Medical Device Link.

Originally Published MX November/December 2002

BUSINESS NEWS

Medical device companies that filed premarket submissions with FDA after October 1, 2002, will be required to pay user fees under the terms of the Medical Device User Fee and Modernization Act of 2002, which was enacted by Congress on October 17 and signed into law by President Bush on October 26.

Passage of the new legislation brings to a close a decade of resistance to user fees among many medical device companies.

Under the terms of the device user fee legislation, FDA is empowered to assess fees totaling $25.1 million in FY03 and increasing to $35 million in FY07. During FY03, the full price for a premarket approval (PMA) application is $154,000; all sponsors of premarket notification (510(k)) submissions will pay $2187 for each such submission.

For small businesses submitting their first PMA or 510(k) applications, and companies making use of third-party premarket review for 510(k) devices, the entire fee is waived. Small businesses also get a break on subsequent submissions, being permitted to pay only 38% of the full price for a PMA ($58,520 in FY03) and, after the first year of the program, only 80% for a 510(k).

Inclusion of greater protection for small companies was a key factor in overcoming the resistance of the Medical Device Manufacturers Association (MDMA; Washington, DC), which made its reputation by opposing user fees when they were first proposed a decade ago.

In final amendments enacted by the Senate, the definition of a small business used in the user fee bill was increased from $10 million to $30 million. Companies with sales revenues below that level qualify for fee reductions under the terms of the legislation.

The bill also includes provisions expected to accomplish the following reforms.

• Establish a new office to oversee the premarket review of combination products.
• Create a mechanism for accrediting third-party inspectors to audit device companies with a good compliance record.
• Codify FDA's modular review program for PMAs.
• Permit electronic device labeling and electronic facility registration.
• Create stringent requirements for legal marketing of reprocessed single-use devices.

Copyright ©2002 MX