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U.S. Department of Health and Human Services

Medical Devices

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Minutes from Negotiation Meeting on MDUFA III Reauthorization: June 17, 2011

FDA - Industry MDUFA III Reauthorization Meeting
June 17, 2011, 10:00 - 4:30 pm
FDA Switzer Building, Washington, DC
Room 1007


To discuss FDA's response to Industry's June 1 alternative proposal, and approaches for mitigating program uncertainty.


Malcolm BertoniOffice of the Commissioner (OC)
Nathan BrownOffice of Chief Counsel (OCC)
Kate CookCenter for Biologics Evaluation and Research (CBER)
Natalia ComellaCenter for Devices and Radiological Health (CDRH)
Christy ForemanCDRH
Alberto GutierrezCDRH
William HubbardFDA Consultant
Elizabeth HillebrennerCDRH
Toby LoweCDRH
Thinh NguyenOC
Tracy PhillipsCDRH
Ruth WatsonOffice of Legislation (OL)
Barbara ZimmermanCDRH
Hans BeinkeSiemens (representing MITA)
Fernando FigueroaQuest Diagnostics (representing ACLA)
David FisherMedical Imaging Technology Alliance (MITA)
John FordAbbott Laboratories (representing AdvaMed)
Donald HortonLaboratory Corporation of America Holdings (representing ACLA)
Mark LeaheyMedical Device Manufacturers Association (MDMA)
Joseph LevittHogan Lovells US LLP (representing AdvaMed)
Tamima ItaniBoston Scientific (representing MDMA)
David MongilloAmerican Clinical Laboratories Association (ACLA)
Patricia ShraderMedtronic (representing AdvaMed)
Janet TrunzoAdvanced Medical Technology Association (AdvaMed)

Meeting Start Time: 10:15 am

FDA Presentation

FDA offered its response to Industry's June 1, 2011 proposal for a two-year extension of MDUFA. FDA explained that the agency does not believe the proposal addresses key challenges facing the program or that it meets the goal of ensuring timely access to safe and effective products. Based on the conclusion of the May 4, 2011 meeting, FDA expected a proposal from Industry for a 5-year program covering topics that Industry had identified on May 4th and agreed to elaborate on at the next meeting: guidance development, third-party review, Pre-IDE/IDE process, improved tracking of premarket review, more detailed reporting at quarterly meetings, and CLIA waiver application goals. FDA remains interested in engaging in discussions on those topics. FDA expressed concern that Industry's June 1 proposal has resulted in a delay in making progress towards full reauthorization of the program, which is under a tight statutory timeline.

FDA expressed its view that Industry's June 1, 2011 proposal would produce even greater uncertainty about long-term program stability which would exacerbate the turnover problem and reduce staff morale. It does not address Congressional intent for a 5-year reauthorization, increases the cost of the reauthorization process, and creates uncertainty by de-linking MDUFA reauthorization from PDUFA reauthorization.

FDA believes that the proposal fails to address the key challenges identified during negotiations, including: management oversight to improve consistency, closing gaps and capacity shortfalls in key technical review areas, retention incentives and relief of reviewer overload to reduce staff turnover, and enhancing and expanding training opportunities to improve productivity of newer reviewers. Additionally, FDA expressed concern that there was an unrealistic expectation of program improvement during the proposed 2-year extension without providing FDA the resources and means with which to achieve that progress. FDA also identified areas where Industry's proposal appeared to apply expectations or goals that were not part of the MDUFA II agreement. For instance, while the Agency believes interactive review (IR) is important, it appeared that Industry is asking for a level of IR that goes beyond that described in the guidance, and beyond FDA's current capacity. Industry responded that issuing the IR Guidance may have technically satisfied the Commitment Letter requirement, but the spirit of the goal was that once issued, the guidance would be consistently followed by reviewers. FDA noted its previous explanation that IR is used a lot more than is documented, but that IR is not an appropriate tool for all submissions. There was also a suggestion by Industry that implementing more IR more consistently would decrease total elapsed time to decision. FDA believes that more consistent IR is important, but will not by itself solve the concerns about total time to decision. Furthermore, Industry discussed qualitative improvements that were raised during the MDUFA II negotiations, including specific requirements relating to training on core competencies, vendor days, and site visits. FDA pointed out that none of these are specified in the commitment letter. In particular, during the MDUFA II negotiations, FDA claimed that it proposed dedicated funding for training. FDA asserted that this proposal was not agreed to and the commitment letter therefore states additional training will be conducted “as resources allow.” Industry stated that at no time during the MDUFA II negotiations were commitments made about qualitative goals and then retracted. Industry also stated that MDUFA II included funding for retention incentive pay, and provided FDA with a spreadsheet from the MDUFA II negotiations. FDA explained that it interpreted the spreadsheet as showing a historical breakdown of personnel costs, but there was no proposal to fund retention payments and such funding was not included in the MDUFA II financial plan. Industry stated its view that the contrast agent guidance document had not met the shared goals of Industry and FDA under the MDUFA II qualitative goals. FDA pointed out that the goal was for FDA to issue the guidance, which it did; and even if FDA issued a new guidance, the agency could not be sure whether Industry would be happy with it or not. With regard to guidance in general, FDA noted that its obligation was to develop guidance to the extent possible, which it is doing. Similarly, Industry appeared to suggest that FDA has not met commitments related to downclassification of IVDs. FDA pointed out that its obligation was to review Industry's list of proposed downclassifications, which the agency has done; the commitment did not revolve around a particular result. Moreover, MDUFA II is not yet completed.

