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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, January 31, 2012

FDA - Industry MDUFA III Reauthorization Meeting
January 31, 2012, 1:00 - 2:30 pm
FDA White Oak Building 1, Silver Spring, MD
Room 2101

Purpose

To discuss MDUFA III reauthorization.

Participants

FDA
Malcolm Bertoni Office of the Commissioner (OC)
Ashley Boam Center for Devices and Radiological Health (CDRH)
Nathan Brown Office of Chief Counsel (OCC)
Kate Cook Center for Biologics Evaluation and Research (CBER)
Christy Foreman CDRH
Elizabeth Hillebrenner CDRH
Toby Lowe CDRH
David Miller Office of Financial Management (OFM)
Tracy Phillips CDRH
Don St. Pierre CDRH
Francisco Vicenty CDRH
Nicole Wolanski CDRH
Barbara Zimmerman CDRH
Industry
Hans Beinke Siemens (representing MITA)
Jen Bowman American Clinical Laboratories Association
Brian Connell Medical Imaging Technology Alliance
John Ford Abbott Laboratories (representing AdvaMed)
Elisabeth George Phillips (representing (MITA)
Donald Horton Laboratory Corporation of America Holdings (representing ACLA)
Mark Leahey Medical Device Manufacturers Association
John Manthei Latham and Watkins (representing MDMA)
Lindsay Morris Medical Imaging Technology Alliance
James Ruger Quest Diagnostics (representing ACLA)
Janet Trunzo Advanced Medical Technology Association

Meeting Start Time: 1:00 pm

FDA presented a counter proposal to Industry’s January 5, 2012 proposal. FDA’s proposal outlined a commitment letter associated with a resource level of approximately $595 million, before adjustment for inflation, over the course of five years. This includes ramping up staffing steadily over the first three years of the program, with some minor increases thereafter, while ramping up performance accordingly over the five year period of MDUFA III. The proposal reflects Industry’s feedback on an overall level of fees that the Industry associations and their members could agree on. The Agency indicated that they would have liked to see a higher level of investment in the device review program, but understood that it was necessary to scale back the expectations of what could be accomplished during this round of reauthorization. The Agency believes their proposal outlines a program that reflects substantial improvements over the current program.

The Agency’s proposal used an estimate for the base for the current program of approximately $73,540,000 in FY13, which would be adjusted for inflation in subsequent years. That base includes approximately 32 additional FTEs that FDA plans to hire before the end of MDUFA II using current user fee resources from carryover balances. The Agency estimates the enhancements in FY13 to be approximately $21,890,000 to support an average of 65 additional FTEs, bringing the total FY13 fee-based costs to approximately $95,430,000. The Agency noted that the fee proposal uses FTE averages over the course of each fiscal year to indicate the staffing ramp-up, to accurately estimate the cost for the entire year. Therefore in the ramp-up years, there will be a lower number of FTEs on board at the beginning of the year, and a higher number of FTEs on board by the end of the year when compared to the average FTEs used for cost estimation purposes within a given year..

In FY14, the Agency proposed that the average FTEs increase by 66 FTEs to a cumulative increase of 131 additional FTEs, bringing the total FY14 fee-based costs to approximately $112,170,000 before inflation adjustment. In FY15, the average FTEs would increase by 59 FTEs to a cumulative increase of 190 FTEs, bringing the total FY15 fee-based costs to approximately $127,540,000 before inflation adjustment. In FY16, the average FTEs would increase by 13 FTEs to a cumulative increase of 203 FTEs, reaching the final cumulative increase of 208 FTE by the end of the year. In FY16, the total fee-based cost would be approximately $129,990,000 before inflation adjustment. In FY17, the Agency proposed to maintain the cumulative increase of 208 FTEs throughout the year, which yields a total fee-based cost of approximately $130,330,000 before inflation adjustments. The Agency’s proposal included some additional supporting costs for the Independent Assessment, training and professional development, and IT improvements. These year-by-year totals sum to approximately $595,460,000 over 5 years before inflation adjustments.

The Agency indicated that this proposal outlined the spending pathway necessary to meet the commitments in the proposed commitment letter, and recommended to Industry that the fee revenue structure follow the same path as closely as possible to ensure that the Agency has sufficient resources in the early years, and to avoid any imbalance between fee collections and obligations in the later years. The Agency proposed using a formula for inflation adjustments that uses a 3-year average of payroll & Consumer Price Index - Urban (CPI-U) for the Washington, DC area. The Agency proposed a maximum increase of 4% in any given year for inflation adjustments.

