1 1 2 3 UNITED STATES DEPARTMENT OF HEALTH/HUMAN SERVICES 4 FOOD & DRUG ADMINISTRATION (FDA) 5 CENTER FOR DEVICES & RADIOLOGIC HEALTH (CDRH) 6 CENTER FOR BIOLOGICS EVALUATION & RESEARCH (CBER) 7 8 9 10 11 CDRH/CBER MEDICAL DEVICE USER FEE AND 12 MODERNIZATION ACT (MDUFMA) STAKEHOLDER MEETING 13 14 15 16 17 18 19 20 Gaithersburg, Maryland 21 Wednesday, December 3, 2003 22 2 1 PARTICIPANTS: 2 MARK BARNETT, Moderator CDRH 3 DAVID FEIGAL 4 CDRH 5 JESSE GOODMAN CBER 6 OVERVIEW: 7 LINDA KAHAN 8 CDRH 9 DIANE MALONEY CBER 10 MARK KRAMER 11 FDA Office of Combination Products 12 PANEL 1: 13 FRANK CLAUNTS FDA Office of Financial Management 14 DAN SCHULTZ 15 CDRH 16 BOB YETTER CBER 17 MARK LEAHEY 18 Medical Device Manufacturers Association 19 CHUCK SWANSON Medtronic, Inc. 20 PAUL TOUHEY 21 Fujirebio Diagnostics 22 3 1 PARTICIPANTS (CONT'D): 2 PANEL 2: 3 CAP ULDRIKS CDRH 4 DON ST. PIERRE 5 CDRH 6 BOB O'HOLLA Johnson & Johnson 7 NAPOLEON MONROE 8 Henry Schein, Inc. 9 PANEL 3: 10 BOB GATLING CDRH 11 THINH NGUYEN 12 CDRH 13 NICOLE WOLANSKI CDRH 14 KATHY LUNDBERG 15 Guidant Corporation 16 PANEL 4: 17 STEVE NIEDELMAN CDRH 18 DIANE WURZBURGER 19 Siemens Medical Solutions 20 TERRY SWEENEY Philips Medical Systems 21 JOHN STIGI 22 CDRH 4 1 PARTICIPANTS (CONT'D): 2 PANEL 5: 3 BARBARA ZIMMERMAN CDRH 4 PAM FURMAN 5 Association of Medical Device Reprocessors 6 TONY BLANK Boston Scientific Corporation 7 ROSLYNE SCHULMAN 8 American Hospital Association 9 ELIZABETH JACOBSON AdvaMed 10 11 12 13 14 15 16 17 * * * * * 18 19 20 21 22 5 1 C O N T E N T S 2 AGENDA SESSION: PAGE 3 Overview: Where are we now? 24 4 5 Panel 1: How is the User Fee 56 Process Working? 6 7 Panel 2: Electronic Labeling and 132 Section 301(4) 8 9 Panel 3: Bundling, Modular PMA, and 178 Expedited Applications 10 11 Panel 4: Third Party Inspection 226 12 Panel 5: Reuse 269 13 14 15 16 17 18 19 20 * * * * * 21 22 6 1 P R O C E E D I N G S 2 (9:02 3 MR. BARNETT: I want to get 4 started. I'd like to welcome you to this 5 public meeting on the Medical Device User 6 Fee and Modernization Act or MDUFMA as we've 7 come to call it. I'm Mark Barnett, 8 assistant director for education and 9 communications at the FDA Center for Devices 10 & Radiological Health and I'll be serving as 11 your moderator today. When you registered 12 today you should have received a package 13 that contains a meeting agenda, some of 14 presentations that our panelists are going 15 to be making today, a list of guidances that 16 we have issued to date on MDUFMA, some 17 important web addresses, and information on 18 how to get a transcript of this meeting. 19 As you all know, MDUFMA authorizes 20 the FDA to collect fees from the 21 manufacturers of medical devices to offset 22 the cost of reviewing applications for new 7 1 products. It also has some important 2 provisions about third-party inspections and 3 new requirements for manufacturers who 4 reprocess devices labeled for single use. 5 Now that the program has been 6 underway for a while we felt that it's time 7 to take stock of what we've accomplished so 8 far and to find out from the industry, the 9 folks that are submitting the applications 10 and paying the fees, how the program is 11 working at their end. And also we want to 12 get the industry's reactions to the 13 implementation of the third party and the 14 reprocessing provisions and, of course, 15 that's where this public meeting comes in. 16 The law does not require us to 17 have this kind of meeting until a year from 18 now but we decided to hold this one early in 19 the implementation process because we wanted 20 to let you know what's happened and what's 21 going to happen with the program and to hear 22 back from you about how MDUFMA is impacting 8 1 on the industry, the consumers, and health 2 care providers. 3 And that's really the key to what 4 we need today from everyone, an appraisal of 5 how the present law is being implemented and 6 how it might be implemented better in the 7 future. We don't need ideas on how the 8 legislation might have been written better 9 or ideas for new legislation in the future. 10 That's an interesting topic but it's not for 11 today. 12 Let me talk a little bit about the 13 structure of the meeting. We've structured 14 today's meeting as a series of five panel 15 sessions, each one covering a specific 16 aspect of MDUFMA, and during each panel 17 we'll be hearing from both the FDA people 18 who have been working on implementing these 19 various aspects and from the stakeholders 20 who are affected by them. 21 Each panel session is scheduled 22 for one hour and we've divided that hour 9 1 into three equal parts, 20 minutes for the 2 FDA, 20 minutes for stakeholder comments, 3 and 20 minutes for questions from the 4 audience. 5 The first panel is going to cover 6 how the user fee process is working in 7 general and FDA's progress in meeting the 8 performance goals that we've committed to. 9 The second panel is going to cover 10 electronic labeling for certain prescription 11 devices and a new provision that requires 12 identifying the manufacturer on the device 13 itself. 14 The third panel will cover 15 guidances on various MDUFA issues including 16 modular PMA submissions, the bundling of 17 multiple devices or multiple indications in 18 a single application, and expedited review 19 of pre-market applications. 20 The fourth panel will cover the 21 third-party inspection program including 22 eligibility criteria for that and the fifth 10 1 panel will cover new requirements for 2 reprocessed single-use devices. 3 In addition four people registered 4 to speak in advance of the meeting. I'm 5 going to be calling on them after the panel 6 session where their comments are going to be 7 most appropriate. 8 A few ground rules. In order that 9 we stay on time and allow everybody to 10 participate we've told those folks that are 11 going to be giving planned presentations to 12 limit themselves to no more than five 13 minutes. And so after four minutes I'm 14 going to give the speaker a reminder and 15 then after five minutes I'm going to call a 16 halt. 17 And we've also set a time limit 18 for questions and comments from the floor 19 and that's no more than three minutes per 20 person. And so, again, I'm going to give 21 the questioner a reminder when there is one 22 minute left and then call a halt when the 11 1 time is up. Again, that's just to be sure 2 that everybody has a chance to speak and 3 that we stay within the time that's been 4 allotted to this meeting. 5 One more ground rule and that is 6 I'm going to ask that the questions from the 7 floor be related specifically to the topic 8 of that particular panel. The FDA folks 9 that are here today are going to be 10 listening carefully to what they hear and in 11 fact the proceedings are being transcribed 12 and the transcriber is sitting right here so 13 that both the FDA and anybody in the room 14 and anyone else can have a lasting record of 15 the comments that were made today and also 16 so the FDA folks can take those comments 17 into account as they continue to implement 18 MDUFMA. 19 And on that positive note let me 20 introduce the directors of the two FDA 21 centers that are affected by MDUFMA, 22 Dr. David Feigal, who is director of the 12 1 Center for Devices and Radiological Health 2 and Dr. Jesse Goodman, who is director of 3 the Center for Biologics Evaluation & 4 Research. Folks, do you want to come on up? 5 DR. FEIGAL: Well, sometimes the 6 Commissioner's office calls at inopportune 7 times. I actually wanted to just do 8 something fairly simple this morning and 9 thank everyone here for your commitment to 10 making this program a success. 11 If you look around the world at 12 user fee programs you'll often see that they 13 are very difficult to get started. The 14 initial user fee programs in the UK on the 15 drug side were so short of funds in the 16 first year that they actually had to go back 17 and redraft the legislation in an emergency 18 to even keep the place afloat. 19 And we were faced with a challenge 20 along with you of trying to put together a 21 viable program with categories of reviews 22 that we didn't track in our data system, 13 1 with numbers that we could get some rough 2 estimates of but didn't know exactly how 3 they went. And in addition to the process 4 of looking at the fee structure and the 5 value added that fees could bring to the 6 program there was also the challenge at the 7 same time of bringing about some of the 8 legislative changes that are part of the 9 Modernization Act, part of the 10 unpronounceable acronym MDUFMA, and 11 negotiating those in a way that actually 12 moved things forward and moved things that 13 we wanted to accomplish. 14 And some of the things in the 15 legislative part are actually, I think, as 16 profound a change as some of the changes we 17 wish to bring about with the fees and the 18 structure. Some of them reflect moving into 19 the future in ways that we don't know quite 20 how to do yet such as electronic labeling. 21 We will not be labeling products or 22 providing products in the next decade in the 14 1 way we did in the last decade and the 2 legislation reflects that. 3 And part of the purpose of today's 4 meeting and future meetings will be to pay 5 close attention to some of those sections to 6 see the kinds of things that we need to 7 accomplish to adapt to not just the 8 technology itself but the whole medical 9 environment in which these products are used 10 and the way technology is available there. 11 The ability to have third party 12 inspectors is something new for FDA. It's 13 something that's actually new for Congress. 14 And there was quite a bit of concern about 15 the third party inspection and if you 16 followed the birth of the legislation you'll 17 notice that it was one of the more 18 contentious things. It was one of the 19 things that almost killed the bill at the 20 time, some of the concerns but still the 21 strong desire to be able to have that. 22 Because as we look at the 15 1 environment for the device community we know 2 that you operate in a global environment and 3 being in a global environment means that you 4 have inspectors from all around the world, 5 you have fees from all around the world, and 6 our ability to actually have a more flexible 7 way of getting inspections and other parts 8 of our work accomplished are ways that in 9 fact we can move towards an ultimate goal 10 where we will have recognition of harmonized 11 regulatory processes around the world so 12 that the burden to industry will be less and 13 the benefits to consumers will be quicker. 14 And I think one of the frustrating 15 situations for the international regulatory 16 scene now is that it is going to get more 17 burdensome before it gets less and more 18 countries coming on adding requirements, 19 adding fees, and very few countries have 20 done what Hong Kong has done which is to say 21 that if a product is approved in any Global 22 Harmonization Task Force founding member 16 1 it's automatically recognized as an approved 2 product in Hong Kong. Clearly Hong Kong is 3 ahead of the rest of us and you'll see 4 little parts of that broader vision. 5 So today's topics are very, very 6 diverse. There will be a great deal of 7 interest in the revenue, in how it has 8 started, but I think to me it's much more 9 important to focus on where we will be in 10 fiscal year 2004 and 2005. 11 The program is getting on track. 12 There has been a very unusual event, which 13 is a commitment in writing by OMB before the 14 President's budget is even released to fully 15 support this program in 2005, and when the 16 program was originally envisioned we had a 17 target which said if we can ramp up to a 18 certain level and sustain that level we can 19 change the performance of the device program 20 in the entire agency in the Device Center 21 and in the Biologic Center and in the field. 22 And we have the commitment now and 17 1 we have that commitment not just because of 2 our own efforts but because of the very 3 strong and supportive lobbying and weighing 4 in on the part of industry and other 5 stakeholders to say to the administration 6 this is important, and saying it at a time 7 when they're actually asking most 8 departments in the 2004 budget and in the 9 2005 budget to look for ways to cut their 10 size they've made a commitment to building 11 this program to the level we said it needed 12 to be built to. That will allow us to build 13 to and reach the objectives we set out. 14 So I hope that this meeting today 15 will provide an opportunity, as Mark 16 mentioned, earlier than we were required to 17 do but I hope that the center will always be 18 perceived as a group that is open to getting 19 feedback from stakeholders on how to do 20 things better or how things are working. 21 And we look forward to the comments that 22 we'll hear today about getting this program 18 1 on track. 2 So with that let me introduce 3 Jesse. 4 MR. BARNETT: I introduced them 5 together so just for clarity's sake that one 6 there is Dr. Feigal and this one here is 7 Dr. Goodman. 8 DR. GOODMAN: Good morning. I'd 9 certainly like to second and support David's 10 comments about the importance of the user 11 fee program and our support for it. CBER, 12 of course, is a relatively small part of the 13 device universe but we share many of the 14 same goals. And I think particularly some 15 of the people in the room we've worked with, 16 others we haven't, but just to briefly 17 mention the kind of the devices we regulate 18 are those involved in assuring the safety or 19 purity or potency of our regulated biologic 20 products. And that's particularly with 21 respect to assuring safety of the blood 22 supply, blood donor screening, et cetera, 19 1 also the HIV and related retroviral 2 diagnostics and the devices used in the 3 manufacturing of blood cells and tissue 4 products. 5 What I can say is obviously the 6 need for innovation in those areas and the 7 public health impacts of the work that all 8 of you do in those areas are tremendous. 9 And this is a very close fit with what is 10 our center's vision, which is using 11 innovative technology to advance public 12 health. 13 Starting about a couple of years 14 ago and certainly the last two years as I 15 came into a CBER leadership position and did 16 more in the device field I really both heard 17 from and sought out many people in the 18 device community to see what your concerns 19 were, how we could improve what we're doing 20 at CBER with respect to devices, and we 21 heard those and listened to them and have 22 acted on those. And I think MDUFMA really 20 1 already offers tremendous promise to help us 2 progress in those areas. 3 I really do feel that in the last 4 year particularly we've made tremendous 5 strides in response to those concerns in 6 terms of both quality and efficiency of 7 review. And I want to thank people here for 8 the input and I want to thank the CBER staff 9 for their contributions to that. 10 One of the things we've also done 11 is interact much more closely with David and 12 his colleagues and staff at CDRH and I think 13 that's been bi-directionally very 14 beneficial. We've worked with the Office of 15 Combination Products in the Commissioner's 16 Office on those relevant issues because I 17 know that both David and I feel there is 18 tremendous promise there and we want to work 19 together to help you bring that promise into 20 being. 21 We think that's been productive. 22 We've done a lot of training of our 21 1 reviewers in terms of least burdensome, 2 MDUFMA, device review, and, again, we've 3 done that hand in hand with our colleagues 4 at CDRH in general. We've done things like 5 smooth the flow of documents through our 6 system and a number of other innovations. 7 And I think the result of all of this has 8 been that we have been able to meet the 9 goals that we've set. 10 You can see the Secretary's report 11 to Congress that is available on our 12 website. I think Bob Yetter and others may 13 talk more about this but I think we have 14 lots and lots more challenges ahead to 15 sustain and improve our performance. 16 There have been a lot of good 17 things along the way, approval of the things 18 that you as innovators bring to us that help 19 make public health better. Examples are 20 some of the HIV Rapid tests, a test to 21 detect bacterial contamination in blood, the 22 implementation of nationwide West Nile Virus 22 1 blood donor screening under IND within only 2 eight months. These are tremendous 3 accomplishments that really come from a 4 culture of partnering and collaborating 5 where appropriate. 6 So we do, I think, very much value 7 and need these resources and your continuing 8 input to be able to build on the positive 9 things we've accomplished so far and sustain 10 them. So we will really pay attention to 11 the input you give all of us today. And I'd 12 also encourage people, and I always do, to 13 please contact me or my Director's office 14 staff if you have suggestions, concerns, or 15 anything else. 16 So with that we'll turn it over to 17 Mark and the program. Thanks. 18 MR. BARNETT: Thank you. Well, 19 before we get into the first panel I want to 20 ask Linda Kahan and Diane Maloney and Mark 21 Kramer to come on up here and give us a 22 brief overview on where we stand with 23 1 implementing MDUFMA. 2 You're going to be looking at 3 trees in great detail for the rest of the 4 day and this is your opportunity to look at 5 the forest and see in a general way where 6 MDUFMA stands. I'll wait until they sit 7 down and then I'll introduce them. 8 They're not going to be using 9 slides. Could we get the lights a little 10 brighter? I'm afraid they're going to fall 11 asleep sitting in the dark here. Can we get 12 the lights so we can see them? 13 Let me introduce these folks. 14 Linda Kahan is deputy director of the Center 15 for Devices and Radiological Health. Raise 16 your hand there. Good. Diane Maloney is 17 associate director for policy in the Center 18 for Biologics Evaluation & Research. Mark 19 Kramer is director of the Office of 20 Combination Products in the Office of the 21 Commissioner. 22 Linda, let me start out by asking 24 1 you a question about something to tie into 2 what Dr. Feigal said. I want to get more 3 concrete about statutory deadlines. Those 4 were built into the statute to begin with. 5 How are we doing in meeting those deadlines? 6 MS. KAHAN: We're actually doing 7 very well in meeting all the statutory 8 deadlines that were in MDUFMA for the first 9 year. And, interestingly enough, and David 10 alluded to this, a lot of those statutory 11 deadlines were related to the parts of 12 MDUFMA that are not user fee-related. 13 We had a number of statutory 14 deadlines about third party programs, about 15 getting out criteria for companies to become 16 third party accreditors, organizations to 17 become third party accreditors, and we did 18 that. And we in fact accredited 15 third 19 parties and you're going to hear more about 20 this later. 21 We also had a number of statutory 22 deadlines that related to reuse of single- 25 1 use devices in getting out information about 2 which products would no longer would be 3 exempt from 510(k). So those things have 4 come up. 5 There has been a number of reports 6 that were due in the first year and that's 7 taken up time but we have managed to meet 8 all those. 9 MR. BARNETT: I remember last 10 April when we did the teleconference on this 11 there were people writing in who said they 12 didn't even know that MDUFMA existed. They 13 didn't know what a user fee program was. 14 They didn't know what their responsibilities 15 were. Now some time has elapsed. Has that 16 changed? What have you been doing to let 17 people know what their responsibilities are? 18 MS. KAHAN: Well, we certainly 19 hope it has changed. Those of you who 20 listened in or participated in the 21 conference we had last April, we did get a 22 number of calls from companies saying that 26 1 this was the first that they were hearing 2 about this. We've really tried to improve 3 our communication and I think that one of 4 the lessons we've learned early on is that 5 we can never over-communicate. The more 6 communication we do the better we are and, 7 of course, this meeting is one example of a 8 way that we try to communicate. 9 In terms of doing outreach we have 10 taken a number of very proactive steps 11 including things like writing letters to 12 every single device company that's 13 registered. We've done mass mailings that 14 send out fact sheets to people about MDUFMA 15 and about what they have to do to meet the 16 requirements and about what FDA's 17 obligations are under MDUFMA. 18 We've set up a website which I 19 know most of you have accessed and that's 20 full of all kinds of information from the 21 very general to the very specific about 22 what's in the law, about what we're doing to 27 1 implement the law, about where you can get 2 information and forms and guidances, so 3 we've done that. 4 We've also tried to be as 5 available as we can for meetings with 6 stakeholders whether it's for individual 7 companies or for trade associations. We've 8 tried to make ourselves available for that. 9 We've also put a lot of time into guidances 10 as a way to communicate what the agency is 11 trying to do to implement MDUFMA and what 12 our current thinking is on different parts 13 of it. 14 And so we're hopeful that all of 15 those things will help us communicate 16 better. And one of the things that we did 17 very early on that I hope people will 18 continue to take advantage of is we 19 established an open docket. That just was a 20 way for anybody who had anything to tell us 21 about what was going on in MDUFMA to get to 22 us as quickly as possible and to share with 28 1 the wider community of interested 2 stakeholders what was on their mind. And 3 that's been a useful place for us to hear 4 what stakeholders have to say and also for 5 stakeholders to talk to each other. 6 MR. BARNETT: You mentioned 7 guidances as a key vehicle and yet we're 8 hearing from the industry that there is a 9 problem about getting in early enough and 10 getting comments in on guidances so that 11 they can have some input in the process 12 before things get published. Is that a 13 problem, do you think, and then if it is 14 what's happening with it? 15 MS. KAHAN: I think it is a 16 problem if the industry thinks it's a 17 problem and I think that perception is very 18 important for us to address. I think that 19 the staff really understands the frustration 20 that people feel about not being able to 21 engage us as often or as long as they would 22 like to. And we also feel the constraints 29 1 that make that not possible all the time. 2 A number of things go into the way 3 we handle guidances. Some of them have to 4 do with time constraints and with 5 legislation that was effective immediately, 6 and that had large changes involved in it. 7 A lot of the guidances needed to go out 8 quickly. And when something has to get done 9 quickly that means that you don't have 10 necessarily all the up-front dialogue that 11 you'd like. 12 One of the things that we did, as 13 I mentioned earlier, to try to address this 14 and compensate in some way was the open 15 docket so that people could get in with 16 comments as quickly as they could. There 17 are also some legal constraints when we 18 develop guidances which people are very 19 aware of and that has to do with the fact 20 that we have to be transparent and we have 21 to always create a level playing field when 22 we do guidances. 30 1 So sometimes a company or a trade 2 association or a particular consumer group 3 may have a wonderful idea and we'd like to 4 work with them, we'd like to develop that 5 idea, but it's got to be done in a way that 6 everybody else can also be part of that 7 process. And doing things that way 8 necessarily slows things down and makes it a 9 little bit less efficient. That's part of 10 the price we pay for being a democracy. But 11 it also does slow down that kind of guidance 12 development. 13 The other thing I wanted to point 14 out with respect to guidances because we 15 have heard from industry about their 16 concerns here is that a lot of the 17 discussion about industry concerns related 18 to specific parts of MDUFMA really happened 19 when we were talking with industry and 20 various stakeholders other than industry and 21 Congress about what would go into the 22 legislation itself. 31 1 And many of the guidances that 2 we've put out since MDUFMA passed really 3 reflect what we believe was the intent of 4 the legislation in all of those discussions. 5 Having said all that, we really would like 6 to make the guidance process as useful and 7 as transparent and as interactive as we 8 possibly can. And we are hoping that we'll 9 be able to get more input and to act on that 10 input. And I just would like people to 11 think about whether their concerns have to 12 do with access or whether sometimes they 13 just don't get the right answer that they'd 14 like from the agency. 15 And let me just end this part of 16 this discussion about guidances by saying 17 that there has been a number of very 18 specific cases with respect to MDUFMA where 19 we have had industry input that has changed 20 the guidances between the time we were 21 thinking about them, between the draft and 22 the final. 32 1 Two examples that I can think of 2 that I know later panels will talk about in 3 more detail have to do with the 4 implementation of Section 301 and how the 5 agency should approach that requirement that 6 there be identification on the actual device 7 itself. And when we were thinking about how 8 we should bill for modular PMAs there was 9 input from the industry stakeholders that 10 really affected the way that turned out. 11 So we do hear you and we would 12 like to work with you to make the guidance 13 process more satisfying. And we'll be 14 interested to hear comments from people. 15 MR. BARNETT: Linda, it seems like 16 one of the keys to getting this implemented 17 well is to hire the right kind of people. 18 What are you doing about that? 19 MS. KAHAN: Dan Schultz is going 20 to talk more about the whole hiring process 21 when he gives his presentation but I would 22 like to highlight something that I think has 33 1 been really emblematic and important in the 2 way we've implemented MDUFMA. 3 One of the things that we've done 4 is we've made a real point, having listened 5 to our stakeholders, of not simply 6 replicating the staff that we have on hand 7 by just growing it larger to look exactly 8 like it did in '02 but simply bigger. We've 9 really tried to focus on what the needs are. 10 And one of the ways we've done 11 this is we've created product groups of 12 experts from across the agency on particular 13 product areas. And we had all of those 14 people get together and say what kind of 15 staffing do we need to make sure that we can 16 meet the challenges and the changes in 17 technology that are going to come through in 18 medical device applications over the next 19 five years. 20 And we had those experts from each 21 product area get together and come up with 22 recommendations and then we had all of the 34 1 people involved across the centers rank and 2 prioritize those in terms of what was most 3 essential most quickly. And we've done our 4 hiring that way. We actually have lists of 5 types of experts that we need and types of 6 reviewers that we need. And we hire them in 7 that order as soon as we can get them. 8 One example that stands out in my 9 mind because it has come up so many times 10 when people have been looking at this is 11 that we've almost increased our capacity of 12 statisticians by about a third since MDUFMA 13 started. So that's a way that we've been 14 really focused about making sure we get the 15 right scientists, the right statisticians, 16 the right engineers, the right medical 17 officers. We've really tried to focus that. 18 MR. BARNETT: What about the folks 19 that are already on board, getting them 20 trained? 21 MS. KAHAN: Really a priority. 22 Something that we were very, very concerned 35 1 about and industry was concerned about was 2 that we have resources to provide the people 3 on board as well as the people that we're 4 going to hire with opportunities for 5 professional development that will keep them 6 at the top of their game and get them to the 7 place where they can ask the right questions 8 and answer them most efficiently when they 9 come in. 10 MR. BARNETT: One more question, 11 Linda. You've been involved in 12 implementation right from the start, heavily 13 involved in this. What's been the biggest 14 challenge for you? 15 MS. KAHAN: Well, I think for me 16 and for all the staff across the agency 17 that's been involved but especially the 18 staff in the centers, in CDRH and CBER, 19 we're implementing this program with all of 20 its changes at the very same time we're all 21 doing our day jobs. Everybody knows this 22 intellectually. We all expected it. 36 1 And in fact it was something that 2 we really worked with the industry and other 3 stakeholders when we were negotiating MDUFMA 4 was to set up goals that would kick in, for 5 the most part, towards the end years because 6 we knew there would be this start-up time. 7 But the fact is that we're meeting the 8 statutory deadlines on nonuser fee things, 9 we're setting up user fee programs, we're 10 setting up tracking systems, we're putting 11 out guidances, we're doing all of these 12 things just to get the program started and 13 at the same time we're still doing all the 14 work that we need to do. That's been a 15 challenge but I think people have really, 16 really risen to that challenge. 17 I think that there has been 18 tremendous support from the staff. And 19 actually, Mark, there has also been 20 tremendous, I think, cooperation among the 21 agency components. You have others here to 22 speak to that. 37 1 MR. BARNETT: And what a segue 2 into asking Diane about CBER. Anything to 3 add on that? 4 MS. MALONEY: Well, I was taking 5 notes as Linda was talking rather than just 6 interrupting but basically I just wanted to 7 point out a couple of things when you talked 8 about statutory requirements. Although most 9 of the statutory requirements apply to both 10 CDRH and CBER there was one specific 11 requirement in MDUFMA, I think, as most 12 people know, that required the Secretary to 13 make a report to Congress on devices in 14 centers other than CDRH. So that's us. 15 That's CBER. 16 And so I just wanted to mention as 17 Dr. Goodman already did that that report has 18 gone and it is posted on our website and the 19 Secretary did, I think, make a very positive 20 statement about CBER's performance to date. 21 Some other points I'd like to make 22 is I can't state any more strongly as Linda 38 1 did the importance of communications. And 2 since I've been in CBER when I first started 3 I really did not have much interaction with 4 the device community and I think CBER has 5 come a long way. When I first started in 6 CBER my experience was a lot of the 7 communications were with CDRH and the device 8 industry and we were hearing things third 9 hand. To me that's not the best way to do 10 business. 11 But I have seen things change. 12 I've seen us doing a lot more outreach, 13 trying to be more proactive, and the device 14 industry coming directly to us. And I 15 really want to encourage that. I think the 16 only way we can do our jobs well is to know 17 the industry that we work with, to know what 18 the concerns are, to know what reality is 19 really like. 20 And the other point I wanted to 21 make on the guidances, there are some 22 problems with the guidance process but we 39 1 try to do the best we can and, again, 2 developing the guidance at the draft stage 3 together, although it would be nice, there 4 are problems in terms of transparency and 5 all. But we can learn an awful lot 6 beforehand through liaison meetings, through 7 sidebars, through meetings like this and Qs 8 & As. So I really do want to encourage 9 people to continue to tell us what's 10 working, what's not working. 11 And then I just also want to 12 emphasize all the guidances that we have put 13 out are all of CBER and CDRH guidances. I 14 hope that to you it has appeared very 15 seamless. We have worked so well together. 16 It has been so rewarding to me and I think 17 to others in the Center for Biologics to 18 have had this experience. I mean, it has 19 been really challenging, really hard. I've 20 never seen people work so hard but it has 21 been so rewarding as well and I think with 22 our relationships and our discussions and 40 1 interactions with industry, with the Center 2 for Devices, and with the folks in the 3 Office of the Commissioner. 4 MR. BARNETT: Thank you. Mark, 5 let's talk about combination products. I'm 6 talking about things that combine a drug and 7 a device or a device and a biologic. There 8 are some difficult regulatory issues there 9 and that was actually recognized when MDUFMA 10 was developed because it required the FDA to 11 establish an office within the Office of the 12 Commissioner to handle combination product 13 issues. And, of course, that's where you 14 come in. What does your office do? 15 MR. KRAMER: Well, actually I 16 think if I recall correctly the first MDUFMA 17 requirement was for FDA to establish the 18 Office of Combination Products. I think we 19 had 60 days to do it. We've been in 20 existence since December 24, '02, so we met 21 that time frame. 22 The office actually has six 41 1 statutory responsibilities. What I'd like 2 to say at the outset, though, to make sure 3 this is clear is that the office doesn't 4 actually do the pre-market review of 5 combination products. That continues to be 6 done by the centers to which the products 7 are assigned. 8 What we do is at the front end we 9 assign the products and we do that based on 10 a determination of the primary mode of 11 action of a combination product. We assign 12 a lead center. 13 We ensure the timely and effective 14 pre-market review of combination products 15 primarily by developing policy to ensure 16 smooth regulation. And we also get involved 17 with coordinating and facilitating the 18 review process when more than one center is 19 involved. 20 We have a role to ensure the 21 consistent and appropriate post-market 22 regulation of combination products and 42 1 primarily what we're doing there concerns 2 GMP requirements and adverse event reporting 3 requirements. 4 And then we also have smaller 5 roles with respect to dispute resolution. 6 We will get involved in resolving a dispute 7 brought to us regarding the timeliness of 8 review of a pre-market application. We are 9 responsible for reviewing and updating 10 agreements, guidances, and practices related 11 to the assignment of combination products 12 and we report to Congress on an annual basis 13 on what the office is doing and the progress 14 we're making. 15 I'd also like to mention that we 16 have a report as well. It is not yet 17 available but as of late yesterday I 18 understand it is with the Secretary and we 19 expect it to be cleared shortly and it will 20 be made available on our website. 21 The other thing that I wanted to 22 mention, and this is not one of our 43 1 statutory roles but I think it's probably 2 one of our most important, is to serve as a 3 resource to sponsors and review staff within 4 the centers for regulatory issues related to 5 combination products. Sometimes these 6 products really cause a lot of scratching of 7 the heads in how we're going to deal with 8 them. And we really see our role as a 9 facilitator and problem solver and where I 10 think we've provided really the most value 11 added is being able to work with sponsors 12 and centers in dealing through these issues. 13 I'll also mention that while our 14 name has combination products in it several 15 months ago the Commissioner decided to 16 consolidate the product jurisdiction program 17 within the Office of Combination Products. 