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FY 2007 Table of Contents

Funding For MDUFMA and ADUFA Triggers

+$7,425,000

Why is this initiative necessary?

FDA requests $4,950,000 in new budget authority for the Devices and Radiological Health program and $2,475,000 for the Animal Drugs and Feeds program. These funds will allow the agency to meet statutory requirements, known as triggers, and enable FDA to continue to collect user fees in FY 2007.

FDA continues to make great strides in reducing the time it takes for safe and effective human drugs to reach the market using the resource enhancements funded from user fees under the Prescription Drug User Fee Act (PDUFA). Following the PDUFA model, Congress authorized similar user fee programs for medical devices under the Medical Device User Fee and Modernization Act of 2002 (MDUFMA), and for animal drugs under the Animal Drug User Fee Act of 2003 (ADUFA).

A significant feature of these programs is the requirement that the Federal government appropriate and spend a minimum amount on the process for reviewing these medical products. This minimum amount is indexed to the cost of living, and failing to meet these statutory triggers means that FDA cannot collect the user fees. If we do not receive the $7,425,000 in additional budget authority, the MDUFA and ADUFA user fee programs will be out of compliance with conditions of the Acts, thus requiring the orderly closure of activities financed by the user fees.

FDA user fees supplement appropriated funds and allow FDA to hire additional scientific and technical review staff, improve the review process, and modernize the information technology infrastructure that supports these activities. In return, the Secretary of Health and Human Services has committed to specific FDA performance goals for the review process. These goals are designed to reduce the time required to bring safe and effective medical products to market.

The additional budget authority requested meets the statutory triggers identified below.

How does this request support Executive Branch public health priorities?

The request supports the Administration's vision of advancing medical research and rapid approval of medical products for longer, healthier and better lives. Because some of these products are medical countermeasures, it will also enhance the ability of the nation's health care system to respond effectively to bioterrorism and other public health threats. Finally, this initiative also supports the important goal of increasing access to innovative technologies to advance health.

MDUFMA: FDA regulates a wide array of medical devices intended to advance the health of consumers. The following facts highlight the public health significance of the domestic medical device industry:

• This is a $320 billion a year industry, with 15,000 manufacturers.
• It produced 8,897 premarket submissions (applications) for medical devices in 2004.
• More than 7 million Americans receive device implants each year.

FDA faces challenges respond to a growing industry, the accelerating pace of technology, increasing postmarket issues including product recalls and new and more complex medical device technologies. Devices are getting smaller, as miniaturization, new materials and nanotechnology become common. Smarter devices are fueling development of personalized medicine, combination products, information-rich therapeutics, intelligent devices and the biotechnology revolution. MDUFMA user fees are critical to FDA's ability to meet these challenges while ensuring continued high quality reviews.

What are the risks of not proceeding with the initiative?

• If we do not receive $7,425,000 to meet the MDUFMA and ADUFA statutory triggers, FDA will lose $55,330,000 in user fees.
• Without the support of user fees, FDA will be forced to execute draconian personnel reductions. Review performance will plummet as morale collapses.
• It will take many years to recover from the exodus of highly skilled review and managerial staff, and once again achieve a high-performance organization.
• Critical FDA work supporting the President's vision of a Healthier America will be delayed or will go undone.
• The flow of potentially life saving medical devices will decline, limiting the availability of safe products, including those for untreated conditions.
• A growing U.S. medical device industry will suffer significant economic disruption.
• Failure to promote safe and effective new animal drugs will lead to more compliance problems with illegal animal drug use, illegal compounding of unapproved animal drugs, the use of unapproved drugs in food-producing animals, leading to greater human health risks associated with increased tissue residue in food-producing animals.

What activities will these funds support and what results will be achieved?

MDUFMA: Under MDUFMA, user fee support significantly improves the level of performance for the device review process. This, in turn, reduces the time required to complete clinical trials and speeds products to market that save lives, reduce suffering and enhance quality of life. MDUFMA user fee support has enabled FDA to achieve ambitious performance goals required by MDUFMA. Continued user fee support would allow the agency to meet the FY 2007 medical device premarket review performance commitments made by the Secretary in a formal letter to the Congress on November of 2002. Examples of performance commitments made include:

• Increasing the decision goal for Expedited Original Pre-Market Approval (PMA) submissions from 80% in 300 days in FY 2006 to 90% in FY 2007.
• Increasing the decision goal for Original PMA submissions from 80% in 320 days in FY 2006 to 90% in FY 2007.
• Increasing the decision goal for 180-Day PMA Supplement submissions from 80% in 180 days in FY 2006 to 90% in FY 2007.

ADUFA: Under ADUFA, the Agency was authorized to collect fees needed to enhance and modernize the animal drug review program and agreed to meet a comprehensive set of performance goals established to show significant improvement in the timeliness and predictability of the new animal drug review process. Over a five year period (FY 2004-FY 2008), CVM must achieve a set of progressive performance goals for the review of six specific types of applications, with each year requiring FDA to review and act in shorter periods of time.

As a result of ADUFA, additional benefits are also expected:

For the Animal drug industry, earlier time to market provides:

• Cost savings for pharmaceutical sponsors and shorter drug development times.
• Economic benefits for animal drug manufacturing firms due to increased revenues.
• Incremental savings that allow a reinvestment of dollars into the research and development of new products.
• Increased capacity to resolve new and rapidly emerging scientific issues that impact approval decisions.
• Increased opportunities for pre-submission meetings and consultation and guidance development for industry, leading to more high-quality applications and fewer review cycles.

For Farmers, ranchers, processors and the public, reduced time to market provides:

• A public health benefit through earlier access to safe and effective drug treatments resulting in improved health of livestock and companion and service animals.

For CVM, performance and management process improvements provide:

• Increased capacity to resolve new and rapidly emerging scientific issues that impact approval decisions.
• Increased opportunities for pre-submission meetings and consultation and guidance development for industry, leading to more high-quality applications and fewer review cycles.

FY 2007 Table of Contents

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