Medical Device User Fees and User Fee Acts
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Medical Device User Fees and User Fee Acts
Erin D. Williams
Specialist in Public Health and Bioethics
April 26, 2010
Congressional Research Service
7-5700
www.crs.gov
RL34571
CRS Report for Congress
P
repared for Members and Committees of Congress
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Medical Device User Fees and User Fee Acts
Summary
The Food and Drug Administration (FDA) is the agency responsible for ensuring the safety and
effectiveness of medical devices. An establishment may not market a device in the United States
without FDA’s prior approval or clearance.
In 2002, Congress first granted FDA the authority to collect user fees from medical device
establishments. The authority was granted to help reduce the time required for the agency to
review and make decisions about marketing applications. Lengthy review times harmed
establishments, which waited to market devices, and patients, who waited to use them. User fee
law provides a revenue stream for the agency, and also requires it to set performance goals for
rapid application review.
The authority to collect medical device user fees has been authorized in five-year increments, and
will expire next on October 1, 2012. In 2002, it was first established in the Medical Device User
Fee and Modernization Act (MDUFMA; P.L. 107-250). Before reauthorization, it was amended
by the Medical Device Technical Corrections Act (P.L. 108-214) and the Medical Device User
Fee Stabilization Act of 2005 (P.L. 109-43). It has been reauthorized once, in the Medical Device
User Fee Amendments of 2007 (MDUFA 2007), enacted as Title II of the Food and Drug
Administration Amendments Act of 2007 (H.R. 3580; P.L. 110-85).
Since medical device user fees were first collected in FY2003, they have comprised an increasing
proportion of FDA’s device budget. In FY2003, $14.8 million of user fees comprised 6.8% of the
budget. In FY2007 (the year of the most recent reauthorization), $35.2 million of user fees
comprised 13.2% of the budget.
Medical device user fees have raised a number of issues. These have prompted Congress to
determine the following: which activities should require fees; how user fees can be kept from
supplanting federal funding, or being diverted from device review (through triggers); which
activities the agency should fund with user fees; and how to qualify as a small business. (Small
businesses pay reduced fee amounts.)
In addition to addressing the above issues, medical device user fee legislation has served a
secondary purpose as a moving vehicle that legislators could use to address a range of issues
related to medical devices. For example, MDUFA 2007 included provisions about the extent to
which FDA can delegate activities to third parties (inspections and the review of premarket
notifications); establishment registration requirements (timing and electronic submission); a
unique device identification system; reporting requirements for devices linked to serious injuries
or deaths; and requirements that FDA and GAO conduct certain studies. MDUFMA included
provisions about reprocessed single use devices and other topics.
This report provides an overview of FDA and the medical device review process. It then presents
the legislative history of user fees. Next, it explains the basics of FDA’s medical device user fee
system, noting the way in which various provisions have evolved. Finally, it provides an
overview of non-user fee issues addressed in the device user fee acts. This report will be updated
as events warrant.
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Contents
Introduction ................................................................................................................................ 1
Background: FDA and Medical Device Regulation...................................................................... 2
Medical Devices and the Device Industry.............................................................................. 3
FDA Device Regulatory Structure ......................................................................................... 3
Approval or Clearance of Medical Devices ........................................................................... 4
FDA Postmarket Activities .................................................................................................... 6
Medical Device User Fee Acts .................................................................................................... 6
MDUFMA ............................................................................................................................ 7
MDTCA ............................................................................................................................... 8
MDUFSA ............................................................................................................................. 8
FDA Agreement .................................................................................................................... 8
MDUFA 2007 ....................................................................................................................... 9
Commitment Letter ............................................................................................................... 9
Medical Device User Fees......................................................................................................... 10
Triggers .............................................................................................................................. 10
User Fees and the Device Review Budget ........................................................................... 11
Activities Requiring Fees .................................................................................................... 12
Fee-Collection Offset .......................................................................................................... 13
Fee Exceptions, Reductions, Refunds .................................................................................. 14
Humanitarian Use Devices (HUDs)............................................................................... 14
Devices Intended for Pediatric Use................................................................................ 14
Applications from Federal or State Government Entities ............................................... 14
Further Manufacturing .................................................................................................. 14
Premarket Notification by Third Parties......................................................................... 15
Small Businesses .......................................................................................................... 15
Modular PMA Refunds ................................................................................................. 15
Use of Fees ......................................................................................................................... 16
Performance Goals.............................................................................................................. 17
Performance Goal-Setting Process....................................................................................... 17
Quarterly Performance Reports ........................................................................................... 17
Postmarket Safety ............................................................................................................... 19
Annual Reports to Congress ................................................................................................ 20
Non-User Fee Provisions Regarding the Regulation of Medical Devices Established in
User Fee Acts......................................................................................................................... 20
Non-user Fee Topics in MDUFA 2007................................................................................. 20
Third-Party Review of Premarket Notification .............................................................. 20
Required Registrations and Filings ................................................................................ 21
Unique Device Identification System ............................................................................ 21
Reporting for Devices Linked to Serious Injuries or Death ............................................ 22
Accredited Third-Party Inspections ............................................................................... 22
Reports ......................................................................................................................... 23
Non-user Fee Topics Only in MDUFMA............................................................................. 24
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Tables
Table 1. Medical Device Approval Basics.................................................................................... 4
Table 2. Premarket Approvals (PMAs), Panel-Track Supplements, and Premarket
Notification (510(k)s), FY2003-FY2008 Cohorts ..................................................................... 5
Table 3. Medical Device Review Process Funding: Total Program Level and User Fee
Funding, FY2003-FY2012 ..................................................................................................... 11
Table 4. Full Time Equivalents (FTEs) in the Medical Device Review Process, FY2003-
FY2011.................................................................................................................................. 11
Table 5. MDUFMA/MDUFA 2007 Fee Schedule, FY2007-FY2012 .......................................... 13
Table 6. The Process for the Review of Device Applications...................................................... 16
Table 7. Comparison of Performance Goals in MDUFMA and MDUFA 2007............................ 18
Table 8. Appropriations Authorized for Postmarket Safety Information, FY2008-FY2012......... 19
Table 9. CRDH Warning Letters, Seizures, Injunctions, Civil Money Penalties and
Recalls, FY2000 – FY2008 .................................................................................................... 19
Table B-1. MDUFMA Base Fees (PMA), FY2003-FY2007....................................................... 26
Appendixes
Appendix A. Acronyms Used in This Report ............................................................................. 25
Appendix B. History of MDUFA Provisions.............................................................................. 26
Contacts
Author Contact Information ...................................................................................................... 29
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Introduction
Medical device user fees consist of congressionally authorized private money, which is paid by
medical device establishments to the Food and Drug Administration (FDA). FDA is an agency
within the Department of Health and Human Services (HHS). User fee funds are one of the two
revenue streams available to FDA for carrying out its mission with respect to medical devices: to
promote and protect the health of the public by ensuring safety and effectiveness of medical
devices.1 The second revenue stream is direct appropriations from Congress.
Medical device establishments, to whom most regulations and fees apply, are often device
manufacturers, but can also be domestic companies and importers who prepare and/or propagate
devices. Establishments must obtain FDA approval or clearance before marketing their medical
devices in the United States. They must continue to abide by FDA’s requirements, including the
payment of certain user fees, while their devices are on the market.
The authority to collect medical device user fees has been authorized in five-year increments. The
same is true for the two other FDA user fee programs for prescription drugs and animal drugs.2
The agency’s authority to collect medical device user fees is set to expire on October 1, 2012.
Medical device user fees were first authorized in 2002. The Medical Device User Fee and
Modernization Act (MDUFMA; P.L. 107-250) created the authorization. It inserted two new
medical device user fee sections in the Federal Food, Drug and Cosmetic Act (FFDCA §§737-
738; 21 USC Chapter 9). MDUFMA was amended twice by smaller laws before its user fee
authorities were reauthorized. These two laws were the Medical Device Technical Corrections
Act (MDTCA; P.L. 108-214) and the Medical Device User Fee Stabilization Act of 2005
(MDUFSA; P.L. 109-43).
In 2007, MDUFMA’s user fee authorities were reauthorized just before their expiration. The
amendments came in the form of the Medical Device User Fee Amendments of 2007 (MDUFA
2007), enacted as Title II of the Food and Drug Administration Amendments Act of 2007
(FDAAA; H.R. 3580; P.L. 110-85).3
FDAAA was the most significant and sweeping piece of FDA legislation since the Food and Drug
Administration Modernization Act (FDAMA; P.L. 105-115). FDAAA addressed topics ranging
from food safety, to postmarket surveillance of drugs, to pediatric medical devices, to the
formation of a nonprofit organization to assist FDA.
Two key factors converged to enable the passage of the broad legislation. The first was that
significant FDA revenue streams would have been lost if its medical device and prescription drug
user fees had not been reauthorized before their expiration at the end of FY2007. A failure to
reauthorize the legislation would have cost the agency more than $280 million in user fees over
1 FDA, About CDRH: Mission, April 30, 2009, http://www.fda.gov/AboutFDA/WorkingatFDA/
FellowshipInternshipGraduateFacultyPrograms/MedicalDeviceFellowshipProgramCDRH/ucm108143.htm.
2 See CRS Report RL33914, The Prescription Drug User Fee Act (PDUFA): History, Reauthorization in 2007, and
Effect on FDA, by Susan Thaul, and CRS Report RL34459, Animal Drug User Fee Programs, by Sarah A. Lister.