18 That means we're involved with 19 jurisdictional issues not only related to 20 combination products, which by definition 21 cross CBER, CDR, and CDRH, but other 22 products as well. 44 1 So if you have a product and it's 2 unclear whether it is a drug or a device but 3 it's clearly not a combination product 4 that's ours as well. And we also get 5 involved with some ÄÄÄÄ issues and things 6 like that where applicable. 7 We currently have a staff size of 8 about seven people and we're expected to 9 grew to a size of about 10. So it's going 10 to remain a fairly small office, again 11 recognizing the fact that our main role is 12 in policy development and facilitation, 13 coordination and not the actual review 14 process itself. 15 MR. BARNETT: Mark, if you look at 16 a section of the statute that deals with 17 combination products you see the words 18 "promptly" and "timely" over and over again. 19 So it's clear that the intent of the 20 Congress was that combination product 21 approval should be speeded up. So the 22 question is what are you doing about that? 45 1 MR. KRAMER: Well, it's true. I 2 think it's something like eight times in 3 maybe twenty lines of the legislation it 4 says either "promptly" or "timely." And if 5 I divide that up into the assignment process 6 and the pre-market review process I'll 7 explain the kinds of things that we're 8 doing. 9 With respect to assignment that's 10 really where we play an active role in 11 reviewing and responding to requests for 12 designation submitted by industry as to how 13 a product will be regulated. And what we've 14 tried to do there is to make the review 15 process within our office much more 16 efficient. 17 We have a much more definitive 18 process for how quickly we will do certain 19 things and meet certain time frames. We've 20 reinstituted a monthly meeting of 21 jurisdictional liaisons from the three 22 centers and within our office where we 46 1 discuss active RFDs or requests for 2 designations and other jurisdictional issues 3 to ensure good communication and timely 4 resolution of these submissions. 5 And I think it's all paying off. 6 We have 60 days to review and respond to 7 requests for designations and in FY '03 our 8 mean total review time to get a response out 9 to industry was about 38 days. So we're 10 pretty pleased with those results and we're 11 working very hard to make sure that we can 12 sustain them. 13 The other key part I think that 14 we're doing as part of the assignment 15 process has to do with primary mode of 16 action which I mentioned a few moments ago. 17 Primary mode of action is the statutory 18 criterion that we need to use to assign a 19 combination product to a Center. But PMOA, 20 as we lovingly call it, has never been 21 defined in the law, it's not defined in the 22 regulations, and we're in the process of 47 1 doing just that. 2 Just as Linda said there has been 3 a public docket opened on MDUFMA issues. We 4 have also had a public docket open as a 5 follow-up to a public hearing we held about 6 a year ago on combination products issues. 7 And we've carefully considered all the 8 various comments that we've received and 9 we're developing for public review and 10 comment a definition of primary mode of 11 action which we hope to have out in the not 12 too distant future and that will probably be 13 part of a proposed rule. 14 Moving on to the review part of 15 the process, again, we're not involved in 16 doing the actual reviews but where I think 17 we provide the value is in facilitating that 18 process either directly by ensuring good 19 coordination between the centers or by 20 development of policy. 21 And the kinds of things that we're 22 doing there are, first, for a year now we've 48 1 had a standard operating procedure on the 2 consultation and collaborative review 3 process. And we have really seen a lot of 4 positive returns on having a documented and 5 living process that is actually being used 6 by the centers on a daily basis to ensure 7 that the requesting center receives quality 8 and timely feedback from the center that 9 they're requesting help from. 10 We actually get involved with 11 monitoring the consultation process. Last 12 fiscal year we monitored and provided 13 assistance with what I believe were 81 14 consulting reviews between the centers and 15 Combination Products. Again, the goal there 16 is to ensure that the second center knows 17 what's expected of them, that they can 18 respond in a timely way, and that they in 19 fact provide that timely feedback. 20 We're developing guidance in a 21 number of areas that will ultimately result 22 in a more efficient review process such as 49 1 when we need one application versus two 2 applications for a combination product, how 3 we select the regulatory authorities to be 4 applied to a combination product, submission 5 format and content, providing the most 6 efficient, clear way that a combination 7 product submission should be formatted in 8 order that parts of it, perhaps, can be 9 ported off to another center in a format 10 that they're used to to make that consulting 11 review much easier to accomplish and in the 12 end ensure a quicker review process. 13 One of the other things we're 14 doing in this area that I think is really 15 important is, again, providing guidance on 16 an informal basis to industry and to review 17 staff on regulatory issues that arise in 18 dealing with a combination product. And 19 we're doing all of this just as CDRH and 20 CBER are with respect to MDUFMA requirements 21 with regard to training and reviewer tools 22 for review staffs that they will have at 50 1 their fingertips examples of best practices 2 to use in terms of reviewing these types of 3 products because one of the issues with 4 combinations is that people don't tend to 5 get them frequently enough to get very good 6 at them. 7 And therefore there needs to be a 8 just in time training available so that 9 people can have access to the information 10 they need when they need it in terms of what 11 the requirements are for handling a 12 combination product review. 13 So what I hope that we'll provide 14 in essence is a more systematic, systemized, 15 regularized consultation process that works 16 well, first, and, secondly, a much clearer 17 more predictable path to the pre-market 18 review and post-market regulation of 19 combination products. 20 MR. BARNETT: Mark, you just used 21 the word "clearer." Let me ask you one more 22 question because I think in terms of clarity 51 1 there are two aspects of combination 2 products that may cause some confusion. One 3 of them is the GMP requirements and the 4 other one is adverse event reporting. What 5 are you doing to clarify that? 6 MR. KRAMER: Well, a couple of 7 things. First I think that one of the 8 issues with combination products that I've 9 seen historically and I think this is true 10 of review of all products but I think it 11 could tend to cause more of a problem for 12 combinations and that is that there tends to 13 be more of a focus on what is going to be 14 needed in order to get a new product 15 approved. 16 But as part of getting a new 17 product approved we also need to look at the 18 quality systems that need to be in place for 19 that product and adverse event reporting 20 requirements. But historically I think 21 those have gone by the wayside and been 22 dealt with later in the review process, 52 1 perhaps too late to really have a very 2 meaningful consideration of how all those 3 issues need to be addressed. 4 So what we're doing now as part of 5 the request for designation process is where 6 possible providing our preliminary 7 determination of what GMP and adverse event 8 reporting requirements a product will be 9 subject to. This is at Day One, I mean, 10 when a product is first coming in for 11 assignment so that a sponsor will be able to 12 think about and consider these issues much 13 earlier in the process than historically has 14 been the case. 15 We're also encouraging a lot of 16 discussion between the centers and sponsors 17 on these issues. One of the things that I 18 had heard early on was that sponsors might 19 be surprised and expecting a device 20 inspection, for example, for a device 21 biologic combination but instead having a 22 team biologics inspection and our goal is 53 1 that there shouldn't be any surprises. You 2 should know what type of inspection and what 3 types of requirements you'll be subject to 4 much earlier in the process. 5 We're also developing guidance 6 documents and internal standard operating 7 procedures both for the GMP and adverse 8 event areas. One thing that we've seen is, 9 for example, for adverse events there tend 10 not to be very strong links between adverse 11 event reviewers in various centers because 12 typically the device folks review MDR 13 reports and the drugs and biologics people 14 review their types of reports but there's 15 generally not that much crossover. 16 And then what happens is when a 17 combination product review or adverse event 18 comes in it's more difficult to figure out 19 who do you need to contact in another center 20 in order to ensure adequate participation in 21 the review process. 22 So what we're developing are, 54 1 first, standard operating procedures that 2 will ensure good communication between 3 reviewers in the centers on these kinds of 4 issues and then also, importantly, guidance 5 documents that will address when a default 6 mechanism for adverse event reporting or GMP 7 might need to be supplemented in order to 8 best address the issues for that product. 9 An example might be let's say you 10 have a drug device combination that's under 11 review in CDR under NDA. If we say nothing, 12 I mean, typically what it means is that that 13 product is being reviewed under NDA and it 14 would be subject to drug adverse event 15 reporting. 16 But there might be cases where 17 malfunction reporting such as would be 18 provided under MDR might be applicable for 19 that kind of product. And what we're trying 20 to do is to develop the guiding principles 21 for when you might need to supplement 22 adverse event reporting or GMPs in order to 55 1 be most appropriate for a given type of 2 product. 3 So those are the types of things 4 that we're doing in that regard and I think 5 they will provide a lot more clarity for 6 sponsors and for our own folks in terms of 7 how these issues should be handled. 8 MR. BARNETT: Thanks, Mark, and 9 thanks to the three of you for the good 10 overview. The schedule now calls for a 15- 11 minute break but it's so early in the game 12 we're not tired enough for fifteen minutes. 13 So let's take a five-minute stretch break 14 and be back here in five minutes. Thanks. 15 We'll set up the next panel. 16 (Recess) 17 MR. BARNETT: Let me introduce now 18 our first panel on how the user fee process 19 is working in general in CBER and CDRH and 20 Bob Yetter is associate director for review 21 management in CBER. 22 Representing the Medical Device 56 1 Manufacturers Association is its executive 2 director Mark Leahey and representing 3 AdvaMed is Chuck Swanson, Vice President for 4 Quality and Regulatory Affairs, Medtronic, 5 Inc. 6 And after this panel we're going 7 to have a public presentation from Paul 8 Touhey, who is President of Fujirebio 9 Diagnostics, Inc. So without further ado, 10 let me begin with Frank. 11 MR. CLAUNTS: My name is Frank 12 Claunts and I've had the pleasure of working 13 towards the enactment of MDUFMA as we were 14 working on the development of the 15 legislative package and of the performance 16 goals and since MDUFMA has been enacted I 17 have had the pleasure of working on 18 implementation of MDUFMA. 19 And I'm going to talk to you about 20 two things this morning. The first half of 21 my discussion is going to just be a very 22 quick summary of things that we've 57 1 accomplished from the financial management 2 perspective in implementing MDUFMA. And 3 then we're going to talk about the financial 4 results of MDUFMA in summary for the second 5 half. 6 On the accomplishments I want to 7 stress that the things that I'm going to 8 talk about are the results of a team of over 9 20 people from the Center for Devices & 10 Radiological Health, from the Center for 11 Biologics Evaluation & Research, from the 12 Office of Regulatory Affairs, and the Office 13 of the Commissioner. And I think they take 14 great pride in the fact that they've worked 15 very hard to try and make MDUFMA work. 16 Within a month after the act was 17 signed by President Bush on the 26th of 18 October we published in the Federal Register 19 a summary notice that described the fees for 20 2003, gave interim procedures, and told 21 everybody don't send checks yet, we can't 22 collect money until we have an appropriation 58 1 and until we also have internal systems in 2 place to receive and account for these fees. 3 President Bush signed that 4 enabling legislation on the 20th of February 5 and once those appropriations were signed 6 within five days we published in the Federal 7 Register a notice with detailed payment 8 procedures. We had established a lockbox at 9 the US bank at St. Louis. We wanted to have 10 an intermediate third party fiduciary 11 collect the money and manage it for us. 12 We also set up a unique payment ID 13 number system and cover sheets that were 14 accessible on line and we asked firms to use 15 these cover sheets. We tried to design the 16 cover sheets so that they were very helpful 17 to firms in figuring out what the amount of 18 fee was that had to be paid for each 19 application. 20 And the key to those cover sheets 21 was a unique ID number assigned to each 22 cover sheet and that number is something 59 1 that was put in both CDRH's data systems and 2 the agency's financial management data 3 systems so that we could link these two and 4 make sure that we could keep up with what 5 applications had paid fees and which hadn't. 6 Early on in the process, too, we 7 issued guidance on qualifying as a small 8 business, on which applications are subject 9 to fees and how we defined them, on 10 bundling, and on many other topics related 11 to MDUFMA. We tried to work very hard to be 12 proactive in getting information out, 13 posting those guidances and payment 14 instructions and Federal Register notices on 15 the MDUFMA website that we created. 16 In March and April we sent out 17 invoices for all the applications that had 18 come in between October 1st and March 31st 19 and we also conducted a webcast in early 20 April to explain our invoicing process and 21 also the fact that all applications that 22 came in on or after April 1st had to have 60 1 the fee paid at the time the application 2 came in before we would commence review. We 3 tried to respond to questions then. 4 We developed internal plans for 5 fee allocation and use to try and make sure 6 we used that money in a way that was going 7 to help to achieve the performance goals 8 that were crucial in MDUFMA. And we also 9 created a set of internal daily reports so 10 that we get daily reports on the fees 11 received the previous days, on applications 12 that came in that didn't have fees 13 associated with them, and a daily update on 14 any firms that are in arrears in their fees. 15 We also had to develop and 16 implement a modified time reporting system 17 in both CDRH and CBER because the MDUFMA law 18 defined a new process in the statute, the 19 process of review of device applications 20 that didn't exist before. It put together a 21 subset of activities that were unique and we 22 had to come up with a way to account for 61 1 that subset of activities, to develop what 2 those costs were for that subset of 3 activities in 2002, and to use that same 4 process to account for it in future years 5 because that was required under the trigger 6 requirements of MDUFMA. 7 August 1 we published the fees for 8 2004 right on the schedule required in the 9 legislation. On August 25th we managed to 10 make the cover sheet that firms had 11 previously had to print out on their 12 computers and fax into the agency sent 13 electronically. We had a number of data 14 security issues to work out before we could 15 do that. And Mark Leahey and some of his 16 staff came in to help us to try and make 17 sure that we had the cover sheet designed in 18 a way that was very user-friendly for the 19 people who would be filling out the 20 information and electronically transmitting 21 it. 22 On the 29th of October we secured 62 1 assurances of adequate appropriations or an 2 adequate request for appropriations for 2005 3 and beyond as both Dr. Feigal and 4 Dr. Goodman mentioned earlier in their 5 comments this morning. We are very pleased 6 at this commitment of appropriated resources 7 as envisioned in MDUFMA for the three years 8 2005, 2006, and 2007 as contained in that 9 letter. We think that's a real key to the 10 long term health of the program. Our 11 Commissioner and many of you worked very 12 hard in the background before this letter 13 was issued and we're grateful for it. 14 We're now working on the fiscal 15 year 2003 financial report that's due to 16 Congress under MDUFMA. It's due by the end 17 of January. And we're also working on a 18 five-year financial plan that will be 19 published and put on our web when it's 20 completed. 21 This is a summary of the fees. 22 I'm not going to talk about this but it 63 1 simply shows the fees that were published 2 for 2003 and 2004. 3 The next thing I want to do is 4 just give you a very brief summary of some 5 of the things that are in our financial 6 report and the financial results from last 7 year. And, of course, the whole financial 8 emphasis is to gather the additional 9 revenues that are needed in order to give us 10 the resources to meet the performance goals 11 that we'll talk about next on the agenda 12 this morning. 13 We actually had a much higher 14 collection of application fees in the month 15 of September than we had in any previous 16 month. I think it was in large part a 17 result of the fact that anybody who could 18 sent their application in in September to 19 take advantage of the FY 2003 fees rather 20 than the higher 2004 fees. As a result of 21 the heavier than expected September 22 collections we collected a total of $21.9 64 1 million in fees last year. 2 Now, some of you may say hey, 3 that's more than you planned when you set 4 fees for 2004, and that's right. It's about 5 2.3 million more than we had planned when we 6 set fees for 2004 last August. But it's 7 still $3.2 million less than the $25.1 8 trigger that was established in MDUFMA for 9 2003. 10 Now, that has an impact on how 11 much we need to collect next year. And the 12 middle column of this table shows the amount 13 of fees that we had originally envisioned 14 needing to collect in 2004 in order to make 15 up the shortfall in 2003 and that was 33.9 16 million. 17 The only thing different in these 18 two columns is the compensating adjustment 19 that we need. Instead of needing an 20 additional 5.5 million to make up that 21 shortfall with the higher collections that 22 we had, particularly in September, we only 65 1 need an additional 3.2 million to make up 2 that shortfall and to have us on track or a 3 total of 31.7 million to be collected next 4 year rather than the 33.8 million. 5 As soon as we got these 6 preliminary results and we found our 7 shortfall was not as great as we had 8 anticipated back when we set the fees for 9 2004 we notified the appropriation 10 committees. And the reason we notified the 11 appropriation committees is because in the 12 appropriation act they set the amount of 13 fees that we're allowed to collect and spend 14 for the fiscal year. 15 And previously they were going to 16 set that at 33.9 million and we wanted to 17 get that to the new lower amount of 31.7 18 million so that their fee ceiling for us 19 would be consistent with our latest 20 financial results for 2003. By doing that 21 they will make that 31.6 million the amount 22 that we can collect and spend in 2003. 66 1 And if we should collect anything 2 more than that under the terms of MDUFMA any 3 excess collections we get above the amounts 4 Congress appropriates we are to set aside 5 and credit against the next year's fee. So 6 let's just say the next year's revenue 7 target under the statute was 37 million. If 8 we collect a million more than we thought we 9 would in 2004 when we set that revenue 10 target we deduct that extra collection from 11 the revenue target so that we collect less 12 in fees the next year. 13 I think in truth that's very 14 unlikely to happen because as some of you 15 may know when we set the fees for 2004 we 16 did not lower the number of applications 17 that we expected to get. We kept the 18 application number estimate the same as it 19 was in 2003. We got fewer applications than 20 we had planned. Should we get exactly the 21 same number of applications in 2004 and they 22 pay the 2004 fee rate we still would get 67 1 less than 31.6 million in 2004. We'll get 2 about 31.1 million or about $600,000 less. 3 So I wanted to point that out. 4 The law makes it very clear that if we 5 collect less than we anticipated that's 6 taken care of in a compensating adjustment 7 in increasing the fees for the next year. 8 If we collect more than is anticipated in 9 any year we make up for that by charging 10 less in the next year when we set fees the 11 next year. And the act sets out that 12 mechanism and that's clearly more efficient 13 than trying to make adjustments once fees 14 have been set for the year and people begin 15 to pay fees. 16 What are the results? In 2004, 17 very quickly in summary, of the 21.9 million 18 we collected we spent about 14.9 million and 19 carried the balance over to use in the 20 current fiscal year. We used that money to 21 do a number of things to support the 22 program. 68 1 In part we used it to support an 2 additional 22 staff years that were spent on 3 the process for the review of device 4 applications. That's 22 more paid staff 5 years spent on that process in 2003 than 6 were spent in 2002. 7 But that 22 staff years really 8 understates what was done because those 9 staff years were hired very heavily towards 10 the end of the year. Most were hired near 11 the last quarter of the fiscal year and the 12 Center for Devices and Radiological Health 13 actually put on a net of 67 additional 14 people over and above what they had at the 15 beginning of the year in the device review 16 program. So they burned less than 67 FTE 17 because they were hired late in the year. 18 But we are in a position to be 19 utilizing about 100 more staff years in the 20 device review process in 2004 than we used 21 in 2002 and, of course, the real key to 22 utilizing those additional staff years is 69 1 having the resources to be able to improve 2 our review performance and to meet the 3 performance goals that have been established 4 for MDUFMA. 5 And there will be a lot more 6 details about our financial performance in 7 the report to Congress that we make. It's 8 due the end of January. We'll make it 9 available on our website just as soon as it 10 has been cleared by the Department of Health 11 and Human Services and transmitted to 12 Congress and it will be available for you. 13 So that's a little summary on the 14 resources and I'll turn it over now. I 15 think we're going to talk about what we've 16 done with the money. 17 MR. BARNETT: We will and that's 18 Dan. 19 DR. SCHULTZ: The key question of 20 the morning is how is he going to get 21 through 26 slides in five minutes. And even 22 though I'm from New York and I talk pretty 70 1 fast that's going to be a little tricky. So 2 what I'm going to do is try to summarize for 3 you. I'm not going to read all the numbers. 4 I'm going to try to summarize some of the 5 key concepts and hopefully create some food 6 for discussion and for some of the comments 7 of the other panel members. 8 So what I'd like to do is show you 9 real quickly where we are and where we need 10 to be and then get into what we have done so 11 far in terms of preparing for the challenges 12 that lay ahead. We will talk a little bit 13 about hiring, training, guidance 14 development, scorecards measuring our 15 progress. and CPR projects that we have in 16 terms of really changing the culture of the 17 center in ways that will allow us to do both 18 more timely as well as quality review work 19 and then finally a couple of conclusions. 20 Those of you were involved in the 21 negotiations may remember there were a lot 22 of people sitting at the table who wanted us 71 1 to look at a lot of different parameters. 2 We basically developed those parameters. We 3 developed the data to look at those 4 parameters on the run and what we ended up 5 with, quite frankly, is a wide mixture of 6 goals and different kinds of parameters that 7 hopefully satisfied everybody's needs to a 8 certain degree. 9 So when you look at the numbers, 10 specifically looking at the review time 11 goals and looking at the baseline data from 12 2001, from FY 1999 to 2001, and then looking 13 at the key goals that kick in 2005, 2006, 14 and 2007 what you see is that there are some 15 areas where we're actually fairly close to 16 meeting those goals and there are some areas 17 where we're quite far away. And I'm going 18 to try to summarize how we got there in a 19 little bit. 20 As I mentioned, we tried to look 21 at all the different types of submissions 22 that we get including PMA and panel track 72 1 supplements. One particular area that 2 people were concerned about was how we 3 performed on expedited reviews, those 4 products that really have the chance to make 5 a significant public health impact where in 6 fact we found in looking at our previous 7 data that we were actually slower in some of 8 those areas than we were in the regular 9 PMAs. And this was an area where we felt 10 that with additional resources we could 11 really make some major changes. 12 PMA supplements were also looked 13 at. Again, one thing that you might look at 14 is where it says 180 days those are 15 statutory time frames. And we are going to 16 meet those statutory time frames most of the 17 time. We always have and we always will 18 continue. 19 Again, some of these areas were 20 things that we were told we did not want a 21 drop off. And then there were other areas 22 where we were told that we wanted to see 73 1 major improvement. And I think that's why 2 you see one parameter which we're performing 3 at 89 percent down to another parameter 4 where we're only performing at 17 percent 5 and where we obviously have a long ways to 6 go. 7 With respect to 510(k)s again the 8 goal is to make a decision in 90 days and to 9 do it 75 percent or higher in 2005 to 2007. 10 As you can see here, we're actually fairly 11 close in terms of meeting that. But we 12 still, I think, have significant room for 13 improvement. If we can make those early 14 decisions, get those questions out earlier 15 on, I think despite the fact that the 16 ultimate goal may not be that far off that 17 we can actually do better than that if we 18 can change some of the ways that we operate 19 and ask the questions early and get your 20 responses back early. 21 So what does it all mean? Again, 22 as I mentioned, some of the goals are simply 74 1 a reflection of the statutory requirements. 2 Some goals are for pieces of the process 3 that we think when added together should 4 result in a better whole. And some of the 5 goals reflect significant changes in the way 6 we do business which will allow us to bring 7 new products to market faster. 8 In terms of hiring, as Frank 9 mentioned, we looked at this from a number 10 of different aspects. The first time I 11 heard the word "burn" I wasn't sure what 12 they were talking about. I don't recall 13 that we had actually burned anybody. We 14 might have gotten annoyed sometimes but that 15 seemed a little bit drastic. 16 But if you look at the number of 17 FTEs that we "burned" in FY '02 versus FY 18 '03 what you see is an increase of six, not 19 terribly impressive. So you look at the 20 number of people which is what I tend to 21 look at, the number of new people that we've 22 actually brought on board over the last 75 1 year, and I will tell you that the numbers 2 don't nearly reflect what it's like to see a 3 whole cadre of individuals, look at their 4 backgrounds, look at their CVs, and look at 5 the places where they're going to be working 6 and making a significant impact in the 7 future. 8 So, as Frank mentioned, we've 9 actually brought on about 67 new people over 10 the course of the last year. I'll go into 11 that in a little bit of detail in the next 12 couple of slides. And the difference is 13 that most of that hiring actually occurred 14 within the last part of this year. And this 15 took an effort not only of the professional 16 staff in defining what the areas of need 17 were but in all of our support services in 18 being able to get those people onboard in an 19 incredibly rapid manner. 20 And currently we are undergoing a 21 significant training program to make sure 22 that all these people get integrated into 76 1 the program, learn what their jobs are as 2 quickly as possible. 3 So all this takes time. Again, as 4 Linda mentioned earlier, all of these 5 functions are being performed by people who 6 have day jobs as well in terms of reviewing 7 the documents that we currently have. 8 I think when you look at the 9 distribution by office it's pretty clear 10 that the resources have in fact gone into 11 pre-market review. You can see here ODE has 12 hired 26, OIVD 11, and there have been 13 groups in the other offices as well. But 14 clearly I think that we have met our 15 mandate, which was to focus our hiring on 16 those areas which could help us meet the 17 performance goals that were set out in the 18 legislation. 19 The other thing I think that's 20 interesting to point out is the types of 21 skills that we've hired. Again, when you 22 look at medical officers, engineers, 77 1 scientists, project managers, which I'll 2 touch on a little bit later, program 3 support, CSO statisticians, and we even 4 hired an attorney. I'm not sure why but we 5 did hire an attorney. 6 In addition to looking at the 7 distribution in terms of skills and in terms 8 of areas we I think for the first time have 9 looked at different ways of hiring people 10 that made sense for those individual 11 positions. There are some positions where 12 you know that person is going to be needed 13 for a long time. There are other positions 14 where you think that there is going to be a 15 focused area of concern for a few months or 16 a couple of years. 17 So it makes sense to consider not 18 only bringing people on full-time, which has 19 been the traditional way we've hired in 20 government, but also to look at various 21 programs such as the intern program, which 22 has actually borne us some fruit in terms of 78 1 finding people, getting them onboard, seeing 2 what they're like, seeing if their skills 3 and interests match the work that we do, and 4 actually we've actually been able to hire 5 some people from that intern program who are 6 now extremely productive members of our 7 staff. 8 We've also looked at contracting a 9 lot of the work as well as joint hires which 10 provides us with the opportunity to get 11 people involved in different aspects of the 12 center and improve the communication between 13 the various offices which is necessary to be 14 able to meet our goals as well. 15 So what are we doing for this next 16 year? Actually this process is beginning 17 now. The MDUFMA product teams that Linda 18 mentioned are formulating their '04 19 prioritized hiring plans. We've already 20 identified 11 positions that the center has 21 approved and we already have two hires 22 onboard. 79 1 Again, I can't overemphasize the 2 fact, again as Linda mentioned, the idea is 3 not simply to add bodies. The idea is to 4 meet specific areas of need within the 5 center and to that end in addition to hiring 6 the scientific disciplines necessary to 7 evaluate the magnitude of new technologies 8 that we're seeing we're looking for people 9 who can help us manage things more 10 efficiently. 11 We also recognized early on that 12 while it's fine to have medical officers 13 looking at clinical studies if you send a 14 consult over for a statistical review and 15 hear that that statistical review will not 16 start for another three months that's not an 17 efficient way to run a program. So despite 18 the fact that people within ODE had specific 19 needs in their own areas they actually 20 recommended not hiring people within ODE but 21 actually hiring the statisticians to allow 22 the people that were there to do their jobs 80 1 more efficiently. 2 This is a new way of thinking and 3 it's a way of thinking that I think is 4 really going to get us to where we need to 5 be two and three years from now. I 6 mentioned the dual hires, people working in, 7 for instance, ODE and OST. That allows us 8 to hire people who have expertise in various 9 areas and want to do some bench work as well 10 as some review work. But it also does a lot 11 more than that. It provides people in both 12 offices a better magnifying glass into what 13 the other offices are doing and allows these 14 people to act as liaisons between the 15 various parts of the center, again with the 16 focus of meeting the performance goals. 17 I mentioned outside experts. One 18 of the programs that have really impacted 19 the center in a major way is the Medical 20 Device Fellowship Program, which is a 21 specific program set up by Dr. Feigal a 22 couple of years ago in order to be able to 81 1 attract the best and the brightest from the 2 outside, again in recognition of the fact 3 that we're seeing an incredibly wide variety 4 of new technologies and we clearly cannot 5 have all of the in-house expertise necessary 6 to review all those products as efficiently 7 as they should be reviewed. So having these 8 experts from the outside who we can call on 9 as needed is an incredibly valuable resource 10 for us. 11 Bringing people onboard is just 12 the beginning. One of the things that 13 again, have been mentioned earlier is 14 professional development. There has been a 15 particular commitment to increasing 16 professional development this year. I know 17 these numbers may not be terribly 18 informative but what I think is informative 19 is that when you look at our entire 20 operating budget minus salaries and 21 benefits, obviously the big part of our 22 budget, but if you look at the operating 82 1 budget greater than 40 percent of our 2 operating budget in 2003 was spent on 3 various types of professional development. 4 And what I think is even more 5 encouraging is that of the 310 employees in 6 ODE 291 or almost 95 percent of the 7 employees in ODE participated in some aspect 8 of professional development over the course 9 of the last year. 10 Guidances have been mentioned. 11 Again, there is going to be a more detailed 12 discussion of some of these guidances later 13 on but suffice it to say that this has 14 occupied a significant amount of our time. 15 Again, we took a lot of our best and 16 brightest who, by the way, also had other 17 things that they were doing at the same time 18 in order to get these things out. 19 I know that there are going to be 20 some additional comments made on the way 21 that process transpired and I'm happy to 22 discuss that later. And we have additional 83 1 guidances which will be forthcoming. 2 Again, the goal of these guidance 3 documents, and I think this may hopefully 4 help to explain the process, was to get this 5 program up and running, to provide enough 6 information both to our own staff and to the 7 industry to allow this program to take off. 8 We recognize that there will need 9 to be some additional guidances, some more 10 specific guidances, some changes to the 11 guidances that we already have as the 12 program develops. As we have data these 13 things may need to change over time but we 14 thought it was extremely important at least 15 to get some clarity as to how our internal 16 processes relate to the new bill. 17 The other thing that we think is 18 critical is measuring our performance and we 19 have a program in place to set up 20 scorecards. Hopefully that data will enable 21 both us and you to monitor our progress in 22 real time. 84 1 The scorecards are designed to be 2 aligned from the center through the offices 3 to the divisions and even down to the branch 4 level in order to be able to measure 5 performance at every level within the 6 organization and make sure that we're moving 7 in the right direction. We're currently 8 entering baseline data and working very hard 9 to adjust our measurement tools. 