REQUIRED BY THE
MEDICAL DEVICE USER FEE
AND MODERNIZATION ACT OF 2002
FOOD AND DRUG ADMINISTRATION
DEPARTMENT OF HEALTH AND HUMAN SERVICES
September 13, 2007
The Honorable Richard Cheney
President of the Senate
United States Senate
Washington, D.C. 20510
Dear Mr. President:
Enclosed is the fourth annual financial report to Congress required by the Medical Device User Fee and Modernization Act of 2002 (MDUFMA). This report covers fiscal year (FY) 2006, documenting how the Food and Drug Administration (FDA) satisfied the conditions specified in MDUFMA for continuing to collect and spend medical device user fees.
The report also presents the user fee collections and related expenses for FY 2006, and details the amount carried over to FY 2007. In FY 2006, FDA received $34 million and obligated $32 million of user fee collections. In addition, FDA received an increase in appropriations for its medical device program in FY 2006. About 72 percent of total expenses for medical device review went for FDA staff salaries and benefits. The remainder went toward the operating and the infrastructure to support the medical device review program. The infusion of resources is essential to enabling FDA to meet the performance goals associated with MDUFMA.
Two years ago the survival of this crucial program was in jeopardy. I urged Congress to quickly enact legislation needed to keep this program viable. Now, I want to express my gratitude to Congress for the enactment of the Medical Device User Fee Stabilization Act of 2005 (MDUFSA), signed by the President on August 1, 2005. Because of your quick action, this program will ensure a healthy medical device review program at FDA through FY 2007. Please accept my gratitude for your concern and timely action.
Michael O. Leavitt
Identical letters to:
The Medical Device User Fee and Modernization Act of 2002 (MDUFMA) requires the Food and Drug Administration (FDA) to report annually on the financial aspects of its implementation of MDUFMA. Required under MDUFMA, this is the fourth annual financial report to Congress that covers activities for fiscal year (FY) 2006.
MDUFMA, amended by the Medical Device User Fee Stabilization Act of 2005, specifies that three conditions must be satisfied in order for FDA to collect and spend MDUFMA fees.
- Within FDA’s salaries and expenses appropriation, the amount appropriated for devices and radiological health after FY 2004 must be at least $205,720,000, excluding fees, adjusted for inflation.
- The fee amounts that FDA can collect must be specified in the Appropriation Acts.
- FDA must spend at least as much from appropriated funds for the review of medical device applications as it spent in FY 2002, adjusted for inflation.
MDUFMA also contains a provision that FDA must spend at least as much on medical device inspections as it spent in FY 2002, increased by 5 percent in each fiscal year.
This report explains how FDA met the four statutory conditions in FY 2006. The report also provides information on user fee collections, expenditures, and carryover balances. In FY 2006, FDA net collections totaled $34 million from fees. FDA obligated $32 million from MDUFMA collections to support FDA’s medical device review program. FDA carried forward into FY 2007 a balance of $16 million. About 72 percent of the total expenses for the medical device review program in FY 2006 went for personnel salary and benefit costs. The reminder (about 28 percent of the total expenses) was primarily the operating and the infrastructure costs necessary to support the medical device review program.
MDUFMA fees, with the increased appropriations from Congress enabled FDA to dedicate 191 more full-time equivalents (FTEs) to the medical device review program in FY 2006 than the FTEs dedicated in FY 2002. An additional 73 contractor staff-years were also dedicated to the device review in FY 2006 compared with FY 2002. These resources have enabled FDA to achieve the performance goals associated with the enactment of MDUFMA, and strengthen FDA’s medical device review program. FDA looks forward to continued strengthening of the medical device review program in FY 2007.