Medical Device User Fee - FDA Regulations

Getting your company’s newest medical device to market may take a little longer than expected. As the industry negotiates with the FDA over user fees (up for renewal this year), patient advocacy groups are stepping in to voice their concerns about the current device approval process. If these concerns result in significant changes to the process, medical companies can expect to spend even more time waiting on the FDA – despite possibly paying higher user fees.

User Fees Explained

Congress passed the Prescription Drug User Fee Act in 1992 when the pharma industry and the FDA recognized the need for an increase in funding to help expedite new drug approvals. With federal appropriations at their limit, the industry agreed to pay user fees with new drug applications, and the FDA committed to meeting target completion dates. The success of this program prompted the device industry to adopt user fees as well, resulting in the Medical Device User Fee and Modernization Act in 2002. Both the drug and device user fees are up for reauthorization this year.

Negotiations between the pharma industry and the FDA have reportedly gone well. Thanks to an early agreement, the hearing on prescription drug user fees – scheduled for Feb 1 – shouldn’t bring any surprises. A hearing regarding new user fees for generic drugs and biosimilars will be held the following week and is also predicted to go smoothly. Negotiations between the device industry and the FDA have not followed suit, and now both are under pressure to come to an agreement before the scheduled February 15th hearing.

The Source of Contention

The device industry wants a quicker review process for low-risk devices, but patient advocacy groups say the process needs more scrutiny, not less. In an effort to shed light on problems with the current review process, House Democrats are calling for a probe into two devices – the “Lap-Band” and urogynecologic surgical mesh – both of which have reportedly caused problems in patients, according to MassDevice.

The FDA maintains that safely speeding up the approval process will require a significant increase in user fees. Business Week reports the industry paid $295 million in user fees to the FDA over the past 5 years, and the FDA is asking to increase that number to as much as $805 million over the next 5 years. The industry had a very different figure in mind, proposing to pay $447 million, according to minutes from the December 6th meeting. Minutes from more recent meetings have not been released so it’s not yet known if the two sides are getting any closer.

The FDA was asked to provide a proposal to Congress by December 31st and then January 15th, but as of publication they had not submitted anything. Despite the missed deadlines, Business Week reports that a spokeswoman for AdvaMed, the industry’s advocate in Washington, said they are making progress.

What’s at Stake?

A dramatic increase in user fees would be yet another blow to medical device companies, who are already facing a new medical device excise tax due to go into effect next year. It’s an industry rife with fees and red tape, but that’s the cost of doing business in the highly regulated medical space. The question is; at what point does the cost outweigh the benefits? It’s a fine line, but it’s one that must not be crossed if America hopes to remain a leader in medical technology innovation.

Update as of Feb 1, 2012:

After much debate, the FDA and the medical device industry announced on February 1st that they have come to an agreement on the issue of user fees. The industry will pay $595 million over the next 5 years, double the amount previously paid, but significantly less than the $805 million that the FDA initially asked for. The increased fees will ensure both a faster and safer review process by allowing the FDA to hire approximately 200 more employees by the end of the 5 year period and requiring evaluators to meet with representatives from device companies midway through the review process.