10 Again, as I think Linda mentioned 11 earlier, a lot of these measures that were 12 mandated in MDUFMA are things that we have 13 not measured before. And just getting the 14 baseline data, getting the measurement 15 tools, getting the databases in place has 16 been a monumental effort. 17 There have been questions about 18 well, what are you doing to focus on those 19 aspects of your program that will allow you 20 to meet the performance goals, and I think 21 that these are just a couple of examples of 22 teams and projects within the center that 85 1 have gone on within the last year that I 2 think you can see without any great 3 explanation are specifically focused on 4 making our various processes more efficient. 5 The PMA filing team put out a 6 guidance document. We have a PMA closeout 7 team. It was apparent to me and others over 8 the last couple of years that we did very 9 well in terms of completing the scientific 10 review at times and yet at the end there 11 were delays due to administrative procedures 12 that perhaps were not necessary and could be 13 avoided. 14 We're looking at ways to stream- 15 line the 510(k) program to make it clearer 16 what kind of information needs to be 17 provided and what kind of information needs 18 to be reviewed. We're looking at ways to do 19 better in terms of communicating between the 20 various experts in the center so that the 21 consultations are the right consultations 22 performed at the right time for the right 86 1 reasons answering the right questions and 2 that they are performed in a timely manner. 3 And then finally we're looking at 4 a program of after action review to examine 5 our processes, see what worked, see what 6 didn't work, and try to figure out how to do 7 it better the next time. 8 As someone who knew a little bit 9 about numbers and what they meant once said, 10 not everything that can be counted counts 11 and not everything that counts that can be 12 counted. So, bottom line, we are committed 13 to meeting all of the performance goals. We 14 believe that we're laying the groundwork to 15 make that happen. We will need your help, 16 as we have in the past, to move forward and 17 make this happen. And with that I'll stop 18 and I thank you very much. 19 MR. BARNETT: Thank you. Bob 20 Yetter? 21 DR. YETTER: I'd like to tell you 22 a little bit about CBER's MDUFMA activity. 87 1 During the negotiations one of the things 2 that we heard was very important to industry 3 was harmonization with CDRH so that there 4 would be some consistency of expectation 5 across the two centers. 6 To that end I want to assure you 7 that CBER is participating on all of the 8 MDUFMA committees. All of the guidance 9 documents being issued are joint guidance 10 documents between CDRH and CBER. And we've 11 also taken steps to harmonize review 12 processes and procedures. One of the 13 greatest things that we've done here or one 14 of the important steps in this respect is to 15 use the CDRH bluebook memos as interim 16 general reviewer guidance pending 17 development of center- specific standard 18 operating procedures. 19 We also implemented a device 20 review subcommittee of our Review Management 21 Coordinating Committee. The Review 22 Management Coordinating Committee is the 88 1 center committee responsible for regulatory 2 process. The Device Review Subcommittee is 3 specifically aimed at regulatory process for 4 device review, developing standard operating 5 procedures, and looking at how best to 6 streamline that process. Also some of our 7 offices, OBRR in particular, have undertaken 8 certain management initiatives in order to 9 improve their device review approach. 10 You heard earlier from Diane 11 Maloney that there was a number of reports 12 involved and CBER has been involved in 13 those, particularly the Section 205 report 14 on nonCDRH review. CBER had to be involved 15 with that since nonCDRH review, well, that's 16 us. This report summarized our performance 17 through June 30, 2003, and it highlights the 18 performance improvements and lays some 19 groundwork for device review in CBER 20 generally. Also we've been involved with 21 CDRH and the Office of the Commissioner in 22 the development of the FDA annual report to 89 1 Congress. 2 Our activities in 2003 3 concentrated primarily on timeliness and 4 problem solving and to that end we showed 5 improvement in all of the goal areas under 6 MDUFMA. For 2004 what we're targeting is to 7 sustain our 2003 performance, improve upon 8 it if we can, to train our people in the 9 MDUFMA guidances that are coming out, and to 10 actively implement the commitments under 11 MDUFMA having to do with bundling to improve 12 consistency of review and enhanced 13 management oversight. 14 We did show better performance on 15 device review in fiscal year 2003. What led 16 to that? Part of it was better management. 17 We had input from a professional consultant 18 on how to manage, better definition of 19 roles, and active mentoring of reviewers by 20 management staff. We had a number of 21 training initiatives on least burdensome, 22 the 510(k) paradigm, and these training 90 1 initiatives were reinforced both at the 2 office and the divisional level. 3 But perhaps the most important 4 part was a focus on problem-solving in 5 cycle, an emphasis on problem-solving, not 6 just problem identification. This meant 7 completing our review earlier in the cycle 8 and then moving to solving the problems 9 found during that review. That turned out 10 to be a very effective approach. 11 One of the things that was a 12 concern to industry and, frankly, it 13 concerned us, was document handling. As you 14 may expect, CBER and the FDA in general is a 15 document-intensive organization. We deal 16 with a lot of paper. We instituted new 17 courier service, a bar-coded delivery system 18 to make sure that we could track documents 19 through and make sure they got to the right 20 places. This has been extended to our IND 21 system now as well. 22 We developed an improved standard 91 1 operating procedure for document handling 2 and also with CDRH participated in a best 3 practices workshop which also improved our 4 performance, we believe. 5 Since Dan ended with a quotation I 6 suppose that I will, too. It was Winston 7 Churchill who said that this is not the end. 8 It's not even the beginning of the end. But 9 it is the end of the beginning. And I think 10 it's reasonable to say that it's been a good 11 beginning. Thank you. 12 MR. BARNETT: Thank you. Mark 13 Leahey? 14 MR. LEAHEY: I am the executive 15 director of the Medical Device Manufacturers 16 Association. Those of you fortunate to be 17 here all day will probably be tired of 18 seeing me up here. I'm speaking on all five 19 panels. That's because I think it's very 20 important that these smaller innovative 21 companies are represented here today. And 22 in some of the panels I may have one or two 92 1 points to make. In this first panel I may 2 have a few more. 3 At the beginning of the meeting 4 today Mark expressed the importance and this 5 is a great time for stakeholders to see how 6 they're being affected by the new 7 legislation. And then he went on to say 8 this is not the time to talk about the 9 intricacies of the bill but, again, while we 10 don't want to get stuck in the weeds here I 11 think the effect that this is having on 12 companies relates to maybe some of the 13 structures here and, again, I'm not going to 14 waste my time and get into the weeds but 15 I'll just touch on a few of those. 16 We're talking about user fees. 17 The impact of user fees has been 18 controversial for many, many years. This 19 started in '92. Last year with the 20 enactment of the user fee program there was 21 quite a bit of back and forth. But I'm here 22 to tell you that conversation is in the past 93 1 and the issue isn't whether CDRH needs 2 additional resources. It does. We just 3 need to make sure these resources are 4 generated in such a fashion that doesn't 5 negatively impact the smaller innovative 6 companies in the market place. 7 Last year myself, Paul Touhey, and 8 others at MDMA came to the table during the 9 negotiations in the summertime and I think 10 had a real impact on the final passage. And 11 the bill had three critical components. It 12 had initial user fees, it had Congressional 13 appropriations, and it had FDA performance. 14 And in order for everyone to call this 15 program a success all three must be place 16 moving forward. 17 So one year later where are we 18 now? Well, user fees, as everyone in this 19 room knows, jumped on average 35 percent. 20 In the 510(k)s for companies over 30 million 21 it was up close to 60 percent. These types 22 of fees simply cannot be sustained by the 94 1 smaller innovative companies out there. It 2 just can't work and we've had assurances 3 that this may be an aberration from the 4 first year but we need assurances in place 5 that make sure we don't see these 35 percent 6 increases moving forward. 7 Also this year we saw an 8 appropriations shortfall of $11 million. As 9 everyone knows the baseline was supposed to 10 be $190 million. They came in at 194 but 11 well below the 205 where they needed to hit. 12 I think that, as Dan pointed out and others, 13 FDA is doing their part to try to still 14 maintain the performance goals promised to 15 the industry last year and I was very 16 encouraged to hear Dan say that the 17 baselines are currently being adjusted as 18 well because I think it's real important to 19 point out that we need the most recent data 20 as we're looking at performance here. 21 We need to look at 2000, 2001, and 22 2002. When you incorporate 1999 in there it 95 1 throws off the numbers a bit. So we're 2 very, very, pleased to see that that is part 3 of FDA's initiatives moving forward. 4 The shortfall is very, very 5 troubling given the fact that industry 6 doesn't have the ability to say well, we 7 didn't hit our numbers here, we were $3 8 million short, as everyone found out, but 9 unfortunately we are responsible for making 10 up that shortfall in years past and I'll 11 discuss that a little bit later but when we 12 looked at structuring the original deal I 13 think when you look at MDUFMA all three 14 parts were in place from Day One. It was 15 Congressional appropriations, industry user 16 fees, and it was FDA performance. 17 The way this was structured 18 Congress had three years to ramp up. 19 Industry was held accountable from Day One 20 and now we're starting to see the problems 21 from that structure. 22 Others in industry have 96 1 characterized the performance improvements 2 part of MDUFMA as an overall improvement of 3 about 25 percent. Well, I think if you look 4 at 1999 numbers, sure, maybe the overall 5 improvement in 2000-2007 is 25 percent. But 6 if you look at where FDA's performance was 7 in 2002, the last year without a user fee, 8 and look where it needs to be in '07 I don't 9 think you're going to see a great 10 improvement from '02 to '07. 11 This is a credit, I think, to 12 Dr. McClellan, to Dr. Feigal, to Dan, to 13 everyone at the agency really making 14 tremendous improvements from '99 to 2002 but 15 we should try to exceed these performance 16 goals that are set out in '07 as well. 17 Next year and beyond, right now by 18 all accounts the House and the Senate seem 19 to be falling about $20 million short of the 20 required '04 funding levels and if you look 21 at the OMB letter to Congress it actually 22 calls for the President's '04 budget adopted 97 1 by Congress to be actually $184 million. So 2 that would be a $7 million shortfall from 3 '03. 4 These shortfalls here coupled with 5 the fact that, as Frank Claunts pointed out 6 in his slides, there may be another 7 reduction in submissions next year the way 8 this bill is structured these shortfalls by 9 the industry have to be made up and yet 10 Congress is not held to the same standards. 11 And that simply is not fair. We view that 12 as not fair to the industry. 13 And especially, again, the smaller 14 companies, a $200,000 user fee to a company 15 with $30 million in sales, the fee rate in 16 proportion to the revenue would be like a $2 17 million user fee for a $3 billion company. 18 So this really does affect, we think, the 19 smaller companies disproportionately to the 20 larger companies. The smaller companies 21 cannot sustain continued dramatic spikes in 22 fees. 98 1 So looking forward what reforms 2 are needed to ensure a strong, viable user 3 fee program that fosters innovation? If 4 there is an appropriations shortfall under 5 the legislation Congress will be forced to 6 revisit MDUFMA in 2004. As everyone in this 7 room knows, if they don't appropriate the 8 additional $60 million included in the 9 inflationary adjustments the user fee 10 program sunsets. 11 We are not here to say that we 12 want to see this program sunset. We have 13 lived up to our bargain. We are paying the 14 user fees. We want to see this program 15 continue in a viable, sustainable way but, 16 given the current structure, we don't think 17 that that would be in our best interest. 18 Given the current structure and if 19 there is a shortfall from Congress without 20 addressing the potential to cap these 35 21 percent increases to industry we can't in 22 good conscience say it's in the best 99 1 interests of the medical technology sector. 2 So what can we do? I know our 3 sister organization has called for a third 4 party audit to look at what money FDA needs 5 and where does it go. We concur with them. 6 Last year before MDUFMA was enacted we 7 called for the same thing, an audit to see 8 what resources FDA needs, what those monies 9 will be utilized for, and what type of 10 performance could the industry expect. 11 Unfortunately due to time constraints that 12 audit was not able to occur. 13 But PDUFA had it prior to moving 14 forward in 1992 and we think it's critical 15 again to go one year into this program and 16 look and see if everyone's expectations were 17 in line, what's expected from the industry 18 in the form of user fees, what we can expect 19 from Congress in the form of Congressional 20 appropriations, and given those resources 21 what type of performance one can reasonably 22 expect out of FDA. 100 1 I think with a year's knowledge 2 going into this and using the three most 3 current years of data, the 2000, 2001, 2002 4 baseline moving forward, what can we expect 5 in performance? 6 Finally, we are open to any and 7 all suggestions to try to find ways that 8 would minimize the dramatic fee increases 9 that we saw between '03 and '04. But I 10 can't say it enough. Thirty-five percent 11 fee increases cannot be sustained by smaller 12 companies. 13 Looking at the legislation, the 14 only way we can reasonably foresee to 15 prevent these fees from occurring in the 16 short term would be to eliminate the work 17 load and compensating adjustments. We can 18 still have an adjustment in there for 19 inflation but the compensating adjustment 20 that resulted in, I think, 16 or 20 percent 21 of the fee increase needs to be eliminated. 22 And yes, this may result in FDA 101 1 not having as stable a source of revenue as 2 they would like and maybe they'd come up a 3 million or $2 million short each year. But 4 the aggregate total of the result of 5 eliminating these adjustments is far, far 6 less than the Congressional appropriations 7 that they are willing to forego in '03 and 8 '04. 9 So we support the FDA's efforts. 10 We support Commissioner McClellan and 11 Dr. Feigal. We think they've done a 12 fantastic job in running the agency and 13 trying to expedite the review of products 14 but we just need to make sure that we get 15 FDA the resources they need in a responsible 16 manner and don't do it in a manner that 17 adversely impacts the smaller companies. 18 Thank you. 19 MR. BARNETT: Thank you, Mark. 20 Chuck Swanson. 21 DR. SWANSON: I appreciate the 22 opportunity to be here and I do want to 102 1 thank FDA for all the efforts that they have 2 put in over this past year to implement the 3 user fees. It has not been an easy process. 4 I think we all understood that from the 5 start. There are obvious opportunities for 6 improvement and I want to try to focus on 7 that in some of my comments. I had the 8 opportunity to be a part of the team that 9 negotiated from an industry standpoint the 10 user fees so I have an abiding interest in 11 the success of the program. 12 I want to comment both on the 13 resources that are needed and on the program 14 and systems improvements. And I think there 15 has been some talk about this on the 16 resource side. I just want to add some 17 comments here. Again, AdvaMed has lobbied 18 very hard for the appropriations part of the 19 user fee package. It is user fees plus 20 appropriations that were necessary to meet 21 the resources that FDA said they needed. 22 And with the agreement that has 103 1 been reached by the Office of Management and 2 Budget there will still be a revenue 3 shortfall so the question on the table is 4 what resources does FDA need to meet the 5 goals because they are still committed to 6 meet those goals. 7 And that's the basis for the 8 AdvaMed request for a third party audit, not 9 to know how you're spending the money but to 10 know how and what resources are needed to 11 approve and review the submissions that FDA 12 sees. That was information that had we 13 requested during the review process but time 14 did not the generation of those data. 15 Hiring plans for FY '04 and '05 I 16 think are interesting. Yes, you're going to 17 hire more people. We're obviously 18 interested in who and how and where and I 19 think there needs to be a greater use of 20 contract resources. 21 The benefits of contract resources 22 are two-fold. First it allows FDA to deal 104 1 with the ebb and flow of submissions and not 2 to be impacted with a large increase in 3 staff that may not be sustainable in the 4 long term if submissions are not at a 5 full-time level that we have seen in the 6 past. 7 And the other is to be able to 8 identify and bring in expertise when and 9 where needed whether it's clinical or 10 technical expertise to review submissions. 11 This provision is allowed under FDAMA that 12 sponsors can actually ask for outside 13 experts and FDA needs to have stable of 14 these resources, more than just the 15 fellowship program. I think there is a 16 greater need there. 17 The final area is in training. 18 The importance of training cannot be 19 underestimated. We recognize that and we 20 applaud FDA's efforts. From a product 21 standpoint I think product knowledge is also 22 a key part and I think the question on the 105 1 table is what can industry do to help 2 reviewers gain better product knowledge. 3 Things like the vendor days have 4 been useful in the past but I think we need 5 to think more broadly about how we can 6 expand the product knowledge of the 7 reviewers and this goes not only for the 8 full-time hires but for the contract people 9 as well. 10 On a system side I think there is 11 a need to improve systems that are already 12 in place. I just want to touch on a few of 13 these. The modular PMA review process. FDA 14 has come out with additional guidance based 15 on their experience. In many ways there are 16 improvements in that but there is a 17 continued unwillingness of FDA to expand the 18 modular PMA beyond original PMAs to panel 19 track 180-day supplements. 20 Not all of those apply but there 21 certainly are cases where the benefits of 22 modular review can be seen in those and I am 106 1 sure this will be discussed more fully in 2 the PMA panel. 3 510(k) paradigm, abbreviated 4 510(k)s have not worked. The review time is 5 basically the same as the standard 510(k) 6 and the numbers are obviously lower as the 7 result of that. You can argue whether 8 that's chicken or egg but I think FDA needs 9 to think about ways to improve that process 10 from a timeliness and an efficiency 11 standpoint. 12 And finally I want to emphasize 13 for those of us who are in the PMA business 14 the importance of the pre-IDE and agreement 15 meetings. FDA resource limitations have 16 impacted the utility of these meetings in 17 the past. With additional resources it is 18 my hope that FDA will focus more time and 19 effort on making sure that these meetings 20 are not only meaningful but that they have 21 some substance even on pre-IDE meetings that 22 there is continuity in those requirements. 107 1 Clearly if data change there need to be 2 reconsiderations but if people change there 3 isn't a need to do that. 4 Guidance, I think there has been 5 discussion about the guidance and FDA felt 6 the need to get those guidances out quickly. 7 I agree with that but there is a frustration 8 on the part of industry, clearly, that we 9 were not actively involved to the extent we 10 could have been. That's the case. We've 11 got to deal with it. What I hope that FDA 12 will do is actively work with industry now 13 to identify areas where the guidances need 14 to be improved and implement those changes. 15 And I just want to identify a 16 couple of things that relate to the user fee 17 and performance goals, the subject of this 18 panel, and one of those is on the October 19 2003 guidance on the FDA, industry 20 interactions on PMAs, a couple of points 21 there. 22 The approvable letter pending GMP 108 1 inspection is a final decision from a 2 decision goal standpoint but there were 3 extensive negotiations during the user fee 4 process and the expectations and the results 5 that came out of that were that's a 6 reasonable action if the sponsor is not 7 prepared for the inspection. 8 But if the problem is with FDA and 9 the Office of Compliance in getting the 10 inspection done that should not be a final 11 action. These are CDRH goals, performance 12 goals; they're not ODE performance goals. 13 The second point is on approvable 14 or denial letters. Not all of these are 15 final actions even though they are final 16 actions from a performance decision goal 17 standpoint. Sponsors have the ability to 18 respond to those. The guidance is silent on 19 whether these are truly final actions from a 20 decision goal standpoint. Clearly it 21 wouldn't be consistent with the intent of 22 the user fees if that were the case. 109 1 The other area that I want to 2 comment on is the 2003 guidance on assessing 3 user fees. Give great credit to FDA for 4 greater efficiency and consistency in the 5 use of real time review. This has helped 6 immensely and because of user fees and 7 because there is an early process for 8 decision-making on those the use of that has 9 expanded. 10 Unfortunately there is no early 11 system for decisions on PMAs versus PMA 12 supplements, what is panel track or 180-day 13 supplements, and we as Medtronic have 14 experienced a situation where we had 15 negotiations with FDA for over a year on a 16 new device that was going to be a PMA 17 supplement. We conducted the clinical 18 study, filed the PMA supplement. It was 19 logged in as a PMA supplement only to have 20 the program management staff overrule that 21 and say it was an original PMA. 22 That's problematic from an 110 1 industry standpoint because it significantly 2 penalizes us if you don't get that 3 information until late. For example, we 4 were unable to do a modular PMA because it 5 was a supplement. So it needs to be a 6 process. 7 There is also concern here about 8 the lack of specificity in that definition 9 which gives rise to the potential for 10 regulatory decision creep, if you will. The 11 expectation was that the number of PMAs, the 12 number of PMA supplements, that were going 13 to be seen were those based on history, 14 i.e., that there were not going to be 15 changes in the criteria for PMAs versus PMA 16 supplements and that shouldn't occur. 17 Other than that I applaud FDA and 18 from an industry standpoint we are anxious 19 to work with FDA to make sure that the 20 system for user fees is efficient and 21 effective. Thanks. 22 MR. BARNETT: Thank you. Now, 111 1 before we go to questions and answers from 2 the audience we have a public presentation 3 from Paul Touhey, who is president of 4 Fujirebio Diagnostics. Paul, do you want to 5 come up here? 6 MR. TOUHEY: Fujirebio Diagnostics 7 was formerly Synercorp's diagnostics 8 business in Malvern, Pennsylvania. 9 Synercorp is a bio-pharmaceutical company 10 that is now part of Johnson & Johnson. 11 I'm also a member and past 12 chairman of the board of the Medical Device 13 Manufacturer's Association. The MDMA 14 represents the entrepreneurial, innovation- 15 driven sector of the medical technology 16 industry. 17 I'd like to make two points this 18 morning. First, MDMA gave its support to 19 user fees last year because FDA must be 20 properly and appropriately funded to 21 effectively review medical technologies. 22 Second, the escalation in user fees that we 112 1 experienced this year simply, as Mark 2 mentioned, can't be sustained by smaller 3 device companies and, frankly, large 4 companies, either. 5 Significantly, this will stifle 6 innovation because these companies are the 7 driving forces in producing new products and 8 improving quality and affordable care 9 through the advancements in R&D. 10 I would like to thank the FDA and 11 their staff for putting together today's 12 meeting. We fully support efforts to make 13 sure that CDRH gets the resources it needs 14 to meet its performance goals for medical 15 device reviews. As Commissioner 16 Dr. McClellan has taken important steps to 17 achieve this goal. Deputy Commissioner 18 Crawford and CDRH director David Feigal have 19 been impressive in our dealings together as 20 well. 21 The collaboration and interaction 22 between the FDA and industry we're 113 1 witnessing today is crucial if we are to 2 achieve the common goal of providing the 3 American public with safe and effective 4 medical technologies as efficiently as 5 possible. 6 As you know, the medical community 7 relies heavily upon smaller, entrepreneurial 8 companies for innovation. It's estimated 9 that 80 percent of the innovation comes from 10 companies with 50 employees or less. Not 11 surprisingly, therefore, many small 12 companies with limited funds view user fees 13 as a tax on innovation. 14 Historically MDMA, representing 15 these companies, has opposed device user fee 16 proposals; however, last year when it became 17 clear that user fees had the support within 18 Congress, the administration, and 19 significant support from larger medical 20 device companies and their trade association 21 MDMA adopted a pragmatic approach and worked 22 with Congress and the administration to 114 1 craft a two-tiered user fee system that 2 recognized the very important difference 3 between a $5 million company and a $5 4 billion company. 5 In the end the bill was not 6 perfect but it was much better than earlier 7 versions. The law promised Congressional 8 funding for FDA in return for fees paid by 9 industry. Performance requirements for FDA 10 were imposed. As we have heard from the 11 FDA, additional money is needed to 12 adequately fund device reviews. As noted 13 earlier, we strongly support additional 14 funding for FDA. We have spoken to our 15 Congressional representatives to fully fund 16 MDUFMA. 17 Over the past year MDMA and its 18 member companies have met several times with 19 members and the staff of the House and 20 Senate Appropriations Committee to advocate 21 for full funding of the user fee program; 22 however, in a recent letter from OMB to 115 1 Congress the administration proposed a 2 reduction of $37 million to the device 3 review program from the amount committed by 4 Congress a little over a year ago from the 5 original terms of MDUFMA. 6 The anticipated Congressional 7 appropriation shortfall dwarfs the $5 8 million shortfall in user fees from industry 9 due to the decrease in the number of 10 submissions filed in 2003. As Mark 11 mentioned, everyone in this room knows to 12 compensate for reduced revenue generating 13 submissions from industry user fees 14 increased dramatically from 2003 to 2004. 15 The average increase was approximately 35 16 percent. 17 These increases were a direct 18 result of the compensating adjustment 19 provision of the MDUFMA legislation, a 20 provision that MDMA did not support during 21 last year's negotiations as we foresaw the 22 massive increase in fees that has 116 1 transpired. 2 Again, we do not dispute the FDA's 3 needs for additional funding; however, 4 industry cannot now be expected to bear the 5 entire burden of the shortfall. Currently 6 if Congressional appropriations fall below 7 levels agreed to under the original terms of 8 MDUFMA the user fee program will sunset in 9 2006. 10 In order for the program to 11 continue one of two things must happen. 12 Either the administration will request and 13 Congress will appropriate the money 14 originally agreed to by the administration, 15 Congress, and industry last year or there 16 must be a material alteration to the terms 17 of MDUFMA. To be acceptable to industry 18 such an alteration would have to result in 19 other changes to the program. 20 MDMA has long argued that 21 compensating adjustments and work load 22 adjustments do not make practical sense and 117 1 result in ongoing, again, massive increases 2 in fees. In MDMA's view these two 3 provisions render the first attempt at user 4 fees unworkable. To ensure we have a 5 strong, viable user fee program these two 6 provisions must be eliminated. This will 7 ensure the sky-rocketing fee increases 8 planned for 2004 will not be replicated in 9 future years. 10 Finally, no reasonable person 11 believes a $30 million company, which is the 12 definition of a large company in the law, 13 should be paying user fees equal to a 14 billion dollar company. The second tier 15 user fee should be increased to a $100 16 million threshold. 17 MR. BARNETT: One more minute. 18 MR. TOUHEY: Dr. McClellan and 19 Dr. Feigal and others have done an 20 outstanding job at FDA and we fully and 21 actively support and appreciate the need to 22 properly fund the agency. We look forward 118 1 to working with the administration, FDA, and 2 Congress to ensure that we have a strong 3 viable user fee program moving forward that 4 strikes the proper balance between getting 5 FDA the resources it needs while fostering 6 innovation. 7 Dr. Feigal, last year I committed 8 to you that MDMA and small companies would 9 be flexible and forthright in support of an 10 effort to meet your funding needs while 11 meeting the needs of the smaller companies. 12 I again commit to working with you this year 13 and ask for your commitment to work with us 14 to modify MDUFMA with the benefit of a 15 year's experience so that we have a viable, 16 sustainable user fee program moving forward 17 that can help the FDA meet its needs. Thank 18 you. 19 MR. BARNETT: Thank you, Paul. 20 We're going to open the floor now to 21 questions. But before I do that, Frank, I 22 want to ask you a question because it's come 119 1 up several times at least obliquely during 2 this conversation. And that is the whole 3 idea of third party audit of what's 4 happening with user fees and especially in 5 light of the fluctuations that are 6 apparently occurring with the 7 appropriations. Why don't you respond to 8 that first? 9 MR. CLAUNTS: Sure, Mark. Many 10 people may not be aware but FDA currently 11 undergoes a third party audit for all of its 12 financial systems and reports, including the 13 financial systems that collect and account 14 for the spending of user fees that are 15 collected. 16 This annual financial audit is 17 performed under the requirements of the 18 Chief Financial Officers Act and it's a 19 rigorous audit of all the components of 20 FDA's accounting system and its reports, 21 including how we collect and spend those 22 user fee dollars. 120 1 FDA's complete financial 2 statements are published on our website 3 every year along with the auditors' opinion 4 on those financial statements. And we've 5 gotten an unqualified opinion from our 6 auditors each one of the last years since 7 1998. 8 This independent third party audit 9 has the auditor selected by the HHS 10 Department of the Inspector General. The 11 Office of Inspector General coordinates the 12 financial audit for all components of the 13 department and the folks doing the audit 14 this year are Ernst & Young. They are 15 nearly finished with their FY 2003 audit and 16 we expect the results of that audit and the 17 report to be available on our web fairly 18 soon. 19 Now, in addition to that third 20 party audit the trigger provisions of MDUFMA 21 also require another independent third 22 party, the Comptroller General of the United 121 1 States, to perform an independent study and 2 report back to Congress for FY 2003 and FY 3 2004 if appropriations for FDA's device 4 review program are less than as specified in 5 MDUFMA. That was the case in 2003. It's 6 going to be the case in 2004. And so we are 7 going to be having that independent third 8 party study by the Comptroller General that 9 is already specified in the act. 10 In addition to these independent 11 third party studies there are specific 12 requirements in MDUFMA that FDA develop and 13 send to Congress a financial report by the 14 end of January of each year for the 15 preceding fiscal year. That report is under 16 development now and as soon as it has been 17 cleared by the Department of Health and 18 Human Services and sent to Congress, we'll 19 post that on our website and make that 20 available to folks. And likewise there is 21 an annual performance report required under 22 the MDUFMA statute. 122 1 Basically we believe that using 2 these multiple existing third party reviews 3 of FDA and the reports that we're going to 4 be making available to Congress should 5 answer a lot of the questions that people 6 may have. And we think that it's probably a 7 reasonable thing to ask for people to wait 8 until they have the results of these audits 9 and studies before deciding if something is 10 needed over and above those. 11 MR. BARNETT: Thanks, Frank. And 12 now is there anyone here who has a question? 13 If so step up to the microphone that's in 14 the middle, identify yourself with your 15 affiliation, and remember we have a 3-minute 16 limit. 17 QUESTION: My name is Larry 18 Coppler and I'm with Medrad, Incorporated. 19 I was wondering if Dr. Schultz would give 20 some more details on the turbo 510(k) he 21 mentioned in his presentation. 22 DR. SCHULTZ: This is actually a 123 1 program spearheaded by the Office of In 2 Vitro Diagnostics. They are actually, I 3 must admit, ahead of the Office of Device 4 Evaluation in developing this program. The 5 idea being, and again it's difficult in an 6 office as varied as ODE with the different 7 types of devices that we have to come up 8 with a single format that will enable us to 9 evaluate all those different types of 10 devices. 11 So the Office of In Vitro 12 Diagnostics is actually much further along 13 in looking at a template type of submission 14 and, again, based on their experience we 15 would like to look at specific areas within 16 ODE where that type of submission would be 17 applicable. So, again, this is not 18 something that is going to happen tomorrow, 19 at least in ODE, but it's certainly 20 something that we're looking at down the 21 road. 22 And how that eventually will 124 1 evolve into electronic submissions is again 2 something that we are extremely interested 3 in because, as Dr. Feigal mentioned, looking 4 what the program is going to look like in 10 5 years that's clearly the way we would like 6 to go. 7 QUESTION: Steve Binyon with 8 Baxter Health care. I've got actually two 9 questions for Dr. Yetter. Can you comment 10 on what if any CBER new hires took place in 11 2003 associated specifically with MDUFMA and 12 device reviews? And also do you have any 13 specific examples of OBRR management 14 initiatives associated with improvement in 15 device reviews and the process? 