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Medical Devices

Minutes From Negotiation Meeting on MDUFA III Reauthorization, December 13, 2011

FDA - Industry MDUFA III Reauthorization Meeting
December 13, 2011, 11:00 am - 12:30 pm


To discuss MDUFA III reauthorization.


Malcolm Bertoni Office of the Commissioner (OC)
Ashley Boam Center for Devices and Radiological Health (CDRH)
Nathan Brown Office of Chief Counsel (OCC)
Kate Cook Center for Biologics Evaluation and Research (CBER)
Christy Foreman CDRH
Bill Hubbard FDA Consultant
Elizabeth Hillebrenner CDRH
Toby Lowe CDRH
David Miller Office of Financial Management (OFM)
Don St. Pierre CDRH
Francisco Vicenty CDRH
Ruth Watson Office of Legislation (OL)
Nicole Wolanski CDRH
Barbara Zimmerman CDRH
Brian Connell Medical Imaging Technology Alliance
David Fisher Medical Imaging Technology Alliance
John Ford Abbott Laboratories (representing AdvaMed)
Elisabeth George Phillips (representing (MITA)
Mark Leahey Medical Device Manufacturers Association
Joseph Levitt Hogan Lovells US LLP (representing AdvaMed)
John Manthei Latham and Watkins (representing MDMA)
David Mongillo American Clinical Laboratories Association
Patricia Shrader Medtronic (representing AdvaMed)
Janet Trunzo Advanced Medical Technology Association

Meeting Start Time: 11:00 am

FDA presented a counter-proposal to Industry’s December 6, 2011 proposal. FDA noted its position that few modifications can be made to their November 29, 2011 financial proposal if they are to preserve the objectives in the draft Commitment Letter. In particular, FDA expressed its view that the FTEs needed to support the performance expectations could not be lowered any further. Based on their examination of assumptions, evaluation of requirements, and analysis of risks, FDA confirmed its estimate of 321 additional FTEs for full performance assuming Pre-Submission quantities grow to 2,500 by FY2015, and 275 additional FTEs if Pre-Submission quantities are no greater than 2,000 in FY2015. FDA stated they cannot commit to the proposed goals without sufficient staffing. FDA’s counter-proposal included alternatives for addressing financial uncertainties which can potentially lower overall costs.

FDA presented three alternatives for addressing the annual rate of cost increase. The first alternative was FDA’s previous proposal to use their best estimate of 3% annual inflation across the five-year period. The second alternative was to take the greater of Industry’s 2.24% annual inflation estimate or an inflation adjustment that follows the formula used in other user fee programs (weighted 60% on the most recent 3 year average of FDA payroll costs and benefits and 40% on the consumer price index, or CPI-U, for the Washington, DC area.) The third alternative was to simply use the annual adjustor without setting a base. Industry asked if, under the third option, fees would still be capped when an inflation adjustor is utilized. FDA replied that a cap could be calculated based on reasonable assumptions.

FDA presented two alternatives for addressing Pre-Submission workload, assuming the interim performance trigger is met. The first alternative was FDA’s previous proposal for binary funding options based on submission levels above or below 2,000 in FY2015. The second alternative was for annual adjustments based on quantity. In this alternative, FDA assumed a base of 1,800 Pre-Submissions and 255 FTEs by the end of FY2015. Industry noted that FDA is presently reviewing 1,800 pre-IDEs per year with current resources and asked why FDA believes they need 255 additional FTE to continue what they are doing now. FDA clarified that the estimated 255 FTEs are needed to accomplish the entire draft Commitment Letter, including but not limited to goals for Pre-Submissions. FDA also noted that they do not believe the draft commitments regarding Pre-Submissions reflect what they are doing now with pre-IDEs; additional work will be required to manage and meet specific goals.

FDA presented a potential approach for making adjustments to user fee resources based on annual Budget Authority (BA) appropriations. One would first estimate the total process cost for the next year by using the annual cost increase formula to project from the actual cost from the prior year. One would then estimate the funding from BA appropriations for the next year based on the President’s Budget for Devices and Radiological Health. Based on these estimates, one could then calculate the amount required from user fees, with adjustments based on differences between estimates and amounts assumed in the MDUFA III agreement, up to a specified cap.