3 See CRS Report RL34465, FDA Amendments Act of 2007 (P.L. 110-85), by Erin D. Williams and Susan Thaul.
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five years. Reauthorization legislation was characterized as “must pass,” providing a moving
vehicle for Congress to address other concerns about FDA.
The second key factor leading to FDAAA was the emergence of a landscape of criticisms about
the agency’s response to safety concerns raised about a range of products the agency regulates.
Publicized examples included adverse events related to products ranging from prescription drugs
such as Vioxx, to medical devices such as cardiac stents, to imported items such as heparin and
pet foods, to human foods such as spinach. Congress was able to address many of these threats to
public safety in FDAAA.
Debates about which non-user fee topics were to be addressed in FDAAA and how they should be
addressed slowed the process of reauthorization of FDA’s authority to collect user fees. Those
delays sparked concern that FDA would have to lay off some 2,000 employees due to the
resulting funding shortfall, or at least issue legally required notices to the employees 60 days
before such lay offs would have to occur.4 However, neither layoffs nor notices were ultimately
necessary. FDAAA was signed into law on September 27, 2007—four days before the user fee
collection authorities would have expired.
Numerous topics of debate related to user fees have emerged over time. While many of these are
related to the smaller details of the user fee program, three raise overarching policy issues for
lawmakers. One concern is that the agency’s reliance on funds collected from the establishments
that it regulates could possibly create a conflict of interest. A second is that a reliance on fees
could lead appropriators to give the agency less federal funding than they otherwise would.5 A
third is that the requirement that user fees only be expended on activities related to medical
device approval drains resources needed for postmarket activities. Consideration of each of these
issues will help to inform readers as they consider the details of the medical device user fee
program described in this report.
The remainder of this report contains the following information. The first section describes FDA’s
regulation of medical devices. The second section contains details about the medical device user
fee acts and related key documents. The third section describes the way in which medical device
user fees currently function, and provides relevant background for the various user fee provisions.
The final section of the report discusses the various non-user fee topics that have been introduced
or addressed in medical device user fee acts.
Background: FDA and Medical Device Regulation
In order to understand the function and impact of medical device user fees, and related policy
issues, a basic understanding of the way that FDA reviews and regulates devices is useful. This
section presents the definition of a medical device, an overview of the device industry, an
introduction to the medical device components at FDA, and a survey of the agency’s user-fee
4 See “Prescription Drugs: FDA Could Issue Layoff Notices Without Prescription Drug User Fee Act Reauthorization,”
Kaiser Daily Health Policy Report (September 17, 2007), at http://www.kaisernetwork.org/daily_reports/
rep_index.cfm?DR_ID=47555.
5 CRS Report RL34334, The Food and Drug Administration: Budget and Statutory History, FY1980-FY2007,
coordinated by Judith A. Johnson.
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relevant requirements for medical device establishments, both before and after products come to
market.
Medical Devices and the Device Industry
The first step to understanding FDA’s regulation of medical devices is to see how the agency
defines the term. According to statute, a medical device is
an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or
other similar or related article, including any component, part, or accessory, which is (1)
recognized in the official National Formulary, or the United States Pharmacopeia, or any
supplement to them, (2) intended for use in the diagnosis of disease or other conditions, or in
the cure, mitigation, treatment, or prevention of disease, in man or other animals, or (3)
intended to affect the structure or any function of the body of man or other animals, and
which does not achieve its primary intended purposes through chemical action within or on
the body of man or other animals and which is not dependent upon being metabolized for the
achievement of its primary intended purposes.6
According to this definition, a medical device can be anything from a tongue depressor to a home
pregnancy test to a wheelchair to a pacemaker. Types of medical devices vary widely, as do their
respective levels of complexity and risk. Therefore, device manufacturing requirements vary
significantly as well.
In part due to the diversity of medical devices themselves, medical device establishments tend to
have certain characteristics. These characteristics can be highlighted by comparing the device
industry with the pharmaceutical industry. The device industry is more fragmented and smaller
than the pharmaceutical industry. For example, the Centers for Medicare and Medicaid Services
(CMS) reports that the 2008 annual national health expenditures were $234.1 billion for
prescription drugs, and $26.6 billion for durable medical equipment.7 The device industry is also
dominated by smaller companies. These characteristics are important in discussions of user fees,
particularly with regard to the way that fee amounts impact individual companies, and the effect
that fees have on the development and review of new medical devices.
FDA Device Regulatory Structure
A brief structural overview of FDA provides background for understanding the way that FDA
regulates medical devices, and for understanding the activities that require user fees. FDA has
five regulatory centers, each focused on a particular type of product. The center within FDA
primarily responsible for ensuring the safety and effectiveness of medical devices is the Center
for Devices and Radiological Health (CDRH). One other center, the Center for Biologics
Evaluation and Research (CBER), regulates some devices—specifically those associated with
blood collection and processing procedures, as well as with cellular therapies (e.g., stem cell
6 FFDCA 201(h); 21 U.S.C. 321(h).
7 Centers for Medicare and Medicaid Services, NHE Web Tables (Historical), Table 2. National Health Expenditures
Aggregate Amounts and Average Annual Percent Change, by Type of Expenditure: Selected Calendar Years 1960-
2008, Washington, DC, p. 2, http://www.cms.hhs.gov/NationalHealthExpendData/downloads/tables.pdf. [Note that the
definition of durable medical equipment (DME) (Social Security Act sec. 1861(n)), is not identical to that for medical
devices (FFDCA 201(h)), but is the most similar type of expenditure tracked by CMS.]
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treatments). Jurisdiction of the centers’ medical device review is governed by the FDA Intercenter
Agreement between CBER and CDRH (October 31, 1991).8
Approval or Clearance of Medical Devices
Different types of applications to FDA trigger different user fees. These application types are
highlighted in the following description of the way in which FDA classifies devices, and the
mechanisms establishments can use to apply to market their devices.
CDRH categorizes medical devices according to their risk into one of three classes: Class I, II,
and III. (See Table 1) The risk a device poses, and the regulatory controls required, increases
from Class I to Class III. The device classification regulation defines the regulatory requirements
for a general device type in each class. Most Class I devices are exempt from Premarket
Notification and require only registration with FDA before marketing; most Class II devices
require Premarket Notification (a 510(k)9) before marketing; and most Class III devices require
Premarket Approval (PMA). Device applications are reviewed by CBER under biological license
applications (BLAs). Devices on the market under 510(k)s have been cleared by FDA, while
those on the market under a PMA or BLA have been approved by FDA.
Table 1. Medical Device Approval Basics
Device
Safety/Effectiveness
Classification Examples
Controls Required
Submission
Class I
elastic bandages, examination gloves, General Controlsa
-Registration only unless 510(k)
and hand-held surgical instruments
specifically required
Class II
powered wheelchairs, infusion
General Controls &
-510(k) clearance unless exempt
pumps, and surgical drapes
Special Controlsb
-IDE possible
Class III
heart valves, silicone gel-filled breast General Controls &
-PMA approval unless 510(k)
implants, and implanted cerebella
Premarket Approval
specifically permitted
stimulators
IDE probable
a. General controls include five elements: (1) establishment registration (use FDA Form 2891) of companies
which are required to register under 21 CFR 807.20, such as manufacturers, distributors, repackagers and
relabelers, and foreign firms; (2) medical device listing (use FDA Form 2892) with FDA of devices to be
marketed; (3) manufacturing devices in accordance with Good Manufacturing Practices (GMPs) specified in
21 CFR 820; (4) labeling devices in accordance with labeling regulations in 21 CFR 801 or 809; and (5)
submission of a premarket notification 510(k) before marketing a device. (Most Class I devices are exempt
from the premarket notification requirements).
b. Special controls may include special labeling requirements, mandatory and voluntary performance standards,
and postmarket surveillance.
Of all device-related submissions, a PMA is the most rigorous and time-consuming application
process for manufacturers and review process for the FDA. (The same is true of a Panel Track
Supplement, as described below.) A 510(k) is significantly less rigorous, and is much more
common. Most PMAs and some 510(k)s require clinical trials,10 which are conducted with FDA
8 FDA, “Devices Regulated by the Center for Biologics Evaluation and Research” (updated June 18, 2009), at
http://www.fda.gov/BiologicsBloodVaccines/DevelopmentApprovalProcess/510kProcess/ucm133429.htm.
9 510(k), which is short hand for Premarket Notification, refers to the governing section of the FFDCA.
10 For more information on the regulation and sharing of results from clinical trials, see CRS Report RL32832, Clinical
(continued...)
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permission via an investigational device exemption (IDE) that allows a device to be used in a
clinical trial to gather information on its safety and effectiveness. The majority of medical devices
that come to market do so with 510(k) clearance rather than PMA approval. (See Table 2)
Applications to FDA for PMAs, BLAs, and 510(k)s all require user fees.
Table 2. Premarket Approvals (PMAs), Panel-Track Supplements, and Premarket
Notification (510(k)s), FY2003-FY2008 Cohorts
Fiscal Year
PMAs and Panel-Track Supplementsa 510(k)sb
FY2003
50 3,741
FY2004
61 3,309
FY2005
58 3,344
FY2006
58 3,449
FY2007
39 3,192
FY2008
37 3,213
FY2009
39 3,857
Source: CDRH -
http://www.fda.gov/downloads/MedicalDevices/DeviceRegulationandGuidance/Overview/MedicalDeviceUserFeea
ndModernizationActMDUFMA/UCM198456.pdf.
a. Filed cohort & included expedited submissions.
b. MDUFMA cohort.
