FOOD AND DRUG ADMINISTRATION SECOND ANNUAL CDRH/CBER MDUFMA STAKEHOLDER MEETING Gaithersburg, Maryland Thursday, November 18, 2004 2 1 PANEL MEMBERS: 2 MARK BARNETT 3 DANIEL SCHULTZ 4 JESSE GOODMAN 5 LINDA KAHAN 6 DIANE MALONEY 7 MARK KRAMER 8 FRANK CLAUNTS 9 JOHN STIGI 10 JANET TRUNZO 11 MARK LEAHEY 12 DONNA-BEA TILLMAN 13 DON ST. PIERRE 14 LEN WILSON 15 PATRICIA SHRADER 16 TIM ULATOWSKI 17 MICHAEL MARCARELLI 18 THINH NGUYEN 19 MARY BETH JACOBS 20 KARA LYNCH 21 JAN WELCH 22 DIANE WURZBURGER BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 3 1 PANEL MEMBERS (CONT'D): 2 BARBARA ZIMMERMAN 3 STEVE TURTIL 4 GINETTE MICHAUD 5 ROBERT O'HOLLA 6 NAOMI HALPERN 7 JENNIFER MALLARD 8 LARRY SPEARS 9 ROBERT DURGIN 10 NICK HORVATH 11 ROBERT BRITAIN 12 MARY HOUGHTON 13 14 15 16 * * * * * 17 18 19 20 21 22 BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 4 1 C O N T E N T S 2 AGENDA: PAGE 3 Opening Remarks & Welcome 5 4 Panel 1: How is the User Fee Process 47 Working? 5 Panel 2: Premarket Review Performance 114 6 Goals 7 Panel 3: Qualitative Performance Goals 179 (e.g., Modular PMA Program, 8 and GMP and BIMO Inspectional Programs) 9 Panel 4: Third Party Inspection Program 225 10 Panel 5: Reuse 253 11 12 13 14 * * * * * 15 16 17 18 19 20 21 22 BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 5 1 P R O C E E D I N G S 2 (9:03 a.m.) 3 MR. BARNETT: Okay, ladies and 4 gentlemen, I think we're ready to get 5 started. If you'll have a seat, please. 6 Have a seat please, thank you. I want a 7 silent room. All right, I would like to 8 welcome you to this second annual public 9 meeting on The Medical Device User Fee and 10 Modernization Act of MDUFMA as we come to 11 call it. I am Mark Barnett, Assistant 12 Director for Education and Communications in 13 FDA Center for Devices and Radiological 14 Health, and I will be serving as your 15 moderator today. 16 When you registered you should've 17 received a packet that contained some 18 important information; it has a meeting 19 agenda, it has some of the presentations the 20 panelists are going to be making, it has a 21 list of the guidances we've issued to date 22 under MDUFMA, some important web addresses, BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 6 1 it's got information in it about how you can 2 obtain a transcript of this meeting and 3 information on where to eat lunch. 4 Everybody knows I think by this 5 time that MDUFMA authorizes the FDA to 6 collect fees from manufacturers to help 7 offset the cost of reviewing applications for 8 new medical devices. But MDUFMA has some 9 other important features as well: it has 10 provisions about third party inspections and 11 new requirements to manufacturers who 12 reprocess devices that are labeled for 13 single-use only. Some of you might recall 14 that last year we held our first MDUFMA 15 public meeting in December, when the program 16 had been underway for just about a year. 17 The law didn't require that we do 18 that but we were anxious at that point to 19 take stock of where we stood with the 20 program, where we were with implementation, 21 and we wanted to find out from stakeholders, 22 how the program was affecting them in their BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 7 1 own work. Last year's meeting accomplished 2 that because in fact the FDA folks have used 3 what they learned last December in 4 implementing MDUFMA, especially in developing 5 guidances. For example this afternoon you 6 are going to hear about some changes we made 7 to the Modular PMA Program, and that was in 8 response to comments that we got from you. 9 So today's meeting is a continuation of the 10 dialogue that we started last year. 11 We're here today to let you know 12 what happened to the program, what's going to 13 happen, and hear back from you about how 14 MDUFMA has impacted the industry and 15 consumers and healthcare providers. So the 16 FDA folks that are here today are going to be 17 listening carefully to what they hear, and 18 they are going to take that into account as 19 they continue to implement MDUFMA. In fact, 20 as I said, the proceedings are being 21 transcribed, so everybody can have a record 22 of what was said here today. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 8 1 Now we're going to use the same 2 format for today's meeting that we used last 3 year. That means we've structured the 4 meeting as a series of five panel sessions, 5 each one covering a specific aspect of 6 MDUFMA, and during each panel you will be 7 hearing from both the FDA people who are 8 working on implementation and from the 9 stakeholders who are affected by them. Each 10 panel session is scheduled for one hour. 11 We'll divide that hour into three equal 12 parts: 20 minutes for the FDA, 20 minutes 13 for stakeholder comments and then 20 minutes 14 for questions from the audience. 15 The first panel is going to cover 16 how the user fee process is working in sort 17 of a general way and how the process for 18 designating small businesses is going. The 19 second panel is going to cover pre-market 20 review performance goals for both the 510(k) 21 and the PMA programs. And we are also going 22 to talk about new people we've hired under BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 9 1 MDUFMA, the use of outside experts in the 2 review process and the use of internal 3 milestones to help us meet our own 4 performance goals. 5 The third panel is going to cover 6 what we're calling qualitative performance 7 goals, and that means including the modular 8 PMA program and the GMP and BIMO inspectional 9 programs. The fourth panel is going to cover 10 the third party inspection programs, and that 11 includes eligibility criteria for both the 12 accredited persons conducting the inspections 13 and the establishments who want to 14 participate in that third party program. And 15 the fifth and final panel is going to cover 16 the new MDUFMA requirements for reprocessed 17 single-use devices. 18 Let me say a few words about the 19 question and answer period, that 20 minutes 20 at the end of each of the panels. Let me say 21 two things: first of all we are going to ask 22 that the questions you ask apply to that BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 10 1 panel. If you have general questions about 2 MDUFMA that don't apply, we do have a section 3 at the end of the program for those 4 questions. So let's have the questions at 5 the end of the panel apply just to that 6 panel. 7 And secondly, we've set a time 8 limit for the questions so that we can stay 9 on time and everybody who wants to speak can 10 get a chance to do so. I'm going to limit 11 each person to no more than three minutes, 12 and so I'm going to give the questioner a 13 reminder when two minutes are over and then 14 I'll call a clear halt after three minutes. 15 Again that's to make sure that everybody gets 16 a chance and that we finish on time. 17 Each questioner is going to be 18 allowed one follow-up question: you ask your 19 question, someone on the panel will respond 20 and I'll say, "Does that answer your 21 question?" and you may want to say, "No, it 22 doesn't," and you ask for clarification and BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 11 1 we'll -- and we'll do it again but we'll go 2 through that cycle just one time, okay? 3 Let me begin now, before we begin 4 the panels, by introducing the directors of 5 the two FDA centers that were affected by 6 MDUFMA; Dr. Dan Schultz is Director of the 7 Center for Devices and Radiological Health 8 and Dr. Jesse Goodman is Director of The 9 Center for Biologics Evaluation and Research. 10 So I'm going to turn it over to you guys. 11 MR. SCHULTZ: Mark, thank you very 12 much. Ladies and gentlemen, it's a pleasure 13 to be here this morning and we certainly 14 appreciate all the interest demonstrated by 15 your presence here today. This is a critical 16 time for this program, and what you are going 17 to be hearing today from all of these 18 different panels is an update on what's been 19 going on as far as implementing this law. 20 You are going to hear a lot of data that 21 shows what we've been doing over the last 22 couple of years. You're going to hear plans BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 12 1 for the future that are in place in order to 2 fulfill the promise of MDUFMA. And you are 3 going to hear a lot of discussion back and 4 forth, there are going to be questions; this 5 is really a time for your participation, for 6 us to listen to what you have to say and to 7 try to do the best that we can in order to 8 make this law succeed. 9 As you know, our mission is to 10 ensure safe and effective devices and to 11 provide them in a timely fashion. We have 12 done a lot over the last couple of years in 13 order to try to make that happen. We have 14 hired a highly qualified medical engineering 15 and scientific staff in order to accomplish 16 those goals. We have a review process that 17 is flexible, is responsive, and allows us to 18 interact with the industry the way that we 19 feel that we ought to and the way that we 20 feel is beneficial to everybody. 21 And we are providing a safety net 22 for post market systems that can rapidly BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 13 1 detect and resolve problems. This is not 2 done in a vacuum, it's done as a partnership 3 with the industry, and we value that 4 partnership and we certainly look forward to 5 working with you in the future. It can't be 6 done without revenue; the revenues that have 7 been generated over the last couple of years 8 have allowed us to make considerable strides. 9 You're going to hear a lot of discussion 10 today about the performance goals and how 11 much we've accomplished and whether or not we 12 got to 25 percent or whether it's 24 percent 13 or whether it's 28 percent. 14 Frankly I think you can present 15 those numbers pretty much any way you want. 16 The bottom line as far as I'm concerned is, 17 we have accomplished more than the resources 18 should have allowed us to accomplish over the 19 last couple of years. But as far as I'm 20 concerned, we've just, we have just set the 21 table for what we can accomplish over the 22 next couple of years if this program is BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 14 1 allowed to continue. 2 The other thing that this program 3 has done is it has put us on the map. 4 Devices have finally gotten people's 5 attention, and we want to keep it that way. 6 We think it's critical that the device 7 program be seen as an important part of FDA 8 and HHS and this program has allowed us to do 9 that. We are at a critical point; I think we 10 all know that. As of October 1st, it's 11 necessary that the trigger fix be 12 accomplished in order for this program to 13 continue. 14 I'd like to just make a couple of 15 closing comments because I think that what 16 you're really here for today is to listen to 17 the experts and hear the data and have the 18 discussion in the individual panels. But I'd 19 like to close with a couple of comments: one, 20 as I mentioned, there's going to be a lot of 21 discussion about performance. I think again 22 we've accomplished an incredible amount in BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 15 1 the last couple of years, but as I said 2 before, we've just really just started and 3 "you ain't seen nothing yet" as somebody once 4 said. 5 You're going to hear discussion 6 about the fees themselves and the impact on 7 the industry. And we do understand that and 8 we do appreciate that. And again, as I've 9 said before, our goal is not to collect 10 money, our goal is to accomplish what we all 11 want to accomplish, that is making sure that 12 devices in this country are safe and 13 effective and get to market in a timely 14 fashion. You're going to hear people use the 15 word "renegotiate." That sounds very 16 innocuous. It sounds very simple. It sounds 17 like something that makes a lot of sense. 18 What I'd like you to do when you hear that 19 word is substitute the word "kill." 20 The word "kill" does not sound 21 quite as innocent and innocuous. But that is 22 the risk unless we as a group unite together BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 16 1 to make sure that this program succeeds, it 2 will be killed and the promise that we have 3 started to implement, the promise that we 4 have in order to make this the shining light 5 of FDA will be gone. And it will be gone for 6 the rest of my lifetime certainly and 7 probably for the rest of yours as well. We 8 will not get another chance to get this done. 9 And finally I'd just like to 10 mention the fact that, you know, this is -- 11 this is called the stakeholders' meeting. 12 And the word "stakeholders" is bandied about 13 a lot and used in a lot of different ways 14 nowadays, but I think that in this case and 15 for this meeting and at this time, the term 16 "stakeholders" is really extremely important. 17 The people in this room and the people that 18 we represent are the stakeholders for medical 19 devices. If this program goes away, you may 20 hear that, well, it'll be fixed in some other 21 way. 22 I just want you to think with all BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 17 1 the other things that are going on, there are 2 hearings going on downtown as a matter of 3 fact as we speak here today, which will be 4 probably on the front page of the Washington 5 Post tomorrow as opposed to this meeting. 6 Think about where devices will fit in the 7 priorities of Congress over the next year. 8 We are the stakeholders, we are the ones that 9 can make this program succeed, but in order 10 to do that we need to speak with a clear 11 single voice that tells Congress and tells 12 all those people that are listening that we 13 want this program to succeed and we will make 14 it succeed and we need it to succeed. Thank 15 you very much. 16 MR. BARNETT: Go ahead, Jesse. 17 MR. GOODMAN: Well, likewise, good 18 morning, and I won't take much time, but I 19 certainly support and second Dan's comments 20 and concerns. I think one of the best parts 21 of MDUFMA for CBER -- and I know CDRH has 22 been a really positive part of this too -- BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 18 1 has been, you know, are -- that it has 2 encouraged and enabled us to work together 3 with a lot of people; and that includes our 4 colleagues at CDRH, the office of combination 5 products and stakeholders, industry product 6 developers, et cetera. And I think that's 7 been really really good for us and for the 8 products, and we appreciate that. 9 I think in the last couple of 10 years, we have together accomplished a 11 tremendous amount; you'll hear some more 12 about this from folks today. Some of it's 13 about timelines, but I also think some of it 14 is about quality of the process, training and 15 quality of staff, management of our 16 processes. I think we've accomplished a lot 17 and I think you may not realize that even for 18 our small center with the few resources that 19 we've been assisted with from MDUFMA, this 20 has really made a difference because this has 21 occurred in the context of, for example, 22 other discretionary resources being scarce BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 19 1 and lots of other challenges in our public 2 health missions. 3 So thanks to the program and to the 4 incredible efforts of our staff and to the 5 willingness of you folks to work with us; I 6 think this has been real positive. We've got 7 lots more to go and we want to do it no 8 matter what, and MDUFMA can help us do it. 9 And that includes continuing to focus not 10 just on timelines but on quality of our 11 processes, finding ways to help unique and 12 complex devices like combination products 13 move smoothly and efficiently and bring 14 patients the rewards that they can bring, and 15 continuing to strengthen our management and 16 training. 17 So again I think these continued 18 resources and as I said just as important 19 your input and your partnership with us can 20 really help us do that. I just like to close 21 by saying that I think I've often heard Dan, 22 and before him, David Feigal, saying, you BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 20 1 know, and representing just how exciting and 2 innovative the device industry is. At CBER, 3 we have some -- we tremendously appreciate 4 that and we see your devices as the ones that 5 help support and make possible critical 6 public health products like blood and tissue. 7 We see these as very, very important and is 8 also having a very bright future, and we look 9 forward to supporting each other as that goes 10 forward. So again I really, I thank my 11 staff, I thank Dan and I thank others, and we 12 will continue to work with you in the future. 13 Thanks very much. 14 MR. BARNETT: Thank you very much. 15 And now before we go to the first of the five 16 panels we talked about, we have an 17 introductory -- what -- I think five and a 18 half panels today. So let me ask Linda Kahan 19 and Diane Maloney and Mark Kramer to come up 20 here and talk to you, kind of give you a 21 brief overview on where FDA stands in 22 implementing MDUFMA. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 21 1 Okay, well, let's start out -- and 2 yeah, I can barely see you down there. This 3 is what we call an intimate setting here. 4 Anyway, for those of you on the other side of 5 the room, Linda, let me ask you to tell us a 6 little bit about -- two years have gone by 7 since MDUFMA was enacted, where do we stand? 8 Where are we now in terms of accomplishments, 9 where we have to go, where we've been? 10 MS. KAHAN: Well, I happen to have 11 a little list but it's -- I would like to 12 give a general overview of -- 13 MR. BARNETT: Put the microphone a 14 little closer. Yeah, that's good. 15 MS. KAHAN: Is that better? Sorry. 16 We have come a very long way and really put a 17 lot of important parts of this program into 18 place. And when I say "we," and as I keep 19 saying "we," it really includes CBER and The 20 Office of Combination Products and ORA and 21 The Office of Policy and The Office of Chief 22 Counsel, Office of Financial Management, all BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 22 1 of these people have played a very big part 2 in making this happen. 3 We've actually met all the 4 statutory deadlines that we were required to 5 meet for startup. We've put a financial 6 system in place that bills and collects and 7 makes small business determinations and 8 grants -- and grants with reduced fees, and 9 you are going to hear more about that in the 10 next panel. We've hired staff to help the 11 review process and we've done it in a very 12 targeted way, we've been very careful about 13 what we need and where those resources should 14 go, so for example, we've hired about 15 15 statisticians since the program started 16 because we saw that as a real need. 17 We've expanded our use of outside 18 experts through our medical device fellowship 19 program and through shared hires, and as of 20 the end of '04 we've had over 60 experts, 21 clinicians, academics, scientists, engineers, 22 going through that medical device fellowship BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 23 1 program and helping people work on reviews. 2 We've also issued many guidances 3 about how we're implementing MDUFMA: those 4 guidances are intended to help not only 5 industries but also our reviewers understand 6 the processes that have to be streamlined and 7 the way we are going to handle that. We've 8 put in tracking and monitoring systems to 9 help us keep track of what we're doing, and 10 more importantly, we've also put in some new 11 management devices and set new internal 12 milestones to make sure that we can meet the 13 aggressive standards and goals that we need 14 to, and Dr. Tillman is going to talk more 15 about that in the next panel along with Don 16 St. Pierre from OIVD. 17 And on the third party front, we 18 did what we were supposed to, we accredited 19 15 third parties to do inspections, and we've 20 issued guidance for both third parties and 21 for firms who we'd really like to start using 22 this new opportunity to get inspections done BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 24 1 on their own time frames, and you're going to 2 hear more about that also. 3 And lastly, I just want to mention 4 that we have implemented the requirements 5 that we were mandated to attend to for 6 reprocesses, for the most critical reprocess 7 single-use devices, we've accomplished that 8 and that piece is done and it's hopefully 9 going to make things easier. So that's kind 10 of the accomplishments. 11 MR. BARNETT: Let me ask Diane on 12 behalf of Biologics, do you want to answer 13 that? 14 MS. MALONEY: Okay, I think that's 15 better. I have to say I agree with all of 16 the points that Linda has made. From the 17 CBER perspective, I think we've accomplished 18 an awful lot as well. I think one of the 19 things we learned as we entered MDUFMA, was 20 the importance of direct communication with 21 our stakeholders. And I think this past year 22 we really have enhanced those interactions BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 25 1 and we have a much greater appreciation for 2 that and we'll continue to do that. 3 I think you will hear from a lot of 4 our people as well in terms of where we are 5 today in our performance and our improved 6 quality as well. We've had -- some of the 7 things that we are doing are emphasizing 8 mid-cycle target for our reviews, emphasizing 9 active problem solving within the cycles as 10 well, we're increasing training. And I hope 11 -- it's obvious to me from the comments that 12 you've heard already and that you'll hear 13 throughout the day, the interactions 14 throughout -- within the agency across the 15 centers and with the Commissioner's office, I 16 think is pretty seamless, and I think that's 17 been a great accomplishment. 18 MR. BARNETT: Mark, how about 19 combination products? 20 MR. KRAMER: Our goals are a little 21 bit different, I think, you know, we are 22 focused on --not loud enough. We're focused BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 26 1 on combination products issues, our goal is 2 to try to make the regulation of combination 3 products as common sense, transparent, and 4 predictable as possible. In that, like this 5 year we issued a proposed rule on the primary 6 mode of action of a combination product; 7 that's the criterion that we use to determine 8 the assignment of a combination product to a 9 lead center. 10 We issued three guidance documents; 11 one on good manufacturing practices, one on 12 user fees, and one on dispute resolution. 13 And we have also maintained our performance 14 in accordance with all the required time 15 frames for a review of formal requests for 16 assignment of combination products; the 17 number of requests was actually up 50 percent 18 this year and rising. Previously, the peak 19 year in the number of requests for 20 designation that had been submitted were 40, 21 and this year we are already at 63 with six 22 weeks or so of the year to go. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 27 1 And we are doing those, getting 2 those out in around 40 days out of the 60 3 days time frame that we are allowed. So we 4 are pleased with that performance. We've 5 also tried to increase the transparency of 6 the jurisdictional process. And a few months 7 ago we posted on our website, our capsular 8 descriptions of about 70 actual 9 jurisdictional determinations. This had been 10 an area that industry had been asking for 11 more transparency for quite a while and this 12 is a first step that we've taken and we plan 13 to do more. 14 And finally, I think we've made 15 headway in ensuring a timely and effective 16 pre-market review of combination products 17 which is one of our responsibilities, working 18 with the three centers, and as you'll see in 19 the report to Congress on the activities of 20 our office, which will be issued within the 21 next few months. We are working on 22 completing it right now. All combination BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 28 1 product reviews in all three centers were 2 completed within all established time frames. 3 So the timeliness has been quite good. 4 MR. BARNETT: Linda, what you guys 5 have given is a kind of longer list of 6 accomplishments. Beyond that have you seen 7 changes within the agency that have resulted 8 from working on MDUFMA? 9 MS. KAHAN: Yes, I think there are 10 two main changes that I would point to as 11 being really fundamental: One is a 12 development to a higher level of the 13 increased focus on collaboration and 14 "seamless", that is the word that Dianne 15 used. I think that one of the things that 16 MDUFMA has done is that its really forced us 17 to be much more disciplined about the total 18 product life-cycle, and about putting things 19 in place that will make sure that we meet 20 internal deadlines so that we get to the end 21 product quickly using all the experts that we 22 need to use from the center, from outside the BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 29 1 center, from industry, from academia. So I 2 think that's been a important piece of it. 3 The other thing, and I think along 4 with that because, really, part of the 5 process is the applicant; I think we've also 6 seen an increased attention to transparency 7 on the part of reviewers who know that they 8 have got to deal with applicants quickly and 9 clearly in order to get the best submissions 10 we can in order to meet the deadlines. 11 And the second thing is really one 12 that Dan mentioned earlier that I think you 13 kind of have to be where we've been to 14 appreciate this heightened visibility and 15 importance of the device program within the 16 Agency and within the Government. Now we are 17 one of the haves instead of the have-nots, 18 and people pay more attention to us. It's 19 almost sort of -- maybe what the frog who 20 turns into a prince feels like. I mean 21 suddenly people pay attention to you, they 22 are looking at you differently and what you BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 30 1 want counts, and you have a voice at the 2 table, and that has been a tremendous help to 3 our staff and we think to the industry and 4 ultimately to the American public. 5 MR. BARNETT: Dianne? 6 MS. MALONEY: I guess again I agree 7 with Linda and within the Center for 8 Biologics, what we have seen as well -- 9 similar things -- I think in an increased 10 spirit of communication and cooperation 11 within the center and across centers and 12 throughout the agency. And we're seeing this 13 at all levels, I think your support staff, 14 reviewers, and emphasis from management as 15 well. 16 MR. BARNETT: If we have time 17 later, I'll ask you, Linda, to elaborate on 18 the frog and the prince. But in the 19 meantime, Mark? 20 MS. KAHAN: I guess I would echo 21 the same thing. I think that combination 22 products are also a have now, and I think BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 31 1 that's very important. I think that's one of 2 the main complaints that industry had, before 3 it was that there was really no go to place 4 in order to resolve these issues that 5 affected more than one center. So I think 6 it's really helped provide a clear focus for 7 combination products issues and make them a 8 have as well. 9 MR. BARNETT: Linda, let's look at 10 the other side of the coin, it's all been 11 pretty rosy so far. But what would you say 12 have been the biggest, I don't know if I 13 should use the term "failures" or "drawbacks" 14 or "setbacks" in this program since it 15 started? 16 MS. KAHAN: I think "failures" 17 probably isn't the right -- isn't the word 18 I'd use. I think, you know, "frustrations;" 19 I think there has been, from my point of view 20 there has been two really big frustrations. 21 One, of course is the fact that we have not 22 been able to benefit from a stable funding BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 32 1 base; I think that's been a frustration for 2 everybody. Certainly, for the agency folks 3 it means that we can't predict, we can't ramp 4 up as efficiently as we'd like to, and I can 5 certainly understand the concerns from the 6 industry about not knowing what fees are 7 going to be from year to year and how many 8 resources are going to be available. 9 I think the other thing is sort of 10 more practical. I think that despite the 11 resources that we have been putting into 12 updating our IT systems, they remain 13 fragmented and old at a time when they really 14 need to be state-of-the-art to make sure that 15 all of this work does get done as efficiently 16 as possible and gets tracked and monitored 17 and reported. One of the symbols of just how 18 difficult the situation is, is that when we 19 have to reconcile the fees that we have 20 received in a year with the different types 21 of applications that we've received for that 22 year, we wind up doing it by hand, which is BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 33 1 not a great situation. So, hopefully that's 2 something we can address. 3 MR. BARNETT: Let's get back to the 4 positive things again. Some people have said 5 in reflecting on how well you have done, that 6 the program is doing so well that either the 7 goals weren't set high enough or you didn't 8 need the money in the first place. How would 9 you respond to that? 10 MS. KAHAN: Well, my first response 11 is that I would never apologize for the great 12 job that all of the people at FDA have done 13 to achieve what we have achieved. I think we 14 are doing very well in meeting some of the 15 goals that we set for ourselves and that we 16 worked out with industry. And there are a 17 lot of reasons for that: two of the most 18 important reasons are that we've gotten these 19 resources. I think people cannot 20 underestimate the difference that the 21 resources have made. If we hadn't had MDUFMA 22 resources last year, for example, we just BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 34 1 couldn't have done any of the things that we 2 did because of the other kinds of constraints 3 we had on our resources from budget. 4 And I think that the other piece of 5 it that people have to be aware of is that 6 our people have worked incredibly hard, 7 incredibly long hours, and part of that is 8 due to the enthusiasm and the excitement that 9 goes along the with the new program. People 10 just are willing to do all kinds of things to 11 make sure that the program succeeds in this 12 early period of time. And we have people 13 working very long hours and overtime and on 14 the weekends, and that's not a situation that 15 we could sustain. 16 We haven't met all the goals. I 17 think there are significant places where we 18 need to improve, specifically the cycle 19 goals. But there are more subtle things as 20 well. In order to meet the goals that we 21 have been meeting, we consciously and 22 unconsciously take resources from other BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 35 1 places and other things that are going on. 2 When you hear -- when you -- you are going to 3 have a whole panel on modular review this 4 afternoon and I think one of the things we 5 found is that because modular reviews did not 6 have a quantitative goal, we're slipping a 7 little bit on the way, on the time that those 8 take. So that's just one piece of how this 9 plays out. 10 And I think that the other thing 11 that I want to point out about succeeding at 12 this program and perhaps succeeding more than 13 people might have expected in the first 14 couple of years is that we've learned from 15 our colleagues in Drugs and Biologics that if 16 -- who have had experience under PDUFA, that 17 if you are going to exceed with -- if you are 18 going to succeed with any of these goals, 19 you've got to manage each and every 20 application to the most aggressive goal. You 21 can't tell which one you can let go and which 22 one you can't let go. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 36 1 So even the 10, 15, 20, 25 percent 2 of the ones that aren't going to be counted 3 as to whether or not we've met our 4 quantitative goal, they all get that kind of 5 -- some kind of extra attention, and I think 6 that's an important part. 7 And, just finally, I want to echo 8 what Dan said so strongly this morning, which 9 is that we are really at a critical point. 10 And the idea that we are going to keep up 11 progress if MDUFMA goes away or if the 12 resources are reduced, it's a fairy tale, 13 sort of like the prince and the frog because 14 it's just not going to happen, we will lose 15 resources, we will have to let go staff, we 16 will have to stop trying to improve our 17 systems and in fact we will regress, and so 18 we are just at a critical point. 19 MR. BARNETT: One of the key 20 factors of MDUFMA right back from the start 21 has been this stress on keeping stakeholders, 22 keeping the industry informed, working with BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 37 1 them and so on. Last year's meeting was a 2 good example. We didn't need to have it but 3 we had it anyway and this one as well. What 4 else are you doing to make sure that people 5 are getting input and knowing what's going on 6 and so on? 7 MS. KAHAN: Well, we are trying 8 very hard -- and here again, I speak -- I 9 know I speak for the other folks as well -- 10 we've really have been trying to put an 11 emphasis on communication and being as 12 transparent as possible. This meeting is 13 obviously, as Mark said, an example of that 14 kind of thing. And for those of you who 15 weren't at last year's meeting, you'll find 16 that just because you are here today, you are 17 going to get mail from us, you are going to 18 get quarterly reports by e-mail about what's 19 happening with MDUFMA. We post those reports 20 for everybody on the web but it's a special 21 little mailing for the people who show up at 22 the meeting. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 38 1 All of us, CBER and The Office of 2 Combination Products and The Office of 3 Financial Management and ORA when necessary 4 have meetings with the major trade groups 5 whenever we are invited, we also try to show 6 up at places where we know there are going to 7 be a lot of stakeholders like RAPS or FDLI, 8 where we can talk to manufacturers and users 9 and hear what they have to say. We have an 10 open docket for guidance ideas as well as for 11 any comments on individual provisions of the 12 statute. 13 We actively let people know on the 14 web what's happening and we've used it an 15 awful lot to get things out quickly. And we 16 continue to meet with individual applicants 17 of course, on individual applications with 18 respect to trying to get that kind of 19 feedback. I think -- I think that you'll 20 hear this. I hope, and I think you will hear 21 this afternoon from industry representatives 22 on some of our panels that in fact we have BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 39 1 been hearing your comments and we have been 2 responsive and some of the things that you've 3 suggested have shown up in changes and in 4 ways that we can move forward. 5 MR. BARNETT: Diane, you had a 6 meeting just last week, right, that is sort 7 of an example of this? 8 MS. MALONEY: Well, just last week 9 our folks, but I think CDRH folks as well, 10 participated in the IVD round table, so that 11 is an example. I guess the other thing I 12 think that we all do hear is, not only 13 through these meetings but we are trying to 14 be proactive seeking out what concerns do you 15 have. So I know when I run into people at 16 meetings CBERs or whatever, I say, "How are 17 we doing, tell me, we really want to know," 18 so I can just underscore that as well, we 19 really care. 20 MR. BARNETT: Mark. 21 MR. KRAMER: I would echo the same, 22 I would just, you know, again in compiling BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 40 1 this, our report to Congress, I realized just 2 the other day that we had done 22 3 presentations to external groups at 4 educational meetings and trade associations 5 and things like that. So we are doing what 6 we can in order to make sure that people are 7 aware of the various things that we are 8 doing, you know, for an educational purpose 9 as well as to get their input and exchange 10 ideas about what we are doing and whether 11 it's working or not. 12 MR. BARNETT: Okay. Linda, you 13 talked about hires and I think Dan mentioned 14 it as well, and yet you know some people 15 would say you haven't hired as many staff as 16 would have been expected. Is that true and 17 why? 18 MS. KAHAN: Well, I think some 19 people think that and I think reasonable 20 people can differ about what the right number 21 of staff we're to put on, but we have had 22 some obstacles in hiring, a number of BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 41 1 factors: first of all, as you may remember, 2 way back when the actual appropriation for 3 '03 didn't pass until we were pretty well 4 into the fiscal year and so we couldn't 5 collect fees until -- we couldn't begin 6 collecting fees till the April after the 7 October that the legislation was passed, so 8 that slowed things up. 9 And we've also had smaller 10 appropriations than we expected especially in 11 '04, which would put a significant cramp in 12 things. And we also had fewer -- collected 13 fewer user fees than we expected as well. 14 The other thing that people may not be aware 15 of and it's not anybody's fault, it's just a 16 sense of -- it's just one of those artifacts 17 of timing is that over the last year there's 18 been a consolidation in HHS of all HR 19 services or human resource services at the 20 department level. And so there's been some 21 delays, unexpected delays because of the 22 transition period. So I think those are some BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 42 1 of the reasons. 2 MR. BARNETT: Okay. We've been 3 talking about the past and let's have one 4 more question for you guys now about the 5 future. And let me just talk about 6 priorities for the coming year: start out 7 with you, Linda. 8 MS. KAHAN: Okay, I want to be 9 pretty specific about the kinds of things we 10 would like to accomplish next year in 11 addition to the more general thing of making 12 sure we get people onboard, that we get them 13 trained, that we provide professional 14 opportunities for development for our staff, 15 and that we increase our use of outside 16 experts through the Medical Device Fellowship 17 Program as to contracting and other ways that 18 we can get outside experts to help us. 19 More specifically, I think that 20 we'd like to focus more on guidance for next 21 year in terms of the device specific 22 guidances and the standard development BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 43 1 guidances that can help get products through 2 the process more quickly because they produce 3 better applications coming in the door and it 4 makes review easier once the products get in. 5 We also want to work with industry to 6 establish goals for modular review program 7 which we'll be talking about later, and also 8 for GMP pre-approval inspections. We'd like 9 to work on that as well. 10 And finally, I think another big 11 piece of work next year is going to be to 12 address the reprocessor submissions for 13 semi-critical devices as required by the 14 statute: that's another chore we've got for 15 next year. 16 MR. BARNETT: Diane? 17 MS. MALONEY: We have similar 18 priorities -- 19 MS. KAHAN: Move it closer. 20 MS. MALONEY: Similar priorities as 21 well for The Center for Biologics: training 22 professional development and use of outside BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 44 1 experts as well is something that we will 2 focus on. In addition we will also be 3 working with CDRH on the guidances that Linda 4 was just referring to. Another important 5 priority for us is the critical path for CBER 6 devices; for instance, the pathogen detection 7 and inactivation devices. We also -- another 8 high priority for us is -- as is for I think 9 all of us -- is to work on combination 10 products, especially those in tissue 11 engineering, combination biologics devices as 12 well, trying to come up with -- it's sort of, 13 I guess again, they were streamlined or 14 seamless approach to the review of such 15 products. And then finally, the application 16 of quality systems approaches to our review. 