The Agency’s proposed commitment letter includes features, which were discussed by the Agency and Industry throughout the course of these negotiations, that are intended to improve the device review program. The process improvements in the Agency’s proposal include implementing a more structured process for managing Pre-Submissions, and have included details about that process in the commitment letter. While earlier discussions included specific timelines and goals for different steps in the Pre-Submission process, those have been removed in the Agency’s current proposal because the resource level in the proposal does not include increased resources specifically dedicated to the Pre-Submission process. The Agency recognizes that the additional user fee resources will benefit the program overall, and that the base resources contribute to the Pre-Submission process; however, the fee proposal of $595 million plus inflation does not allocate any additional FTEs specifically to the Pre-Submission process. The Agency proposed to make the indicated improvements using base resources, indicating in the proposed commitment letter that the Agency will improve the Pre-Submission process as resources permit.

Another process improvement included in the Agency’s proposal, Submission Acceptance Criteria, is intended to ensure that FDA is only reviewing complete submissions, and outlines the Agency’s commitment to implement revised submission acceptance criteria. The Agency proposed that they will publish guidance outlining the objective criteria for revised “refuse to accept/refuse to file” checklists, and also proposed to include draft statutory language that would mandate inclusion of an electronic copy (e-Copy) with all MDUFA submissions. Additionally, the Agency indicated its continuing commitment to utilizing Interactive Review during the premarket review process. The Agency proposed to apply user fee revenues to improve the guidance document development process. The Agency supports reauthorization of the Third Party Review program. Although different proposals for specific improvements to the Third Party Review had been considered earlier in the negotiations, the Agency’s current resource proposal does not include resources specifically allocated to improving the Third Party Review program, so the Agency proposed to improve the program as current resources permit.

The Agency’s proposal included a provision for Patient Safety and Risk Tolerance, outlining steps the Agency intends to take regarding benefit-risk determinations and input from the patient perspective.

In addition to process improvements, the Agency’s proposal outlined Review Performance Goals for various submission types. The PMA goals include Substantive Interaction goals and MDUFA decision goals for Original PMA submissions and 180-Day PMA Supplements. The Substantive Interaction goal requires a substantive interaction with the applicant within 90 calendar days of filing. The percentage of submissions required to meet this goal ramp up from 65% in FY13, 75% in FY14, 85% in FY15, to 95% in FY16-17.

The MDUFA decision goals differ for Original PMA submissions that do and do not require Advisory Committee (panel) input. For Original PMA submissions that do not go to panel, the goal is to reach a MDUFA decision within 180 FDA days, with a single target that ramps up from 70% of submissions received in FY13, to 80% in FY14-15, to 90% in FY16-17. For Original PMA submissions that do go to panel, the goal is to reach a MDUFA decision within 320 FDA days, and the target ramps up from 50% of submissions received in FY13, to 70% in FY14, then 80% in FY15-16, reaching 90% in FY17. The Agency’s proposal also outlines interactions that the Agency will have with the applicant for any Original PMA submission review that extends beyond the goal, which FDA proposed as an alternative to the previous two-tier goal structure.

For 180-Day PMA Supplements, the Agency’s proposed goal is to reach a MDUFA decision within 180 FDA Days, with a single target that ramps up from 85% in FY13, to 90% in FY14-15, to 95% in FY16-17. Real-Time PMA Supplements have a proposed goal of reaching a MDUFA decision within 90 FDA Days, with the single target ramping up from 90% in FY13-14 to 95% in FY15-17.

The Agency’s proposed goals for 510(k) submissions include Substantive Interaction within 60 calendar days of receipt, ramping up from 65% in FY13, 75% in FY14, 85% in FY15, and 95% in FY16-17. The proposal indicates that a MDUFA decision should be issued within 90 FDA days for 510(k) submissions, ramping up from 91% in FY13, 93% in FY14, to 95% in FY15-17. The proposal also outlines interactions that the Agency will have with the applicant for any 510(k) submission review that extends beyond the goal.