Device user fees are also required with four types of submissions FDA may require to supplement
a PMA when there are changes in safety and effectiveness data: Panel Track Supplements, 180-
Day Supplements, Real Time Supplements, and 30-Day Notices. Panel Track Supplements are
akin to second entire PMAs. They reflect new indications for use or significant changes in device
design or performance, and require substantial clinical data. An artificial heart valve approved for
use to replace the aortic valve, and proposed for use in the mitral valve, would require the
submission of a Panel Track Supplement. 180-Day Supplements are submitted for significant
changes to medical device components, materials, designs, specifications, software, labeling, or
color additives. A proposed change in a blood glucose monitoring system from wired to wireless
telemetry would require this type of submission. Real Time Supplements are submitted when
there are minor changes to the design, software, sterilization or labeling of a device. A change in
the storage temperature and expiration dating for an injectable gel would require this type of
supplement. 30-Day Notices are submitted for modifications to manufacturing processes or
methods, such as a change in the sterilization process.
One alternative to a PMA that FDA offers also requires a fee: the Product Development Protocol
(PDP). A PDP is based on early consultation between the sponsor and the FDA, leading to a
device development and testing plan acceptable to both parties. It aims to minimize the risk that
(...continued)
Trials Reporting and Publication, by Erin D. Williams, and CRS Report RL32909, Federal Protection for Human
Research Subjects: An Analysis of the Common Rule and Its Interactions with FDA Regulations and the HIPAA
Privacy Rule, by Erin D. Williams.
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the sponsor will unknowingly pursue—with the associated waste of capital and other resources—
the development of a device that FDA will not approve.
One additional type of submission also requires a fee. It is a 513(g) request for classification
information, so named because of the section of the FFDCA that regulates it. 513(g)s enable
requesters to obtain information from FDA regarding the regulatory status of their devices or
products.
FDA Postmarket Activities
In addition to receiving FDA clearance or approval prior to marketing, device establishments
must meet certain requirements once their products are on the market. Many notable examples of
this do not have an associated fee. For example, FDA inspects establishments where medical
devices that are marketed in the United States are manufactured. Inspections assess compliance
with FDA’s quality system requirements for ensuring good manufacturing practices and other
applicable specifications.11 FDA also collects information about adverse events related to medical
devices, and may request or require recalls of medical devices in certain circumstances. While no
fee is associated with these functions, they are important to consumer protection, because they
reflect the agency’s efforts to help ensure that devices on the market meet required safety and
effectiveness standards. In addition, they help to inform user-fee related policy discussions; the
effect that user fees have on the agency’s ability to conduct postmarket activities has been
debated.
Two postmarket activities required of medical device establishments do have user fees associated
with them. One is that establishments must register annually with FDA (establishment
registration). The other is that establishments of certain class III devices must file periodic reports
required by a PMA approval order (periodic reporting).
Medical Device User Fee Acts
Congress first authorized FDA to collect user fees from medical device manufacturers with the
passage of MDUFMA in 2002. This was 20 years after a parallel authority had been granted for
prescription drugs. As had been the case for drugs, the impetus behind authorizing user fees for
medical devices was reducing the amount of time it took for FDA to make decisions about
manufacturers’ applications to market their products. The agency attributed the long review times
to a shortage of funds to employ enough staff. The time taken in review affected patients, who
waited for new products, and manufacturers, which waited to market the products. Manufacturers
thus agreed to pay user fees (and Congress granted FDA the authority to collect them) so that
FDA could hire more staff and decrease its review times. This section provides a historical
overview of the laws Congress has passed related to medical device user fees: MDUFMA,
MDTCA, MDUFSA, and MDUFA 2007. It also introduces two important related documents, the
FDA Agreement and the Commitment Letter.
11 The regulations governing FDA’s quality system requirements for ensuring good manufacturing practices can be
found at 21 CFR 820.
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MDUFMA
In the years prior to MDUFMA’s 2002 enactment, FDA’s resources for its devices and
radiological health program had increased at a lower rate than its costs.12 As stated in the House
Report to H.R. 3580 (MDUFMA):
The medical device industry is growing rapidly. The complexity of medical device
technology is increasing at an equally rapid pace. Unfortunately, FDA’s device review
program lacks the resources to keep up with the rapidly growing industry and changing
technology. Because prompt approval and clearance of safe and effective medical devices is
critical to improving public health, it is the sense of the Committee that adequate funding for
the program is essential.13
In addition to issues raised by medical device review funding capabilities at FDA, prior to
MDUFMA, concerns had also emerged regarding the reprocessing and re-use of medical devices
that FDA had cleared or approved as single use devices (SUDs). Reprocessing means cleaning
and sterilizing a device and verifying that it functions properly. Concerns about SUDs, funding,
and the agency’s capacity to inspect device establishments as frequently as required by law paved
the way for congressional action in 2002.
In preparation for the enactment of MDUFMA, FDA officials met with industry leaders to agree
upon mutually acceptable fee types, amounts, exceptions, and performance goals.14 The
agreement specified that, in return for the additional resources provided by medical device user
fees, FDA was expected to meet performance goals defined in a November 14, 2002, letter from
the HHS Secretary to the Chairmen and Ranking Minority Members of the Committee on Health,
Education, Labor and Pensions of the U.S. Senate and the Committee on Energy and Commerce
of the U.S. House of Representatives.15
MDUFMA was enacted in order to provide
Key MDUFMA Provisions:
FDA “with the resources necessary to better
• device user fees authorized through FY2007
review medical devices, to enact needed
• establishment inspections by third parties allowed
regulatory reforms so that medical device
manufacturers can bring their safe and
• reprocessed single-use devices regulated
effective devices to the American people at an
earlier time, and to ensure that reprocessed medical devices are as safe and effective as original
devices.”16 MDUFMA amended the FFDCA to enact three significant provisions for medical
devices: (1) it established user fees for premarket reviews of devices, (2) it allowed establishment
12 FDA, "Medical Device User Fee and Modernization Act; Public Meeting," 72 Federal Register 19528, April 18,
2007, (hereinafter, “Public Meeting”).
13 U.S. Congress, “House Committee on Energy and Commerce, Medical Device User Fee and Modernization Act of
2002,” H.Rept. 107-728, report to accompany H.R. 3580 , 107th Cong., 2nd sess., part 1 (Washington: GPO, 2002), p.
23.
14 This process was similar to the one used previously during the enactment and reauthorization of the user fee act for
prescription drugs, the Prescription Drug User Fee Act (PDUFA). For further information on PDUFA, see CRS Report
RL33914, The Prescription Drug User Fee Act (PDUFA): History, Reauthorization in 2007, and Effect on FDA, by
Susan Thaul.
15 This letter is generally referred to as the 2002 “FDA Commitment Letter.” See 148 Cong. Rec. S11549-01(2002).
16 Medical Device User Fee and Modernization Act of 2002, H.Rept. 107-728 (October 7, 2002), p. 21.
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inspections to be conducted by accredited persons (third parties), and (3) it instituted new
regulatory requirements for reprocessed single-use devices.
MDUFMA enabled FDA to collect over $133 million from medical device companies during the
first five years of the program (FY2003-FY2007).
MDTCA
Prior to MDUFA 2007, MDUFMA was amended by two laws. The first of these was the Medical
Device Technical Corrections Act (MDTCA, P.L. 108-214). It addressed three areas of
MDUFMA.17 First, it removed certain barriers to the third-party inspection program. Second, it
amended an electronic labeling provision to extend the circumstances in which electronic labeling
could be used. Third, it delayed the implementation of a provision that required a device to
“prominently and conspicuously” bear the name of its manufacturer.
MDUFSA
The second law that amended MDUFMA prior to its reauthorization was the Medical Device
User Fee Stabilization Act of 2005 (MDUFSA, P.L. 109-43). It contained five primary measures.
First, it lowered trigger amounts of direct appropriations required for the agency to be able to
collect user fees. Triggers are discussed in more detail below. Second, it changed the method of
setting user fee amounts, eliminating the inflation, workload, compensating, and final year
adjustments of revenues used for setting fees. Third, it allowed the HHS Secretary to use
unobligated carryover balances from fees collected in previous fiscal years. Fourth, it made it
easier for companies to qualify as small businesses and pay reduced user fees. Fifth, it deemed as
misbranded (and thus subject to FFDCA penalties) any reprocessed SUD that did not identify the
manufacturer, but allowed such information to be provided by a detachable label intended to be
affixed to the medical record of a patient.
FDA Agreement
In preparation for MDUFA 2007, FDA and industry representatives met, as they had prior to
MDUFMA, and discussed many of the above factors. They negotiated an agreement that they
submitted to Congress (“FDA Agreement”).18 The Agreement contained legislative proposals as
well as arguments to support those proposals. Pursuant to MDUFMA (§105), on April 30, 2007,
FDA held a public meeting about the FDA Agreement. Attendees expressed general satisfaction
with its terms. Congress incorporated most of the recommendations into MDUFA 2007.
17 FDA, Summary of the Medical Devices Technical Corrections Act (MDTCA), November 2004, http://www.fda.gov/
MedicalDevices/DeviceRegulationandGuidance/Overview/MedicalDeviceUserFeeandModernizationActMDUFMA/
ucm109128.htm.