17 MR. BARNETT: Mark? 18 MR. KRAMER: I think we have a lot 19 of work left to do. Even though I think 20 we've made good progress, what we need to do 21 -- everything we've done so far has been in 22 draft, so we need to complete the public BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 45 1 review process, comment process, and then 2 finalize the primary mode of action role as 3 well as the three guidance documents we've 4 got out. We have two other guidance 5 documents that are nearly complete that need 6 to finish their cycle and then be put out for 7 review. Those are on -- whether you need or 8 how to determine appropriate number of 9 marketing applications for combination 10 product and on adverse event reporting. 11 We have been tackling the cost 12 labeling issue over the last several months: 13 that's a very sticky, complex regulatory and 14 legal issue associated with when, for 15 example, a drug might need to be relabeled in 16 order to reflect its use with a device and 17 thereby constitute a combination product. 18 And we're planning on holding a public 19 meeting on that issue in the first half of 20 next year in order to get more public comment 21 on this whole issue with an eye toward 22 rulemaking and hope -- we have some ideas BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 46 1 that we think will help finally solve this 2 issue. 3 And then I think there's a host of 4 other issues that people are finally seeing 5 their way clear to begin working on: I call 6 them more downstream issues. I think people 7 are beyond the worry, I hope people are 8 getting beyond the worry of whether 9 combination products will ever be approved at 10 all and now they are looking at post- 11 approval issues, post-approval changes, 12 promotion, advertising, and all kinds of 13 other issues that weren't among our initial 14 priorities, but really, within the whole 15 regulatory framework that need to be thought 16 through in terms how to deal with combination 17 products. 18 And then I think finally, although 19 not last, is that we have to evaluate the 20 impact of all the things we are doing and 21 determine whether they are working or not. 22 And I think that will take some time, we'll BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 47 1 need to just sit back and monitor whether in 2 fact these things are making a difference and 3 if there are areas that perhaps we weren't 4 able to address within a current regulatory 5 and statutory framework, perhaps there may be 6 some legislative changes that are -- that 7 might be needed to finally fix certain issues 8 with combination products. I don't think we 9 are there but we will need to have that 10 evaluation process once we've had a chance to 11 sort of roll out the whole picture of 12 everything that we plan to do. 13 MR. BARNETT: Okay, thank you very 14 much, Linda, Dianne and Mark. We are due now 15 for a 15-minute break. I have roughly 10 16 minutes, so why don't we back at five after, 17 Thanks. 18 Ladies and Gentlemen, the panelists 19 are up here and everybody take their seat, 20 please. Okay, now let me introduce our first 21 panel -- and remember this is the one on how 22 the user fee process is working and how the BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 48 1 small business determination and the waiver 2 provisions have been put in place. Our 3 panelists are Frank Claunts, who is User Fee 4 Finance Coordinator with FDA's Office of 5 Management; John Stigi, who is Director of 6 the Division of Small Manufacturers 7 International and Consumer Assistance -- I've 8 got to breathe twice when I say that, you 9 have to have good lungs -- in the Office of 10 Communication, Education and Radiation 11 Programs in CDRH; representing AdvaMed is 12 Janet Trunzo, who is AdvaMed's Executive 13 Vice- President; and representing the Medical 14 Device Manufacturers Association is MDMA's 15 Executive Director, Mark Leahey, and why 16 don't we start, Frank, with you? Can you 17 come up here? 18 MR. CLAUNTS: Good morning, 19 everyone, it's a pleasure to be here and to 20 talk with you about how the process is 21 working. And the comments of this first 22 panel are already focused on the financial BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 49 1 aspects of the process. The other panel 2 later in the day are going to be talking 3 about the performance aspects and other 4 aspects. We are focusing on user fees, 5 finances, the MDUFMA finances, and I am going 6 to make remarks already segmented into four 7 different areas. I am going to talk to you a 8 little bit about how user fees are set 9 because I've heard some comments, some 10 confusion about, gee, why was there just a 11 tiny increase in the 510(k) fees and a much 12 bigger increase in the PMA fees. 13 I am going to also talk about the 14 financial results; how much money we 15 collected in 2004 and how many fee-paying 16 applications of various types we received. 17 The third part of my comments is going to 18 focus just very briefly on what's working 19 well. We think we have a good story to tell 20 about what's working well. I am just going 21 to go over the list of things, short list of 22 things we think are working well in financial BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 50 1 aspects of the program. I'm going to begin 2 by talking about what's not because we've got 3 some very critical concerns as both Dan 4 Schultz and Jesse Goodman mentioned earlier, 5 we've got some crucial things that have to 6 happen to keep this program going and to 7 achieve its promise. 8 Focusing on how fees are set, 9 basically, the amount of fees for each year, 10 for each type of application, are determined 11 by three different things: that is the 12 revenue target for that fiscal year as 13 adjusted, which is provided in the statute, 14 the statutory relationship of the fees, and 15 that's very clearly spelled out in the 16 statute and I am going to go over that. And 17 thirdly, the number of fee-paying 18 applications we expect to receive each year. 19 So, I am going to comment briefly on each one 20 of these areas. I am going to start with the 21 revenue target. 22 The MDUFMA statute sets a revenue BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 51 1 target for us for each year beginning at 2 $25.1 million in 2003 and going up to $35 3 million in 2007. It was agreed that this was 4 going to be a $35 million program, but the 5 industry wanted to step up. And just by the 6 fact that it steps up from year to year, 7 there's a built-in increase of -- in the 8 neighborhood of nine per cent each year as we 9 step up from 25.1 million to 27.2 to 29 and 10 so on. Now, in addition these revenue 11 targets that are included in the statute are 12 all stated in 2003 dollars, and the statute 13 provides an inflation adjustment so that 14 those revenue targets can keep up with 15 inflation. 16 And we know those inflation 17 adjusters for 2004 and 2005, they are 4.3 per 18 cent for 2004 and 4.4 percent for 2005. We 19 simply inserted four percent as a placeholder 20 for what those revenue targets may be in 2006 21 and 2007. We won't know the exact amount of 22 those revenue adjustments until we have BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 52 1 figures on the CPI and price indexes much 2 closer to the beginning of each fiscal year. 3 So with those adjustments, then there's an 4 adjusted revenue target, inflation adjusted 5 revenue target, that's provided on this last 6 line. And the inflation adjusted revenue 7 target really goes up every year somewhere 8 between 12 and 14 percent. 9 So I wanted to share this with you 10 because there's been some talk of, "gee, we 11 should have just an inflation adjustment 12 every year, and nothing more than that," and 13 everybody would say, "well, that certainly 14 seems reasonable, that's, you know, that's 15 four percent or five percent, in that range." 16 But they forget the fact that we have an 17 agreement that the revenue target also steps 18 up from that 25 million to 35 million and 19 adds another nine percent to that. So that's 20 why we have this inflation- adjusted revenue 21 target that if nothing else changes, we would 22 expect to increase by 12 to 14 percent, and BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 53 1 this is all spelled out in the statute and is 2 a part of our fundamental program. 3 Now, none of this addresses a 4 couple of other things: Workload adjuster or 5 compensating adjuster. We've never invoked 6 the workload adjuster and I am not going to 7 talk about that, but I am going to talk 8 briefly about the compensating adjustment 9 because it is something that a lot of folks 10 have talked about. What is this compensating 11 adjustment and why is it there? Its purpose 12 was to provide stable and predictable 13 revenues. Now, FDA was concerned that from 14 its perspective, in order to grow this 15 program, in order to acquire the additional 16 reviewers, the additional contract staff that 17 we need to enhance our review capability, we 18 need to have a predictable revenue stream. 19 We can't go hiring folks one year and then 20 having to let them go the next year and, you 21 know, this is essential for stable program 22 growth. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 54 1 In discussions that preceded the 2 enactment of MDUFMA, we talked about 3 mechanisms we've used in other acts to 4 provide this revenue stability from year to 5 year. And one of the big concerns we had was 6 that if revenues are based on application 7 fees alone, there's very little stability or 8 predictability there because the number of 9 applications that can come in from year to 10 year varies very dramatically: it can be up 11 one year, down the next, and is very little 12 predictable about it, and because of that, in 13 other FDA user fee programs and prescription 14 drug user fee program, and of the animal drug 15 user fee programs, only a portion of our user 16 fee revenue comes from the applications each 17 year because that part is volatile. 18 And there are other fees that are 19 in place like an establishment fee, an annual 20 establishment fee and an annual product fee 21 that are much more predictable and stable 22 because you have roughly the same number of BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 55 1 approved products paying that fee every year, 2 the same number of establishments 3 manufacturing these products each year or the 4 same number of sponsors submitting 5 applications. So a lot of the fees are 6 geared to, you know, annual establishment 7 fees or sponsor fees or product fees, and 8 that provides revenue stability with the 9 application fee being only a third or fourth 10 of the fee, and that part is a little 11 volatile, but having more stable other legs 12 to the -- to the composition of the fees is 13 helpful to get that stability. 14 When we had these discussions prior 15 to the enactment of MDUFMA, the medical 16 device industry was very uncomfortable with 17 discussions of product fees or establishment 18 fees or sponsor fees. There was -- they said 19 "no, we understand your need for stability 20 and predictability in the revenues but we 21 don't like those mechanisms that you're using 22 in the other user fee act, and instead we BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 56 1 prefer something that we'll call a 2 compensating adjustment," and this is 3 basically what it is: it says that if you 4 have any shortfall in -- below your revenue 5 target in any one year, you can take the 6 amount of that shortfall and add it to the 7 revenue target for subsequent years. 8 So that's basically the concept of 9 what this compensating adjuster is or 10 compensating adjustment and how it came to 11 be. And while it was intended to provide FDA 12 with revenue stability, it also works against 13 stability and predictability, unfortunately, 14 in terms of the numbers of -- the amount of 15 fees because if we have a compensating 16 adjustment that's applied in the subsequent 17 year, it will cause the fees to go up. 18 Now, the second leg of the -- or 19 the second factor that determines the fee 20 levels is called -- or is the statutory 21 relationship among the fees, and the statute 22 says that the keystone for all the fees is BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 57 1 the fee for a PMA or a BLA or a panel track 2 supplement or BLA efficacy supplement. Those 3 are the full fee applications, and everything 4 is keyed off those, and by statute the 5 180-day supplement is 21.5 percent of 6 whatever fee we charge for PMA, and the 7 real-time supplement is 7.2 percent of 8 whatever we charge for a PMA or a BLA. And 9 if we have qualifying small businesses 10 submitting these applications, they all pay 11 38 percent of the full application fee. 12 There is a slightly different 13 algorithm in the statute for 510(k) fees. 14 For 510(k) fees, the statute says that we are 15 to set the fees so that the revenue we 16 collect from 510(k)s will be the same amount 17 of revenue that we would have collected if 18 every 510(k) paid a fee of 1.42 percent of 19 the PMA fee. But we're to make a slight 20 adjustment so that firms that are not 21 qualified small businesses pay a higher fee 22 and those firms that do qualify as small BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 58 1 businesses pay only 80 percent of the fee 2 that the larger businesses pay. 3 So basically, that's said in 4 statute, the relationship between the fees 5 all keyed to the PMA fee. One of the 6 important things I point out here in the 7 510(k) fee, last year, 2004, was the first 8 year where we had the two tiers: the first 9 tier, the fee was just 1.42 percent flat for 10 everybody. Last year, we established the 11 510(k) fee at two tiers and we assumed that 12 80 percent of the submitters would qualify as 13 small businesses. Our experience was, more 14 than halfway through the year, only about 15 15 percent of the submitters were qualifying as 16 small businesses. 17 So we changed the dynamics of that 18 drastically for the assumptions in the 2005 19 fees, saying only 15 percent of the 20 submitters will be qualifying small 21 businesses and 85 percent of the submitters 22 will pay the higher fee, and that's why there BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 59 1 was almost no change in the 510(k) fee. The 2 result of the change in that part of the 3 algorithm means that the 510(k) fees for 2005 4 went up by less than one percent. 5 Now, the third leg of the algorithm 6 and how these fees are set is the number of 7 applications that will pay fees. And before 8 MDUFMA was enacted, we sat down and we tried 9 to do some estimates on how many of each type 10 of fee we would get, and this column, the 11 2003-04 estimate, shows how many applications 12 of each type we thought we'd get. Now, this 13 was before we had any experience with the 14 impact of fees, before we knew for sure how 15 many folks would qualify as small businesses 16 or before our bundling policies were 17 completely developed and made available to 18 folks. 19 When we actually finished the year 20 in 2003, this column shows the number of 21 fee-paying applications of each type that 22 we've actually received. So we only received BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 60 1 46 full fee paying PMAs or BLAs or full fee 2 paying supplements, and only six of those at 3 the small business rate, much less than we 4 had thought we would. And I point out 5 there's one thing that's not shown on here, 6 we thought about ten small businesses would 7 be totally exempt from these fees because of 8 their first submission, it turned out that 9 last year 16 were totally exempt. So we 10 really underestimated the number that would 11 be totally exempt. 12 We also had fewer 180-day 13 supplements, only 118 versus 171, and more 14 real-time supplements, 136 versus our 15 estimate of 86. And that was clearly a 16 result of the dynamic, once fees were 17 imposed, anybody that could qualify submitted 18 their supplement as a real-time supplement at 19 the lower fee rather than as a 180-day 20 supplement, and so that the total numbers of 21 180-day and real-time supplements added 22 together were fairly consistent. They were BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 61 1 about the same as we predicted, but the ratio 2 between them was very different. And we'd 3 expected we'd get about 4000 510(k)s and we 4 got about 4000 510(k)s. 5 Now, seven months into the last 6 fiscal year, the end of last March, we did a 7 projection of how many fee- paying 8 applications we'll get at the end of last 9 year, and we assumed we'd have the same 10 pattern of submissions with a big spike in 11 submissions in the last quarter because that 12 was what we had in 2003, and so this was our 13 estimate of the number of fee-paying 14 submissions we'll get. Looking at that data 15 and working with those estimates, we then 16 developed our fee basis for 2005, and we 17 actually made more optimistic assumptions 18 about the number of applications that would 19 actually pay fees in 2005 and the data in 20 2003 and 2004 would necessarily support 21 straight line, but we thought, based on 22 information we were hearing, that there was a BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 62 1 likelihood of seeing some increases in some 2 areas. So this last column is the fee basis 3 that we established for fees in 2005. 4 So when we set fees for 2005, we 5 assumed that there'd only be 51 full 6 fee-paying PMAs or BLAs or full fee-paying 7 supplements submitted, whereas when we 8 submitted the -- accepted the fees for the 9 previous two years, we'd assumed there would 10 be 58 who would've paid the fees. That's one 11 of the reasons that our fees have fallen 12 short is because we overestimated the number 13 of -- types of these applications that would 14 be paying fees. We also only estimated that 15 we'd get about 3600 510(k)s when we set fees 16 for 2005, because in 2004, our estimate was 17 like we won't be getting -- we would only get 18 about 3400. 19 So that's the third tier, so if you 20 know your revenue target and the statutory 21 relationship between the fees and the number 22 of fee-paying applications you expect to get, BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 63 1 then you can calculate the fees. And we do 2 this by simply having a mathematical model 3 that captures the relationships between the 4 fees plugged into at the numbers of each type 5 we expect to get, and when adjusting this 6 number for the PMA or BLA until we hit the 7 revenue target of 32,429,000. And when we do 8 that, these are the fees that resulted. 9 And I wanted to share that with you 10 because there seem to be some mystery about 11 the process we use in setting these fees and 12 it follows a very detailed prescription for 13 how these fees are to be set that's in the 14 statute, and the only thing that we have any 15 discretion over at FDA is our estimates of 16 the numbers of applications that pay fees 17 that we'll receive each year. And in order 18 to try and minimize the volatility of the 19 fees, we did commit when we set the fees for 20 2005 that we'll use the numbers that we used 21 in setting the 2005 fees for the following 22 two years as well in order to try and address BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 64 1 concerns about the volatility of these 2 numbers. 3 And the next thing I want to share 4 with you is our financial results from 2004. 5 This slide shows the profile of fee-paying 6 submissions that we received in 2003 and the 7 fact that we had a big spike at the end of 8 the year. We got 29.4 percent of our 9 applications in the final quarter and when we 10 did our projections in the middle of 2004, we 11 thought we'd see things following the same 12 pattern, but in fact they followed a 13 different pattern. It turned out that in 14 2004 we didn't have as nearly as big a spike. 15 We had a little spike in the last quarter but 16 we ended up only getting about 26.5 percent 17 of our revenues in the last quarter versus 18 29.4 percent in 2003. 19 And the first quarter turned out to 20 be the biggest of the year for us which in 21 some ways is not surprising, if the fourth 22 quarter is -- I am sorry, the first quarter BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 65 1 for us is October 1 to December 31st, so 2 folks are submitting applications and in 3 order to put information about the numbers of 4 submissions and shareholder reports and if 5 that's what drives their timing, it makes 6 sense that we might get a lot of those in the 7 -- our first quarter of the fiscal year. 8 But, since, you know, since we didn't have as 9 big a spike, we didn't get as much money in 10 2004 as we thought we would or as many 11 fee-paying applications. 12 This shows -- the first slide here 13 is for PMA or BLA or panel track supplements 14 that would pay the full fee which was 206,000 15 last year, it was a small business fee for 16 those. We only received last year, 40.5. 17 Now, you recall the earlier slides that we 18 projected 47, but that was based on the spike 19 at the end of the year that didn't happen. 20 And so our fee-paying applications, you know, 21 really went down from 51, counting the small 22 and large business fees in the -- in 2003 to BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 66 1 44.5 in 2004, and again, this is the original 2 forecast that we made and this is the revised 3 fee basis for 2005. Again, the 2005 basis is 4 too optimistic. 5 Now, some folks look at these 6 numbers and they say, "Oh, whoa boy, FDA's 7 workload's really going down, it went down 8 from 51 last year to 44.5 this year." But 9 that's only the number of fee-paying 10 applications and that's why I've got the rest 11 of this chart on here. In addition to those 12 things that paid fees, we had to spend time 13 reviewing first submissions from small 14 businesses that were exempt from fees and we 15 had 16 last year in 2003; where we'd only 16 expected 10, we actually had 19 in 2004. So 17 we had a lot more applications exemption fees 18 that we had to review and we had to spend 19 just as much time reviewing those 20 applications as we do the ones that pay fees. 21 In addition we had one pediatric 22 exemption, it was for pediatric indications BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 67 1 and didn't pay a fee, and we had four BLAs 2 that were bundled with other fee paying BLAs. 3 So when you look at fee-paying and non 4 fee-paying combined at the bottom, the 5 workload was relatively stable there in the 6 PMA and BLA areas. There wasn't necessarily 7 a dip in the workload between the two years 8 but there was a dip in the ones that paid 9 fees. 10 We have the same numbers here for 11 180-day supplements. Again, you see the 12 trend here is down, again because of the 13 imposition of fees. And we had estimated 14 there'd be 95 in 2005; that's a slightly 15 lower number than the 106 that we had in 16 2004, but these may continue to trim down 17 again as they head for the last two years 18 because of the higher fee associated with the 19 180-day supplement as compared with the 20 real-time supplement. These are the 21 real-time supplements, and again they're 22 showing, you know, trend up. We projected a BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 68 1 175 of these in our 2005 fee setting, we 2 actually got a 177 fee-paying this year in 3 our fee setting. And then these are the 4 numbers of 510(k)s: We actually got a little 5 less than 3400 in this year compared to 4000 6 last year. These numbers are revised because 7 we had a couple withdrawn; after the end of 8 the year we shifted 4001 in the previous 9 slide, but we have 3391 this year that paid 10 -- paid fees, and again, 15 percent paid the 11 small business fee and 85 percent paid the 12 higher fee and that's still lower. Our 13 estimate for next year was 3600 and our 14 estimate this year was about 200 hundred 15 lower than that. 16 What do those numbers mean when 17 translated into revenues for us? This shows 18 by those same fee categories the amount we 19 receive for full fees and for small business 20 fees and the total and we had some pluses and 21 minuses from the previous fiscal year, we had 22 some refunds and some additional payments BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 69 1 submitted out to a negative, almost a 2 $140,000, so that the total we collected in 3 fee revenue for this year, the amount that we 4 could use to enhance the device review 5 process was 26,832,000. 6 Now, our target for this year 7 including the compensating adjustment was 8 31.7 million. We've got 26.8 million, so we 9 still have a shortfall of 4.8 million, and 10 under current law, we would collect that 11 shortfall as a compensating adjustment to the 12 revenue target and as we stated in our 13 Federal Register notice, we defer those until 14 we know what exactly is the size of the 15 shortfall, now that we know exactly the size 16 of the shortfall for the first two years, we 17 would divide that between the remaining two 18 years in the program 2006 and 2007 when we 19 set fees for those years. 20 Third part of my discussion is just 21 a brief look at what's working well in MDUFMA 22 and we have a number of things that from the BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 70 1 financial perspective I think are working 2 well. I think our fee collection process has 3 been working pretty well, the use of the 4 cover sheet, keeping track of the fees, the 5 use of our contractor, Mellon Bank, to be the 6 fiduciary for us to collect these fees. We 7 worked also very hard to keep the fee 8 collection process totally separate from the 9 review process, and did I say Mellon Bank? I 10 am sorry, if I did -- our fiduciary is U.S. 11 Bank -- I'm sorry, Mellon Bank is a fiduciary 12 for a different program, it's U.S. Bank in 13 St. Louis, that's our fiduciary for this 14 program. 15 We work really hard in keeping our 16 collection apart from our review, in this 17 program. The reviewers only get an 18 application once there have been checks by 19 administrative staff to make sure that the 20 application is in. The reviewers have no 21 interaction with the firm over fee payment. 22 That's left to Mellon Bank and to other BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 71 1 administrative staff. We're very proud of 2 the small business determination process. 3 John Stigi and his staff have done a -- I 4 think, an outstanding job. We had over 625 5 requests for small business determinations in 6 2004, as some of you may know, the law gives 7 us 60 days to process those requests, but in 8 spite of that John Stigi and his staff have 9 been reviewing those and responding to them 10 on an average in less than two weeks. 11 We're pleased that we've been able 12 to set the fees in a timely manner and give 13 everybody notice of the fees for the coming 14 year. The law says we're to do this in early 15 August every year and we have met those 16 deadlines and we've produced documents that 17 have given all the rationale for the numbers 18 that are used in the process to try and 19 explain that and make it transparent to our 20 stakeholders, and the most important thing is 21 those fees are dedicated to device review 22 workload. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 72 1 We've been able to grow our device 2 review staff in both CDRH and in CBER as well 3 as some of the support staff in our Office of 4 Regulatory Affairs and they've been crucial 5 for our successes in MDUFMA. Without the 6 MDUFMA revenues in 2004, this program 7 would've contracted and our performance would 8 have deteriorated. We had, and we'll talk a 9 little bit more in a minute about it, an 10 appropriation setback we had last year, but 11 in spite of that appropriation setback 12 because of fees, we didn't have to contract 13 our program, in fact we were able to expand 14 it and enabled to keep on track in meeting 15 our performance goals. 16 And probably the most important 17 thing or one of the most important things 18 surely is the visibility in respect to the 19 device review program. Linda mentioned that 20 in her remarks earlier this morning. I think 21 Dan mentioned it as well. Basically, we're 22 on the map. We have attention and an BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 73 1 extraordinary thing happened a little over a 2 year ago; while the passage of MDUFMA didn't 3 get the immediate attention of the 4 Administration that we had hoped it would, it 5 finally did. 6 The Administration's budget for 7 2004 missed the mark that MDUFMA had set for 8 it. When the Administration realized that 9 and the impact of it a little over a year 10 ago, the Director of the Office of Management 11 and Budget wrote a letter to the Speaker of 12 the House and the President of the Senate 13 advising them that the Administration was 14 committed to making appropriation request in 15 2005 and in subsequent years that would in 16 fact meet the trigger thresholds for 17 appropriation specified in MDUFMA. Friends, 18 this is unheard of. It really is. 19 The whole focus of that letter was 20 the medical device appropriation line in the 21 Drug Administration budget, and keeping up 22 with that commitment, the Administration's BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 74 1 budget request did meet that. They committed 2 to do it last year, they did and they made 3 that commitment for future years, and the one 4 thing that they said they needed to do was to 5 get legislation enacted to deal with two 6 triggers in MDUFMA. 7 There are some triggers in MDUFMA 8 that says, if we miss those appropriation 9 amounts in 2003 or 2004, and those 10 appropriations weren't made up before October 11 1, 2005, this programs terminates, and the 12 Administration said, "I'll commit to meeting 13 those triggers in the future, I met them in 14 2005, I'll meet them in 2005 and in future 15 years, but I must have Congress's support in 16 eliminating the makeup appropriations for 17 2003 and 2004," and they submitted that 18 legislation to Congress in May, and so we -- 19 we really had their attention. 20 They focus on the device line item 21 on the Department reviews on budget, knowing 22 that meeting that MDUFMA trigger is crucial. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 75 1 What's not working well with MDUFMA, I -- I 2 probably should have changed the order of 3 these and started and ended up on a happier 4 note of what's working well. But what's not 5 working well with MDUFMA is that revenues for 6 us have not been stable and predictable 7 either, and I know that that is a concern for 8 industry and the fee levels haven't been 9 stable and predictable. It's a problem we 10 both see and we are both concerned about. 11 Our fees have been less than -- our fee 12 revenues have been less than envisioned in 13 these two -- the first two years and 14 appropriations have been lees than envisioned 15 in the first two years, and our staffing 16 increased more slowly than originally 17 envisioned, it's still increased and 18 increased significantly but not quite as 19 rapidly in 2004 as we had initially 20 envisioned, and we have an urgent need to add 21 staff and support for them in order to 22 continue to meet the MDUFMA goals for the BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 76 1 balance of the program. The next, first 2 we'll talk briefly about the fee shortfalls, 3 we -- you know, the top line here shows our 4 revenue target adjusted for inflation only, 5 without a compensating adjustment in the 6 first two years, combined for 53.5 million. 7 The second line shows what we actually 8 received in each year, and as you will see, 9 in 2003, we received 3.2 million less or 13 10 percent less than we were supposed to receive 11 in fee revenues. 12 In 2004, we received six percent 13 less than we were supposed to receive in fee 14 revenues. Combined for the two years, we are 15 down 4.8 million or 9 percent. Now, we did 16 revise the numbers of fee-paying applications 17 and these were set for 2005, that fix may 18 have been too modest to use as you can see 19 from some of our numbers, but even if it's -- 20 it's too modest, we still expect collections 21 to be much closer to revenue targets in 22 2005-2007, and the bigger issue for us now is BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 77 1 the appropriation shortfalls. This is 2003, 2 the blue column up here shows the 3 appropriation trigger that's set in MDUFMA. 4 MDUFMA sets a trigger for how much of the -- 5 of the -- how much should be appropriated 6 each year for the line item, for Devices and 7 Radiological programs in the FDA Budget, and 8 that Trigger for 2003 was 205.7 million, and 9 it goes up each year for inflation, but our 10 appropriation fell short of that mark by 11 about $12.4 million in '03. It was still 12 about $3 million higher than the President's 13 initial request for us, but it didn't have 14 the additional funds and they have been 15 anticipated. 16 In '04, we had -- have an even 17 sadder tale to -- tale to tell. The mark was 18 up to 210 million in '04 with inflation, but 19 the amount actually appropriated in green was 20 only 19 -- was 19.5 million short of that or 21 a nine percent shortfall, and we had the -- 22 the situation where the actual amount BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 78 1 appropriated for us in 2004 for Devices and 2 Radiological Programs was $2.2 million less 3 than in the previous year, 2003, and in spite 4 of that, just the cost of meeting the federal 5 pay raise, and we don't have any choice in 6 that. Congress passes a pay raise, says the 7 President claims the pay raise after review 8 by Congress, but whatever that pay raise 9 finally determined by the President is, we 10 have to pay, and so that cost us $8.5 11 million, and the Administration said, "Well, 12 we can do this," because FDA is going to save 13 or the Device Program is going to save over 14 $11 million in information technology and 15 administrative savings in 2004, but they 16 didn't wait till we'd saved the money to make 17 the cut in the budget, it was made and we had 18 to live with, you know, with less resources. 19 Clearly, saving money through administrative 20 savings and information technology savings is 21 a good goal and something we wanted to do, 22 but the goal for us was more optimistic in BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 79 1 what we could really do, and so we had to 2 make some reductions in staff in order to, 3 you know, to cope with the size of those 4 cuts. The truth is that a $19.5 million 5 shortfall on our appropriations is just 6 slightly exceeded by the $26 million we 7 collected in fees last year, if you just, you 8 know, compare the two items. Right now, 9 we've achieved increases in staffing in 2004 10 in all our programs that support devices but 11 they've been a little less than planned due 12 to the appropriation shortfall of 2004. The 13 good news is if the Administration has 14 recognized that with the letter I mentioned 15 to you from the OMB director a year ago, and 16 we have -- and they requested the full amount 17 of funds we need in 2005, but there are two 18 essential things that have to happen for this 19 program to survive and to thrive. We have to 20 get that 2005 appropriation pass that leaves 21 that threshold. The slide says 217 million 22 because that was the level that was BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 80 1 calculated when the President's budget was 2 submitted. In fact, inflation wasn't quite 3 as high in reality as when the President's 4 budget was submitted; the real number was 5 about 215 million, but we have to have that 6 appropriation of 215 million to meet the 7 MDUFMA trigger threshold, and if we don't 8 have it, this program will cease on October 1 9 of next year. The second thing we have to 10 have for this program to survive is a 11 legislative change that forgives the 12 requirement to make up the appropriation for 13 2000, the appropriation shortfall between the 14 MDUFMA trigger for appropriations and the 15 amount that was actually appropriated. If 16 that statutory requirement isn't changed by 17 2000 -- by October 1 of next year, then this 18 program goes belly up. It will no longer 19 exist, we will not collect fees next year, we 20 will not have fee revenues to use to support 21 the program. And what that will mean is a 22 real -- it means several things. There will BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 81 1 be an immediate deterioration in performance, 2 as we have to lay off staff and cope with 3 that, and it will also mean if the program 4 dies that the visibility that's kept the 5 Administration focused on giving us a higher 6 level of appropriations, the reason to do 7 that goes away if MDUFMA goes away too. So 8 not only will we lose the fee revenues but we 9 lose the incentive that has been built into 10 MDUFMA to get higher appropriations, and all 11 this happens on October 1, but the fix is 12 really needed now. Why is the fix needed 13 now? If we get this appropriation with 215 14 million, we have the capability then, the 15 money to go out and start hiring folks 16 immediately, but we have this trigger hanging 17 over us like the sword of Damocles that says 18 this program ends next year on October 1. If 19 we don't, you know, change the legislation, 20 we can go out and hire the staff with much 21 greater confidence if that trigger is removed 22 from us. If that -- if that sword continues BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 82 1 to hang over us, it's much harder to go out 2 in good conscience and hire these additional 3 staff if we face the prospect of having to 4 lay them off and other folks, after the 1st 5 of October. Fortunately, the prospects for 6 2005 are brighter. The -- you know, we 7 expect to get the appropriation that we need. 8 We think that's the least of our problems 9 right now. We think the fix in the 2003 and 10 2004 triggers is the bigger problem. This 11 simply shows the trigger amount in blue and 12 the House mark and the Senate mark, which are 13 right at the trigger mark, we think that the 14 conferees between the House and the Senate 15 will report out a bill, if not tomorrow then 16 something will probably go to the -- for the 17 Congress next week and we hope that that will 18 be a bill that will have an adequate amount 19 to meet the MDUFMA trigger. We have reason 20 to think it will. This one slide is not in 21 your handouts, I apologize, I developed it 22 late, there was some concern about how much BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 83 1 money comes from fees and how much from 2 appropriations in this program, and I just 3 wanted to characterize this graphically for 4 you. The MDUFMA trigger for 2005 says that 5 we have to have 215 million for 6 appropriations for the Device and 7 Radiological Health Program. Now that's not 8 just device review, it's all of the device 9 program including our field inspection and 10 everything else. But the amount of revenue 11 that we expect to get, our revenue target for 12 the fees is 32 million, 32.4 million, so that 13 really represents only about 15, read less 14 than 15 percent of the total resources we 15 expect to have available next year, and I'm 16 not saying it's not important, but I just 17 want to put it in context. The 18 appropriations are still by far the largest 19 driving resource -- resource for us, but both 20 components are critical to -- to our being 21 able to make this program work, and so, these 22 were our two urgent needs but our real need BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 84 1 is -- is this catch-up amendment, and I think 2 here I'm supposed to change these slides so 3 that Janet Trunzo's slides are available to 4 come up here, if I can remember how to do 5 that. 6 MR. CLAUNTS: I don't know, just 7 close this window. Ah, here they are, I get 8 it, right here. 9 MS. TRUNZO: Oh, Okay. 10 MR. CLAUNTS: There you go. 11 MS. TRUNZO: Good morning, and 12 thank you, FDA, for allowing us to present 13 our positions here this morning and for all 14 of the five panels that are coming up. This 15 one or that one, okay. Good, thank you. 16 First of all, I'll start off with the good 17 news, just as Frank started off with the good 18 news earlier. Some of the very positive 19 happenings over the last two years is, first 20 of all, I would like to thank FDA for it's 21 willingness to meet with stakeholders. Linda 22 spoke of that earlier in her presentation BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 85 1 this morning about -- she covered all of the 2 various types of meetings that FDA has with 3 its stakeholders, and many of those meetings 4 are indeed with AdvaMed and many of our 5 working groups, and are conferences, and for 6 that we are very appreciative. Also, FDA's 7 flexibility in calculating increases in fees 8 for '05. FDA did show some flexibility in 9 that, the compensating adjusters actually 10 were deferred until '06 or '07, and I thought 11 that that was also something worth 12 mentioning, and also FDA has put numerous 13 systems in place to meet performance goals. 