Comments Regarding the Medical Device User Fee Act

​To the Food and Drug Administration
Center for Devices and Radiological Health

Docket Number: FDA-2010-N-0389

April, 16 2012

The coalition is not enthusiastic about user fees, but in today’s budgetary climate, they are necessary, especially since the FDA has been under-funded for years. In particular, the Center for Devices and Radiological Health (CDRH) has struggled to manage an expanded demand for more complex devices with inadequate appropriations. The coalition will continue to advocate with Congress for increased funding for the FDA to ensure the agency has the resources it needs to carry out its mission of protecting and promoting the public health.

A major problem with FDA user fees as currently structured is that it prioritizes industry performance goals over other equally important goals, such as public health and safety goals, which are not funded by the fees. A 2009 GAO report stated: “FDA officials said that this [growing dependence on user fees] has seriously limited the agency’s ability to fulfill its oversight responsibilities in some areas, particularly those not funded with user fees.”

In the discussion draft, FDA states, “Nothing in this letter precludes the Agency from protecting the public health by exercising its authority to provide a reasonable assurance of safety and effectiveness of medical devices.” That is an empty statement. There is nothing specifically dedicated to safety in this user fee agreement.

For example, no user fees are allocated for postmarket surveillance to determine if there are problems with the devices. If the UK hadn’t studied metal-on-metal hips and determined their risks, it is unlikely that FDA would have known they should be recalled. The agreement does not include funding to improve MAUDE analyses or improve the recall system, to make sure, for example, that a patient is informed if a heart valve in his body has been recalled. The MDUFA agreement does not include funding to pay for de novo reviews, which could provide more safety information than the current 510(k) clearance process.

It is clear from the Federal Register notice that the main purpose of user fees is to speed up medical device clearances and approvals. Ensuring patient’s safety regarding devices on the market or being considered for the market is not the role of user fees. And, unfortunately, as device companies demand and receive more meetings and explanations for FDA decisions, that takes up resources that leave even less funding for safeguards or any time.

Specific Concerns with the Proposed Recommendations

 

User Fees Are Too Low

Although the total amount of device user fees increases significantly in this agreement over five years, the fees are starting from such a low point that they will still pay a small percentage of what these reviews actually cost. If user fees double, but the workload triples due to a “ramp-up” in performance goals, then CDRH is actually losing ground. The medical device user fees have been and with this new agreement still are too low. That is especially true for the largest companies and for all 510(k) fees.

PMA user fees for the largest medical device companies should be comparable to those for INDs of pharmaceutical companies of similar size. The largest device companies (such as Johnson & Johnson) currently pay user fees of $220,050 for a PMA and $4,049 for a 510(k) application.

This is 12% and 1%, respectively, of the same company’s user fees for a prescription drug application ($1,841,500), and about 20% of what the device review actually costs the FDA. The PMA user fee increases by about 12.7% from 2012 to 2013. This provides an enormous disincentive for the FDA to demand PMA applications, even for devices where the risks are truly unclear. The 510(k) application fees are also much too low to even pay for a small proportion of staff time.

Small device manufacturers pay extremely low user fees. Firms with sales of up to $100 million pay only half of the full 510(k) user fee. Firms with sales up to $30 million pay nothing for their first PMA, and small firms pay one-quarter for subsequent PMAs.

Other regulatory entities receive much higher user fees than CDRH, without giving the industry a say in how those monies are spent. The Nuclear Regulatory Commission gets 90% of its $1 billion funding from user fees paid by industry. The Federal Aviation Administration gets almost all its $10 billion budget from user fees paid by customers. The Pipeline and Hazardous Materials Safety Administration gets almost its entire $200 million budget from oil company user fees. Those fees actually pay for the work that the agencies do, but the agencies are not beholden to the industry to make decisions about how best to do their jobs. Even the FDA’s Center for Drugs gets the majority of its budget from pharma user fees, although those fees have the same kind of strings at medical device user fees. Even with the proposed increases, device companies would be paying only a fraction of the costs of device reviews, and none of the costs of post-market surveillance.

User Fees are Probably Inadequate to Meet Performance Goals

The total amount of user fees is not enough to meet the performance goals, except under certain conditions. Under section C—Shared Outcome Goals—of the Federal Register notice, the FDA states that “Improvements outlined in the draft commitment letter…should reduce the average Total Time to Decisions…provided that the total funding of the device review program adheres to assumptions underlying the agreement” (emphasis added).

In the January 31, 2012 Minutes From Negotiation Meeting on MDUFA III, the Agency stated that “they have some concerns about how solid a financial footing this agreement establishes given that there are a lot of uncertainties about how much effort will be required to meet the goals, and that in order to bring the proposal to a level that Industry could agree to, FDA had to take away any margin of error.”

User fees set inappropriately low and the lack of any margin of error will set CDRH up to fail to meet the performance goals negotiated with industry.

It is especially disturbing that the individual fees will decrease if the total exceeds a specified level, but there is no such safeguard if the total fees are too low.

Unfunded Industry-proposed Mandates

Industry wanted the FDA to meet performance goals on Pre-Submissions and Third Party Review, but industry did not want user fees applied to these programs. The coalition supports FDA’s position that they will manage pre-submissions and Third Party Review “as resources permit.”

Furthermore, we recommend that the Third Party Review program be scrapped altogether. It is the CDHR’s job to review safety and effectiveness of devices. Third parties have inherent conflicts-of-interest. They know that device makers can shop around to find the most lenient review companies, and the fact that they are certified by the FDA is not assurance that the review companies are equal in terms of the standards that they require. Also, with the current Third Party Review program, the FDA often finds the reviews are scientifically inadequate, which slows down the clearance process.

We are also concerned that user fees will be insufficient to fund interactive reviews and patient safety and risk tolerance meetings. These meetings will consume a great deal of staff time, and if Congress agrees to industry’s additional demands, the gap between resources and required CDRH meetings and negotiations with industry will be even greater.

In the final draft document, FDA should explicitly state next to any performance goal that is not funded with user fees that FDA will meet the goal only “as resources permit.”

Conclusions

We support applying user fees for additional CDRH staff, increased training, and for guidance document development and would like to see additional user fees in the future for additional work. For example, if a device is approved or cleared, the company should pay an additional user fee to help support the FDA’s post-market surveillance. If a device is recalled, that should add another user fee for FDA to help manage the recall.

As we stated earlier, we are not fans of user fees. But with today’s budget restraints, they are necessary, especially since the CDRH has been under-funded for years. However, the user fees that CDRH would receive in this agreement are much too low to support the additional performance goals and work that industry has demanded, and completely inadequate to improve the future safety record of medical devices such as hips, mesh, glucose test strips, contact lens solution, and cardiac devices.

American Medical Women’s Association (AMWA)
Breast Cancer Action
Center for Medical Consumers
Connecticut Center for Patient Safety
Consumers Union
National Research Center for Women & Families
Our Bodies Ourselves
THE TMJ Association
U.S. PIRG
WoodyMatters