16 DR. YETTER: We are allotted I 17 believe the number is 11 FTEs for MDUFMA in 18 the past year. I'd have to go back and 19 guarantee that that's really the number but 20 11 FTEs was our allotted number. 21 I should explain to you that an 22 FTE, full-time equivalent, deals with 125 1 essentially person hours. Because of the 2 breadth of products that we deal with nobody 3 or very few people are specifically solely 4 dedicated to MDUFMA processes. So 11 FTEs 5 actually covers considerably more people 6 than 11. 7 For instance, it would cover one 8 person who works half-time on MDUFMA and 9 half-time perhaps on PDUFA products, another 10 person who does half-time on MDUFMA and 11 half-time on something that's covered 12 neither by PDUFA or MDUFMA. That would be 13 one FTE. 14 Also, some of the money that we 15 use because of the lag in hiring was used 16 for infrastructure improvements. Now, as 17 far as management improvements within the 18 Office of Blood Research and Review we had a 19 consultant come in, talk to the management 20 in Blood, discuss the appropriate 21 interactions for management, help them with 22 their supervisory approach. 126 1 Some of the things that have taken 2 place and actually have been extended across 3 was a recent training on the appropriate 4 regulatory oversight, supervisory oversight 5 of reviews and how that should work. Now, 6 we have extended that beyond merely the 7 Office of Blood to the entire center but 8 these are some of the things that have gone 9 on. 10 MR. BARNETT: Thank you. Our next 11 questioner is Elizabeth Jacobson. We used 12 to call her Liz when she worked for us but 13 now she is Elizabeth. 14 QUESTION: I'm still Liz Jacobson. 15 I'm from AdvaMed and I wanted to comment on 16 Frank's response. Just very briefly. I 17 think the problem here is that we seem to be 18 talking past each other a little bit on this 19 audit question and I'm going to propose that 20 we stop using the word "audit" because I 21 think it has connotations that maybe we 22 don't mean. 127 1 We certainly have no quarrel, 2 Frank, and haven't with accounting systems 3 and reports that FDA is using. And I 4 promise you I'm going to read those 5 financial statements every year. 6 MR. CLAUNTS: They are good for 7 insomnia, Liz. 8 MS. JACOBSON: But I also think 9 industry is really united in feeling that 10 we'd like to take a look now that we're a 11 year out on estimates of what it really is 12 costing to get the job done and, as Mark had 13 mentioned in his comments, we had asked for 14 this at the negotiation stages. It wasn't 15 possible to do that at that time because of 16 the time constraints and the necessity that 17 the systems weren't necessarily up to 18 generate the information. 19 But we think that it would be 20 extremely useful in informing the 21 discussions that we're going to have on how 22 to keep the user fees from getting out of 128 1 control to the point where companies can't 2 afford them and also as we start looking at 3 the trigger that again has to be looked at. 4 So I'd like to put this to bed if 5 we could for the rest of this meeting just 6 to say that I think we need to keep talking 7 to each other, and clearly we've been 8 talking past each other a bit, so we can 9 both understand what it is that industry is 10 really asking for and trying to make sure 11 that we can get that and maybe get away from 12 this concept of audit, which we used, I 13 mean, but I think in retrospect that was 14 probably a loaded word and we shouldn't have 15 done that. 16 Clearly, it evoked a response from 17 you, Frank. Thanks. 18 MR. BARNETT: Thank you. Is there 19 anyone else that has a question or comment? 20 Going, going, gone. 21 MR. LEAHEY: I'd like to make one 22 more comment if I could. 129 1 MR. BARNETT: Yes. 2 MR. LEAHEY: Whether we call it an 3 audit or what not, again, I think industry 4 is united in that we need to just make sure 5 that these fee increases are moderate moving 6 forward. I would just like to leave 7 everyone with a quick comparison. 8 If you look at what's happened to 9 PDUFA since 1992 to 2004 they started off 10 with $100,000 user fee. Now it's $573,000. 11 If that same increase happened in the device 12 world we'd be looking at an 871 PMA 13 application in 2015. 14 And finally if you look at the 15 contribution from industry and Congress' 16 contribution in PDUFA in 1992 the drug 17 industry contributed $9 million in user 18 fees. In 2004 they are set to contribute 19 $240 million. During that same time period 20 Congress has appropriated 100 and I think 27 21 million in 1992. Now in '04 they are set to 22 appropriate I think about 185 million. So 130 1 while the industry's contribution has gone 2 up 2600 percent Congress' contribution went 3 up less than 50 percent. 4 So clearly we need to do something 5 to ensure that that disproportionate funding 6 does not occur with the devices as well 7 because it's a much, much different world, 8 as we know. But for maybe the drug-eluting 9 stent I don't think there is a product out 10 there that has the billion dollar market 11 potential that a lot of the drugs do. 12 MR. BARNETT: Thank you. We're 13 running a few minutes ahead of schedule 14 which is all to the good. Let's take a 15 five-minute stretch while we switch panels 16 and letþs see you back here in five minutes 17 sharp. And let's get Panel 2 to come up. 18 Panel 2, come up, please. 19 (Recess) 20 MR. BARNETT: If you'll have a 21 seat, please, we're ready to start. I want 22 to introduce our second panel now on 131 1 Electronic Labeling for certain prescription 2 devices and also to talk about a new 3 provision that requires identifying the 4 manufacturer on the device itself. 5 For the FDA Cap Uldriks is special 6 assistant to the Director in the Office of 7 Compliance, CDRH, and Don St. Pierre is the 8 deputy director of the Office of In Vitro 9 Diagnostic Device Evaluation and Safety. I 10 always have to breathe in the middle of that 11 name. You have to have real lungs to say 12 that without stopping. And rejoining us is 13 Mark Leahey representing the Medical Device 14 Manufacturers Association and representing 15 AdvaMed is Bob O'Holla, who is Vice 16 President for Regulatory Affairs in the 17 Medical Devices and Diagnostic Group of 18 Johnson & Johnson. 19 And after this panel we're going 20 to have a public presentation by Napoleon 21 Monroe of Henry Schein, Inc. So we'll start 22 out with Cap. It should be interesting. 132 1 MR. ULDRIKS: At this point of the 2 meeting we're going to get down to some more 3 particulars and, as Mark said, we're going 4 to talk about electronic labeling and then 5 labeling of the device itself. And I 6 acknowledge that with both of these 7 provisions there has been a little bit of 8 anxiety about what they mean and what they 9 don't mean and I've been living with that 10 almost every day. 11 I paid attention to the comments 12 that have been submitted so far to the 13 docket and I just want to encourage people 14 to continue to submit comments to the docket 15 because for me it makes it a lot more 16 meaningful to draft something up that makes 17 sense rather than just come out of an ivory 18 tower. 19 And in many ways, too, for these 20 two sections, 206 Electronic Labeling and in 21 301, I feel like I'm running after a running 22 target because it's constantly shifting in 133 1 terms of what is it going to mean, what is 2 not going to mean. And I can tell you now 3 that there probably are going to be some 4 technical changes to 206. So there will 5 probably be a sense of relief in that 206 6 may be clearer in terms of what it covers. 7 There was some question as to whether it was 8 going to cover In Vitro Diagnostics. That 9 was our intent. Language in the Senate Bill 10 explicitly includes that so that provides a 11 little clearer direction for us. 12 Without that kind of language I 13 had to use some sort of half-baked legal 14 theory. It would have worked, maybe, but 15 it's clearer to have the language in the 16 statute. So at least we have that. 17 And also there was a concern about 18 how far it would extend out. If it was 19 limited to health care facilities, how far 20 out could that go, and it's going to go out 21 pretty far. And the question comes up would 22 it be for doctors or dentists, too, in their 134 1 individual offices? Probably so. 2 But again that's just where the 3 technical changes stand today. Where it 4 finally ends up I don't know. 5 As I mentioned I'm going to try 6 and go through what's been going on here but 7 I have to admit that when I first read these 8 two sections and started working with them I 9 thought my god, I feel like Dorothy in the 10 Wizard of Oz. This is not Kansas any more. 11 I had a hard time making sense of this 12 stuff. 13 So, anyway, I've been trying to go 14 through this and I'll start with electronic 15 labeling and I'm going to stick pretty close 16 to what I know so far because we haven't 17 even really drafted guidances, gone through 18 a review process in the agency. 19 The one thing we all can 20 acknowledge is that electronic labeling is 21 not new. People have been using it before. 22 It's just that this now can be used as a 135 1 sole means of providing labeling. So that's 2 new. But we've used diskettes before in 3 video, CDs, Internet, and DVDs to provide 4 labeling and specifically for instructions 5 for use I think has probably been the 6 primary point of view or purpose of that 7 kind of labeling. 8 And it's also become important, I 9 think, for the in vitro diagnostic community 10 because they engage in commerce throughout 11 the world. They have a global commerce kind 12 of issue and so they have to deal with a lot 13 of foreign languages. And the same for the 14 regular medical device area as well. So 15 electronic labeling is a lot more efficient 16 in dealing with that rather than having 17 stacks of paper to go along with the device. 18 So I talked about the statutory 19 provisions that are probably going to be 20 changing. At least I know that it passed 21 the Senate so that it includes in vitro 22 diagnostics and that takes care of their 136 1 paper problem in terms of real estate that 2 goes along with information. 3 The other thing is what does the 4 term "user" include? Is it going to be a 5 licensed health care practitioner in a user 6 facility or how far out does it go? And 7 we're going to have to define that but we 8 will want to have that be as comprehensive 9 as possible because I think the purpose of 10 this section of MDUFMA was to facilitate the 11 use of electronic labeling in a sensible 12 way. So I really don't think that standing 13 in the way of it is going to get us 14 anywhere. 15 And also I think an important 16 point to understand is that it will include 17 blood establishments. So for blood bankers 18 out there that might be helpful to 19 understand. 20 Some of the problems I'm going to 21 be facing, and you maybe can help with this, 22 hopefully, we have some terms to define for 137 1 Section 206. One of those words is going to 2 be "promptly," and what does that mean? 3 What's prompt? Does it mean fax a paper 4 copy as soon as you get the request? Or 5 does it mean you ship it out next day 6 delivery on FedEx or send it over by courier 7 or what? 8 And I think there are probably 9 lots of different kinds of scenarios that 10 mean different kinds of things where in this 11 situation it's prompt, in that situation 12 it's a different kind of prompt. 13 We also have to define "at no 14 cost." What is no cost? Just from prior 15 experience dealing with another regulation 16 on diagnostic X-ray systems, that gets to be 17 a real sticky point and you think it's easy 18 and straightforward and it's not. And, of 19 course, I have to joke a little bit in that 20 when you see ads on TV and it's like you can 21 buy this for 9.95 and the shipping and 22 handling is 8.95 can you add in that, too? 138 1 So we'll have to deal with the 2 kinds of costs that get loaded in or don't 3 get loaded in to providing paper labeling. 4 The other thing I want to bring to 5 your attention only to think about 6 implementing 206 from your point of view is 7 that you also have to integrate this into 8 the quality system regulation in terms of 9 how you manage that. And it's going to be 10 particularly important to understand how you 11 use design controls in terms of your inputs 12 and outputs and what your user needs when 13 you use the electronic format. It's going 14 to be real hard to make sure you got it 15 right. 16 Based on my experience from 17 listening to other companies who have worked 18 on this it's not a piece of cake. So just 19 understand that and give yourself lead time. 20 The other thing is you need to make sure you 21 include this in labeling controls. Just 22 because it's not paper doesn't mean it's not 139 1 part of labeling controls. 2 The other thing is you're going to 3 have change controls when you need to change 4 the labeling for some reason. It goes 5 through the same process. And then when 6 something happens where you've got to change 7 the labeling because there's misinformation 8 in your label and something's wrong or 9 whatever that has to be included in your 10 corrective and preventive action plan. So 11 you have at least these four basic 12 categories you have to begin to think about 13 under the quality system regulation. So 14 that's a new idea. 15 The other thing which is probably 16 going to be less pleasant to think about but 17 it's a reality and it's going to be 18 difficult, I think, is that if you're going 19 to be using electronic labeling what do you 20 do when you have a recall based on the 21 labeling, when the labeling itself misbrands 22 the product in some way. 140 1 So you're going to have to think 2 about how you're going handle that kind of 3 situation and for the medical device area 4 how you're going to handle your corrections 5 and removals under 21 CFR Part 806. And I 6 think it's going to be important to 7 understand or to develop some way of 8 assuring yourself you're keeping your 9 customer up to date on the labeling so that 10 you know that what they're using is the rev 11 level that you want them to use, that they 12 haven't printed it off six months ago, kept 13 that, and didn't go back and check what was 14 the current stuff. 15 I know we haven't issued a draft 16 guidance on this but I'm just raising these 17 issues. You can always submit comments to 18 the basic docket to begin to lay out some 19 ideas that you have on 206 so it will help 20 bring the initial draft guidance into better 21 focus so it's closer to the mark. That just 22 makes it more efficient for everybody. But 141 1 we're going to wait until we see what 2 Congress does with the technical changes 3 first before we go any further with it. 4 Now, this is not the darling of 5 MDUFMA, Section 301, and I realize that 6 people have had difficulty with it, no one 7 less than I have. Mark mentioned what this 8 is about. And so it's about you've got to 9 label the device somehow with who is the 10 responsible manufacturer. 11 And then the second half of that 12 is that the Secretary, in this case FDA, can 13 waive the requirement if you meet one of two 14 criteria: Either it's not feasible or it 15 will compromise the provision of safety and 16 effectiveness for the device. 17 How do we get there? This has 18 been a really, really difficult task to 19 figure out how to approach this. And 20 obviously it caused enough confusion and 21 concern on our part that we issued the 22 guidance in June of this last summer, 142 1 June 23, to say we're going to use 2 enforcement discretion in terms of 3 implementation so that not until 18 months 4 after we issue final guidance on this 5 provision will we begin to work with the 6 enforcement perspective of it. Understand 7 that in the Senate bill they have extended 8 the statutory effective date to 36 months 9 from the date of MDUFMA but I still think we 10 need to think about how we're going to work 11 with that. 12 In the meantime what are the next 13 steps we're going to take with this? This 14 is based on the comments that we got in 15 response to the initial guidance saying 16 we're going to delay enforcement. The 17 comments were pretty clear that you all were 18 not enthused about this at all. So we're 19 trying to figure out an easier, kinder, 20 softer way to go about doing this and part 21 of that is to propose how are we going to go 22 about granting waivers because that seems to 143 1 relieve the burden of this a little bit and 2 set some groups aside. 3 So we want to begin to think about 4 criteria we could use. Basically what are 5 we going to think about when we say it's not 6 feasible? Is it impossible or possible but 7 too costly or is it based on risk or is it 8 based on brand confusion? What criteria can 9 we use? 10 So we're going to be developing a 11 draft guidance and asking you to comment on 12 those kinds of ideas and what you think 13 could be workable in terms of granting 14 waivers, perhaps, for categories of devices 15 or something like that or some way of 16 looking at devices so we have criteria to 17 use to say if you fall here then it doesn't 18 make sense that this applies because it 19 meets the criteria in the statute itself. 20 Either it is not feasible because we define 21 feasibility this way or because it 22 compromises the provision of safety and 144 1 effectiveness and we're looking at it this 2 other way. So there are two avenues to do 3 that. 4 So that's how we're going to deal 5 with that favorite child of MDUFMA. So I'll 6 leave it over to the next speaker then. 7 MR. BARNETT: Thank you very much, 8 Cap. Our next speaker then will be Mark 9 Leahey. 10 MR. LEAHEY: And since it's going 11 to be a long day up here and I have no 12 slides I was just going to speak from the 13 table. 14 Section 301 of MDUFMA established 15 new labeling requirements for OEMs and 16 reprocessors of single use devices. As 17 enacted Section 301 is unnecessarily broad, 18 unworkable for FDA, and fails to achieve its 19 original intended goal, to identify 20 reprocessed SUDs for physicians, nurses, and 21 device users to ensure accurate reporting of 22 patient injuries and product malfunctions to 145 1 FDA. 2 Section 301 was intended to close 3 significant gaps in FDA's post-market 4 surveillance systems designed to protect 5 patients. Section 301 as originally 6 proposed was intended to specifically 7 identify reprocessed versions of SUDs to 8 ensure that physicians, users, and hospital 9 administrators knew that the device they are 10 using was reprocessed. 11 OEMs typically label and/or 12 imprint the company name and logos directly 13 on their medical devices. Such branding is 14 associated with a certain level of quality 15 device purchasers have come to expect from a 16 particular OEM. This branding and product 17 familiarity also allow physicians, hospital 18 staff, and patients to identify a particular 19 device with a particular OEM in the event of 20 a recall, warning, patient injury, or 21 product malfunction. 22 A common complaint from 146 1 physicians, nurses, and hospital 2 administrators uncovered during the House 3 Energy and Commerce and Senate Labor 4 investigation into FDA's regulations of 5 reprocessing was that they frequently have 6 no idea when they are in fact using a 7 reprocessed SUD. Once a medical device is 8 removed from its packaging and placed in a 9 tray ready for use on a patient physicians 10 and nurses typically identify the device 11 with the OEM. 12 To promote patient safety FDA's 13 medical device reporting regulations require 14 manufacturers to report patient injuries and 15 product malfunctions to FDA. This reporting 16 requirement is the cornerstone of FDA's 17 post-marketing surveillance systems for 18 medical devices. This information enables 19 both the manufacturer and FDA to identify 20 safety and/or effectiveness problems and 21 take any needed corrective action to prevent 22 unnecessary patient injuries. 147 1 The FDA and GAO agree that the 2 existing regulatory scheme does not 3 adequately capture patient injuries and 4 product malfunctions involved in 5 reprocessing SUDs. According to FDA the 6 lack of specific labeling to identify 7 reprocessed devices has led to widespread 8 under-reporting of patient injuries and 9 product malfunctions involving reprocessed 10 SUDs. This has undermined the agency's MDR 11 regulations, leaving it blind to the post- 12 market safety and effectiveness of these 13 devices. FDA has further stated that device 14 failures may be particularly under-reported 15 when the hospital recognizes that the device 16 that failed was a reprocessed SUD. 17 Pursuant to a request from the 18 chairman of the Labor Committee GAO 19 conducted an audit of the MDR system as it 20 relates to reprocessed SUDs. GAO reached 21 the same conclusions as FDA. The current 22 surveillance systems for medical errors and 148 1 adverse events do not detect all infections 2 and injuries resulting from the use of 3 reprocessed SUDs. Section 301 as originally 4 proposed was designed to correct this 5 problem and make sure FDA gets the 6 information it needs to protect patients. 7 Section 301 will require FDA to 8 unnecessarily devote significant time, 9 money, and resources to review petitions to 10 exempt medical devices from the new labeling 11 requirements. As currently written Section 12 301 is overbroad and is extended far beyond 13 what is necessary to identify reprocessed 14 SUDs for MDR reporting as originally 15 intended. 16 The implications of extending this 17 provision to OEMs are enormous in terms of 18 cost to manufacturers, the FDA, and 19 ultimately consumers and patients. 20 Currently there are thousands of medical 21 devices on the market. All of these devices 22 are subject to Section 301's labeling 149 1 requirements. 2 Several manufacturers have 3 estimated that the cost of implementing this 4 provision could be upwards of $200 million 5 per company and, again, as I spoke earlier, 6 the user fees with this labeling requirement 7 and what it would mean to small companies, 8 this is all going to kill and stifle 9 innovation. 10 Most importantly, fully 11 implementing Section 301 will require a 12 significant expenditure of FDA's limited 13 resources to evaluate and process thousands 14 of exemption petitions. The cost of 15 applying Section 301 to all medical devices 16 far exceeds its benefit, particularly given 17 its limited original intent. 18 What's the status of 301? Well, 19 as Cap alluded to, the Senate has passed 20 legislation that would extend the effective 21 date an additional 18 months and unless 22 Section 301 is amended to apply only to 150 1 reprocessed SUDs there will continue to be a 2 significant hole in the FDA's post-market 3 regulatory scheme designed to protect 4 patients. 5 MR. BARNETT: Mark, thank you. 6 Bob O'Holla? 7 MR. O'HOLLA: Thank you, Mark. 8 Before I begin I just have one question. 9 I've been watching this panel over here of 10 three people and I don't know, Mark. Are 11 they judges? 12 MR. BARNETT: Yes, right. 13 MR. O'HOLLA: If I had known that 14 was the case I would have put more animation 15 in my part because I think Dan is going to 16 win. 17 MR. BARNETT: No, the animation 18 comes in the swimsuit contest. That's going 19 to be later. Do you know about that? 20 MR. O'HOLLA: I didn't know about 21 that. 22 MR. BARNETT: And I don't think 151 1 you want to know more about it. 2 MR. O'HOLLA: Good morning, 3 everyone. I appreciate the opportunity to 4 speak on two subjects that I find exciting, 5 one because it's very positive and one 6 because it causes Cap tremendous angina, 7 electronic labeling. I think this is a 8 valuable new tool and I want to commend FDA 9 for getting involved as MDUFA was being 10 written and making sure that that new tool 11 had broad enough wording, for example, the 12 use of the term "electronic labeling" so 13 that we're not constrained to be using just 14 disks or memory boxes or just the Internet, 15 so that we're open to future ways that 16 electronic information may be transferred in 17 the future. 18 So I commend them on that. I also 19 think it's going to be a tremendous tool. 20 Somebody said earlier the world is getting 21 more complex every day. And it's getting 22 more multi-lingual every day and the easier 152 1 it is to put languages on labels and on 2 inserts electronically the better it will be 3 for users across the world. 4 I also think that this tool, 5 having experienced it first hand and maybe 6 one of the first companies to have done it 7 for a brand new product it will allow new 8 technologies to get to patients much faster. 9 And I'll use the example of the Cypher drug 10 eluding stent. 11 Again I commend Dan and his staff. 12 They made it easy, made it look easy, 13 implementing electronic labeling. All the 14 conversations that went on internally about 15 how that was to be done, you made it look 16 easy. And we got to patients probably two 17 weeks sooner than we would have had we had 18 to go back, print the labeling, stuff them 19 in the boxes, and get them out the door. 20 So I think we got approval on it 21 Thursday morning. I forget the exact date 22 but by Thursday afternoon the first 153 1 shipments were made to hospitals. So that 2 was a big benefit to patients. 3 The Bluebook Memo was mentioned 4 earlier by Cap. I'd like to applaud the 5 least burdensome approach FDA has taken in 6 that memo with respect to not requiring 7 submissions to move to electronic labeling. 8 I think that's a positive step. I think 9 reporting the move in annual reports for 10 PMAs and not requiring 510(k)s was the right 11 thing to do. 12 Cap, you mentioned two things I'd 13 just like to comment on. One of them was 14 what does providing paper promptly mean. 15 Just to give you our experience so far with 16 at least the Cypher drug-eluting stent, we 17 armed sales reps with laptops so if they 18 were asked for labels they either had paper 19 in their car or were able to hook up in the 20 hospital and print out a version at the 21 hospital and if that didn't work we were 22 faxing them to them. So our users were 154 1 getting paper virtually immediately. 2 MR. ULDRIKS: On demand. 3 MR. O'HOLLA: On demand. Just to 4 give you a feel, that was very high during 5 the first couple of days and then tapered 6 off to almost nothing now. 7 The other thing you mentioned 8 about the controls we have to put in place 9 over electronic labeling, the one example 10 that struck me was making sure that your 11 customer is using the right rev of the 12 insert. I think we need to be careful that 13 we don't put more controls on the electronic 14 version than we do on the paper because 15 there is no control right now to make sure 16 customers are using the right rev, for 17 example. They could have taken the insert 18 out of the last box they got and they keep 19 that one and they never look at the insert 20 again. So let's be careful that we don't 21 stifle what we're doing electronically. 22 Cap also mentioned that there is 155 1 further guidance coming and I'd just like to 2 comment on two issues. One is the 3 definition of a health care facility and we 4 would suggest that that be interpreted as 5 broadly as possible to include such things 6 as doctors offices and other facilities that 7 provide care under the supervision of a 8 health care professional. 9 Lastly, you mentioned the 10 clarification on IBD applicability. We do 11 believe that E-labeling currently applies to 12 IBDs perhaps in a contorted way but does get 13 there. But we support any language that 14 would help clarify that in the technical 15 amendments and would urge FDA to join us in 16 doing that. 17 The next favorite subject is 18 Section 301. As Mark pointed out earlier, I 19 think this was a good idea put on the table 20 to correct a very narrow problem that when 21 broadened turned into a very impractical and 22 unnecessary provision. Industry welcomes 156 1 the current enforcement discretion. 2 It reminds me I have a son who is 3 a policeman and gave me this little card. 4 And when I get stopped, which is not often, 5 but when I get stopped I show the officer 6 this card and he uses his enforcement 7 discretion to let me go even though I've 8 broken the law. So if you're going to hand 9 out cards I'd like to be first in line to 10 get that. 11 The current enforcement discretion 12 points out the difficulties and Cap 13 elucidated them very nicely of implementing 14 this provision as a broad concept. It's 15 impractical for many reasons. First, not 16 all the devices can nor should be labeled. 17 Screws, implants, surgical gloves, those are 18 the kinds of things that I don't think that 19 anybody sitting in the room at the last 20 minute when that provision was negotiated 21 thought about. I was there. I don't like 22 to admit that often but I know I didn't 157 1 think about it. 2 The cost associated with doing 3 this, there will be a design and development 4 cost to mark many devices. There are 5 equipment costs to get the equipment into 6 the production cycles and there is the 7 ongoing processing costs of marking those 8 devices. 9 And what is the public health 10 benefit to be derived from those added 11 costs? I venture to say that except for the 12 confusion associated with reprocessed 13 devices no public health issue was ever 14 identified calling for marking of every 15 medical device. 16 So we encourage FDA to grant 17 waivers as broadly as possible. And we urge 18 continued enforcement discretion and FDA's 19 active participation in achieving an 20 appropriate legislative fix to this 21 unworkable provision. Thank you. 22 MR. BARNETT: Thank you, Bob. We 158 1 now have a public presentation from Napoleon 2 Monroe, Corporate Brand Development, Henry 3 Schein, Incorporated. 4 MR. MONROE: Thank you. I'm 5 pleased to be able to speak with you today. 6 I'm going to change the remarks that I 7 submitted just a bit in response to items 8 that have already been mentioned. 9 I am representing not only Henry 10 Schein but the DTA, the Dental Trade 11 Alliance of America, which is the leading 12 trade association representing 13 manufacturers, distributors, and others 14 serving the US dental industry, and HIDA, 15 the Health Industry Distributors 16 Association, the international association 17 representing medical products distributors. 18 Since 1902 HIDA has provided leadership in 19 the health care distribution industry. 20 Henry Schein is the largest and we 21 believe the best distributor of health care 22 products and services to office-based 159 1 practitioners in North America and Europe. 2 Your dentist, your family doctor, even your 3 veterinarian are probably our customers. 4 One of the ways we try to compete 5 effectively is through private labeling to 6 give greater consumer choice and to lower 7 overall costs to the industry for those 8 practitioners who wish to shop for lower 9 costs. I'll preface my remarks by saying it 10 is not and shouldn't be an adversarial 11 situation. We have not been shy about 12 making our points to Mr. Uldriks and others 13 but we don't believe that it is adversarial. 14 We all understand and agree that a law which 15 was passed would be problematic if enforced, 16 that labeling all medical devices would 17 drive up health care costs needlessly and 18 have other negative implications as have 19 been outlined already. 20 Please note that neither DTA nor 21 HIDA nor Henry Schein takes any position 22 opposing the labeling of reprocessed single- 160 1 use devices. We and other trade 2 associations have put forth our comments, 3 objections, and thoughts and they are well 4 documented in the docket. These would drive 5 up health care costs, severely limit 6 opportunities for contract manufacturing and 7 private labeling. These business practices 8 help to make US industry competitive, 9 provide other consumer choices. 10 Device by device waiver as allowed 11 by Section 301 we believe to be impractical. 12 Again, the details of the opposition can be 13 seen in the docket. We support the position 14 that other than for reprocessed single-use 15 medical devices the laws in place prior to 16 the passage of MDUFMA were wholly adequate 17 to protect the consumer. We applaud FDA's 18 decision to give us a small card that gives 19 a little pass. And we appreciate also the 20 fact that FDA has apparently supported the 21 technical correction, giving longer time. 22 The entreaty would be that you 161 1 accept industry's view that Section 301 is 2 impractical as written and interpret it as 3 broadly as possible as suggested until the 4 law can be revisited. Enforcement of 5 Section 301 for all medical devices will 6 only accelerate higher health care costs, 7 which are already rising at rates much 8 higher than the rate of inflation. 9 There are some fairly recent 10 events that I have not had time to clear 11 comments with either HIDA or DTA but we've 12 been advised by staff in the Senate that 13 some members had concerns about security and 14 safety and that that might have been 15 rationale but, as you pointed out, 16 Mr. O'Holla, that's nowhere reflected in the 17 legislative history. 18 And in the conversation with 19 Senate staff they have indicated that there 20 were certain members who wanted to have the 21 labeling requirements for this reason. But 22 it is my personal belief that any possible 162 1 benefit of the added labeling requirements 2 of Section 301 is outweighed by substantial 3 negative impacts of Section 301. 4 To the best of my knowledge 5 nowhere in the legislative history is there 6 any discussion of security concerns. The 7 belief is that the continued and even 8 enhanced enforcement of the labeling 9 requirement in effect prior to Section 301 10 will better protect the health care system 11 and the interests of consumers than the new 12 section 301 requirements. This type of 13 enforcement can be especially important to 14 protect against devices which are 15 inappropriately labeled or inappropriately 16 manufactured offshore. 17 Dr. Feigal mentioned earlier the 18 global regulatory harmonization. I would 19 like to point out that the impact of Section 20 301 on global manufacturing could be highly 21 problematic. 22 Regarding Section 206 as with the 163 1 rest of the panel members Henry Schein 2 completely supports the supply of 3 information in an electronic or paperless 4 form to help reduce health care costs and 5 make the system more efficient. We wish to 6 confirm the interpretation of Section 206 7 that distributors would also be able to 8 supply this information and that health care 9 facilities will be broadly interpreted so 10 that we can serve the doctors offices and 11 all facilities appropriately. 12 We'd like to make all medical 13 devices which are for professional use only 14 subject to Section 206 and perhaps even 15 later at some future time Congress can 16 consider making pharmaceutical information 17 available electronically also. All these 18 interpretations seem to be consistent with 19 extending the benefits of paperless 20 information transfer and Henry Schein, of 21 course, will support any appropriate 22 verifications and validations necessary to 164 1 ensure process integrity. 2 We again thank you for the 3 opportunity to speak with you and would look 4 forward to the exchange of ideas during this 5 meeting or afterward. 6 MR. BARNETT: Thank you, 7 Mr. Monroe. It's time now for questions 8 from the audience and I know that Pam Furman 9 did have a question. Is Pam here? Come on 10 up. 11 QUESTION: Thanks, Mark. I'm Pam 12 Furman, executive director of the 13 Association of Medical Device Reprocessors, 14 and AMDR is concerned and wanted to address 15 the comments made today and submitted to 16 FDA's docket that suggest erroneously that 17 Section 301, the device marking requirement, 18 was intended to apply only to reprocessed 19 devices. 