At Industry’s request, FDA presented additional details regarding their FY2013 baseline financial estimates. FDA took preliminary FY2011 actual data and projected that FY2012 costs will be 1.37% higher than FY2011 and that FY2013 costs will be 3% higher than FY2012. FDA also provided their preliminary estimate of the FY2012 BA appropriations. Based on these estimated costs and BA resources, FDA presented their estimate for user fee resources needed to cover the current base FTE level. FDA reiterated their intention to use additional MDUFA II funds to begin hiring FTEs prior to MDUFA III, if an agreement is reached; this results in reducing the new FTEs needed in FY 2013. Specifically, FDA proposed hiring 32 FTEs to improve the manager to reviewer ratio as mush as possible by the end of FY2012. FDA therefore added costs associated with maintaining an additional 32 FTEs to their estimate of the FY2012 baseline costs to be carried into FY 2013.

FDA presented a mechanism for making adjustments. Application fees could be fixed to provide predictability for Industry. Adjustments could instead be made to registration and/or product fees, for which the larger base quantities result in smaller individual dollar adjustments. Such adjustments could be an alternative to the final year fee offset provision. FDA provided sample fee structures with various BA and workload adjustments. Industry noted that they plan to develop a proposed fee structure that would be acceptable to industry members, subject to FDA’s concurrence, and that, in any event, industry was not if favor of product fees. Industry did request data on the number of products listed per company so that they can determine maximum exposure for any individual company for this option to be evaluated.

As stated on November 29, 2011, FDA estimated they would need between 225 and 321 additional FTEs, depending on Pre-Submission workload levels. FDA presented their estimated resource needs for these FTEs under their 3% annual inflation estimate and Industry’s 2.24% annual inflation estimate, both with an assumed 1.5% annual increase in BA appropriations.

FDA stated their criteria for acceptable interim performance triggers: reasonable and objective criteria that reflect the likely outcome of a good faith effort, including some tolerance for less-than-perfect outcomes; triggers must be based on factors within FDA’s control; and triggers must be limited to a small set of key indicators. FDA emphasized the importance of considering a good faith effort; if FDA misses the trigger, nobody wins, as they will not have the resources needed to achieve the draft Commitment Letter. The objective for the interim performance triggers should be to see if the program is on track and worthy of continued investment.

FDA proposed that five out of the following six criteria be met to trigger further increases beyond FY2014 levels: 510(k) and 180-day PMA Supplement FY2012 receipt/filed cohorts must meet MDUFA II performance goals; 91% of 510(k)s received in the first half of FY2013 must receive a decision within 90 FDA days; average Total Time for 510(k) FY2013 receipt cohort with MDUFA decisions as of 3/31/14 must be 114 days or less; 65% of the 510(k) FY2013 receipt cohort and 75% of the first half of the 510(k) FY2014 receipt cohort must receive substantive interactions within 60 days; 65% of the PMA and panel-track FY2013 receipt cohort and 75% of the first half of the PMA and panel-track FY2014 receipt cohort must receive substantive interactions within 90 days; and, 65% of the 180-day PMA supplement FY2013 receipt cohort and 75% of the first half of the 180-day PMA supplement FY2014 receipt cohort must receive substantive interactions within 90 days. The criterion for average Total Time would be considered met if the applicant average time increases and FDA average time decreases. Industry noted their disagreement with considering the criterion met if the average applicant time increases. Industry stated this could happen as a result of FDA asking questions that are not necessary. FDA indicated their analyses show this does not happen often and noted their plan to reduce manager to reviewer ratios should limit such occurrences even further. FDA also indicated they would consider a counter-proposal with a tolerance associated with this criterion.

Industry asked why FDA did not include performance criteria for Pre-Submissions. FDA stated their commitment to meeting Pre-Submission goals outlined in the draft Commitment Letter, but noted they are at higher risk for missing these goals due to the lack of interim targets and substantial unknowns with this new program (e.g., development of appropriate IT tools, program management, and submission quantity.) FDA reiterated their position that interim performance triggers should be attainable based on good faith efforts. Industry indicated their strong desire to include criteria for Pre-Submissions.

FDA also provided additional details requested by Industry on their plans for training and IT enhancements.

Meeting End Time: 12:30 pm

Page Last Updated: 03/23/2017
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