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Thursday, May 17, 2012

The FDA Medical Device User Fee Program

Judith A. Johnson
Specialist in Biomedical Policy

UPDATE: The Senate Committee on Health, Education, Labor, and Pensions and the House Committee on Energy and Commerce reported bills on May 7 and May 10, 2012, that include, along with other FDA-related provisions, the Prescription Drug User Amendments of 2012 (Title I), the Medical Device User Fee Amendments of 2012 (Title II), the Generic Drug User Fee Amendments of 2012 (Title III), and the Biosimilar User Fee Act of 2012 (Titles IV): S. 2516, the Food and Drug Administration Safety and Innovation Act, and H.R. 5651, the Food and Drug Administration Reform Act of 2012. The MDUFA provisions in Title II of both bills are virtually identical and differ from the HHS draft proposal discussed in this report in only minor technical details. (Note: The rest of this report has not been updated since April 24, 2012.) 

The Food and Drug Administration (FDA) is the agency responsible for the regulation of medical devices. These are a wide range of products that are used to diagnose, treat, monitor, or prevent a disease or condition in a patient. A company must obtain FDA’s prior approval or clearance before marketing many medical devices in the United States. The Center for Devices and Radiological Health (CDRH) within FDA is primarily responsible for medical device review and regulation.

Congress first gave FDA the authority to collect user fees from medical device companies in the Medical Device User Fee and Modernization Act of 2002 (P.L. 107-250). The purpose of the user fee program is to help reduce the time in which FDA can review and make decisions on marketing applications. Lengthy review times affect the industry, which waits to market its products, and patients, who wait to use these products. The user fee law provides a revenue stream for FDA; in conjunction, the agency negotiates with industry to set performance goals for the premarket review of medical devices. Reauthorization of FDA’s medical device user fees last occurred in 2007, just before the FDA’s authority would expire, via the Medical Device User Fee Amendments of 2007 (MDUFA II). Current authority will expire on October 1, 2012.

On February 1, 2012, FDA announced that it had reached “an agreement in principle” with the medical device industry on proposed recommendations for the second reauthorization—referred to as MDUFA III. A draft MDUFA III package, composed of statutory language and the FDAindustry agreement on performance goals and procedures, was posted on the FDA website on March 14, 2012, and a public meeting describing the draft was held on March 28, 2012. The 30- day comment period on the draft ended April 16, 2012. Following review of the comments, FDA may revise the recommendation and then is to submit the final package to Congress.

Since medical device user fees were first collected in FY2003, they have comprised an increasing proportion of FDA’s device budget. Medical device user fees have raised a number of concerns, prompting Congress to carefully consider issues such as which agency activities could use fees, how user fees can be kept from supplanting federal funding, and which companies should qualify as a small business and pay a reduced fee.

Congress is also considering reauthorization of the Prescription Drug User Fee Act (PDUFA) as well as new proposals for a Generic Drug User Fee Act and a Biosimilars User Fee Act. It is likely that these three will be combined with MDUFA III along with a variety of related and unrelated issues. Because of the importance of user fees to FDA’s budget, PDUFA and MDUFA are considered to be “must pass” legislation, and Congress has often in the past included language to address a range of other concerns. For example, MDUFA II included provisions about the



Date of Report: May 11, 2012
Number of Pages: 37
Order Number: R42508
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