Medical Device User Fee and Modernization Act (MDUFMA II) - Legislative Recommendations (April 30, 2007)| Goals for PMAs, Panel-track PMA Supplements, and Premarket Reports | Review Time Goal | Performance Level | |||||
|---|---|---|---|---|---|---|---|
| FY03 | FY04 | FY05 | FY06 | FY07 | |||
| Decision | Make an “FDA decision” | 320 days |
No Goal | 80% | 90% | ||
| Cycle | Issue a “major deficiency” letter as the first action |
150 days | No Goal | 75% | 80% | 90% | |
| Issue all other first actions | 180 days | No Goal | 75% | 80% | 90% | ||
| Issue a “major deficiency” letter as the second or later action | 120 days | No Goal | 75% | 80% | 90% | ||
| Act on an amendment containing a complete response to a “major deficiency” or “not approvable” letter | 180 days | No Goal | 75% | 80% | 90% | ||
| Act on an amendment containing a complete response to an “approvable” letter |
30 days | 90% | |||||
Comparison of Quantitative Decision Goals in MDUFMA I and II
| MDUFMA I | MDUFMA II |
|---|---|
| PMA Final Decision Goals | |
| 50% of PMAs and panel track PMA supplements in 180 days | 60% of PMAs and panel track PMA supplements in 180 days |
| 90% of PMAs, panel-track supplements, premarket reports in 320 days | 90% of PMAs and panel track PMA supplements in 295 days |
| NA | 50% of expedited PMAs and expedited panel track PMA supplements in 180 days |
| 90% of expedited PMAs in 300 days | 90% of expedited PMAs and expedited panel track PMA supplements in 280 days |
| Modular PMA Goals | |
| NA | 75% of PMA modules in 90 days |
| NA | 90% of PMA modules in 120 days |
| 510 (k) Goals | |
| 80% of 510(k)s in 90 days | 90% of 510(k)s in 90 days |
| NA | 98% of 510(k)s in 150 days |
| 180-Day PMA Supplement | |
| 90% of 180-Day PMA supplements in 180 days | 85% of 180-Day PMA supplements in 180 days |
| 95% of 180-Day PMA supplements in 210 days | |
| Real-Time PMA Supplements | |
| NA | 80% of Real-Time PMA Supplements in 60 days |
| 90% of Real-Time PMA Supplements in 90 days | |
| BLA Goals | |
| 90% of BLAs in 10 months | Same as MDUFMA I |
| 90% of BLA supplements in 10 months | |
| 90% of BLA resubmissions and BLA supplement resubmissions in 2 months | |
DR. SHUREN: Well, again, welcome everyone. What I'd like to do is to give you a little bit of background on MDUFMA, walk you through the proposed legislative recommendations we put out in a Federal Register notice, and then talk to you about the next steps we'll take to finalize those recommendations before we send the final package over to Congress for their consideration.
So, MDUFMA I, the goals here were to develop a sustainable review program to increase predictability in review times and increase timeliness in the review process. And the overall goal was to get safe and effective medical devices to patients and practitioners more quickly.
Critical here is that the FDA standards do not change. What MDUFMA is about is providing additional resources to the agency to make improvements in its review process. But the review standards do not change. Now MDUFMA I was amended, a big amendment in 2005 called MDUFSA, another acronym. But what I want to do is just give you the basic mechanics of what the law looks like today and then tell you about some of the challenges we've encountered and what our recommendations are to address those challenges.
So first off, what MDUFMA does is it gives the agency additional resources through appropriations and user fees. And right now, about 83 percent of the costs of our device review program are covered by appropriations, and 17 percent of it comes from user fees. The historical experience in our appropriations has been that they've gone up for the device program at an annual rate of about 3-1/2 percent each year. And user fees under MDUFSA got locked in at an increasing rate of 8-1/2 percent for 2006 and 2007. MDUFMA provided a variety of fee waivers and fee discounts for small businesses, and we'll come back to that in a few minutes. There were also some other waivers that anyone can take advantage of, such as if you are manufacturing a device for a pediatric indication.
There are triggers that actually require that the agency receive a certain amount of money and that the agency spend a certain amount of money on device review and inspection to keep the program going. There are many performance goals. As you heard from Dr. Schultz, it was fairly complex. We had 77 quantitative goals and eight qualitative goals. MDUFMA created a third-party inspection program for surveillance inspections for good manufacturing practices. There were a number of provisions that pertain to the reprocessing of single-use devices, and it created an Office of Combination Products.