18 Public Meeting.
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MDUFA 2007
Congress addressed many issues in MDUFA 2007. Subtitle A reauthorized and amended FDA’s
authority to collect medical device related user fees. Subtitle B amended certain aspects of
medical device regulation.
The primary issue addressed in MDUFA 2007
Key MDUFA 2007 Provisions:
was the reauthorization of FDA’s authority to
• device user fees authorized through FY2012
collect user fees from medical device
• new fee types added
manufacturers. FDA’s authority to collect
these fees would have expired on October 1,
• fee amounts reduced
2007, if Congress had not acted. MDUFA
• qualification as a small business made easier
2007 extended the authority through October
1, 2012. The pending expiration of this
authority was one of the primary drivers of MDUFA 2007 and FDAAA.
MDUFA addressed several other issues as well. One was to generate an increased and more stable
user fee revenue stream for the agency with the addition of two new types of fees. MDUFMA had
only authorized FDA to collect various application fees, which were payable upon submission of
an application of FDA. According to FDA, there were fluctuations in the number of applications
submitted from year to year, and fee revenues repeatedly fell short of expectations.19 In order to
address this issue, MDUFA 2007 added establishment fees (paid annually by each device
establishment registered with FDA) and product fees (paid annually for each class III device for
which periodic reporting was required pursuant to the PMA). MDUFA 2007 also added two new
application fees and lowered the existing application fee amounts. The law was drafted to
increase the total revenue generated by user fees, offsetting the lowered application fee amounts
with revenue from the new fees.
Another issue addressed by MDUFA 2007 was that domestic and foreign companies had
expressed frustration with the difficulty in qualifying for small business user fee discounts. This
led Congress to enact amendments designed to ease that process.
Commitment Letter
As was the case for MDUFMA, the requirements of MDUFA 2007 are supplemented by a
“Commitment Letter” from the HHS Secretary, this one dated September 27, 2007.20 The contents
of the letter are incorporated into the law by reference.21 The requirements of the law, as
supplemented by the Commitment Letter, are summarized below.
19 Public Meeting.
20 Michael O. Leavitt, "Commitment Letter" to Edward M. Kennedy, FDA, September 27, 2007, http://www.fda.gov/
downloads/MedicalDevices/DeviceRegulationandGuidance/Overview/
MedicalDeviceUserFeeandModernizationActMDUFMA/UCM109102.pdf.
21 FDAAA §201(c).
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Medical Device User Fees
FDA has the authority to collect three types of medical device user fees:
• application fees (paid each time an application is submitted),
• establishment fees (paid annually by all non-exempt establishments), and
• product fees (paid annually for each qualifying Class III device).
The authority to collect these fees will expire on October 1, 2012. This section presents the
current law with respect to medical device user fees. Subsections describe the conditions under
which FDA may collect user fees (triggers), how user fees relate to the medical device budget,
which activities require and are exempt from fees, and the fee collection offset. They also
describe the ways that fees may be used by FDA, fee-associated performance goals, required
quarterly performance reports, the effect of fees on postmarket activities, and required annual
reports to Congress.
This section presents current user fee law for each topic mentioned above. (For information on
the history of each of the provisions in law, see Appendix B). Relevant citations to sections of
MDUFA 2007 and MDUFMA are included parenthetically in the text, while those to the FFDCA
and United States Code (USC) are included in footnotes.
Triggers
The authority to collect user fees is subject to two statutory triggers. If either trigger is not
satisfied for a given fiscal year, FDA loses the authority to collect user fees. The first trigger
places a requirement on Congress. It prohibits FDA from collecting fees if direct congressional
appropriations to FDA for salaries and expenses related to devices and radiological health fall
below a certain threshold. The trigger requires that, each fiscal year, FDA’s salaries and expenses
appropriation line for Devices and Radiological Health, exclusive of user fees, not be more than
1% below $205,720,000 multiplied by an inflation adjustment factor.22 For FY2007, the year that
user fees were last reauthorized, this translated into a minimum requirement of $229,334,000.23
The second trigger places a requirement on the HHS Secretary. It requires that fees only be
collected and available to defray increases in the costs of the resources allocated for the process
for the review of device applications. This requirement is considered to have been met each fiscal
year if the costs funded by appropriations and allocated for the process for the review of device
applications do not fall below specified levels.24
22 FFDCA 738(g); 21 USC 379j(g).
23 FDA, Funding For MDUFMA and ADUFA Triggers (in FY2007 Budget Formulation and Presentation), February
22, 2006, http://www.fda.gov/AboutFDA/ReportsManualsForms/Reports/BudgetReports/2007FDABudgetSummary/
ucm112801.htm.
24 FFDCA 738(h)(2)(B); 21 USC 379j(h)(2)(B).
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User Fees and the Device Review Budget
The amount of user fees collected has increased each year since collection was first authorized.
MDUFMA fees comprised less than 7% of FDA’s program level device review budget in
FY2003, and over 13% in FY2007. The amounts are projected to continue to increase each year
until the authorization expires in FY2012. In addition, almost every year since user fees were first
introduced, they have constituted an increasing proportion of FDA’s device-related budget. (See
Table 3) Over the period of FY2003 to FY2007, the amount of user fees more than doubled,
while the amount of direct appropriations increased by about a quarter. In FY2007, device user
fees translated into 208 FTEs, or 15.6% of the FTEs in the device review process. (See Table 4)
For FY2008, an increase of 37.6% in user fees is authorized above the FY2007 level. For each
subsequent year through FY2012, fee amounts are authorized to increase by 8.5% per year,
generating a total of $287 million for FDA over five years.25
Table 3. Medical Device Review Process Funding: Total
Program Level and User Fee Funding, FY2003-FY2012
(dollars in thousands)
Fiscal Year
Total Program Level Medical Device User Fees User Fee/Total
FY2003 Actual
$217,285 $14,838 6.8%
FY2004 Actual
$179,245 $23,875 13.3%
FY2005 Actual
$244,282 $27,161 11.1%
FY2006 Actual
$255,041 $32,069 12.6%
FY2007 Actual
$267,543 $35,202 13.2%
FY2008 Actual
$275,284 $36,422 13.2%
FY2009 Actual
$345,311 $47,304 13.7%
FY2010 Appropriated
$368,342 $57,014 15.5%
FY2011 Requested
$384,815 $61,860 16.1%
FY2012 Authorized
not available
$67,118
—
Sources: FY 2003-FY2011: FDA, Tables for FY2005-FY2010: ALL PURPOSE TABLE—Total Program Level, 2005 -
2011, http://www.fda.gov/AboutFDA/ReportsManualsForms/Reports/BudgetReports/default.htm; FY2012:
MDUFA 2007.
Table 4. Full Time Equivalents (FTEs) in the Medical Device Review Process, FY2003-
FY2011
Total Device Device User Fee/ Device User Fee
Fiscal Year
Review FTEs
Funded FTEs
Funded/ Total
FY2003 Actual
1,485 33 2.2%
FY2004 Actual
1,061 137 12.9%
FY2005 Actual
1,516 153 10.1%
25 FFDCA 738(h)(3); 21 USC 379j(h)(3).
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Total Device Device User Fee/ Device User Fee
Fiscal Year
Review FTEs
Funded FTEs
Funded/ Total
FY2006 Actual
1,498 184 12.2%
FY2007 Actual
1,544 208 15.6%
FY2008 Actual
1,546 221 14.3%
FY2009 Actual
1,707 236 13.8%
FY 2010 Appropriated
1,755 284 16.2%
FY 2011 Requested
1,820 298 16.4%
Source: FDA, Tables for FY2005-FY2011: ALL PURPOSE TABLE—Total Program Level, 2005 - 2011,
http://www.fda.gov/AboutFDA/ReportsManualsForms/Reports/BudgetReports/default.htm.
Activities Requiring Fees
Device establishments must pay fees when they submit certain types of applications to FDA for
product clearance or approval, and must also pay two types of annual fees.26 (See Table 5) The
annual fees are an establishment registration fee (paid once each year by each manufacturer) and
product fees (paid for each Class III device for which the PMA requires periodic reports to be
filed). The annual fees are projected to generate about 50% of the total device fee revenue from
FY2008-FY2012.27
The amount of each type of user fee, other than the establishment fee, is set as a percentage of the
PMA fee,28 also called the base fee. The law prescribes both the base fee amount for each fiscal
year, and also the percentage of the base fee that constitutes most other fees. For example, a 30-
day notice fee is equal to 1.6% of the base fee.
As mentioned under the previous heading, the law raises the base fee (the PMA fee) annually by
8.5% per year from FY2008 to FY2012. (See Table 5) FDA asserts that this annual increase will
ensure that fee revenues contribute their expected share to total program costs, and will provide
industry with stability and predictability in the fee revenues it would expect to pay.29 During the
course of MDUFMA, from FY2003-FY2007, the rate of increase of the base fee (and thus the
amounts of the contingent fees) slowed. It increased 34% between FY2003 and FY2004, and 8%
between FY2006 and FY2006. (See Table B-1 in Appendix B for MDUFMA Base Fee
Amounts.)
Unlike the other fees, the amount of the establishment fee (also known as the establishment
registration fee) is set in its own section of the law.30 Like the other fees, it is authorized to rise
8.5% per year from FY2008-FY2012. (Earlier statistics do not exist, because the fee was first
authorized for FY2008). In addition to the base fee increases, in one circumstance, the HHS
26 FFDCA 738(a); 21 USC 279j(a).
27 Public Meeting.
28 A PMA is the most involved type of application that a device manufacturer could make to FDA (FFDCA §
738(a)(2)(A)). For more information, see CRS Report RL32826, The Medical Device Approval Process and Related
Legislative Issues, by Erin D. Williams.
