2007), FDA has been negotiating with industry groups, including AdvaMed, the Medical Device Manufacturers Association (MDMA), and the National Electrical Manufacturers Association (NEMA), to revise the fees law. The newly authorized agreement–known as MDUFMA II–represents a “three-way commitment” among the agency, Congress, and industry, explained AdvaMed President Stephen J. Ubl in the trade association’s April 16 press conference, echoing his assessment when a general agreement on fees was announced in February.

FDA April 30 Meeting

FDA held a public meeting April 30 to discuss the proposed MDUFMA II recommendations. If passed, MDUFMA II will be authorized for fiscal years 2008 through 2012.

The fee for filing periodic reports would also be annual, starting at $6,475 in 2008 for a total of $2.5 million, or 5 percent of that year’s total fee revenues, if 425 reports are submitted and 10 percent pay the lower small business fee of $1,619.

These proposed fees would enable the agency to “significantly” reduce current application fees, which would constitute the remaining 50 percent of fee revenues, according to the Federal Register notice. For example, the full premarket approval (PMA) fee would be reduced to $185,000 for 2008, representing a 34 percent decrease from the $281,600 fee in 2007. However, fee amounts would increase over time, with the full PMA fee up to $256,384 by 2012.

Further, FDA proposes providing benefits for small businesses by reducing fee rates for applications including premarket application, panel-track PMAs, 180-day PMA supplements, and annual reports, from 38 percent to 25 percent of the standard fee.

Both Ubl and Mark B. Leahey, executive director of the industry group MDMA, applauded the boon for small businesses. “MDMA is pleased that smaller companies will receive grater fee relief under the proposal, which will help foster innovation,” Leahey told BNA.

Additionally, the agency is recommending extending MDUFMA’s three triggers for using fees from the industry: one is tied to appropriation for devices, and two are tied to agency spending on device review and inspections. This addresses concerns expressed by Sen. Orrin Hatch (R-Utah) in a March 21 letter to FDA Commissioner Andrew von Eschenbach that the trigger for the fees would not be device-specific as in the past, but was being changed to agencywide funding. A change in policy could cause the device industry to subsidize other parts of FDA’s work, the senator had said.

More Rigorous Performance Goals

The agency is proposing to meet “more rigorous goals for medical devices” to decrease application review time, explained Jeffrey Shuren, assistant commissioner for policy in the Office of the FDA Commissioner, during FDA’s press conference. This can be accomplished by eliminating cycle goals, or interim endpoints, and focusing solely on final decisions for applications.

“They interfere with our ability to have a much more interactive dialogue with the sponsor” particularly because of the “tight timeframes” in which the agency works, Shuren explained April 16.

Industry representatives welcomed this change. Ubl said during AdvaMed’s press conference that cycle goals “didn’t have a bearing on the final decision” of an application and were essentially “clock stopping.” Trunzo agreed, adding that this enables all involved parties to incorporate “the basic concept of interactive review into the program” which “is a win for everybody.”

FDA proposes improving performance on final decisions, such as reaching a decision for 60 percent of nonexpedited PMAs and panel-track (i.e., ones needing advisory panel review) PMA supplements within 180 days and for 90 percent within 295 days, up from existing MDUFMA commitments to review 50 percent of PMAs and panel-track PMA supplements in 180 days and 90 percent within 320 days.

To further enhance the premarket review process, the agency proposes continuing to issue guidance documents, specifically pertaining to diagnostic imaging devices and in vitro diagnostics (IVDs). Concerning IVDs, FDA additionally proposes conducting a pilot program to evaluate integrating the 510(k) review process (premarket notification) with the Clinical Laboratory Improvement Amendments (CLIA) waiver review process and reviewing class I and II low risk IVDs to determine if any could be exempt from premarket notification.

Finally, FDA proposes three revisions to the third party inspection program: “streamline the administrative burdens associated with qualifying for the program,” “expand participation in the program,” and “permit device companies to voluntarily submit to FDA reports by third parties assessing conformance with an appropriate international quality  systems standard,” according to the Federal Register notice.

SOURCE: BNA