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U.S. Department of Health and Human Services

Medical Devices

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Minutes from Stakeholder Meeting on MDUFA III Reauthorization, December 20, 2011

Stakeholder Meeting on MDUFA III Reauthorization
December 20, 2011, 1:30 - 2:30 PM
Teleconference

Purpose

To provide a status update of the ongoing MDUFA III negotiations.

Participants

FDA
Malcolm BertoniOffice of the Commissioner (OC)
Nathan BrownOffice of Chief Counsel (OCC)
Kate CookCenter for Biologics Evaluation and Research (CBER)
Sheryl KochmanCBER
Toby LoweCenter for Devices and Radiological Health (CDRH)
Michelle McMurray-HeathCDRH
Barbara MyklebustCDRH
Francisco VicentyCDRH
Ruth WatsonOffice of Legislation (OL)
Stakeholders
Alexandra BennewithUnited Spinal Association
Cynthia BensAlliance for Aging Research
Paul BrownNational Research Center for Women & Families
Susan M. CampbellWomenHeart: The National Coalition for Women with Heart Disease
Suzanne HenryConsumers Union
Cathy HillAmerican Association of Neurological Surgeons/ Congress of Neurological Surgeons
Jeanie KennedyAmerican Academy of Orthopaedic Surgeons/ American Association of Orthopaedic Surgeons
Lisa McGiffertConsumers Union
Martha NolanSociety for Women’s Health Research
Kate RyanNational Women’s Health Network
Additional Registered Stakeholders
Darby HullConsumer Federation of America
Jenny LiljebergAmerican Society of Cataract and Refractive Surgery
Rebecca O’ConnorParkinson’s Action Network
Lisa PhelpsNational Organization for Rare Disorders
Andrew SperlingNational Alliance on Mental Illness
Cindy TomlinsonAmerican Society for Radiation Oncology

Meeting Start Time: 1:30 PM

Update on Negotiations

FDA reviewed the status of negotiations with Industry. FDA and Industry continue to meet frequently to discuss financial aspects of the proposal. FDA presented a counter proposal on November 29 th which took into consideration newly available FY 2011 actual cost data. Actual costs were lower than FDA’s previous assumptions and therefore the proposal cost was lowered. These and other financial assumptions were discussed further in subsequent meetings. Given the uncertainty associated with estimates over a five year program, FDA is proposing adjustments regarding inflation and workload. FDA has proposed utilizing the same basic inflation adjuster used in PDUFA, wherein annual adjustments are made based on the three year average of payroll costs and benefits and the latest CPI-U for the Washington, DC area. Thus far, there is a substantial gap between Industry’s financial proposals and what FDA believes would be needed to fund the goals and commitments in the draft Commitment Letter. FDA continues to work with Industry to examine underlying assumptions and explain their estimate of resource needs. FDA remains hopeful that agreement will be reached soon.

Discussion

Stakeholders asked when FDA anticipated reaching agreement and if a package would be delivered to Congress by January 15, 2012. FDA noted their commitment to work diligently towards an agreement.

Stakeholders commented on some elements of the draft Commitment Letter that were shared at the November stakeholder meeting. Specifically, stakeholders were disappointed to see that Industry does not appear to support investing in post-market activities. Stakeholders asked if Industry was supportive of improved infrastructure and training. FDA replied that Industry has indicated willingness to support some training and IT improvements. Stakeholders asked FDA to clarify the intent of stakeholder input on guidance document development. FDA replied that this would include all stakeholders, including patients, consumers, Industry, and the public.

Stakeholders asked about Industry’s financial proposals and FDA’s financial proposals. FDA identified three general areas of disagreement in financial discussions: the base of the MDUFA II program (i.e., the amount needed to maintain the FTE currently supported by Industry under MDUFA II); how much effort (measured in FTE) is needed to accomplish the performance improvements outlined in the draft Commitment Letter; and, the appropriate “fully loaded” cost per FTE. FDA has attempted to take a data driven approach to estimating the level of effort needed to accomplish the proposed goals. Industry has asked FDA to consider additional efficiencies, but FDA believes they have fully considered efficiencies and the Agency’s financial projections have come down somewhat to reflect that additional consideration. FDA used a method of determining the cost of a fully loaded FTE that has been used by all user fee programs, including previous MDUFA programs. FDA acknowledged that the cost per FTE has gone up more quickly over the course of MDUFA II due to increased operating costs at White Oak, homeland protection presidential security directives, and improved IT infrastructure. Stakeholders asked why costs are not stratified by Center rather than FDA as a whole. FDA replied that doing so would not lower the costs in this case, as the average payroll costs in CDRH and CBER are higher than that for FDA as a whole. Additionally, FDA-wide costs per FTE are more stable than Center-level costs, and have proven to be good predictors. In response to a stakeholder question, FDA clarified that the FY 2011 average fully loaded cost per FTE was $253,153.

Stakeholders asked if there are any other points of contention besides those relating to FTEs. FDA emphasized the need to reach agreement on how much effort it would take to meet the goals in the draft Commitment Letter. FDA has used the best information available, and applied professional judgment based on experience with the program to date. While Industry may disagree with aspects of FDA’s estimates, FDA believes the Agency’s resource estimates have been refined to the point that no further reductions can be made, given the current set of performance commitments being proposed. If the parties cannot reach agreement on the user fee levels to support the current draft Commitment Letter, the goals may need to be modified to match the level of funding that Industry will support.

Meeting End Time: 2:30 PM