29 Public Meeting.
30 FFDCA 738(a)(3); 21 USC 379j(a)(3).
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Secretary has the authority to increase the fee amount of the newly created establishment fee up
to an additional 8.5% (over the annual 8.5% increase) in FY2010. The HHS Secretary may do
this if fewer than 12,250 establishments pay the fee in FY2009. This measure is designed to
ensure that the fees collected from this source total 45% of total fee revenues, ensuring that FDA
has a stable funding base from user fees.
Table 5. MDUFMA/MDUFA 2007 Fee Schedule, FY2007-FY2012
MDUFMA
MDUFA 2007
Fees Structure
2007
2008
2009
2010
2011
2012
Application Fees
PMA/BLA/PDP (i.e., base fee)
$281,600 $185,000 $200,725 $217,787 $236,298 $256,384
Small
Businessa
$107,008 $46,250 $50,181 $54,447 $59,075 $64,096
Panel
Track
Supplements
$281,600 $138,750 $150,544 $163,340 $177,224 $192,288
Small
Businessa
$107,008 $34,688 $37,636 $40,835 $44,306 $48,072
180-Day
Supplements
$60,544 $27,750 $30,109 $32,668 $35,445 $38,458
Small
Businessa
$23,007 $6,938 $7,527 $8,167 $8,861 $9,614
Real
Time
Supplements
$20,275 $12,950 $14,051 $15,245 $16,541 $17,947
Small
Businessa
$7,705 $3,237 $3,512 $3,810 $4,134 $4,485
510(k)
$4,158 $3,404 $3,693 $4,007 $4,348 $4,717
Small
Businessa
$3,326 $1,702 $1,847 $2,004 $2,174 $2,359
30-Day
Notice
$2,960 $3,212 $3,485 $3,781 $4,102
Small
Businessa
$1,480 $1,606 $1,742 $1,890 $2,051
513(g)
$2,498 $2,710 $2,940 $3,190 $3,461
Small
Businessa
$1,249 $1,355 $1,470 $1,595 $1,731
Product Fee
Annual
Fee
for
Periodic
Report.
$6,475 $7,025 $7,623 $8,270 $8,973
Small
Businessa
$1,619 $1,756 $1,906 $2,068 $2,243
Establishment Fee
Establishment
Registration
$1,706 $1,851 $2,008 $2,179 $2,364
Source: FDA, Medical Devices: Proposed Industry User Fee Schedule for MDUFMA II, April 30, 2009,
http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/Overview/
MedicalDeviceUserFeeandModernizationActMDUFMA/ucm109319.htm.
a. Small Business indicates the reduced small business fee associated with whatever item is listed above. (For
more on the smal business fee reduction, see the smal business subsection below.)
Fee-Collection Offset
It is possible that in some years, the amount of fees collected will exceed the amount that FDA is
authorized to collect. In that circumstance, for the four-year period of FY2008 through FY2011,
FDA may collect fees that exceed the authorized amount. A reduction is to be made in fees in
FY2012 only if the total amount collected in the four-year period exceeds the total amount
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authorized for the same period.31 According to the FDA Agreement, this aggregation over four
years will provide for greater financial stability for FDA than treating each year in isolation.
Fee Exceptions, Reductions, Refunds
Certain types of devices, sponsors, and manufacturers are exempt from certain fees, and small
businesses pay a reduced rate.32 These fee reductions, exemptions, and refunds are explained
below.
Humanitarian Use Devices (HUDs)
HUD applications are exempt from user fees other than establishment fees.33 An HUD is a device
that is intended to treat or diagnose a disease or condition that affects fewer than 4,000
individuals in the United States per year. A device establishment’s research and development
costs could exceed its market returns for products to address diseases or conditions affecting
small patient populations. HUD law provides an incentive for the development of devices for use
in the treatment or diagnosis of diseases affecting these populations. A qualifying manufacturer
may submit a humanitarian device exemption (HDE) application, which is similar in both form
and content to a premarket approval (PMA) application, but is exempt from the effectiveness
requirements of a PMA. Once on the market, certain follow-up measures related to effectiveness
apply.
Devices Intended for Pediatric Use
In order to encourage the development of devices for use with children, any application for a
device intended solely for pediatric use is exempt from fees other than establishment fees. If an
applicant obtains an exemption under this provision, and later submits a supplement for adult use,
that supplement is subject to the fee then in effect for an original PMA.
Applications from Federal or State Government Entities
Any application from a state or federal government entity is exempt from fees for a premarket
application, premarket report, supplement, premarket notification submission, or establishment
registration unless the device is to be distributed commercially. Indian tribes are exempted from
having to pay establishment registration fees, unless the device is to be distributed commercially.
Further Manufacturing
In order to avoid the charging of multiple fees for a device that has multiple manufactured
components, any application for a product licensed exclusively for further manufacturing use, is
exempt from fees other than establishment fees.
31 FFDCA 738(h)(4); 21 USC 379j(h)(4).
32 Unless otherwise noted with an alternate citation, all exceptions listed in this section can be found at FFDCA
738(a)(2)(B); 21 USC 379j(a)(2)(b).
33 FFDCA 520(m); 21 USC 360j(m).
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Premarket Notification by Third Parties
Under authority created by FDAMA, FDA accredits third parties, authorizing them to conduct the
primary review of 510(k)s for eligible devices.34 The purpose of the program is to improve the
efficiency and timeliness of FDA’s 510(k) process, the process by which most medical devices
receive marketing clearance in the United States. No FDA fee is assessed for premarket
notification (510(k)) submissions reviewed by accredited third parties, although the third parties
may themselves charge a fee for their services.
Small Businesses
Small businesses—those with gross receipts below a certain amount—pay reduced user fees and
have some fees waived altogether.35 These fee reductions and exemptions are important, because
the majority of device establishments are small businesses.36 According to the Government
Accountability Office (GAO), the vast majority of companies that paid medical device user fees
in 2006 qualified as small businesses:
Of the 697 companies that qualified as small businesses under the MDUFMA user fee
program in fiscal year 2006, 656, or about 95%, had revenues at or below $30 million—the
threshold for small business qualification originally set by MDUFMA in 2002. Of the 41
companies that had revenues above $30 million but at or below the current threshold of $100
million, 35 had revenues above $30 million but at or below $70 million. Of the 697
companies that qualified as small businesses in fiscal year 2006, two-thirds submitted at least
one device application subject to user fees during that year. These companies were
responsible for about 20% of the approximately 4,500 device applications subject to user
fees that were submitted to FDA in fiscal year 2006.37
An establishment is considered to be a small business if it has annual gross sales or receipts of
$30 million or less. Proof of receipts may consist of IRS tax documents or qualifying
documentation from a foreign government. Small businesses are exempt from fees for their first
PMA, and pay at a rate of 25% of most other user fees, and 50% of premarket notification fees.38
Small businesses must pay the full amount of the establishment fees. (See Table 5)
Modular PMA Refunds
Manufacturers may choose to submit to FDA the large amount of information required in a PMA
in sections, over time, in a modular PMA. In the event that a manufacturer chooses to withdraw a
modular application before FDA takes its first action on the application or before all of the parts
have been submitted, the HHS Secretary may make a partial refund of the filing fee.39
34 FFDCA 523(c); 21 USC 360m(c).
35 FFDCA 738(d),(e); 21 USC 379j(d),(e).
36 Public Meeting.
37 Government Accountability Office, “Food and Drug Administration: Revenue Information on Certain Companies
Participating in the Medical Device User Fee Program,” GAO-07-571R (March 30, 2007), at http://www.gao.gov/
new.items/d07571r.pdf.
38 FFCCA 738(d); 21 USC 379j(d).
39 FFDCA 738(a)(2)(D); 21 USC 379j(a)(2)(D).
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Use of Fees
There are two different provisions that describe how FDA may use the device fees it collects.
Both suggest that FDA may expend user fees on premarket approval activities, and not on
postmarket surveillance. One provision was created by MDUFMA. It states that fees “shall only
be collected and available to defray increases in the costs of the resources allocated for the
process for the review of device applications.”40 The law specifies the elements of the “process
for the review of device applications.”41 (See Table 6) They focus solely on activities involved in
premarket approval. The one partial exception to this rule is the inclusion of the evaluation of
postmarket studies that are required as a condition of approval.
MDUFA 2007 did not amend the above provision. However, §201(c) did include the statement in
its findings that fees would “be dedicated toward expediting the process for the review of device
applications and for assuring the safety and effectiveness of devices.”42 The law specifies that fees
are to be used to support FDA in achieving the performance goals identified in the Commitment
Letter. While it is conceivable that assuring the safety and effectiveness of devices could be
interpreted to encompass postmarket surveillance, the Commitment Letter lists only premarket
activities. MDUFMA (§101) contained similar specifications in its findings.
Table 6. The Process for the Review of Device Applications
The USC defines the process for the review of device applications as the following:
• premarket reviews;
• premarket inspections;
• monitoring of research relating to premarket reviews;
• review of investigational new drug applications (INDs) and investigational device exemptions (IDEs);
• monitoring of research conducted to develop INDs or IDEs;
• development of guidance, policy documents, and regulations to improve the process for the review of device
applications;
• development of test methods and standards applicable to premarket reviews;
• technical assistance to applicants;
• initial classification or reclassification of a device;
• actions required to cal for PMAs for Class III devices marketed before the Medical Device Amendments of 1976
(P.L. 94-295);
• evaluation of postmarket studies required as a condition of approval; and
• compiling, developing, and reviewing information concerning devices subject to premarket review to identify
safety and effectiveness issues.
