Originally Published IVD Technology November/December 2005
INDUSTRY NEWS
New user fee act becomes lawPresident Bush signed into law the Medical Device User Fee Stabilization Act (MDUFSA), which updates and revises the Medical Device User Fee and Modernization Act of 2002 (MDUFMA). Analysts believe that the new law is an improvement over the previous version and will benefit the IVD industry greatly.
"We look at MDUFSA as a midcourse correction," says Mark E. Brager, director of communications at the Advanced Medical Technology Association (AdvaMed; Washington, DC). "It was with some foresight that the sunset provision was built into the original law since it provided the opportunity to reassess the program and admit that the original formula for calculating the user fees wasn't as well thought out as it could be, or as fair to the IVD industry as it could be."
MDUFSA caps user fee rate increases at 8.5% annually for the next two years. In addition, the law raises the threshold for determining eligibility for the small-business fee reduction from $30 million in annual revenues to $100 million.
Industry analysts believe that MDUFSA will help more IVD manufacturers, specifically the smaller, technologically innovative companies, afford the rising costs of device submission fees and help bring new products to market. The law will also provide adequate funding to FDA for resources that the agency needs to review and approve product applications and continue the user fee.
"We expect these fee rates to generate sufficient revenues that will allow us to continue to improve CDRH's performance and infrastructure, while assuring the IVD industry that fee rates will increase at a predictable pace," said Donald St. Pierre, deputy director at the Office of In Vitro Diagnostic Device Evaluation and Safety (OIVD; Rockville, MD).
Analysts point out that under MDUFSA, the fees for the final two years will be predictable and stable. The first three years of the program produced fees that were unpredictable and rose to levels that were unexpected and burdensome, especially for small IVD companies.
"Because of a number of factors, the user fee rate increases were unsustainable," says Brager. "For the first two years, the user fees grew over 50%. If that formula had been maintained for the foreseeable future, we were looking at 20% increases for 2006 and 2007. So as part of the negotiations, we were able to get a limit of 8.5% for the user fee increases, which limits it to single digits. It also provides stability because the IVD manufacturers can anticipate what the fees are going to be and can plan accordingly. For some small companies, a 10–20% user fee increase makes a big difference in their planning."
In addition, analysts believe that Congress struck a good balance between the needs of FDA and the economic burden that IVD manufacturers were willing to carry in a user fee program. By doing so, Congress ensured that the IVD industry and FDA could return to the table in 2007 and decide appropriate fees for a healthy device program.
"We're in the very early stages of beginning to look at everything across the board," says Brager. "Taking the prescription drug user fee program as a model, with each iteration of that program, its scope has been expanded to cover more things, set up performance goals, and look at other areas. So for us, everything will be on the table. We'll also be looking at performance goals, possibly looking at applications that currently do not have performance goals and setting some up for them. The one that comes to mind is modular premarket approvals (PMAs)."
Additional information can be accessed via the FDA Web site at www.fda.gov/cdrh/mdufma.
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