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Medical Device User Fee and Modernization Act of 2002

As previously reported on October 17, 2002, the Senate passed H.R. 5651 that would, for the first time, implement user fees for medical device companies, in exchange for the Food and Drug Administration agreeing to reduce the time it takes to review applications. The House approved the legislation one day earlier.

President Bush signed the legislation on October 26, 2002.

Summary

The Medical Device User Fee Act (MDUFA) establishes a system to speed up the evaluation process for applications, reports, application supplements and submissions sent to the Food and Drug Administration (FDA). The law will be retroactive to October 1, 2002 and is supposed to run through October 1, 2007, at which point Congress would have to renew the legislation in order for the law to continue.

It is expected that these user fees will cut the average review time at FDA for applications by as much as 25 percent over a five-year period.

The law stipulates that medical device user fees are restricted to being used to defray costs of the resources allocated for the review of device applications.

Fees will be collected on the following:

• Premarket application (PMAs) - $154,000
• Premarket report (PMRs) - $154,000
• Panel track supplement - $154,000
• 180-day supplement - $33,110
• Real-time supplement - $11,088
• Efficiency supplement - $154,000
• Premarket notification (510(k)s) - $2,190

Small Business

Contained in the law is an exemption for small business. The law defines a small business as an entity that reported $30 million or less of gross receipts or sales in its most recent Federal income tax return.

Under the law, small businesses will be granted one waiver of the fee required for their first premarket application or premarket report. Subsequent premarket applications, premarket reports or supplements submitted by a small business will be subject to a reduced rate of 38 percent of the established fees. There are additional exemptions for humanitarian purposes and state or federal government entities.

Third-Party Inspections

The new law will allow the use of third parties to inspect the facilities of medical device manufacturers. FDA-approved third parties may inspect device manufacturing facilities conditionally through 2012. However, FDA itself must conduct every third inspection of domestic facilities.

Within one year of enactment of the law, the Secretary of the FDA must be able to accredit third-party persons for purposes of conducting inspections. The criteria for accreditation must be published in the Federal Register within six months on enactment.

The FDA Secretary shall accredit no more than 15 persons who request to be accredited. Such persons may not be government employees and can not be associated in any fashion with entities that design, manufacture or promote medical devices.

Another Provision of the MDUFA

The law includes a requirement that the identification of the manufacturer of a medical device be displayed on the device or an attachment thereto, with exemptions allowed to be issued by the Secretary. It will also require reprocessed single-use devices to carry prominently on the label a statement identifying the product as such, along with the name of the person responsible for reprocessing and the manufacturer. This provision takes effect 15 months after the enactment of the Act.

U.S. AGENT SECTION

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