14 In our quarterly meetings with FDA, it is 15 very apparent that a lot of work is put into 16 the process for coming up with the types of 17 data that is very important for the industry 18 to see. The numerous performance goals that 19 are part of MDUFMA required a lot of tracking 20 systems and I know that that was a lot of 21 work, and sometimes even in these stakeholder 22 meetings that FDA has with us, as Linda BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 86 1 mentioned earlier, some of the types of data 2 actually have to be calculated in a manual 3 fashion. So there -- there has been a lot of 4 work in the progress towards the requirements 5 under MDUFMA, and that is also good news. 6 Lastly, the FDA has agreed to do a cost 7 analysis study. I'll give you a little bit 8 of history about the cost analysis study. 9 This was something that industry requested 10 two years ago during the user fee 11 negotiations. We asked for more specific 12 information on the resources it took to 13 review each type of application. At that 14 time, we were under a time crunch to get the 15 negotiation completed, and because of that 16 time crunch, there was not enough time to do 17 a cost analysis study, and we know now that 18 FDA has agreed to do the study and has also 19 issued a contract with a outside consultant 20 to conduct a study and I believe the initial 21 part of that is ongoing right now. Frank 22 mentioned in his presentation this morning BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 87 1 that the new methodology that was used for 2 calculating user fees for '05. FDA 3 readjusted based on the prior receipts of 4 applications, readjusted the numbers of each 5 type of application upon which the fees were 6 based. This was different from what the 7 original fees were based on because we were 8 basing it, during the negotiations, those 9 fees on an average of over a -- the preceding 10 five-year period, and this readjusted number 11 resulted in a fee increase of -- of 15.7 12 percent. Also, in doing that, FDA, as I 13 mentioned earlier, deferred the compensating 14 adjuster. We were very -- AdvaMed was very 15 disappointed though that in a proposal that 16 we had presented to FDA in which we did a 17 similar process of readjusting the numbers of 18 applications upon which the fees were based 19 and deferring the compensating adjuster, we 20 came up with a methodology by which you could 21 get a single digit increase in fees for FY 22 '05, which would have been more acceptable to BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 88 1 the industry, but FDA did not accept our 2 counter proposal. So let me go over what the 3 fee increases were, Frank went through this 4 but I presented it in -- I'm presenting it in 5 a different way. The -- for the PMA fees, 6 the '04 increase from '03 to '04 was 34.3 and 7 then in FY '05 as I mentioned a moment ago, 8 it was 15.7 percent, so we've got 50 percent 9 increase in PMA application types for '05, 10 and in fact for the 510(k)s it was a -- 11 because of the way the 510(k) fees were 12 calculated for '04, we had a huge jump and a 13 very modest increase in 510(k) fees for '05. 14 So now we have a total since the inception of 15 the program of 59 percent increase for '05 16 for the 510(k) fees. And the revenue 17 shortfall presents also an interesting 18 problem for us for the calculation of fees 19 for '06 and '07 because the -- the 20 compensating adjuster is been deferred until 21 '06 and '07 and Frank mentioned that now 22 we're facing a $4.8 million shortfall. The BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 89 1 method that I believe was presented to us is 2 that FDA would take half of that $4.8 million 3 shortfall and apply it to fees for '06 and 4 '07, and that would then resolved in fee 5 increases using -- with the inflationary 6 increase and the statutory increase of a 7 little over eight percent, that would give us 8 fee increases of at least 20 percent for '06 9 and '07. 10 MS. TRUNZO: So what does industry 11 feel about that? That is going to be more 12 increases in fees, much higher than what we 13 had anticipated as the program would go, and 14 again not knowing where we will be in '06 and 15 '07, there is a chance that we're going to 16 again have spikes of increases in fees, so 17 we're not going to have that predictable 18 stable process that we talked about, the same 19 thing that Frank talked about. So we all 20 want -- somewhat of the same thing, but the 21 way we get there is probably different. So, 22 the industry expectation for '06 and '07 is BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 90 1 that, we have -- we would like to see a 2 single digit increase in fees, as that would 3 include inflation; we believe there's a way 4 to get there. We also would like -- I'll go 5 back to what I said earlier, the good news is 6 that FDA is conducting this cost analysis 7 study to determine resources needed per 8 application type. 9 We would like to see a cost 10 analysis study, that is conducted in such a 11 way that the methodology would give us the 12 kind of information that we really need to 13 move forward with. We need to know 14 precisely, we need to ring each type of 15 application and that cost -- and we are very 16 hopeful that that cost analysis study will 17 give us that kind of information and we will 18 continue to work with FDA to ensure that that 19 does occur. And with that last slide, that 20 conclude my comments. Thank you very much 21 for your attention. 22 MR. BARNETT: Thank you, Janet. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 91 1 Mark. 2 MR. LEAHEY: Good morning. My name 3 is Mark Leahey, I'm the executive director 4 with the Medical Device Manufacturers 5 Association. I too, would like to begin by 6 thanking the FDA, in particular Cindy and 7 others, who I know worked so hard to put this 8 meeting together. I think it's an important 9 step in the dialogue back and forth between 10 the Industry and the Federal Government. I 11 think, again as Dr. Shultz alluded to in his 12 opening statements, you know, we are viewing 13 this as a partnership. I think it is 14 important that both the industry and the 15 agency have a better understanding of each 16 others concerns and I think again the second 17 annual stakeholders meeting that we're here 18 today is a step in the right direction. 19 I would also like to point out that 20 I respectfully disagree with Dr. Shultz in 21 that the re-negotiation, the word renegotiate 22 means "kill," we have a lot of good dialogues BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 92 1 back and forth but I would think that 2 actually the opposite is true. If nothing is 3 done to MDUFMA in the coming -- before 4 October 1, 2005 this program goes away, it 5 actually requires legislative modifications 6 to keep this program continuing because there 7 is a shortfall. So, I actually think that if 8 we do not think the program goes away, so 9 it's really an opportunity to work this 10 partnership to try to come to a conclusion 11 that the FDA, the Industry and Congress can 12 all agree with. Moving onto my presentation, 13 I am sure some of you are looking at the 14 slides and are either thinking that I'm 15 careless, or losing my mind. But as I was 16 preparing for this presentation, the first 17 place that I looked was my slides from last 18 year, and unfortunately a lot of the 19 positions and topics I discussed last year 20 hold true today, so that's why you see kind 21 of the modification. Things that are in 22 parenthesis are new to the slide and I did BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 93 1 add two slides this year, but it is my hope 2 and I'm certainly willing to spend plenty of 3 time before next years Stakeholders meeting 4 to create new slides because I think some of 5 these issues are troubling. 6 Again, by way of background, last 7 year we discussed the title one of MDUFMA, 8 which is the user fees and again the impact 9 of user fees on smaller companies and 10 innovations has been controversial for years. 11 But we have come a long way, our MDMA is the 12 voice of the small innovative entrepreneurial 13 sector of the marketplace, and we understand 14 that CDRH and FDA needs additional resources, 15 that's not the issue here. The issue is how 16 do we get the resources to FDA without 17 adversely impacting the industry. And 18 looking at title one, it has three critical 19 components, which I discussed last year: We 20 have the user fee; we have the congressional 21 appropriations; and we have enhanced FDA 22 performance. Last year, I said, "where were BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 94 1 we?" And - "Where are we?" last year, now 2 it's "where were we?," first year as Janet 3 alluded to, we had down average 35 percent 4 increase in fees, we had an appropriation 5 shortfall of 11 million in '03 and enhanced 6 performance, I think it was too early to tell 7 whether that was being realized. The 8 following year, again, this is my 9 presentation from last year -- when I was up 10 here last year, I said, "What can we expect 11 next year and beyond?" We said that the 12 appropriation shortfall was likely to be 13 between 20 and 27 million, we also said that 14 FDA is projecting decreased submissions in 15 2004, which would result in fee increase in 16 2005 and we also said the smaller companies 17 cannot sustain these continued spikes in 18 fees. Again, this is all from the 19 presentation of last year. Now, two years 20 later, new slide, where are we? Well, fees 21 have gone up on average over 50 percent in 22 just two years, again, you saw the 50 percent BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 95 1 increase in PMA fees and 60 percent increase 2 in 510(k) fees, there is a 4.8 million dollar 3 industry shortfall that is going to result in 4 another 15 percent fee increase. I mean, we 5 do appreciate the flexibility shown by the 6 agency to defer this compensating adjusted to 7 the following year, without that we would 8 have seen fee increases in 2005 upwards of 30 9 percent again. So we do appreciate their 10 willingness to work with the industry to try 11 to minimize the fee increases, but clearly 12 something is wrong if this structure is 13 resulting in 30 percent fee increases each 14 year. The appropriation shortfall, again, we 15 predicted between 20 and 27 million, 16 unfortunately it wasn't a shortfall of 20 17 million that is two years in row in which the 18 money has not been there. We're optimistic 19 for the output prospects in FY05, hopefully 20 within the next week even, the appropriations 21 will be delivered for FY '05 and appropriate 22 the resources much needed but as Frank BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 96 1 alluded to earlier, this does nothing to 2 address the approximately $30 million 3 shortfall that has accumulated in FY '03 and 4 '04. Two years later, again, dealing with 5 the improved performance, this is something 6 what we'll talk more about in the next panel. 7 I think it maybe too early to tell in some 8 areas, but I think you know, to FDA's credit, 9 they have, even prior to the user fee have 10 been improving their performance and we'll 11 discuss that in the next panel. 12 Dealing with reforms that are 13 needed to ensure a strong viable user fee 14 program and possess innovation, again last 15 year, I thought that the appropriations 16 weren't there, we would go back and we were 17 hoping that we could take care of this in '04 18 as well, but unfortunately, it looks like, 19 this is an issue we'll address in 2005. 20 We're also calling for the third party audit 21 -- cost analysis, I know that audit is a 22 sensitive word and we are thankful that the BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 97 1 agency has undertaken steps to move forward 2 as it relates to the audit to see what money 3 FDA needs and where it will go. And again, 4 last year, we were calling for the 5 elimination of workload and compensating 6 adjustors. MDMA believed at the time and you 7 know, was really willing to work with others 8 but we think that the only sure fire way to 9 stabilize these fee increases moving forward 10 is to eliminate the compensating and workload 11 adjusters. 12 So, looking ahead now, as I stand 13 here in 2004, MDMA -- let me say this again, 14 is committed to this program. We want to see 15 FDA get the resources it needs but we also 16 believe that there needs to be a sensitivity 17 to the pressures that the industry is facing 18 and, we believe that this partnership -- this 19 working together can result in this program 20 being strong moving forward, but in order for 21 that to happen we need a few things and full 22 funding in FY '05 is a must. Without full BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 98 1 funding in '05 unfortunately, I don't see 2 ourselves having a third annual stakeholders 3 meeting. I think that there will be 0 for 3 4 in honoring the commitments made to the 5 industry and I think that will not go over 6 well, at least from our membership. I think 7 again, when we are here entertaining 8 forgiveness of this 30 plus million shortfall 9 from congressional appropriations, there 10 certainly has to be a recognition that this 11 4.8 million dollar shortfall that we 12 discussed before is forgiven as well. To 13 simply forgive Congress of their shortfall 14 and not forgive the industry, I think is 15 inequitable and something that we will insist 16 on. Moving forward, again like AdvaMed, many 17 in the room may think we agree on nothing, we 18 really do. I think we're closer than people 19 may give us credit for. We think that, you 20 know, this fee increases need to be 21 stabilized, we've called for a fee increases 22 with inflation only, we think that given, as BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 99 1 I said earlier the dramatic fee increases 2 we've seen in the first two years and I 3 understand that, Frank discussed the built in 4 9 to 12 percent fee increases that occur each 5 year but that doesn't take into account -- 6 again, the dramatic fee increases that we've 7 seen in the first two years of the program. 8 So I think at a minimum, moving forward in 9 '06 and '07, simply having fee increases 10 equal to inflation, given those dramatic fee 11 increases we saw in the first three years of 12 the program is merited. 13 Another issue which I'll discuss in 14 the next panel is, you know, I'm not saying 15 that FDA has to reinvent the wheel here, I 16 think -- but one thing again, it's part of 17 this agreement, which I spoke of when the 18 first slide was -- enhanced performance from 19 FDA and I think we're getting there, I think 20 they're doing a tremendous job, I think 21 they're exceeding their goals in many cases 22 and they should be applauded for that, and BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 100 1 I'm not saying that they have to reinvent the 2 wheel, but I think, now that there is data 3 available, if there are certain areas, maybe 4 1, 2, 3 areas in which they can enhance their 5 performance, and I know they're committed to 6 it, and they are -- the goals aren't 7 necessarily the ceiling, it's the floor, but 8 I think their willingness to simply to review 9 those goals would be welcomed by the 10 industry. 11 And then, finally the third party 12 audit that was discussed, we discussed 13 earlier, I think that is a positive step in 14 the right direction. I agree with Janet that 15 we need to make sure that this cost analysis 16 really drills down to the numbers that we 17 need because this is something that MDMA and 18 others in the industry called for, prior to 19 the enactment of the user fee and 20 unfortunately due to time constraints and 21 others it didn't occur but that's something 22 that you know, we really are pushing for. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 101 1 The final point I'd like to make here is 2 just, you know, a road map or maybe a model 3 that we need to be wary of. The prescription 4 drug user fee, everyone holds it out as a 5 great success, but everyone in this room 6 understands that the pharmaceutical industry 7 and the device industry is much much 8 different. They really do have a device, a 9 device that has the revenue potential of a 10 block buster drug and you know, in looking at 11 the fees you have from PDUFA starting in '93, 12 the user fee for a drug was a $100,000. In 13 2005, that fee is $672,000. If that same 14 increase happens with MDUFMA, you're looking 15 at a PMA fee of over a million dollars in 13 16 years and that's something that should be 17 called reason for applause. 18 One final point I want to note that 19 the pharmaceutical contributions started off 20 at 36 million dollars in -- pardon me in 21 1993. Their contribution in 2005 would be 22 over a quarter million dollar or $278 BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 102 1 million, that's a dramatic escalation in 2 their contribution. I think, unless we take 3 care of the compensating adjusters and put a 4 stabilizing mechanism in place with this 5 program, the device industry is going to be 6 subject to the same type of fee increases and 7 again, given the landscape and the makeup of 8 the device industry, it simply cannot be 9 sustained. Thank you. 10 MR. BARNETT: Thank you, Mark. 11 Well, it's time now for questions and answers 12 and so let me ask anyone who has a question 13 to step up to the microphone and identify 14 yourself. Are you ready? 15 MR. O'HOLLA: I'm Bob O'Holla from 16 Johnson and Johnson. 17 MR. BARNETT: The mic, start over 18 Bob. 19 MR.O'HOLLA: Do you have any idea 20 of the proportion of the user fee represents 21 of the device review portion of the FDA 22 budget? BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 103 1 MR. CLAUNTS: What was the question 2 again? 3 MR. O'HOLLA: Frank showed the 4 slide that shows that user fees are a 5 relatively small proportion of FDA's total 6 budget for the device program. Do you have 7 any idea and having looked at the numbers how 8 -- what percentage user fees are of the 9 amount of money FDA spends for device review? 10 Just for review? 11 MR. CLAUNTS: Is it okay now? Just 12 for device review our baseline that we 13 measured for 2002 that we spent for device 14 review from appropriations was a 120 million 15 roughly and if we add inflation to that for 16 2005 we are in the neighborhood of a 125 17 million. So if you just look at device 18 review alone and add in the 34 million that 19 we should be getting from user fees, then 20 user fees would be roughly a quarter of the 21 total device review process if you just look 22 at device review as opposed to the total BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 104 1 device program. 2 MR. BARNETT: Okay, anyone else? I 3 want to ask a question, Frank, are you 4 sending the money to the right bank? I was 5 concerned about that. 6 MR. CLAUNTS: I'm not -- 7 fortunately they're not depending on me to 8 send it to the right bank, these are the 9 folks that send it to the bank and I think it 10 is coming to the right bank, if it doesn't 11 the application doesn't get reviewed. So 12 they're pretty conscientious about that. 13 MR. BARNETT: Well, anybody else 14 want to -- 15 MS. TRUNZO: I have one. 16 MR. BARNETT: Yes. 17 MS. TRUNZO: My question is for 18 Frank. This morning, Linda, in her 19 presentation made a comment about the IT 20 systems, that many of the IT systems are old 21 and fragmented. Since you're handling all 22 the money over there at that, one of those BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 105 1 banks, could you tell us how much of the user 2 fee revenues that were collected in '03 and 3 '04 -- approximately how much of the use fee 4 revenues collected in '03 and '04 went to the 5 improvement in the IT infrastructure? 6 MR. CLAUNTS: I don't have the 7 exact information for you, we're still 8 putting the '04 figures together. Our 9 financial report is due to Congress at the 10 end of January. For '03, I don't have the 11 report up here, but it was a significant 12 amount for '03 and it was largely focused on 13 trying to make major sustaining changes to 14 our, I guess the impact program or the -- our 15 imaging program -- image program. We didn't 16 spend much of the 2004 money on IT at all 17 because we were so pressed with other cuts in 18 2004 that we had to spend almost all the 19 money just to sustain personnel in 2004, 20 there's very little that went to IT. 21 MR. LEAHEY: I had a question as 22 well. Frank, just following up on your BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 106 1 presentation, did I hear you correctly when 2 you said dealing with the trigger issue that 3 a proposal was floated in May of this past 4 year to address the trigger? 5 MR. CLAUNTS: You did hear me 6 correctly, it wasn't a proposal, well, it was 7 a legislative proposal. A piece of draft 8 legislation was sent from OMB to the hill to 9 effect the changes in MDUFMA, that would be 10 necessary to eliminate the make up 11 requirement for appropriations in -- for 12 shortfalls in 2003 and 2004. 13 MR. LEAHEY: And I guess just 14 building on that, you know, in light of this 15 partnership that we have, you know, again I 16 view the participants as industry, the agency 17 and Congress and I was just wondering if the 18 thoughts of making a modification without all 19 three stakeholders, without their buying. 20 MR. CLAUNTS: You know, we are a 21 part of a larger component, it's the 22 administration and we have to work with our BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 107 1 colleagues at the Department of Health and 2 Human Services in the Office of Management 3 and Budget and they have developed a 4 legislative proposal and this legislative 5 proposal is what they call a clean bill that 6 does nothing but waives the requirement for 7 the make up of appropriations in 2003 and 8 2004, it has no other provisions in there and 9 I think, I'd like to just kind of elaborate 10 on that a little bit in the light of what Dan 11 said when we -- when he opened the comments 12 this morning about looking at re- negotiation 13 meaning kill. We understand that there is a 14 legislative fix that has to be made, but our 15 concern is that we need to keep that 16 legislative fix very clean, very limited. If 17 we start opening up or re-negotiating gee, 18 should we change this, should we change that, 19 we will never get the fix made in time to 20 meet our requirement. I think we're wide 21 open to renegotiating MDUFMA, and in fact we 22 expect to, that's one of the reasons that BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 108 1 MDUFMA has a five year lifespan, the current 2 MDUFMA expires in, at the end of 2007 and we 3 would very much like, I think probably to 4 begin a dialogue with stakeholders on 5 renegotiating MDUFMA but we can't do that 6 until we got this lifeline that has to be 7 taken care of keeping the program alive 8 beyond 2000 or 2005. Once we've done that, 9 we look forward to entering into a 10 negotiation, because I think everything is on 11 the table, we need to talk about industry 12 concerns, which we share. We don't like the 13 fact that these fees are going up as high as 14 they are. We know that puts industry in an 15 uncomfortable position and we don't like it. 16 Those are the mechanisms that were built into 17 the statutes, some of which we didn't support 18 but they were built into the statutes, when 19 it was negotiated and finally enacted by 20 Congress. So we don't like those, and in the 21 long term we want to work closely with you to 22 try and make some of those changes. But we BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 109 1 think for the short term we have to get 2 legislative fixes that are clean and can be 3 enacted quickly by Congress. The more we 4 deviate from that clean administration bill 5 of very simple fixes, the more other people 6 are going to want to come and add ornaments 7 to the legislation and the more jeopardy I 8 believe it's going to be in. 9 MR. LEAHEY: Well, let me just make 10 one final point again, and our association 11 has been very clear over the past year that 12 unless steps are taken to stabilize the fees 13 and deal with this compensating adjuster, 14 this industries shortfall, it's not going to 15 have the support of MDMA. You may be able to 16 go forward and move a full clean fix but I 17 think that you know, you run the risk of 18 alienating this partnership and I think the 19 prospects long-term when the true 20 reauthorization comes up in '07 becomes more 21 difficult. I hope that we can work together. 22 I think we have time to work together before BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 110 1 October 1st, to see if there are minimal 2 changes that can be made. In this -- this 3 forgiveness of the trigger, you're making it 4 sound like it's just a footnote. As I said 5 this deal had industry -- three components, 6 industry user fees, congressional 7 appropriations and enhanced performance, and 8 when you're making a material alteration to 9 one of those components, which is to 10 congressional appropriations, this is not a 11 footnote, this is a material alteration which 12 needs to be approved I would think or at 13 least read between all the industries 14 stakeholders. And if there are other minor 15 changes that can be made that address some of 16 the concerns, I think that benefits the 17 partnership long term. 18 MR. CLAUNTS: I don't disagree with 19 anything you've said about having the 20 partnership and working together on this. 21 Basically, what the administration bill does 22 is nothing different than what Josh Bolton BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 111 1 said the administration was going to do in 2 his letter October of 2003. So it's been on 3 the table for a long time, and sort of that 4 was what the administration was proposing to 5 do, Mark -- 6 MR. LEAHEY: We've been on record 7 for a long time saying that that's not an 8 appropriate remedy. 9 MR. CLAUNTS: I understand that, 10 and I think our real key is keeping any 11 changes absolutely minimal so that we can get 12 something passed to keep this legislation 13 alive and reap the benefits of Enhanced 14 Medical Device Improvement over the long haul 15 rather than see this come to a very sad end 16 by next October. 17 MR. BARNETT: One more cycle on 18 this, go ahead. Okay. 19 MR. LEAHEY: Minimal we can do, but 20 simply having it isolated to the trigger 21 forgiveness is something that we can't. 22 MR. BARNETT: Okay. I wanted to BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 112 1 ask you a question, you were talking about 2 urgency, I think you used the word urgent? 3 MR. CLAUNTS: Yes. 4 MR. BARNETT: In terms of 5 eliminating the appropriation catch up 6 provision, why the urgency, what is the sense 7 of time on that? 8 MR. CLAUNTS: Let me explain that a 9 little more, Mark, the sense of urgency is 10 that, you know, everyone would say, hey, this 11 legislation doesn't sunset you know, if those 12 fixes aren't made until next October, so 13 we've got -- 14 MR. BARNETT: Right. 15 MR. CLAUNTS: You know, almost 11 16 -- you know, 10 months before but we are 17 already facing that. But, we are giving a 18 very big appropriation increase due to the 19 existence of MDUFMA in the trigger 20 requirement, and we expect to get 21 appropriation of 215 million dollars for 22 device program in 2005 versus about 191 BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 113 1 million for the device program in 2004. We 2 want to use this appropriation increase to be 3 able to hire staff and to build our review 4 capacity in both, CDRH and in CBER in order 5 to, you know, improve the review process but 6 it's awfully hard to go out and sort of 7 aggressively adding that staff, if you got 8 the "sword of Damocles" hanging over you that 9 says, you know, everybody go out and hire, 10 you may well have to serve a RIF notice to, 11 in 60 days before the end of the fiscal year. 12 So we'd be serving RIF notices around the 13 first of August, if this program isn't 14 salvaged. It's hard to build up the kind of 15 enthusiasm and to sustain the enthusiasm for 16 the program that we had going right now, if 17 we don't get this fix made pretty quickly. 18 MR. BARNETT: Okay, any other 19 questions from the floor? If that's the case 20 I would say thank you to this panel and will 21 call up our next panel. 22 SPEAKER: Well, go ahead now, hurry BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 114 1 up -- 2 MR. BARNETT: Well, that was an 3 orderly transition if I ever saw one. Okay, 4 it's time for our second panel then, on 5 Pre-Market Review Performance Goals and, our 6 panelists are Dr. Donna- Bea Tillman, who is 7 Director of the Office of Device Evaluation 8 in the Centre for Devices and Radiological 9 Health; Don St. Pierre is Deputy Director of 10 the Office of In Vitro Diagnostic Device 11 Evaluation in CDRH; Len Wilson is assistant 12 to the Associate Director for Review 13 Management in FDA Centre for Biological 14 Evaluation and Research or CBER; representing 15 AdvaMed is Pat Schrader, Vice President of 16 Corporate Regulatory and External Affairs 17 with Becton Dickinson and rejoining us is 18 Mark Leahey, representing MDMA. So, let's 19 start out with you Donna-Bea. 20 MS. TILLMAN: Okay. Good morning, 21 can everybody hear me? No, all right. Can 22 everybody hear me now? All right, I'm going BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 115 1 to talk today about the Pre-market Review 2 Performance Goals and the steps that CDRH has 3 been taking in order to meet these goals. 4 All right, we've heard a lot of talk this 5 morning already about MDUFMA's promise. You 6 know, the basic idea behind MDUFMA is that 7 FDA is going to turn dollars into shorter 8 review times. I also think it's important 9 for everybody to recognize that with this 10 promise comes the challenge and that is that 11 we need to meet the MDUFMA goals, but we also 12 need to make sure that we maintain our 13 commitment to good science and continue to 14 promote the public health. So, how are we 15 going to make this happen? How are we going 16 to balance the challenges of MDUFMA in terms 17 of doing things more quickly, well, at the 18 same time ensuring our public health 19 protection mandate? 20 Well, the old vision of Pre-market 21 review was that you've got two offices that 22 are basically responsible for doing this and BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 116 1 that's really their business and nobody 2 else's. What we've had to do is, we've 3 developed sort of with NCRH, a new vision of 4 pre-market review, sort of building on Dr. 5 Feigal's TPLC model and the idea is that 6 pre-market review is sort of everybody's 7 business and that Pre- market review is 8 something that has to embraced by the Center. 9 In order to foster this vision we're doing a 10 couple of things, we've put together a fairly 11 extensive shared hire program where we have 12 staff that have joint appointments in 13 multiple offices and so they're able to 14 participate in pre- market review, while, at 15 the same time engaging in basic science or 16 working in surveillance and biometrics or 17 other areas. We have a number of electronic 18 IT projects that are underway, that are going 19 to enable us to better share information 20 across the center, and then, we also have 21 shared agreement on some time lines that 22 we're basically have formed the foundation of BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 117 1 our MDUFMA program and shared commitment to 2 meeting these goals across the center. So, 3 everybody who is involved in doing pre- 4 market review understands the MDUFMA goals 5 and understands what we need to do in order 6 to meet them. So how are we spending your 7 money? We've heard some discussion today 8 about the different sources of revenue that 9 MDUFMA provides to CDRH. Well, obviously the 10 thing that we're doing, that people are the 11 most interested in is we're hiring and we 12 certainly are hiring. If you look at the -- 13 this chart, it shows you the CDRH device 14 review process FTEs over the past four years 15 and you can see that the number of people 16 involved in the pre- market review program is 17 definitely growing and we expect that, you 18 know, it will continue to grow. The kinds of 19 people that we're hiring are primarily a 20 scientist to do pre-market reviews, as you 21 can see we've got basic scientists and 22 engineers, medical officers and we're also BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 118 1 hiring project managers and other people to 2 help us better manage our time frame. 3 Besides hiring people -- bringing people on 4 through the traditional mechanism, we're also 5 heavily using the Medical Device Fellowship 6 Program, the benefits of this program are 7 that it enables us to have the right people, 8 with the right skills at the right time to, 9 you know, answer the right issues. It 10 enables us to be flexible, so if we've got an 11 area that we need particular people in, we 12 can bring them in, and we can have them 13 provide us with the expertise we need and 14 then if a different area becomes important 15 the next year we can bring different people 16 in. So, this is the program that we've used 17 quite a bit in the past, and I have no doubt 18 that it will continue to be one of the key 19 components of us meeting our MDUFMA 20 commitments in the future. Training is 21 another key thing that I think MDUFMA brings 22 us and this is an area that hasn't been able BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 119 1 to be fully realized I think, because we 2 really have had to focus particularly in 3 FY'04 for spending our resources on just sort 4 of maintaining our basic level of staff. But 5 all those new people that we're bringing on 6 board need to be trained. We have -- the 7 people that we have hired today have been 8 trained and they're coming up to speed and 9 so, I think we can expect to see them 10 starting to make significant contributions to 11 the program. You know the training isn't 12 complete, but it will continue. 13 We also need to be able to put 14 resources into training our existing staff, 15 so we can continue to maintain the sort of 16 world class scientific expertise that we've 17 had, and this is an area that I think, has 18 also not received as much attention as it 19 needs to, and another area that we hope 20 MDUFMA could help us with in the future. And 21 then finally, improved IT infrastructure, we 22 talked a little bit of about that already BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 120 1 this morning as was mentioned our current 2 systems are positively archaic and I think 3 we've got some programs in place to try and 4 look it, how we can use the MDUFMA resources 5 to enable us to better do our review work, to 6 better track what we have in house, to better 7 answer the kinds of questions that our 8 stakeholders have about the kinds of 9 submissions we have, and how long it's taking 10 us to do things, and may be even one day move 11 into the world of electronic review and 12 electronic submissions. I'm next going to 13 talk a little bit about our performance but I 14 haven't gone into in- depth because I only 15 have 15 minutes. If you look into your 16 packet there is a copy of a presentation that 17 was made at the end of FY'04, that gives you 18 detail numbers on our MDUFMA performance, but 19 I wanted to start briefly with just talking a 20 little bit about some of the performance 21 issues relating to original and panel track 22 PMAs. Now, I apologize, the data on the BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 121 1 slide is a little altered, it has to done by 2 hand and the lady who does this, I can see 3 her sitting her out there in the audience, 4 takes her quite bit of time to do this and so 5 we don't always get it done. 6 But the point I wanted to make here 7 is that as you all know the MDUFMA goals are 8 receipt cohort based and because PMAs take a 9 fairly long time to review, we can never have 10 a extremely -- it takes a long time in order 11 to get the final data on any year. So, you 12 can see for FY'03 back in August of this year 13 that about three quarters of the PMAs were 14 complete and you can see actually at this 15 time all of them had met the MDUFMA goals and 16 that about a quarter of them were still in 17 process. So even though it's already FY'05, 18 we still don't have complete data on FY'03 19 for the PMA cohort. 20 This slide gives you a little more 21 details about that cohort and you can see 22 this, we've made final decisions on 41 out of BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 122 1 the 47 submissions and that were doing very 2 good in meeting our decision goals and you 3 can see that 95 percent of them met the goal. 4 So, we're clearly well on our way with the 5 original PMA. In terms of the first action 6 goal of making major deficiency letters out 7 and within 150 days, you can see we're also 8 doing well in meeting that. One of the ways 9 in which we've tried to manage our program is 10 to try to be more predictable. We've heard 11 from the industry that meeting these cycle 12 goals is also of importance and we have put a 13 lot of resources in trying to make sure that 14 happens. 15 On terms of the FY'04 cohort, it's 16 a lot of an early advantage and you can see 17 that at least as of August you know, it's 18 sort of the flip side of FY'04, only about a 19 quarter of those had reached final decisions 20 and in fact, so we've made 11 decisions as of 21 the end of September 30, those are pending 22 and we're meeting the goal quite handily on BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 123 1 those as well and we're also continuing, I 2 think, to have good performance on meeting 3 the cycle goals of the original PMAs. So, 4 sort of, given all of this what is there left 5 to do? Well, I think that as we've already 6 mentioned, we view the MDUFMA goals not as a 7 ceiling but as the floor and I think that 8 we're going to continue to work to try to 9 shorten both the cycle and the total division 10 time -- total decision times, with the idea 11 that we'll improve our predictability, the 12 companies will better understand how long 13 it's going to take them to get their first 14 round of deficiencies, if there are any, as 15 well as decrease in time to market. 16 So, in order to accomplish this, 17 we've set up some milestones for original 18 PMAs, and panel track PMAs and we've 19 developed a number of scenarios; we've got a 20 one cycle scenario here and a two cycle 21 scenario here and we are intend - what we're 22 trying to do and what we're working very hard BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 124 1 to do is to more intensively manage the 2 program, so that everybody who is involved in 3 the PMA review process understands what these 4 different goals are, understands what the 5 steps are in the PMA process and they were 6 managing the process along the way. Now, as 7 you might imagine, this is fairly resource 8 intensive and in order to achieve the kind of 9 performance we've had has really taken a lot 10 out of our staff and nevertheless, I think 11 that if we continue to have the resources 12 that MDUFMA provides, you can expect to 13 continue to see additional improvement. 