You can think about MDUFMA I as ramping up the program. Essentially it was about increasing the size of the review program through an increasing amount of resources, funding provided to the agency, and in return there would be improved timeliness of review. And, in fact, the goals for MDUFMA I got progressively more challenging.
In MDUFMA II, now that we've built up that critical mass, the plan for MDUFMA II is to maintain a stable program, ensure there are adequate resources to keep the program that we have today in 2007. We would continue to have improved performance, and we would essentially fine tune the user fee program.
The key challenge from FDA's perspective is that the performance goals have been complex, and they've had some unintended consequences. And I'll walk you through that in just a minute. The third-party inspection program has not been the success we would like for it to have been. And the agency currently lacks predictable and stable user fee funding. So to address that, the goals that the agency had walking into reconsideration of MDUFMA were to simplify the performance goal structure, to make the third-party program workable, and to provide adequate and predictable funding for FDA to maintain a stable device review program.
So our recommendations for legislation, as you'll see in the Federal Register notice we put out just about two weeks ago, cover performance goals. They're broken out into quantitative and qualitative. We address funding through user fee revenues, the amount we get, and the user fee structure, how those fees are actually apportioned. There are some additional small business fee reductions, and there are some recommendations for changes in the third-party inspection program.
We think MDUFMA II will have some very important benefits to the public health. First off, patients and practitioners will have access to safe and effective medical devices more quickly. And we'll get there through continued improvement in device review times, as well as greater transparency in the review process. We plan to be a lot more open about what we are doing, to the entire public, not just to industry.
MDUFMA II will also give the agency the resources it needs to maintain cutting-edge scientific expertise necessary to provide the timely review, and to ensure the safety of increasingly complex devices of tomorrow, because also the funding we talk about of an appropriations does not just go for device review. It's also for device safety. It goes for the whole program. In fact, the scope of MDUFMA covers a variety of device safety activities. So we'll get there through adequate and stable funding for the agency.
And then lastly, MDUFMA II would allow the FDA to better focus its inspectional resources on the higher-risk devices, and we would get there by enhancing our third-party inspection program.
So let me first turn to the performance goals. This chart is just to give you a flavor of what we've been dealing with. Current performance goals fall into two buckets. There are decision goals. That's what we decide at the very end of the day. For example, are we going to approve an application or not approve it? And then there are cycle goals. Those are sort of interim steps along the way. For example, if we send out a formal request for more information, if it's for a pre-market approval application, those are the applications for the higher-risk, more complex devices, we would send out a major deficiency letter. So there's actually a goal for when we would send out that letter. That's a cycle goal.
And the problem we ran into with these is that by focusing on trying to meet the cycle goals, sometimes that interfered with our ability to have a back and forth, an interaction, with the sponsor, try to work out some of the information requests we needed, some of the additional analysis we may need, in a more informal way. And in an effort to meet those cycle goals, we really cut down on that interaction. We don't think that that was very productive -- something we want to change in MDUFMA II. Also because there are so many goals we're trying to focus on, we're really missing the big picture, which is ultimately the decision goals, because that's what makes the difference for timely review.
So what we are proposing is the following: First off is continued improvements with current staffing. How do we get there? Well, MDUFMA I, as I mentioned, was about building up the program, bringing on more people. Well now those people have been on board, they have been trained, and so we now have a very well tailored, very expert set of staff, and we expect to see now return on the investments we've made in MDUFMA I. We'll also continue to put in place efficiencies through investments in our IT systems and other actions we would take.
For the goals themselves, first off, we'd eliminate the cycle goals. Secondly, we're going to create two-tiered decision goals, one goal that's earlier on, meaning that we'll make a decision within a certain number of days on a certain percent of those applications, and then a later goal, which is that we'll make a decision on a greater number of those applications at a later time. And lastly, there are some new goals for application types for which they weren't goals in the past.
What I've put up here, this is actually up on our website, so I'm not going to walk you through all the goals. I just want to highlight a few things. There's a comparison between MDUFMA I and MDUFMA II, and you'll see, some of these there were no goals in MDUFMA I and now there are new ones in MDUFMA II. But I just want to point out on the right side here, for example, you'll see some of these are a lot tougher than we had before. Three lines down you'll see for expedited PMAs that we would make a decision 50 percent of the time in 180 days. This goal wasn't there before. Before, we treated all PMAs the same.