Industry disagreed with FDA's assertions that qualitative goals have been met. FDA and Industry discussed the goals and the commitment letter language. Industry expressed concern that not every detail of the agreement is captured in the commitment letter, and Industry disagreed with FDA's characterization of some of the goals. FDA noted the apparent differences in expectations for the MDUFA II qualitative commitments make it difficult simply to extend the program for two years as Industry proposed. FDA and Industry agreed that for purposes of reauthorization it may be necessary to have more explicit language in the commitment letter or in another document what constitutes success of any qualitative commitments. Industry questioned whether FDA would be amenable to an agreement which specifically dictated dedicated funding for certain aspects of the program. FDA replied that if Industry agrees to invest in the program by increasing fees to pay for enhancements, Industry should hold FDA accountable for placing resources in the areas both parties think will solve the problem.

FDA also explained its concerns with the resources in Industry's two-year proposal. Industry's proposal represents an 11% cut from user fee resources anticipated by FDA in fiscal year (FY) 2013 to maintain the projected FY 2012 level of user fee program support. Industry questioned how FDA calculated this. FDA explained that the MDUFA II spend plan includes user fee collections higher than user fee obligations in the first two years and obligations higher than collections in the last two years, such that total collections and total obligations are balanced over the five year period. Industry questioned this spend plan again and asked FDA to provide documentation from the MDUFA II negotiations showing that the outyears of MDUFA II would result in more spending than collection from fees; FDA agreed this issue should be further discussed. Industry's proposal uses the planned FY 2012 collections ($67.1M) as a baseline rather than the planned FY 2012 obligations ($75.6M), resulting in only approximately $70M in user fees for FY 2013. In order for FDA to maintain current resources, FDA would need funding in FY 2013 equivalent to the FY 2012 obligations plus inflation ($78.6M). This gap represents an 11% cut to FDA resources. Industry pointed out that when one compares FY 2012 collections ($67.1M) to FDA's stated need for FY 2013 obligations ($78.6M), there would be a 17% increase in user fees and that the FDA and Industry have not agreed on the appropriate baseline to use moving forward.

Industry has expressed a strong concern with increasing total elapsed time to 510(k) decisions; FDA agrees that this should be addressed in MDUFA III. FDA analyzed data to understand the underlying phenomenon and developed their April 13, 2011 proposal with the intent of addressing its root causes. FDA again presented data showing that the average number of FDA days per review cycle has been constant since 2005 while the average number of manufacturer days per review cycle has increased since 2005, along with the average number of review cycles per 510(k). The problem of increasing total elapsed time appears to be driven by a combination of increasing numbers of cycles and increasing time Industry takes for each cycle. FDA believes the solution is not simple and involves investing resources in the program to support the changes outlined in FDA's proposal package. FDA does not believe Industry's June 1, 2011 proposal will result in a reversal of this trend.

