Posted 02 November 2016
By Michael Mezher
The US Food and Drug Administration's (FDA) top negotiator for the fourth iteration of the Medical Device User Fee Act (MDUFA IV) presented changes to the funding mechanisms of the program at a public meeting at FDA's White Oak Campus on Wednesday.
Last week, FDA released its draft recommendations for changes to its user fee program for medical devices which would allow the agency to collect roughly $999.5 million—an increase of $320 million over the previous five-year program—from industry.
According to FDA Associate Commissioner for Planning and lead MDUFA negotiator Malcom Bertoni, both FDA and industry agreed to changes on how the program is financed "to improve the performance, the predictability, the consistency and the transparency of the overall program."
"I think the outcomes we achieved in these negotiations really were successful in terms of addressing these issues," he added.
First, Bertoni said the amount of funding FDA gets throughout the program should be more reliable than in past agreements.
"One thing we did a little bit differently in these draft recommendations is we kept all our negotiations around the dollar numbers for the most recent annual costs that we had … so the numbers that we're showing in the agreement and the draft statutory language are based on our fiscal year 2015 actual costs," Bertoni said.
Another major change from past MDUFA agreements is the elimination of the so-called "fifth-year fee offset," which required the agency to reduce its fees in the fifth year of the program if it "over-collected" in the previous years.
According to Bertoni, removing this clause will help FDA maintain adequate funding for its workload when the number of submissions and registrations are higher than expected.
"Essentially, we keep and spend what we collect … if more submissions come in, FDA gets to keep and spend those fees to handle the additional workload," Bertoni said.
Under the draft agreement, FDA and industry also agreed to change how it estimates the number of registration fees the agency is expected to receive to account for growth in the industry.
"Previously, we used to estimate what that number would be and just assume that it held constant over the five years. More recent history demonstrates that we've had growth in the number of registrants," Bertoni said. "We used that historical information to make some projections about continuing linear growth. The significance of that is it's more realistic and it helps keep the registration fee down."
Fees for Small Business
Bertoni also detailed changes to the fees paid by small businesses under the proposed program.
"We've tried to maintain a focus on looking after the concerns of small businesses in terms of the fees. There are some additional investments in this program, so fees are going up, but we've really tried to make sure that we're limiting the impact on small businesses," Bertoni said.
Despite the increases in fees across the board under the proposed MDUFA IV program, small businesses will be paying a much lower percentage of those fees than in the past for premarket notification submissions.
"In fact, even though there were some increases in the full fee of the 510(k) or the premarket notification submissions—they're going from 2% of the premarket application to 3.4%—the actual small business fee has been reduced. The small business fee used to be 50% of the full fee, and now it's going to be 25% of the full fee," Bertoni said.
"So the net result is that for a small business, the 510(k) fee really does not change much at all. In fact, it'll be 5% lower in real dollar terms than it was in fiscal year 2016," he added.