All-Hands Notice from Dan Schultz about MDUFMA II (Issued April 16, 2007)Today, it is my great pleasure to share some very good news.
In 2002, FDA, Congress, and the medical device industry worked together to draft a landmark agreement that became the Medical Device User Fee and Modernization Act of 2002. MDUFMA has provided us with a significant new source of resources: medical device user fees paid by industry have provided FDA more than $110 million during the first four years of the program. These additional resources have given us the ability to pursue and achieve a complex and challenging set of negotiated performance goals. And the entire Center has seen some very real and practical benefits: expanded training opportunities; newer, more capable desktop and laptop systems; new IT systems that will make your life a bit easier; and expanded collaboration among Offices, allowing each of us to better learn from the insights and experiences of our coworkers. You have all shared in the hard work that has been required to bring us to this point, and you have my thanks and appreciation for all you have done.
But under current law, MDUFMA’s user fees will come to an end on October 1, 2007. If that were to occur, our review program would be seriously disrupted, it would not be possible for us to maintain our current level of performance, and we would expect significant delays in the review of new devices. Health care professionals and patients would be denied timely access to improved devices and improved treatment options.
The good news is that’s not going to happen. Instead, we are setting the stage for continued progress in meeting our public health missions.
Late last week, FDA, AdvaMed, MDMA, and NEMA agreed to support a set of legislative proposals to Congress that will reauthorize medical device user fees through fiscal year 2012. During the five years covered by the proposals, FDA would receive approximately $287 million from user fees. We also agreed to a streamlined set of performance goals that will improve our focus on getting safe and effective devices to market as rapidly as possible, and to other improvements to our review processes and the third-party inspection program. This set of legislative proposals will inevitably be termed "MDUFMA II."
Here’s a brief outline of our MDUFMA II proposals —
Fee Structure. We’re proposing three types of fees:
Our proposal provides industry with predictable, stable fees. All MDUFMA II fees will be specified in the statute, will increase by a constant 8.5% each year, and, except for the registration fee, cannot be adjusted in any other manner. Because of the uncertainty involved with the registration fee (we can’t really know how many establishments will continue to register once they learn a fee will be required), that fee will be subject to a limited one-time adjustment. The new fees, particularly the establishment registration fee, will help FDA by providing a broader, more stable, revenue base. The broader base also means that all of the existing application fees assessed under MDUFMA will be significantly reduced from current levels (for example, the standard fee for a PMA submitted during FY 2008 will be almost $100,000 less than the fee for FY 2007).
Performance Goals. The “cycle” goals of MDUFMA — the first action and subsequent action goals — will not be continued. Instead, we will focus more sharply on FDA decisions, and the decision goals will be more challenging. Here are three examples:
Our full set of performances goals will be provided in a letter from the DHHS Secretary to Congress. These goals are ambitious, and will require continued diligence and focus from all of us. I believe that the goals we are agreeing to are reasonable in light of the resources we gained under MDUFMA and the assurance of a sound financial base provided by MDUFMA II. We will report our performance on a quarterly basis, and we will also provide information on the total time required from receipt to FDA’s final action.
Small Business Relief. In addition to lower application fees across the board, the fees paid by small businesses — the majority of device manufacturers — will be further reduced. For example, a small business will pay 50% of the standard fee when it submits a 510(k), compared with 80% at present, and 25% of the standard fee when it submits a PMA, compared with 38% at present. We will continue to provide a fee waiver for the first PMA submitted by a qualified small business applicant. In addition, the proposal would allow a way for foreign businesses to qualify for small business fees and fee waivers.
Other Changes to Our Review Processes. Among other improvements, we will make greater use of interactive review to encourage informal communication with companies; provide greater opportunity for stakeholders to provide input into the development of guidance documents; and clarify the processes and data requirements for the review of imaging devices that use contrast agents or radiopharmaceuticals. We will also be able to provide greater opportunity for you to participate in continuing education and other training that will help you keep pace with technological and medical advancements and to build skills that will be helpful to both the Center and you as your career with FDA advances.
The Third-Party Inspection Program. The proposal would streamline the third-party inspection program, which permits FDA-accredited private sector auditors to conduct routine inspections, by making it easier for manufacturers to participate in the program. FDA will consider the results of third-party inspections when we plan our own inspections.
In Vitro Diagnostic Devices. We will foster the development of innovative in vitro diagnostic tests by issuing new guidance on important emerging issues and by reviewing some low-risk devices to determine whether any can be exempted from premarket notification. We will also conduct a pilot program to assess the simultaneous review a company’s 510(k) application and waiver application under the Clinical Laboratory Improvement Amendments.
Over the next few months, we will publish a Federal Register notice outlining our proposals, we will expand our consultation with stakeholders by holding a public meeting to discuss our proposals, and Congress will hold hearings. We’ve got a lot of work ahead of us, but the benefits to FDA, industry, health care professionals, and patients will make it all worthwhile. To help set the stage for these efforts, members of the FDA team that worked with industry to develop our proposals will meet with each Office to provide additional information and to take your questions.
Thank you again for all your efforts in helping us reach this important juncture. I’ll keep you informed as we progress through the legislative process. In the meantime, I’m planning to do an all-hands video broadcast on MDUFMA some time over the next few weeks, in which you’ll have a chance to ask questions and offer comments. You’ll be receiving an announcement about it soon.
Dan Schultz
Updated April 23, 2007
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