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This article was originally published in The Gray Sheet

Executive Summary

DEVICE USER FEE IMPLEMENTATION STRATEGY UNDER DEVELOPMENT AT CDRH, according to staffers at the Center for Devices and Radiological Health. The device center began efforts in February to develop several models for the collection and use of device industry user fees. The models, which are expected to be completed in several months, will provide estimates of the improvement in device application review times that could be achieved with the addition of user fees to the CDRH budget, as well as estimates of the user fee rates that will be needed to achieve given improvements. CDRH is developing the user fee models to provide the FDA Commissioner's office with information as it negotiates with Congress on device user fee legislation. The strategy also would provide the device center with potential plans of action should user fee legislation be enacted. President Clinton's economic plan proposes device user fees, and Sen. Edward Kennedy (D-Mass.) and Rep. Henry Waxman (D-Calif.) are said to be considering drafting device user fee bills. Device center staffers are in the process of developing projections for average review times and resources expended on premarket approval applications, 510(k)s, and investigational device exemptions. As part of this effort, CDRH is evaluating a sample of 200 510(k)s. Preliminary data on 60 of the 510(k)s indicates that the average size of an application has nearly tripled from 24 pages in fiscal year 1984 to roughly 70 in FY 1992, and that the percentage of 510(k)s that include clinical data has increased from 2% to 4-6%. Staffers at the device center's office of management services who are involved in the user fee project met with CDRH Director Bruce Burlington the week of March 15 to gain his input on development of the strategy. CDRH staffers also have been meeting with personnel from the agency's office of planning and evaluation, the Center for Drug Evaluation and Research and the Center for Biologics Evaluation and Research to discuss their ongoing efforts to implement a user fee program for prescription drugs and biologics that was mandated by the Prescription Drug User Fee Act of 1992. CDRH is looking for ways to accommodate the small device manufacturers that could be hardest hit by user fees. One idea under consideration is use of a scaled fee system for companies under a certain income threshold. Although CDRH would like to make allowances for small firms, device center staffers plan to lobby against adoption of a small business provision similar to that included in the drug law because it is thought to be overly complex and difficult to implement. For the same reasons, the device center also is against provisions for reimbursement of user fees. The drug user fee program requires FDA to reimbursement a portion of a company's user fees if the application is not filed. The device center also is considering how best to apportion fee collection between the three possible sources of industry funds: application submissions, facility registrations, and product listings. CDRH staffers feel that several potential problems exist with collection of registration and listing fees that will have to be dealt with. For example, many device facilities registered with FDA are not actual manufacturing sites. In addition, many importers' registered facilities are import offices consisting of one or two individuals. The center fears that these types of facilities could disappear from FDA's registration list if user fees are imposed. A potential difficulty with user fees for product listing is the disparity in the number of listings required for different types of products. For example, heart valve manufacturers may have only one or two listings per device, while hip prostheses manufacturers, whose products are made up of many different components, could have numerous listings per device. CDRH believes that user fees should not be imposed on investigational device exemption applications because the majority of IDEs do not lead to marketing applications and because IDE fees could restrict research and development of new devices. The device center is developing its strategy based on the assumption that any user fees appropriated by Congress will be earmarked for device center programs and not for the federal Treasury as a deficit reduction tool. The Clinton economic plan indicated that user fees might go towards deficit reduction. The administration has come down in support of the drug user fee legislation, which stipulated that user fees would go only to the agency. Commissioner David Kessler stated at a March 16 House Appropriations agriculture subcommittee hearing on the agency's budget that the administration would seek a supplemental appropriations bill enabling implementation of the drug user fee law. Kessler did not discuss the administration's position on the use of device user fees, but he stated: "There is no question that this administration is committed to reducing the deficit, and all appropriate ways to do that are on the table, including additional user fees beyond the Prescription Drug User Fee Act in different industries we regulate." The measures reportedly being considered by Kennedy and Waxman would divide device user fee funds between CDRH and the federal Treasury. Regardless of whether CDRH receives funds from user fees, Kessler maintained that the device center needs additional resources to decrease review times for 510(k)s. He indicated that the current average review time had climbed to about 140 days. By comparison, the average review time was 126 days in fiscal 1992 and 102 days in fiscal 1991 ("The Gray Sheet" Jan. 11, p. 6). Kessler told Congress it is "going to have to make a decision" between providing CDRH with additional funds and lengthening review times. "If you want me to open the application and read the application and assure safety and efficacy, we can't do it in 90 days...140 days is about the best we can do." At an August 1992 hearing on the prescription drug user fee legislation, Kessler warned that 510(k) and PMA backlogs could double in two years if user fees were not made available to the device center ("The Gray Sheet" August 17, 1992, p. 2). In fact, the backlog of active overdue 510(k)s has more than tripled in three-and-a-half months, jumping from 331 at the end of September 1992 to 1,060 in mid-January. The Commissioner pointed to the growing complexity of 510(k) submissions as one reason for the 510(k) review slowdown. "In 1977 it wasn't so hard" to demonstrate substantial equivalence to a pre-1976 device in a 510(k) submission. "What happens as you move beyond 1977," he added, is that "it becomes...more and more complex to make that kind of [substantial equivalence] finding." Consequently, Kessler stated, "if you want to assure safety, if you want to assure the American public that these devices are working, you have to give us either the resources" or the time to review applications, "and it can't be done in 90 days." Another strain on CDRH resources noted by Kessler is the overall increase in submissions, from about 2,000 in 1982 to 11,000 in 1992. Kessler also alluded to the device center's "triage" plan for expediting review of low-risk 510(k) devices ("The Gray Sheet" March 15, p. 3). Kessler said that FDA should "accelerate the important," "breakthrough" 510(k)s, while for "the ones that are not breakthrough, I think it is" acceptable "to take some more time" reviewing the submissions. "I think there are changes we need to make in the medical device review process," he concluded. Another resource pressure cited by Kessler at the hearing is the growing amount of legislation that CDRH must help implement. Kessler highlighted the Mammography Quality Standards Act of 1992 ("The Gray Sheet" Oct. 12, 1992, I&W-2) and the Clinical Laboratory Improvement Amendments of 1988. He estimated the former would require the work of 65 full-time equivalents of CDRH, the latter 171 FTEs. The device center is supposed to get funding from the Health Care Financing Administration for CLIA implementation but to date has not received any ("The Gray Sheet" March 1, p. 6). Kessler also noted that implementation of the Safe Medical Devices Act of 1990 continues to demand a significant amount of resources.



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