Expedited PMAs are the ones for the most innovative devices. They're also often the most complex devices. But because they're the ones we know the least amount, they often take the most amount of work. But we're still going to try to make a decision in 180 days 50 percent of the time, and for the later goal, we're actually moving that down from 90 percent and 300 days to 90 percent and 280 days. And as you start to shave off more time, it becomes more and more challenging to get there, but we do think with the staff we have on board we can do that.
The other thing I want to point out on the goal here on 180 day PMA supplements, it may look a little confusing. The FDA is going from 90 percent making a decision 180 days to 85 percent? Doesn't it look like performance is getting worse? Well, the original goal was actually a combination of a decision goal and a cycle goal, and we're changing this so that the goal right now is only a decision goal. There's nothing really interim about it.
So in the past, if we would sort of ask for more information, we'd have to do that by essentially, if the supplement was incomplete, by making it not approvable. And in essence, we're resolving that issue now. We will go out and now put out a major deficiency letter, so the process would continue along, and the only thing we get credit for is making that final decision based on all the information. So we do think it is a more challenging goal.
For the qualitative goals, they break down as I've listed them here on the slide, and I'll just walk you through them very quickly. I talked a minute before about how in MDUFMA I, it was much more challenging to have informal interactions with the sponsor. And we think it is important to have that kind of dialogue because there may be a number of issues we can work out with a phone call or an e-mail rather than having to send a formal request for information. And that's what interactive review is. In fact, we'll put a guidance to lay out our thoughts in terms of how interactive review would actually be conducted.
Maintenance of performance means that for those activities where we don't have a goal, we will continue to at least maintain our current performance. Certainly, no one's going to be upset if we do better.
Guidance document development. Well, right now we have a fairly established process for getting input from the public on our guidance documents, but what we do is we put the guidance document out when drafting it for comment. What we're going to do now is actually put out a list of the guidances we think we may work on in the next year or so and ask for comment on that, namely does it makes sense to be working on these guidances? Is there another guidance we should work on, and do you have any preliminary thoughts on what the guidance would cover? And we'll take that into account. We'll still keep the same process we currently have in place, which is we'll develop a draft and we'll put that out for public comment before we go to a final. So this is in addition.
Quarterly updates. We will provide to the public a report card on our performance every quarter. We're also going to track our performance in total days, so not just how much time it took FDA for its review, but the total time for when the application came in to when, in fact, we made a final decision. So that also includes industry's time. It will be a better measure on how long it may be taking for products coming into the agency to actually to get the nod to go forward and go on the market.
For meetings, we find that meetings are incredibly helpful for working things out with sponsors. Industry finds it very helpful as well. When they're developing a product, what kind of information do they need to collect and other activities? What this simply is is a commitment to continue to try to schedule meetings in a timely fashion, because we're finding the number meetings were increasing due to what we industry find a valuable interaction.
And lastly, for reviewer training we will use user fees, if appropriate, and we have the funding to do it, to invest in training of our reviewers, because we think it's important and industry thinks it important that we maintain our reviewers with cutting-edge expertise.
We have a goal that pertains to imaging devices. A number of these will use a radiopharmaceutical or a contrast agent. We call these concomitant products, because it's one product being used with another product, and we are going to develop a guidance that sort of clarifies that process and the procedures that we use, including data for the review of those imaging devices when used with contrast agents or radiopharmaceuticals.
There are a number of goals that pertain to in vitro diagnostics, essentially lab tests. And why the focus? Well, you've heard a lot about personalized medicine, about being able to target treatments to individuals. But really the pathway to get there is that you need safe and effective tests to identify who are the people who are going to be high responders for treatment, who are the people who may be at greatest risk for adverse events. So there's a little bit more of a focus on qualitative goals for in vitro diagnostics this go around.
And the agency plans to put out a variety of guidances or revise some existing guidances in some important areas, including ones that address bio threats and pandemic influenza, and emerging infectious diseases. In addition, if you have a lab test in a laboratory, they're subject to two regulatory regimes, one by FDA, and we actually focus on the device and the manufacturing of the device, the test. And then there's the Clinical Laboratory Improvements Act that CMS, the Centers for Medicare and Medicaid Services oversees, and that actually goes to the quality of the lab itself and the laboratorium. Well, FDA has a function here in CLIA. We actually categorize the devices. We determine are they waived, are they moderate complexity or high complexity, and a variety of requirements are imposed depending on that categorization. Right now, when we make the determination, we do it after we've looked at the application. And so if we're going to do a waiver, and these tend to be when there's a 510(k), the devices that are of lower risk, we first want to know a lot more about that device before we make a decision. So we'll do the 510(k) and then we'll do the look at the waiver request. We're now going to conduct a pilot program to see if we can perform those activities simultaneously.
