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The Medical Device User Fee and Modernization Act of 2002 (MDUFMA) was enacted “in order to provide the Food and Drug Administration (FDA) with the resources necessary to better review medical devices, to enact needed regulatory reforms so that medical device manufacturers can bring their safe and effective devices to the American people at an earlier time, and to ensure that reprocessed medical devices are as safe and effective as original devices.”1 MDUFMA has four particularly important features:
Medical device user fees and increased appropriations were viewed by FDA,
Congress, and industry stakeholders as essential to support high-quality, timely
medical device reviews, and other activities critical to the device review program.
MDUFMA provides for fee discounts and waivers for small businesses. Small businesses
make up a large proportion of the medical device industry, and these discounts
and waivers help ensure they remain economically healthy and innovative.
The performance goals and commitments set under MDUFMA are comprehensive and
demanding. By FY 2007, a total of 85 will be in effect. All of these were developed
collaboratively by FDA, Congress, and the device industry. FDA provides periodic
reports on its progress towards meeting these goals to its stakeholders and
Congress. FDA also provides an annual financial report to Congress to help ensure
transparency and accountability of its use of the additional resources provided
by MDUFMA.
Before MDUMFA. In the years preceding enactment of MDUFMA, FDA’s medical device program suffered a long-term, significant loss of resources that undermined the program’s capacity and performance.
In early 2002, the medical device industry and Congress recognized that the program needed additional resources. Indicators of problems included: expedited premarket approval applications were taking longer than standard reviews; many reviews were delayed because necessary expertise was stretched thin or not available; and many guidance documents were out-of-date. In response, leaders of the device industry approached FDA and Congress to initiate discussions about linking new user fees to increased appropriations to augment the resources available for device review. Congress concluded that "FDA resources are limited, and that without a new infusion of funding, it is likely that review times will increase in the future."2 Soon after, Congress, FDA and industry worked to develop a solution: the Medical Device User Fee and Modernization Act of 2002.
Progress Under MDUFMA. FDA has made significant progress towards meeting MDUFMA’s fundamental objectives:
Problems that Limited Progress. Although FDA has been making good progress towards achieving MDUFMA’s central objectives, our progress has been limited by financial shortfalls and uncertainties. As originally enacted, MDUFMA specified the amounts that Congress was expected to appropriate each year from FY 2003 through FY 2007, and the revenues user fees were expected to provide in each of those years. However, in practice, the user fee framework under MDUFMA has created uncertainty for industry and FDA regarding the annual increase in fees and the amount of funds that would be collected by the Agency in any given year. For example,
By May 2005, uncertainty concerning whether corrective legislation would be
enacted before the October 1, 2005 termination date required FDA to impose a
hiring freeze in its Center for Devices and Radiological Health.
FDA was also faced with a very difficult task of trying to develop a workable
approach to implement section 502(u) of the Federal Food, Drug, and Cosmetic
Act (added by section 301 of MDUFMA) which required all medical devices to “prominently
and conspicuously” bear the name of the manufacturer. This provision applied
to all classes of devices and the only allowable exception involved FDA’s
granting of device-specific waivers. There were many questions and concerns
regarding the interpretation of the provision and the burden its implementation
would impose on FDA and the regulated industry.
To avoid the premature termination of medical device user fees and to address
the concerns regarding section 502(u), Congress enacted the Medical Device User
Fee Stabilization Act of 2005 (the Stabilization Act). The Stabilization Act:
(1) repealed the appropriations trigger for FY 2003 and FY 2004 and allows for
tolerances of up to 1% of the appropriations trigger for FY 2005-2007, (2) provides
for predictable application fees by establishing fixed annual fees for FY 2006
and FY 2007, although at a lower rate of increase than under the original legislation;
and (3) expands the definition of “small business” for FY 2006 and
FY 2007. The new law also limits section 502(u) to reprocessed single-use devices
and eliminates the granting by FDA of device-specific waivers. However, the
Stabilization Act leaves open how to ensure predictable revenues for FDA.
Moving Forward. With the enactment of the Stabilization Act,
FDA plans to build on its MDUFMA achievements during FY 2006 and FY 2007. We
expect continued progress towards achieving MDUFMA’s performance goals,
but we also anticipate that some of the commitments established under MDUFMA
will be more difficult or not feasible to achieve.
The user fee provisions of MDUFMA will sunset on October 1, 2007. If the user
fee program is not reauthorized, FDA will be unable to continue on our current
path of improvement and will instead be facing very difficult financial challenges
to our medical device program.
On November 17, 2005, FDA is holding the Third Annual Stakeholder Meeting on
MDUFMA. The focus of this meeting will be on obtaining input from interested
parties to help us and our stakeholders evaluate the program and prepare for
possible new legislation to reauthorize MDUFMA user fees. We strongly encourage
you to attend this meeting and provide your comments and recommendations that
will help us provide for continued improvement and additional benefits to all
our stakeholders. To learn how to participate in this important effort, see
the accompanying Federal Register notice.
1 Medical Device User Fee and Modernization Act of 2002, Report 107-728 (October 7, 2002), p. 21.
2 Medical Device User Fee and Modernization Act of 2002, House Report 107-728 (October 7, 2002), p. 21.
Updated September 29, 2005
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