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Medical Devices

Minutes From Negotiation Meeting on MDUFA III Reauthorization, November 10, 2011

FDA - Industry MDUFA III Reauthorization Meeting
November 10, 2011, 9:00 am - 12:30 pm
FDA White Oak Building 1, Silver Spring, MD
Room 2101

Purpose

To discuss MDUFA III reauthorization.

Participants

FDA
Malcolm BertoniOffice of the Commissioner (OC)
Nathan BrownOffice of Chief Counsel (OCC)
Frank ClauntsFDA Consultant
Kate CookCenter for Biologics Evaluation and Research (CBER)
Christy ForemanCenter for Devices and Radiological Health (CDRH)
Elizabeth HillebrennerCDRH
Michael HoffmannCDRH
David MillerOffice of Financial Management (OFM)
Thinh NguyenOC
Tracy PhillipsCDRH
Don St. PierreCDRH
Francisco VicentyCDRH
Ruth WatsonOffice of Legislation (OL)
Nicole WolanskiCDRH
Barbara ZimmermanCDRH
Industry
Hans BeinkeSiemens (representing MITA)
David FisherMedical Imaging Technology Alliance
John FordAbbott Laboratories (representing AdvaMed)
Donald HortonLaboratory Corporation of America Holdings (representing ACLA)
Tamima ItaniBoston Scientific (representing MDMA)
Mark LeaheyMedical Device Manufacturers Association
Joseph LevittHogan Lovells US LLP (representing AdvaMed)
James RugerQuest Diagnostics (representing ACLA)
Janet TrunzoAdvanced Medical Technology Association

Meeting Start Time: 9:00 am

FDA Counter-Proposal

FDA considered Industry’s* feedback from November 3, 2011 and presented a revised resource proposal based on minor changes to the draft Commitment Letter and revised assumptions and assessment of risk, resulting in a substantial reduction in the estimate of resources needed to achieve it. The proposal assumed a slower FTE ramp up, flattening of Pre-Submission growth in 2015, increased efficiencies from Refuse To Accept (RTA) and Pre-Submissions, and reductions in estimates for the Independent Assessment and IT enhancements. These changes in assumptions result in increased risk for the Agency, slight lengthening of substantive interaction interim goals and pre-submission goals, and a return to FDA’s October 24, 2011 proposal for all other quantitative goals, which reflects slightly longer interim targets for FDA review days and average total time to decision goals than Industry proposed on October 31, 2011. Together, these changes in assumptions and projections resulted in roughly a 25% reduction in FTEs the FDA would need, bringing the estimate to 373 FTEs. The operational costs are also reduced with proportional reductions in training as well as reductions in IT and for the independent assessment.

FDA’s proposal assumes the cost to maintain FTEs will increase by 4% per year over the course of MDUFA III and that Budget Authority appropriations will increase by only 1.5% per year during this period. FDA previously included in its resource proposal amounts necessary to cover the expected shortfall in appropriations to maintain the 1230 FTEs dedicated to the MDUFA process in FY10. Based on Industry’s feedback, FDA’s revised resource proposal only includes the expected shortfall in appropriations that would cover the 1064 MDUFA process FTEs originally projected in MDUFA II. FDA noted that the number of FTEs dedicated to the MDUFA process grew under MDUFA II as a result of unanticipated increases in Budget Authority appropriations for activities which fall within the statutory definition of the process for device review, but which do not directly support accomplishment of goals. FDA acknowledged that the issue of anticipated Budget Authority appropriation shortfall was a challenging one, but both sides need to be realistic about the level of performance the Agency can deliver if shortfalls occur. Because such a high percentage of the MDUFA process is covered by Budget Authority appropriations, even slight differences between appropriation increases and inflationary increases can result in substantial deficits for FDA.

FDA provided their plans for how additional effort would be allocated to the following items in the draft Commitment Letter: Pre-Submissions, 95% FDA goals with a follow-up program for the remaining 5%, Third Party review, Substantive Interaction, management oversight, and guidance. In response to Industry’s request, FDA provided information regarding the current distribution of the medical device review process FTEs among CDRH, CBER, ORA, and OC; the proposed distribution of new FTEs across these components of the Agency; and the overall distribution. FDA plans to allocate 90% of the new FTEs to CDRH. FDA also explained that the FTE support module, which has been used for over twenty years across all user fee programs, dictates three support FTEs for every seven direct FTEs, two of whom go to the Center and one of whom goes to OC. FDA utilized this model in their proposal, with a slight reduction in FTEs to OC. FDA also noted that they are focussed on making sure resources go where necessary to support the program so that commitments can be met.