FDA presented new data demonstrating that the rate of Not Substantially Equivalent decisions (NSEs) has decreased from 8 percent in FY 2010 to 5 percent in the first eight months of FY 2011; there has been corresponding 4 percent increase in the rate of Substantially Equivalent decisions (SEs). Industry asked what might be driving this improvement in NSE rates. FDA offered a hypothesis that the high NSE rate in 2010 might have been a one-time phenomenon resulting from the impact of the 510(k) program review.

In response to Industry's concern with program uncertainty that prompted Industry to offer a two-year reauthorization, FDA offered a new approach to addressing such uncertainties. FDA expressed as the premise that the parties can address the assumptions affecting performance without encroaching on the policymaking process that rests beyond the scope of MDUFA negotiations. FDA proposed negotiating a 5-year agreement based on current assumptions and available information. During the public review process in the Fall, Industry can assess whether current assumptions about workload still hold based on any program changes announced by the Agency that were not considered during the current negotiations. If there are any substantial departures from current assumptions, they can be addressed through the public comment process and by following up with Industry and other commenters about the concerns they have. Because FDA and Industry have a mutual interest in ensuring that the final recommendations to Congress have broad support, it will be FDA's objective to address any concerns raised by Industry before submitting the recommendations to Congress so that Industry would continue to support the agreement. Industry questioned whether the commitment letter could specifically include the assumptions upon which it was negotiated. FDA indicated willingness to discuss documenting assumptions either in the commitment letter, on the record of the minutes, or in the Federal Register Notice.

FDA responded to ACLA's concerns regarding the Agency's consideration of the regulatory framework for lab developed tests (LDTs). Specifically, ACLA proposed on June 1, 2011 that if FDA ended its policy of enforcement discretion for LDTs, FDA should reopen negotiations with ACLA to establish lower user fees and streamlined performance goals for LDTs. FDA indicated that ACLA's assumption about potential LDT submissions is not consistent with FDA's stated intention to address LDT regulation using a risk-based, phased-in approach. FDA believes that LDT workload during MDUFA III will be minimal and can be managed within current assumptions. Furthermore, FDA expressed lack of clarity as to whether ACLA's proposal for lower fees and streamlined goals for LDTs had support from the other Industry groups. FDA noted that the process provides for negotiation between FDA and Industry as a whole, and the Agency must produce one set of recommendations for Congress.

FDA discussed the 25 action items released by CDRH in January 2011, plus seven additional items that were referred to the Institute of Medicine (IOM). As previously stated, FDA does not believe that the 25 action items will have a significant impact on MUDFA III performance. On June 15, 2011, Industry provided FDA with a list of specific areas of concern to them, including five specific planned documents: 510(k) Modifications Guidance; Third Party Review Program changes; 510(k) Paradigm Guidance; Notice to Industry Letters SOP; and De Novo Guidance. FDA noted that one of these has now been released (Notice to Industry Letters SOP), another is expected shortly (510(k) Modifications Guidance), and the remaining three are expected by October. The impact of each document on MDUFA III workload and performance can therefore be considered either during negotiations or beginning with the public comment period as described above.

FDA discussed its approach for addressing the uncertainties regarding the IOM recommendations for the 510(k) program. The IOM report is expected to be released by the end of July. FDA is not bound to adopt IOM recommendations; FDA will consider them and make its own decisions. FDA indicated that it would review the IOM report and identify priorities for policy development by October, prior to publication of MDUFA reauthorization recommendations and before the start of the public comment period and public meeting.

FDA also pointed out that the Agency also faces uncertainties. FDA cited uncertain budget authority appropriations and the prospect of regulatory reform efforts by Congress, both of which FDA believes are at least as significant as the uncertainties raised by Industry. FDA also stated that the agency is very concerned with the current status of negotiations given the reauthorization schedule. FDA presented the overall schedule in September, 2010 and Congressional Committees have reiterated the importance of meeting or beating the statutory timeline for delivering recommendations by January 15, 2012. FDA presented a comprehensive package of proposals for a 5-year agreement on April 13 th and Industry has not yet formally responded to FDA's proposal. FDA remains ready, willing, and able to discuss Industry's proposal ideas for reauthorization of MDUFA. FDA expressed concern that any further delay in discussing details of a 5-year agreement jeopardizes the schedule.