Source: 21 USC 379i(5); FFDCA 737(5).
40 Emphasis added. FFDCA 738(h)(2)(A)(ii); 21 USC 379j(h)(2)(A)(ii).
41 Emphasis added. FFDCA 737(5); 21 USC 379i(5).
42 Emphasis added. 21 USC 379i note.
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Performance Goals
In addition to enabling the continued collection of user fees, user fee law requires FDA to meet
new performance goals, which are articulated in the Commitment Letter.43 These performance
goals set general timetables for certain types of activities (such as PMA reviews), but allow for
some flexibility that may be prudent, given that different types of PMAs and other applications
may vary in complexity. Therefore, performance goals generally state that, for a certain
percentage of applications, FDA will complete a particular type of activity within a given time
period. (See Table 7)
In addition to the specific time-related goals presented in Table 7, the Commitment Letter also
articulates several other goals. Four of these are related directly to the review process. One states
that FDA will, at a minimum, maintain its current performance for processes for which
quantitative goals were not identified (such as IDEs and 30-Day notices). Two others state that
FDA will continue to incorporate an interactive review process for informal communication
between FDA and sponsors to facilitate accurate and timely application reviews, and will make
every effort to schedule both informal and formal meetings before and during the review process.
In a fourth goal, the agency agrees to apply user fee revenue to support device reviewer training,
as resources permit.
The Commitment Letter contains several other goals as well. Three relating to guidance
documents state that FDA will update, or issue to the extent possible, guidance documents in
accordance with the goals stated in the Commitment Letter, and will develop a guidance
document regarding imaging devices with contrast agents or radiopharmaceuticals. In another,
FDA agrees to facilitate the development of in vitro diagnostic devices (laboratory tests) by
exploring ways to clarify the regulatory requirements and reduce the regulatory burden.
Performance Goal-Setting Process
FDA will be required to work with various stakeholders in order to develop performance goals
and plans for meeting those goals in preparation for user fee reauthorization in 2012.44 FDA will
be required to consult with an array of governmental, professional, and consumer groups; publish
its recommendations in the Federal Register; provide a public comment period; and hold a public
meeting. In addition, the recommendations will have to be revised upon consideration of public
comments, and transmitted to Congress not later than January 15, 2012.
Quarterly Performance Reports
The Commitment Letter states that FDA will report quarterly its progress toward meeting the
quantitative performance goals. In addition, for all submission types, FDA will track total time
(time with FDA plus time with the company) from receipt or filing to final decision (approval,
denial, substantial equivalence [SE], or nonsubstantial equivalence [NSE]). FDA will also
provide, on an annual basis, de-identified review performance data for the branch (section of
43 FFDCA 738(g); 21 USC 379j(g).
44 FFDCA 738A(b); 21 USC 738A(b).
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reviewers grouped by subject-matter) with the shortest average review times and the branch with
the longest average review times for 510(k)s, 180-day supplements, and real-time supplements.
Table 7. Comparison of Performance Goals in MDUFMA and MDUFA 2007
MDUFMA MDUFA
2007
PMA and Panel Track Supplements
50% of PMAs and panel track PMA supplements in 180
60% of PMAs and panel track PMA supplements in 180
days
days
90% of PMAs, panel track supplements, premarket
reports in 320 days
90% of PMAs and panel track supplements in 295 days
N/A
50% of expedited PMAs and expedited panel track PMA
supplements in 180 days
90% of expedited PMAs in 300 days
90% of expedited PMAs and expedited panel track PMA
supplements in 280 days
Modular PMA
N/A
75% of PMA modules in 90 days
N/A
90% of PMA modules in 120 days
510(k)s
80% of 510(k)s in 90 days
90% of 510(k)s in 90 days
N/A
98% of 510(k)s in 150 days
180-Day PMA Supplements
85% of 180-Day PMA supplements in 180 days
90% of 180-Day PMA supplements in 180 days
95% of 180-Day PMA supplements in 210 days
Real-Time PMA Supplements
80% of Real-Time PMA Supplements in 60 days
N/A
90% of Real-Time PMA Supplements in 90 days
Biological License Applications
90% of BLAs in 10 months
90% of BLA supplements in 10 months
Same as MDUFMA
90% of BLA resubmissions and BLA supplement
resubmissions in two months
Source: FDA, Comparison of Quantitative Decision Goals in MDUFMA I and II, April 30, 2009, http://www.fda.gov/
MedicalDevices/DeviceRegulationandGuidance/Overview/MedicalDeviceUserFeeandModernizationActMDUFMA/
ucm109319.htm.
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Postmarket Safety
While FDA may not generally use medical device user fees to fund postmarket surveillance or
safety activities, MDUFA 2007 (§212(h)) did separately authorize appropriations for postmarket
safety information.45 (See Table 8)
Table 8. Appropriations Authorized for Postmarket Safety Information,
FY2008-FY2012
FY2008 FY2009 FY2010 FY2011 FY2012
$7,100,000 $7,455,000 $7,827,750 $8,219,138 $8,630,094
In preparation for MDUFA 2007, questions had been raised about the effect of MDUFMA on
postmarket activities. According to FDA, MDUFMA focused on premarket review activities,
largely limiting FDA’s use of MDUFMA funds to this area, and focusing all performance goals on
it as well.
Measuring the impact of user fees on enforcement activities is not a straightforward endeavor,
and is beyond the scope of this report. However, Table 9 tracks some types of FDA enforcement
activities from FY2000 (before MDUFMA was passed) through FY 2008 (the most current year
for which the information is available).
Table 9. CRDH Warning Letters, Seizures, Injunctions, Civil Money Penalties and
Recalls, FY2000 – FY2008
Civil
Recalls
Fiscal
Warning
Money
Year
Letters
Seizures Injunctions Penalties
Class I
Class II
Class III
FY 2000
528 0.5 2.33 0 38 723 177
FY 2001
498 2 1 1 8
960
236
FY 2002
285 1 1 0 44
1.170
240
FY 2003
205 0 2 1 84
1,012
204
FY 2004
198 2 1 2 36
1,235
219
FY 2005
182 3 2 1 77
1,351
170
FY 2006
154 4 0 1 76
1,252
222
FY 2007
155 1 4 1 45
1,102
132
FY 2008
152 0 1 0
131
2,178
163
Source: Warning Letters: FDA Office of Legislation; All other items: FDA, The Enforcement Story (for FY 2004 -
FY 2008): CDRH Charts, http://www.fda.gov/ICECI/EnforcementActions/EnforcementStory/default.htm.
Note: FDA warning letters advise firms of violations that require corrective action. In a seizure, a violative
product is held pursuant to a court order. An injunction is a court order requiring a firm to perform (or refrain
from performing) some action to avoid a violation. A civil money penalty is a court ordered fee imposed
45 FFDCA 738(h)(3); 21 USC 379j(h)(3).
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because of a violation of law. A recall is an action taken by a firm to remove a violative product from the
market. Class I recalls are the most serious (the violative products likely to cause harm or death), and Class III
are the least serious. See FDA, Regulatory Procedures Manual: Chapter 11, Glossary, March 2009,
http://www.fda.gov/ICECI/ComplianceManuals/RegulatoryProceduresManual/ucm179275.htm.
Annual Reports to Congress
MDUFA 2007 (§213) requires the Secretary to submit annual fiscal and performance reports for
FY2008 through FY2012 to the Senate Committee on Health, Education, Labor and Pensions,
and the House Committee on Energy and Commerce.46
Fiscal reports are to address the implementation of FDA’s authority to collect medical device user
fees, as well as FDA’s use of the fees. Performance reports are to address FDA’s progress toward
and future plans for achieving the fee-related performance goals identified in the Commitment
Letter. Performance reports are to include information on all previous cohorts for which the
Secretary has not given a complete response on all device premarket applications, supplements,
and premarket notifications in the cohort.
Non-User Fee Provisions Regarding the Regulation
of Medical Devices Established in User Fee Acts
In addition to reauthorizing the collection of user fees, MDUFMA and MDUFA 2007 each
amended various aspects of the regulation of medical devices. Some topics were addressed by
both acts. Others were addressed only in one. This section provides information about the non-
user fee topics addressed in MDUFA 2007, and a listing of such topics addressed only in
MDUFMA.
Non-user Fee Topics in MDUFA 2007
The non-user fee related topics in MDUFA 2007 were included in its Subtitle B. Some of these
were also addressed in MDUFMA. Topics include third-party review of premarket notification,
required registration and filings, a unique device identification system, reporting for devices
linked to serious injuries or death, inspections by accredited persons, and several reports required
from government agencies. The current state of the law with respect to each of these items is
summarized below, highlighting the amendments made by MDUFA 2007.
Third-Party Review of Premarket Notification
Under the initial authority of FDAMA, the HHS Secretary has been authorized to accredit non-
FDA employees to review applications for Class I and certain Class II devices.47 This authority, as
reauthorized in MDUFA 2007 (§221), is set to expire at the end of FY2012. According to FDA,
the purpose of the accredited third-party (ATP) program is to improve the efficiency and
46 FFDCA 738A; 21 USC 379j-1.
47 FFDCA 523 (c); 21 USC 360m(c).
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timeliness of FDA’s 510(k) process, the process by which most medical devices receive
marketing clearance in the United States.