14 In terms of 510(k), our FY'03 15 performance basically demonstrated that while 16 we were doing pretty good in meeting the 17 decision goals for 510(k), we were a lot 18 further away from meeting the FY'05 goals in 19 terms of the cycle goals. And when we looked 20 at this, we also decided that the way to 21 approach it was to more intensively manage 22 the process and so we've developed a number BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 125 1 of scenarios and a number of internal time 2 lines that we're using to manage 510(k) as 3 well. And the idea behind this process, 4 basically is that the 510(k) comes in, FDA 5 conducts an initial review and then sometimes 6 early on in the process, we need to make a 7 decision about whether the remaining issues 8 are such that we can continue to work 9 interactively with the company to resolve 10 them or that they are significant enough that 11 we're going to need put the file on hold. 12 And so, this is forcing our staff to pick up 13 the files earlier to begin to conduct an 14 in-depth review earlier so that if there are 15 issues we can identify them earlier and move 16 towards meeting them, you know, the total 17 cycle goal, the total goals and the cycle 18 goals as well. 19 So, as a result of putting this 20 process in place, if you look at our FY'04 21 performance in 510(k), you can see that 22 actually we have seen significant BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 126 1 improvements and our performance in terms of 2 meeting these first action and second action 3 goals. And you know, this is preliminary 4 data and there is still a lot of things that 5 we can continue to do to improve the program, 6 but I think one of the things that this shows 7 is that the additional resources that MDUFMA 8 has given us today has made a difference and 9 the changes that we've made in terms of how 10 we manage our program have also made a 11 difference. What about the science? I 12 mentioned that part of the challenge of 13 MDUFMA is meeting these goals while at the 14 same time making sure that we continue to, 15 you know, hold the scientific bar where it 16 needs to be. I just wanted to mention to you 17 that we've developed a program called the 18 Program to Assess the Quality of Pre- Market 19 Reviews and the idea behind this program is 20 that we're going to have a retrospective peer 21 reviewed assessment of reviews that are going 22 to be done by our own internal staff. We're BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 127 1 going basically be going back and putting a 2 group of experts together in certain areas, 3 for example, biocompatibility is one of the 4 pilot areas. Going back and looking at the 5 quality of the science in our submissions and 6 making sure that as we try to speed the 7 process up that we don't lose anything in the 8 science. So our pilot on this program is 9 ongoing right now, and we hope to have some 10 more information to share with you about it 11 in the future. 12 So, where have we been with MDUFMA? 13 Well, I think we've made a lot of progress in 14 meeting the goals but it's come at a price 15 and you know, this little cartoon is really 16 not -- even though you might laugh at it, 17 it's not totally inaccurate portrayal of what 18 some of my staff looks like at the end of the 19 day. Our staff are working at the limits of 20 their abilities, you know, they've been very 21 excited about this program, they've been 22 motivated to meet the goals but that BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 128 1 motivation has come with the expectations 2 that the program will provide benefits to 3 them as well. Luxuries -- and I don't 4 necessarily consider these really luxuries, 5 such as training, standards, and guidance, 6 development have been neglected. So 7 everything has been put sort of in the 8 meeting the MDUFMA goals basket and these 9 other things have not received their share of 10 attention. So, one of the things that that, 11 you know, that we're going to rely on MDUFMA 12 to do, in order to move forward, is we're not 13 going to able to do these things unless the 14 program continues. Where are we now? Well, 15 we're going to continue to improve 16 performance, but I think that everybody needs 17 to recognize that just because we are who we 18 are, doesn't mean that we can stay there 19 without continued support of MDUFMA and 20 continued additional resources. The number 21 of combination products is growing, every 22 time you turn around there is some novel kind BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 129 1 of combination product out there, these are 2 very challenging submissions, there is new 3 kinds of technical expertise that are needed 4 to review these, and new regulatory paradigms 5 that have to be developed and so these are, 6 you know, these take a lot more effort than 7 just your standard submission. The number of 8 510(k) with clinical data is growing and I 9 asked the folks in the office to send me 10 examples of some of their recent devices that 11 have required clinical data and these are 12 some of the ones they gave me, these require 13 more in-depth review, occasionally they 14 needed to go to panel meetings and so these 15 require more resources. I think we're going 16 to continue to see more and more complex PMA 17 devices -- 510(k) devices, as time goes by. 18 The number of expedited submissions 19 is also growing. This year in FY'04 we had 20 14 expedited submissions. That's really a 21 landmark number for us versus three in FY'03, 22 these require shorter time frames and we have BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 130 1 put processes in place, where we are managing 2 expedited submissions to even shorter time 3 frame and they bring increasingly complex 4 scientific questions. These are part of our 5 things to review. So, all these challenges 6 mean that we simply can't rest on the 7 progress that we've made, I think we're going 8 to need to continue to look for new ways to 9 improve the program and we're going to 10 continue to require the additional resources 11 that MDUFMA brings us. So, where are we 12 going in the next couple of years? Well, I 13 think it's really accurate to say that the 14 best is yet to come. We're not just looking 15 at meeting the MDUFMA goals; we're looking at 16 beating the MDUFMA goals, and in order to do 17 this we're going to have to continue to 18 systematically manage our time frame. 19 I think the improvements to IT 20 structure that were alluded to before are 21 going to be key, if we're going to really, 22 actually start to make real improvements that BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 131 1 last over time I think improving our IT 2 infrastructure is going to be critical for 3 doing this and that obviously takes money. 4 Well- trained staff, we're going to need to 5 be able to put resources into training our 6 folks, guidance development is going to be 7 key, that's not only you know, makes the 8 process more predictable but it also makes it 9 easier for industry to know what they need to 10 do and ensure, ultimately shorten review time 11 and time to market and better communication 12 as well. So, the real promise of MDUFMA is 13 not simply the shorter review time, it's 14 things like, more interaction, stronger 15 science, better predictability and better 16 public health and I think that these are all 17 the things that you can look forward if 18 MDUFMA continues. And I also want to mention 19 that we will continue to be committed to 20 least (inaudible), that's also something that 21 I think is a cornerstone of our program and 22 that also you can expect to see. And Don is BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 132 1 going to talk about OIVD. 2 MR. PIERRE: I want Donna-Bea to 3 give my talk. I just had a couple of slides 4 because everything that is going on in OIVD 5 -- in ODE is also happening in OIVD. You 6 know, it's kind of one and the same, and face 7 the same challenges. But there are a few 8 things that are specific to IVDs that I 9 certainly don't want our industry to feel 10 left out and so I wanted to say a couple of 11 things. We have started a pilot program in 12 -- for IVDs with electronic submissions and 13 this is done with the co- operation of 14 industry, we've had some people that have 15 volunteered to do this and we've trained 16 them, they've come in in-house and trained 17 them. Without the industry's support we 18 wouldn't be able to do this pilot, and we 19 wouldn't be nearly as far along in this 20 program as we are. Pre-IDEs, this is a 21 voluntary program for industry, unlike ODE, 22 where they get lots of IDEs formal BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 133 1 submissions. Lot of the IVD devices don't 2 require IDEs, so this is the way that we can 3 start interaction early on in the process. 4 This program has practically doubled over the 5 last few years, based on -- and this is -- I 6 think this is a tribute to industry because 7 they're actually coming in and talking to us 8 beforehand and that's -- in years gone past 9 that's not something that industry actually 10 liked to do, I don't think. So, this has 11 been a great program for us and it's at zero 12 cost. Decision summaries, this is something 13 that we do in IVDs, now where we put up our 14 review summaries on the web, so that people 15 -- they kind of, you know, people who've kind 16 of been viewing them, its like 17 mini-guidances. So for people that have new 18 submissions that haven't submitted this type 19 of application before, they can go up to the 20 web and pull out what FDA reviewed and what 21 they felt was important about a submission, 22 so they can tailor their studies along the BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 134 1 same line. 2 So I think this has been a great 3 benefit to industry. We're redesigning our 4 web page because we've gotten some feedback 5 that, there's a lot of -- there's a wealth of 6 information there, it's great information, 7 sometimes it's hard to find and sometimes 8 it's not as easy to use as we would like. So 9 we're re-designing that. So hopefully that's 10 going to come out soon. We've got a quarter 11 of our staff or may be a little over a 12 quarter of our staff as new. So, we've got a 13 lot of internal training going on, and the 14 interesting thing about the training is that 15 it really does it stresses total product life 16 cycle; it stresses communication; it stresses 17 collaboration. So if you look back at what 18 we have done over the past year or two years, 19 all of our key successes, our best successes 20 have been when we've collaborated with 21 industries. So, it's when we've partnered, 22 when we've worked together with the industry, BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 135 1 with the trade associations, with all those 2 people that are important to our program. 3 Those successes, the best successes, the past 4 review times, the new programs and all those 5 initiatives, the best ones and the ones that 6 we always claim credit for, are the ones that 7 where we're working together, so it's a new 8 FDA and it's I think a much better FDA. So, 9 other things that are going on within our 10 office, we're very pro-active in bioterrorism 11 activities, not promoting them, but actually 12 having to deal with them. There's a lot of 13 stuff going on for the IVD industry regarding 14 the Clinical Laboratory Improvement 15 Amendments, CLIA, and waiver criteria for 16 that, that's something that we spent a lot of 17 time on, and we've been working with industry 18 and CMS and CDC on that program and hopefully 19 we'll have something out in the near future 20 on that. And, we're putting a great deal of 21 effort into pharmacogenomics and genetics and 22 we have lots of resources going to that. The BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 136 1 nice thing that I see today, that I haven't 2 seen in many years is actually being able -- 3 instead of reacting to everything that's 4 happening, we're actually at the table more 5 along the same time that it's going on. So 6 we can actually help with the process move 7 forward. So, I think it's a great time for 8 FDA and I hope nothing gets killed. 9 MR. BARNETT: Thank you. Len. 10 MR. WILSON: Good morning, I'd like 11 to start off by echoing some of the concerns 12 and challenges that my colleagues from CDRH 13 have mentioned. In particular, the challenge 14 of the burnout factor, particularly in CBER, 15 we've been spending an enormous amount of 16 time trying to keep pace with -- well, the 17 number of regulatory pathways that we deal 18 with, we've been doing this for years. But 19 also now we have a series of timelines that 20 we've got to maintain. The other thing that 21 I'd like to underscore is that CBER has 22 traditionally had a higher percentage of BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 137 1 510(k)s that may include clinical data so, 2 we've been under that challenge for a period 3 of time, and we think that the PDUFA program 4 -- MDUFMA program in general is very, very 5 valuable and we would certainly like to see 6 it continue. Synergy is the key. We are 7 continuing to harmonize with CDRH. We 8 continue to have active participation in all 9 the MDUFMA committees, guidances that you see 10 coming on under MDUFMA have our endorsement 11 on it, and we are further integrating or 12 merging some of our review procedures with 13 those in CDRH thorough the auspices of the 14 Device Review Subcommittee, and there is also 15 great commitment for improved management 16 initiatives particularly in the Office of 17 Blood, where most of our medical devices 18 reside. What I would like to do now is just 19 go through a couple of quick tables on how we 20 have performed, you can see the number of 21 devices, FTEs to -- FY '02, 3 and 4 are 22 increasing. We have 510(k) performance, BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 138 1 preliminary data, and what you see there is 2 that we are meeting the -- we are actually 3 exceeding the FY '05 goals. In FY '04, again 4 the same thing, we've taken the commitment to 5 meet these goals very, very seriously. PMA 6 performance, while the numbers are small, we 7 still take it very seriously to meet these 8 goals, and the additional 510, I'm sorry, PMA 9 performance. These are all in your packet. 10 We also regulate BLAs medical devices in some 11 instances, and again we are meeting the FY 12 '05-'06 goals. As you can see again, we are 13 exceeding them. We have several pending but 14 that's the asynchrony of dealing with the 15 cohorts. What improvements led to better 16 performance? Well, we just, we really took a 17 commitment to better manage our review 18 process. We have regulatory project managers 19 that have somewhere between 20 and 40 20 applications pending at any given time. They 21 have to operate with nominally 267 22 simultaneously operating time hammers. You BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 139 1 can't fake managing these reviews, they have 2 -- when they come in and do it, you've got to 3 jump right on top of them, they've got to be 4 sent to review committees and basically 5 shepherded very, very closely. There's been 6 an improved focus on problem solving within 7 the cycle rather than relying on waiting till 8 the end. What that does is, it basically 9 ensures a second cycle and we are trying to 10 reduce that. We've also concentrated on 11 supervisor and reviewer training. We've got 12 a couple of programs that we have been 13 pushing and some of them are at the 14 grassroots level, some of them are at the 15 center level. We've improved our document 16 handling significantly. We now have bar code 17 delivery, so that it's kind of like FedEx, so 18 that if we do misplace one of the 1.5 million 19 regulatory documents that we track per year, 20 we'll at least know that it's lost and we 21 will know that it was misdelivered to the 22 wrong place and then in the next cycle of BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 140 1 delivery, we can go back and get it. We've 2 had dramatic improvements there. We have 3 also conducted just for the third year, best 4 annual practices, best practices workshop 5 relative to IVDs with CDRH, and what we are 6 hoping to accomplish in FY '05 is to take 7 advantage of many of the aspects of what's 8 going in the agency to further evaluate and 9 improve our performance, for example, quality 10 systems approach to review process. All this 11 is coming down the pike relative to -- in a 12 PDUFA context, we are looking at the 13 advantages that we can gain from that. The 14 number of 510(k)s are increasing, we know it. 15 Therefore, we will be planning to deal with 16 it rather than just simply be reactive and 17 maybe slip timeframes, cycle strategies. We 18 know where the cycles are at any given time. 19 Again, we've had some benefit of having dealt 20 with user fees for a decade. We've had many 21 of our systems in place to track these and 22 its helped quite a bit. We have a mid cycle BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 141 1 meeting now for 510(k)s where we know where 2 we stand, so that we can get to the 3 manufacturer somewhere at the midpoint and if 4 we can resolve issues without sending a cycle 5 letter, we'll try to do that. And we are 6 hopefully going to be getting an increased 7 number of electronic submissions. Again, we 8 have the experience in dealing with PDUFA and 9 electronic submissions, and with that -- 10 that's all I have to say for now, thank you. 11 MR. BARNETT: Thank you Len. Pat 12 Schrader. 13 MS. SHRADER: Good morning, I'd 14 like to thank FDA for the opportunity to make 15 a couple of comments on performance under 16 MDUFMA. I was really very pleased to be able 17 to talk about this particular topic because I 18 think it's one where the news is more good 19 than bad, and I'd like to focus both on some 20 of the good things that are happening and 21 some of the opportunities that remain for 22 improvement in the future. But what I'd like BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 142 1 to do first is kind of reset the stage for 2 those of you who may not have been involved 3 in some of the original discussions about 4 MDUFMA, and you've heard little bits and 5 pieces of this in comments that some of the 6 other speakers have made, but I wanted to try 7 to lay out the whole picture for you. If you 8 go back to the years, I'll say 1999 through 9 2002, there was pretty general agreement in 10 the industry that FDA's performance in review 11 of 510(k) submissions was pretty good. That 12 the turnarounds were reasonable, the number 13 of cycles weren't too bad, and I would say 14 that overall there was a level of content. 15 There are always of course, outliers and I'll 16 talk a little bit more about outliers later. 17 When you looked at PMA performance, you got 18 an entirely different picture, well, some PMA 19 reviews were conducted in what companies felt 20 was a pretty efficient fashion. I would say 21 that the vast majority complained about the 22 PMA performance being way substandard and BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 143 1 being way too slow, and particularly, if you 2 look at expedited submissions which of course 3 represent the real breakthroughs in this 4 industry, FDA's performance had been well 5 below par. And I'll recall back to the days 6 of David Feigal, it's one of the things that 7 Dr. Feigal wasn't hesitant to stand at a 8 podium and say that this was an area that 9 really needed improvement. There were some 10 other opportunities too that FDA had not been 11 able to take full advantage of including 12 guidance which the industry always clamorous 13 for. A good look at pre and post market 14 balance is the way of expediting review for 15 some products. We are also looking at an 16 environment where FDA resources, CDRH 17 resources had been steadily shrinking, and 18 although the trends hadn't turned at that 19 point in time, it looked pretty clear to 20 anybody who had a calculator in their hand 21 that that performance was not going to be 22 able to be sustained over time. There have BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 144 1 been losses in staffing and even on the part 2 of the agency, there was lot of concern over 3 being able to get innovative products to 4 market very quickly. So a lot of the focus 5 behind MDUFMA was to try to stabilize FDA and 6 to look at areas for improvement and to begin 7 some of those improvements, and that was what 8 we were actually working toward in this first 9 five-year cycle. One of the -- and I'm sure 10 many other companies have their series of 11 clichés that they use frequently and one of 12 our favorites is what's gets measured gets 13 done, we set goals for ourselves, and so the 14 focus here was to set some goals for FDA that 15 would become increasingly aggressive as time 16 went on. I looked at three specific areas, 17 staffing, there was a recognized need for 18 staffing increases and as you can see those 19 staffing increases have taken place. An area 20 that I think is an opportunity for FDA to 21 articulate is support from MDUFMA better, is 22 to able to provide some of the data that's BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 145 1 been talked about and be able to more clearly 2 explain where these resources are going and 3 how they are directly helping in the review 4 process. So, there's no question that 5 resources have improved. Again there's still 6 opportunity for improvement, as you've heard. 7 In terms of PMA performance, I'm not going to 8 read you -- this is all from FDA's report, 9 but I did want to focus you on, again, is the 10 notion that what gets measured gets done. If 11 you look at the expedited PMAs, they do have 12 focus and they are currently meeting goals, 13 and as I mentioned previously, those goals 14 become more aggressive over time. Looking at 15 CBER, of course, you guys are the princes of 16 a 100 percent, I must say when you look over 17 performance overall, in part, I think due to 18 the fact that there was a management system 19 in place at CBER, even prior to MDUFMA that 20 could be readily applied, whereas CDRH had 21 some building from the ground up to do. 22 Again 510(k) performance has been acceptable, BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 146 1 by and large, both CDRH and CBER are meeting 2 their goals in that area. So, the question 3 is to whether FDA can meet the goals that 4 become more aggressive as time goes on? I 5 think the answer is, yes. Now, let me 6 refocus this a bit and I probably don't need 7 to remind participants, but I will remind the 8 FDA, that we are both in industry and we are 9 a collection of companies. And at the end of 10 the day, what my company cares about is, what 11 our numbers look like. I can do a certain 12 amount of persuading around the overall 13 industry performance, but when I'm actually 14 talking to my management about resources that 15 are needed in regulatory programs, what they 16 are going to focus on is, what does this all 17 look like to me. As the numbers have shown 18 you, last year was not a huge year in 19 submissions for us, and I should also 20 mention, I work for a company that does a 21 virtually a 100 percent 510(k)s. We 22 submitted only a couple of medical device BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 147 1 510(k) and as you can see we had some decent 2 review times, we had some slightly more 3 disappointing review times, there are 117 4 days, special 510(k)s as they have been are 5 going through very rapidly, very predictably 6 and were also participating in the STED 7 program, which I'll certainly provide AdvaMed 8 with the data when we find out how long that 9 process is actually going to take, it is less 10 than 90 days at this point in time. About 11 half of our business is medical device and 12 the other half is diagnostics, and as you 13 would expect, we actually do more diagnostics 14 applications per year than we do devices. 15 Primarily, because once you develop a 16 diagnostic platform, adding one assays is 17 what makes the product sell, so we tried to 18 do that very rapidly. We submitted 14 510(k) 19 submissions, 13 traditional, one special, 10 20 of our traditional 510(k)s cleared in less 21 than 90 days, our special, of course, cleared 22 in less than 30 days. We did have some BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 148 1 outliers in this group. We actually had 2 three 510(k)s that took roughly 150 days or 3 more to get through. Let me just mention 4 that the one CBER 510(k) that we did do was 5 within the group of 10 traditionals(?) that 6 cleared in less than 90 days, so those three 7 slow 510(k)s were CDRH products. As we 8 typically do when applying quality systems to 9 our process review, we went back and looked 10 carefully at what the issues were and we will 11 claim a portion of the credit or blame for 12 the length of the review time, and that we 13 did not make the submissions as uncomplicated 14 as we possibly could have, they were complex. 15 On the other side, the information that I got 16 from the business was that, CDRH was lacking 17 the expertise that they needed to complete 18 timely reviews of these submissions, so some 19 opportunity for improvement for both of us. 20 Based on the fact that the data on our 21 diagnostic side looked a little different 22 than what we were seeing on the medical BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 149 1 device side, we went out and collected some 2 anecdotal data from other diagnostic 3 companies and let me just remind you, this is 4 anecdotal, but sometimes, both on the 5 industry and the FDA side, what you are 6 dealing with is perception. 7 The perception is that cycle times 8 are slipping, and the belief is that if the 9 cycle time slip, it's going to make it 10 increasingly difficult to complete reviews in 11 90 calendar days. A number of companies that 12 we talked with said that although FDA is 13 meeting its goals, they've actually seen an 14 increase in time in some of their simple 15 submissions. And they also noted that the 16 goals for first round of questions is now at 17 75 days rather than 60 days, as it was 18 previously, so certainly some opportunities 19 for improvement there. I think one of the 20 other issues that we need to look at is 21 whether, and Mark mentioned this previously, 22 whether the performance goals are BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 150 1 appropriate. First, I would say that this 2 was an initial effort at putting some numbers 3 on the table that the industry found 4 acceptable, not fantastic but acceptable and 5 that FDA felt that they could reasonably 6 achieve. These were never intended to be the 7 end all, be all goals for product reviews. 8 Second, they are still in the process of 9 gathering data, the goals didn't kick in 10 until, in some cases next year and we tend as 11 these occasions not to have complete 12 information on all the cohorts -- the receipt 13 cohorts that have been come in during the 14 years. So you really have to look at this 15 over a period of time rather than at a point 16 in time to see if you're getting the 17 improvement that you're looking for. So I 18 think the data-gathering activity is a very 19 important one. I again would refocus FDA, as 20 time goes on, that it's really important to 21 look at the outliers, because it's the 22 outliers that are going to kill you. I was BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 151 1 pleased to hear Donna-Bea say that they are 2 doing retrospective reviews. I think that 3 that could add lot of value to the program. 4 Again. I think the application of quality 5 system principles try to find the root cause 6 for those long reviews and let's look for the 7 corrective actions that are going to address 8 them. So what are the future needs? First 9 I'd like to say good job to FDA. I think -- 10 I think you've done the things that you said 11 that you were going to do and certainly the 12 willingness and the enthusiasm around meeting 13 MDUFMA goals across the Board has been very 14 impressive. What do we need? We still need 15 more data. There's, as I already mentioned, 16 incomplete data on performance goals because 17 of the cyclical nature of what we are looking 18 at, but I think that will become more 19 available and more meaningful with time. It 20 is important that several people point out to 21 look at how the fees are actually being used 22 because of course, the focus here was to make BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 152 1 sure that they were used for product reviews 2 and further to be able to delineate what kind 3 of resources you need for each type of 4 application that you are looking at. I've 5 already mentioned and I won't say again the 6 outliers are really important place to focus. 7 And finally and this also has been pointed 8 out. This is a very innovative industry and 9 new technologies are being discovered every 10 day. It's most important for FDA to stay 11 up-to-date and keep ahead -- to the extent 12 they can -- of the technology to try to make 13 sure that they are going to have the 14 resources in place to continue this 15 improvement. 16 As far as a message that I would 17 give the industry, I think it's important for 18 you to collect your own data, most companies 19 do, and share it with the FDA, give them some 20 insight into when -- where you're finding the 21 issues, what those issues are and what can be 22 done to overcome some of them. After all BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 153 1 nobody has ever been able to solve a problem 2 that they weren't aware of and that they 3 didn't have some detail on. So rather than 4 looking at this as negative feedback, look at 5 it as information that FDA can use to improve 6 its process. And finally for those who are 7 less than totally satisfied with metrics in 8 place today, I would strongly suggest looking 9 forward to the renegotiation that's required 10 for '07, to look at the progress that's been 11 made and any additional or different metrics 12 that might be more meaningful at that time, 13 thank you. 14 MR. BARNETT: Thank you and now, 15 Mark. 16 MR. LEAHEY: Thank you, I agree 17 with Pat that this is an area where FDA 18 deserves praise for their performance. I 19 think that the steps they had taken over the 20 past few years have really resulted in faster 21 reviews, a better quality review and again 22 allowing this better dialogue between the BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 154 1 industry and the agency. So again, I don't 2 want it to sound like sour grapes here. I 3 think that they have done a tremendous job 4 with the decision goals. I know this work 5 remains, the cycle goals and as far as 6 providing guidance documents, but I would 7 just what to talk briefly about some areas 8 where, you know, maybe there's an opportunity 9 to review the performance goals. I'm not 10 making any judgments. I'm just simply 11 stating and I'm not blaming folks for the 12 decision goals that were put together two 13 years ago. I think there was a lack of data 14 at that time, I think we're learning more as 15 Pat said and again this is not meant to be an 16 indictment on anybody. It's simply laying 17 out some of the data that exists in the 18 current scenario and see if there are 19 opportunities to enhance performance. Again, 20 in dealing with performance goals, I kind of 21 view this as the benefit of the bargain, what 22 industry, what their expectations were BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 155 1 entered into with MDUFMA. When the industry 2 contemplated user fee in 2002, it did so with 3 the understanding that review times would 4 improve. And I have to say that that has 5 happened. I think this is happened 6 progressively since 1999. I know that maybe 7 Pat and I differ a little bit but, on the 8 opinion there, but I think if you look at the 9 '03 ODE(?) report and look at the, you know, 10 original PMAs, looking at the receipt cohort 11 in 1999, the 90 percent of PMAs reviewed in 12 405 days and that's a closed cohort now, in 13 2000, also a closed cohort, the review time 14 went down to, the 90 percent when down to 342 15 days. So I think to FDA's credit since '99, 16 they are making steps to improve their 17 performance and we appreciate that. The one 18 area that, again I think is worth discussion 19 is, given the substantial investment that the 20 industry is making in form of user fees 21 upwards of $150 million over the course of 22 five years, other areas in which the decision BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 156 1 goals should be reviewed or enhanced where 2 necessary. I'm not saying there are, but I 3 think at least engaging in that practice is 4 worthwhile. And again taking a step back 5 here, I know that it's not just all about 6 decision goals, a lot of our members think 7 it's all about decision goals. They say, you 8 know, end of the day how many days does it 9 take FDA to review. I think that where the 10 emphasis is and I agree with that, but they 11 realize that cycle goals are important, in 12 addition the outreach that FDA has made and 13 you know, we certainly have appreciated folks 14 coming over to speak at our FDA workshops and 15 dealing with our member companies when 16 there's been a problem, the drafting of 17 guidance documents, these are all things that 18 fall outside the scope of decision goals 19 which we do appreciate and understand that 20 that is the value derived from the user fee 21 as well. So again not to sound like someone 22 who is constantly complaining, but I want to BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 157 1 focus the last three minutes on the decision 2 goals, because that is kind of end of the day 3 business determination or issue that a lot of 4 our member are taking or looking at. I'm 5 just simply saying if there are areas in 6 which we can enhance that over the course of 7 the next few years. 510(k)s as Pat said, her 8 company primarily submits 510(k)s, most of 9 the industry primarily submits 510(k)s. If 10 you look at the number of submissions that 11 fall within the goals letter, 90 percent of 12 them, over 90 percent are 510(k)s. And to 13 FDA's credit, they have done a pretty good 14 job even prior to the user fee on turning 15 around FDA 510(k) submissions, and in fact, 16 you know, their own numbers show that 75 17 percent of these submissions were being 18 reviewed within 90 days, FDA days prior to 19 MDUFMA. The goals letter does state in '07 20 that FDA may increase this to 80 percent, but 21 that's discretionary, you know, I'm here to 22 hopefully express the -- at least the BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 158 1 sentiment from our association that we hope 2 that that 80 percent target could be met 3 because I think it would be significant in 4 realizing that that getting the additional 5 preparations and user fees will help reach 6 that goal. I think it's also important to 7 point out here, that the 510(k) submissions 8 represent the single largest revenue 9 generated per submission, if you any of your 10 -- original PMAs, you have PMA 180 day 11 supplements or real time supplements, your 12 510(k)s. The 510(k)s are responsible for the 13 largest revenue per submission at over $11.4 14 million just in '04, so to not take the -- a 15 look at -- hard look at 510(k)s, I think 16 would be -- would problematic. The 180 day 17 supplements, again just dealing with the 18 decision goals, I know that there is work to 19 be done in cycle goals and I can appreciate 20 the other steps that folks have been taking 21 to improve guidance, drafting and outreach. 22 But dealing with the decision goals for the BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 159 1 180 day supplements, again they make about -- 2 make up about 2.5 percent of the submissions 3 under the goals letter and using FDA's own 4 numbers, 90 percent of these are being 5 reviewed within 180 FDA days prior to MDUFMA, 6 and under MDUFMA FDA stated that -- that 70 7 percent would be reviewed within 180 days in 8 '05, 80 percent in '06 and 90 percent in '07. 9 So you know, this, obviously it is a bit of a 10 disconnect of where the goals state they will 11 be in '05 and '06, realizing that they are 12 already achieving this. I think this is 13 wonderful, but I just --pointing out the fact 14 that sometimes these goals, at least in '05 15 and '06, don't necessarily result in enhanced 16 performance that many in the industry thought 17 when they entered into this agreement. And 18 again the 180 day supplements generate about 19 4.4 million in revenue. The real time 20 supplements, they make about -- up about 5 21 percent of these submissions under the goals 22 letter. The goal is to maintain current BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 160 1 performance. I think that's appropriate and 2 I know that that it just a goal and folks at 3 FDA are trying to improve on that as well. 4 But again going back to this issue just from 5 the industry's perspective, this is a 6 substantial amount of money that we are 7 investing in a program, understanding it's 8 not all about decision goals but that's one 9 of the clearest metrics that our folks can 10 take a look at to see if this program is 11 successful. And in '04 the real time 12 supplements resulted in 2.4 million. The 13 PMA, BLAs and panel tract supplements 14 represent less than 2 percent of the 15 submissions under the goals letter. I know 16 there's a lot of emphasis focused on the 17 expedited PMAs. Again, these are the novel 18 products, they are important, but I think 19 it's important to note that between 1999 and 20 2003, there were less then 10 expedited PMAs 21 submitted each year. So, to put all the 22 focus on the enhanced performance with the BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 161 1 expedited PMAs, I don't think gives an 2 accurate portrayal of what the industry as a 3 whole is concerned with. These are 4 important. They are important goals, but 5 again, I think it's important to realize that 6 90 percent of these submissions are 510(k)s. 7 MDUFMA calls for 90 percent to be reviewed 8 within 320 days and prior to MDUFMA, they are 9 about 85 percent, there is room for 10 improvement. These are important 11 submissions, but again they represent less 12 then 2 percent of the total submissions 13 within the goals letter. And again the PMAs 14 did represent a substantial amount of revenue 15 under MDUFMA, just under $8.7 million, but 16 that is again far less than the 510(k) 17 submissions. So, in closing I just want to 18 say that, again, we realize that there is 19 more to it than decision goals, we are not 20 placing blame on the goals that were 21 implemented or drafted two years ago. I 22 think there may have been a lack of data, and BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 162 1 MDMA just is simply asking FDA to take a look 2 at all the performance goals cycle and 3 decision goals. If there's, you know, no 4 more movement available, that's fine, but I 5 think, you know, simply taking a look, 6 revisiting some of these goals based on the 7 new data that's come out in the last two 8 years, would go a long way to instill that 9 atmosphere of a partnership between the 10 industry and the agency. And finally again 11 really do appreciate the outreach that has 12 been made on behalf of the agency to the 13 industry as a whole and particularly small -- 14 smaller companies. I think the FDA workshop 15 that we held was very helpful. We understand 16 that the review times here are based on the 17 quality of submission as well and these 18 educational opportunities, outreach 19 opportunities that allow smaller companies to 20 better understand the system are important to 21 improving the overall review system. Thank 22 you. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 163 1 MR. BARNETT: Okay, questions? 2 MR. DURGIN: I'm Bob Durgin with 3 Biomet Inc. First of all I'd like to 4 congratulate the review staff for all the 5 hard work and effort that has been put in the 6 last year, both as well as at the office 7 accommodation products. We have duly noted 8 the times of some of the e-mails that have 9 been generated late into the evening and on 10 weekends and I want to thank everyone for 11 that work. My question goes to whether or 12 not you can shed some light on some of the 13 systems that may be in place to improve the 14 efficiency of reviews, for example, in terms 15 of project assignment is there any effort 16 made to assign review to someone who may have 17 been involved with the review of the 18 predicate device on a 510(k) and I'll also 19 emphasize the outliers that Pat spoke to, 20 what type of personal management practices 21 are in fact in place to look at those reviews 22 where the performance goals have not been BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 164 1 accomplished? 