Discussion on various topics:

FDA provided clarification regarding the medical device user fee spend plan as it relates to user fee collections. Earlier, FDA explained that Industry's proposal represented in an approximate 11% cut in user fee resources, and Industry noted that an increase to $78.6M in user fee collections in FY 2013 would result in a 17% increase in collections from FY 2012. FDA explained that the calculation of a 17% increase is based on comparing authorized user fee collections in FY 2012 ($67.2M) to projected obligations in FY 2013, assuming that the FY 2013 obligations would be 4% higher than the planned FY 2012 obligations. FDA noted the underlying assumptions agreed to at the start of MDUFA II, in which the Agency would spend at a rate less than collections in the early years, holding in reserve some user fees for use in later years. The Agency would then spend more than collections in the later years, using the funds held in reserve from the early years to make up the gap between collections and obligations in the later years, as described in the spend plan. The intent for adopting this strategy was to ensure a steady but moderate increase in user fees over the course of MDUFA II. The Industry proposal suggested using FY2012 authorized collection levels of $67.2 million, rather than FY2012 spending levels which projected to be $75.6 million. In order to maintain or preserve the level of spending at the end of MDUFA II, the fees in FY2013 and FY2014 would need to be based on the current spend plan, not the collection of user fees..

Industry next addressed FDA's response to the Industry proposal. Industry noted the proposal it presented on June 1, 2011 was a good faith effort to provide a complete proposal. It had support from AdvaMed, MDMA, and MITA, and subsequently received ACLA's support (contingent upon recognition of distinctions for clinical labs and LDTs). Industry emphasized there was no support within Industry for the increase in fee levels to approximately 40% of the cost of the process for the review of device applications associated with the FDA proposal package. Industry also stated that it did not support a one-time increase of 17% from FY 2012 to FY 2013. Industry also stated its view that, given the differences of perspective relating to qualitative goals, that future qualitative goals would need to have far more specificity for everyone to have a clear understanding of expectations. FDA expressed its commitment to the intent and process of MDUFA II, but noted that Industry's proposal seemed to suggest expectations beyond the agreement at the time.

Discussion turned to Industry's list of concerns regarding potential impacts on workload caused by selected items in the Plan of Action for the 510(k) program, which CDRH released in January, 2011. FDA explained that as a general matter, the Agency intends to take a risk-based, phased-in, and transparent approach to any changes to the program, and that the Agency takes into account its commitments to performance under MDUFA when considering program changes. The following provides an overview of the topics discussed.

Notice to Industry Standard Operating Procedure (SOP) - FDA noted the SOP, which is publicly available for comment, is proposed to be used when FDA issues Notice to Industry letters, which can take the form of Level 1 immediately in effect” guidance, or as “Advisories” for letters that do not constitute guidance. This is already within FDA's current regulatory authority. The Notice to Industry Letter concept would be applied rarely to a select subset of issuances, providing a focused and streamlined approach for communicating with industry and stakeholders. FDA explained that the SOP is designed to provide quicker information relating to safety issues that will affect a device submission. Industry raised concerns that this new procedure may bypass Good Guidance Practices (GGP) and the safeguards that follow, with meaningful opportunities for feedback before a final policy being issued. FDA explained that the SOP is subject to GGP, as indicated in the SOP. Industry also suggested that there was uncertainty due to when Level 1 immediately in effect Notice to Industry Letters would be issued because the standard is vague, and that there might be a “down-classification” of guidance as Notice to Industry Letters. FDA noted that the standard for what constitutes Level 1 guidance under GGPs has not changed, and that there is a high threshold for issuing something as Level 1 guidance. As a result, the standard for issuing Level 1 guidance (i.e., without prior public comment) has not changed, and any uncertainty about when it will be used has always existed. Furthermore, FDA noted that industry has requested more guidance, and FDA questioned how the release of guidance could create more uncertainty.

Assurance Cases - FDA explained this is in a pilot project phase and is not meant to be broadly adopted. Instead, it is intended to be used on a case-by-case basis when current tools fail to detect a potential issue during the premarket review and have been unable to adequately address the identified post-market issue. FDA is using this process to assess issues with infusion pumps, where FDA noted that Failure Modes Effects Analysis (FMEA) was unable to pinpoint or adequately address post-market issues. The Assurance Cases are FDA's attempt to address and detect these issues by looking at data in a different manner. FDA plans to evaluate if developing an assurance case has an impact. Industry voiced concerns about finding experts who could develop assurance cases. FDA acknowledged the lack of expertise in the medical device field, but highlighted that this field has routinely adopted methodologies and practices used by other sectors. FDA did not expect this pilot to have a significant impact on workload, and may save FDA time reviewing a submitter's risk management system.

