Medical Device Daily Washington Editor

WASHINGTON – Acting FDA commissioner Lester Crawford said yesterday that the FDA is open to considering an overhaul of – or perhaps even a “different system” than – the current user fee program put in place by the Medical Device User Fee and Modernization Act of 2002 (MDUFMA).

Addressing the annual meeting of the Medical Device Manufacturers Association (MDMA; Washington) at the Madison Hotel, Crawford praised the program as the key to recent improvements in product approvals and clearances by the Center for Devices and Radiological Health. But he said he also recognized the industry’s concern with escalating fees.

“I think going to a different system should be put in the table, and I would be open to that,” he said.

MDUFMA, now in its third fiscal year, has drawn sharp criticism from the device industry because of rapidly increasing fees as a result of shortfalls in the number of applications received by the agency over the last few years.

MDMA has been the most vocal in its opposition to the MDUFMA compensating adjustor, which allows the shortfalls of one year to roll into the next and forgives Congress its shortfall obligation.

Mark Leahey, MDMA’s executive director, said that this places an unfair burden on industry, especially the smaller entrepreneurial companies developing innovative technologies and which MDMA tends to represent.

According to Leahey, Congress has delivered less than 50% of the funds promised, while industry has met 90% of its obligation.

“We simply cannot sustain these dramatic fee increases,” Leahey said. “We need to do more to ensure that these fees are reasonable and that there really is improved performance from FDA in exchange for these fees.”

A fix of the compensating adjustor is mandated by Oct. 1. If a consensus can’t be reached among the FDA, Congress and industry, the program will sunset.

“We do support paying FDA a reasonable fee for enhanced performance, but we’re not willing to perpetuate a broken program,” Leahey said.

Crawford told the meeting attendees that there are ongoing conversations with Congress and industry, saying that FDA “is working hard to find a solution that will address the industry’s concern.”

He said there are meetings on Capitol Hill on a regular basis, but he declined discussing any specifics. “But it is in all parties’ interest to find a solution,” he said. “It would be unfortunate to have MDUFMA end in the near future.”

In response to one MDMA member’s charge that higher fees are keeping many companies from filing certain submissions for fear of the cost, Crawford said that he has seen no evidence that there is a “chilling effect” as a result of higher fees.

“The last thing we would want is to impede cutting-edge companies in any shape, form or fashion,” he said. “But there are things we have to work out.”

Crawford said the user fee program has been – in part – the cause of a culture change at FDA. He described the agency 10 to 15 years ago as “aloof” and not actively engaged in the development of new technology.

“I like the idea of it [the user fee program] because it helps brings us face to face with the industry, and it allows us to collaborate and develop goals for the future,” he said. “We basically didn’t know what was going on in the pipeline for any of the products we regulated.”

He said the program has provided the revenue to build “much-needed infrastructure” to enhance agency performance, enable it to hire more experts and produce reduced product review times.

In 2002, 77% of 510(k) approvals occurred within 90 days, according to Crawford. By 2004, that number had increased to 85%.

He also noted that decision time for premarket approval applications has decreased from 260 in 2002 to 218 days last year.

Opponents have argued that there needs to be a better way to evaluate FDA performance goals, saying that agency productivity had improved even before the implementation of MDUFMA.