2 MS. TILLMAN: Well, I'll try to 3 answer that. Your question about whether we 4 tried to assign the same kinds of devices to 5 reviewers. There is sort of two ways to look 6 at that. One is we have to guard against 7 putting together an organization where there 8 is only one person who is capable of doing 9 one particular kind of device and then if 10 that person leaves, then we are sort of left, 11 not having the expertise we need. So as 12 somebody who has been a branch chief in the 13 past, you know, you want to have -- you 14 generally have groups of reviewers who are 15 experienced reviewing certain types of 16 devices and you try to assign those devices 17 to those groups of reviewers, which you've 18 got to balance the need to make sure that 19 you've got a diversion of organization that 20 you can kind of cover your bases, if somebody 21 is out or let's say that particular kind of 22 device for some reason there is a blip and BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 165 1 there is a lot of them that come in at once, 2 you need to have enough people who can handle 3 the workload. So it's a balance between 4 giving them all to one person and just 5 assigning them randomly and I think there is 6 a, there are good reasons why the decisions 7 are made. Does that answer that part of your 8 question? 9 MR. DURGIN: Yes. 10 MS. TILLMAN: Okay, then your other 11 question is about managing the outliers? 12 MR. DURGIN: Yes. 13 MS. TILLMAN: Well, one of the 14 things -- and I'll talk about 510(k)s, 15 actually the same comments apply to PMAs. 16 When we established our internal milestones 17 for 510(k)s, the idea was that we were going 18 to manage every 510(k) to meeting these 19 milestones, and then what would happen would 20 be, there would be some that throughout the 21 process that would become obvious that they 22 were either increasingly complex, scientific BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 166 1 or regulatory issues and that they simply 2 weren't going to be able to meet those 3 milestones. But we did not want to develop a 4 process by which, you know, we had sort of 5 haves and haves not, so the way internally 6 this was an ODE, we managed our 510(k) 7 program is, when a 510(k) comes in, there is 8 an expectation that it's going to meet the 9 milestones. If it gets to the point where 10 the -- usually it's at the branch chief 11 level, there is a recognition that it's 12 probably not going to do that, we don't just 13 simply abandon it and say, okay well, that 14 one is left to do whatever it does. We are 15 still, you know, working carefully to try to 16 make sure even those that are going go over 17 the review timeframe don't just simply get 18 lost. 19 MR. DURGIN: Well, follow up to the 20 first part of the question, I guess, one of 21 the concerns that I would have personally is 22 that, occasionally we will have a review of a BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 167 1 510(k) and have questions generated that were 2 resolved with respect to the predicate device 3 and it doesn't seem to be much internal 4 communication with reviewer on the predicate. 5 MS. TILLMAN: Yeah, I mean our -- 6 you mean this goes down to some of the 7 challenges we have with our current IT 8 systems and that we don't have the best 9 processes(?) in place for sort of 10 electronically maintaining historical 11 knowledge. We do have an image system were 12 all closed 510(k)s and all the review memos 13 are imaged and those are available to the 14 reviewers, but sometimes it's not always easy 15 or obvious to go back to those, Don, might 16 have some thoughts on that too. He has the 17 same issues -- 18 MR. ST. PIERRE: Yeah, a lot of the 19 same issues. I just want to go back to your 20 last question also. The fact that, in IBDs 21 for diagnostics for trying to manage those 22 review cycles and the endless cycles, we have BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 168 1 a policy internally where, you know, one 2 round of questions is the divisions and they 3 get go. The second round of question that go 4 out, if there is a second round of questions 5 and most of them don't, but if there are a 6 second round of questions then, if those 7 questions are still fairly significant, it 8 could result in us not actually clearing that 9 submission then or we are not going to be 10 able to do it timely in the next round. Then 11 those submissions get to come and -- they get 12 to come and meet with me and the division and 13 the office director. So they get a little 14 personal attention at that time. So there is 15 some -- I mean, if those ones that go 16 multiple cycles, that you just -- you can't 17 actually meet review goals, MDUFMA goals on, 18 so those are the ones you got to actually try 19 to fix. 20 MR. DURGIN: Thank you. 21 MR. BARNETT: Okay, anyone else? 22 Yes, go ahead. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 169 1 MR. HORVATH: My name is Nick 2 Horvath, I'm from Guidant Corporation, I have 3 a question about the pre-IDE process. Is the 4 pre-IDE process and some of the earlier 5 processes leading to an improvement? You 6 think that's helping you with new improvement 7 in the review times? 8 MR. ST. PIERRE: We hope so but 9 we've actually asked the same question, so we 10 actually have a group within the center that 11 has agreed to actually do an analysis for us, 12 so I'm hoping this time next year we actually 13 have a clear answer to that. But the review 14 staff honestly think it does, and they spend 15 a lot of time on the pre-IDEs working with 16 the manufacturers. So there is clearly the 17 perception internally and we have been 18 pushing the program, so that perception 19 internally is that it has a lot of benefit. 20 We just don't actually have the numbers yet, 21 but we're going to try to find the numbers. 22 MR. HORVATH: As a frequent user of BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 170 1 that process, we would be very interested in 2 that, we are trying to measure that 3 ourselves. I have a second related question 4 and that is, if a manufacturer wants to get 5 some continuous feedback from FDA on the 6 quality of its applications or in ways that 7 it can make its applications better or 8 improve its applications to facilitate 9 improvements in the review times. How do we 10 go about systematically getting that 11 feedback? I know we asked for it 12 anecdotally, but there doesn't seem to be any 13 way to really gauge in some systematic manner 14 that information. 15 MS. TILLMAN: I can tell you that 16 we'd be more than happy to provide that kind 17 of feedback if there -- you know, if the 18 industry wanted to make some kind of 19 proposal, the area whether the question of 20 FDA feedback has come up most recently is in 21 the area of the third party credited persons 22 that do those reviews and there is some BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 171 1 interest in trying to provide some feedback 2 to them, since they act sort of, like, 3 external FDA reviewers in many ways. But if 4 you know, if the industry wants to come with 5 a proposal for how we can do that, you know, 6 we'd be happy to provide that kind of 7 feedback. 8 MR. ST. PIERRE: And if it's -- if 9 a company seems to be having a consistent 10 problem with their applications, we invite 11 them in. 12 MS. TILLMAN: That's true. 13 MR. BARNETT: Anyone else? 14 Donna-Bea, I have a question, I thought I 15 heard you say that in fact, the expedited 16 review that from earlier. 17 MS. TILLMAN: Yes. 18 MR. BARNETT: That's not something 19 you figured you want, those are the device 20 that are breakthroughs. 21 MS. TILLMAN: Right. 22 MR. BARNETT: To what extent have BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 172 1 you fixed that? 2 MS. TILLMAN: And that's a really 3 good question, actually because this gets 4 back to a point that Pat had made. We were 5 concerned about the fact that expedited 6 submissions appear to be taking longer and so 7 when we set up some of these internal 8 timeframes for MDUFMA, we set up even shorter 9 timeframes for expedited submissions and so 10 in the same way that we are more aggressively 11 managing our standard PMAs to timeframes, we 12 are even more aggressively managing are 13 expedited review PMAs to these internal 14 timeframes. And I have every expectation 15 that we're going to actually -- that that's 16 going to be in an area where we are going to 17 se some significant improvement. So I think 18 it really gets down to the fact that we've 19 got additional resources so we can put more 20 people on these expedited submissions and 21 that we are going to be more closely 22 monitoring the process. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 173 1 MR. BARNETT: You just volunteered 2 to the last question, I believe, the ability 3 to have more feedback for the -- 4 MS. TILLMAN: Uh-huh. 5 MR. BARNETT: What about, you 6 talked about electronic submissions and 7 getting into that. You're going to ask the 8 industry for feedback on that as well? 9 MS. TILLMAN: Yes, actually that's 10 an area that I'm personally very interested 11 in and we've got a -- you know, we've got the 12 Turbo 510(k) program that is going on in OIVD 13 that's one pilot program and that's one way 14 to potentially approach the idea of 15 electronic review. But we are also looking 16 sort of more broadly at other options for how 17 we might develop an electronic review process 18 and we are not just talking about electronic 19 submissions where you convert your stuff into 20 PDF and it comes in and then our folks print 21 it and review it. That's what my IT people 22 call 'paving the cow path'. What we want to BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 174 1 look at is to see if we can think about 2 whether there's a whole new and better way to 3 do the review that utilizes some of the new 4 IT that's out there and what we're doing is, 5 we are doing a little bit of internal kind of 6 thinking about that and what I'm hoping to do 7 is to develop some kind of a workshop or some 8 kind of meeting with the industry to solicit 9 your input to what you would like to see in 10 an electronic review program and I would hope 11 that we could be doing that this summer or 12 next fall. So yes, we are very interested in 13 -- because frankly it only makes sense to go 14 that way if that system, if that process is 15 better than the existing one and so if there 16 isn't anything to be gained by going to an 17 electronic review, there is no reason to do 18 it. But I think that they are pretty -- they 19 are clearly are going to be some gains and 20 we'd be interested to see what the gains are, 21 the industry would like to see as well. 22 MR. BARNETT: Does anyone else have BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 175 1 a question before we close this one, yes? 2 MS. TRUNZO: One of the performance 3 goals -- 4 MR. BARNETT: Just for the sake of 5 the transcribers. We know who you are but 6 say it so. 7 MS. TRUNZO: I'm Janet Trunzo, with 8 AdvaMed. One of the performance goals, that 9 is -- does not take effect until '07 is not 10 one that we've not heard anything about and 11 that is the goal for PMA reviews and that 50 12 percent of the PMA reviews are to be reviewed 13 in 180 days, and my question to Donna-Bea is, 14 have you set up any tracking systems to start 15 to work at that and if so do have any data to 16 share with us on that thus far? 17 MS. TILLMAN: Yeah, the only data I 18 can give you is sort of anecdotal. If you 19 look at the slide that has all the little 20 bars for each bar, and it was hard to read, 21 is the PMA, you'll see that there's is a 22 pretty good chunk and I might -- if I had a BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 176 1 guess to make, I'd say that that was 2 somewhere just 30 to 40 percent of them that 3 are currently what we call kind of one-cycle 4 PMAs. We know that's a goal we have to meet 5 in 2007, we haven't -- we've been really 6 focusing on developing systems that are 7 enabling us to meet the goals we have to meet 8 more quickly, but we're certainly going to 9 have to try to think about what we need to do 10 for that. In the same way, when I talked 11 about the 510(k)s, I mentioned that the key 12 -- the key thing that occurs during the 13 510(k) review process is the decision about 14 whether the issues are significant enough to 15 require submitting an additional information 16 letter and stopping the clock or whether we 17 can work interactively with the company to 18 finish up those issues. And that's the same 19 kind of decision we're going to have to be 20 making, you know, with these PMAs in order to 21 do what you are saying. We're going to have 22 to get enough of them in that are complete BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 177 1 enough and that the remaining scientific 2 issues are minor enough that we can resolve 3 them interactively in order to make that 4 happen. And that's going to be something 5 that not only FDA has to have a stake in, but 6 the industry has to have a stake in because 7 if, you know, if all the submissions we get 8 in are -- have major kinds of deficiencies, 9 then it's going to be more difficult for us 10 to meet that goal. Hopefully Guidance will 11 help in that area. 12 MR. BARNETT: Other questions? If 13 not, we are right on schedule, it's time for 14 lunch now; we are due -- an hour and 15 15 minutes. In you package you will find a list 16 of restaurants here, there is also a 17 restaurant in the hotel, if you want to see 18 some of the others, walk out of the door turn 19 to your right and look around the lake. We 20 will see you back here then at 1:30. 21 (Whereupon, at 12:11 p.m., a 22 luncheon recess was taken.) BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 178 1 A F T E R N O O N S E S S I O N 2 (1:30 p.m.) 3 MR. BARNETT: Okay, we're back, it 4 was a great day out there, wasn't it? Hope 5 you enjoyed it. We're back now to look at 6 our third panel on Qualitative Performance 7 Goals. Let me introduce the panelists: Tim 8 Ulatowski is Director of the Office of 9 Compliance in CDRH, Mike Marcarelli is 10 Director of the Division of Bio-research 11 Monitoring within the Office of Compliance in 12 CDRH. Thinh Nguyen is director of the 13 Pre-market Approval Section with the Office 14 of Device Evaluation in CDRH. Dr. Mary Beth 15 Jacobs is the Associate Director for 16 Regulatory Affairs and Acting Deputy Director 17 with the Office of Blood Research and Review 18 in FDA's Center for Biologics Evaluation and 19 Research, and representing of AdvaMed is 20 Janet Trunzo, that organization's Executive 21 Vice President. Dr. Susan Alpert, was going 22 to be here but couldn't make it. So let's BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 179 1 begin, Tim, with you. 2 MR. ULATOWSKI: Excuse me, well, I 3 use a spare pair of glasses, my other ones 4 broke this morning, so I have to squint or 5 something and you know what's going on with 6 my eyes. Well, I think this is the first 7 time I've spoken to the MDUFMA annual meeting 8 as the Director of the Office of Compliance. 9 And let me begin with a couple of comments: I 10 think people hear Compliance and MDUFMA, I 11 think those are contradiction in terms to a 12 certain extent; and that's not entirely the 13 case as I'll describe in my presentation. 14 I think that my appointment to the 15 Office of Compliance as director is a signal 16 to the industry and to the agency that the 17 agency puts a lot of effort, will put a lot 18 of effort into the Pre-market review process 19 in regard to compliance activities, someone 20 who knows the Pre-market review process, 21 someone who now knows in much more detail the 22 compliance process and bring in those two BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 180 1 together much more effectively. 2 I heard this morning, perhaps some 3 implied notion about the resources that are 4 assigned to the Office of Compliance in the 5 MDUFMA funds. Well, I've to say that there 6 is an extremely rigorous process that's 7 employed in the center in regard to 8 evaluating what resources are needed to move 9 the Pre-market freight. So that's, there's 10 no real possibility for any -- for different 11 resources to really be devoted to other than 12 MDUFMA related activities, through all of 13 these multi layered reviews that we have. 14 And then in my base funding, if I call it 15 that, of course I've to take an additional 16 chunk out to support MDUFMA related 17 activities in terms of the inspections and 18 reviews of manufacturing supplements and 19 other items. 20 But with the remainder of the 21 compliance funds, let me just say that I hope 22 that the industry and others do not grudge of BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 181 1 the office as it supports its other 2 activities such as registration, listing so 3 that the industry can import products, for 4 example, that it expends resources on 5 preparing for potential terrorist threats; 6 that it expends resources in supporting the 7 public confidence in the manufacturing 8 sector, so you all can claim with pride and 9 honor that you're made in the U.S.A., and 10 that we're supporting the letters, many 11 letters, we get from you to check on your 12 competitors if they're doing something you 13 think isn't right. 14 So those are the other things that 15 we expend our money on. But let me go 16 through this slide show; and I'll expand on 17 some of the slides as I go through them. 18 Well, roughly, I'm going to talk about the 19 review process for PMAs at this point in 20 time. And very simply stated, the review 21 process consists of the receipt of the 22 manufacturing section within the office, the BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 182 1 review of the manufacturing section by my 2 office, assignment of the inspection to the 3 field staff through ORA headquarters, the 4 inspection that occurs, the inspection report 5 that's completed by the inspectors and goes 6 through the supervisory process in ORA, and 7 then the review of that reports by CDRH. 8 Now, you'll note that somewhat 9 different from ODE, device evaluation, is the 10 two major components and the agency will have 11 to come together and work smoothly to make 12 this happen in regard to GMP inspections, my 13 office and ORA's components headquarters and 14 the field staff. And I manage the Office of 15 Compliance; John Taylor, ORA. I'll say 16 without reservation, you've heard about my 17 commitments and the office's commitments to 18 the Premarket program. Likewise with John 19 Taylor who is completely committed to 20 supporting the MDUFMA process in regard to 21 Premarket activities. 22 The other aspect is, we talk about BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 183 1 inspections -- and I'll lead you through some 2 of the other activities that the Office Of 3 Compliance does, non-MDUFMA related or 4 supposedly so. But you should know or 5 perhaps you do know that when we get PMAs and 6 review the manufacturing section and look 7 towards assignment of inspections, we do look 8 back at inspection history to see in fact if 9 we had a recent inspection, what was that 10 outcome of that inspection, how related was 11 it to the product. And from time to time we 12 don't even have to do inspection. So those 13 other, what people thought were non-MDUFMA 14 related inspections, have a lot of value to 15 the Premarket process in terms of speeding 16 the process along. 17 Now, attaching some numbers to what 18 I just spoke about: The manufacturing section 19 review in the Office of Compliance is a 20 30-day process for what I call regular PMAs 21 and a 20-day process for expedited PMAs. 22 This is not a lot of time for my staff to BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 184 1 conduct an in-depth review of that 2 manufacturing section. And some of these 3 manufacturing sections are quite, quite 4 detailed. And 20 days certainly for 5 expedited. One thing with expedited is when 6 a PMA comes in, sometimes it's not identified 7 as expedited, and so we will continue as a 8 30-day review. But if it comes in upfront 9 identified appropriately as expedited, then 10 we'll give it the attention that it deserves 11 as an expedited PMA. 12 Now the inspection is either a 13 60-day process or a 45-day process depending 14 whether it's foreign or domestic. We've 15 instituted changes for the foreign inspection 16 process since it takes more time to get the 17 investigators arranged, schedule arranged, 18 and going to the sites, wherever they may be. 19 We push the assignment of the foreign 20 inspections up to just about day zero when we 21 get the manufacturing section. So we do the 22 assignment almost at day zero for foreign BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 185 1 inspections. And that assignment will 2 proceed while we're conducting the 3 manufacturing section review. 4 If something is wrong, major -- in 5 a major way with the manufacturing section, 6 we have the opportunity to stop the foreign 7 inspection assignment if that has to happen. 8 Forty five days for domestic inspections, the 9 assignment occurs during the review of the 10 manufacturing section. Now, completion of 11 the report by the investigator on the field, 12 30 days, and the review by my staff of the 13 inspection report, another 30 days. So we're 14 trying through -- if we had the numbers up, 15 we're under a 150. We're trying to align 16 ourselves with -- as Donna-Bea spoke this 17 morning with her timeframes in regard to the 18 important PMA review timeframes as she's 19 described. 20 Now, I don't have statistics here, 21 and I guess next year I'll bring some of 22 those to the table: it's not that they're not BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 186 1 great. In fact I think we made great strides 2 over the past couple of years in meeting the 3 sort of timeframes that we now described: the 4 thirty days for reviewing my staff, the 30 5 days after inspection. And ORA has made 6 great strides, I'll go over a little bit more 7 detail on that, just a moment. 8 We made some improvements: In the 9 office, as it's the center's priority, MDUFMA 10 is the key priority of my office. Now I'll 11 also add, as for ORA, certainly immediate 12 acute situations of public health importance 13 also rise to the top as you would expect. 14 So, we have to keep in mind the things that 15 will happen from time to time that direct our 16 attention elsewhere. But as much as we can, 17 these two co-exist as a primary activity of 18 the Office of Compliance and ORA. 19 Through our cooperations with the 20 ORA, with our district PMA coordinators now, 21 whereas there were none before, and so the 22 effort of ORA to identify people who will BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 187 1 shepherd the inspection process, monitor the 2 inspection process in the individual 3 districts is a great step forward in making 4 sure things happen and don't get derailed. 5 We have as you probably know now 6 manufacturing section guidance for people who 7 are contemplating PMA submissions. We also 8 correspondingly have -- and I left off this 9 slide -- manufacturing section internal 10 review guidance as well as internal guidance 11 for the review of the inspection reports that 12 come in at the tail end of the inspections. 13 And we train to that, we train 14 staff to those guidance documents to help 15 improve our efficiency and effectiveness, our 16 productivity in regard to getting the freight 17 through. Tracking is a problem as Donna-Bea 18 and others mentioned this morning. The 19 Office of Compliance has antiquated tracking 20 processes, resources, and we're making 21 efforts to improve those tracking resources. 22 One action we've implemented is updates on BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 188 1 status of inspections. We provide the status 2 to ODE, we will provide and we -- I think we 3 provide it now, maybe one or two reports in 4 our cycles, biweekly cycles -- these status 5 reports to ORA, so that we're in line with 6 ORA as far as what's on in the queue for 7 inspection. 8 There is areas for additional work: 9 one area is what I call firms not ready for 10 inspection. In some months we did biweekly 11 reviews with the senior staff in my office 12 going through each and every activity in the 13 office as far as pending inspection 14 activities. First thing we had our PMA 15 inspections and manufacturing section 16 reviews, EIR reviews related PMAs; that's 17 number one on the list. And in some months 18 100 percent of the inspections in the queue 19 are firms not ready for inspection. We've 20 already made assignments, they've been called 21 by the district as is the process, and 22 they're not ready. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 189 1 They're called again, they're not 2 ready, and some of the times when they will 3 be ready, it's not a matter of days or weeks, 4 it's a matter of months. That's an issue we 5 have to deal with on your side in the 6 industry, on our side on FDA. 7 Approvable pending GMP: How we 8 apply that action, when we apply it, is an 9 issue before us that we are in discussion. 10 So we're applying it appropriately, so that 11 there's no gamesmanship, to be frank, and 12 there should not be. 90-day waivers of 13 manufacturing sections, that's still a 14 possibility, an opportunity for 15 manufacturers, submitters of PMAs. If that 16 happens of course that delays the inspection 17 process and you're already on no goals in the 18 first 180-day cycle obviously. 19 External guidance: we have 20 additional guidance in process. I think 21 Linda alluded to this or maybe even stated 22 specifically that we have additional guidance BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 190 1 that relates to these process review time, 2 not just for GMPs but also BIMO. And I'll 3 turn it over to Mike. 4 MR. MARCARELLI: Good afternoon and 5 thanks for having me here today. I am going 6 to talk a few minutes about the Bio-research 7 Monitoring Program in CDRH and how the MDUFMA 8 initiative impacts our program. Today we'll 9 cover what our program goals are in BIMO with 10 respect to implementing MDUFMA. Some of the 11 program changes we've made which we think 12 will make our program more efficient and 13 facilitate the inspection and thus a review 14 of MDUFMA applications as well as some 15 program needs. 16 Well, first of all our primary goal 17 is a greater focus on MDUFMA submissions, 18 where we're focusing one group of people in 19 our office to handle these kinds of 20 applications to ensure that they are promptly 21 addressed, that inspection assignments get 22 over quickly and that the assessment and BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 191 1 review of the inspection report is done 2 properly and that information is then 3 conveyed to the ODE reviewer. And we want to 4 make sure that that's done as quickly as 5 possible so the reviewer can have complete 6 confidence that the information they're 7 reviewing is a complete and accurate 8 representation of what went on during 9 research process. 10 One of our program goals is to have 11 a preliminary compliance assessment no later 12 than day 80 for regular PMAs and day 70 for 13 expedited PMAs. Now this preliminary 14 assessment is going to consist primarily of a 15 483 from our field organization. So that's 16 what we're shooting for. And then we're 17 shooting to have a final assessment, final 18 compliance headquarters evaluation of the 19 inspections no later than day 120 for routine 20 PMAs and day 110 for expedited reviews. For 21 your convenience I just superimposed the 22 review cycle timeline on to the BIMO BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 192 1 timeline, and these are the days and the 2 goals that we're shooting for here. The 3 items in red are somewhat out of our control 4 and the items in black are pretty much what 5 they are here. 6 But as you can see what we -- we're 7 going to try to get the assignments out by 8 day 20, allow the field at least 60 days for 9 routine PMAs to get the inspection done and 10 get -- give us a 483, and then provide us 11 another 40 days or so to get the EIR in-house 12 and provide the summary to ODE. A lot of 13 this depends on some front-loading that we do 14 with the review division and we'll talk a 15 little bit more about that. 16 Some of the program changes that I 17 alluded to earlier, I'll talk in detail about 18 now: We've realigned our division, we've 19 created one whole branch that focuses solely 20 on MDUFMA based applications, and we've 21 culled out of that branch a group of people 22 who just handle compliance or For-cause type BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 193 1 inspections. So those are the inspections 2 that cause us a lot of heartburn, take a lot 3 of time, a lot of resources, and take away 4 from applications where that's not an issue, 5 and that's really the majority of the 6 applications that we get into our center. 7 Our inspectional focus has changed a bit on 8 MDUFMA based inspections. We're focusing on 9 data audits here. 10 The research has been closed for a 11 few years; it doesn't make much sense to 12 cover the entire compliance program. We're 13 trying to provide our field investigators 14 with specific information, specific data 15 points, that they'll cover during their 16 inspection. So they can get in, they can 17 check the more critical information, provide 18 that -- their feedback to us and then we can 19 give that feedback to the review division. 20 As I showed you on the timeline, there is 21 some front-loading involved with the ODE 22 review divisions. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 194 1 We've started as an outreach 2 program with the review divisions. We go out 3 periodically to talk with them about PMAs 4 that are in the pipeline, maybe PMAs of some 5 novel technologies that could prove to be an 6 advancement to public health or to medical 7 care in this country, and we try to schedule 8 those as quickly as possible and get the pump 9 primed within the headquarters office to give 10 our field organization enough lead time to 11 get this done. As you know the field has 12 competing interest out there and it's 13 important that what they receive from us is 14 substantive and important. 15 We've also implemented a program 16 that we call early intervention inspections, 17 and although it's not directly related to the 18 MDUFMA program, it could be. We're looking 19 at device research during real time: they can 20 work pretty much at human subject protection 21 issues and compliance with the protocol. 22 What we're trying to do out here is right the BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 195 1 ship before it gets too far off course for 2 one, and ultimately if these research studies 3 appear in marketing applications that are 4 before our review division, it may preclude 5 the need for additional BIMO inspections 6 during the review cycle process. 7 Also we're currently engaged in 8 ongoing dialogue with ORA counterparts and 9 headquarters, the device field committee, the 10 district offices, and so forth. Well, what 11 do we need? We need a commitment from 12 industry too; this is a shared process, we 13 can't do it alone in FDA. We need some buy 14 in from industry here. It would really help 15 us if you could communicate with the review 16 divisions as quickly as possible, when you -- 17 when you think you're going to filing the PMA 18 or a 510(k) application that has clinical 19 data in it. If you let them know that, they 20 will communicate that to us during our 21 outreach sessions, we'll be able to prime the 22 pump and get that all taken care of ahead of BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 196 1 time. 2 In addition to that when you 3 actually submit the application, it's 4 important that you include information that's 5 important for our field investigators to use 6 during their inspection. You have to 7 understand now, they're at a bit of a 8 disadvantage out in the field because when 9 they get an inspection assignment from us, 10 it's the first time they're -- they're even 11 aware that this device has been in research 12 or that we are even considering the marketing 13 application for it. So they need the prep, 14 the need the proper information, the proper 15 addresses, contact numbers; they need to know 16 what's in the protocols so they can focus on 17 the more critical safety and effectiveness 18 endpoints, as well as taking a look at all 19 informed consent documents that were used 20 during the research. 21 Also what's important for our 22 auditing purposes, to have a line listing of BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 197 1 data by site and subject included in the 2 submission. And I just threw a little board 3 in there about what else could industry do, 4 and this is just pretty much my personal 5 opinion, but we've talked with some industry 6 groups about the possibility of including 7 certified third party audits in your 8 submission. A lot of you already have. You 9 utilize a quality system approach, you have 10 internal audits, maybe you have external 11 audits from independent auditors. 12 And that information, if you were 13 willing to share that with us, may go a long 14 way in us determining that an inspection is 15 or is not needed. Of course we will reserve 16 the right to go out and verify whatever you 17 provide to us, but I know most people in this 18 room haven't been involved with for-cause 19 complaint type inspections, but this is a 20 normal approach that we use for those kinds 21 of inspections where if we have a question 22 about reliability, we ask a company to engage BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 198 1 a third party independent auditor to provide 2 us a clear and objective assessment of the 3 data, and that would go a long way for us 4 too. Well, if we do all this together, 5 what's the outcome? 6 Well, the BIMO process will be 7 primed, we'll have it primed in headquarters, 8 we'll have it primed out in the field, 9 they'll know something is coming out there, 10 they can schedule it ahead of time, they can 11 prepare ahead of time and they can spend as 12 little time as possible in your facilities, 13 and that's what we really want, right? We'll 14 meet the time frames which is certainly 15 important. We'll improve the confidence and 16 the research reviewers will -- would be very 17 happy to know that what they're presented 18 with is actually what occurred during the 19 research and they can base their scientific 20 decisions on valid and reliable data. And 21 also lastly, we're here to protect public 22 health and advanced public health, and one BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 199 1 way to do that is to get needy medical 2 devices to the market. Thank you. 3 MR. BARNETT: Thank you. Thinh? 4 MR. NGUYEN: Good afternoon. Thank 5 you for the opportunity to be here this 6 afternoon to talk, to update to you about the 7 modular PMA process. I've talked about this 8 process last year and I'm going to give you 9 an update today of what we're trying to do 10 and from the experience we learned in the 11 last year or so. When we -- the first 12 guidance document issues under MDUFMA with 13 the assessment user fee guidance document 14 that talk about the different types of 15 supplements and the modular program and the 16 expedited program and the bundling policy and 17 all that stuff, and in that guidance document 18 we requested you give us some inputs on the 19 modular program. 20 And there was two inputs that came 21 out of that request that I'll address today. 22 It wasn't addressed in our guidance document BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 200 1 because it's still pending: one is modular 2 program for panel track PMA supplements. In 3 our guidance today we say that that modular 4 PMA is only available for original PMA, not 5 panel track supplements. So we -- we have a 6 second look at that question raised by the 7 industry. The second is the fact that the 8 comment came in that stated that "90 days is 9 not adequate, we like to have it at 75 days 10 per review cycle." I'm going to try and 11 address both of these points today. 12 The first one is it's a good news; 13 Panel track supplements is now going to be 14 part of the modular review process if it 15 includes pre-clinical data. By that what I 16 mean is that if the panel track supplements 17 only contain clinical data, you cannot submit 18 different module with -- with -- divide the 19 clinical data into two different modules and 20 submit it, you know, one as a module, one as 21 PMA; that's not acceptable. If you have some 22 pre-clinical data, you can submit it as a BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 201 1 module before you come in with a clinical 2 PMA. 3 The second concept is one that came 4 out of DCD, Dr. Tillman now is office 5 directives -- and it worked effectively, 6 efficiently and not divisions. If you want 7 to implement that across the office and not 8 modules may be submitted at the same time if 9 it's acceptable to review divisions. In our 10 current guidance document we've stated that 11 the only module that can be reviewed with the 12 pre- clinical modules and is the 13 manufacturing module because it is reviewed 14 by the Office of Compliance. 15 What I've seen over the past year 16 or so is that teams are getting little bigger 17 than what it was before. Instead of 4-5 18 people, now you see 8-9 people per PMA team. 19 And some of those people came from other 20 offices like OSEL, for example. So what I 21 meant here is instead of submitting a 22 pre-clinical module, if you and the division BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 202 1 come to agreement that that pre-clinical 2 module could be split into two different 3 sections, for example, two different modules, 4 one include all the mechanical testing, one 5 include all the electrical testing: those two 6 modules could be submitted at the same time 7 because more than likely they're going to be 8 reviewed by two different people. 9 So I just wanted to make that point 10 clear. The other point is that even that 11 without said though, there should be a 12 90-days review time between the submission of 13 the last module and the submission of the 14 PMA; that's still in place. Next I'm going 15 to give you some data from the modular 16 program from FY'00 to FY'03. I don't have 17 data for FY'04, just because a lot of modules 18 are incomplete at this point in time. So any 19 d ata I'll give you will be incomplete data. 20 So approximately about 80 with 80-85 modules, 21 not (inaudible) module we receive per year 22 from FY 2000 to FY03, there's a drop in FY03, BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 203 1 as you can see. 2 The average review time per cycle, 3 it's not per module, it's per cycle, some of 4 the module will have one or two cycles, and 5 some have three or four, and as you can tell 6 from the slide, it's a little bit more than 7 the 90 days that we provided in our guidance 8 documents. I'll get into the reason why 9 that's a little higher than before in my last 10 couple of slides. The average review of 11 cycles approximately by 1.3; what this slide 12 basically tell you that 60 percent or 65 13 percent of the time, we finished review in 14 one cycle and it closed. The other 35 15 percent of the time it's approximately two 16 cycles. I want to spend the most time 17 talking about this particular slide, because 18 it shows you for the last -- for FY00 and 19 FY01, the 90 percent -- the 90 days mark is 20 about 50 percent time, so is FY02; track each 21 other pretty well. The 60 percent mark is 22 approximately a little bit higher than that BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 204 1 and then it goes up to about 120 by the 70 2 percent mark. For FY03 you see an increase 3 of 50 percent, it's 114 days, a 60 percent is 4 129 days, so it's rising in FY03, brought in 5 the other three years and the -- here is the 6 issues: according to the FDA guidance 7 document that we put out, we asked you to 8 limit the number of modules you submit to the 9 FDA and you have done that, so thank you for 10 doing that. 11 The number of modules are 12 decreasing per PMA; it's now 3 or 4 modules 13 and not 8 or 9 or 10. So it's much easier 14 for us to manage, for the division to manage. 15 But because of that -- that reducing the 16 numbers of, reduction in the number of 17 modules, the modules are not more complex. 18 You know, the modules are going to be all 19 pre-clinical data versus just bi-compatibilty 20 (inaudible) it did in the past. The data -- 21 the data also shows there's a wide 22 variability in the number of review days; BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 205 1 going anywhere from less than 30 days to up 2 -- to I've seen some modules that close out 3 in about 4-500 days. So the review time is 4 very unpredictable at this point in time. 5 And the other reason is the fact 6 that we spent a tremendous of resources in 7 FY03 toward meeting the MDUFMA goals. That's 8 probably the primary reason why you see -- 9 the surge in the -- rise in the number of 10 review days is because resources are pulled 11 from all the offices and go towards the -- 12 trying to meet the MDUFMA goals. 