20 We're fortunate on this point 21 because Congress' intent is very clear and 22 it is reflected clearly in the legislative 165 1 history. And let me read to you the 2 legislative history surrounding Section 301. 3 That legislative history states, "This 4 section applies to all devices, not just 5 reprocessed single-use devices." So it 6 doesn't get much clearer than that. There 7 is no ambiguity. 8 It's true that opponents of 9 reprocessing had originally sought to have 10 Section 301 apply only to reprocessed 11 devices but at FDA's urging Congress 12 expanded Section 301 to apply to all 13 devices, not just reprocessed devices, as is 14 clearly reflected in the legislative 15 history. 16 It is true that Section 301 places 17 significant burdens on small manufacturers, 18 all manufacturers but particularly small 19 manufacturers and reprocessors are small 20 manufacturers; however, Congress intended 21 that those burdens be applied to all 22 manufacturers, not just reprocessors, and we 166 1 urge FDA to reject any suggestion otherwise. 2 Thank you. 3 MR. BARNETT: Thank you, Pam. 4 Anyone else? Step up to the mic. Well, we 5 got some questions in before this session 6 and so I'm going to interject a few if I 7 may, Panel. 8 On electronic labeling one of the 9 questions is will electronic labeling 10 contain all the information available on the 11 paper label? 12 MR. ULDRIKS: Electronic labeling 13 has to contain all of the information 14 required to appear in paper labeling. So it 15 basically has to mirror what's required by 16 regulation. It doesn't give any break that 17 way. 18 MR. BARNETT: This one says if 19 electronic labeling is designed for health 20 professionals how can it be used in a home 21 care setting? 22 MR. ULDRIKS: Well, that can be a 167 1 little problematic but you have to rely on 2 the relationship between the provider and 3 the patient in terms of providing 4 information that the patient is going to 5 use. So I'll just give you an example. 6 I know my personal physician uses 7 a little thing he holds in his hand all the 8 time, an electronic, but what he gives me 9 for instructions when I go home like for a 10 lab test he gives me a little piece of 11 paper. So that's how he handles it with me. 12 So it's up to the doctor, I would think, to 13 handle that with their patient. 14 MR. BARNETT: If you turn that 15 around, though, suppose a consumer uses a 16 prescription product at home. Can that 17 person get a copy of electronic labeling, 18 say, from the manufacturer? 19 MR. ULDRIKS: I don't think that's 20 really ironed out yet. The purpose of this 21 is to have access from the professional-type 22 person to the manufacturer. I don't think 168 1 it's necessarily intended for the consumer 2 to the manufacturer. That's not the dynamic 3 we're addressing here. 4 MR. BARNETT: What about some 5 definitions, things like "health care 6 facility," "promptly," "no additional cost"? 7 How will those get formally defined and 8 when? 9 MR. ULDRIKS: Well, they'll get 10 formally defined when we issue a final 11 guidance but, as I mentioned before, I need 12 to get feedback or input from the 13 manufacturers. And what Bob said here today 14 is helpful for me to realize that they can 15 provide something promptly in that it's on 16 demand and that they can do it that quickly. 17 I was not envisioning it being that 18 efficient. I'll just need information in 19 terms of how people have handled this in the 20 past and that will be helpful to define 21 things for the future. 22 MR. BARNETT: Let me ask Don 169 1 St. Pierre a question about IVDs. What 2 about the applicability of electronic 3 labeling to IVDs? 4 MR. ST. PIERRE: Well, I'm glad 5 everybody here thinks that IVDs should be 6 able to use electronic labeling also. From 7 my perspective being up on this panel I 8 would just say to the IVD people who are 9 here to make sure that the technical 10 corrections actually go through to make it 11 clear. Even if they don't Cap has never 12 lied to me and he said not to worry so I am 13 not worried and I don't think you should be 14 worried, either, but I think that will make 15 things a lot simpler for everybody. 16 MR. BARNETT: Don, after a year of 17 MDUFMA a lot of companies have not converted 18 to electronic labeling. I don't know if you 19 can answer the question but why is that? 20 MR. ST. PIERRE: Well, I actually 21 heard a really good presentation from 22 industry at the Regulatory Affairs 170 1 Professional Society a little over a month 2 ago and she gave a nice presentation to 3 outline all the things that are necessary 4 for companies to implement electronic 5 labeling. And her bottom line message was 6 if anything we need to be more careful for 7 our customers. So there is a lot that needs 8 to be factored in just with their 9 validation, verification, and all their 10 design controls that will apply to 11 electronic labeling. 12 And I think they're taking a very 13 cautious and careful look on how to do that. 14 So I think that's why we haven't seen it 15 just flood out there. They've taken an 16 appropriate approach to getting it out 17 there. 18 MR. BARNETT: Bob? 19 MR. O'HOLLA: Mark, I think the 20 other factor that comes into that is 21 although it's very important that electronic 22 labeling is acceptable here in the United 171 1 States it's still not as widely accepted 2 around the world and industry is working to 3 get it accepted around the world. Once it 4 is more accepted world-wide it becomes a 5 much more cost-effective useful tool on an 6 ongoing basis. 7 MR. BARNETT: Let's talk a little 8 about Section 301 on device labeling. Cap, 9 I'll go back to you and ask based upon a lot 10 of the things you've heard today and what 11 you know about do you anticipate that FDA is 12 going grant a lot of waivers? 13 MR. ULDRIKS: Are you asking Santa 14 Claus or what? That's part of the statutory 15 provision is to be able to grant waivers. 16 I've mentioned this before and I'll say it 17 again. I don't want to spend the rest of my 18 life at FDA stamping waivers and getting the 19 paper out the door. 20 I think we need to do this in a 21 very efficient way and that's by looking at 22 types of devices or categories of devices to 172 1 say if you have a screw that's going to be 2 implanted that's just not feasible. Or if 3 it's so small or if the nature of the 4 material, liquid or a gel, you can't label 5 that necessarily because we're not talking 6 about the container. We're talking about 7 the thing itself. 8 So don't confuse the label which 9 is on the container versus the labeling, 10 meaning on the thing itself, and for some 11 things you're just not going to be able to 12 do that. And for other things it doesn't 13 make any sense. And Linda is going to 14 clarify something. 15 MS. KAHAN: I think everything 16 that Cap said is correct and I think that 17 what people have been saying reflects the 18 realities of the concerns that people have 19 but one of the things that we could get a 20 lot of help with from the industry and from 21 other people that are interested in this is 22 that since the law is here and even if we 173 1 have the technical correction some of the 2 concerns that you have all raised are still 3 going to be with us. 4 It would be really useful to us if 5 the docket comments that you file and you 6 send to us relate to the kinds of practical 7 issues that are now on the table. If there 8 is a type of device, a category of device, 9 that you have good reason to be able to tell 10 us this should not be labeled because it 11 can't fit into one of these categories 12 that's what we need to hear. That would be 13 a lot of more useful for us going forward 14 with the kind of practical efficient way of 15 handling these things than, frankly, a lot 16 of letters that say this is not going to 17 work. 18 We do have to implement this. We 19 want to do it in a way that is efficient. 20 Certainly neither Cap nor I nor anybody else 21 in this room wants to spend their time 22 stamping and reviewing waiver petitions. So 174 1 if there are larger points that you can make 2 about categories of devices, about types of 3 devices, that we can use to make a decision 4 about this that would really help us. 5 And I'd like to just make a pitch 6 at this point for everything that goes on 7 throughout this conference that to the 8 extent you've got some practical ways that 9 we can solve some of the problems that 10 you've put on the table by all means let us 11 know all the things that you think are wrong 12 with the legislation. That's what we're 13 here for. That's what your Congressmen are 14 here for. But also include all of those 15 practical things about how we can implement 16 what we've got in front of us in a way 17 that's going to work. 18 MR. BARNETT: Thanks, Linda. 19 MR. ULDRIKS: Let me just add one 20 thing to do that, too, because I found the 21 comments submitted so far to be extremely 22 helpful. But sometimes I need more than 175 1 just your conclusion. I need to know why. 2 I need to have some information behind it so 3 that I can begin to follow a rationale, so 4 that I can apply it maybe even more broadly. 5 So the more you say to me the better is what 6 I'm trying to say. 7 MR. BARNETT: Anyone else out here 8 want to join this conversation, come up to 9 the mic. Well, if not we can -- 10 MR. ULDRIKS: My God, this is your 11 time to ease it up here so just -- 12 MR. BARNETT: It's then time to go 13 to lunch. We're running just a few minutes 14 early and that's fine. It's now five 15 minutes after 12:00. Why don't we say 1:15 16 as the time to rejoin back here in the room? 17 Oh, I meant to tell you there is 18 some information in your packet about local 19 restaurants if you don't want to stay in the 20 building. If you do want to stay in the 21 building there is a restaurant and they know 22 you're coming. 176 1 MR. ST. PIERRE: Mark, since we're 2 early since I wasn't in the last panel and I 3 know I'm not supposed to mix panels but 4 there was a question about the turbo 510(k) 5 so I think I could probably provide a little 6 bit more update as to where we are with 7 that. Since we're early do you want to do 8 that? 9 MR. BARNETT: Why don't we do it 10 as soon as we get back? Do you want to try 11 that? 12 MS. KAHAN: Why don't you find the 13 person who asked the question? 14 (Whereupon, at 12:09 p.m., a 15 luncheon recess was taken.) 16 17 18 19 20 21 22 177 1 A F T E R N O O N S E S S I O N 2 (1:15 p.m.) 3 MR. BARNETT: I want to introduce 4 our third panel on guidances on various 5 MDUFMA issues including modular PMA 6 submissions, bundling of multiple devices or 7 multiple indications in a single 8 application, and expedited review of PMAs. 9 And our first panel consists of 10 for FDA Bob Gatling, who is director of the 11 Program Operations staff in the Office of 12 Device Evaluation, CDRH, Thinh Nguyen, who 13 is chief of the Pre-market Approval section 14 in that group, Nicole Wolanski, who is also 15 with the Program Operations staff in the 16 Office of Device Evaluation, and shortly re- 17 joining us will be Don St. Pierre, and here 18 they come. 19 Representing AdvaMed as she walks 20 in and has a seat is Kathy Lundberg, chief 21 compliance officer at Guidant Corporation, 22 and rejoining us is Mark Leahey representing 178 1 the Medical Device Manufacturers 2 Association. So we're all here now except 3 Don. Why don't we get started. Bob? 4 MR. GATLING: Well, the crowd is a 5 little bit smaller here after lunch but we 6 will press on. The guidance finally issued 7 I think in the last 10 days or so and I'm 8 really glad that's out because it's going to 9 make my job a lot easier because you'll have 10 a chance if you haven't already to look at 11 that guidance. 12 Let's talk about bundling. We're 13 going to go over a few things today and 14 these are the areas that I'm going to cover 15 but broadly. I'm not going to go into the 16 details of what's in the guidance because 17 you can read that at your leisure. 18 And in the goals letter that the 19 Secretary sent to Congress for MDUFMA there 20 was a little section in there saying that 21 FDA will consider in consultation with 22 stakeholders when bundling multiple devices 179 1 in a single submission may be appropriate 2 and we tried to pull together this 3 information in this guidance document. 4 Before MDUFMA we were doing bundling and it 5 was really an administrative thing more for 6 our purposes of processing a file or doing a 7 review in different groups and so it was 8 always there. Now it has a more important 9 thing in that it affects fees and it also 10 affects us meeting the goals that we need to 11 make for MDUFMA. 12 So bundling, what is that? We 13 have that defined as the inclusion of 14 multiple devices or multiple indications for 15 use for a device in a single pre-market 16 submission. Back in the earlier days when I 17 first joined the agency I remember getting a 18 510(k). I was a reviewer and what it was 19 was the person's catalog. I mean, boy, you 20 talk about bundling. That was the ultimate 21 bundle. It was about 30 pages or so. 22 And what we ended up doing in that 180 1 one is we actually broke that out into 2 separate submissions for product types. 3 There was an orthopaedic section, so we 4 broke that out. So even back in the earlier 5 days we were doing bundling and unbundling 6 documents. 7 So bundling, when is that really 8 okay? It's really when the supporting data 9 are similar that there's primarily one 10 review division or group for the particular 11 type of a product or group of products and 12 the devices or indications for use are 13 similar and it's all going to be done in one 14 review. These are some key points that 15 you'll see throughout the entire document in 16 all the various issues. And FDA is not 17 going to cull out devices just to increase 18 fees and we don't expect industry to bundle 19 together just to reduce the fees, either. 20 The guidance goes into some 21 specifics having to do with different 22 generic types. In general you can probably 181 1 bundle those if they're the same generic 2 type. If they're different 510(k) maybe you 3 might be able to do that if you're relying 4 on that similar data set, one of those 5 higher, higher issues. 6 If it's a PMA then you're probably 7 not going to do that because there is going 8 to be a different data set associated with 9 those particular devices. Multiple 10 indications, again 510(k), it's a 11 possibility where we're looking at similar 12 data, similar types of issues, but if you 13 have a device and it has like three or four 14 indications and one of those indications 15 we've never really looked at before we'd 16 probably recommend you pull that one out 17 because it's going to keep your other 18 indications from getting through in a timely 19 fashion because there may be more questions 20 about this new particular indication. 21 And in PMA multiple indications 22 you're probably not going to do that because 182 1 it's going to be a different data set, again 2 another one of those higher standards. 3 510(k) devices with PMAs, 4 generally no but there may be some 5 exceptions. So if you have a product that 6 requires a lot of extra accessories and 7 things that could be 510(k) those you could 8 probably bundle together because all the 9 uses are within one procedure and that's 10 listed out in the guidance document. 11 Changes that affect multiple 12 devices, there is a lot of examples in the 13 guidance document. We tried to pull 14 together from our review experience some 15 very pertinent-type examples for that and 16 then again it's in that one review. So it's 17 that higher level that we're going to be 18 looking at. 19 Reprocessing reused devices, there 20 is a whole section in on that and the way we 21 have it listed is that if it's the same 22 device type and the same OEM you can 183 1 probably do that. We'll definitely consider 2 it. If it's a different OEM then you're 3 going to have a lot of explaining to do why 4 the data from the various OEMs apply to your 5 particular product. We think they're going 6 to be different but we'll listen to any 7 comments you might have. 8 And in Vitro diagnostics, there is 9 a section on that and we have a resource 10 here, Don St. Pierre from the Office of In 11 Vitro Diagnostics section if you have any 12 particular questions because it covers 13 things such as multiple analytes and 14 reagents and intended uses, different sample 15 matrices, and replacement reagents. So we 16 try to cover that all in the guidance. 17 Some tips on bundling, you should 18 supply all the data that you normally would 19 in two or more submissions all in that one 20 thing and meet all the requirements that 21 we'll be looking for the device type. And 22 if you're bundling together a change in a 184 1 product make sure you list all those 2 previous file numbers to help us locate 3 those and if we have any questions they may 4 be in those earlier submissions. 5 Inappropriate bundling, we 6 probably will get those so we'll probably 7 call you and talk to you but we're 8 definitely going to send you a letter and 9 until it's all resolved it will be placed on 10 hold. And then if you don't like our answer 11 and you want to appeal it then it's going to 12 remain on hold while we work out all those 13 appeal procedures on that. 14 In the appeals right now we're 15 going to be using 21 CFR 10.75 but we're 16 working on a separate appeals guidance 17 document. I don't know when that will be 18 out but it's being considered at this point 19 in time. 20 If you submit a submission and you 21 say oh, man, I should have put in this extra 22 thing. I want to send it in right now. 185 1 I'll slide it in there. You probably 2 shouldn't do that because it's really going 3 to mess up the clock for us in our review 4 because we probably may have already put 5 together the review group or the reviewer 6 and stuff so that's generally frowned upon. 7 And withdrawals, again, if you put 8 together something and you feel that maybe 9 you should pull that out or we come to 10 agreement that it's going to be a longer 11 time in reviewing that and it should be in a 12 separate submission you can withdraw those 13 at any time. The actual indication, you 14 don't have to withdraw the whole submission. 15 Here are some contacts. You have 16 my name up here. We have OIVD and CBER. 17 Here's the website for the guidance 18 documents, the general one, and, of course, 19 the dockets and we're always interested in 20 any comments that you may have. And just to 21 let you know, dockets when they actually get 22 one in they will send it to the resource 186 1 person over in the center so we know it's 2 actually come in. It's not just sits there 3 and we have to go get it so they're pretty 4 good about that. And that's all I have. 5 MR. BARNETT: Thank you, Bob. 6 Thinh Nguyen? 7 MR. NGUYEN: Good afternoon. This 8 afternoon I want to give you an update on 9 the modular and expedited program that we've 10 been working on for a while now even before 11 MDUFMA. The Senate and the office wanted to 12 take a look at both these programs and, 13 number one, look at the modular PMA program 14 and see how it effective it's been since 15 1998 when the program started and then 16 Dr. Feigal also had an interest in expedited 17 review of PMA as to why these PMA review 18 times were normally longer than traditional 19 PMAs. 20 So even before MDUFMA we were 21 asked to take a look at both these programs 22 and see how we can make either make 187 1 improvements or actually if it is not 2 effective even do away with. For example, 3 modular come out during reengineering effort 4 that we will take that away expedited in the 5 statute. There is nothing you can do about 6 that but to improve the program. 7 So as the result of our many 8 discussions with industry we present our 9 findings on the modular PMA and expedited 10 program to the industry through meetings and 11 presentations that I've done in the past 12 like AdvaMed yearly meetings. And because 13 of the success of the program from the 14 industry viewpoint I think even from the 15 internal viewpoint I think the modular 16 program has been quite a successful program 17 even though we think there are some issues 18 of concern that we need to revise the 19 guidance document to make it even better. 20 So MDUFMA now amended Section 21 515(c) of the Federal Food Drug and Cosmetic 22 Act to put in modular review. So now that 188 1 program is part of the statute and no longer 2 a policy for the office or the center. 3 So our guidance document is going 4 to include additional user fee requirements 5 under MDUFMA and then based on some of the 6 comments we get back from meeting with 7 industry put in an additional flow chart, 8 previously asked questions and answers, and 9 a sample shell that we would like the 10 industry to follow whenever you can. So we 11 believe that these improvements are going to 12 make the program even better. 13 Under MDUFMA the full fee for 14 modular PMA is due with the submission of 15 the first module. So when you submit your 16 first module you have to provide us with the 17 full fee. If we receive the first module 18 but we don't have the fee we're going to put 19 the submission on hold until we've got 20 clearance from OFM that the money is in for 21 us to start reviewing. That's in the law. 22 The 90-day review period, there 189 1 are concerns about the 90-day review period 2 and industry would like us to lower that 3 number to 75 days. When we go back and look 4 at the program I don't think we can do it at 5 this point in time. As we go through some 6 of these changes and decide at that point in 7 time, a year or two after we implement these 8 changes, to see how the program is running 9 at that point we may consider lowering the 10 review time. 11 But at this point in time we think 12 90 days is adequate for us to do a review of 13 a module especially now when we limit the 14 number of modules to like three or four and 15 not having descriptive sections where there 16 is nothing for us to review. So the 90-day 17 review period stays the same. Nothing has 18 changed from that angle. 19 Upon receipt of the final PMA 20 module, i.e., the clinical module, the PMA 21 180-day review clock must start. The module 22 and PMA guidance document were revised to 190 1 put the scope of the guidance documents, the 2 original PMAs as done in the past and PMRs, 3 pre-market reports, which are PMAs basically 4 for reprocessed devices. 5 As in the past you submit the PMA 6 module in accordance with an agreed-upon 7 shell that you and the division come into 8 agreement with. We may refuse to accept any 9 proposal for a PMA shell if the timing is 10 inappropriate. 11 In our guidance document we 12 basically said that if you're within six 13 months from having all the information 14 required in the traditional PMA then you 15 should go ahead and submit a traditional PMA 16 instead of doing a modular PMA because I 17 don't think you're going have the benefit of 18 our modular review program if it's a short 19 time and doesn't allow us the time to review 20 and give you feedback. 21 I have companies that call and say 22 we have all the information but we want to 191 1 submit a modular PMA and, as I say, there is 2 no benefit to you doing that. You might as 3 well go ahead and submit the traditional 4 PMA. 5 Only the clinical module may be 6 permitted as the final module. The problem 7 with having clinical modules submitted as 8 one of the earlier modules is that we have a 9 90-day commitment that we're trying to 10 achieve and within 90 days it is very 11 difficult to review a clinical module 12 especially if you have to arrange for a 13 panel meeting. So we don't think having a 14 clinical module is appropriate for one of 15 the earlier modules. It should come in as 16 the last module and activate the 180-day 17 review clock. 18 PMA modules, complete all the 19 testing for each module before submitting 20 the module to the agency. When you come 21 into an agreement with the FDA what the 22 shell and the module contains you have to 192 1 have enough information for us to know 2 what's in each of the modules. And once you 3 have that information you should just follow 4 through and provide us all the testing 5 within that module. 6 The law also allows us the 7 opportunity to reject any modules that are 8 incomplete. It is something that we have 9 had concern with in the past that we 10 presented industry that we have a module 11 that came in that basically doesn't have 12 anything in it other than the promise note 13 that said within six months we'll have our 14 test data available to you. So what 15 happened? We came back and sent you a 16 deficiency letter basically maybe even 17 longer than the submission you sent to us. 18 So because of the reason we have language in 19 our statute to allow us the capability to 20 reject any incomplete modules and not start 21 a review on them. 22 The final PMA module needs to 193 1 address all of the outstanding issues that 2 hadn't been addressed in the previous 3 module; that is, if you have modules that 4 haven't been closed out yet and we send you 5 a deficiency letter then if you are going to 6 decide to send the last module to us you 7 need to incorporate the response to all the 8 deficiencies we've raised in the earlier 9 modules to us to complete the PMA. 10 The final review period will be 11 conducted on the final module with reference 12 to the other previous modules. You will 13 complete the PMA and at that time we will 14 make the final decisions for the entire PMA. 15 The expedited PMA criteria, you've 16 seen that before. I'm not going to go 17 through it. It's basically the four 18 criteria in the statute. It stays the same. 19 Nothing is changed from that angle. What 20 has changed is that we see an increase in 21 combination products. So it's eligible for 22 expedited for combination products where 194 1 CBER or CDRH has been designated as the lead 2 center. 3 Because of the environment that we 4 live in today we also want to entertain any 5 requests from the US Department of Defense 6 or Homeland Security regarding any device 7 they want us to expedite to help the troops 8 or the civilian populations for national 9 security reasons. 10 For expedited PMA what the MDUFMA 11 put in is that in order to meet the time 12 frame designated by the performance goal 13 letter you have to be able to provide us 14 with these three elements right up there. 15 You have to attend the pre-PMA filing 16 meeting with us and at that meeting we're 17 going to tell you the kind of testing and 18 the kind of information that you're going to 19 have to provide in the PMA when it comes in 20 to the agency for review. And so when the 21 application comes in you have to have all 22 the information to consider for the PMA to 195 1 be filed. 2 And then one of the other problems 3 we have seen from the past is that 4 manufacturing information is often 5 incomplete. I mean, we may have done a 6 review and finished it in ODE but then the 7 Office of Compliance and the company are 8 going back and forth for a long time before 9 we can get this product out to the market 10 place for the public use. And so we ask 11 that manufacturing information be complete 12 when you come in so that we can get the 13 inspection for the company, get going on the 14 inspection of the plant. 15 I just want to make one 16 clarification, though. If you didn't do 17 those three things and you still meet the 18 expedited criteria we're still going to 19 expedite review of your PMA. It's just that 20 the performance goal will not include the 21 review time for those PMAs that didn't meet 22 these three criteria. So it's like the 196 1 two-tier system. 2 The procedure for applying for 3 expedited status stays pretty much the same. 4 You apply, request expedited status in 5 writing to us, and we notify you within I 6 believe the guidance documents say 14 days. 7 If it comes in before the PMA comes in right 8 during pre-IDE meeting or during the IDE 9 process we will take 14 days to get the 10 response back to you. If it's during the 11 PMA period when you submit the PMA then it's 12 going to be determined at the time of filing 13 that we're going to make a decision whether 14 to expedite your PMR. 15 Multiple review, if multiple PMA 16 meet the same expedited criteria then it's 17 first-in first-reviewed. And when the 18 expedited PMA is approved if one of them is 19 approved the expedited status is removed 20 from the remaining expedited PMAs and then 21 you retain the place in the review queue for 22 the current cycle and subject, as I said 197 1 before, to first-in first-reviewed 2 procedures. 3 That's my phone numbers and all 4 the staff that I have. So any time you have 5 any questions please contact any one of us. 6 I also want to make a couple 7 statements here about this other guidance 8 document that we put out in the last year or 9 so that I think a lot of people spent a lot 10 of time working on it. I think you should 11 take a look at those guidance documents. If 12 you have any questions just give us a call 13 and we'll be able to try and answer your 14 questions. Thank you. 15 MR. BARNETT: Thank you. Mark? 16 MR. LEAHEY: I am going to just 17 make a few comments here from the table. I 18 want to first commend FDA for the recent 19 guidance related to bundling, modular PMAs, 20 and expedited applications. I think they 21 are all very, very helpful, especially for 22 some of the smaller companies who don't have 198 1 the Washington office to look through those 2 guidance documents and help them navigate 3 the system. 4 I just want to make a few quick 5 comments related to the bundling guidance. 6 As Bob stated earlier, prior to MDUFMA it 7 was an administrative practice but now has a 8 financial impact on companies as well. And, 9 again, we commend FDA's efforts in the 10 recent guidance to try to make the review 11 process more efficient. I think the 12 rationale in practice made a lot of sense 13 when reading through the guidance document 14 as to why certain applications should be 15 bundled and why others should not. 16 Again, though, we need to really 17 focus on the financial implication that 18 occurs through some of these bundling 19 practices. Some have stated just in '03 20 alone that eight full fee generating PMAs 21 the revenues were lost due to bundling 22 practices and that resulted in a $1.23 199 1 million shortfall in the total revenue 2 targets for '03. 3 When you look at a $3.2 million 4 shortfall over one-third of that is the 5 direct result of bundling of PMAs. It has a 6 real impact on the bottom line here. And 7 that's again for the original PMAs. We 8 don't know what the implications were with 9 the revenues for PMA supplements for 10 510(k)s. 11 That's not saying we're not 12 against bundling and we don't think it has a 13 practical sense but given the way that 14 MDUFMA is structured we need to try to find 15 a way that allows more efficient review but 16 doesn't adversely impact the revenue targets 17 and again results in increased fees moving 18 forward. 19 I think it highlights the need to 20 go back and revisit and modify the work load 21 on compensating adjustments because, again, 22 it makes practical sense here to allow 200 1 bundling to occur. But because MDUFMA is 2 structured in such a way that looked at or 3 estimated the applications that will be 4 submitted for the FDA without incorporating 5 the increased bundling that would occur and 6 in particular with the higher fee-generating 7 submissions in the PMA world it's having a 8 real impact on the compensating adjustment 9 moving forward. 10 So, again, we support the practice 11 of bundling; however, we need to make sure 12 that this practice doesn't result in a 13 shortfall of fees to the FDA. And moving 14 forward, I think again, by eliminating the 15 work load and compensating adjustments we 16 would be sure that people would be bundling 17 and that FDA would be accepting the bundled 18 submissions in an efficient manner but not 19 adversely impact the fee structure for the 20 rest of the industry in years to come. 21 MR. BARNETT: Thank you, Mark. 22 Kathy? 201 1 MS. LUNDBERG: Having been part of 2 the team to help work through this 3 legislation initially along with Chuck and 4 Bob and many of the others who are in the 5 room today it's great to be at this point, 6 where we're at the fine-tuning stage in 7 trying to make sure that this all works 8 together. 9 I can offer some comments on all 10 three topics and I think these three topics 11 in particular are good examples of where the 12 guidances that either have been out or have 13 just recently come out are really helpful 14 and I think represent areas where comments 15 have been listened to. But I did hear an 16 interesting idea over lunch to encourage 17 innovation and that was once a company hits 18 the million dollar mark in fees that maybe 19 they get a free pass on the next one. So 20 just an idea for implementation. 21 On the bundling AdvaMed early in 22 2003 submitted some comments about bundling 202 1 and talked about the point that FDA has 2 permitted submission of a single application 3 when a single review of data would address 4 the issues raised. And it said this 5 practice should allow FDA to more 6 effectively allocate resources and promote 7 timely clearance of devices and that 8 typically industry has bundled when the 9 circumstances indicate that it would make 10 sense. 11 So one of our goals back then was 12 to offer the suggestion don't take a step 13 backwards when a guidance is drafted, that 14 we recognize the manufacturer needs to help 15 make the case for this but that we really 16 did believe it was most efficient both for 17 FDA in terms of their review resources and 18 timely approvals for industry. 19 And we put together some guiding 20 principles and examples of those and we said 21 where it's currently permitted we should 22 continue to allow it and when a single 203 1 review of data either for a PMA or a BLA 2 when you can reference the data it shouldn't 3 require additional user fees and gave some 4 examples there like a single packaging or 5 process change affecting multiple products 6 or a labeling change across multiple 7 devices. 8 We also said when devices were 9 submitted for the same platform like 10 multiple analytes on a single platform 11 should be allowed and reprocessed devices 12 should probably be handled in that same way 13 unless they are from different OEMS. We 14 thought that technology might drive the need 15 for separate submissions in that case. 16 And in the guidance that was just 17 recently put forward on November 21st it 18 does contain some very helpful direction. 19 It does talk about the considerations here. 20 As the user fees might potentially go down 21 the review time and the performance goals 22 could go up because you are being more 204 1 efficient. 2 And the general principles in the 3 new guidance, I think, really reflect some 4 of the comments submitted earlier in the 5 year, that it is appropriate for devices 6 that have the same scientific and regulatory 7 issues and it does give examples of where 8 that's the case. 9 And as has been pointed out, the 10 guidance itself talks about the fact that 11 FDA should not cull out the device to 12 increase user fees and applicants should not 13 inappropriately bundle to avoid user fees. 14 So I think there are many good examples in 15 that guidance. There are some examples 16 where it's very clear that bundling is 17 indicated and other areas where it may not 18 be appropriate but there's still room left 19 to try to discuss that point if a 20 manufacturer feels that it could be 21 appropriate. 