AdvaMed and the Medical Device Manufacturers Association will turn their attention to FDA performance measures now that Congress has passed legislation preserving the user fee program through 2007.

The two associations, which have at times disagreed over how to fix the program, both agree that all proposals to ensure that FDA has predictable revenue should be up for debate when reauthorization discussions begin in 2007.

AdvaMed's 510(k) and PMA working groups plan to "immediately turn their attention" to developing metrics to assess FDA performance, President Steve Ubl said in a June 28 interview with "The Gray Sheet."

Acknowledging that industry and the agency both lacked the information needed to benchmark performance when the Medical Device User Fee & Modernization Act was passed in 2002, Ubl said that "we'll have much more information to work with going into the next round."

Ubl plans to "bulk up" AdvaMed's internal and external resources in a fashion similar to its approach to Medicare, where the association uses "a whole constellation of folks" for technical assistance. "We need to examine our whole negotiating apparatus going into the next round," he said.

MDMA Wants To Determine FDA's Resource Needs

MDMA will also focus on FDA performance goals when reauthorization discussions begin in 2007. The trade group fought to have performance goals addressed in the bill that just passed, but said that time constraints precluded a broader discussion.

In a July 28 interview, Executive Director Mark Leahey said that stakeholders must determine what FDA's resource needs are. "Through no real fault of FDA, when you ask them how much it costs to review a PMA, 510(k) or PMA supplement, they don't have the number," he said. "It's that type of data that's required."

Once costs are determined, stakeholders need to develop a "structurally sound" model, he said.

"If FDA collects more applications in a year, they collect more money," Leahey said. Similarly, "if they collect fewer in a year, they collect less money because they'll have less work to do. It's a logical connect that I think the current program does not have."

While AdvaMed strongly supports the user fee program, MDMA's membership will determine whether the program should be continued in 2007 "depending on the different components," Leahey said. "I wouldn't say it has been pre-determined that [the program] would be reauthorized if it wasn't a strong program moving forward."

"Trigger-fix" Legislation Offers Temporary Reprieve

With congressional passage of the "Medical Device User Fee Stabilization Act," the user fee program is slated to continue through 2007.

Because Congress failed to fully fund the program in fiscal years 2003 and 2004, device user fees were set to expire Sept. 30 unless legislation was passed.

The bill (HR 3243) passed the House July 26 after Reps. Joseph Pitts (R-Penn.) and Anna Eshoo (D-Calif.) introduced the bill the day before.

"This program significantly reduces the time it takes to get life-saving medical technologies to the market without compromising safety," Eshoo said July 26.

The Senate followed suit, passing an identical companion bill (S 1420) by unanimous consent late on July 27. The Senate HELP Committee previously marked up the bill July 20 (¹ Also see "Small Biz Threshold Stretched As “Trigger-Fix” Bill Clears Senate Committee" - Medtech Insight, 25 July, 2005., p. 10). The bill awaits the President's signature.

FDA announced July 29 that it has delayed publishing the FY 2006 fee rates until two weeks after the enactment of the law.

The Medical Device User Fee Stabilization Act of 2005 raises the small business threshold to allow companies with $100 mil. or less in annual sales to qualify for user fee discounts. Previously, only companies earning $30 mil. or less qualified.

The bill forgives congressional and industry funding shortfalls, caps annual fee increases at 8.5%, eliminates the compensating and workload adjustments, and modifies Sec. 301 to apply solely to reprocessors.

The bill's passage is "an excellent outcome, when you look at fee increases north of 20% and where we ended up in single-digit [increases]," Ubl said. "It means more predictability for our members going forward."

MDMA also praised the bill's passage. "The entire industry is better off because of this comprehensive fix," Leahey said.

The Device User Fee Bill: A Look Back

Both Ubl and Leahey have been heavily involved in user fee negotiations over the past four years.

Recounting initial efforts at soliciting industry support for the program, Ubl described an environment where companies were submitting increasingly complex devices during a time that FDA was faced with declining appropriations and record retirements.

User fees "seemed like a logical area to explore, and more than anything, I'm proud that we were able to work across our membership - small companies, medium companies and larger companies - to forge consensus that user fees were necessary," he said.

Leahey offered a different portrait of AdvaMed's efforts, saying that the "biggest obstacle" to enacting trigger-fix legislation "wasn't really Congress or the FDA. It was certain large companies and AdvaMed."

Specifically, Leahey cited AdvaMed's initial opposition to raising the small business threshold. In a July 28 letter to members, he also maintained that AdvaMed was willing to support a trigger-fix bill that would have forgiven Congress' funding shortfalls without addressing industry's concerns relating to fee increases, performance goals or reprocessing issues.

Calling MDMA's statements a "gross mischaracterization of AdvaMed's role in the process," Ubl said: "the small business piece has always been part of the conversation with the agency and with the parties on the Hill....We very much support relief for small companies."

Ubl added that AdvaMed wanted to closely examine the impact of any changes to the small business threshold on all key players before making changes. "Our concern is that we still don't have a very accurate fix of how the small business threshold is playing out in actual practice."

"We wanted a streamlined, clean piece of legislation, [and] we didn't want to drag this into the fall," Ubl said. "We didn't want this to become a renegotiation of the program."

Congress Passes Device User Fee Bill To Preserve Program Through ’07

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