13 So, and according to the statute, 14 the performance goal letter, it's stated that 15 FDA will work with the stakeholder to come 16 out with a performance goal for modular 17 review. So I'm presenting you with two 18 options today. For FY0 -- the first option 19 is for FY06: 70 percent of the module 20 received will have an action taken by the FDA 21 within the 120 days of each review cycle. 22 These recommendations are based on the data BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 206 1 from FY03 that you just saw a minute ago. 2 And for FY07, it's 80 percent. If you take 3 this recommendations, the advantage is more 4 predictability, because you have high 5 percentage. But the disadvantage is longer 6 review time. 7 The alternative is to have a higher 8 percentage or lower percentage, so it's less 9 predictability but also a lower number of 10 days. At 90 days we can recommend 50 percent 11 for FY06 and 60 percent for FY07. And like I 12 said, the advantage is you have a shorter 13 review time but only at 50 percent, the other 14 50 percent, you're not going to know what 15 happened to those until we share the data 16 with you. So these are two options that we 17 propose today after looking at the data that 18 we had in the last four years. And I'm also 19 asking for any other option that you may 20 have, please bring it to us and submit it to 21 the MDUFMA docket and we will look at it and 22 evaluate it carefully and hopefully come to BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 207 1 an agreement with the stakeholder as to 2 what's an appropriate performance goal for 3 the modular program. I know industry in the 4 past have wanted 75 days, I just don't think 5 at this point in time that something is 6 feasible with the -- as you heard Dr. Tillman 7 this morning, the resources are at it's 8 maximum capacity right now. So I can't 9 recommend anything more than what I'm 10 proposing options one and two today. Thank 11 you very much. 12 MR. BARNETT: Thank you, Thinh. 13 Mary Beth? 14 MS. JACOBS: Good afternoon, I'm 15 happy to go through all the topics that our 16 CDRH colleagues went through from the CBER 17 point of view. First of all, modular PMAs: 18 CBER has two types of submissions; the PMAs 19 and the BLAs. And before I go to the PMAs, I 20 just want to make sure that those who haven't 21 dealt with us understand that we also have 22 BLAs, if you saw those described in the BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 208 1 number of this statistics. Those are the 2 kinds of applications that are used for the 3 license devices that are the test for 4 infectious diseases for donors of blood, and 5 they are used to make licensed blood 6 products. So the tests for HIV and 7 hepatitis, et cetera, as well as for blood 8 type are covered under BLA. So this will 9 cover only PMAs, and the HIV diagnostics are 10 assigned administratively to CBER because we 11 do so much work on HIV already. 12 So most of these PMAs that I'm 13 talking about are for HIV diagnostics, but 14 not all. So we have a small number of these 15 compared to CDRH. Since 2000, we've had 11 16 PMAs of which eight are modular. And we use 17 an approach similar to what Thinh is 18 describing that the module submission timing 19 is worked out with the review division. And 20 I'm showing you the same data that Thinh 21 showed. These are the numbers of modules 22 that we've had since 2000. And you'll see, BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 209 1 as Frank Claunts described earlier today, 2 that the workload is kind of variable by 3 year; it could be 6 to 21 modules. And if we 4 look at our review time, you'll see that 5 other than '02, it's been 51 to 81 days. 6 And I think, to be fair to our 7 colleagues at CDRH, part of this is because 8 we're dealing primarily with one product 9 class, HIV diagnostics. And if firms take 10 the time to call us, have a teleconference or 11 a meeting and discuss what their product is, 12 we've experience with this product line and 13 can give them good advice. So I'd like to 14 give us credit for doing the job to get these 15 done quickly but I'd also like to be fair to 16 them in the range of their product cycle. 17 Our cycle number is -- I think 18 you're going to see in all of these that '02 19 was a bit of an outlier year, but they're in 20 general running one to one-point-four. And 21 in terms of how long they've taken, they've 22 clustered around 90 days except for '02 where BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 210 1 we had some that went up substantially over. 2 So as we consider moving forward, in the 3 goals approach that were described by Thinh, 4 we're working with him on this approach to 5 modular goals. He's asked for comments that 6 we go to the MDUFMA docket on those goals, so 7 please send any comments that you like to 8 have on modular PMAs that would go to CBER to 9 the same docket, they would apply to both 10 centers. 11 And just to anticipate one point 12 that's on Dr. Susan Alpert's slides, we did 13 meet our non-modular cycle and decision goals 14 in '03 and '04. Looking at the GMP process, 15 we have the same basic process as what's 16 described by Thinh. In other words we have 17 received, we have done manufacturing review, 18 we have assignment to the field, we have 19 generation of the report by the field, and 20 then we have the review of the report in 21 house. We have one slight difference in that 22 our manufacturing review is split into two BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 211 1 different offices. We have our product 2 division doing manufacturing review and the 3 QSR review is split between our Office of 4 Compliance and the product division. 5 We're going to be evaluating our 6 timing compared to the timing that was 7 announced by Thinh and are going to be 8 working with the district PMA coordinators. 9 I asked our lead scientist who works on the 10 HIV diagnostics and our PMA coordinator who 11 does the assignments with the field, have you 12 had the kind of experience that they're 13 having in CDRH of having firms that are not 14 ready, and do you think that for inspection 15 when they're called, when we're ready, when 16 we finish the manufacturing review. And they 17 said this is happening frequently. Now, I 18 don't have a number whether frequently means 19 4 or 6 times out of 11. 20 But at any rate we're going to be 21 continuing to work with them with the CBER 22 contact as we have on all the other MDUFMA BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 212 1 related areas. In the BIMO process we have a 2 member from our BIMO staff on all of the PMA 3 and BLA applications, and the timing that 4 were announced by Mike, we're going to be 5 comparing that to the timing that we do as 6 we've discussed, we have a mid-cycle meeting 7 at which we assess what all the major issues 8 are. So we think that our timing is lining 9 up pretty well with theirs although we're not 10 doing exactly the same way. And again as 11 they're going forward with their discussion, 12 we're having a CBER contact with the BIMO 13 issues. 14 So I'd like to say thank you for 15 your attention and any feedback you've had on 16 these, I'd be happy to talk with you later, 17 or you can send your specific comments on the 18 goals into the docket as Thinh described, 19 thank you. 20 MR. BARNETT: Thank you, Mary Beth. 21 Janet? 22 SPEAKER: I'll just sit down here BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 213 1 so I could -- 2 MS. TRUNZO: Great, thank you. 3 Today, I'm going to be making DR. Alpert's 4 presentation. I am not going to be following 5 it precisely as the over -- the slides I have 6 shown here because I'm going to give it my 7 own little spin since this is my opportunity 8 to do so. 9 The purpose of this session is to 10 talk about qualitative performance goals, and 11 I'm going to ask a rhetorical question here 12 and I'm going to answer it: Why do we have 13 qualitative performance goals in MDUFMA user 14 fee program? And this was a very important 15 feature during the MDUFMA user fee 16 negotiations. And we -- and the industry 17 wanted to have certain other goals mentioned 18 in the -- in the goals letter, because what 19 our concern was, was that those types of 20 review activities that did not have a 21 quantitative performance goal associated with 22 it could have the potential of being BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 214 1 neglected. Because we understood that FDA 2 would establish tracking systems for all of 3 the quantitative performance goals and work 4 towards meeting those goals. But at the same 5 time, we had concerns about all the other 6 types of activities that could -- that would 7 not fall under those quantitative goals. 8 There are a number of goals listed in the 9 qualitative goals section of the goals letter 10 that is part of MDUFMA. I'm only going to 11 talk about a few of those today. 12 The first one that I think is very 13 important and it was one that was mentioned 14 earlier this morning in one of the FDA 15 presentations. The first one of those is 16 that for all of the activities that do not 17 have a specific time frames, all of those 18 reviews, 30 day notices, IDEs, real time 19 reviews, those kinds of submissions and all 20 the other activities, had to have maintenance 21 of current performance. That was key and 22 that's what I'm going to talk about a little BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 215 1 bit here in some of the areas that were 2 mentioned. 3 The second goal is the Pre-approval 4 inspection goal. It specifically states that 5 FDA will take steps to ensure that 6 pre-approval inspections are conducted in a 7 timely way, something like those words. I 8 might have taken a little liberal 9 interpretation here. And then the third of 10 those goals was the early collaboration 11 meetings, scheduling of those meetings, and 12 having those meetings in a timely way. I'll 13 talk a little bit about the -- and then the 14 fourth one was the modular review program and 15 that there was to be established, in 16 collaboration with stakeholders, a modular 17 review performance goal. 18 Now in Thinh's presentation today, 19 he talked about the fact that the number of 20 modules have decreased in '03 -- not sure 21 what the '04 number was -- if it was going in 22 that same downward trend; may be he can BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 216 1 answer that question during the panel 2 discussion. At the same time that the number 3 of modules have decreased, we have seen an 4 increase in the average review time. And 5 even though these, the number of these -- 6 Thinh provided a number of reasons why the 7 average review time has increased for the 8 modules most recently. 9 The most dominant of all of those 10 reasons is the fact that resources were 11 diverted from the modular review program to 12 areas where you had to get the goals met. 13 That is a little bit of an issue in that, as 14 I mentioned before, current performance 15 needed to be maintained. My expectation 16 would have been that the review times for the 17 modules in the '03 would be at least as 18 similar as review times for the modular 19 program in '02 with the time of MDUFMA. 20 AdvaMed submitted to FDA some 21 proposals as far as the modular review 22 program goes. The first of those proposals BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 217 1 was that modular review should be applicable 2 to Panel Track Supplements. And I applaud 3 FDA for agreeing to allow modular review for 4 Panel Track Supplements. I think that's a 5 very important step forward, very much 6 appreciate FDA going along with that 7 proposal. The second proposal that we made on 8 modular review was to have a performance goal 9 for modules in line with the qualitative 10 goals letter. 11 We proposed two goals: we proposed 12 a cycle goal and we proposed a module 13 close-out goal. The first action on a 14 module, our goal was to do it in 75 days. We 15 did not in our proposal give a percentage of 16 the time for that and that's something that 17 looks like -- is something to be considered 18 as to how we might propose a percentage of 19 time. And then the second part of the goal 20 was the close-out, kind of a -- equivalent to 21 the decision goals for the other types of 22 submissions. And for that, we proposed that BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 218 1 modules should be closed-out in 90 days. 2 So, our first response initially to 3 your proposals, both options one and two, is 4 that we're going to be proposing something 5 that is not option one or option two, okay. 6 All right, that's my modular review 7 statement. 8 Let's move on, pre-approval 9 inspections: In the presentations that I've 10 heard here this afternoon, FDA -- and I'm 11 very pleased to hear that FDA has set up 12 systems and a process by which the 13 pre-approval inspections are being scheduled 14 and that -- and a process by which the BIMO 15 inspections are being scheduled. And I'm 16 very pleased to hear the coordination between 17 the Office of Compliance with the -- with 18 ODE, I think that's a really important part 19 of the whole process and it's good to hear 20 that there is a systematic approach to this, 21 in order that the PMA approval goals would be 22 achieved. Our position has always been that BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 219 1 the approvable letter pending GMP should only 2 be used in cases when the company is not 3 ready, the facility is not ready for an 4 inspection. 5 Now, it was mentioned earlier that 6 there are cases in which the facility is not 7 ready for an inspection, but we did not want 8 to see the use of the approvable GMP letter 9 as a means to stopping the clock, the review 10 clock in order to meet goals. So it appears 11 that FDA has taken this very seriously and 12 has set up systems and I'm very pleased to 13 hear that. I appreciate that and applaud you 14 for doing that. 15 The other area that I mentioned in 16 the beginning was that there was the third 17 element of the -- fourth qualitative goal; 18 and that was scheduling of early 19 collaboration meetings and having those 20 meetings in a timely way. These are the 21 pre-submission meetings, the determination 22 meeting, and the early agreement meeting or BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 220 1 IDE, pre-IDE meeting. 2 Those meetings are very important 3 to ensuring that the PMA approval times are 4 consistent with the goals, and it is 5 important that those meetings are scheduled. 6 I know that the reviewers are very busy with 7 trying to do the reviews in a timely fashion, 8 and perhaps the collaboration meetings are 9 not high on the priority list, but I would 10 encourage the scheduling and timing of those 11 meetings to be in line with the qualitative 12 goal that was mentioned in the goals letter. 13 So I think I'm going to conclude there. I've 14 touched all four of the qualitative goals and 15 why there is a need for qualitative goals, 16 and someday may be qualitative goals are 17 going to become quantitative goals. Thank 18 you. 19 MR. BARNETT: Okay, we do have some 20 time for questions although we're running 21 slightly behind time. Anybody want to step 22 up and ask one? I would ask one I think and BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 221 1 that is, somebody talked about foreign 2 inspections, what about PMA inspections for 3 foreign firms as compared to domestic ones? 4 Are they, are they taking longer or about the 5 same? Anybody? 6 MR. ULATOWSKI: Well, as a lot of 7 you know, foreign inspections is another 8 animal compared to domestic inspections. As 9 far as scheduling the inspection and the 10 problems that occur with foreign travel these 11 days, in these troubled times. So, first 12 thing we've had instances where the foreign 13 inspections had been delayed because of 14 travel restrictions or other situations like 15 that. On the whole though despite some 16 issues in regard to foreign inspections, 17 we've been able to stay within the window of 18 approval for the PMA is because the PMA was 19 hung up on other issues, clinical issues or 20 other issues that enabled us to work with 21 that time delay and actually get the 22 inspection. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 222 1 And so the short answer is, yes, 2 there are problems, there will continue to be 3 an issue. And likewise with domestic: I'm 4 not -- I don't want anyone to get the 5 impression that getting appropriate people 6 out for a domestic inspections is not an 7 issue from time to time, because of the 8 issues that occur, that -- that happen in 9 terms of public health, high risk issues that 10 occur. 11 MR. BARNETT: Tim, you talked a 12 couple of times about a firm not being ready 13 -- 14 MR. ULATOWSKI: Yes. 15 MR. BARNETT: -- For an inspection. 16 What happens, do you actually cancel the 17 inspections sometimes, and then what happens 18 to the clock? 19 MR. ULATOWSKI: Well, we've kept -- 20 we've kept people in the queue. "We" being 21 actually ORA, because it's the inspection 22 process for ORA and the queue, and their BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 223 1 queue for inspection. Well, we've been 2 having discussions about modifying that 3 because of the extreme delays of some of the 4 folks that have been delayed. But when we -- 5 if we take -- would happen to take someone 6 off the queue, if that would happen, then we 7 have to have ample opportunity and notice to 8 get someone back on the queue because the 9 inspection process can't turn on a dime. 10 When that site will be ready, we 11 need to know as well in advance as possible 12 so that we can get things scheduled. We 13 can't get someone out the next day, if 14 they're ready. So six weeks, eight weeks, 15 whatever the process will be to get process 16 going for people not ready, who will get off 17 the queue and then get back on the queue in 18 good order. And we won't take someone off 19 willy-nilly. We'll communicate with them 20 about the status, the progress, when they 21 think they are going to be ready, and keep 22 them in the queue if it's going to be a short BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 224 1 period of time. But what I'm talking, these 2 people are months and months out, trying to 3 get things done. 4 MR. BARNETT: Thanks. One more -- 5 one more opportunity. Anybody with a 6 question? If not, thank you very much, 7 panel, and let's get our next panel up here. 8 Okay, this is our panel. Are we all here? 9 SPEAKER: Yes, we are. 10 MR. BARNETT: This is our panel on 11 the Third Party Inspection Program. Let me 12 introduce the panelists: Kara Lynch is the 13 Special Assistant to the Director in the 14 Office of Regional Operations with FDA's 15 Office of Regulatory Affairs or ORA. 16 John Stigi is the -- with the 17 Office of Communication, Education and 18 Radiation Program. I said the longer title 19 earlier, I can't do it twice in one day. Jan 20 Welch is the quality system (IVD) expert with 21 the Office of Compliance in CDRH. 22 And representing AdvaMed and the BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 225 1 National Electrical Manufacturers Association 2 or NEMA, is Diane Wurzburger who's Director 3 of Health Policy and Reimbursement with 4 Siemens Medical Solutions. So let's begin, I 5 guess with, with Kara? Thanks. 6 MS. LYNCH: Can you hear me now? 7 Better? 8 MR. BARNETT: Yes. 9 MS. LYNCH: Okay, I'm here to talk 10 about the inspections by Accredited Persons 11 Program today, and I'll start with an 12 overview purpose of the program. I'll 13 quickly touch on some of the features of the 14 program, talk about the current status, and I 15 will leave you with some contacts and 16 resources in the case that you have questions 17 or concerns about the program. 18 Now, as many of you know, the goal 19 of the Accredited Persons Inspections Program 20 is to save time and save resources. On the 21 manufacturer's side, the program would allow 22 the scheduling of Accredited Persons and BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 226 1 other inspections by regulatory authorities, 2 hopefully at the same time, therefore saving 3 them time in the inspection process. On the 4 FDA side, the program, once it's fully 5 implemented, would hopefully enable us to 6 more efficiently use our resources. It would 7 allow us, potentially, to go visit firms, do 8 inspections of firms that we otherwise might 9 not be able to, and thus would result in us 10 having more information about more firms in 11 general. 12 As you know, the AP Inspection 13 Program was authorized under the Medical 14 Device User Fee and Modernization Act of 15 2002, and it tells FDA to accredit third 16 parties or accredited persons to conduct 17 inspections of eligible manufacturers of 18 Class II and Class III devices. Now the 19 process for inspection as it would happen, in 20 a simplified version: an eligible 21 establishment would select an accredited 22 person from the list that CDRH maintains on BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 227 1 their website of accredited persons. Those 2 two parties would get together and negotiate 3 amongst themselves a fee for this inspection. 4 FDA would not be funding these inspections 5 nor would we be involved in the negotiations 6 for the fee. 7 The firm would then make a formal 8 request to FDA to use the accredited person 9 and FDA would evaluate that request and 10 either approve or deny it. And assuming 11 approval, the accredited person would then 12 schedule an inspection and assess the quality 13 system at the establishment. The AP would 14 then prepare a report based on a format that 15 FDA has been training the auditors to use, 16 and then submit that report to FDA as well as 17 the establishment. FDA would then make their 18 final compliance determination based on that 19 report. 20 It's interesting to note that the 21 accredited persons are held to a very strict 22 Conflict of Interest Provision that is not BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 228 1 dissimilar from the one that is utilized for 2 FDA employees. It's also important to note 3 that pre-approval bioresearch monitoring in 4 for-cause inspections would continue to be 5 conducted exclusively by FDA. And FDA does 6 retain the right to inspect in accordance 7 with Section 704 of the Act. So even if we 8 had approved the use of an accredited person, 9 we would still have the authority to do an 10 inspection. 11 Now as you probably are aware, in 12 January there were technical changes that 13 were made to the legislation and some of 14 those impacted eligibility, hopefully making 15 it easier for establishments to overcome the 16 burden of meeting these requirements to 17 participate in the program. Some of the 18 things that didn't change were that their 19 most recent FDA inspection had to have been 20 classified, finally classified, as NAI, No 21 Action Indicated, or VAI, Voluntary Action 22 Indicated. They have to market a Class II or BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 229 1 III device in the United States, and market 2 or intend to market one or more devices in 3 one or more foreign countries. 4 Some of the changes occurred in the 5 next two items. The accredited person is 6 certified, accredited or otherwise, 7 recognized by one of the foreign countries as 8 a person authorized to conduct inspections 9 and/or the laws of one of the foreign 10 countries where the device is or is to be 11 sold recognizes an inspection by FDA or by a 12 person accredited as described in the Act. 13 Now, the accreditation criteria was 14 initially created and issued in April of 15 2003. The guidance for industry was 16 published on April 28th and it described the 17 criteria that was to be used by our third 18 party review board in reviewing the dossiers 19 of candidates for the program. And it was 20 utilized in the first year to accredit the 15 21 people. We were initially limited to 15 in 22 the first year, so it was used to accredit BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 230 1 all the applicants we got. We ended up with 2 15 applicants being listed. After that 3 process, I think we found some areas that the 4 guidance criteria could be tightened up a 5 little, so the guidance was revised and 6 re-issued on October 4th of this year. And 7 the guidance can be found at the website I 8 list here on the slide. 9 Some of the milestones we've made: 10 on October 24th, we listed our first 15 11 accredited persons. CDRH maintains a website 12 on which the list is maintained. And as I 13 mentioned during the first year, we 14 accredited just 15 parties. It's interesting 15 to note, 9 of them were foreign based and 6 16 of them domestic; however, their auditors are 17 located all over the globe, they're not 18 necessarily based where their headquarters 19 are. As of April 28, 2004, new applicants 20 could apply for accreditation under the 21 program, and I know in October this year, we 22 did add one additional accredited party to BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 231 1 the list. 2 Relative to training; there are 3 strict training requirements for the 4 accredited person auditors under this 5 program. It includes classroom training, 6 which is both FDA classroom training and AAMI 7 training, and it also involves joint 8 performance audits. And in January of this 9 year, we had our first classroom training. 10 It involved 43 auditors and all of them 11 successfully passed the final exam that we 12 gave at the end of it. 13 At that time approximately one 14 third of those trainees had also completed 15 the other classroom training part of it, the 16 AAMI training, and thus upon completion of 17 that training were eligible to start their 18 joint audits with FDA. It's interesting to 19 note that some of the APs have also hired, 20 auditors that are also qualified under the 21 MRA program. And they have had under the MRA 22 program, those auditors would have had BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 232 1 similar FDA classroom training and they would 2 have had the same AAMI training. 3 So what we did was we evaluated the 4 MRA training versus the AP training and 5 decided that the one significant difference 6 in those two training programs was relative 7 to evidence development, and we developed a 8 module that we provided to the MRA auditors 9 in February of 2004. All of those auditors 10 successfully completed that training and the 11 associated exam. So we have -- you can do 12 the math -- 59 candidates total, although 13 through attrition we've lost six candidates, 14 about ten percent. 15 Where we are today? Current status 16 is that we have 4 accredited person firms who 17 have two auditors each who have completed all 18 of the FDA's required classroom training and 19 the joint audits and are able to conduct 20 independent inspections. In addition we have 21 gone to approximately half of all the 22 eligible auditors to conduct at least their BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 233 1 first joint audit. There are three joint 2 audits in the process, so they've all -- at 3 least half have conducted at least their 4 first joint audit. Most of the people that 5 have completed all of the audits and the 6 classroom training were from the MRA program, 7 because under the MRA program we have the 8 similar performance audit process, so those 9 people had sort of a step up on the game. 10 We have had some difficulty in 11 scheduling these joint audits, and the major 12 problem we've had is relative to finding 13 firms who are willing to host a joint audit. 14 The firms have to agree in advance of the 15 inspection to host a joint audit and sign a 16 waiver, because the AP auditors are not 17 entering the establishment under any FDA 18 jurisdiction. In addition we had a lot of 19 requests for foreign audits, and while we'd 20 like to fulfill those, we do have resource 21 restraints in the foreign arena. We do far 22 fewer foreign inspections than we do BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 234 1 domestic, and therefore we try to prioritize 2 those based on pre-approval and for-cause 3 type work. So just for the firms to 4 participate they have to meet eligibility 5 requirements, and not all the firms in the 6 foreign arena do. So that is -- has been a 7 stumbling block for us as well. 8 How can industry help? We're 9 hardly encouraging any qualified 10 manufacturers to consider hosting a joint 11 performance audit for us. They would have to 12 be a Class II or Class III device 13 manufacturer; their last FDA inspection would 14 have had to been finally classified as NAI, 15 No Action Indicated, or VAI, Voluntary Action 16 Indicated and it would have had to have been 17 completed within the last 20 months or so, 18 which would give us a little lead time to 19 planning it. 20 And if you know of any 21 establishments that are interested, they 22 should feel free to contact the Office of BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 235 1 Regulatory Affairs, Division of Field 2 Investigations; and their contact information 3 is here on this slide. The Division of Field 4 Investigations has been the lead point in ORA 5 for implementing the AP Inspection Program, 6 and as you can see there's an e-mail address, 7 a phone number and a fax, and if you have 8 questions or concerns about this process, 9 feel free to give them a call. 10 And in addition I'll close by 11 listing the CDRH website. They do have a 12 MDUFMA page -- devoted to MDUFMA page which 13 is helpful, and I've also listed Division of 14 Small Manufacturers. And I don't even know 15 your new acronym, I'm sorry. International 16 Constituent -- something like that: DSMICA, 17 they're always helpful. John will always 18 find the answer for you if he doesn't know it 19 himself, so thank you very much. 20 MR. BARNETT: Thank you, Kara. 21 John? 22 MR. STIGI: Well, that wraps up BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 236 1 FDA's side. 2 MR. BARNETT: Okay, you don't want 3 to define DSMICA, right? 4 MR. STIGI: No, what everyone -- 5 MR. BARNETT: Okay. 6 MS. WURZBURGER: Thank you. Good 7 afternoon, I'd like to thank the Agency for 8 giving me the opportunity to join you this 9 afternoon and to provide some comments from 10 industry's perspective on behalf of AdvaMed 11 and NEMA jointly. The program has been 12 developing a little slowly, and unfortunately 13 to my dismay and my overhead, little slower 14 than indicated by that date up there of May 15 23rd, 2004. The response to the draft 16 guidance that FDA had released regarding the 17 implementation criteria for APs, back in 18 April 2003, industry did submit comments 19 summarizing some of our concerns with that in 20 May of 2003, so it's been a little bit 21 further back than 2004. I don't even have an 22 excuse with January time frame right, in BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 237 1 typing out -- the new date. 2 We were very pleased however, in 3 looking through this guidance in the release 4 recently in October of this year, to see that 5 FDA had considered much of our 6 recommendations and had incorporated many of 7 the changes that we had pointed to, including 8 those related to the expansion of the 9 compliance scope both for the data that was 10 being requested from industry as well as the 11 data that the third parties would be allowed 12 to, or permitted to, investigate on their 13 inspections. And that's been brought back to 14 what we believe to be the legislative intent, 15 focused on the Quality System Regulation, 16 which is very positive. 17 We also have noted, and very 18 positively also, the allowance by the agency, 19 the recognition that the inspections that are 20 being conducted can be done so 21 simultaneously, both with the agencies, third 22 party programs as well as those third party BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 238 1 inspections that are happening outside of the 2 FDA program. So that's very positive. 3 Although we would like to emphasize again the 4 need to have a flexible program in terms of 5 scheduling and timing for the reports that 6 fall from these inspections. 7 As you know, third party 8 inspections who are conducting these 9 inspections and the ISO requirements are 10 doing several inspections perhaps over the 11 two year time period where there are pieces 12 of those reports that are provided today to 13 the manufacturers, and we'd just like to 14 ensure that as we are moving forward and 15 inspections can be done simultaneously by a 16 third party representative as well as a third 17 party ISO inspection, that there's also a 18 recognition of the reporting on the 19 submission time frame as well. There was a 20 guidance also released by the agency in June 21 of 2004, which provided the criteria for 22 manufacturers when they were requesting BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 239 1 inspection by an AP. And again industry 2 provided their comments back in August of 3 2004. 4 Touching on a few of the same items 5 as we had earlier, including the allowance of 6 cumulative inspections which again we're very 7 pleased to see that there's been some 8 recognition of that, but once again making 9 sure that we're seeing the other piece of 10 that which includes the reporting completion. 11 Also our need to ensure that the language is 12 clear within the guidance, that there's no 13 re- application necessary for these different 14 inspections that are having -- happening over 15 a two year period, if there are multiple 16 inspections, that there's not a need to re- 17 apply within that two year period again, the 18 application process would be very burdensome 19 for all, I think, involved. And also it 20 would be helpful to see an explicit statement 21 within the guidance that these inspections 22 conducted through the AP system also satisfy BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 240 1 the requirements, statutory requirements, by 2 FDA. 3 We are still waiting for a response 4 to the comments that were provided and are 5 looking forward to seeing the next version of 6 this draft from the agency. Just to review 7 again, which I think was done very well 8 earlier, the program intent and our interest 9 in this program again was to ease the overall 10 regulatory burden both of industry as well as 11 FDA. Of course FDA can, we perceive will 12 have more efficient use of their resources, 13 but also from the industry perspective, our 14 ability to more efficiently manage our 15 inspections as well is very important to us 16 and really needs to -- it drives home the 17 points, the system needs to be flexible. We 18 also, of course, are very interested, and 19 have been all along, in the harmonization of 20 this with our existing -- with the existing 21 third party program. It's very important to 22 us that these systems work together, so that BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 241 1 there's the ability to work within process 2 that's been established now within the 3 industry. 4 And the point, of course, that the 5 program is voluntary. So we're hoping that 6 as we look at the program, as it develops, 7 that it's not too burdensome for industry so 8 that we can take advantage of it. And from 9 the future perspective from industry, we will 10 of course subscribe to the program, again if 11 it's not too complicated or time consuming or 12 expensive for us, and the burdensome issue is 13 something that we have to weigh very 14 carefully. And AdvaMed and NEMA will 15 continue to support the benefits of the 16 program and encourage membership to 17 participate as the program develops. Thank 18 you. 19 MR. BARNETT: Thank you, Diane. 20 Well, now we are ahead of schedule. I can't 21 keep track of this. First we're behind and 22 then we're ahead. Well, that's good. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 242 1 Questions? Anybody? Well, if there's no -- 2 I'll ask one then. How long is it going to 3 take for the Accredited Person's Program to 4 get under way? I mean we're not doing it 5 now. What do you predict? 6 MR. STIGI: As Kara said, we have 7 four bodies out there right now that are 8 accredited actually under both programs, 9 under the MRA and the AP programs that can do 10 independent work for FDA right now. It was 11 just a matter of -- 12 MR. BARNETT: Does that help? Go 13 ahead. 14 MR. STIGI: Anyway, most 15 importantly, working with the remaining 16 bodies to host some joint inspections with 17 them, so they can be qualified. Our plan is, 18 within about the next week or so a letter 19 should be going out from Steve Niedleman, the 20 Assistant Commissioner for Regulatory 21 Affairs, to all of the APs and also to the 22 Class II and III manufacturers, again, BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 243 1 encouraging the manufacturers to use the 2 program, volunteer to host inspections and 3 also letting the APs know what our 4 expectations are of them. And so hopefully 5 that will jumpstart things. 6 MR. BARNETT: Yes, please. 7 MR. BRITAIN: Hi, I'm Bob Britain 8 with NEMA. For the folks in FDA, is it clear 9 to you what we mean by carrying out 10 inspections over a two year program, a two 11 year period, and that one CE mark inspection 12 or ISO inspection will be done over a 13 two-year period with maybe four visits? Is 14 it clear to you that we want to be able to do 15 the FDA inspection in four pieces to 16 culminate at the end of that two-year period 17 where you would get a complete report? You 18 may get summary reports after each one of 19 four -- of the four semi-inspections of them. 20 I just want to make sure that that's clear 21 and that somehow it shows up like that in the 22 next document we see. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 244 1 MR. STIGI: Well, we tried to 2 address that in the most recent, the October 3 4, 2004, document. I don't know if you had a 4 chance to take a look at that one, but we 5 clearly show that -- again, these would be in 6 lieu of the biennial inspections, we made 7 that clear. We also wanted to make it clear 8 that it would not necessitate re- 9 application. I mean, there was some concern 10 about re- applying. So that you would apply 11 once and multiple inspections done over that 12 two-year period would be fine, you wouldn't 13 re-apply for each one. 14 We're not specific, some say they 15 can do it in two inspections, others say 16 four. We know there will be a number in 17 there. And we would expect a write up, you 18 know, at the conclusion of each section of 19 the audit. So we're pretty clear on that. 20 MR. BARNETT: Anything else? 21 Anyone with a question? 22 MS. WURZBURGER: I actually do. Is BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 245 1 there a date for the next draft of the 2 manufacturers' criteria? The second guidance 3 that was released or -- 4 MR. STIGI: We have no -- well, you 5 might be referring to the June 3rd document, 6 because that was a draft document? 7 MS. WURZBURGER: Yes. 8 MR. STIGI: Yeah, I don't know what 9 the plan is for going final with this 10 document. I believe we've gotten -- the 11 comment period ended and we'll be looking at 12 the comments that have come in. But, again, 13 realize that they support one another, and I 14 think a lot of the NEMA concerns were 15 addressed in the latest October 4th document. 16 MR. BARNETT: Anything else? Well, 17 if not, we'll go for a 15 minutes break. 18 It's now 10 minutes to 3:00, so why don't we 19 meet at 3:05 back here? See you then. 20 (Recess) 21 MR. BARNETT: Okay, let's get 22 started again. All right. Okay. Now BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 246 1 because we are a little ahead of schedule, 2 which I thought was a good thing, it turns 3 out it's not so good may be because two of 4 our panelists are not here yet. And so we 5 are going to turn things around and we were 6 going to have a kind of open mike session at 7 the end, and instead of that let's have it 8 now and then that will give our missing 9 panelists a little time to get here. So let 10 me see if anybody here that wants to talk in 11 a general way about MDUFMA; ask questions, 12 make comments? Dan? 13 MR. SCHULTZ: We want to wait -- 14 I'm going to sit here in between my two 15 friends. We're going to wait a little while 16 for the Reuse Session was scheduled to start 17 at 3:30 and some of the people that were 18 supposed to participate are keeping to that 19 schedule even though we are ahead of time. 20 So what I'd like to do is see if there are 21 any other comments, questions, discussion 22 points from any of the other sessions, here's BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 247 1 your chance, you know, if I can't answer your 2 question there -- we will find somebody who 3 can, and we are interested in any comments on 4 any part of the session today. I will, let 5 me start off by, making a couple of remarks. 