Under the program, persons may elect to submit a 510(k) to an ATP rather than directly to FDA.
The ATP then conducts the primary review of the 510(k), and forwards its review,
recommendation, and the 510(k) to FDA. By law, FDA must issue a final determination within 30
days after receiving the recommendation of an ATP. Submissions reviewed by ATPs are not
subject to FDA user fees, though the ATP may charge its own fee. For 510(k)s submitted during
FY 2008, 510(k)s reviewed by Accredited Third Parties (ATPs) received FDA marketing
clearance in an average of 104 days after initial receipt by the ATP—17% faster than comparable
510(k)s reviewed entirely by FDA (126 days).48
Required Registrations and Filings
In addition to registering annually with FDA, medical device establishments are required to
provide the HHS Secretary a list of devices on which they perform specific functions (such as
marketing or manufacturing).49 MDUFA 2007 (§§222-223) restricts the list and establishment
registration periods from October 1 to December 31 of each year, and reduces the list requirement
from twice to once per year. MDUFA 2007 (§224) requires these registrations and listings to be
submitted electronically, unless the HHS Secretary grants a waiver.50
Unique Device Identification System
The HHS Secretary is required by MDUFA 2007 (§226) to promulgate regulations establishing a
unique identification system for medical devices.51 The law contains no associated deadline. Such
a system for medical devices might be used to help reduce medical errors, facilitate recalls,
identify incompatibility with other devices or potential allergic reactions, improve inventory
control, improve reimbursement, and reduce product counterfeiting.52 Since 2004, FDA has
required bar code labeling for drugs.
Prior to the passage of MDUFA 2007, the medical device identification encompassed four
disparate elements.53 One was the use of the universal product number (UPN), devised by the
Department of Defense to streamline purchasing operations. A second was the use of a product
data utility (PDU) to maintain accurate product data for electronic data interchange. A third was
the use of auto-identification technologies, such as bar coding, that allow distributors and
purchasers to electronically read UPNs or other identification information. And a fourth was the
use of identification systems in some hospitals that can read UPNs and capture data or link UPNs
to a PDU database. These types of medical device identification were quite disparate and had
48 FDA Office of Legislation. Numbers are the most recent available as of publication.
49 FFDCA 510(b), (i)(1), (j)(2); 21 USC 360(b), (i)(1), (j)(2).
50 FFDCA 510(p); 21 USC 360(p).
51 FFDCA 519(f); 21 USC 360i(f).
52 Eastern Research Group, Inc., prepared for FDA, ERG Final Report: Unique Identification for Medical Devices,
Contract No. 223-03-8500, In Partial Fulfillment of Task Order 7, March 22, 2006, http://www.fda.gov/
MedicalDevices/DeviceRegulationandGuidance/UniqueDeviceIdentifiers/ucm054169.htm.
53 Id.
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penetrated the market to widely varying degrees. Only a few hospitals were making use of
identification systems in their operations.
Reporting for Devices Linked to Serious Injuries or Death
When MDUFA 2007 was passed, the law required the HHS Secretary to promulgate regulations
requiring establishments to report to the Secretary if they became aware of information
reasonably suggesting that their marketed device had or might have caused a serious injury or
death.54 MDUFA 2007 (§227) specifies the reporting requirements for such devices that have
malfunctioned.
Accredited Third-Party Inspections
Accredited third-party inspections were introduced in MDUFMA (as amended by MDTCA) with
the goal of reducing the burden on FDA inspectors by enabling FDA-accredited persons (third
parties) to conduct certain inspections on FDA’s behalf. Inspections play an important role at
FDA. According to GAO:
During quality system inspections, FDA investigators examine manufacturing controls,
processes, and records. These inspections are FDA’s primary means of assuring that the
safety and effectiveness of medical devices are not jeopardized by poor manufacturing
practices.55
MDUFA 2007 (§228) amended the accredited third-party inspection requirements, as described
further below. According to the FDA Agreement, the amendments are aimed at increasing the
quantity of useful information FDA has about the compliance status of medical devices marketed
in the United States, and permitting FDA to focus its resources on inspecting those firms and
products posing the greatest risk to public health.
FDA is required, by statute, to inspect certain domestic establishments where medical devices are
manufactured at least once every two years.56 According to a 2007 GAO report, FDA has not
been meeting this requirement.57 Instead, five or six years sometimes pass between FDA
inspections at any one establishment.
FDA accredited the first third-party on March 11, 2004. As of April 6, 2010, 24 organizations had
applied to conduct independent third-party inspections of establishments, of which 16 had
received FDA accreditation. Between March 11, 2004 and April 6, 2010, 43 inspections of
domestic establishments and two inspection of a foreign establishment had been conducted by
accredited organizations jointly with FDA officials as part of training that FDA requires of
accredited organizations. During this same period, 15 auditors from eight of these organizations
completed the necessary training and were cleared to conduct independent inspections. As of
54 FFDCA 519(a)(1); 21 USC 360i.
55 Government Accountability Office, “Medical Devices: Status of FDA’s Program for Inspections by Accredited
Organizations,” Report to Congress, GAO-07-157 (January 2007).
56 FFDCA 510(h); 21USC 360(h).
57 Government Accountability Office, “Medical Devices: Status of FDA’s Program for Inspections by Accredited
Organizations,” Report to Congress, GAO-07-157 (January 2007).
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April 6, 2010, these auditors had conducted 36 independent inspections—16 of domestic
establishments and 20 of foreign establishments.58
GAO reports that several factors may influence manufacturers’ interest in voluntarily requesting
an inspection by an accredited organization:
Potential incentives [to request inspection by an accredited organization] include the
opportunity to reduce the number of inspections conducted to meet FDA and other countries’
requirements and to control the scheduling of the inspection. Potential disincentives include
bearing the cost for the inspection and uncertainty about the potential consequences of
making a commitment to having an inspection to assess compliance with FDA requirements
in the near future.59
MDUFA 2007 changed the third-party accredited person inspection program in three major ways.
First, it streamlined administrative burdens associated with qualifying for the program. For
example, for clearance to use a third party, the law now requires that firms provide FDA with 30
days prior notice of their intent to use a third party listed on FDA’s website. Previously, a firm
was required to petition FDA for such clearance.
Second, it made amendments designed to expand participation in the program. For example, the
law now permits firms to use third parties for an unlimited number of consecutive inspections
without seeking a waiver, with certain exceptions. Previously, the third-party program restricted
qualified manufacturers of Class II and Class III medical devices to two consecutive third-party
inspections, after which FDA was required to conduct the next inspection, unless the
manufacturer petitioned and received a waiver from FDA.
The third change has to do with FDA’s process for setting its inspection priorities. To do this, the
agency uses a risk-based approach. To inform the risk-based approach, MDUFA 2007 requires
FDA to accept certain reports that are voluntarily submitted by establishments. Establishments
may submit reports by third parties that assess conformance with an appropriate international
quality systems standard, such as those set by the International Standards Organization.60
Previously, FDA did not accept such submissions.
Reports
MDUFA 2007 requires two reports by GAO and one by FDA to be delivered to Congress by
September 27, 2008. One report is to present the results of a GAO study on the appropriate use of
510(k) clearance as a part of the device classification process to determine whether a new device
is as safe and effective as a classified device. (§225) The second is to present the results of a
GAO study on the number of nosocomial infections attributable to new and reused medical
devices and the causes of such infections. (§229) MDUFA 2007 defines a nosocomial infection as
an infection that is acquired while an individual is a patient at a hospital and was neither present
nor incubating in the patient prior to receiving services in the hospital. The third report requires
58 FDA Office of Legislation.
59 Government Accountability Office, “Medical Devices: Status of FDA’s Program for Inspections by Accredited
Organizations,” Report to Congress, GAO-07-157 (January 2007).
60 The International Standards Organization (ISO) is the world’s largest developer and publisher of international
standards. ISO is a non-governmental organization that forms a bridge between the public and private sectors. See
http://www.iso.org/iso/about.htm.
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FDA to conduct consumer testing and determine whether labeling requirements for indoor
tanning devices provide sufficient information to consumers regarding the risk of damage to eyes
and skin. (§230)
Non-user Fee Topics Only in MDUFMA
The following issues were addressed in MDUFMA, but not in MDUFA 2007:
• The review of combination products (products that combine elements of devices,
drugs, or biologics) was to be coordinated by a new office in the Office of the
Commissioner.
• Electronic labeling was authorized for prescription devices intended to be used in
health care facilities.
• The sunset provision applicable to intended use based on labeling (§513(i)(1)(E))
was revoked.
• MDUFMA explicitly provided for modular review of PMAs.
• New provisions were added concerning devices intended for pediatric use.
• GAO and the National Institutes of Health (NIH) were directed to prepare reports
concerning breast implants.
• The manufacturer of a device was required to be identified on the device itself,
with certain exceptions.