We will look at a number of low-risk IVDs to see if they might be exempted from pre-market review. This is pretty standard operating procedure for devices. But, you know, when something is brand new and comes on the market, we don't know a lot about it. It might be high risk. It may be a class III device. A lot of requirements go to it. As we gain more experience with it, we may downclassify it to class II. And for some devices where we have a lot of experience and it's very, very low risk, they wind up being exempted from pre-market review, although they still have to follow a variety of other requirements under the Act.
And then lastly, we're going to actually review our pre-IDE program, essentially where we are working with sponsors during the development of in vitro diagnostic, and we're going to look at that program in terms of its effectiveness and efficiency.
Third-party inspection program. Under third-party inspection, the agency can accredit a third party -- what we call an accredited person -- and they can conduct one of these surveillance good manufacturing practice inspections. Essentially, this is where there isn't necessarily a problem, but the law actually says we're supposed to conduct these inspections every other year, just to see if people are, in fact, compliant with GMPs.
The law right now provides very strong protections against conflict of interest. The only firms who can participate are really the good players, those who have a good track record. And FDA still retains the ability to go in and inspect that firm for cause, if there is a need. And the value of third-party inspection is that it allows the agency to focus on those devices that are higher risk or the ones we may have the most concern about. So we think that there can be tremendous value if the program works out right. However, our experience to date has not been so positive. There's been limited industry participation. So far, only 14 medical device firms have petitioned FDA to use an accredited person, and 3 of those inspections have been conducted so far.
There's a cost involved to the agency. We've spent just shy of $3 million to actually set it up, to do the training, and of course there's also an auditing function here as well. Once an accredited person is out there, we're still going to do followup to make sure they're doing a good job.
And the reason we think there are problems is because there are number of disincentives currently built into the program. It's a fairly cumbersome process to go through. And the ability to use an accredited person is fairly limited. So we want to address those in MDUFMA II. And what we have proposed is first off to streamline the administrative burdens. Right now, if you want to use an accredited person, you have to ask the FDA, and we wind up having to clear that individual, even though there may not be an issue. What we're going to do instead is we're recommending that you notify the agency. If we have an issue, we may come back. But if no issue, certainly by 30 days, you could proceed and use that accredited person. You don't need to then wait for FDA to clear that petition.
Secondly, we would expand participation. Right now, you can only have two consecutive inspections by an accredited person. After that, you have to wait on FDA. We think we can provide a greater incentive if we allow an unlimited number of inspections as long as you continue to be a good player. If there's a big problem, then you wouldn't be able to use the program. And that's the way the program is designed right now. And, of course, the agency would still retain the ability to do for-cause inspections.
And then lastly, something a little bit new. This isn't exactly through accredited persons, but this is now to say, you know what, a lot of these companies, where they market in the U.S. and they market in another country, well, when they market to the other country, they have to follow the laws of those countries. And their requirements for manufacturing may be a little bit different than ours. However, the information gathered can be incredibly useful to the agency. So what we would allow now is that if you had one of those inspections and it was to a standard that the agency found acceptable, not equivalent, but one where the information may be useful, we would accept those reports, and we would use it in prioritizing which firms we would inspect. So it doesn't mean that you're completely out of getting an inspection, but by having more information, the agency may decide that you can move lower on the priority list.
Now let me just turn to funding and fee structure. Remember I mentioned before the agency needs adequate resources and stable resources. So funding is about adequacy, and the fee structure is how we instill stability. Let me just walk you through that. The challenge the agency has faced is that over the last five years the costs for an FTE, to actually have a person on board, has gone up 5.8 percent a year. And in fact the cost for device review programs, you take the people, you take the costs for infrastructure, you add it all together and that's been going up at a rate of 6.4 percent a year. A lot of that has to do with our costs of coming right here, to White Oak.
And the big drivers are really outside of the agency's control. They're first off statutorily mandated payroll and benefits, they're the rent we pay here at White Oak, and they're the contracts we have for security. Security costs have gone up in the post-9/11 era. So we don't have a lot of control on those increased costs, but we have to deal with it. And if those costs aren't met, then effectively we wind up downsizing the program. And what we have found is that our funding needs so far haven't really kept pace with our costs. So we're hoping to address that in MDUFMA II.
