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DEVICE USER FEE DISCUSSIONS BETWEEN HIMA AND FDA

This article was originally published in The Gray Sheet

Executive Summary

DEVICE USER FEE DISCUSSIONS BETWEEN HIMA AND FDA are expected to begin by mid-October. The talks are intended to lay the groundwork for official negotiations among the Health Industry Manufacturers Association, FDA and congressional staffers on user fee legislation. HIMA's board will meet in a special session in late October to discuss strategy for negotiating user fee legislation. In a Sept. 23 memo to HIMA members, association President Alan Magazine said that the official negotiations would likely begin in December; however, it is now expected that the talks will commence at an earlier date. One of HIMA's principal aims in the legislative discussions will be to make certain that user fee legislation directs user fee revenues toward FDA's device review program rather than deficit reduction. "Never before has the device industry come as close as it did during the last budget cycle to having [user] fees enacted specifically directed toward deficit reduction," Magazine maintains. In early August, a Senate/House conference dropped a provision in the Senate's fiscal 1994 FDA budget bill that would have required collection of $175 mil. in user fees from agency-regulated industries other than the prescription drug industry ("The Gray Sheet" Aug. 9, p. 17); the bill would have required that some of the funds be used for deficit reduction. Magazine also notes that Vice President Gore's recently released "reinventing government" report recommends the collection of device user fees for deficit reduction. The association president asserts that HIMA "must be engaged in efforts to ensure that user fees not be used for general deficit reduction purposes, but that they be used to address the product approval problems at FDA which have been so deleterious to our industry" (emphasis Magazine's). HIMA's approach is similar to that used by the prescription drug industry in negotiating user fee legislation last year. Due to lobbying by the Pharmaceutical Manufacturers Association, Congress included a provision in the Prescription Drug User Fee Act of 1992 requiring that funds collected under the legislation be directed to FDA's drug approval program. The Sept. 23 memo outlines HIMA's strategy for implementing its newly established policy of participating in user fee legislation negotiations. Until recently, HIMA had been categorically opposed to device user fees, which have been proposed by the executive branch over the past several years but not adopted by Congress. In a June policy statement, HIMA said that it would "reconsider its position of absolute opposition" to user fees because of "consistent" efforts by the Clinton Administration and some members of Congress to establish a device user fee program. While noting that HIMA still does not endorse user fees, the June memo said that the association would negotiate legislative proposals if FDA showed "demonstrated progress" in following suggestions for improving FDA device programs outlined in a recent House Energy and Commerce oversight subcommittee report. HIMA now has modified that position because "the political momentum...for further action on user fees by the Congress" requires that the association participate in negotiations before it can make an assessment regarding improvements in the device program, Magazine says in the Sept. 23 memo. "We expect user fee discussions will occur before we can determine if" recent approval program policy initiatives "will result in positive reforms," the HIMA president remarks. Magazine adds: "While we, as an industry, prefer not to pay user fees, we have an obligation to work with FDA and the Congress to set meaningful performance goals as part of the legislative process." HIMA believes that "the momentum which is building for user fees gives us an opportunity to shape the legislation and ensure that significant product review improvements -- in particular reasonable and predictable time frames -- are achieved." Magazine notes that factors contributing to the movement toward user fees include FDA's development of a proposal to collect $25-30 mil. in fees from the device industry in fiscal 1995 ("The Gray Sheet" Sept. 20, p. 3) and the "considerable interest" in device user fees shown by the House Energy and Commerce Committee, which is chaired by John Dingell (D-Mich.). HIMA recently met with Dingell staffers to hear their "concerns," Magazine tells members. The National Electrical Manufacturers Association also is developing a strategy on the user fee issue. NEMA, which has traditionally opposed user fees, recently has met with staffers of Rep. Dingell, Senate Labor and Human Resources Committee Ranking Republican Nancy Kassebaum (Kans.) and Sen. Orrin Hatch (R-Utah) to discuss the prospects for user fee legislation in Congress. NEMA's board plans to consider the association's position on user fees at a meeting in November.
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