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FDA medical device user fees to double

Arundhati Parmar

Under a preliminary deal announced recently, medical device user fees paid to the U.S. Food and Drug Administration are going to more than double in the next five years.

That might not sit well with some medical device makers who have long complained that over the years the agency has become too unpredictable and slow in clearing products for the market.

But “double” is a misleading representation of the facts on the ground as fees in the past have been fairly “modest,” says FDA spokeswoman Karen Riley. In other words, if you are going from zero, the increase is always going to look massive.

The problem is that the FDA has long been “overworked and underfunded.” Riley says the tentative deal is merely “correcting a deficit.”

Consider the following, she says:

  • The $287 million that the FDA will have collected by the end of September over the past five fiscal years represents only 20 percent of the agency’s medical device premarket review activity conducted by the Center for Devices and Radiological Health (CDRH). By contrast, prescription drug user fees account for 60 percent of the review activities conducted by reviewers of the Center for Drug Evaluation and Research (CDER). The increased amount of $595 million that the agency will now collect over the next five years will now account for 35 percent of review activities.
  • Attrition rate of CDRH reviewers was 8.6 percent, much higher than the 4.7 percent of CDER reviewers in fiscal year 2010.
  • Fees have been modest. Companies with less than $100 million in gross receipts or sales qualify to pay the user fee for small companies. In 2012, that’s $2,024 instead of the standard $4,049 for a 510(k) and $55,013 for a premarket approval application (PMA) or PMA in lieu of the standard $220,050. Further, first-time applications with gross receipts of less than or equal to $30 million don’t pay a fee for a PMA at all.

So it’s unfair to think that the FDA has been robbing medical device companies blind.

Fine, but now that the agency will collect higher fees, the onus is on CDRH reviewers, new and old, to live up to the higher performance standards that FDA has committed to in this deal. One key benchmark is shorter review times that are supposed to improve progressively over the course of the next five years.

Failure won’t be an option because AdvaMed, the device industry lobby and trade group, will be watching closely.

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