The Agency’s proposal incorporated goals for CLIA Waiver applications. Additional resources have not been included in the MDUFA package for CLIA Waiver applications, but the Agency intends to implement these goals within current resources. The goals include a Substantive Interaction within 90 days for 95% of applications, a decision within 180 FDA days for 95% of CLIA waiver applications that do not go to panel, and a decision within 330 FDA days for 95% of CLIA waiver applications that do go to panel. The goals also include a goal to reach a decision within 210 FDA days for 90% of dual 510(k) and CLIA waiver submissions, although the Agency does not believe this is the most efficient way to review submissions and does not encourage this pathway. The Agency included this goal due to the interest expressed by Industry, but indicated that the pilot program that FDA conducted demonstrated that the dual submission is not an efficient process.

The Agency’s proposal includes goals for Biological Licensing Applications (BLAs) and their supplements that remain at previous goal levels. Specifically, original BLA and BLA efficacy supplement goals, similar to PDUFA goals, state that FDA will review & act within 10 months of receipt for 90% of standard submissions and within 6 months of receipt for 90% of priority submissions. For original BLA and BLA efficacy supplement resubmissions, FDA will review and act within 2 months for 90% of Class 1 resubmissions and within 6 months for 90% of Class 2 resubmissions. Additionally, FDA will review and act within 4 months of receipt for 90% of BLA manufacturing supplements requiring prior approval. The BLA goals were not included in the MDUFA II commitment letter, although BLA user fees were included in the MDUFA II statute and were collected during MDUFA II. Both FDA and Industry have acknowledged that the omission from the MDUFA II commitment letter was an oversight that we are correcting in MDUFA III. FDA has been adhering to those goals during MDUFA II, even though they weren’t in the commitment letter.

The Agency’s proposal included Shared Outcome Goals that outline the joint commitment of FDA and industry to reduce the average Total Time to Decision for PMA applications and 510(k) submissions. The Agency proposed that they would report the average Total Time to Decision on an annual basis. Shared outcome goals proposed for PMAs are 395 calendar days beginning with FY13 submissions, 390 calendar days beginning with FY15 submissions, and 385 calendar days beginning with FY17 submissions. Shared outcome goals proposed for 510(k)s are 135 calendar days beginning with FY13 submissions, 130 calendar days beginning with FY15 submissions, and 124 calendar days beginning with FY17 submissions. The proposed definitions of these measures are based on a “trimmed mean,” so that the results of FDA’s and Industry’s joint efforts to improve program outcomes can be judged based on the majority of the submissions, without the results being skewed by a small number of outliers. For 510(k)s, the Average Total Time to Decision would be calculated by excluding the highest 2% and lowest 2% of values, and the cohort would be considered closed when 99% of the submissions have reached a MDUFA decision. For PMAs, the Average Total Time to Decision would be calculated by excluding the highest 5% and lowest 5% of values, and the cohort would be considered closed when 95% of the submissions have reached a MDUFA decision.

The Agency’s proposal includes infrastructure improvements, including the Agency’s intent to increase scientific and regulatory review capacity, improve training, and continue improvements on its IT systems. The Agency intends to seek statutory authority for streamlined hiring. The Agency’s proposal includes an Independent Assessment that will provide a comprehensive assessment of the process for the review of device applications. The FDA is proposing to incorporate findings and recommendations of the independent assessment into its management of the premarket review program. The Agency is also proposing to report its progress throughout MDUFA III through quarterly and annual reporting. At Industry’s request, the proposed reporting structure includes significantly increased granularity over the reporting provided during MDUFA II.

The Agency noted that they estimated the resources to accomplish this commitment letter based on historical workload data and a projection of budget authority appropriations. If workload changes significantly from the current assumptions, or if BA is substantially different from the current assumptions, the Agency notes that it will be more challenging for FDA to meet these performance goals. However, FDA emphasized their commitment to meeting these goals.

The Agency believes there should be better mechanisms to account for workload and sees this issue as affecting both the Agency and Industry. Industry had expressed some concern about whether policy changes like the 510(k) modifications guidance could increase workload. FDA, on the other hand, is very concerned about other policy changes beyond their control that could increase workload, such as device legislation under consideration by Congress. FDA is concerned that, to the extent some of those bills have provisions that are squarely within the scope of these negotiations, there is a risk that those legislative proposals could confound the provisions in the Commitment Letter that FDA and Industry have so carefully worked out over the past year. The Agency expressed their hope that all parties to these negotiations remain committed to the program that we have worked out jointly here, consistent with the ground rules. The Agency wants to avoid a situation where the Agency’s attention and resources are diverted to activities that conflict with these provisions, which could make it more difficult to achieve the goals we have agreed to, and could introduce a variety of negative unintended consequences.