22 And withdrawal could happen either 205 1 by FDA or the applicant and, as we've seen, 2 there are guidelines for further 3 consultations. So overall I think that that 4 will do a good job. I think just the timely 5 determination of yes, this bundling is or 6 isn't appropriate is something we would need 7 to pay attention to. 8 In terms of the modular PMAs that 9 guidance has been out for a while and this 10 one gives you very clear how-to and when-to 11 direction. As you heard, there is a sample 12 shell in there. It gives very clear 13 direction on how much time should be between 14 modules and when the fees are due. I think 15 one challenge we would continue to have is 16 on performance goals. We did in the goals 17 letter ask about improved performance in 18 this area, too. 19 Currently, as you heard, it is 20 using the 90-day goal but with every type of 21 submission if there is a plan in place and a 22 way to make those process improvements along 206 1 the way you could commit to a Year 3 through 2 5 improved performance, for example, in this 3 type of submission along with all the others 4 that have been committed to. 5 And I think there is one technical 6 correction on this, that a closed module 7 would not be reopened unless a significant 8 issue arises related to safety and 9 effectiveness. And we are curious. I have 10 not had a chance to study the CBER report, 11 what is their experience in using modular 12 for that and are the review times identified 13 for those modulars as well. 14 And one challenge we would also 15 continue to make is the applicability of 16 this process for PMA supplements and 17 particularly for panel track, the 18 supplements that do have clinical data. If 19 it's efficient in the review process for 20 PMAs we think it would be efficient for 21 certain PMA supplements as well and those 22 panel track supplements do pay a higher user 207 1 fee. So this is something I think we can 2 continue to work together to identify how we 3 could make this work. 4 And lastly on expedited 5 applications prior to the recent guidance 6 some of the questions have been what is 7 really the formal mechanism for determining 8 the expedited status. And we know, we have 9 seen the data, that historically longer 10 review times have been the case for these. 11 But that's due to lots of reasons and the 12 new technology is not the least of them. 13 And what about similar devices in 14 this approval process? What happens to them 15 if they are a similar kind of device that is 16 like one that has already been designated 17 expedited? 18 So I think that the recent 19 guidance also addressed many of these 20 points. It firmly established what the 21 criteria are to request the expedited status 22 and pointed out that FDA can also designate 208 1 expedited. And it would certainly be 2 happiness to anyone of us if we got that 3 letter but we have to certainly justify why 4 that is and the timing around when a 5 determination is made is given in that 6 guidance which is helpful, within two weeks 7 of the request if it's pre-submission. And 8 lots of different times in the stage of the 9 life cycle of a product could be appropriate 10 times to ask for that expedited. 11 And the topic around tracking with 12 performance goals, the pre-filing meeting, 13 and having the application complete and the 14 manufacturing area ready are all criteria in 15 place. And the interesting point to me was 16 what happens with these multiple devices 17 that may all be similar and could all have 18 expedited status. When one is approved the 19 others do revert to nonexpedited and it 20 gives the mechanism for how that would 21 happen. 22 One question could be how does 209 1 that get treated for performance goals. How 2 would you start and stop that clock and what 3 bucket would that fall into in the end 4 analysis? 5 And I think the other piece of 6 this is that good faith efforts should be 7 demonstrated by manufacturers and FDA to 8 resolve any of the outstanding issues, that 9 there is really a collaborative effort there 10 to keep these things moving along. And one 11 example here of adding some resources, 12 either the OST staff potentially may play a 13 bigger role in these new products and assist 14 with the new technology reviews or gain some 15 experience in what this new technology is. 16 And also we would want to continue 17 to encourage the use of other types of 18 technology just along the way in the review 19 process either through electronic kinds of 20 submissions or e-mail questions or 21 video-conferences just to use everything at 22 our disposal to keep these kinds of 210 1 expedited submissions moving as quickly as 2 possible. 3 So that concludes my comments. 4 MR. BARNETT: Thank you, Kathy. 5 It's time now for your questions and 6 comments so let me open the floor and see if 7 anybody wants to come up to the microphone 8 and ask a question or make a comment. Just 9 identify yourself. 10 QUESTION: Cheryl Kochman from 11 CBER. I wanted to respond to Kathy's 12 comment about CBER's experience with modular 13 PMAs. We don't have the data with us but 14 the recollection is that we had two and we 15 don't have an exact review time or review 16 average but we met all of the '05 review 17 goals in '03. So to date our experience 18 with them is good. 19 MR. LUNDBERG: Thank you. 20 QUESTION: Candice Williams from 21 Olympus America. You mentioned that the fee 22 with bundling, that if you submit the fee 211 1 and then it's determined later that you 2 didn't submit enough of a fee or that it 3 can't be bundled that it was going to go on 4 a hold status. And, of course, that's 5 something that all the manufacturers and 6 industry are trying to avoid is the hold 7 status so we have predictable times. 8 Is there a mechanism where you can 9 get a final determination before you make a 10 submission on whether this is an important 11 product group to be bundled? 12 MR. GATLING: Oh good. I think 13 that's a good question. The contact 14 telephone numbers and the people listed 15 there, including myself, that's a way. I 16 would start there. And I think two people 17 have asked that and we're working on it now. 18 We will get back to you. And we'll try to 19 give you some guidance on that ahead of time 20 before you actually send it in. 21 If you have any doubts I would 22 recommend that you do talk to us first 212 1 rather than just send it in and just wait 2 for what happens. 3 QUESTION: I wanted to ask an 4 additional question for CBER. Is there any 5 possibility of taking the modular PMA 6 approach and applying it to BLAs? 7 MS. KOCHMAN: Cheryl Kochman 8 again. We do have rolling reviews for 9 certain kinds of BLAs but we don't have 10 something that is similar to a modular PMA 11 right now. I'm not sure it's something that 12 we could accommodate but it's certainly 13 something that we could be thinking about. 14 MR. BARNETT: Anyone else? 15 QUESTION: Chuck Swanson from 16 Metronic. I just wanted to amplify on the 17 comment that Kathy Lundberg made about 18 performance goals. The goals letter does 19 say that FDA will develop performance goals 20 from modular PMAs and my question to FDA is 21 when do you intend to engage industry in the 22 development of those performance goals? 213 1 MR. NGUYEN: I think the new 2 guidance document has been published and I 3 think we're going to take a little bit of 4 time to see how it plays out. Internally 5 we're going to have a discussion in terms of 6 how we look at the data, review the data, 7 and see how we can engage in discussion with 8 you all regarding the review time, how can 9 we reduce the time if this can be done, but 10 right now from the way the data looks we 11 think 90 days is appropriate. Ninety days 12 may be appropriate but that's not a 13 performance goal. 14 MS. KAHAN: I think that Thinh's 15 point though, Chuck, was that we're not 16 going to be looking at negotiating new 17 performance goals until we have some 18 experience with this. So if we want to say 19 a year or something like that we can try to 20 pin that down but it won't be now. 21 DR. SWANSON: You have some 22 experience you can start with. 214 1 MS. KAHAN: Well, I think Thinh's 2 point, though, is that we've just put out 3 this guidance and new procedures and so I 4 think that we want to see what that looks 5 like and see if we're meeting the 90 days 6 now that we've got more coming in as modular 7 and see how that works but we certainly will 8 be engaging you. 9 MR. BARNETT: When the people over 10 on the table over on the far side speak can 11 you all hear it in the back? Are you okay? 12 All right, great. Yes? 13 QUESTION: This is Janet Trenso 14 (?) from AdvaMed. I have a question on 15 modular. I'd like to understand the 16 rationale for not including panel track PMA 17 supplements under the modular review 18 program. 19 MS. WOLANKSI: That was something 20 that we carefully considered. We felt that 21 in our experience the panel track 22 supplements for the most part just came in 215 1 just for a change in indication for use and 2 it primarily consisted of clinical data that 3 was not easily broken up into the different 4 modules. 5 Many times when some of the 6 supplements that have been reviewed as panel 7 track supplements come in if it does contain 8 a change to the device that does require 9 pre-clinical data. Those could probably be 10 considered originals and therefore would 11 qualify for the modular program. 12 QUESTION: So you're saying then 13 that those applications that would be 14 originally a panel track supplement you're 15 going to call them an original PMA? 16 MS. WOLANKSI: I think we're going 17 to be clearer in what we call original 18 versus panel track supplements. If it 19 really does contain that quantity of 20 information for the different types of 21 review disciplines then we would call it an 22 original. 216 1 QUESTION: I have one other 2 question. Earlier one of the panelists 3 mentioned that there were eight PMAs bundled 4 last year. Can FDA clarify the accuracy of 5 how many PMAs were bundled? 6 MR. NGUYEN: I don't have the data 7 with me but I do not believe that it was 8 eight bundled. There were some supplements 9 bundled but not eight original PMAs bundled. 10 MR. LEAHEY: I'll just respond. 11 Actually, Jan, you were on the call that day 12 in late July when they talked about the '04 13 rates and someone in that meeting had said 14 that eight original PMAs had been lost due 15 to the bundling. So I was just relying on 16 the information that was given to me at that 17 meeting. 18 DR. SCHULTZ: Not true. I think 19 we can categorically say that that's not 20 true and I think the idea that there has 21 been a change in bundling policy ÄÄÄÄ 22 MR. LEAHEY: I stand corrected. 217 1 Again, it was just information that was 2 represented to me. 3 MR. BARNETT: Next questioner. 4 QUESTION: Mike Fitzpatrick from 5 America's Blood Centers. Does CBER have or 6 are they contemplating an expedited BLA 7 review process like the expedited PMA 8 process? 9 MS. KOCHMAN: We do have something 10 called a fast-track BLA. It would be very 11 similar to expedited. So we have a lot of 12 similar mechanisms, a lot of similar 13 criteria, but we don't always have the same 14 terminology. So what you're looking for 15 might exist. It just might be called 16 something different. 17 MR. BARNETT: Anyone else? Yes. 18 QUESTION: Glen Wilson, Center for 19 Biologics. CBER also has with its BLA 20 process a priority review. Fast track has 21 one element of a high risk on medical need, 22 et cetera, but if there is another 218 1 compelling reason for prioritizing review 2 for BLA that can be done also. 3 MR. BARNETT: Thank you. Anyone 4 else in the audience have a question? Well, 5 while we're waiting for you to think of a 6 question let me ask Bob Gatling one of my 7 own and that is do you intend to keep a list 8 of devices that have been bundled in the 9 past and then make that list available to 10 industry? It seems then they would have a 11 precedent to have at least a general idea of 12 what has succeeded in the past and what 13 hasn't. 14 MR. GATLING: The answer is we 15 don't have that right now and I can see how 16 that would be helpful so I'll take that back 17 with us. 18 MR. BARNETT: Don? 19 MR. ST. PIERRE: And along those 20 same lines bundling was one of the big 21 issues for the IVD industry because those 22 kits are made up of systems. You have 219 1 reagents, you have platforms, and each one 2 in and of itself could be its own 3 application. That's not traditionally how 4 we've done things. So there was a big 5 concern about inappropriate bundling or FDA 6 separating products out to get more fees and 7 I think it's pretty clear that hasn't 8 happened. 9 But one of the things that we 10 thought because we were very interested in 11 transparency was actually for those things 12 that are bundled to put it out on our 13 website as to these are the things that are 14 bundled so that other people know what's 15 been bundled, what hasn't been, so it 16 increases transparency. 17 We actually haven't seen a need to 18 do that, at least not put it high on our 19 priority list, because bundling has been in 20 effect now for a long time and of all the 21 applications that we've seen there have been 22 two so far that we thought were maybe a 220 1 little bit over the edge and we went back to 2 the companies and worked with them to 3 separate those out. 4 So I think in the IVD industry 5 although this was a big concern everybody's 6 doing it appropriately and following those 7 guiding principles that were in the original 8 guidance that said FDA wasn't going to 9 inappropriately unbundle and industry wasn't 10 going to inappropriately bundle. So I think 11 everybody is doing that in practice so the 12 need to actually make it more public, to us 13 it hasn't risen to that level yet. 14 MR. BARNETT: While we're talking 15 to you, Don, why was it necessary to have a 16 separate section in the bundling regulations 17 for IVDs? 18 MR. ST. PIERRE: IVDs are special. 19 MR. BARNETT: You want to stop 20 right there or want to -- 21 MR. ST. PIERRE: Well, I mean, 22 IVDs are a little bit different which was 221 1 why it was thought that maybe creating its 2 own office was a way in creating this total 3 product life cycle approach to products was 4 a good place to start. 5 So in IVDs we have always done 6 things a little bit differently, too, so we 7 had before the 510(k) paradigm came out a 8 replacement reagent or original equipment 9 manufacturer types of guidance which talks 10 about placing certain reagents on different 11 instruments and not having to come in with 12 new applications every time you've got a new 13 combination. 14 So we have our own issues specific 15 to IVDs. We've tried to capture a lot of 16 that which is just current practice in the 17 bundling guidance and that really is a good 18 guidance. Everybody did a great job on that 19 one. 20 MR. BARNETT: Anyone else have any 21 questions for this panel? Yes. 22 QUESTION: My name is Nick Horvath 222 1 (?). I'm director of regulatory affairs at 2 Guidant CRM. I have a follow-up question to 3 Janet Trenso's question to Nicole and Thinh. 4 I've been laboring under the understanding 5 that a decision to determine whether an 6 application was a PMA or a PMA supplement 7 was predicated on the application itself, in 8 other words what type of change you're 9 making in your application, whether you're 10 changing your indication for use, adding a 11 new therapy, creating a new device for a new 12 therapy rather than on the amount of 13 material that was in the application or the 14 amount of work that was going to be done. 15 It sounded to me like based on 16 your comment that we might be changing, that 17 FDA might be changing, the way it's going to 18 determine whether an application is a PMA or 19 a PMA supplement and it seems to me that 20 when you create a PMA out of a PMA 21 supplement you absolutely create more work 22 for the Office of Device Evaluation. 223 1 So it seems self-defeating to 2 create a PMA out of a PMA supplement and 3 then have to negotiate the fact that you've 4 got a lot more work. So I'd be interested 5 to know whether that is the direction that 6 FDA is taking. 7 MS. WOLANKSI: I certainly didn't 8 mean to give the impression that I would 9 like to create more work for the office. 10 What I was trying to say was that there have 11 been times in the past where perhaps groups 12 have kept things within one original PMA and 13 just called it a PMA supplement when it 14 might have been a better idea to separate it 15 out due to the drastic change in both the 16 device and the indication for use. So it 17 will be consistent throughout the whole 18 office and we won't be doing it just to 19 create more work. 20 MR. NGUYEN: Can I add something 21 to that? With the passage of MDUFMA, too, 22 now we have different categories that have 224 1 different fees associated with them. So 2 that's why one of the first guidance 3 documents we put out was an assessing user 4 fee guidance document where we actually 5 defined what's the difference between 6 original and panel track. We were talking 7 180 days because it has fees implications. 8 And to be consistent across the 9 office we try to use those guidelines at 10 this point in time when the guidance 11 document was put out to make sure that we'd 12 be fair across the board to all the 13 manufacturers, that this is the policy that 14 we're going to follow when we're assessing 15 whether this is a supplement or panel track 16 or an original PMA because of the fee 17 implications associated with defining what 18 kind of application it is. 19 MR. BARNETT: Anyone else? Seeing 20 no one at the microphone, let's take a five- 21 minute stretch break and during that time 22 let's have the next panelists come up, Panel 225 1 4, come on up here so we're ready to roll in 2 five minutes. 3 (Recess) 4 MR. BARNETT: It is time now to 5 introduce our fourth panel and this one is 6 going to be on the third party inspection 7 program, including eligibility criteria. 8 For the FDA our panelists are Steve 9 Niedelman, who's FDA's Assistant 10 Commissioner for Regulatory affairs, Jan 11 Welch is with the Division of Enforcement in 12 the Office of Compliance, CDRH, and John 13 Stigi is the Director of the Division of 14 Small Manufacturers International and 15 Consumer Assistance in the Office of Health 16 and Industry Programs in CDRH. 17 Representing NEMA is Diane 18 Wurzburger, Director of Health Policy and 19 Payment at Siemen's Medical Solutions, 20 representing AdvaMed is Terry Sweeney, 21 Senior Vice President for Corporate Quality 22 and Regulatory Affairs at Philips Medical 226 1 Systems, and rejoining us is Mark Leahey 2 representing the Medical Device 3 Manufacturers Association, and we'll lead 4 off with you, Steve. 5 MR. NIEDELMAN: Thank you, Mark, 6 and good afternoon. It's certainly a 7 pleasure to share the panel with my friends 8 from CDRH, John Stigi and Jan Welch, and 9 fellows from industry being Diane, Mark, and 10 Terry Sweeney. 11 This third party inspection 12 program, the AP program, really provides an 13 excellent and a novel opportunity for 14 industry to partake in a program that FDA is 15 certainly behind and very supportive of. We 16 have attempted on several occasions in the 17 past to develop a similar program like this 18 and I think we're finally getting to the 19 point of seeing this become a reality as we 20 begin to roll it out. 21 There are lots of pluses for both 22 industry and for government in rolling out 227 1 this program. There are lots of 2 efficiencies gained for both sides and it's 3 something that we genuinely hope you will 4 take advantage of. We're certainly gearing 5 up and ramping up quickly to make this as 6 successful a program as possible. 7 This afternoon I'll talk about the 8 purpose of the program, provide a brief 9 overview and features of the program, advise 10 you of the current status as to where we're 11 at as it's rolling out, and then provide you 12 some contacts and resources for you to use 13 as the program matures and as more 14 information is needed or questions arise. 15 One of the purposes of the program 16 is to increase efficiencies both for 17 manufacturers as well as for government. 18 Manufacturers under this program will be 19 able to hopefully schedule their accredited 20 persons and CAB or conform with the 21 assessment inspection simultaneously, 22 thereby providing you some efficiency in 228 1 saving time that you spend with 2 investigators for all the different types of 3 organizations that do inspection oversight 4 at your facilities. 5 On FDA's behalf it provides us 6 some more efficient use of our scarce 7 investigational and inspectional resources. 8 By not having to spend time in your plant 9 we're able to get to others and we're able 10 to gain more intelligence and learn more 11 about the industry as a whole so that we get 12 a better snapshot of what is going on there. 13 And we see that as a win-win for both 14 parties who are tied to the third party 15 program. 16 The third party program is 17 authorized under Title 2 Section 201 of the 18 Medical Device User Fee and Modernization 19 Act, MDUFMA, where it altered Section 704 of 20 the act to allow for these types of 21 inspections. It's rather prescriptive as to 22 the requirements as to how we will accredit 229 1 third parties who will be doing these 2 independent voluntary inspections of 3 eligible manufacturers of Class 2 and Class 4 3 device manufacturers. To date as required 5 by the statute we have listed 15 people that 6 will be ready to begin their training 7 sessions that are scheduled for the 8 beginning of January. 9 All these inspections are 10 independent of the mutual recognition 11 agreement that FDA has with the European 12 union for devices; however, many of the 13 features are similar in the two programs and 14 they were modeled closely so that it would 15 minimize some of the confusion for field 16 folks, et cetera, in rolling out this 17 program. And I have provided for you a 18 website that should be useful for you if you 19 don't have it already for updates on the 20 latest for MDUFMA outreach and MDUFMA 21 information that CDRH provides to its 22 stakeholders. 230 1 The primary features of the 2 program, it provides a process of 3 inspection. Eligible manufacturers, those 4 manufacturers who basically have a history 5 on most recent inspection of being no action 6 indicated, NAI, or voluntary action 7 indicated, VAI, these folks will be able to 8 select an accredited person from a list that 9 FDA will maintain on a website. We have an 10 obligation to maintain that list as current. 11 We have an obligation to list and delist 12 accredited persons as they become available 13 within a very short time frame as specified 14 by Congress. 15 Because this is a voluntary 16 program the fee is negotiated among the 17 parties. This is not an FDA-funded program. 18 It's between the manufacturer and the third 19 party provider and the fees are negotiated 20 amongst you guys. We really don't get 21 involved in that. 22 The firm requests of us the 231 1 ability to participate in the program and to 2 use an accredited person. And we approve or 3 deny your participation in the program as 4 well as perform some type of evaluation to 5 assure that you're using the appropriate 6 accredited person for the type of 7 inspectional program needs that you have and 8 the type of manufacturing that you're 9 conducting. 10 With approval the accredited 11 person will assess the quality system in 12 accordance with the quality system 13 regulations as they are specified in the CFR 14 and they will in turn determine compliance 15 with those requirements as an outcome of 16 their inspection. They will prepare and 17 submit reports to FDA. Upon the completion 18 of those audits those reports will be 19 submitted in a very timely fashion. I think 20 we have three weeks to submit those reports. 21 Those reports will be FDA equivalent or FDA 22 type of inspection reports. 232 1 As part of that reporting to FDA 2 they also have an obligation that if they 3 become aware of any serious or significant 4 hazard to health or significant risk 5 situation they are to notify FDA as soon as 6 possible of that situation. And then FDA 7 would evaluate the report, evaluate the 8 inspectional findings, and make the final 9 determination as to the level of compliance 10 at your facility, whether you're no action 11 indicated, voluntary action indicated, or 12 official action indicated or violative. 13 The program provides very strict 14 conflict of interest provisions to the 15 accredited persons. This is not an easy 16 thing for folks to get past. And I know our 17 accreditation board has a difficult task 18 evaluating that as these APs apply for 19 listing in the program. We ran into a 20 similar situation with the MRA program and 21 this goes beyond the requirements of the MRA 22 program. 233 1 The statute says that we will 2 limit the number of APs to 15 for the first 3 year and we have listed those 15 folks. 4 That's a public document. It's out there on 5 the website and they have been advised that 6 they have been selected. 7 Pre-approval, that would be pre 8 PMA bio-mo, bioresearch monitoring, and any 9 for-cause type of inspections that we 10 indicate are necessary at a particular 11 facility. Those will continue to be 12 conducted exclusively by us. They will not 13 be eligible for third party accredited 14 persons participation. And we, of course, 15 retain the right to inspect in accordance 16 with our authority under Section 704 at any 17 time that we see it's reasonable or the need 18 arises. 19 Is my establishment eligible? As 20 I mentioned before, the criterion is that 21 your most recent inspection has been no 22 action indicated or voluntary action 234 1 indicated. In addition you need to market a 2 device in the United States as it's 3 currently structured and the device is 4 marketed or intended to be marketed in one 5 or more foreign countries, one of which 6 recognizes your accredited person, and have 7 a statement that the law of the country 8 where the device is to be sold recognizes 9 FDA's inspection. Now, that's as it's 10 currently structured. There are potential 11 technical amendments that are floating 12 around that we are working in concert with 13 Congress to try to make this a little bit 14 more flexible for everybody. 15 How will the accredited persons be 16 monitored? The CDRH, Center for Devices, as 17 well as CBER will monitor the inspection 18 reports. They will evaluate the inspection 19 reports to determine the level of 20 compliance. Those reports, as I indicated, 21 will be FDA-type reports to assure 22 conformance to FDA requirements as part of 235 1 the quality system reg. 2 We will periodically inspect the 3 AP facilities, the accredited person 4 facilities, to assure that conflict of 5 interests requirements continue to be met 6 and various record-keeping requirements are 7 being maintained, et cetera. We may 8 accompany accredited persons on inspections 9 from time to time. We see that as a rare 10 event. But it's an opportunity also for us 11 to keep our hands on and make sure that 12 there is comfort level that the person is 13 staying on top of their game and doing the 14 best job they can. 15 With the new authority came some 16 new enforcement tools in the line of civil 17 money penalties. These are in addition to 18 other penalties already out there for some 19 accredited persons. If the accredited 20 person fails to meet the standard of 21 accreditation that's subject to a civil 22 money penalty consideration. 236 1 The failure to disclose 2 information that poses a threat to public 3 health, again, there is a statutory 4 requirement that that be done as quickly as 5 possible so that if we need to get into a 6 firm as FDA that we can do so or if the 7 accredited person fails to act in a manner 8 that's consistent with the section of the 9 act that provides for the accredited 10 person's third party program then we have 11 the option of assessing civil money 12 penalties. 13 Additional prohibited acts, 14 failure by the accredited person to provide 15 immediate notification of a condition that 16 could cause or contribute to an unreasonable 17 risk, again, that same message. The premise 18 is that if there is a problem out there we 19 need to know about it. If they provide 20 false information in a report or they fail 21 to include material facts in their report 22 those are also both prohibited acts that 237 1 Congress included with this legislation. 2 The current status, technical 3 changes are needed and being considered in 4 Congress. We're providing advice to 5 Congress to address issues that have been 6 raised by the various stakeholders and the 7 different trade organizations, et cetera. 8 We're very supportive of many of these 9 changes and we hope that we will get a more 10 flexible program as a result of it. 11 Dialogue continues. There was a 12 Senate bill passed the middle of last week 13 and there is still discussion between the 14 houses on those technical amendments. There 15 will be additional industry guidance 16 forthcoming. We expect somewhere at the 17 beginning to middle of January. 18 DSMICA, the Division of Small 19 Manufacturers, International and Consumer 20 Assistance, is developing guidance for 21 industry as to how to participate in the 22 program. They are going to be providing for 238 1 how to apply to be a participant in the 2 program, what requirements, what are your 3 obligations, et cetera, and that guidance 4 should be forthcoming probably in the middle 5 of January. So that will provide a lot more 6 of a road map for you as to how to go to the 7 next step. 8 As I mentioned, in October we 9 listed 15 accredited persons. Nine are 10 foreign-based and six are domestic. The 11 middle of January we have the FDA 12 requirements training program scheduled for 13 these APs, accredited persons, and that will 14 be classroom-type training, an FDA 15 requirements course similar to what we have 16 provided in the past for mutual recognition 17 agreement, and then we plan immediately 18 after to begin scheduling those inspections 19 that are part of the training program. 20 There will be a three-tiered 21 inspectional audit program with the first 22 inspection these APs will follow our 239 1 investigators to see how it's done. The 2 second one will be a co-shared audit and the 3 third audit we will observe them doing the 4 audits to make sure that they are proficient 5 and capable of working independently. So 6 that's the rollout for that aspect of it. 7 We are very enthusiastic about 8 this program. We see this as a win-win 9 opportunity for everybody. We really hope 10 and encourage industry to take advantage of 11 this. It is being looked upon and looked at 12 from other industries. As I said, we've 13 tried to get a program like this off the 14 ground in the past and we are anxious to get 15 it moving and keep it going in a positive 16 fashion. 17 And lastly I thought I'd provide 18 to you contacts and resources for additional 19 information about the program and about 20 MDUFMA. There is the CDRH web page, the 21 MDUFMA web page, and then DSMICA's web page. 22 And John Stigi has certainly 240 1 played an instrumental role as well as his 2 staff in getting the program as far as it 3 has and we'd like to continue forward with 4 that. So with that I would like to turn the 5 podium over to Diane. 6 MS. WURZBURGER: Good afternoon. 7 My name is Diane Wurzburger. I'm with 8 Siemens Medical Solutions. Terry Sweeney of 9 Philips Medical Systems and I are here today 10 both on behalf of AdvaMed and the Diagnostic 11 Imaging and Therapy Systems Division of NEMA 12 to provide joint comments supported by 13 industry as a whole on the provision under 14 MDUFMA for third party inspections. 15 We would first like to commend the 16 agency for its leadership and are encouraged 17 by the ongoing efforts to engage industry as 18 you work to establish this very important 19 program. Looking first to the intent of the 20 program overall, the parties interested in 21 the benefits of this program, of course, 22 include Congress, FDA, manufacturers, and 241 1 third parties. 2 We believe that on balance the 3 MDUFMA provision for third party inspections 4 has potential for establishing a 5 constructive new program for ensuring the 6 safety of medical devices, allowing for more 7 efficient use of resources, and encouraging 8 continued cooperation between FDA and 9 industry. We ask the agency to keep in mind 10 one of the overriding interests of Congress 11 in creating this program, that is, to 12 facilitate the ability of both FDA and 13 industry to ease their regulatory burden. 14 This includes more efficient use 15 of resources by FDA which includes their 16 ability to assign resources for compliance 17 concerns or patient safety issues and the 18 ability of device manufacturers to combine 19 their current burden of quality standard 20 inspections by third parties with the third 21 party inspection program to FDA standards. 22 It is important and interesting to 242 1 note that the quality system of regulation 2 of FDA is approximately 90 percent 3 equivalent to the ISO 1345 standards 4 required by the EU, Canada, and other 5 countries by which we are inspected. 6 The third party inspection program 7 will be a voluntary program to industry. 8 Device manufacturers are not compelled to 9 participate but will subscribe if the 10 program is not complicated, time-consuming, 11 and expensive. 12 One recommendation on which Terry 13 will elaborate is to model this program on 14 the existing third party inspection approach 15 as much as possible. In light of this 16 recommendation and the recommendations that 17 follow we do not expect the agency to 18 compromise on its inspectional standards. 19 Rather we are hopeful that the agency will 20 demonstrate flexibility on the scheduling 21 and format of these inspections, on the 22 combination of inspections to FDA standards 243 1 with other international inspections, and on 2 the operational details of the program. I'd 3 like to introduce Terry Sweeney. 4 MR. SWEENEY: Thank you, Diane. 5 I'm Terry Sweeney with Philips Medical 6 Systems and what we'd like to talk about is 7 I think FDA deserves a lot of credit for 8 going forward and accepting this program. 9 There is always a lot of fear factor, I 10 think, when you start talking about third 11 party anything within the FDA whether it be 12 third party review of 510(k)s or other 13 submissions and in this case third party 14 inspections. The FDA deserves a lot of 15 credit for going forward with this. 16 I think they recognized the 17 limitations that they had within their own 18 investigational staffing and the number of 19 firms that they were required to inspect 20 basically every two years was their 21 requirement, that they weren't going to be 22 able to fulfill that requirement on an 244 1 ongoing basis with the current staffing that 2 they had. So therefore, as Steve was 3 indicating, this is definitely a win-win 4 situation whereby the FDA and the industry 5 can help to minimize the total numbers of 6 inspections that have to be conducted and 7 that companies have to be subjected to. 8 Many firms such as Philips are 9 inspected every almost every several weeks 10 on an ongoing basis by different countries, 11 the Hungarians, the Poles, the Czechs, the 12 EU community with their notify bodies coming 13 in, in addition to the FDA, China, and 14 others. 15 So it's almost like a continuous 16 onslaught of inspections. What we're trying 17 to do with this program is to minimize 18 somewhat the total number that we're 19 receiving and hopefully that will continue 20 to coalesce down to where perhaps at some 21 point in the future we would all dream that 22 maybe one inspection would cover for all 245 1 these different countries. That would be an 2 ideal situation. 3 So we're looking at the program 4 requirements here. We require creativity on 5 FDA's part and also some flexibility. Since 6 this is a voluntary program, as has been 7 identified earlier, it's going to be 8 difficult perhaps for companies to subscribe 9 to the program unless it is easy to 10 implement and to utilize. 11 And one of those areas we have to 12 look at is the scheduling of these 13 inspections by these third party groups. 14 Typically a lot of companies right now, 15 especially those in the international market 16 place, have the inspections to cover the CE 17 marking of their device and for other 18 purposes, again, for Asia perhaps. 