Minutes From Negotiation Meeting on MDUFA III Reauthorization, December 6, 2011

FDA - Industry MDUFA III Reauthorization Meeting
December 6, 2011, 9:15 - 10:00 am
Teleconference

Purpose

To discuss MDUFA III reauthorization.

Participants

Meeting Start Time: 9:15 am

Industry presented a counter-proposal to FDA’s November 29, 2011 proposal. Industry assumed a 2.24% annual inflation rate throughout MDUFA III, based on the MDUFA II 5-year average from FY2008 through FY2012. FDA clarified that their assumption for the Agency’s 3% annual inflation rate was based on a 3-year average from 2008 to 2010 that represented what the Agency expects will be the long-term average, because the recent federal salary freeze is not likely to last for another five years. Industry clarified it was simply basing its inflationary projection of the next five years on the experience of the previous 5 years and was not relying on any particular subset. Industry also assumed the FY2012 collections prior to offset ($67 million) as a baseline. Based on these assumptions, Industry proposed a user fee package of $447 million over five years. Industry estimated that this would account for 26% of the medical device review budget in FY2017 if budget authority appropriations increase by 1.5% annually throughout MDUFA III. Industry believes that these additional resources would allow FDA to achieve the goals outlined in the commitment letter. Industry noted their proposals for additional funding for IT and training were placeholders pending their evaluation of additional information from FDA about the details of how the funding would be used.

Industry proposed revised criteria for additional funding, which represent a hybrid of their November 18, 2011 and FDA’s November 29, 2011 proposals. If specific criteria related to review performance are met during FY2012 and FY2013 based on analysis of data on performance through March 31, 2014, an additional $38 million would be provided over the last three years of MDUFA III. The specific criteria that Industry proposed must be met for this additional funding are: FDA must meet or be on track to meet MDUFA II goals for the FY2012 receipt cohort; 93% of 510(k)s received in the first six months of MDUFA III must receive an FDA decision within 90 days; the average total time to decision for 510(k)s must show a trend of improvement in monthly decision cohorts; the average total time to decision for 510(k)s received in the first six months of MDUFA III must be ≤123 days; and the Pre-Submission and substantive interactions goals must be met for the full FY2013 receipt cohort and first half of the FY2014 receipt cohort. FDA requested clarification regarding the criterion related to the total time goal for 510(k)s and whether that meant that if FDA reduces their time, but industry increases its average time, and therefore the total time goal is not met, FDA would not receive the additional funding. FDA noted their concern with being held accountable for part of the outcome that they do not control. Industry explained that if FDA was meeting its goals, including refuse to accept/refuse to file and early signaling of data requirements through Pre-Submission meetings, Industry believes that applicant times would also come down. FDA also noted that it may be difficult to meet the full FY2014 targets on the first half of the receipt cohort given that additional FTEs would be brought on throughout the fiscal year, and only a portion of those FTEs would be available to contribute toward meeting the goals in the first 6 months of the year.

There was discussion regarding how FDA should spend additional MDUFA II funds that are available because of reduced costs due to lower than expected inflation. FDA indicated they are planning to apply such user fee funds to hiring additional FTEs during the remainder of MDUFA II, but only if an agreement is reached that ensures FDA’s ability to maintain those FTEs throughout MDUFA III.

FDA noted that Industry and the Agency remain far apart regarding an appropriate level of resources to support the draft Commitment Letter. FDA indicated that they have conducted thorough analyses of what is needed to meet the draft Commitment Letter and therefore any counter-offer would not differ significantly in resource needs from what they have previously presented. Industry restated their position that the draft Commitment Letter should not be changed to reduce resource needs. Both sides expressed concern with how long it is taking to reach agreement on appropriate funding levels but pledged to continue to look for ways to close the gap.

Meeting End Time: 10:00 am