Industry requested additional granularity on the breakdown of resources for IT enhancements, noting that they did not intend for those resources to be used towards preparations for future implementation of e-Submissions. The Agency clarified that Industry’s feedback on this matter had been incorporated, and the IT resources would be focused on IT improvements to increase efficiency of FDA reviewers, such as enhancing the ability to do electronic reviews based on e-Copy and enhanced dashboards to improve management of the program. The Agency also anticipates that the Independent Assessment will identify IT improvements to enhance the program, and will require resources to implement these improvements. The Agency will also need to update the IT system to track the restructured goals and to implement the enhanced reporting included in the proposal. The proposed resources will go to overall IT improvements to improve efficiency through the program.

Industry also requested additional granularity on the breakdown of the 208 FTEs across the Agency. The Agency indicated that the overwhelming majority of the FTEs would go to ODE and OIVD and that the proposed breakdown is an estimate that could be altered as actual needs are presented throughout the course of MDUFA III, but the intent is to keep the majority of the additional FTEs in ODE and OIVD. The proposal includes a ramp up to 208 FTEs by the end of the program, and the distribution will ramp up proportionally. Of the 208 FTEs, 129 are intended to go to ODE, 52 to OIVD, 14 for CDRH support functions, 4 to CBER, and 9 for Office of the Commissioner support.

In response to the Agency’s proposal, Industry indicated that they appreciate the efforts that went into putting forth this counter proposal and that it represents a lot of work over the past year. Industry highlighted some aspects of the proposal that they believe makes it an attractive package. Industry indicated appreciation for the Agency’s commitment to meeting the goals outlined in the proposal, and emphasized their belief that the increased resources, coupled with the enhancements outlined in the Commitment Letter, will benefit the program as a whole. Industry also noted that the Pre-Submission guidance document and the more structured process should provide more predictability, consistency, and transparency, and that if FDA’s efforts related to 510(k) reform and its “New Science” initiative were successful in making the premarket review process more transparent and predictable, Industry would expect to see a decrease in Pre-Submissions over time. Industry noted that it believed the recent increase in Pre-Submissions has been driven in part by applicant uncertainty regarding FDA requirements. Industry indicated that they appreciate the discussions on submission acceptance criteria, and emphasized that the agreement is to improve upon the checklist with objective criteria, and not to expand it to include subjective criteria. Industry indicated the importance of making sure risk-benefit is understood from a patient perspective, particularly from patient groups that represent a specific disease state. Industry emphasized the intent that the Shared Outcome Goals should be met without limiting interactions or reducing the time that applicants have to respond to questions from the Agency. Industry also indicated that they believe the Independent Assessment will be of value to both the Agency and Industry. Industry emphasized the importance of looking at the goals in totality as designed to achieve a common goal, specifically the shared outcome goal of reducing average total time to decision for both 510(k)s and PMAs, and of looking at the reporting data in a cooperative manner to identify ways to continually improve the program.

The Agency and Industry agreed that the focus on qualitative enhancements should improve consistency, predictability, and transparency. The Agency indicated their belief that the investment in additional resources is also one of the more important aspects of this proposal, and appreciates Industry’s investment. Industry indicated that they believe this significant infusion of resources, coupled with the focus on qualitative goals, should put the program on solid footing moving forward. Industry also stated that given MDUFA II provided resources to maintain the FTE count from MDUFA I and that MDUFA III represents a sizeable increase of 240 FTEs from current levels, FDA should not expect this type of significant resource increase under MDUFA IV. The Agency stated that they have some concerns about how solid a financial footing this agreement establishes, given that there are a lot of uncertainties about how much effort will be required to meet the goals, and that in order to bring the proposal to a level that Industry could agree to, FDA had to take away any margin of error. Nonetheless, FDA expects that the Independent Assessment and increased diagnostics built into the MDUFA III proposal will help the agency continue to improve efficiencies within the program and will also provide valuable information for the MDUFA IV discussions.

AdvaMed, MDMA, and MITA indicated that FDA’s proposal is a good proposal that they can recommend to their ratifiers. ACLA indicated that they will not support an agreement unless they receive written assurance that Laboratory Developed Tests (LDTs) will be exempted from user fees during the course of MDUFA III.

The Agency indicated their desire to get feedback on this proposal and to move forward with the next steps for completing negotiations on the fee structure and statutory language.

Next Meeting

The next meeting will take place February 7, 2012.

Meeting End Time: 2:30 pm