510(k) Paradigm Guidance - Of all the items on Industry's list, this topic is the most comprehensive among the guidance documents. This guidance is intended to provide an underlying process framework to ensure consistency across the office for similar technologies. In the past, FDA has in some instances interpreted the regulatory standard differently or inconsistently. FDA wants to develop a framework for a process that will be consistent across the Center, so that one group does not apply more stringent metrics than another group reviewing a similar device with similar technology. FDA does not foresee any major changes in workload as a result of this guidance. In response to an inquiry from Industry, FDA indicated that this guidance was not expected to have a significant impact on PMA volume, but it might result in more De Novo submissions. Industry asked FDA to define the impact of the revised guidance. FDA explained that based on historical analysis, NSE rates for no predicate, new intended use, and new technology have not changed. Therefore, given the limited pool from which NSEs can be drawn, FDA anticipated that there would not be a lot of additional De Novo submissions, perhaps a handful to a dozen. Industry expressed concern with even a small impact on PMA volume given that FDA is not currently meeting all of the PMA goals.

De Novo Guidance - The de novo guidance attempts to streamline the process. The current process is complicated by the way the statute is written, as the Agency must first find the submission NSE and then the sponsor must submit a petition. Currently, there is no predictability or MDUFA goals. The purpose of the guidance is to give Industry a more predictable process. FDA does not foresee a change in PMA workload. When asked if the number of De Novo submissions are likely to increase to PMA levels, FDA noted it does not anticipate a significant increase in these types of submissions given that few devices are found NSE for reasons (i.e., new technology, new intended use, and no predicate) that would make the device eligible for a De Novo review.

Modifications Guidance - FDA indicated that this guidance may impact workload. The modifications guidance will seek to address issues with making modifications to a cleared device. The guidance would address circumstances in which a 510(k) device would need to be re-submitted. Industry offered its view that FDA is underestimating how many 510(k)s are likely to come in given the broad range of interpretations within Industry regarding when modifications require re-submission. FDA indicated that the Agency would take a risk-based approach regarding modifications, and that the guidance would not amount to a change in FDA's policy; rather, it would merely communicate standards more clearly. FDA indicated that this guidance is expected to be issued in the near future.

Third Party Review - Industry asked about the Agency's planned Third Party Review SOP, and inquired whether the third party review process is an appropriate topic for these negotiations. FDA explained that the SOP will be posted for comment. FDA requested additional information about this inquiry, and Industry indicated it would put the question in writing.

The need for periodic reports was discussed as it related to the potential to increase workload. FDA indicated that it has indicated that periodic reports would not be applied across the board, but rather would only be applied on a case-by-case basis and implemented through device-specific guidance.

Discussion next turned to how to move forward in negotiations. Industry inquired how long it would take the Agency to determine which IOM recommendations it will endorse. The Agency indicated that it would review the IOM report and identify priorities for policy development by this Fall. When asked if the Agency intended to revisit the current timeline, FDA re-affirmed its commitment to meeting the timeline outlined in the statute. FDA noted that one way to manage the process is to make progress towards an agreement and talk about the details of how to strengthen the program assuming that the current program will remain largely intact, rather than be delayed by concerns about uncertainty. FDA clarified that the public comment period provides a forum for input from Industry and other stakeholders, but is not the only means of discussing changes in assumptions that would impact the recommendations FDA will send to Congress. When Industry proposed revisiting the alternative 2-year framework, FDA emphasized that the challenges to the program need to be addressed now, not two years from now. FDA questioned why Industry's concerns needed to be addressed sequentially rather than in parallel with discussion of improvements to the program, so as not to slow down the process. Both sides agreed to discuss further with their respective ratifiers.

Based on the day's discussions, Industry offered to bring to the next meeting a counter-proposal for a process for addressing the uncertainties identified by Industry and detailed proposals for enhancements to the MDUFA program. Industry indicated it would not be prepared to do so in time for the next scheduled meeting on June 21, 2011, but Industry would be prepared to make those proposals on June 27, 2011.

Next Meeting

The next meeting will take place June 27, 2011.

Meeting End Time: 4:10 pm