19 These inspections typically are 20 done on a periodic basis. It's not like FDA 21 where they are scheduled once every two 22 years. Many firms have them once a year or 246 1 perhaps even once every six months as the 2 type of coverage that they have and in 3 addition to that they cover all elements of 4 the quality system. Whereas currently the 5 QSIT program maybe addressed three or four 6 of the major elements of the quality system, 7 these types of audits that we're talking 8 about being conducted by third party groups 9 typically cover all elements of the quality 10 system, usually over a two-year period of 11 time. 12 So we're talking about, first off, 13 having an extensive coverage, more so than 14 the typical FDA inspection that currently is 15 ongoing today for firms that are under Track 16 1 QSIT-type inspections. So the equivalency 17 here is of a Track 2 FDA inspection or a 18 full-blown top to bottom inspection of all 19 elements of the quality system. 20 Looking at the reporting and 21 formatting of these types of audits, again, 22 we need FDA's acceptance that they won't 247 1 receive perhaps a single report covering the 2 elements that they're looking for but will 3 instead see maybe multiple reports, up to 4 perhaps four reports over a two-year period 5 of time from these third party groups. 6 The format also is going to be 7 somewhat different than the typical 8 establishment and inspection report or EIR 9 that is generated by an FDA investigator. 10 And this is some of the detail that we'll 11 need to work out as we roll out this 12 program, try and look at the contents of 13 those reports. 14 The combination of FDA and 15 international quality standards requirements 16 we are looking at, the FDA needs to look at 17 what the delta differences are between the 18 ISO standards that we're being audited to in 19 addition to the QSR requirements of Part 820 20 and try and harmonize those so that we come 21 in with a single inspection to cover both of 22 those areas. 248 1 The frequent inspection results, 2 as I indicated earlier, are going to be 3 coming into FDA much more frequently than 4 their own investigators are able to provide 5 them with data on a firm's compliance. So 6 they are going to need to be prepared to 7 receive that influx of information, perhaps, 8 and be able to respond to it if necessary. 9 The compliance status therefore 10 will be continually updated to the FDA on an 11 ongoing basis for a firm that would 12 volunteer for this program. So we feel that 13 the FDA is getting much more information 14 that they ever had about the compliance 15 status of the company and, again, this is on 16 an ongoing basis. In addition to the 17 reports from the third party groups being 18 sent to the agency the firms will also be 19 providing the agency and the third party 20 groups with their planned corrective actions 21 for any issues noted during the inspection 22 by the third party group. 249 1 In order for the program to be 2 effectively rolled out we're going to need 3 to look at ensuring a good and accurate 4 guidance document so that we as industry can 5 look at that and say well, we understand how 6 this program is going to be implemented by 7 the agency and that we understand what our 8 obligations are to fulfill this part of the 9 notified body or third party inspection 10 groups coming in and how those reports will 11 be forwarded to the agency. 12 The FDA's oversight of these third 13 party groups is going to be also very 14 critical in how that is done both for 15 finding out who is eligible for the program 16 and how the FDA will be training those 17 groups and how those groups will actually be 18 training themselves. I think one of the 19 things going to be critical is that FDA 20 right now has a planned training program I 21 think starting up in January, is it not, 22 Steve? 250 1 MR. NIEDELMAN: That's correct. 2 MR. SWEENEY: Sometime in January 3 the FDA will be kicking off a training 4 program for the third party groups. But we 5 have to look at an ongoing basis as they 6 lose people to attrition or as new people 7 come onboard with these groups how we'll 8 maintain the concurrency of their training 9 and education. We'll basically need to 10 qualify the training program the third party 11 groups themselves use to qualify their 12 auditors on an ongoing basis for other ISO 13 purposes. So I think FDA in addition to 14 giving this training unless they are 15 planning on giving training periodically 16 will have to look at qualification of the 17 training programs these third party groups 18 give their own people themselves. 19 Another difficulty that we're 20 looking at with the implementation of the 21 program is that the number of auditors we're 22 going be looking at in the field is going to 251 1 be quite large. Right now we have 15 2 companies signed up for the third party 3 program that are going to be scheduled to do 4 these types of inspections. If each one of 5 those has four individuals, let's say, 6 covering four regions of the United States 7 and you look at that number of individuals 8 who need training and then you also multiply 9 that perhaps by what the current guidance 10 document says that FDA will have to conduct 11 three follow-on joint inspections with each 12 one of those auditors just that alone is 13 like 180 joint inspections that would have 14 to be conducted and that will be very 15 difficult, I think, for the agency to 16 implement. 17 So hopefully we can look at the 18 program and say well, maybe we can qualify 19 the training program and do some of the 20 auditors, spot check the qualifications of 21 the training, and make sure it's been well 22 received and do it on a sampling basis. 252 1 The compliance data going to be 2 required, and these are parts of the 3 technical corrections that are currently in 4 the legislation that we're looking at and 5 hopefully over the next several weeks we'll 6 have answers as to how the technical 7 corrections will be implemented by Congress, 8 have to do with the data provided to the 9 agency when a company wishes to subscribe or 10 sign up for the program. As Steve indicated 11 earlier, you have to NAI or VAI, no action 12 or voluntary action indicated, and we think 13 as an industry based on the historical 14 process that we've gone through with the FDA 15 the FDA has enough historical record of our 16 companies that they can qualify us for this 17 and there should not be a large need to 18 submit additional supplementary data from 19 either the third party or from the 20 manufacturer to help qualify a company to 21 get into this program. 22 Historically these companies have 253 1 been inspected by the FDA on an ongoing 2 basis so we think the history of the firm is 3 well known to the agency and how it 4 operates. So that should perhaps be enough 5 to get us involved with the program if we 6 are under that status of NAI or VAI. 7 Again, looking at the format and 8 the content of the third party inspection 9 reports, this is going to be a problematic 10 area in that right now companies are paying 11 for these inspections to be conducted by 12 these third party groups and for us to have 13 to greatly format the reports that they 14 generate differently would create an 15 additional burden and time delay to getting 16 the documentation out of the third party 17 inspection group to the company. 18 So we suggest strongly that the 19 reports generated by the third party groups 20 be the model for the type of report that FDA 21 would expect to come out of the inspection 22 process and that if there are a couple of 254 1 nuances that need to be added those can be 2 done. But basically it is going to be very 3 difficult for a third party group to write 4 the equivalent of an EIR, an establishment 5 inspection report, as an FDA investigator 6 would. So perhaps some approach and 7 compromise may be necessary to make this 8 program effective in this area. 9 Again, the FDA file should contain 10 sufficient history on the manufacturer. 11 We'll be giving the FDA all of our 12 compliance data. We're basically opening 13 our doors on an ongoing basis to the agency 14 as to our ongoing compliance status. 15 Many firms that I'm aware of don't 16 get inspected but every four to six years by 17 the agency but in this case they may be 18 receiving information about the compliance 19 of the company every six months, perhaps, 20 for certain outfits such as our own where we 21 get inspected by British Standards Institute 22 every six months. All that information and 255 1 all the corrective actions will be forwarded 2 to the agency real time as it happens. 3 So therefore we're going to need a 4 proposed guideline as to how to implement 5 the program as soon as possible and Steve 6 indicated that that may be forthcoming 7 within the next several months. So we look 8 forward to that documentation being 9 generated. And hopefully, again, some of 10 these comments will be accepted and 11 incorporated into it to make it a worthwhile 12 program that can be implemented very 13 readily. Thank you. 14 MR. BARNETT: Terry, thank you. 15 Mark Leahey. 16 MR. LEAHEY: Just a couple of 17 quick comments. As Terry and Diane stated, 18 this is an issue that has 100 percent 19 alignment within the industry and MDMA and 20 the small manufacturers really applaud any 21 effort to allow FDA to use the resources 22 they have in a more efficient fashion and 256 1 also make it more efficient for the 2 manufacturers. 3 And finally I'd just like to again 4 stress the importance that with the January 5 training on the horizon it is really our 6 hope that the technical corrections bill 7 move forward and that this program can start 8 up as soon as possible because, again, we 9 think it's a good program and I think there 10 is 100 percent alignment within the 11 industry. 12 MR. BARNETT: Thank you, Mark. 13 Anybody in the audience want to come up to 14 the microphone and ask a question or make a 15 comment on this? 16 QUESTION: Napoleon Monroe, Henry 17 Schein. If an accredited person is overseas 18 performing an audit or CE authority 19 extension or an ISO audit, not specifically 20 a FDA third party inspection, and observes a 21 hazard to health on a product being shipped 22 to the US is there an obligation to report? 257 1 MR. NIEDELMAN: Without the 2 specific legislation I would expect that 3 they would do so. It's in their best 4 interest to do so even if they were not 5 doing an FDA inspection per se. If they 6 were an accredited person I'd think they 7 would have an obligation to keep us posted. 8 MR. MONROE: We agree with that 9 because we've seen some awful products being 10 imported into the US and would like to see a 11 level playing field. Thank you. 12 MR. SWEENEY: Mark, can I comment? 13 I think that based on what you've 14 asked there is a very valid question. If a 15 manufacturer, I think, signed up for this 16 program they have signed up. So if this 17 company or their affiliate in Europe is 18 signed up for the program they would be 19 obligated to make that type of report. 20 MR. BARNETT: Thanks. 21 QUESTION: Chad Dunlee (?) with 22 Alcon Laboratories. Could you tell me 258 1 specifically why PAIs are excluded from this 2 program, pre-approval inspections? 3 MR. STIGI: I think the bottom 4 line on that really is the fact that we want 5 to see a track record with the accredited 6 persons. I mean, obviously, the for-cause 7 inspections they couldn't do because we 8 believe there is a compliance problem and 9 they can only do NAI/VAI inspections. 10 The bio-mo, again, takes special 11 training that they would not have and the 12 pre-approval, again, these are significant 13 products and we'd like to see a track record 14 with those accredited persons before they 15 get involved with that product type. 16 MR. NIEDELMAN: I agree with John 17 as well. Sometimes these pre-approval 18 inspections bring on new and novel 19 technologies and things that need to be 20 evaluated and I think we just want to build 21 some confidence before those are considered 22 for the future. 259 1 QUESTION: Good because that's 2 what I wanted to hear that maybe they will 3 be considered for the future. Also another 4 question, are the APs going to be subject to 5 the same rules, if you will, as the FDA 6 during inspections like they won't have 7 access to audit reports and things of that 8 nature? Would you be training them on the 9 same program as what the FDA investigators 10 go by? 11 MR. NIEDELMAN: They will be 12 trained on how to conduct an FDA inspection. 13 And it's more the importance that you're 14 conducting those internal audits but not 15 have access to them. 16 MR. BARNETT: Anyone else? I have 17 a few third party questions, Steve, that 18 came in before today's program. One of them 19 says once my firm has decided to participate 20 in the third party AP program how will I 21 know if the AP that I'm considering is in 22 good standing with the FDA? 260 1 MR. NIEDELMAN: Well, the statute 2 makes it pretty clear that FDA will maintain 3 the list of cleared accredited persons on a 4 current basis and I believe that needs to be 5 updated no more infrequently than 30 days. 6 So if anybody is being listed or delisted at 7 the long shot you're talking 30 days out. 8 As well when you decide to use 9 that AP you have to come to the agency and 10 we make a determination whether that AP is a 11 proper fit for your particular situation 12 anyhow. So there should be a pretty high 13 comfort level. 14 MR. BARNETT: John, did you not 15 publish a list of about 15? 16 MR. STIGI: Correct. 17 MR. BARNETT: How are you going to 18 keep that up to date and add to it? 19 MR. STIGI: Well, obviously, as 20 Steve pointed out, there is a monitoring 21 program that will be in place for the 22 accredited persons and some accredited 261 1 persons for business reasons or whatever 2 reasons may want to change their scope and 3 they'll be applying to the board, maybe, to 4 cover more devices or they may decide to 5 withdraw from the program. And it's our 6 charge to maintain the currency of that list 7 with this input that's coming in. 8 QUESTION: Chuck Swanson from 9 Metronic, two questions on the 10 implementation. The joint inspection 11 program, can you clarify whether this is 12 something that the manufacturer would be 13 soliciting or is this something that FDA 14 would be soliciting of the manufacturer? I 15 assume it doesn't count as an accredited 16 person inspection. 17 The second question I have is a 18 follow-up on Terry Sweeney's comment about 19 this open-ended availability of FDA to ask 20 for additional compliance information. I 21 agree that where the inspections in the past 22 have been either NAI or VAI additional 262 1 information shouldn't be needed but can you 2 give us some of your current thinking on 3 when or how additional information would be 4 requested? 5 MR. NIEDELMAN: Again, these are 6 some of the issues being discussed as 7 technical changes to the act as well. The 8 agency feels that they should be able to 9 consider a whole bunch of relevant 10 compliance information before a firm is 11 qualified for this program. 12 We all are aware and have been 13 aware there have been situations where a 14 firm has had an NAI inspection in the past 15 and have all of a sudden a series of 16 recalls, a series of problems, new 17 management, new staffing, new everything. 18 And so we want to be able to look at 19 relevant compliance information when we make 20 a determination that a firm can or cannot 21 participate in this program, not necessarily 22 to be submitted by the firm but that the 263 1 agency will consider for participation in 2 the program. Again, these are some of the 3 issues that are being discussed beyond us. 4 Besides the training audits we see 5 on a rare occasion there will be the need or 6 there will be the interest of the agency to 7 accompany one of the accredited persons 8 during their audits to make sure that 9 they're continuing to follow our procedures, 10 to make sure that they're following what 11 they were instructed to do on how to perform 12 a GMP inspection, et cetera. 13 Again, we don't see this as 14 routine at all. These will be rare events 15 but will be something that we would like to 16 retain. 17 DR. SWANSON: I was really 18 referring to the training. 19 MR. NIEDELMAN: The training 20 audits? 21 DR. SWANSON: Yes. 22 MR. NIEDELMAN: How do we see -- 264 1 DR. SWANSON: Will industry 2 participation be solicited by the FDA? 3 MR. NIEDELMAN: Yes, industry 4 participation will be solicited as well as 5 we're looking to potentially include the 6 accredited persons themselves to provide and 7 to identify prospective clients that 8 hopefully can fit into our work plan and we 9 can hopefully kill two birds with one stone. 10 Yes? I'm sorry. 11 MR. BARNETT: Steve, here's one on 12 cost. It says will FDA oversee or audit the 13 costs associated with conducting one of 14 these third party AP inspections? 15 MR. NIEDELMAN: No, as I mentioned 16 during my presentation, that's going to be 17 between the contractual parties, between the 18 firm and the third party, so we're really 19 out of the picture. Now, if we learn on the 20 unusual circumstance that hopefully will 21 never happen that different costs get you 22 different outcomes then that may be 265 1 something else that we'd be interested in. 2 But generally speaking, no, we're not going 3 to be involved in that. 4 MR. BARNETT: Steve, this is a 5 question I love. It says how will FDA use 6 the resources it would have otherwise spent 7 on conducting inspection at my firm, lavish 8 lunches? 9 MR. NIEDELMAN: Well, as was 10 mentioned, we don't get into the number of 11 firms that we're obligated or required to do 12 because our scare resources, which are 13 shrinking on annual basis. Fortunately the 14 industry is growing and unfortunately our 15 resources aren't. By you participating in 16 this program on a voluntary basis it will 17 allow us to get into other firms, gain more 18 intelligence about what is going on out 19 there, get into firms that otherwise we 20 could be unable to do. So we hope that 21 would be a plus. 22 MR. BARNETT: Anything else from 266 1 the floor? I see nobody else at the 2 microphone. Oh, one more, yes. 3 QUESTION: Don Middlebrook from 4 Thortech (?) Corporation, a question for 5 Steve or John. Will the APs be issued 6 credentials when they're coming to visit for 7 official joint inspections, number one? 8 Will there be Form 42s and 43s that are 9 issued by the APs? 10 MR. NIEDELMAN: Number one, we 11 will not be commissioning these folks. They 12 will be working as total third party 13 accredited persons. They will not be 14 commissioned and they will not necessarily 15 completing the forms per se that our typical 16 investigators will. The agency, quite 17 frankly, does not anticipate being able to 18 take action as an outcome of any of these 19 inspections and once we become aware of 20 information we would have the need to do our 21 own work and document any observations made. 22 QUESTION: A follow-up question to 267 1 that. I think maybe as you're developing 2 the guidance one of the things important to 3 consider is if there are issues that the 4 manufacturer being inspected feels need to 5 be resolved typically now within 10 days 6 we're in the district office and we're 7 setting up a face to face meeting. We've 8 got the investigator there and the district 9 director there. In the guidance document we 10 might want to encourage these APs to try to 11 be available to facilitate those kinds of 12 meetings should they be necessary. 13 MR. NIEDELMAN: That's a good 14 suggestion. And in their reports they will 15 also document and provide to us corrective 16 actions that the firms have taken to show 17 their intent towards compliance. 18 MR. BARNETT: Anything else? Then 19 it's time for a 15-minute break so we'll be 20 back in here ready to start at 3:00 o'clock. 21 Thanks. 22 (Recess) 268 1 MR. BARNETT: I now want to 2 introduce our fifth and final panel, the one 3 on new requirements for reprocessed single- 4 use devices. For the FDA Barbara Zimmerman 5 up here ready to roll at the platform is 6 chief of the Orthopaedic Devices Branch in 7 the Division of General Restorative and 8 Neurological Devices in the Office of Device 9 Evaluation, CDRH, and Tim Ulatowski is 10 director of the Office of Compliance, CDRH. 11 Representing the Association of 12 Medical Device Reprocessors is Pam Furman, 13 that organization's executive director. 14 Representing AdvaMed is Tony Blank. He is 15 manager of corporate and regulatory affairs 16 at Boston Scientific Corporation. Rejoining 17 us is Mark Leahey representing the Medical 18 Device Manufacturers Association and 19 representing the American Hospital 20 Association is Roslyne Schulman, who is 21 Senior Associate Director of Policy 22 Development. 269 1 We were going to have an invited 2 speaker from the floor afterwards, Dr. Neil 3 Kahanovitz. He cannot be with us but I'm 4 told that his presentation is in your packet 5 if you'd like to see it. 6 So let's begin, Barbara. 7 MS. ZIMMERMAN: Good afternoon. 8 Section 302 of the Medical Devices User Fee 9 Modernization Act amended the Food Drug & 10 Cosmetic Act by adding new regulatory 11 requirements for reprocessed single-use 12 devices. 13 According to this new provision in 14 order to ensure that the reprocessed single- 15 use devices are substantially equivalent to 16 predicate devices 510(k)s for certain 17 reprocessed, single-use devices identified 18 by FDA must include validation data. 19 Required validation data include cleaning, 20 sterilization, functional performance and 21 this functional performance data needs to 22 demonstrate substantial equivalence. 270 1 To implement these new provisions 2 FDA has published an FR notice dated April 3 30, 2003, which lists the reprocessed 4 single-use devices which will have their 5 exemption from pre-market notification 6 terminated and require the submission of a 7 510(k) with validation data and it lists the 8 devices which are not exempt from pre-market 9 notification and will need to include 10 validation data in their 510(k)s. 11 FDA published a second FR notice 12 on June 26, 2003. The purpose of this 13 notice was to add nonelectric biopsy forceps 14 to the list of critical reprocessed single- 15 use devices and this would terminate their 16 exemption from pre-market notification. In 17 addition to these two FR notices FDA has 18 also published a guidance for industry and 19 FDA staff to clarify the provisions 20 regarding validation data and to outline FDA 21 review policy for 510(k)s with validation 22 data. 271 1 What FDA has done so far in 2 addition to publishing the two FR notices 3 and also the guidance document is training 4 the review staff. Formal training has 5 occurred on the new provisions and also on 6 the guidance document. 7 Presently FDA is developing 8 additional training courses for FDA 9 reviewers regarding the review of cleaning 10 data. As many of you are aware, there are 11 no standards for cleaning medical devices so 12 we are in the process of outlining our 13 policy regarding cleaning and also providing 14 training to the review staff. 15 We are meeting with reprocessors 16 to clarify validation requirements. They 17 are aiding in a policy that we're developing 18 regarding the cleaning. And we are 19 considering comments submitted to the 20 docket. 21 So far there has only been one 22 comment submitted to the docket regarding 272 1 Section 302. This was from Guidant 2 Corporation requesting that heart 3 stabilizers be added to the list of critical 4 reprocess single-use devices previously 5 exempt from pre-market notification 6 requirements that will now require 510(k)s 7 with validation data. We are in the process 8 of reviewing this comment and if this 9 comment is found to need to require an 10 update to our existing FR notice we will 11 publish another FR Notice adding this to the 12 list of devices. 13 What is in the future? What dates 14 are coming up that industry and FDA need to 15 act upon? The MDUFMA requirement was that 16 nonexempt reprocessed single-use devices 17 which require validation data this list 18 needed to be published by April 30, 2003. 19 It was actually required to be published by 20 April 26th. We published on April 30th. 21 And because of that the date at which 22 reprocessors must submit their 510(k)s with 273 1 validation data or cease marketing is 2 January 30, 2004. 3 For reprocessed critical single- 4 use devices that no longer will be exempt 5 from 510(k) requirements FDA also published 6 that list of devices on April 30, 2003, and 7 those devices are required to have 510(k)s 8 submitted for them or marketing must cease 9 by July 30, 2004. 10 The addition of nonelectric biopsy 11 forceps to the list was published on July 12 26, 2003; therefore, 510(k)s for these 13 devices are due on September 26, 2004, or 14 marketing must cease. In addition the 15 statute requires us to publish the list of 16 semi-critical devices which will no longer 17 be exempt from 510(k) requirements. This 18 list must be published by April 24, 2004; 19 however, we are currently working on that 20 and hope to publish this list much before 21 April 24th. 22 I want to correct this last box, 274 1 bottom right corner. If we publish on April 2 24, 2004, 510(k)s would be due by July 24, 3 2005; however, if we publish sooner that 4 date may change and be slightly sooner. 5 Thank you and I will turn the mic 6 over to Pam Furman. 7 MR. BARNETT: Pam? 8 MS. FURMAN: Thank you. I'd like 9 to begin by giving a little bit of 10 perspective on MDUFMA as it relates to 11 reprocessing. In terms of the FDA 12 regulatory status of reprocessing prior to 13 the passage of MDUFMA reprocessors were 14 subject to the same requirements as original 15 equipment manufacturers. Third party 16 reprocessors have always been subject to 17 nonpre-market device manufacturing 18 requirements and in August 2000, as many 19 people know, FDA disseminated a guidance 20 document which stated that over a two-year 21 period the pre-market review requirements 22 would be phased in. 275 1 The two-year period has been 2 phased in and to date AMDR reprocessors have 3 received over 70 510(k) clearances for 4 reprocessed devices. So really prior to 5 MDUFMA there was a level playing field 6 between reprocessors and original equipment 7 manufacturers, both industries subject to 8 the same FDA requirements. 9 How about the safety record of 10 reprocessing? Well, it has always been and 11 continues to be excellent. The fact that 12 certain devices labeled as single use can be 13 safely reprocessed is widely recognized by 14 the clinical community, which again and 15 again has expressed overwhelming support and 16 confidence in the safety of reprocessed 17 devices. The American Hospital Association 18 and American College of Cardiology are just 19 two of the numerous health-related 20 organizations that have spoken out publicly 21 in support of the safety of reprocessed 22 devices. 276 1 I think one powerful statistic 2 that I want to share is that in this past 3 summer US News & World Report came up with 4 or identified 17 what they call honor roll 5 hospitals as those outstanding medical 6 centers that "merit a claim for impressive 7 quality and breadth of experience." AMDR 8 members reprocess for 16 of those 17 9 hospitals. Of the 203 top hospitals 10 identified by US News AMDR members currently 11 serve nearly 70 percent. 12 So why MDUFMA? What was the 13 rationale for placing additional 14 restrictions on an industry that was already 15 subject to the same requirements as original 16 device manufacturing, an industry that 17 boasts a long record of outstanding safety 18 and is widely embraced by the nation's top 19 hospitals and doctors as a safe and 20 effective practice? 21 I think it's difficult to identify 22 any public health rationale for MDUFMA's 277 1 reprocessing provisions. Rather, in our 2 view the impetus for MDUFMA lies in 3 economics. It's the product of the original 4 equipment manufacturers' continuing 5 frustration with the economic threat that 6 reprocessing clearly poses. 7 And I think that threat is really 8 twofold and the General Accounting Office, 9 as many people know, studied this issue a 10 few years back and identified this twofold 11 threat. 12 First, every time a hospital uses 13 a reprocessed device rather than buying a 14 new one that is a lost sale for a device 15 manufacturer. Second, more subtle but 16 nonetheless quite important, the very 17 existence of reprocessing has caused the 18 price of certain new devices to come down so 19 reprocessing puts pressure on OEM profits as 20 well. 21 And over the last several years as 22 the commercial reprocessing industry has 278 1 grown there has been tremendous pressure put 2 on state and federal legislators to restrict 3 or eliminate reprocessing and MDUFMA's 4 reprocessing provisions represent the most 5 recent of these efforts. 6 AMDR participated actively in the 7 drafting of MDUFMA. We provided extensive 8 input into the process that led to MDUFMA 9 and our objective, and I think this was the 10 objective of the hospitals as well, was to 11 ensure that MDUFMA's reprocessing provisions 12 would provide for a vigorous FDA regulatory 13 scheme but one that allows hospitals to have 14 continued access to safe, effective, low- 15 cost reprocessed devices. 16 While MDUFMA clearly came about 17 not because of safety problems with 18 reprocessing but rather because of the 19 economic competition that reprocessing 20 presents I do think that MDUFMA contains 21 some very important messages about 22 reprocessing and I'll highlight two quotes 279 1 from the legislative history. 2 First, Congress clearly recognized 3 the important role that reprocessing plays 4 in our health care system. I'll quote here: 5 "The Committee recognizes that there are 6 cost savings associated with using devices 7 that have been reprocessed; therefore, we 8 want to ensure access to safe and effective 9 reprocessed devices." 10 Second, Congress clearly intended 11 that MDUFMA be implemented in the least 12 burdensome manner consistent with FDAMA. 13 And again I'll quote from the legislative 14 history: "In determining the type or types 15 of validation data to be submitted for FDA's 16 review the Secretary should be mindful of 17 FDAMA, which obligates FDA to impose the 18 least burdensome requirements on companies 19 seeking pre-market clearance or approval for 20 their devices." 21 So where are we now? Well, as 22 Barbara said, FDA is implementing MDUFMA and 280 1 reprocessors are complying with MDUFMA's 2 requirements. I'll note that during this 3 period we have had some concern that at 4 least with respect to certain MDUFMA 5 provisions implementation may not be 6 proceeding in the least burdensome manner. 7 In this regard we'll continue to provide 8 feedback to FDA on the implementation 9 process. 10 There is another, I think, 11 striking phenomenon that I do want to 12 highlight, something we've seen in the 13 implementation phase of MDUFMA, and that is 14 that there has been a sharp increase in what 15 I'll call anti-reprocessing rhetoric among 16 organizations that call themselves patient 17 advocacy groups. Additionally there appears 18 to be, at least right now, a broad-based 19 anti-reprocessing media campaign. Rarely a 20 day goes by that I don't receive a phone 21 call from a news outlet that has been 22 informed of the allegedly unsafe, 281 1 unregulated practice of reprocessing. And 2 the frustration for AMDR and the 3 reprocessing industry, and I imagine this is 4 a frustration that hospitals and doctors 5 share as well, is that these assertions 6 simply run directly counter to the facts. 7 Prior to MDUFMA reprocessing was a 8 highly regulated industry and MDUFMA placed 9 additional restrictions on reprocessing. 10 And the safety record of reprocessing has 11 been and continues to be excellent. 12 I think the good news for 13 hospitals, doctors, patients, and the health 14 care system as a whole is that reprocessing 15 is here to stay. Despite the enormous 16 efforts to create fear about reprocessing, 17 to place overly burdensome restrictions on 18 reprocessing, and to eliminate reprocessed 19 devices as an option for hospitals the third 20 party reprocessing industry is growing and 21 continuing to provide hospitals with safe, 22 effective, reprocessed devices. 282 1 While MDUFMA certainly placed new 2 burdens on reprocessors the industry is 3 complying with MDUFMA and it's continuing to 4 provide important benefits to patients, 5 hospitals, and our health care system as a 6 whole. 7 What are those benefits? Well, 8 first obviously reprocessing enables 9 hospitals to save money without compromising 10 patient care. A reprocessed device costs on 11 average half the price of an original 12 device. Hospitals use their savings to 13 improve patient care. 14 And the savings are real. I 15 recently was talking with a major hospital 16 system in Indiana who told me that they were 17 able to hire three new nurses through their 18 reprocessing savings. And there are 19 hundreds of examples like that. 20 Reprocessing also provides 21 significant environmental benefits. One 22 hospital system in California was able to 283 1 divert 15 tons of medical waste simply 2 through their reprocessing program for SCD 3 sleeves. 4 Finally, reprocessing plays a 5 vital role in the competitive landscape of 6 our health care economy. As I mentioned 7 earlier, the very existence of reprocessing 8 has caused the price of certain original 9 devices to come down. This competitive 10 dynamic is critical in keeping devices 11 affordable for our cash-strapped hospitals. 12 Thank you. 13 MR. BARNETT: Thank you, Pam. 14 Tony? 15 MR. BLANK: Well, good afternoon. 16 I'd like to address my comments to the 17 regulatory aspects of MDUFMA as regards to 18 the reprocessing of single-use devices. 19 One key element that will flow 20 through the entire presentation that I have 21 here is the expectation that reprocessed 22 single-use devices should be regulated as 284 1 what they are. They are remanufactured 2 medical devices. Reprocessors are 3 manufacturers and I think AMDR and AdvaMed 4 are actually in agreement on this in that 5 reprocessed single-use devices should be 6 held to the same standards of safety and 7 efficacy as any manufactured medical device. 8 So some key points today. FDA has 9 done a risk classification as specified by 10 the legislation to identify those devices 11 for which their 510(k) exemption should be 12 terminated because of the risk associated 13 with the reprocessing of those devices and 14 we believe that the generation of that list 15 should somehow take into account the unique 16 device designs and we'll talk a little bit 17 about that in a few moments. 18 With regards to validation 19 requirements we believe that the validation 20 of reprocessing should be held to the same 21 standard, again, of safety and efficacy as 22 any other medical device and the validation 285 1 must be a robust, scientific based 2 validation. And the objective, of course, 3 is to assure that those reprocessed single- 4 use devices are safe and effective. 5 Despite the new regulatory 6 processes in place for reprocessed single- 7 use devices there still are stark examples 8 of the fact that we need clarity on the 9 management of reprocessed single-use devices 10 and we have two recent examples I'll go 11 through. 12 We've heard a little bit about 13 bundling. We believe on the very basis of 14 the fact that single-use devices for 15 multiple original equipment manufacturers 16 are by definition different in design it is 17 impossible to scientifically assert that 18 bundling of devices for multiple OEMs is 19 supportable. It just doesn't make sense. 20 Another point, quality system 21 regulation, it's not optional. Reprocessors 22 are manufacturers. Conformance with the 286 1 quality system regulation should be expected 2 and is necessary to ensure safety and 3 efficacy to the public. We're waiting for 4 guidance on pre-market reports and, again, 5 our expectation is that the PMR guidance 6 will specify criteria that hold reprocessed 7 Class 3 single-use devices to the same 8 standard that you would expect for an 9 originally manufactured Class 3 device. 