6 First of all, I'd like to thank you 7 again for attending this session, there was a 8 lot of very, very useful discussion, and 9 believe me, we were listening, I was 10 listening and I think that there is a lot 11 that we can take home in terms of ways that 12 we can work together to make this program a 13 success. I tried to be and intentionally was 14 a bit provocative this morning and I 15 recognize that in terms of the urgency and 16 the passion that I feel in terms of the need 17 to make this program work and the need not to 18 do anything that would jeopardize its 19 existence and its continuance, because I 20 really do think that we are on the brink of 21 some really great changes at CDRH and at CBER 22 that will make the device program a lot BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 248 1 better in the future and for a long time to 2 come. 3 And I also believe the opposite is 4 true were this program to disappear in 5 October. So, you know, that was the spirit 6 in which those remarks were made. I do think 7 again within the -- within the frame work of 8 the legislation, there is a lot of room, a 9 lot of room as there usually is with CDRH for 10 people to come to the table and discuss 11 things, provide us with ideas. If there are 12 areas that we haven't focused on, and I heard 13 a couple this morning, the 50 percent goal 14 was something that we really haven't even 15 started working on yet, the concern about 16 outliers and other submissions that we really 17 could, I think, focus on and figure out ways 18 to deal with. I think there is a lot of 19 areas within the confines of the general 20 concept of the bill the way it exists today 21 that we can work on together and we can 22 hopefully provide answers to some of those BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 249 1 questions and figure out ways to make the 2 legislation work better for all of us. So I 3 just wanted to sort of provide that as a sort 4 of addendum to what I said this morning. And 5 with that I will sort of open it up and see 6 if anybody has anything else that they would 7 like to say. 8 SPEAKER: Okay. While we try that 9 -- 10 MR. BARNETT: One thing we could do 11 is start out and have the FDA folks on this 12 panel go ahead and present their material 13 while we are waiting for the missing 14 panelists. That sound okay? 15 MR. SCHULTZ: No, wait, there's 16 somebody there. 17 MS. HOUGHTON: Yeah, I thought I'd 18 be brave; I'd throw out a question. Has 19 there -- and this is really out of the blue 20 but I am curious -- has there ever been any 21 discussion or thought given to imposing 22 performance goals for the review of BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 250 1 Combination Products as a group, as a 2 category? 3 MR. SCHULTZ: Well, it was not -- 4 what? They apply? Okay so yeah -- did you 5 hear that? If it's a PMA, the PMA goals 6 apply even if it's -- 7 MR. BARNETT: Go to the mike okay, 8 because no one else can hear. 9 MR. SCHULTZ: That's very, very 10 true and those will be challenging, and 11 probably most of the combination products or 12 many of the combination products will in fact 13 not only be applied to the PMA goals, to the 14 standard PMA goals, but I suspect a lot of 15 them will apply to the expedited goals. So I 16 think again, yeah, that they are going to be 17 -- there are going to be challenging reviews, 18 but the review time frames still apply. Is 19 Mark Kramer here? No. 20 MR. BARNETT: Go to the mike. 21 MS. KAHAN: Can you hear me? 22 SPEAKER: Yes. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 251 1 MS. KAHAN: I think a big part of 2 the input is behind setting up the office of 3 Combination Products, and I guess I really 4 need to hear from industry folks about 5 whether we've got this right is just the 6 concern that you raised that when there is a 7 Combination Product that does have this more 8 complex need to collaborate not only within a 9 center but across centers, that there would 10 be somebody who would have responsibility for 11 making sure that those time frames happen, 12 and that the places where you would expect 13 there might be a slow down, would in fact not 14 happen. So I think that a big part of what 15 we hope we'll accomplish by having this new 16 office and what's already done is really to 17 bring all the people together who have to 18 work on this review and make sure that the 19 time frames do keep moving so that we are on 20 top of it. 21 MR. BARNETT: Okay. Let's go 22 ahead, we'll introduce the panel now, okay. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 252 1 This is our panel on Reuse, and for the FDA 2 we have Barbara Zimmerman who is acting 3 Deputy Director of The Division Of 4 Cardiovascular Devices in ODE. Steve Turtil, 5 a biologist in the Division of NSE's(?) 6 Geology General Hospital, Infection Control 7 And Dental Devices. Ginette Michaud, acting 8 Chief of the Infection Control Devices Grant 9 in the Division of NSE's Geology General 10 Hospital Infection Control And Dental 11 Devices. We have Larry Spears who is Deputy 12 Director of the Office of Compliance in the 13 FDA Center For Devices and Radiological 14 Health. Bob O'Holla representing AdvaMed is 15 Vice President, Regulatory Affairs, with 16 Medical Devices Diagnostic group with Johnson 17 and Johnson. Is Naomi Halpern in here? 18 MS. HALPERN: I'm here. 19 MR. BARNETT: Good you are, great. 20 Naomi Halpern represents the Association of 21 Medical Device Reprocessors; she's a Senior 22 Associate with the law firm of Olson Frank BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 253 1 and Weeda. And is Jennifer Mallard here? 2 Not yet, okay, so may be -- 3 MS. HALPERN: I hear she's on her 4 way. 5 MR. BARNETT: On her way, okay, so 6 she'd probably be here by the time we reach 7 her. Okay, and Mark Leahey rejoins us with 8 MDMA. So let's start out there at this end 9 of the table with Barbara. 10 MS. ZIMMERMAN: Good afternoon. 11 Can everyone hear me? Great. I'm going to 12 cover what the section 302 from MDUFMA -- the 13 summary of section 302 from MDUFMA, which was 14 the description of the requirements for the 15 Reprocessing of Single-Use Medical Devices. 16 Briefly, this section discuss that 17 certain reprocessed Single-Use Devices 18 identified by FDA must include validation 19 data, and that this validation data should 20 include cleaning, sterilization, and 21 functional performance data demonstrating the 22 substantial equivalence of them. The BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 254 1 requirements according to MDUFMA were that 2 for reprocessed Single-Use Devices which are 3 exempt from 510(k) requirements, we determine 4 which of the critical reprocessed Single-Use 5 Devices are no longer exempt. So these are 6 -- well, I am discussing in this slide the 7 exempt devices, in the next slide I will 8 discuss the non-exempt devices. 9 On April 30th, 2003, there was a 10 Federal Register notice that included List-I, 11 which was the list of devices that no longer 12 would be exempt from pre-market review and 13 would require the submission of a 510(k) with 14 validation data. There was several devices 15 listed there and it was entitled, List-I. On 16 June 26th, 2003, there was an amendment to 17 List-I that added non-electric biopsy forceps 18 to that list. The due date for validation 19 data to be submitted to FDA was July 30th for 20 those that were on the list on April 30th and 21 it was September 26th for the non- electric 22 biopsy forceps that were added later. I'm BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 255 1 sorry, that's correct. Now I'm going to talk 2 about the non-exempt devices that already 3 required a 510(k) submission, many of which 4 we had seen by the time MDUFMA went into 5 effect. We were asked by MDUFMA to determine 6 which non-exempt reprocessed Single-Use 7 Devices required validation data? And by 8 using the review prioritization scheme which 9 was published in a draft guidance previously 10 in the year 2000, we applied that criteria 11 and came up with what we call List-II. And 12 List-II included the devices that needed 13 validation data submitted to the 510(k) 14 applications. We called these -- we called 15 these applications that came in, Supplemental 16 Validation Submissions. And they were 17 validation data that was added to the 18 existing 510(k) that we had for those 19 devices. The due date for that validation 20 data was to be submitted to FDA by January 21 30th, 2004, so almost a year ago. 22 For the reprocessed Single-Use BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 256 1 Devices which were exempt from 510(k) 2 requirements, we were also asked to evaluate 3 the semi-critical devices. This was the 4 second step in implementing the requirements 5 of MDUFMA. On April 24th, 2004, we amended 6 List-I again and included additional devices 7 that were considered semi-critical devices 8 that now require the submission of a 510(k) 9 with validation data. This data is to be 10 submitted to FDA by July 24th, 2005. 11 I'm now going to summarize here on 12 this slide the categories of comments that 13 we've received since the last Federal 14 Register notice which was the Federal 15 Register notice where we listed the 16 semi-critical devices on List-I. These were 17 the comments that have come in since that 18 time. The reason I brought up that Federal 19 Register notice is because we summarized the 20 comments until that point in that Federal 21 Register notice. 22 We had comments regarding the BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 257 1 bundling of reprocessed single-use devices 2 which Steve Turtil is going to discuss in his 3 presentation in little more detail. We have 4 comments regarding the review prioritization 5 scheme which was one of the factors we used 6 in determining which devices were included on 7 List-I or List-II. And we previously 8 commented on the review prioritization 9 scheme, we will consider the new comments and 10 take action as necessary. We have gotten 11 comments about updating List-I and List-II to 12 include additional devices, and those 13 comments will be reviewed and determined and 14 action will be taken as necessary. And then 15 we also got comments regarding the timeliness 16 of FDA's review of validation data, and Dr. 17 Ginette Michaud is going to discuss that in a 18 little bit more detail. That is a perfect 19 segue into the next presentation which will 20 be given by Dr. Ginette Michaud. 21 MR. BARNETT: Thank you. 22 DR. MICHAUD: Good afternoon. I BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 258 1 would like to take some time this afternoon 2 to talk to you about the submission of the 3 supplemental validation submissions for 4 List-II reprocessed Single-Use Devices to FDA 5 and our review of those files from January 6 30th through November 1st of this year. As 7 most of you are probably aware, we issued 8 guidance on this topic in the summer of 2003 9 and we updated that guidance in June of this 10 year. And in that guidance we described two 11 re-processors, what type of validation data 12 we required in the supplemental data 13 submissions. We also provided guidance to 14 FDA and Industry on the FDA's implementation 15 of the new MDUFMA requirements in terms of 16 the supplemental validation submissions. We 17 anticipated the submission of 53 SVSs; this 18 was based on our knowledge of the number of 19 510(k)s that had been cleared for these 20 devices, these List-II devices. And over 21 all, these submissions were to account for 22 just over 1800 medical device models. On BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 259 1 January 30th, we accounted for the 2 submissions that had been filed and we found 3 that nine SVSs had not been submitted and all 4 of those 510(k)s were found to be NSE and so 5 the devices that would have been subject to 6 the supplemental data were no longer allowed 7 to be legally marketed. We did receive 44 8 SVSs however, and out of those files we were 9 able to find 19 SVSs as substantially 10 equivalent, another 12 were found 11 substantially equivalent to at least for a 12 subset of the models contained in the new 13 submissions, and I should point out that 14 submissions contained anywhere from one 15 device to upwards of several of 300 models so 16 that if there was a partial SE, that could 17 account for a number of models. We also made 18 11 NSE determinations or acknowledged the 19 withdrawal of files when the re-processor 20 withdrew the files before decision was made. 21 And finally we still have two SVSs that are 22 under review. These SVS files are on a BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 260 1 staggered schedule in that they were the 2 subject of an administrative appeal, and 3 those SVSs came in after resolution of the 4 appeal. We are confident that we will be 5 able to complete our reviews and make 6 regulatory decisions on those files in a 7 timely way. 8 I want to look at the data somewhat 9 differently with you because I think if you 10 look at the number of device models that were 11 cleared it gives you a better idea of how 12 this was broken down. Again as I mentioned, 13 we accounted for 1800 device models: 52 14 percent of those device models, independent 15 of which files they happen to be in, 52 16 percent were found to be SE. Those were on 17 the market prior to the submission of 18 supplemental data and they can continue to be 19 legally marketed. Another 33 percent were 20 found NSE and that includes those devices for 21 which we received no supplemental data and 22 devices for which the supplemental data was BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 261 1 judged to be inadequate. And finally, 15 2 percent of the device models that were 3 subject to the SVS files were withdrawn by 4 the reprocessor and -- before we were able to 5 make a regulatory decision. So if you look 6 at these numbers, what it tells you is that 7 there is roughly a 50 percent break down in 8 terms of what can continue to be legally 9 marketed and what can no longer be legally 10 distributed. For those devices found NSE or 11 withdrawn by the reprocessors, again they can 12 no longer be on the market. However, the 13 reprocessors who would like to reprocess 14 those devices can come in with a new 510(k) 15 at any point in the future. Those 510(k)s, 16 of course, will need to include the 17 validation data so that we can make a 18 determination in terms of substantial -- of 19 whether not they are substantially 20 equivalent. 21 So in summary, CDRH completed its 22 mandate in terms of the review of BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 262 1 supplemental cleaning, sterility and 2 functionality validation data for List II 3 reprocess Single- Use Devices. We accounted 4 for a huge number of device models, and these 5 submissions were complex not only 6 administratively, because we were trying to 7 track so many different models and devices 8 from different OEMs, they were also 9 scientifically complex. And so it required 10 enormous effort on the part of our reviewers 11 who did I think a very timely and 12 scientifically grounded review. 13 Just to put this in a different 14 way, we tried to estimate, at least 15 preliminarily, the number of hours that were 16 spent on the review of these files and our 17 preliminary estimate is that approximately 11 18 thousand hours of work was done on the review 19 of these files, the administrative 20 processing, and the issuing of decisions. 21 Stated another way, you would have to hire 22 six full-time employees or six and a quarter BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 263 1 full-time employees working in full year to 2 get this work done. So it really represented 3 a monumental amount of work. The work was 4 very resource-intensive obviously, but it was 5 also highly interactive. 6 Now it was interactive both 7 internally in terms of the communication 8 between review divisions, we were very 9 concerned that our decisions should be 10 consistent across the Office of Device 11 Evaluation and that the requirements that we 12 were communicating to reprocessors also be 13 consistent. And so there was a lot of 14 interaction between reviewers, between review 15 divisions. We also interacted with the 16 reprocessors. We found it very useful to 17 communicate our requirements, our 18 expectations in terms of methodology, what we 19 would consider to be acceptable end points, 20 and the reprocessors availed themselves of 21 that opportunity, and so we were able to, I 22 think, work effectively in those BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 264 1 interactions. 2 The reviews were really thorough 3 and careful, and I think that our staff did a 4 wonderful job in accounting for every single 5 device model that was the subject of these 6 submissions. I can tell you, that 750 of 7 those hours roughly that were spent on the 8 review of this work was uncompensated time, 9 so we had lot of late nights and week- end 10 works to complete this work, and I think that 11 speaks to the dedication of our staff in 12 meeting the MDUFMA mandate. 13 Finally, I didn't feel that our 14 work would be complete until we were able to 15 effectively communicate our decisions to 16 users and purchasers of reprocessed 17 Single-Use Devices, keeping in mind that 18 these devices were all ready on the market. 19 And so we felt that the most effective way of 20 communicating this information would be to 21 include it on our web site, on our reuse web 22 site. The web site includes information on BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 265 1 what it means to receive a non-substantial 2 equivalent letter, what does that mean for a 3 device that's already on the market, what 4 should happen, what the FDA's follow up will 5 be, what purchasers or users of these devices 6 can do to get further information either by 7 communicating with the reprocessors, by 8 communicating with our staff, or by going to 9 our 510(k) searchable database to find out if 10 the clearance is listed. 11 We also have a separate listing 12 that accounts for all 1800 models and tells 13 the user whether the device model can 14 continue to be legally marketed or if it is 15 no longer available as a legally marketed 16 device. So we felt that this was necessary 17 to get the information out to our users. 18 That concludes my presentation. I would like 19 to introduce you to Steve Turtil, a 20 scientific reviewer in the Office of Device 21 Evaluation, he'll tell you more about the 22 validation data requirements that we had in BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 266 1 the review of these submissions. 2 MR. BARNETT: Thank you, Ginette. 3 MR. TURTIL: Good afternoon. Okay, 4 I am going to give a quick tour of the 5 science behind the reviewing that we did for 6 these devices and for these applications. 7 And I am going to give that from the 8 perspective of coming from the Infection 9 Control Devices Branch where we pay 10 particular attention to cleaning and 11 sterilization in the lead reviewers 12 themselves, take -- look the review of the 13 actual performance data. The law requires us 14 to look at three different areas of data: 15 Cleaning, sterilization, and functionality 16 testing. And there is pretty clearly 17 established standards and guidances that are 18 already available for reviewing those 19 devices. 20 What we were really stuck with a 21 difficult starting point was to take a look 22 at the cleaning because there are no BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 267 1 standards, we don't have any guidances, and 2 there's just not a whole lot out there. So 3 we were stuck with the starting off position 4 to say, how are we going to define "clean"? 5 And what we came up with was to allow for 6 successful subsequent sterilization steps to 7 limit to a minimum the organic soil 8 transferred from one patient to another and 9 to prevent accumulation of residual soil 10 after multiple cycles. That still sounds a 11 little vague, so we sat down, we talked with 12 our lab experts and we talk with -- I mean we 13 reviewed the literature and we talked 14 internally, and we tried to come up with what 15 we would like to see in terms of these 16 applications. 17 We threw together a matrix and 18 started to look at the devices in terms of 19 what sort of body contact they have, and we 20 came up with four different categories, broke 21 it down to direct blood contacting devices; 22 ophthalmic devices; tissue contacting BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 268 1 devices, and compromised skin contacting 2 devices. The next thing we thought about was 3 the test types, but even just before that we 4 were thinking what sort of soil should these 5 devices be exposed to during their 6 validation, for generating validation data. 7 And in addition to that, how should they be 8 exposed. 9 So we were thinking about what sort 10 of artificial soils but also what sort of 11 simulated use protocols. Then we thought 12 about different test types that we'd like to 13 see. And this was -- we first drew this over 14 a year ago; It was draft then, it's still 15 draft now, we were just -- it's kind of an 16 evolving process, partly because there is 17 just out in industry and academia there are 18 no standards. These are the test types that 19 we came up with. We didn't think that 20 necessarily all these tests had to be 21 performed on particular devices or that the 22 test types had to be limited to these -- BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 269 1 these suggestions here. 2 But we thought this would be a good 3 starting point and that's a bare minimum we'd 4 want to see visual inspection on all devices, 5 no visual soil. After that it's really 6 device specific; if you have a cardiac 7 catheter -- let's take a look at the open 8 cell in the top left hand corner -- if you 9 have an EP catheter, you should probably be 10 interested in seeing protein, total protein 11 assay. If you take a look at the bottom 12 right hand cell, what we want to see contrast 13 media testing for device that touches 14 compromised skin, that probably wouldn't be 15 as relevant, so that wouldn't as important. 16 And of course, you know this is 17 still evolving, we don't know what this is 18 going to like in a year but it's really up to 19 the reprocessor to justify scientifically 20 what tests they are doing and the protocols 21 they'd establish for that. So that got us to 22 a starting point. The first thing we wanted BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 270 1 to see in the applications were cleaning 2 instructions, and basically for all the 3 applications that came in, we wanted to see, 4 as a minimum, point of use decontamination 5 for the devices that's at the health care 6 facility which should be in the labeling. 7 Some devices might be exempt from this but 8 for almost all devices we are looking for 9 this. 10 If disassembly is possible, we want 11 to see that accounted for. And then for -- 12 in those cleaning instructions at the point, 13 at the location of where they are being 14 reprocessed, we want to see all the 15 parameters and all the specifications. So if 16 ultra sound is used, detergents, enzymatic 17 detergents, we want to see the time, 18 temperatures, and concentrations, all spelled 19 out very clearly. Once that's established, 20 once we saw what the cleaning instructions 21 were, the next thing we wanted to see was 22 validation of those cleaning instructions and BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 271 1 that is when these things are used in the 2 worst conceivable way, when they are really, 3 really soiled and when they go through the 4 cleaning in the worst conceivable way, the 5 shortest times, the lowest concentrations of 6 detergents, we want to know that we are still 7 going to be reaching acceptable end points. 8 So again we took a real close look 9 at what sort of artificial soils were used 10 and the simulated use protocols, then we took 11 a look at the cleaning validation protocols 12 to make sure that they were really worst 13 case, and we wanted to see finally all the 14 details for the test protocols, cleaning end 15 points, and other information. The cleaning 16 validation protocols should support and 17 confirm the effectiveness of the routine 18 cleaning instructions and should include 19 consideration of -- and again this is very, 20 very abridged, we spent a lot of time with 21 this, it's very elaborate, the details we 22 were looking at, very device specific, but BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 272 1 we'd want to see that the soil that's used, 2 artificially soilees(?), represents intended 3 clinical exposure. 4 In addition when it comes to 5 simulating use, we want to make sure that the 6 most difficult locations on the device are 7 soiled, we want to see that the duration of 8 soiling is equivalent to what we would expect 9 in clinical use, worst case, and when it came 10 to use of the device, some devices are really 11 quiet simple, other devices are really 12 complicated, articulating points, buttons, 13 knobs, whatever. We wanted to make sure that 14 that's accounted for worst case use. And 15 finally worst case implementation of the 16 cleaning instructions, we want to make sure 17 that under worst case conditions -- you know, 18 I'd say the coffee machine's off one day and 19 all the workers are pretty grumpy. We want 20 to make sure that under worst-case conditions 21 these things are really going be -- come out 22 acceptable levels of soil on them. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 273 1 These are the -- again these are 2 examples of what we would expect to see 3 accounted for in the cleaning protocols or 4 worst case. Examples would be, if the 5 instructions say, "Sonication for 20-25 6 minutes," we would expect to see validation 7 data generated from loads that go through 20 8 minutes. If the instructions say, "Do not 9 exceed 12 devices per cleaning load," then 10 the validation data should be generated from 11 devices that are 12 per load or more. In the 12 test protocols, we want to see all the 13 details, cleaning end points, specifications, 14 visual inspection again should be included -- 15 and the last two bullets, I can't emphasize 16 enough -- the extraction method should be 17 fully validated, we want to know that after 18 these things are cleaned, the test is 19 performed on them on the extraction fluid is 20 representing really what has been left on the 21 device, and the test methods -- just basic 22 methods validation should be performed for BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 274 1 these, you know, proper controls, standards 2 and calibrations. 3 Getting closer to the end(?) of 4 standard -- for sterilization, standards 5 exist out there, they are very easy to 6 access. Basically, the core information we 7 are looking for is evidence that the devices 8 can be sterilized and that the parameters 9 that are put in place can be consistently 10 met. So we are looking for data for that and 11 also for those devices that are labeled 12 non-pyrogenic, we want to make sure that all 13 the proper endo-toxin levels are reached. 14 I'll step back up to the sterilization 15 question in a minute. 16 Probably one of the biggest issues 17 here which took the most amount of 18 forethought was load configuration, whereas 19 when it comes to sterilization, most of the 20 standards, all of the standards really 21 specify a well defined load configuration, 22 and that's a bit of a challenge for people BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 275 1 who are processing and sterilizing a lot of 2 different device types. So that took a lot 3 of forethought. And finally when it comes to 4 bundling, we thought this issue was also very 5 important. 6 I'll just make two points regarding 7 this: in general we felt that moving from a 8 smaller group of devices that's kind of 9 easier, let's say models, related models, are 10 easier to justify scientifically for bundling 11 and the more that you start including in 12 there when you start moving, when you break 13 over the family barrier into another family, 14 that's going to be much more difficult to 15 justify. And of course that's for families 16 within an OEM but as soon as you start, you 17 know, trying to break over the OEM barrier, 18 it's going to take a lot more a -- lot 19 stronger justification to account for that. 20 And that is -- the consequences of 21 that are really pretty big. I mean it 22 applies to the cleaning itself, it applies to BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 276 1 the sterilization because it's different 2 geometries in the devices, it applies to 3 Ethylene oxide residuals because of basically 4 surface characteristics of the materials. So 5 we paid a lot of attention to that. And I 6 think that's essentially it. At this point I 7 will turn it over to Larry Spears. 8 MR. SPEARS: Thank you, Steve. 9 Good afternoon, I will be giving the 10 compliance update with regard to this 11 practice of "Reuse of Single-Use Devices." 12 And what I wanted to do to begin with is to 13 give you a sense of the background, the 14 pre-MDUFMA background up to the present in 15 terms of what's been happening with, first of 16 all, hospitals and then with the third party 17 reprocessors. Going back to August of 2000 18 when we came out with the guidance on 19 enforcement priorities where the FDA said 20 that, we will more actively regulate this 21 practice, since that time we began to conduct 22 inspections of hospitals that reprocess BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 277 1 Single-Use Devices. 2 And the numbers here we have are a 3 little over 225, actually we are probably 4 close to the 250 in terms of the number of 5 inspections that have been done. And we did 6 those inspections in various different ways. 7 First of all, one of the requirements that 8 came out of this guidance in 2000 was that 9 hospitals needed to register and list just as 10 manufactures do. What we found is that very 11 few actually did register and so we had a 12 challenge to try to figure out which 13 hospitals were in fact reprocessing. So what 14 we did is we did follow up on those few that 15 did in fact register. We also learned about 16 some that were reprocessing from others. 17 You know, we found out here and 18 there, we went to trade shows, and different 19 meetings, and learned about the fact that 20 some of these hospitals were in fact doing 21 this and had not registered. But the bulk of 22 the inspections that we ended up doing were BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 278 1 based on a statistical sample that we did of 2 hospitals across the country, and what we did 3 is we did this in response to a survey. We 4 decided we needed to find out a little bit 5 more about what's going on, we hired a 6 contractor to make telephone calls to all 7 hospitals in the U.S. and to ask them three 8 basic questions. And that is, first of all, 9 "Are you reprocessing Single-Use Devices? If 10 you are, which products are you doing?" And 11 then third, "Are you familiar with FDA's 12 requirements with regard to this, this new 13 requirements?" 14 And so in response to that survey, 15 we followed up with our samples, we found 16 that quite a number of the hospitals, well 17 over a thousand did not respond at all even 18 after multiple attempts. So that was one 19 sample and we went out and did the 20 inspections of that sample. We also looked 21 at those that responded and said that they 22 were reprocessing, there were only a few, and BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 279 1 we went out and inspected those. And then we 2 also found that there were -- the bulk of 3 them said that they were not reprocessing and 4 we took a sample of those and inspected those 5 hospitals also. 6 And so what do we find? Well, for 7 the most part we found that hospitals were in 8 fact either not reprocessing, or when we went 9 and found that they were, they promised to 10 discontinue that particular practice. We 11 found some have registered as reprocessors 12 when in fact they reprocessed reusable 13 devices, which was not part of the 14 enforcement guidance that we were talking 15 about. And so we found that most of them 16 promised to discontinue and many had in fact 17 gone to the third party companies to have 18 that work done for them, so they were either 19 going to new products or they were going to 20 companies to do it for them. 21 What we found in some of the 22 earlier inspections though is that some were BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 280 1 reprocessing, they really did not initially 2 intend to stop, and so we did issue a warning 3 letter to one of the hospitals, and a couple 4 of untitled letters, these were for GMP 5 problems. With regard to the third party 6 companies, what we found as we looked back a 7 number of years, this is back in the 1990s, 8 particularly the early 1990s, we had quite a 9 number of these third party companies, we 10 were up to around 15 or 20 different 11 companies. And we found early on a number of 12 problems as we did those inspections, we 13 found some real problems in the areas of 14 validation, purchasing controls and component 15 controls. 16 And so a number of warning letters 17 were in fact issued. We did follow up on 18 those warning letters and found that in some 19 cases there was correction and in some cases 20 there were not. We did in fact file two 21 injunctions against companies that were in 22 fact not prepared to make the changes; they BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 281 1 either could not make the changes to be in 2 compliance with the good manufacturing 3 practice regulation or in fact they just 4 would not. And so we found that as we went 5 through that process, those companies went 6 out of business. So the numbers have 7 whittled down; we had 15 or 20 about ten 8 years ago, about a year ago we were down to 9 ten companies, and now we are down to five or 10 six. Actually we know of one other company 11 that has registered. 12 And as we look at the compliance 13 history of those -- those companies in recent 14 times, they have been in substantial 15 compliance; there have been a number of 16 corrections that have been made and we have 17 found that they are in fact or have at least 18 improved in their conformance with the 19 regulation. What I wanted to talk about in 20 this last slide is what are we going to do in 21 terms of the follow up to these MDUFMA 22 activities and requirements, what kinds of BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 282 1 actions are we going to do in terms of the 2 Office of Compliance working together with 3 our field officers? 4 First of all, as a follow up to the 5 issuance of these not substantially 6 equivalent or NSE letters and also the 7 withdrawals by some companies, in some cases 8 a company decided that they wanted to 9 withdraw their submission. So in either case 10 what we did is we contacted the five 11 companies that made these submissions, we 12 called them directly by phone and then we 13 asked them a number of questions. We wanted 14 to find out what their plans were in terms of 15 discontinuing the practice; did they 16 discontinue, or are they going to and when. 17 And then we wanted to find out whether or not 18 they were going to withdraw products that 19 were already in distribution. So we asked 20 each one of those questions to them. 21 What we found is that each and 22 everyone that we called said that, first of BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 283 1 all, they had either discontinued already or 2 were getting ready to, and secondly, that 3 they would in fact withdraw the products from 4 various hospitals and the various customers. 5 Now -- and so that was good news for us. As 6 a follow up to that we are planning to go out 7 and conduct inspections of those hospitals to 8 verify this. An assignment has been prepared 9 already to go out to inspect those companies, 10 those five companies that I have mentioned, 11 they came in with submissions. We want to 12 find out -- we want to verify that they have 13 discontinued their reprocessing activities 14 and we want to find out that they -- that in 15 fact they have removed products from the 16 market. 17 And then we also want to look at a 18 couple of things that came up in our SVS 19 reviews in our Office of Device Evaluation. 20 There were a few concerns here and there; one 21 of the areas of concern that was raised was 22 with regard to packaging validation and the BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 284 1 adequacy of packaging that was used. So we 2 want to take a look at that and there is a 3 couple of other issues that we will be 4 looking at in those inspections. One of the 5 things we are also concerned about as we look 6 at these reprocessors is to make sure that 7 they can in fact adequately validate their 8 processors. We require that of manufacturers 9 and so as we go out and inspect these 10 reprocessors, we want to look at some of the 11 key processes such as cleaning and 12 disinfections and sterilization to ensure 13 that they are able to do these things. 14 And Steve brought up in some detail 15 some of the kinds of things that we're 16 looking to see. We are going to go out and 17 see what kind of activities they have engaged 18 in, to effectively validate those particular 19 products. So those assignments would be 20 going out. And in terms of doing those 21 inspections, those are first done by our 22 field force, the Office of Regulatory BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 285 1 Affairs. In some cases we may have various 2 individuals from CDRH with appropriate 3 scientific expertise to go out and assist and 4 look into some of these issues. So that 5 pretty much concludes my remarks, thank you. 6 SPEAKER: Thank you, Larry. Bob 7 O'Holla? 8 MR. O' HOLLA: Thank you. I only 9 made one slide so -- because I can't shuffle 10 paper and do the computer thing at the same 11 time. I want to congratulate FDA. I mean, 12 clearly listening to them this afternoon, 13 there's a tremendous effort put into the 14 review of these validation submissions, the 15 amount of time, the difficult logistics, the 16 difficulty in the science, and they are to be 17 commended for what they've done. 18 Now having said that, you all would 19 be disappointed if I was satisfied with 20 everything that's been done. And perhaps by 21 the time I'm finished speaking, you may all 22 think that -- you may all view Mark Leahey as BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 286 1 being the moderate on this panel. I'm it's a 2 first for him. MDUFMA required FDA to 3 complete several tasks and we've heard about 4 the tasks they've completed. I'd like to 5 take some time now to talk about what they've 6 accomplished since the passage of MDUFMA 7 regarding Reuse and what still needs to be 8 done given what they've learnt. 9 First is regarding labeling 10 requirements and that -- MDUFMA required the 11 packaging of any reprocessed Single- Use 12 Device sold after January 25th, 2004, to have 13 on its label the statement "Reprocessed 14 Device for Single-Use, Reprocessed By" and 15 the name of the manufacturer. 16 This provision was designed to make 17 it easier for health care professionals to 18 know when they're using a reprocessed device. 19 However, confusion still exists because of 20 the fact that the package label most often 21 refers to the Original Equipment 22 Manufacturers' device. So instead of saying BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 287 1 a reprocessor 'X' Trocar, it says, OEM 2 Trocar. It appears to us that this is 3 extremely misleading as the device inside 4 that package is by FDA's own paradigm, a new 5 device manufactured by the reprocessor. 