Options for Further Cost Reductions

FDA suggested that one means of managing uncertainty with submission quantity and/or financial parameters could be a mid-course or annual “correction.” This would mitigate the risk of under/over-estimates in assumptions regarding the program. While the concept could be applied to workload within any or all submission types, establishment and registration fees, inflation, and Budget Authority shortfalls, FDA presented an example of how it could be applied to Pre-Submission workload, as this is an area associated with much uncertainty. If Pre-Submission quantity was not as high as expected by 2015, no additional FTEs would be necessary and hiring driven by Pre-Submission workload would stop at this point during the ramp up phase. If Pre-Submission quantity was higher than expected in 2015, FDA would retain additional user fee revenue from the additional submissions, up to an agreed upon ceiling, while keeping the cost of an individual Pre-Submission constant. FDA would use this revenue to hire additional FTEs to complete reviews of the additional Pre-Submissions. The goal of this framework would be to maintain a balance of workload and the resources needed to meet it. Both parties would need to agree upon objective criteria for measuring workload and any equations associated with the planned analysis.

FDA also indicated that the Third Party Review enhancements could be reduced or eliminated from the Commitment Letter for a savings of up to $8.5 million over five years. Industry stated their belief that Third Party Review enhancements would create efficiencies for FDA in terms of workload and therefore not require significant additional resources. FDA explained that efficiencies were considered in modeling resource needs; however, the Third Party program is very small and therefore the impact of efficiencies is also small and also speculative. With the development of a new SOP, FDA is already making a concerted effort within current resource levels to improve the program. Additional resources are needed for FDA to make more information available to Third Party reviewers so that they can do their job better. Industry asked if FDA believes the enhancements outlined in the Commitment Letter would fix the program and result in a net gain. FDA indicated that their proposal for net resources rather than projected savings reflects their high level of uncertainty regarding the whether the program would result in a net gain in efficiency for FDA.

FDA also noted that resources for guidance document development could be scaled back. If fewer FTEs were allocated to managing the guidance development process, fewer guidance documents would be published but user fees could be reduced. FDA explained that this proposed scale-back still reflects an improvement over current performance in guidance development.

While FDA does not favor such an approach, FDA indicated that more substantial cost savings could be realized by extending the timeline for addressing the submissions that miss FDA goals and extending the goals for average total time to decision. FDA proposed specific longer goals that could be met with a cost savings of $20 million over five years. Industry agreed with FDA that this approach is not desirable. Industry suggested revisiting MDUFA II FDA day goals. FDA replied that adopting one-tier FDA day goals was a program efficiency and FDA was not confident that goals for average total time to decision could be met with MDUFA II goals.

Industry noted that FDA’s cost proposal of $967M included adjustments to the goals letter.

Other Outstanding Issues

FDA noted that they are still working on the fee offset provision and plan to discuss it with Industry soon.

FDA also proposed changes to the Commitment Letter which did not require adding resources to FDA’s counter-proposal: BLA goals and corresponding definitions; public health and safety provisions; a reference to streamlined hiring authority; and a restructuring of the draft Commitment Letter. The public health and safety provisions reflected concerns raised by other stakeholders. FDA proposed a section on patient safety and risk tolerance. This includes implementation of guidance on the factors to consider when making benefit-risk determinations in medical device premarket review, including patient tolerance for risk, magnitude of the benefit, and the availability of other treatments or diagnostic tests. FDA also proposed to meet with stakeholder groups to receive input on the patient perspective on disease severity or unmet medical need and to implement survey instruments to assess risk tolerance for a given medical therapy to assist and guide regulatory decision making. Finally, FDA proposed to increase utilization of patient representatives as Special Government Employee consultants early in the medical product development process. FDA emphasized that these proposals are meant as a tool to better inform the program on the patient perspective.

Next Steps

FDA stated they would provide additional supporting information in response to Industry’s questions received via e-mail. Industry will consider FDA’s counter-proposal and options for further reductions.

Next Meeting

The next meeting will take place November 18, 2011.

Meeting End Time: 12:30 pm

* For purposes of these minutes only, the term industry means AdvaMed, MITA, and MDMA and does not include ACLA unless specifically noted.

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