What we did in figuring out what we needed is we said, all right, what's the cost of the program we have, and if the costs are going up at 6.4 percent, what would they be over the five years of MDUFMA II. And that number is about $1.25 billion. And that's the five years of MDUFMA added together. And that would allow us to maintain the current program. So when we figured out how to apportion it, we said, all right, we know that historical average for appropriations, which was 3-1/2 percent, so if that continued the same, then from user fees we'd be expecting $287 million over the five years of MDUFMA II, so that's the total amount.
And what that would change is that -- remember I mentioned right now MDUFMA I appropriations make up 83 percent of our funding? Well now we'll just go to 77 percent, and user fees, instead of accounting for 17 percent of our costs, would now cover 23 percent of our costs on average.
So that's the funding amount. That's how much we need. How do we ensure stability? Well, one of the problems we've found is user fees right now are only tied to applications, and the number of applications can fluctuate from any given year, and therefore we're never sure how much fundings, how much revenues and user fees we would collect from one year to the next. Also, the applications that have user fees -- not all the applications have user fees. So we do work, but we don't necessarily have a fee tied to it. And we have found that the few revenues have been chronically short of our expectations. This is not a fault of anyone; it's just the nature of how we developed MDUFMA I.
So what we're recommending in MDUFMA II is to create some new fees. They'll go for applications that currently don't have fees, but the big change is this establishment registration fee. It's for each of those establishments that actually makes a device, would pay a fairly nominal fee. Starting in fiscal year 2008, we're proposing that fee would be $1,706. But because there are so many facilities we would expect that would pay that fee, roughly around 13,000, that can provide a lot of revenue, but also a lot of stability. And as a result, all the fees that currently apply to applications in MDUFMA I would go down in MDUFMA II. In fact, most of them would stay below the 2007 levels all the way through 2012.
We would also put in here predictability for industry. Just like the agency needs predictability as to the funding we receive, there's value to industry to have predictability on the fees that they pay so that they can manage their businesses more effectively.
I mentioned before, MDUFMA I has some breaks for small businesses. We're going to add to those. Right now, you can get a waiver if you're a small business defined as having $30 million or less in annual sales or receipts. Your very first PMA, that pre-market approval application, is waived, and we would continue that. But for small businesses as defined by $100 million in annual sales and receipts, you currently are eligible for a fee discount, and we're going to increase those in MDUFMA II. So, if you submit a PMA or related supplement, you used to pay 38 percent of the fee, it would now be 25 percent. And for 510(k)s, it used to be 80 percent of the total fee, now it's 50 percent. So you combine that with the lower fees, it's a fairly substantial break.
We will also make it easier for foreign businesses to qualify as small businesses. One of the problems is that if you're a small business, the way you qualify is you submit a federal tax return, and you pay federal taxes. But if you're a business in another country, you don't normally submit a tax return to the U.S. You'd wind up paying U.S. taxes, and you may not be doing business here. So what we are going to do to redress this is that we would allow the small business to get certified by their national taxing authority, and their chief financial officer would certify that all the affiliates had been certified by the national taxing authority, and send that information to the agency. We will provide more details on what, in fact, folks should do through a Federal Register notice, should this proposal be enacted into law.
I mentioned there are some triggers. There's an appropriation trigger and there's two spending triggers. We think that the success of MDUFMA II does depend on providing increased funding for the agency from appropriations and user fees, and the MDUFMA I trigger for appropriations can be helpful here for trying to ensure the agency gets adequate appropriated dollars. So we are proposing to extend the current triggers in MDUFMA I through the life of MDUFMA II.
So that's the package. Where do we go from here? Well, we've got the public meeting today. There's an opportunity to hear from you all about those recommendations. The public docket is open until May 18th, and we will review all the comments that are submitted, and then based on those comments, we may make some changes to those recommendations, and ultimately put out a final set of recommendations to Congress thereafter.
And as you know, there's already a bill on the Senate side that's going through and will actually hit the Senate floor very, very soon for consideration this week. But the House still has the opportunity to act, and if there are any differences, those will be addressed in conference. So for those who may wonder does it really matter if I provide input into these recommendations? Absolutely, because we're just in the beginning stages for the legislative process, so your comments really can make a difference. And I encourage you, if you do have an opinion, to please share it with the agency.
Updated May 15, 2007
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