6 FDA's recent listings of devices 7 that can no longer be marketed further adds 8 to this confusion because they list the OEMs 9 device, not the reprocessor's device. It 10 gets even murkier when the device is taken 11 out of the package, because then we don't 12 even know it's been reprocessed by anybody, 13 all we see on there is the name of the 14 Original Equipment Manufacturer. Much still 15 needs to be done to ensure that health care 16 providers truly know what they're using in 17 their practice and can actually report on 18 their experiences with these products. 19 The second area is the list of 20 critical reprocessed Single-Use Devices whose 21 exemption from 510 (k) has been terminated. 22 FDA was required to and published the list of BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 288 1 reprocessed SUDs for which 510(k) exemptions 2 no longer applied. The list however is a bit 3 disappointing in that only 16 device types 4 out of a 126 exempt reprocessed device types 5 had their exemptions terminated. It's these 6 types of statistics that cause some concern 7 about whether or not the MDUFMA provisions 8 are doing all that they were intended to do 9 by Congress regarding reprocessing. For 10 example, one device, non-electric biopsy 11 forceps, was added to this list only after 12 extensive comments by Industry. 13 Another device, Heart Stabilizers, 14 still awaits a final decisions by FDA as to 15 whether or not its exemption should be 16 terminated. This particular device has been 17 subject to two separate letters, to FDA by 18 AdvaMed, one well over a year ago, and one in 19 September of this year, urging FDA to remove 20 the exemption. The most recent letter 21 provides details about a patient injury that 22 appears to be directly related to the fact BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 289 1 that the device had been reused. 2 In addition to these specific 3 comments, a review of the list compared to 4 the list of exempt products reveals 5 inconsistencies that are difficult to 6 explain. For example, why are dental burrs 7 no longer exempt while orthopedic surgical 8 burrs continue to be exempt. On the face of 9 it, without knowing the details of how that 10 decision what we've reached, it would seem 11 that at the very least, the same level of 12 concern accorded by FDA to dental burrs 13 should be accorded to burrs used in highly 14 technical and invasive orthopedic procedures. 15 The next area is the list of 16 reprocessed Single- Use-Devices subject to 17 510(k) requiring validation data. FDA was 18 also required to publish this list for which 19 FDA believed it needed to review the actual 20 validation data that supported the safe 21 reprocessing of devices originally designed 22 to be disposable. That list contained 53 BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 290 1 device types out of a total of 228 Single-Use 2 Device types that FDA believes are being 3 reprocessed. That means that FDA has looked 4 at roughly validation data for only 21 5 percent or so of all reprocessed SUD -- 6 Single-Use Device types -- that becomes a 7 tongue twister when you get further and 8 further into this. 9 We believe this low percentage 10 reflects the fact that the risks associated 11 with reprocessing and the difficulty in 12 cleaning and sterilizing devices designed for 13 only one use may not have been fully 14 understood when the list was first developed. 15 The experience todate with the validation 16 data of these 51 device types however, has 17 clearly shed a spotlight on the status of 18 these devices. 19 Let's talk a little bit about the 20 validation data review. We've heard about 21 the extensive work that was done by the FDA 22 reviewers and certainly the way in which it BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 291 1 was organized was extremely impressive. The 2 thing that bothers us however, we talked a 3 little bit about the bundling and not knowing 4 the details about that it's a little 5 difficult to comment in detail. However, 6 1800 devices in 44 submissions seems a bit 7 excessive, at least from the outside. 8 In particular it seems excessive 9 when FDA's own laboratories in their own 10 studies on reprocessing concluded that device 11 reprocessing decisions are a 12 device-by-device, model-by-model decision. 13 So as you bundle within an application across 14 models, as was pointed out earlier, that gets 15 to get a little fuzzy, and then as you start 16 to bundle across manufacturers, it's hard for 17 OEMs to understand how that can be justified. 18 In June of 2004, the Acting 19 Commissioner of FDA announced the 20 availability of the revised guidance 21 documents referred to earlier, pertaining to 22 the review of these additional validation BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 292 1 data for reprocessed SUDs. In that 2 announcement the Commissioner said that the 3 guidance document made it clear that a 4 reprocessor would have 30 days to respond to 5 any questions posed by FDA regarding the 6 validation package. And FDA would have 60 7 days to make its final determination. 8 Now this makes sense because 9 reprocessors and FDA has been saying for 10 years that this validation was already 11 required under GMP and the quality systems 12 regulations, and in fact it was in place. As 13 far back as 1995, in a letter from FDA to the 14 trade associations, FDA confirmed that 15 reprocessors needed to comply with GMP. This 16 was reinforced in the FDA response to the 17 heme-citizen's petition in 1998, when FDA 18 said, "The agency believes that reprocessors 19 compliance with GMP requirements provides an 20 appropriate measure of public health 21 protection for patients and health care 22 providers by ensuring sufficient control over BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 293 1 the individuals, firms, manufacturing quality 2 operations. These requirements provide a 3 reasonable assurance that the firm is 4 providing devices that meet its appropriate 5 specifications." 6 The assertions by FDA that the 7 reprocessors had demonstrated the ability of 8 their processors to provide devices that met 9 appropriate specifications was further 10 repeated by FDA several more times over the 11 ensuing years and by the reprocessors 12 themselves. Given this history and the 13 assertions made, it was not unreasonable for 14 FDA to have a definitive cut-off date for 15 making its final decision on these 16 applications. 17 The results of the review of the 18 supplemental data and the FDA's portrayal of 19 these results however, are most disturbing. 20 Roughly 50 percent, as you've heard, of the 21 devices that were required to have 22 submissions either failed to meet FDA's BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 294 1 expectations of validations of cleaning, 2 sterilization, and functionality, or the 3 reprocessor decided that developing the data 4 did not make commercial sense. That is an 5 astonishing failure rate in our minds given 6 particularly the prior assertions that they 7 already had all of this data. Even more 8 astonishing -- Larry, and I know, you 9 probably want to hit me after this -- is the 10 fact that recent inspections showed them in 11 substantial compliance when we know that they 12 can't pass the validations. 13 FDA has posted on its website a 14 list of those devices that can no longer be 15 legally marketed because there's a lack of 16 data supporting the validation of the 17 cleaning, sterilization, and functionality of 18 these devices. Despite this removal of these 19 devices from hospitals is not considered a 20 recall. Most disturbing is the fact that the 21 failure to validate the cleaning, 22 sterilization and functionality of these BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 295 1 devices is not even considered to be a health 2 risk by FDA. 3 FDA has been quoted in the press 4 saying things like, "Any reference to the 5 specific devices as being dangerous or unsafe 6 is incorrect," or "There is no statement 7 whatsoever by FDA based in our actions that 8 the device is not cleared or withdrawn, or 9 determined by our actions to be unsafe or 10 ineffective." Clearly those statements are 11 in direct conflict with the kind of 12 statements FDA makes when an OEM has a recall 13 for an unvalidated sterilization process. 14 In these cases FDA classifies those 15 actions to remove those devices from the 16 market as a class II recall, and in doing 17 that says, those devices have the potential 18 to cause temporary or medically reversible 19 health consequences, and this is for products 20 that haven't been contaminated by exposure to 21 body fluids or tissues. How can FDA 22 consistently make that determination, yet BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 296 1 when it comes to products failing validation 2 or having been contaminated by body fluids, 3 no health risk is judged to exist and no 4 recall is required? This sends an awfully 5 confusing message to the medical device 6 industry and to hospitals. Right now many 7 hospitals think this is just a paperwork 8 issue with no safety or efficacy issues 9 involved at all. 10 In fact some have been told to use 11 up what's on their shelves. We're at a loss 12 to explain this inconsistent treatment of 13 unvalidated reprocessed SUDs compared to the 14 way OEM devices are treated for exactly the 15 same lack of validation data. The 16 difficulties associated with the validation 17 of reprocessed devices however doesn't end 18 here. For those SUDs where FDA found the 19 validation acceptable, we as OEMs are at a 20 loss to understand how the reprocessor will 21 know about any design changes that could 22 affect the currency of the validation data BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 297 1 generated. We have not been made aware of 2 any schemes by which such knowledge can be 3 gained in a meaningful way by the 4 reprocessors. In fact we have seen quite the 5 opposite by some of our experiences. 6 One of our member companies has 7 received numerous complaints from hospitals 8 because a particular reprocessor has told 9 them that the reason a particular reprocessed 10 device was failing was because the company, 11 the OEM, had changed this device so it could 12 no longer be reprocessed. In fact, no 13 changes had been made to the device. This 14 example however brings to the forefront two 15 issues: First, if the reprocessor thought 16 that such changes had been made, why did they 17 continue to reprocess the devices in question 18 without doing any validation, or secondly, if 19 they really thought the changes had been made 20 when in fact they had not, their scheme for 21 determining design changes is clearly flawed. 22 Unless the current review of BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 298 1 validation data that we've just gone through 2 is only being viewed as a one-time exercise, 3 which clearly would not be acceptable under 4 the current regulations, FDA needs to clearly 5 establish how the reprocessors will need to 6 deal with design changes made by OEMs, 7 otherwise there is no way to ensure that the 8 validation data that has been reviewed 9 remains current. 10 Looking at the bigger picture, the 11 review of this supplemental validation data 12 has provided the FDA with new information 13 regarding this practice that requires further 14 action. Given that only 50 percent of the 15 devices for which validation data was 16 required actually failed to meet FDA's 17 expectations, it is not reasonable to assume 18 that adequate validation data exists for the 19 cleaning, sterilization and functionality of 20 the SUDs that FDA did not examine closely. 21 This extreme failure rate should be 22 considered by FDA as a signal that the BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 299 1 validation data for all other reprocessed 2 devices needs to be called for. Otherwise 3 how else can FDA provide any level of 4 assurance that these devices are being 5 reprocessed correctly? 6 FDA has made assertions in the past 7 that reprocessing was being adequately 8 controlled by GMPs, quality systems and the 9 inspections. These assumptions have been 10 confirmed by a careful review of the data of 11 1800 devices to not be true. FDA needs to 12 provide better assurance that the remaining 13 reprocess devices are meeting the standards 14 that assure safe and effective cleaning, 15 sterilization and functionality based on a 16 careful review of the validation data for all 17 reprocessed devices. 18 As next steps, first it's extremely 19 important that FDA issue a public notice 20 above and beyond its website, regarding these 21 devices. There is, despite what everyone has 22 heard, confusion in the hospitals about what BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 300 1 should I be taking off the shelf? Is it a 2 paperwork issue? Is it a safety issue? We 3 need to be clear with the hospitals so that 4 they understand what needs to be done with 5 these devices. 6 In addition FDA needs to act in a 7 way that's consistent with its past actions 8 regarding improperly validating cleaning and 9 sterilization processes. These types of 10 problems have always been classified as 11 recalls by FDA because of their potential 12 adverse affects on the public health. 13 Improperly cleaned and sterilized reprocessed 14 SUDs present an even higher risk given they 15 have been exposed to blood, body fluids and 16 tissues. The removal of these products from 17 hospitals should be considered to be recalls 18 and need to be controlled as such. We see no 19 logic that can conclude otherwise -- either 20 based on the science of validation or the 21 consistent precedent FDA has established 22 regarding recalls for lack of appropriate BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 301 1 sterilization validation. 2 We've learnt that the validation 3 data that everyone thought was in place for 4 the last ten years, isn't and in extremely 5 large proportion of reprocessed SUDs. This 6 needs to be considered, an insight into this 7 practice that requires further follow-up by 8 FDA. The agency needs to look at more than 9 just the small number of validation 10 submissions it has so far. If the validation 11 data was either absent or as FDA 12 characterized the data, "good but 13 inadequate," for this small subset, why would 14 we accept that all of the other devices being 15 reprocessed are validated? 16 Recent experience has shown us that 17 the assurances about validated reprocessing 18 processes were not accurate. FDA needs to 19 provide a high level of assurance regarding 20 this practice and fully utilize the tools 21 MDUFMA gave it by reviewing all of the 22 validation data for all reprocessed devices BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 302 1 in the same way it reviewed this small 2 subset. 3 I thank you for your attention this 4 afternoon and AdvaMed will be submitting 5 detailed comments around these comments in 6 the near future. Thank you. 7 MR. BARNETT: Thank you, Bob. And 8 since we introduced this panel we have 9 another panelist that's just joined us. I 10 don't want to introduce her now -- just raise 11 your hands a little bit there -- Jennifer 12 Mallard, represents the American Hospital 13 Association. She is the Senior Associate 14 Director for Federal Relations at AHA. 15 Our next speaker is Naomi Halpern 16 who represents the Association of Medical 17 Device Reprocessors. She is a senior 18 associate with the law firm of Olsson Frank 19 and Weeda. 20 MS. HALPERN: Good afternoon. I'm 21 Naomi Halpern. I'm an attorney specializing 22 in providing advice to clients regarding the BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 303 1 Regulation of Pharmaceuticals and Medical 2 Devices by the U.S. Food and Drug 3 Administration. My firm, Olsson Frank and 4 Weeda, is a regulatory counsel to the 5 Association of Medical Device Re-processors 6 or AMDR. AMDR is a trade association that 7 represents the legal and regulatory interests 8 of third party reprocessors of medical 9 devices labeled for single-use. AMDRs 10 members constitute approximately 95 percent 11 of the third party reprocessing industry by 12 volume. 13 At the time MDUFMA was enacted, 14 reprocessing had, as it continues to have, an 15 outstanding safety record. Todate more than 16 25 million devices have been reprocessed and 17 used in this country without any evidence of 18 increased risk to patients. It's not 19 surprising then that the clinical community 20 has repeated expressed overwhelming support 21 for and confidence in the safety of in the 22 safety of reprocessed devices. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 304 1 The American Hospital Association 2 and the American College of Cardiology are 3 among the numerous health related 4 organizations that have spoken out publicly 5 about the safety of reprocessed devices. 6 Just as telling is the fact that AMDR members 7 reprocess for 12 of the 14 hospitals that 8 U.S. News and World Report placed on its 2004 9 honor role as outstanding medical centers 10 that merit acclaim for impressive quality and 11 breadth of experience. 12 Of the top 203 hospitals identified 13 by U.S. News and World Report, AMDR members 14 currently serve nearly 60 percent. In short, 15 medical device reprocessing when done in 16 compliance with QSR requirements has always 17 been safe. Further, at the time MDUFMA was 18 enacted reprocessing was already heavily 19 regulated by FDA. Third party reprocessors 20 were already subject to all of the same 21 requirements to which original manufacturers 22 are subject. Thus it is difficult to find BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 305 1 any real public health rationale from the 2 MDUFMA's reprocessing provisions. Rather 3 AMDRs views that these provisions were the 4 product of OEMs continuing frustrations with 5 the economic threat posed by reprocessing. 6 Nevertheless, it must be said that 7 even as Congress was, at the behest of the 8 original equipment industry, putting into 9 place additional burdens on the reprocessing 10 industry, Congress clearly recognized the 11 important role that reprocessing plays in the 12 health care system. As the legislative 13 history states, "The committee recognizes 14 that there are cost savings associated with 15 using devices that have been reprocessed. 16 Therefore we want to ensure access to safe 17 and effective reprocess devices." 18 It must also be borne to mind that 19 Congress intended MDUFMA to be implemented in 20 a least burdensome manner consistent with 21 FDAMA. This intent is memorialized in the 22 official legislative history of MDUFMA which BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 306 1 says, for example, that in determining the 2 types of validation data to be submitted for 3 FDA's review, the Secretary should be mindful 4 of FDAMA which obligates the FDA to impose 5 the least burdensome requirements on 6 companies seeking pre- market clearance and 7 approval for the devices. AMDR's view is 8 that MDUFMA is not always being implemented 9 in a manner consistent with this directive. 10 In this regard we will continue to provide 11 feedback to FDA on the MDUFMA implementation 12 process. 13 So where are we now? FDA's 14 implementing MDUFMA and reprocessors are 15 complying with the requirements. In 16 particular, our members complied with the 17 requirement to make supplemental validation 18 submissions for some of their previously 19 cleared devices and FDA has completed its 20 review of most of those submissions. Many of 21 the submissions were cleared by the agency. 22 For those submissions that were not cleared, BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 307 1 AMDRs members ceased shipping those devices 2 covered by those submissions immediately. 3 However, AMDR members estimate that 95 4 percent of products remain legally 5 marketable. AMDR emphasizes that the fact 6 that a reprocessed device was not cleared 7 does not mean that the devices are unsafe in 8 FDA's opinion. 9 We are aware that OEMs have been 10 telling everyone who would listen that the 11 issuance of NSE letters to reprocessors just 12 confirms the industries' oft stated 13 allegation that it is not possible to 14 establish that the reprocessing of some of 15 these devices is safe and results in 16 effective devices. 17 With all due respect, everyone in 18 this room is or should be aware that OEMs 19 regularly receive NSE letters, and no one 20 with any understanding of the regulatory 21 process would think to assert seriously that 22 it proves that these OEMs are not capable of BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 308 1 producing safe and effective devices. In 2 short, the issuance of an NSE letter means 3 only that, to-date, the data and information 4 submitted were not sufficient to support a 5 finding of substantial equivalents and 6 therefore to be cleared by FDA. An NSE 7 letter does not establish that the device 8 covered by the letter is not safe and or 9 effective and it certainly cannot with any 10 justification be taken as evidence that the 11 submitter is not capable of producing a safe 12 and effective device. 13 These devices were already cleared 14 by FDA once and safety simply isn't an issue. 15 What must be said is that the requirement to 16 submit validation data for a 510(k) cleared 17 device is an entirely new one. When a 18 medical device manufacturer, an OEM or a 19 reprocessor, faces new regulations or 20 requirements, FDA often requests that the 21 manufacturer submit additional data and 22 information to clarify or expand upon the BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 309 1 originally submitted information. The SVS 2 process was no exception. 3 Indeed while the agency's review of 4 these submissions was proceeding, FDA and the 5 reprocessing industry were still engaged in 6 the learning process to determine what types 7 of information were needed and what types of 8 evidence would be sufficient to satisfy FDA's 9 requirement. Moreover, unlike the typical 10 510 (k) process, this process of clarifying 11 and responding to questions about the 12 submissions occurred in the context of a 13 tight deadline for concluding the process. 14 While MDUFMA did not provide a 15 deadline for the review of SVS submission or 16 give a specific timeframe in which FDA had to 17 make decisions about substantial equivalents, 18 the agency ultimately imposed a November one 19 deadline to complete the process. An 20 enormous amount of work was required to 21 gather the FDA requested data and 22 information. In some cases the NSE letters BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 310 1 reflects nothing more than the lack of 2 sufficient time to develop and submit the 3 information. 4 AMDRs members will continue to work 5 cooperatively with FDA, and AMDR is confident 6 that its members will provide FDA with the 7 required information so that these 8 reprocessed devices can be returned to the 9 market as quickly as possible. Second, we 10 have become aware of efforts by the OEMs to 11 persuade FDA and or Congress to revisit the 12 marking provisions of Section 301 of MDUFMA 13 and specifically to apply these provisions 14 only to reprocessors. We know however, that 15 when Congress is in the process of drafting 16 MDUFMA, OEMs were the ones who championed the 17 idea of marking their devices. Their 18 proposal of course was for the marking of 19 reprocessed devices only. 20 FDA's response was that it would be 21 helpful from a regulatory point of view if 22 all devices were marked. OEM industry BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 311 1 representatives at the time were willing to 2 commit to doing so and some of industry 3 representatives asserted that the industry 4 was already doing so. 5 Congress when enacted the 6 provisions, specifically emphasized that this 7 section applies to all devices, not just 8 reprocessed single-use devices. OEMs now 9 recognize that complying with the provisions 10 will be tremendously burdensome. For this 11 reason some OEMs are now asserting that the 12 marking requirements imposed by Section 301 13 would -- the marking required was not 14 intended to imply to them. They had asked 15 FDA to being by implementing the provision 16 only with respect to reprocessed devices and 17 only later to assess the need to apply the 18 provision to other devices. They have, we 19 believe, also visited with legislators to 20 seek to amend this provision to apply only to 21 reprocessors. However, these assertions and 22 efforts run counter to Congress's documented BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 312 1 intent. Further, there would be no 2 justification for enforcing Section 301 with 3 respect to reprocessors only. Re-processors 4 are subject to all of the regulatory 5 requirements to which OEMs are subject. 6 Well then -- and the burdens that 7 Section 301 would impose are the same for 8 both reprocessors and OEMs. While AMDR 9 wholeheartedly concurs with the assertions of 10 the OEMs that Section 301 will impose 11 significant burdens on manufacturers, 12 especially on small manufacturers such as 13 reprocessors, it is indisputable that 14 Congress intended to -- 15 (Interruption) 16 MS. HALPERN: You all have to 17 forgive me, I was up with kids last night, so 18 -- It is indisputable that Congress intended 19 Section 301 to apply to all devices, not just 20 reprocessed devices. And there is simply no 21 public health justification for implementing 22 the provision in any other manner. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 313 1 Third, we've seen in the last year 2 further efforts from the OEMs to further 3 their economic agenda by attempting to 4 increase the regulatory burdens on 5 reprocessing. Specifically, there have been 6 several petitions from trade associations and 7 individual companies asking FDA to add more 8 devices to the list of devices that either 9 will require a 510(k)s, where previously none 10 was required, or to require Supplemental 11 Validation Submissions for additional 12 previously cleared devices. 13 AMDR does not believe any public 14 health rationale exists for granting these 15 request and we strongly urge FDA to preserve 16 the 510 (k) exemption for all currently 17 exempt reprocessed single-use devices and to 18 decline to require SVSs for additional for 19 additional 510 (k) cleared devices. Finally 20 this year we've seen an upswing in activity 21 on the state level to enact provisions that 22 burden reprocessing. Coinciding with this, BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 314 1 we're also in the midst of a broad based 2 anti-reprocessing media campaign. We are 3 constantly receiving phone calls from the 4 news outlets that have been informed of the 5 allegedly unsafe, unregulated practices, 6 reprocessing. 7 The good news for hospitals and for 8 patients though is that reprocessing is here 9 to stay. Despite the enormous efforts to 10 create fear about reprocessing, to place 11 overly burdensome restrictions on 12 reprocessing and to eliminate reprocess 13 devices as an option for hospitals, the third 14 party reprocessing industry is growing and is 15 continuing to provide hospitals with safe 16 effective reprocess devices. While MDUFMA 17 places additional, unnecessary burdens on 18 reprocessors, the reprocessing industry is 19 complying with MDUFMA and is continuing to 20 provide important benefits to patients, 21 hospitals and our health care systems as a 22 whole. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 315 1 We all know that all across this 2 country, hospitals are facing enormous and 3 urgent cost containment pressures. And 4 hospitals that cannot contain their cost are 5 everywhere closing their doors or eliminating 6 basic services leaving too many people 7 un-served or underserved. In the District of 8 Columbia itself we've lost two hospitals and 9 the third teeters on the brink. Reprocessing 10 is single-handedly going to save a hospital 11 system, but it is part of the answer. 12 Reprocessing does save hospitals substantial 13 amounts of money; these savings arise for us 14 because the cost of a safe and effective 15 reprocessed device is on average half the 16 cost of a new device. In addition hospitals 17 realize savings from reprocessing because 18 their waste hauling and handling costs are 19 significantly reduced. 20 Reprocessing also exerts 21 competitive pressure on the market place 22 keeping the price of original equipment down. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 316 1 In 2000 the USGAO found that hospitals that 2 use reprocessed devices save $200,000 to 3 $1,000,000 annually. That is a lot of money 4 that hospitals can put into additional 5 nursing staff or other patient care 6 improvement. In addition reprocessing is 7 good for the environment. Our members helped 8 hospitals divert nearly 800 tons of waste 9 from landfills last year alone. By 10 reprocessing a single type of device, a major 11 hospital system in California was able to 12 divert over 15 tons of medical waste from the 13 landfills in just the last few years and 14 incidentally saved about $4,000,000. 15 In short reprocessing plays a vital 16 role in our health care system because it is 17 one of the few ways that hospitals can 18 achieve substantial cost savings while 19 maintaining the absolute highest standard of 20 patient care. For that reason it is an 21 industry that I am personally proud to be 22 associated with. The implementation of BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 317 1 MDUFMA has presented some new hurdles this 2 year. Hurdles that the industry does not 3 believe were warranted, but they are hurdles 4 that the industry is meeting and will 5 continue to meet in the coming year. We only 6 urge the agency to keep its eye on the least 7 burdensome path in any further MDUFMA related 8 activities with respect to reprocessing. 9 MR. BARNETT: Thank you, Naomi. 10 Jennifer? 11 MS. MALLARD: Thank you very much 12 for allowing me on behalf on the American 13 Hospital Association to present a few remarks 14 during today's meeting. I know you all have 15 had a very long day so I'll keep my remarks 16 very brief and I also know that you have 17 heard from many at FDA and the Centers for 18 Devices and Radiological Health. But I very 19 much appreciate the opportunity to provide 20 you with the perspective from the end-user. 21 As you know, hospitals have been 22 using reprocessed medical devices for many BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 318 1 years. We believe that reprocessed medical 2 devices are a safe and cost effective option. 3 Hospitals strive to address the environmental 4 concerns regarding medical waste of not only 5 reprocessed devices but for the original 6 devices as well. Hospitals do take into 7 account clinical input and data in their 8 decisions to reuse a single-use medical 9 device. 10 As we have stated before, AHA 11 believes that as long as reprocessing is done 12 appropriately, using reprocessed SUDs is a 13 safe and effective practice for patients. 14 Based most recently on the 2000 GAO report, 15 CDC found that Single-Use Device reprocessing 16 poses minimal health risks. And for the past 17 several years reprocessors have been subject 18 to the same stringent requirements and 19 regulations as the original manufacturers. 20 This further ensures that a reprocessed 21 device can be used safely and effectively. 22 Previously at this meeting, we BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 319 1 shared with you our own feelings over a 2 legislation couple of years ago. Prior to 3 MDUFMA, we were confident in the process 4 already established to determine the safety 5 and efficacy of reprocessed medical devices. 6 However, we were forced to defend the safety 7 and efficacy issue all over again when the 8 real issue surrounding was the financial 9 impact of reprocessing on the original 10 manufacturers. But legislation was passed 11 and we are now moving forward. 12 Hospitals have an interest in 13 ensuring that reprocessing is preserved as a 14 viable option. Not only can reprocessed 15 device reduce health care costs but it does 16 so without sacrificing safety or quality of 17 care for patients. Congress wanted FDA to 18 implement MDUFMA in the least burdensome way 19 and we have been pleased to see that FDA has 20 taken this to heart. At this point the 21 majority of devices -- the majority of 22 devices have been cleared by the FDA through BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 320 1 the adequate submission of validation data. 2 Furthermore, the website is 3 extremely easy to navigate and is incredibly 4 helpful to end-users such as hospitals. FDA 5 should be commended for this. AHA believes 6 that the system is working. While the system 7 is working we also understand that there are 8 kinks in the process that still need to be 9 worked out. One area where AHA sees needed 10 improvement is that there needs to be better 11 communication between the FDA and the 12 reprocessing industry in the review of 13 validation data during the pre-market 14 clearance process, including clear 15 descriptions of what kind of data is 16 specifically required by FDA. 17 However, the bottom line is that 18 the system is moving and moving as Congress 19 has instructed. At this time the bottom line 20 is that AHA feels that further legislation is 21 not necessary and not needed. Thank you very 22 much. BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 321 1 MR. BARNETT: Thank you, Jennifer. 2 We'll now call on Mark Leahey for some final 3 comments. Mark, I think Bob O'Holla called 4 you a moderate; is that a challenge or insult 5 or compliment? 6 MR. LEAHEY: It's nice to have a 7 light head or at least maybe a gray head once 8 in a while. Because I have -- we are at the 9 end of the day and I did allocate some time 10 to Bob because of his commitment to be so 11 passionate, I will make my comments brief as 12 well. I would like to echo Bob's statements 13 that we do want to commend FDA for all their 14 hard work in this area. We know that there's 15 been a lot of time and effort put into this 16 initiative and it is much appreciated. 17 We want to stress the importance of 18 this issue both for patience and innovation. 19 This is a critical issue, a lot of small 20 companies out there developing innovative 21 technologies and we need to insure that these 22 -- investment continues in these product BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 322 1 lines because they are important to patients. 2 We also want to urge FDA to take steps for 3 those products that have been determined not 4 substantially equivalent to take the 5 initiative to pull those products from the 6 market and we are encouraged that there are 7 initial efforts to do so. 8 And one other issue before I talk 9 probably about 301 is we want to urge FDA to 10 continue to actively enforce the existing 11 standards and as they move towards the semi- 12 critical devices, to continue again to move 13 forward to ensure that patients will not be 14 harmed because of some of these devices. I 15 want to focus majority of my time on the 16 Section 301 labeling requirements that are 17 part of MDUFMA. Section 301, under MDUFMA 18 established new labeling requirements for the 19 OEMs and the reprocess industry, single-use 20 medical devices. 21 As enacted, Section 301 is 22 unnecessarily broad, unworkable for FDA, it BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 323 1 fails to achieve its originally intended 2 goal. To identify reprocessed SUDs for 3 physicians nurses and device users to ensure 4 accurate reporting of patient injuries and 5 product malfunctions to FDA. As enacted, 6 Section 301 will unnecessarily drain limited 7 FDA resources and impose an enormous costs on 8 the medical device industry. 9 Section 301, amended Section 502 of 10 the Federal Food, Drug and Cosmetics Act, to 11 require reprocessors and OEMs to attach 12 directly to all medical devices, a label the 13 -- label that prominently and conspicuously 14 identifies the name of the manufacturer or 15 the reprocessor if the device is a 16 reprocessed SUD. 17 Now 301 was intended to close 18 significant gaps in FDA's post market 19 surveillance systems designed to protect 20 patients. Section 301 as originally proposed 21 was intended to specifically identify 22 reprocess versions of SUDs to ensure that BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 324 1 physicians, users and hospital 2 administrators, that the device they were 3 using was reprocessed. 4 A common compliant from physicians, 5 nurses and hospital administrators, that was 6 uncovered during the House Energy and 7 Commerce and Senate labor committees 8 investigation into FDA's regulation of 9 reprocessed SUDs, was that they frequently 10 have no idea when they are in fact using a 11 reprocessed SUD. Once the medical is removed 12 from the package and placed onto a tray ready 13 for -- to use on a patient, Physicians and 14 nurses typically identify the device with the 15 OEM. 16 To promote patient safety, FDA's 17 medical device reporting regulations require 18 manufacturers to report patient injuries and 19 product malfunctions to FDA. This reporting 20 requirement is a cornerstone of FDA's post 21 market surveillance system for medical 22 devices. This information enables both BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 325 1 manufacturers and the FDA to identify safety 2 and/or effectiveness problems and to take any 3 needed corrective actions such as product 4 design changes, recalls or other 5 notifications to the field, to prevent 6 unnecessary patient injuries. This system 7 cannot work without being able to identify 8 when an SUD has been reprocessed. 9 Now the FDA and GAO agree that the 10 existing regulatory scheme does not 11 adequately capture patient injuries and 12 product malfunctions involving reprocessed 13 SUDs. According to FDA, the lack of specific 14 labeling to identify reprocessed devices has 15 led to widespread under reporting of patient 16 injuries and product malfunctions involving 17 reprocessed SUDs. This is undermining the 18 agency's MDR regulations leaving it blind to 19 the post market safety and effectiveness of 20 these devices. 21 Pursuant to a request from the 22 Chairman of the Labor Committee, GAO BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 326 1 conducted and audit of the MDR system as it 2 relates to reprocessed SUDs. GAO reached the 3 same conclusion as FDA: the current 4 surveillance systems for medical errors in 5 adverse events do not detect all infections 6 and injuries resulting from the use of 7 reprocessed SUDs. 8 And finally, Section 301 will 9 require FDA to unnecessarily devote 10 significant time, money. and resources to 11 review petitions to exempt medical devices 12 from the new labeling requirements. As 13 currently written, Section 301 is overbroad 14 and has extended far beyond what it is 15 necessarily to identify reprocessed SUDs for 16 MDR reporting as originally intended. The 17 implications of extending this provisions to 18 OEMs are enormous in terms of cost, to 19 manufacturers, the FDA and ultimately 20 consumers and patients. 21 So with that, again, we want to 22 encourage FDA to continue to move forward in BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 327 1 this important area and look forward to 2 working to ensure that patients are protected 3 from unsafe reprocessed single-use devices. 4 Thank you. 5 MR. BARNETT: Thank you, Mark. 6 Well now its time, before we close this 7 panel, to see if anybody has any questions or 8 comments on the reuse issue, specifically. 9 MR. DURGIN: I'm Bob Durgin at 10 Biomet. Question for Naomi: does AMDR accept 11 the view that reprocessors and not OEMs 12 should accept full responsibility and 13 liability if a reprocessed device causes 14 patient injury? 15 MS. HALPERN: I don't think that 16 liability is an issue here. Yes, our members 17 fully accept responsibility for any injury 18 caused by the reprocessing of a medical 19 device. It is our view that -- and members' 20 views that Original Equipment Manufacturers 21 should remain liable for any injury that is 22 caused by something they did. I don't -- BETA REPORTING & VIDEOGRAPHY SERVICES www.betareporting.com (202) 638-2400 1-800-522-2382 (703) 684-2382 328 1 MR. DURGIN: Can you elaborate on 2 that, since these devices are designed and 3 manufactured for a single use only and not 4 intended for use after reprocessing? 5 MS. HALPERN: I think -- I don't 6 know that there is more to elaborate on and I 7 don't know that it's relevant to the MDUFMA 8 Stakeholders