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Appendix A. Acronyms Used in This Report
510(k) Premarket
Notification
513(g)
Request for Information About Device Classification
ADUFA
Animal Drug User Fee Act
BLA
Biological License Application
CBER
Center for Biologics Evaluation and Research
CDRH
Center for Devices and Radiological Health
CLIA
Clinical Laboratory Improvement Amendments (42 U.S.C. 263a)
FDA
United States Food and Drug Administration
FFDCA
Federal Food, Drug, and Cosmetic Act (21 U.S.C. Chapter 9)
FTE
Full Time Equivalent Employee
GAO
Government Accountability Office (formerly General Accounting Office)
GMP Good
Manufacturing
Practice
HHS
United States Department of Health and Human Services
HUD
Humanitarian Use Device
IDE
Investigational Device Exemption
IND
Investigational New Drug Application
IVD
In Vitro Diagnostic Device (laboratory diagnostic test)
MDTCA
Medical Device Technical Corrections Act ()
MDUFMA
Medical Device User Fee and Modernization Act ()
MDUFA 2007
Medical Device User Fee Amendments of 2007 (, Title II).
MQSA
Mammography Quality Standards Act ()
MDUFSA
Medical Device User Fee Stabilization Act of 2005 ()
NSE Non-Substantial
Equivalence
OIVD
Office of In Vitro Diagnostic Device
PDP Product
Development
Protocol
PDUFA
Prescription Drug User Fee Act
PL Public
Law
PMA Premarket
Approval
SE Substantial
Equivalence
SUD Single-Use
Device
USC
United States Code
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Appendix B. History of MDUFA Provisions
This section contains a history of each of the user fee provisions. It presents topics in the same
order and format used in the Medical Device User Fees section of this report, with one exception.
The history of Use of Fees is presented in the main text with the explanation of the provision, not
in this appendix, because the evolution of the provisions is relevant to their interpretation.
Triggers
The direct congressional appropriations trigger is lower than the one initially set in 2002.
MDUFMA had required an appropriation equal to or greater than $205,720,000 multiplied by an
inflation adjustment factor. (Current law requires 1% less than this amount). In 2005, legislation
was required to enable the continuation of the MDUFMA user fee program because congressional
appropriations had been lower than required for FY2003 and FY2004. MDUFSA (the 2005
legislation) lowered the MDUFMA triggers retroactively for FY2003 and FY2004, and
prospectively for FY2005-FY2007, to the level required by current law. MDUFA 2007
perpetuated the MDUFSA trigger, including the adjustment factor, indefinitely.
The second trigger, for the HHS Secretary, was created by MDUFMA (§102) in 2002 and has not
been amended.
User Fees and the Device Review Budget
MDUFMA (§102) first authorized the collection of fees in FY2003. MDUFA 2007 (§212(h)(1))
authorized an increase for each year between FY2007 and FY2012. The base fee amounts for
FY2003-FY2007 are presented in Table B-1.
Table B-1. MDUFMA Base Fees (PMA), FY2003-FY2007
FY2003 FY2004 FY2005 FY2006 FY2007
$154,000 $206,811 $239,237 $259,600 $281,600
Source: “Fees” section, MDUFMA website of FDA’s Center for Biologics Evaluation and Research, updated
August 2, 2006, at http://www.fda.gov/cber/mdufma/mdufma.htm.
Activities Requiring Fees
All of the application fees except for the 30-Day Notice and 513(g) were authorized by
MDUFMA (§102). As mentioned in the main text, in the lead up to MDUFA 2007, FDA claimed
there had been fluctuations in the number of applications submitted from year to year, causing fee
revenues to repeatedly fall short of expectations.61 MDUFA 2007 (§212 (a)(1), (5)) authorized
establishment and product fees, as well as two new types of application fees (for 30-Day Notices
and 513(g)s) to help establish a more consistent and predictable user fee revenue stream for FDA.
61 Public Meeting.
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MDUFA 2007 also changed the percentage of the base fee assigned to various types of activities,
but the basic method of setting the fees is the same as it was under MDUFMA. The one exception
to this is the way that the premarket notification fee (for 510(k) submissions) is set. Under
MDUFMA, the premarket notification fee had been calculated annually, so that the total of all
such fees, in aggregate, comprised a target amount. MDUFA 2007 provided that these fees are to
be set like the others—as a percentage of the base fee.
MDUFA 2007 lowered the base fee by $96,600 in FY2008 from its FY2007 level. However, as
noted previously, FDA projects that it will still have more fee revenue in FY2008 than FY2007
because the addition of revenue from the new types of fees should more than compensate for the
money lost in fee reductions. The net effect should be an increase in fee revenue for FDA.
Fee-Collection Offset
The authority to consider excess funds in aggregate over several years was added by MDUFA
2007 (§212(h)(2)). Under MDUFMA, FDA was required to reduce fees in any year for which
collections in the preceding year exceeded the amount authorized.
Fee Exceptions, Reductions, Refunds
The following is a history of the various device user fee exceptions, reductions and refunds.
Humanitarian Use Devices (HUDs)
MDUFMA (§102) created the HUD user fee exemption. MDUFA 2007 did not amend the HUD
provisions. However, another FDAAA title, the Pediatric Medical Device Safety and
Improvement Act of 2007 (Title III, §303), allowed that certain pediatric device manufacturers
may also be able submit an HUD application.62 The HUD fee waiver is not significant for
manufacturers of pediatric medical devices. This is because under MDUFMA these
manufacturers had already qualified for user fee exemptions as described in the next paragraph.
The HUD fee waiver does not apply to the establishment registration fee created by MDUFA
2007 (§212(a)(5)).
Devices Intended for Pediatric Use
MDUFMA (§102) created the pediatric use exemption. It was not amended by MDUFA 2007, but
the exemption does not apply to the new law’s annual establishment fee (§212(a)(5)).
Applications from Federal or State Government Entities
This exemption was created by MDUFMA (§102). Unlike the other exemptions, MDUFA 2007
(§212(a)(5)) applied this one to establishment registration fees.
62 For more information about the Pediatric Medical Device Safety and Improvement Act of 2007, see CRS Report
RL34465, FDA Amendments Act of 2007 (P.L. 110-85), by Erin D. Williams and Susan Thaul, and CRS Report
RL33986, FDA’s Authority to Ensure That Drugs Prescribed to Children Are Safe and Effective, by Susan Thaul.
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Further Manufacturing
MDUFMA (§102) created this exemption. MDUFA 2007 (§212(a)(5)) does not apply it to the
newly created establishment registration fee.
Premarket Notification by Third Parties
MDUFMA (§102) created this exemption. MDUFA 2007 does not change the exemption, but
Subtitle B (§221) extends third-party review authority from 2007 to 2012.
Small Businesses
MDUFMA (§102) authorized fee reductions for small businesses. MDUFA 2007 (§212(d), (e))
changed the details of the small business rules established under MDUFMA in two ways. First, it
lowered the fee percentage that small businesses must pay. For example, as stated above, MDUFA
2007 requires a small business to pay 50% of the standard 510(k) fee and 25% of the standard
PMA fee, whereas MDUFMA had required small businesses to pay 80% and 38%, respectively.
(See Table 5)
Second, MDUFA 2007 made it easier for entities to qualify as small businesses with two
amendments. The first removed MDUFMA’s requirement that FDA consider the assets of
partners and parent firms in the small business qualification calculation. The second broadened
the types of acceptable gross receipt documentation beyond IRS filings, making it possible for
foreign establishments to qualify as small businesses.
Modular PMA Refunds
This refund provision was added by MDUFA 2007 (§212(4)).
Performance Goals
MDUFMA (§102) and MDUFA 2007 (§212(g)) each incorporated the contents of a commitment
letter into law by reference. According to the FDA Agreement, the MDUFA 2007 goals are fewer
and more rigorous than those in MDUFMA. They build on the progress made in MDUFMA. In
making these proposals, FDA considered efficiencies gained and expected by means of additional
scientific, regulatory, and leadership training; additional staff, including those with expertise
demanded by increasingly complex device reviews; expanded use of outside experts; and
information technology improvements that allow FDA to better track and manage the device
review process. Like MDUFA 2007, MDUFMA had created performance goals, which were
articulated in the 2002 Commitment Letter. (See Table 7) According to the FDA Agreement, FDA
was on track to meet nearly all of the MDUFMA performance goals, which expired on October 1,
2007.
Performance Goal-Setting Process
A performance goal-setting process was conducted in preparation for MDUFMA. A second one,
required by MDUFMA (§105), was created in preparation for MDUFA 2007. MDUFA 2007
(§213) sets forth requirements for the third such process. The three processes and their
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requirements were similar, except that MDUFA 2007 added the requirements that the
recommendations be revised upon consideration of public comments, and that the
recommendations be transmitted to Congress not later than January 15, 2012. MDUFA 2007 also
wrote all of the relevant consultation requirements into the FFDCA.
Quarterly Performance Reports
These reports were required according to the commitment letters issues pursuant to both
MDUFMA and MDUFA 2007. Each letter specified a unique set of factors to be included in the
reports.
Postmarket Safety
MDUFMA authorized additional appropriations for postmarket surveillance in the amounts of $3
million for FY2003, $6 million for FY2004, and “such sums as may be necessary” for FY2005
through FY2007. However, these sums were not appropriated. MDUFMA also required the HHS
Secretary to conduct a study of the postmarket review impact of the medical device user-fee
program. MDUFA 2007 changed both the amounts and wording of the purpose of the
authorization for post-market safety appropriations.
Annual Reports to Congress
Annual reports were initially required by MDUFMA from the time that FDA was first granted the
authority to collect medical device user fees through FY2007. However, MDUFA 2007 changed
the law by requiring that the reports be made available to the public, by writing the report
requirements into the FFDCA, and by expanding substantive requirements of the performance
report.
Author Contact Information
Erin D. Williams
Specialist in Public Health and Bioethics
ewilliams@crs.loc.gov, 7-4897
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