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Medical Devices

Minutes From Negotiation Meeting on MDUFA III Reauthorization, February 14, 2012

FDA – Industry MDUFA III Reauthorization Meeting
February 14, 2012, 8:30 am – 10:15 am
Teleconference

Purpose
To discuss MDUFA III reauthorization.

Participants

FDA
Malcolm BertoniOffice of the Commissioner (OC)
Ashley BoamCenter for Devices and Radiological Health (CDRH)
Nathan Brown           Office of Chief Counsel (OCC)
Kate CookCenter for Biologics Evaluation and Research (CBER)
Elizabeth HillebrennerCDRH
Toby LoweCDRH
David MillerOffice of Financial Operations (OFO)
Thinh NguyenOC
Don St. PierreCDRH
Nicole WolanskiCDRH
Industry
Susan Alpert  Medtronic (representing AdvaMed)
Jen BowmanAmerican Clinical Laboratories Association
Brian ConnellMedical Imaging Technology Alliance
John FordAbbott Laboratories (representing AdvaMed)
Donald HortonLaboratory Corporation of America Holdings (representing ACLA)
Mark LeaheyMedical Device Manufacturers Association
Joseph LevittHogan Lovells US LLP (representing AdvaMed)
James RugerQuest Diagnostics (representing ACLA)
Patricia ShraderMedtronic  (representing AdvaMed)
Janet TrunzoAdvanced Medical Technology Association

Meeting Start Time:  8:30am

FDA presented a proposal for revised legislative language that reflected Industry’s1 February 10, 2012 proposed fee structure and additional changes. 

The definition of an “establishment subject to registration fee” was modified to eliminate exemptions for certain registrants under MDUFA II.

The PMA fees were updated to reflect Industry’s proposal.  The premarket notification submission fees were updated to reflect Industry’s proposal that 510(k) fees be 2% of the PMA fee rather than the current 1.84%.  The total annual revenue amounts were updated to reflect annual collections outlined in Industry’s proposal.  Under the proposed fee structure, collections slightly exceed estimated expenditures in fiscal years 2013 and 2014, then expenditures slightly exceed collections in the remaining three years, so that the total collections and total expenditures balance out over five years.  During the later years where expenditures exceed collections, carryover balances from the first two years are used to make up the year-by-year difference between expenditures and collections.  Industry asked if the statute should specify the Agency’s ability to spend carry-over balances in future years.  FDA replied that the current statutory authority and the annual appropriation laws have handled user fees in a way that allows FDA to carry forward appropriated but unused funds so that they are available to be spent in subsequent years; this is a feature typical of FDA’s medical product user fee programs.

For consistency with other user fee programs already cleared by OMB, FDA proposed new language regarding timing of payments of fees which clarifies that the payment of user fees is subject to an appropriation.  In response to questions from Industry, FDA confirmed that continuing resolutions are considered appropriations for this purpose, and that unearned revenue (which is caused by payment of fees without submission of a corresponding application) can be carried over to the following year (i.e., when the application may ultimately be submitted) but cannot be used until there is a corresponding submission.  

FDA proposed legislative language for fee adjustments for inflation and to ensure fees do not exceed or fall below authorized levels due to, for instance, potential shifts in the number of facility registrations.  As agreed upon on February 8, 2012, an annual inflation adjustment will be made with 60% weighted towards the three-year average of payroll costs and benefits, and 40% weighted towards the three-year average consumer price index for urban consumers (CPI-U) for the Washington, DC area.  Per Industry’s proposed fee structure, the inflation adjustment will be applied proportionally to all fee types.  FDA proposed allowing for a further annual adjustment of the registration fee to achieve the specified annual revenue and minimize under/over-collections.  

FDA proposed giving the Secretary authority to grant, at the Secretary’s sole discretion, a waiver from or a reduction of fees if the Secretary finds that such waiver or reduction is in the interest of public health.  FDA explained the rationale for this provision as follows.  At the end of 2010, FDA invited the American Clinical Laboratory Association (ACLA) to participate in MDUFA III negotiations, and ACLA accepted.  FDA is revisiting its general policy of exercising enforcement discretion towards many laboratory developed tests (LDTs) and considering publishing draft guidance on this matter.  In the course of MDUFA negotiations, ACLA indicated that it would not support any agreement that subjects additional LDTs to user fees.  FDA has repeatedly indicated that it expects that any changes to the Agency’s policy of enforcement discretion concerning LDTs would have a minimal impact on the amounts of medical device user fees paid by LDT sponsors during MDUFA III; such a change in policy would likely take a risk-based, phased-in approach.  If FDA is granted the proposed statutory authority to waive fees in selective instances, FDA intends to exercise that authority to ensure that no additional LDTs or laboratories would be subject to user fees during MDUFA III due to implementation of the regulatory framework under consideration or due to other changes in policy on LDTs.  FDA noted that MDUFA user fees would continue to apply to those already listed LDTs for any laboratories already registered and to any additional laboratories who decide voluntarily to register as manufacturers or to seek premarket approval or clearance for their tests under existing policy.  FDA offered this proposal in an attempt to satisfy ACLA’s concerns and obtain their support of the final agreement. 

ACLA affirmed that this proposal is acceptable and that they would support the final agreement with its inclusion.  Other members of Industry indicated concern with the proposal, suggesting that the provision is unnecessary given the existing waiver for small businesses.  Industry also noted their concern that use of the waiver could throw off the balance of resources and commitments achieved in this agreement.  FDA replied that they took any potential planned policy change for LDTs into account in their overall assessment of workload.  As such, FDA stated that this provision and any policy around LDTs will not be a basis for FDA to miss performance goals.  Industry indicated their need to discuss the proposal and provide a formal response, but suggested that FDA consider a revised proposal with a cap on waived fees/submissions, and a statement that submissions for which fees are waived under this provision not be subjected to the applicable quantitative performance goals.  ACLA expressed concern about their submissions not being reviewed in a timely manner.  ACLA further explained that they are also regulated by and pay fees to CMS.  FDA noted the substantial disagreement surrounding their proposed fee waiver provision. 

FDA proposed legislative language that reflects Industry’s request to update the appropriations trigger using fiscal year 2009 as a baseline. 

FDA proposed new legislative language to require submission of an e-copy once final guidance is issued; and to provide FDA with streamlined hiring authority in the first three years of the program. 

FDA proposed updating the sunset clause to reflect that the program is effective through October 1, 2017.  FDA also proposed a five year reauthorization of the Third Party Review program. 

FDA noted that their proposed legislative language presented in this meeting is undergoing concurrent review by HHS and also will need to be cleared by the Office of Management and Budget. 

Next Meeting

The next meeting will take place February 16, 2012.

Meeting End Time:  10:15 am

 

1For 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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