10 And then we'll have some comments 11 on post-marketing requirements. Basically 12 because of the varied risks posed by the 13 varied individual designs risk 14 classification is not a category decision. 15 FDA used the RPS, which is alternately 16 referred to as the Review Prioritization 17 Scheme or the Risk Prioritization Scheme, 18 for generating their lists of devices. We 19 would hold that any categorization or 20 determination of risk must in some manner 21 take into account the varied design 22 characteristics of devices. 287 1 And it is not a category decision 2 and in fact that was the conclusion out of 3 FDA's laboratories in 2001. So we would ask 4 that FDA revisit the lists generated and 5 published and somehow take into account the 6 individual design characterizations or 7 individual design characteristics of those 8 devices in defining which devices, for 9 example, should be subject to enhanced 10 510(k)s, which devices that are Class 1 11 should have their exemptions terminated. 12 In general we believe that sound 13 validation principles must be applied. And 14 that means doing the things that we as 15 medical device manufacturers do when we 16 validate processes. That means we develop 17 and establish specifications for our process 18 inputs and, remember, the process inputs to 19 a reprocessing are contaminated or dirty 20 medical devices. 21 That means that a reprocessor must 22 be held and must specify what is the 288 1 acceptable level or type of dirt that will 2 allow the process that that device would be 3 subject to for cleaning to assure that the 4 device that comes out is going to be clean. 5 What are necessary environmental controls? 6 What temperatures? What is the acceptable 7 temperature range for storing those used 8 medical devices that are contaminated and 9 sitting? Is 90 degrees okay? Is 20 degrees 10 okay? These are all things that need to be 11 established. 12 Specific design criteria, again, I 13 can't stress enough the fact that when we as 14 manufacturers design single-use devices we 15 design our devices to assure safety and 16 efficacy of the device. People will tell 17 you that original equipment manufacturers 18 are doing this simply to make money. That's 19 not true. Original equipment manufacturers 20 do this because we design our devices to 21 assure that the devices as delivered and as 22 used are safe and effective. I would remind 289 1 you that there is a number of original 2 equipment manufacturers who do manufacture 3 products that are specifically designed and 4 intended for reprocessing. 5 Other process inputs that we think 6 are important for any validated process to 7 specify would be things like what are the 8 details of the construction, what sort of 9 adhesives are acceptable that are used in 10 the product subjected to reprocessing, et 11 cetera, and similarly it's a reasonable 12 expectation, I think, that not only must a 13 validation consider and specify process 14 inputs. It must consider and specify what 15 are acceptable process outputs. What are 16 the acceptable types and level of dirt on 17 the product as it comes out of the process? 18 Fundamentally validation is about 19 demonstrating the effectiveness, the 20 consistency, the capability, of processes. 21 Many guidances, many papers, many standards 22 have been promulgated about validation and 290 1 we would expect reprocessors to be held to 2 the same standard of safety and efficacy and 3 to employ those same principles of 4 validation that we as manufacturers of 5 original medical devices do every day. 6 Now, here is an example of an 7 arthroscopic blade. This was a finished, 8 reprocessed arthroscopic blade. And I ask 9 you does this look like the output of a 10 validated process? We've highlighted some 11 ÄÄÄÄ debris. If this is indeed the output 12 of a validated process then that suggests to 13 me that there is an acceptable level of 14 biologic debris that is an output of the 15 process. That's not something I as a 16 consumer want to be exposed to. 17 The other thing you'll notice is 18 the cutting edge is dull. How does that 19 impact the performance of this particular 20 device? 21 Now, there are other needs for 22 clarity that continue. Here is an example 291 1 of a recall notification. This is very 2 recent having to do with devices which were 3 originally manufactured by Ethicon 4 Endosurgery. They were reprocessed and 5 subsequent to a finding that they needed to 6 be recalled, I think because they had been 7 resterilized without adequate validation and 8 distributed, a recall notification went out. 9 And there were about 22 codes that were 10 recalled, devices. 11 And what you'll notice is that the 12 name Ethicon appears 22 times in the recall 13 notification. Who is the manufacturer? 14 Ethicon is not. I repeat Ethicon 15 Endosurgery is not the manufacturer of this 16 device. They were the manufacturer of the 17 original equipment. The reprocessor, 18 MedSurg Solutions, is identified in the 19 recall notification near the bottom. Who do 20 you think got the phone calls from the 21 hospitals? Who do you think? It was 22 Ethicon Endosurgery. 292 1 And, Bob, I think that you still 2 get some phone calls. Is that true? So 3 obviously there continues to be a need to 4 communicate to the hospitals, to the users, 5 that when single-use devices are reprocessed 6 we must be able to identify those devices 7 when you hold them in your hand as a 8 reprocessed single-use device. 9 I would hold that if the device as 10 manufactured by the original equipment 11 manufacturer contains the name Ethicon or 12 any other original equipment manufacturer's 13 name and it's subject to reprocessing it is 14 in the best interests of the patient for 15 examples such as this to identify on the 16 device itself who the reprocessor is. 17 And here is another example. This 18 had to do with one of Boston Scientific's 19 esophageal stents. This is a covered 20 esophageal stent that it just so happened 21 one of our sales reps was in a hospital and 22 a physician went to open this device and 293 1 began to examine the device and said 2 something's wrong. And that something is 3 the covering is destroyed. The covering of 4 this esophageal stent is no longer patent. 5 This is inadequate for human use. 6 There were several devices. These 7 were reprocessed single-use devices. Now, 8 they had never been used in patients. And 9 in fact this falls under the category of 10 reprocessing of open but unused. To my 11 knowledge currently there is no active 12 process to regulate the reprocessing of open 13 but unused single-use devices. 14 We as AdvaMed would ask that the 15 FDA look at examples such as this, a very 16 stark example, of the need for regulating 17 the process of reprocessing open but unused 18 single-use devices because clearly there is 19 a risk represented to the patients. And an 20 open question. Does this sort of product 21 coming off of a reprocessor's manufacturing 22 line represent the output of an effective 294 1 quality system? The damage to this device 2 is visible to the naked eye. 3 We've already talked about 4 bundling. Other elements about the quality 5 system regulation, things like material 6 controls, we would expect reprocessors to 7 control all their incoming materials just 8 like we do as manufacturers of original 9 devices, to control all incoming materials, 10 which include, remember, used devices. 11 And that means detecting and 12 appropriately accounting for changes that we 13 as manufacturers make to our devices. We do 14 make changes, be they design or 15 manufacturing changes, to our devices on an 16 ongoing basis. 17 Design controls, again, if you're 18 in the business of manufacturing Class 2 or 19 Class 3 medical devices design controls are 20 not optional. That means since reprocessors 21 themselves have no access to our design 22 specifications and in fact are unaware of 295 1 our changes to the design specifications any 2 validation must in some manner address the 3 impact of those potential changes. 4 And specifically those assessments 5 need to assure that every single device 6 that's reprocessed continues to meet 7 validated design outputs. And every single 8 element of the quality system must be 9 considered and again held to the same 10 standard because the basic premise is we're 11 all manufacturers and the quality system 12 regulation is designed to protect patients. 13 And in order to do that a robust and 14 effective implementation of the quality 15 system requirements is vital. 16 PMR guidance, I would just 17 highlight the section from MDUFMA which in 18 English states that pre-market reports for 19 reprocessed single-use Class 3 devices are 20 to be evaluated to the same extent and held 21 to the same standards as PMAs, specifically 22 provide sufficient evidence to provide 296 1 assurance of the safety and effectiveness of 2 the reprocessed device for its intended use 3 as designed and manufactured. 4 Our interpretation of that means 5 that PMRs should be subject to pre-approval 6 inspections just like devices which are 7 approved through a PMA process may be 8 subject to pre-approval inspection. That 9 means, we believe, clinical studies to 10 establish safety and efficacy of the device 11 to the maximum number of reprocessing. 12 Reprocessing a single-use device creates a 13 new device. 14 The post-market requirement, in 15 response to some of Pam's comments in fact a 16 number of statements are being promulgated 17 in the market place. And we won't get into 18 a match about this but I would say that we 19 would anticipate that all regulatory 20 elements of the manufacture and distribution 21 and promotion of medical devices whether 22 original equipment devices or reprocessed 297 1 medical devices should be held to the same 2 regulatory standards. There should be no 3 differentiation. 4 That means statements like 5 reprocessed at an FDA approved facility, we 6 all know that the FDA doesn't approve 7 facilities, same as or better than the 8 original device, FDA approved 510(k), tested 9 or inspected to a higher level of quality 10 than the original device, or this quote from 11 Brian Sullivan, CFO of Sterilmed, "The 12 devices we send to hospitals are the same as 13 those purchased from manufacturers. Our 14 studies show they are as clean or cleaner, 15 they function the same, and because we test 16 100 percent of them they'll work when the 17 doctor opens them in the operating room." 18 Statements such as these are 19 labeling statements. The courts have held 20 promotional statements whether they 21 accompany the device or not are labeling. 22 And statements such as these in our opinion, 298 1 if we were promulgating comparative 2 statements like these, if they weren't 3 supported by head to head clinical studies 4 or some sort of valid head to head testing, 5 would constitute false and misleading 6 labeling and thus misbranding. And we 7 believe that any entity whether it's an OEM 8 or a reprocessor that promulgates claims 9 such as these needs to be held accountable. 10 Now, another comment on 11 post-market requirements. 12 MR. BARNETT: Tony, let's go about 13 five more minutes. 14 MR. BLANK: Five more minutes, no 15 problem. Post-market requirements, 16 clearance and approval, the statute 17 specifies that a reprocessor must 18 incorporate some level of specification of 19 the maximum number of times the device can 20 be safely reprocessed and either remain the 21 substantial equivalent or safe and 22 effective. 299 1 Therefore we believe that it is a 2 direct consequence of this that reprocessors 3 must demonstrate effective controls to, one, 4 track the number of times the device has 5 been reprocessed. Otherwise how can you 6 assure it remains safe and effective? Two, 7 remove devices from the market after the 8 device has been reprocessed the identified 9 maximum number of times and, three, we 10 believe there should be some mechanism to 11 ensure that the reprocessed single-use 12 devices are returned to the initial 13 purchaser. I realize this is not a 14 requirement of the statute but we believe 15 there need to be some controls in place to 16 limit the potential for cross-contamination 17 should there be some infectious event 18 associated with an outbreak of infected 19 reprocessed devices from a particular 20 hospital. 21 Final point, and that has to do 22 with patients' consent. It is an undeniable 300 1 fact in my opinion that reprocessed single- 2 use devices had been previously exposed to 3 other potentially infectious biologic 4 environments before use on a patient and 5 were in fact never designed to facilitate 6 effective cleaning, repackaging, and 7 resterilization. This is in direct contrast 8 to those devices that are designed for 9 reprocessing. 10 Thus in our opinion a reprocessed 11 single-use device must inherently pose a 12 greater patient risk compared to an original 13 device. An original single-use device is 14 not exposed to a biologic environment before 15 it's used on another patient. In our 16 opinion the only reasonable conclusion from 17 this fact is that patients need to be given 18 the opportunity to choose whether they will 19 consent to the use of reprocessed single-use 20 devices. 21 And that's all I have. 22 MR. BARNETT: Thank you, Tony. 301 1 Mark Leahey. 2 MR. LEAHEY: Thank you. I 3 allocated, as you can probably tell, a 4 little bit of time to Tony because this is 5 an issue that I think affects the large OEMs 6 and the small OEMS alike. Clearly the 7 importance of patient safety has to be first 8 and foremost. 9 This is an issue of importance to 10 both large and small OEMs and the issue of 11 the importance of patient safety cannot be 12 overlooked. And while we're encouraged to 13 see that hospitals are trying to find ways 14 to lower their costs and make the process 15 more efficient it can't be done in a manner 16 that jeopardizes patient safety in the 17 products that they are being exposed to. 18 As Tony said, we are dealing with 19 reprocessed SUDs here. These are not 20 devices that have been manufactured with the 21 intent of reprocessing. Tony laid out the 22 policy point of view of the safety and 302 1 efficacy in some of the larger and smaller 2 OEMs but one thing that hasn't been 3 addressed is the impact that this can have 4 on innovative smaller companies that are 5 part of MDMA. We have heard from venture 6 capitalists out there who are responsible 7 for putting funding together to try to move 8 innovation forward and if you're allowing a 9 reprocessor to come in it has a more 10 dramatic impact on a smaller company, a one 11 or two product line, that has put their 12 blood, sweat, and tears into innovating a 13 product. They have received clearance or 14 approval for single-use only and then allow 15 a third party to come in and not hold them 16 to the same standards, allow them to clean 17 that device up and then go out sell it on 18 their own, you're just going to kill off the 19 lifeline for VC money coming into smaller 20 companies and ultimately that's going to 21 have a real adverse effect on innovation. 22 So this is something that affects 303 1 smaller and large companies alike and we 2 really need to look out for the patients 3 first and foremost with our eye towards 4 innovation and the VC community. 5 MR. BARNETT: Thank you, Mark. 6 And now let's hear from Roslyne Schulman of 7 the American Hospital Association. 8 MS. SCHULMAN: Thank you and good 9 afternoon. Hospitals have been safely using 10 reprocessed medical devices for many years. 11 With constrained health care resources and a 12 heightened commitment to the environment for 13 reducing medical waste these health care 14 providers have decided that reprocessing of 15 single-use devices makes sense for them. 16 Hospitals come to this decision 17 after careful review and evaluation by 18 physicians, nurses, infection control 19 experts, and other care givers who work with 20 these devices every day and are committed to 21 safe patient care. Due to questions raised 22 about the safety and efficacy of 304 1 reprocessing practices in 2000 members of 2 Congress asked the General Accounting Office 3 to review the practice of SUD reprocessing 4 in the US. Among other things they were 5 asked to review the health risks associated 6 with reprocessing. 7 GAO found that the clinical 8 evidence showed the devices can be 9 reprocessed safely. The quote on my slide 10 is from the report that supports this 11 contention. It says that hospital infection 12 control experts at CDC told us that the 13 evidence showed that SUD reprocessing poses 14 minimal if any public health risk. GAO 15 advised FDA to continue the process to bring 16 entities that reprocess SUDs under 17 regulation as manufacturers. 18 In 2001 FDA in fact did that. 19 They began regulating entities that 20 reprocess SUDs, both acute care hospitals 21 and third party reprocessing companies. The 22 FDA working in a cooperative and open 305 1 process with OEMs, reprocessors, and 2 hospitals has implemented a comprehensive 3 plan under which all entities that reprocess 4 SUDs are treated as manufacturers and are 5 therefore subject to the very same 6 regulatory requirements as OEMs. 7 But subsequently the OEMs began to 8 urge that Congress enact legislation that 9 would establish new requirements that go far 10 beyond the FDA's current requirements for 11 safe and effective devices. These 12 requirements as included in MDUFMA subject 13 reprocessed SUDs to more stringent 14 regulation than new devices and have 15 increased the cost of reprocessing. 16 Given the excellent safety record 17 of reprocessing the AHA believe that the 18 reprocessing provisions in MDUFMA are a 19 waste of precious health care dollars. We 20 suspect that these provisions are intended 21 to be so burdensome and costly to implement 22 that they put an end to reprocessing. 306 1 The AHA's overall position is that 2 the legislation was unnecessary because FDA 3 has already established a process that 4 assures the safety and efficacy of 5 reprocessed medical devices. Further we 6 believe that FDA already had the authority 7 to implement many of the provisions in 8 MDUFMA but had simply not determined that 9 there was any public health purpose to doing 10 so up to that point. In the absence of a 11 public health purpose the provisions of 12 MDUFMA simply increase the cost of 13 reprocessed devices to hospitals. 14 The nation's hospitals have an 15 interest in ensuring that reprocessing is 16 preserved as a viable option because it can 17 result in reduced health care costs without 18 sacrificing safety or quality of care for 19 patients. 20 In fact, as GAO, CDC, and other 21 government agencies have noted, there is no 22 evidence to suggest that reprocessed devices 307 1 pose any higher risk to patients than new 2 devices and cost savings to health care 3 facilities can be substantial. These are 4 funds that could be used to expand services 5 to uninsured patients, to fund new 6 technology, and to accomplish many of the 7 other important aspects of the mission of 8 hospitals. 9 With regard to the informed 10 consent question raised by Tony Blank the 11 AHA believes that patients have every right 12 to know about the real risks that they may 13 face when they undergo a surgery or another 14 kind of procedure. Physicians carefully 15 inform patients about the real and 16 documented risks involved in procedures. 17 Experience and studies have shown 18 to us that properly done reprocessing in 19 accordance with the FDA regulations is safe 20 and effective for patients. As I noted 21 before, there is simply no data to indicate 22 that reuse poses a risk to patients. 308 1 In order to minimize the cost of 2 MDUFMA the AHA urges FDA to ensure that 3 their final guidance to reprocessors is 4 consistent with Congressional intent as 5 spelled out in the conference report. The 6 provisions of MDUFMA were to be implemented 7 in the least burdensome way. 8 MR. BARNETT: It's time now to 9 again open the floor for questions. So does 10 anybody want to come up? Identify yourself 11 first. 12 QUESTION: Mark Solomon (?), 13 Vanguard Medical Concepts. This is more of 14 a comment since Tony brought us personally 15 into Slide 7. And I think what we need to 16 talk about are just the anecdotal comments 17 in that slide and, to quote Tony, this is a 18 fact but it's actually my opinion. I think 19 this is more like an opinion. 20 The ground rules that we started 21 off with here, and, Mark, I think you laid 22 them out and Dr. Feigal and others in the 309 1 senior management of FDA, we want to move 2 forward in this whole process. We're 3 playing by the rules. We are where we are 4 today. Let's move it to the next level. 5 And certainly we're playing by those very 6 rules. 7 We are a device manufacturer. 8 This is what we did even despite the 9 evidence that indicated that we didn't need 10 to move to the levels that we did. We have 11 a track record that most of the industry 12 would be very enviable about but at the same 13 time we moved to the next level and we are a 14 device manufacturer just like everybody in 15 this room. 16 So the anecdotal comments about 17 dullness, the opinion on dullness, the 18 opinion on whatever those question marks 19 are, I just really want to get past that. 20 Really, all that does is add more suspect to 21 the whole idea of maybe chain of custody of 22 those devices themselves before they made it 310 1 on to that slide. 2 But what I really want to do is 3 urge everyone, my colleagues here as 4 manufacturers, device manufacturers, of 5 single-use devices, of reusable devices, I'm 6 going to urge all of you to be responsible 7 in your comments as we look forward to 8 moving this many notches forward. And have 9 faith in the industry that we've developed 10 here and the guidelines and the 11 specifications. 12 That's perhaps why Vanguard and 13 other device manufacturers have done so well 14 on our track record and really have a lot of 15 faith in the regulatory professionals who 16 are surrounding us here from the FDA and how 17 far they've taken this process. I commend 18 them for what they've done. Thank you. 19 MR. BARNETT: Thank you. Anyone 20 else? Barbara, let me ask you a question 21 that I've heard before. When is FDA going 22 to publish the list of semi-critical 311 1 reprocessed SUDs that are not going to be 2 510(k)-exempt any more? 3 MS. ZIMMERMAN: The statute 4 requires that we publish this list by April 5 24, 2004. As I mentioned in my 6 presentation, we are striving to do that 7 sooner but that would be the actual date 8 we're required to do it by. 9 MR. BARNETT: Barbara, within CDRH 10 are the validation data going to be reviewed 11 by ODE or by the Office of Compliance? And 12 if it is going to be ODE are the reviewers 13 trained in this area? 14 MS. ZIMMERMAN: Validation data 15 contained in a pre-market application would 16 be reviewed within the Office of Device 17 Evaluation. And the second part of your 18 question? 19 MR. BARNETT: Well, the second 20 part of the question is are those folks 21 trained to do that? 22 MS. ZIMMERMAN: Yes, they already 312 1 received some training according to the 2 guidance document that we published on 3 validation data and there will be subsequent 4 training as we develop our policy further. 5 MR. BARNETT: Yes, sir. 6 QUESTION: Dennis Hunt, Ethicon 7 Endosurgery. As we've heard earlier today, 8 MDUFMA clearly re-articulates the fact that 9 reprocessed single-use devices are different 10 than single-use devices by original 11 equipment manufacturers. We've also heard 12 today that there is confusion in the market 13 place regarding ownership, names on the 14 devices. 15 We heard earlier this morning that 16 the Section 301 labeling requirements for 17 the name of manufacturer on the devices will 18 probably be delayed at least 36 months. My 19 question is specifically around that 20 particular issue, the names on medical 21 devices. 22 For those manufacturers who 313 1 currently conform with Section 301 today and 2 their name does appear on the medical device 3 and then it is again reprocessed there is no 4 requirement today for a secondary 5 manufacturer to take that name off. My 6 question for FDA is can we expect any 7 guidance or any opinion or policy statements 8 in the near future on this issue? 9 MR. ULATOWSKI: Well, I think the 10 morning discussion as you've alluded to 11 indicated one primary area that would have 12 answered one of your concerns about 13 labeling. We've seen displayed another 14 aspect of concern in regard to labeling in 15 regard to the recall notification. 16 That particular recall 17 notification certainly has given some food 18 for thought about presentation of 19 information in recall notices. I think 20 that's been very interesting to us and we're 21 already discussing the impact of that sort 22 of thing. 314 1 But as far as additional changes 2 to devices 301 is really still rolling out 3 as discussed this morning and we'll try and 4 do what we can do with recall stuff. 5 MR. BARNETT: Next. 6 QUESTION: Bob O'Holla, J&J. I 7 would just urge that as you think about this 8 in the context of that recall that you not 9 focus just on your notice although it could 10 be done better. The calls we got from 11 hospitals who didn't believe we weren't the 12 manufacturer and were confused about what 13 product was being recalled I think is more 14 important and that goes to the branding 15 issue. It's at the heart of the branding 16 issue. I would just urge that that not get 17 lost in how can we do our notices better. 18 MR. ULATOWSKI: Sure. 19 MR. BARNETT: Thank you. 20 QUESTION: Hi, Terra Federici (?) 21 With AdvaMed. I may have misheard, Barbara, 22 but I thought I heard you say that you had 315 1 only received one set of comments to the 2 docket with respect to reuse. And I want to 3 clarify for the record that AdvaMed has 4 submitted at least five sets of comments on 5 reuse to the MDUFMA docket and if you have 6 not received this I am happy to supply a 7 full set. 8 MS. ZIMMERMAN: Maybe you could 9 clarify. Were those comments submitted 10 before or after the April 30th publication? 11 MS. FEDERICI: There were comments 12 submitted both before and after. 13 MS. ZIMMERMAN: I know that there 14 were several comments that I reviewed before 15 the publication on April 30th. I am unaware 16 of a submission to the docket regarding 17 Section 302. So if there was something 18 specific to Section 302 which is what you're 19 saying then maybe either you or I can 20 clarify that or you can resend them. 21 MS. FEDERICI: Sure. Great, thank 22 you. 316 1 MR. BARNETT: Anyone else? We're 2 going to quickly switch the folks up here. 3 So we are going to take no more than five 4 minutes as a stretch break. Don't go far. 5 We'll be right back. 6 (Recess) 7 MR. BARNETT: Let's get started 8 again. This last session is what I think of 9 as a last chance session because if you have 10 questions or comments that you haven't made 11 so far this is the time to do it. We've 12 called back Linda and Diane and Dan but 13 we've also called up Dr. Joanne Less to help 14 us in answering questions. Joanne is the 15 MDUFMA implementation director in CDRH. 16 During this session we'll have the 17 same time limit as before, three minutes 18 maximum, but before we do that we have a 19 public presentation from Liz Jacobson, 20 Executive Vice President for Technology and 21 Regulatory Affairs at AdvaMed. Liz? 22 MS. JACOBSON: Thanks, Mark. I 317 1 don't have to introduce myself now. We 2 appreciate the opportunity for an additional 3 couple of minutes at the end of this very 4 long day. 5 AdvaMed is the world's largest 6 association representing manufacturers of 7 medical devices, diagnostic products, and 8 medical information systems. We have more 9 than 1100 members who manufacture nearly 90 10 percent of the health care technology 11 products that are purchased annually in the 12 United States and more than half of the 13 products purchased around the world. 14 But what isn't generally 15 understood or appreciated is that our 16 members span a range of sizes from very 17 large to very small. And in fact more than 18 68 percent of our members are small 19 companies. So the views that we present 20 here represent all of our members. 21 AdvaMed was actively involved in 22 the development of MDUFMA and in the 318 1 negotiations that resulted in the pre-market 2 review performance goals and we're gratified 3 at the high priority that you all have 4 placed on implementation of the provisions. 5 We'd like to thank the FDA staff for all the 6 hard work done as evidenced in the various 7 presentations that we've seen here today. 8 We'd also like to reiterate a 9 couple of points that have been touched on 10 today. First, we're very encouraged by the 11 administration's support for bringing the 12 '05 appropriation for the medical device 13 program up to the amount originally provided 14 for in MDUFMA. And we're also encouraged by 15 FDA's commitment to meet all of the 16 performance goals because that's the point. 17 As you know, AdvaMed aggressively 18 lobbied for full appropriations in '03 and 19 '04 and we were disappointed by the budget 20 shortfalls of the last two years. We 21 consider the MDUFMA legislation with its 22 emphasis on a combination of appropriated 319 1 dollars and industry user fees as critically 2 important to ensuring that FDA has the 3 resources it needs to efficiently and 4 effectively review cutting edge medical 5 technology products. 6 So we were pleased then to see the 7 administration's commitment for '05 and 8 beyond but, as was stated this morning, we 9 remained concerned that as part of this 10 agreement the appropriations reaching the 11 agency are significantly less in '03 and '04 12 than what the agency originally estimated 13 was going to be needed to meet the 14 performance goals and for this reason we 15 have requested that the agency contract for 16 an independent assessment of what FDA needs 17 to reach or exceed the goals and we are 18 going to be following up with the agency on 19 this particular request. 20 We believe that the results of 21 this assessment will be both useful and 22 necessary next year when Congress considers 320 1 potential changes to the appropriations 2 trigger as well as in any discussions that 3 may happen about adjustors to user fees. 4 Our bottom line on the implementation of 5 user fees is that all parties, Congress, 6 FDA, and industry, need to keep focused on 7 the goal, which is to ensure that the agency 8 have sufficient resources to efficiently and 9 predictably review the many cutting edge 10 medical technologies our members produce. 11 Patients need these products and 12 delays in product availability caused by an 13 inefficient review process are unacceptable; 14 however, we also all have to remember that 15 user fees are a new venture for the medical 16 device industry and there are going to be 17 inevitable issues in implementing this new 18 program including some that we heard today. 19 So we're committed to the long- 20 term success of the user fee program and to 21 working constructively with the agency to 22 solve these implementation problems and 321 1 ensure that products reach the marketplace 2 without delay. Second, we appreciate the 3 fact that the agency has determined to be as 4 transparent as possible about process. This 5 desire for transparency has led to your 6 publishing many guidances over the past 7 year, including three most recent. We 8 certainly agree that guidances are necessary 9 and desirable and we appreciate the agency's 10 efforts to be timely and informative. 11 But we did have some serious 12 concerns about some of the things in the 13 guidance on the PMA clock as we've talked 14 about today and we may have some comments on 15 some of the other guidances that have come 16 out. So we think that consultations with 17 industry prior to issuing final guidance 18 documents would yield better products that 19 more accurately represent the intent of the 20 legislation. 21 We do appreciate your comments, 22 Linda, this morning indicating that FDA has 322 1 heard us on this and we also appreciate the 2 consideration we've gotten over the last 3 year or so on all of the other comments 4 we've made on the various provisions. 5 And finally I think the nature of 6 meetings like this is that everybody spends 7 a lot more time addressing problem areas 8 than successful areas. And over the course 9 of today we've covered in great detail those 10 things that both FDA and industry feel could 11 be improved, need more attention, et cetera, 12 but we hope that FDA has also heard the 13 positive news. 14 We greatly appreciate this 15 meeting. We appreciate the opportunity 16 you've provided for public discussion of 17 concerns and suggestions and, for example, 18 while the timing of your most recent 19 guidances maybe didn't allow us to get our 20 members to get formal comments together in 21 time for today we are pleased to see that 22 you're working hard at getting needed 323 1 information out as rapidly as possible. 2 Like FDA we're determined to make 3 the MDUFMA user fee program a success and 4 we're determined to make the third party 5 inspection process a win for both the agency 6 and industry because we think that's also a 7 win for patients. We'll continue to comment 8 on the agency's implementation of the reuse 9 provision. We'll also continue to work to 10 ensure that FDA understands the public 11 health implications of those comments. 12 We appreciate the opportunities 13 provided by electronic labeling. We remain 14 adamant about the lack of public health 15 benefit for the dollars that would be spent 16 implementing the branding provisions. So 17 you can be sure that you'll continue to hear 18 from us on this. 19 There is lots of work remaining to 20 be done to ensure that the intent of MDUFMA 21 is realized. And indeed a lot of the 22 provisions of MDUFMA didn't get discussed 324 1 here today just for lack of time and there 2 are only so many panels you can put into one 3 session. 4 We intend to continue our efforts 5 to ensure MDUFMA's success and we really 6 appreciate the fact that the agency is 7 working equally diligently on implementing 8 this important legislation. So thanks for 9 the time. 10 MR. BARNETT: And thank you, Liz. 11 Does anybody want to come up and do a 12 question or comment? Well, I don't have any 13 more so all right then -- 14 MS. KAHAN: Can I get the last 15 word then? 16 MR. BARNETT: I was just going to 17 say all right then, Linda. You didn't have 18 to jump through there. Yes, go ahead. 19 MS. KAHAN: I just wanted to thank 20 the people who arranged this conference and 21 I know there are lots of people but I need 22 to single out Lynne Rice, who has really 325 1 been working around the clock to make this 2 happen, so thanks. 3 And I really do want to thank the 4 stakeholders who have come out today and 5 have spent the day with us and have provided 6 lots of input over the year since we've been 7 implementing MDUFMA and I know we'll 8 continue to hear from you. And I really 9 want to reiterate what I think we all said 10 this morning which is that we really do want 11 to hear from you. We really are listening. 12 I think that a lot of what people 13 said today will give us things to think 14 about and consider when we make some of our 15 guidances final or put out new draft 16 guidances so we really are listening. We 17 really do appreciate your being here and 18 working with us to make this program 19 successful because I think the bottom line 20 is that everybody in this room is here for 21 the same reason. 22 We want to make sure that safe and 326 1 effective medical products get to people as 2 quickly as possible and in as predictable a 3 way because that's what's best for American 4 consumers and that's what's best for 5 people's health. 6 So thank you again, Mark. Thank 7 you very much. You always do a great job. 8 MR. BARNETT: Thank you, Linda. 9 Thank you. 10 MS. KAHAN: So, again, please keep 11 those letters coming. 12 MR. BARNETT: Bye, everyone. 13 Thanks. 14 (Whereupon, at 4:09 p.m. the 15 PROCEEDINGS were adjourned.) 16 * * * * * 17 18 19 20 21 22