Medical Device User Fee and Modernization Act (MDUFMA) Reauthorization

Medical Device User Fee and
Modernization Act (MDUFMA) Reauthorization
Updated July 12, 2007
Erin D. Williams
Specialist in Bioethical Policy
Domestic Social Policy Division

Medical Device User Fee and
Modernization Act (MDUFMA) Reauthorization
Summary
Unless Congress acts to reauthorize it, the Food and Drug Administration’s
(FDA’s) authority to collect user fees under the Medical Device User Fee and
Modernization Act (MDUFMA; P.L. 107-250) and, by reference, FDA’s obligation
to meet related performance goals, will expire on October 1, 2007. According to the
President’s budget request, in FY2008, funds from a reauthorized MDUFMA would
account for an estimated $47.5 million and 200 full-time equivalent employees
(FTEs). This would comprise 16.6% of FDA’s medical device review budget
authority and 13.0% of its medical device review-related FTEs. While these numbers
and percentages are not as high as those projected for collection under a similar FDA
user fee authority related to prescription drugs (pursuant to the Prescription Drug
User Fee Act), they are significant.
For MDUFMA as passed in 2002, the fee amounts and performance goals
articulated and incorporated in statute were the result of an agreement between FDA
and the medical device industry. In order to facilitate the reauthorization of
MDUFMA, in April 2007, the FDA and industry published the results of their
negotiations with a notice of an April 30, 2007, public meeting on the topic.
According to FDA, during the five years covered by the proposals (through 2012),
FDA would receive approximately $287 million from user fees. This represents an
increase from the $110 million FDA received during the first four years of the
program.
The industry agreement also calls for changes in the fee structure, performance
goals, small business relief, and third-party inspection program. In addition, the
agreement reflects FDA’s initiatives related to the regulation of in vitro diagnostic
devices (laboratory tests). (MDUFMA enabled third-party inspections and set
standards for the use of reprocessed single-use devices.) The details of the proposed
reauthorization of MDUFMA have been incorporated, with a few exceptions, into the
Medical Device User Fee Amendments of 2007 (MDUFA 2007). On May 9, 2007,
MDUFA 2007 passed the Senate as Title III of the Food and Drug Administration
Revitalization Act (S. 1082). On July 11, 2007, the House passed it as Title II of the
Food and Drug Administration Amendments Act of 2007 (H.R. 2900). The bills’
MDUFA 2007 provisions are similar, but not identical. Differences between them
are expected to be addressed in conference. The provisions of MDUFMA and the
proposals for MDUFA 2007 are discussed in this report, following an introduction
to FDA’s medical device review process.
This report will be updated as event warrant.

Contents
Overview: FDA and Medical Device Review...........................1
MDUFMA and MDUFA 2007.......................................5
User Fees....................................................6
Triggers .................................................6
User Fees, Device Review Budget and FTEs....................7
Activities Requiring Fees, and Exceptions to the General Rule......9
Use of Fees..............................................13
Performance Goals........................................14
Accredited Third-Party Inspections...............................17
Reprocessed Single-Use Devices.................................18
Other MDUFA 2007 Provisions.................................19
Annual Reports..........................................19
Postmarket Safety Appropriations Authorization................19
Nosocomial Infections.....................................21
Other MDUFMA Provisions....................................21
FDA Agreement Recommendations not in MDUFA 2007.............21
Interactive Review........................................21
Guidance Document Development...........................21
Diagnostic Imaging Products................................22
In Vitro Diagnostics (IVDs).................................22
Meetings ................................................22
Appendix A. Acronyms Used in This Report...........................24
List of Tables
Table 1. Medical Device Approval Basics...............................2
Table 2. Premarket Approvals (PMAs), Panel-Track Supplements, and
Premarket Notification (510(k)s), FY2003-FY2006...................4
Table 3. Statutory Triggers for MDUFMA (FDA’s Salaries and Expense
Appropriation Line for Devices and Radiological Health, Exclusive
of User Fees).................................................7
Table 4. Funding for the Device Review Process Salaries and Expenses,
FY2003-FY2008 ..............................................7
Table 5. Full Time Employees (FTEs) in the Device Review Process,
FY2003-FY2008 ..............................................8
Table 6. Proposed MDUFA 2007 User Fee Revenue (S. 1082, H.R. 2900, and
FDA Agreement) and Total Dollars Needed for the Device Review
Process, FY2008-FY2012.......................................8
Table 7. MDUFMA Fee Schedule, Current FY2007, Proposed
FY2008-FY2012 .............................................10
Table 8. MDUFMA Base Fee Rates, FY2003-FY2007...................11
Table 9. Use of MDUFMA Fees.....................................14
Table 10. Comparison of Quantitative Decision Performance Goals in
MDUFMA and MDUFA 2007..................................16

FY2000-FY2007 .............................................20

Medical Device User Fee and
Modernization Act (MDUFMA)
Reauthorization
Overview: FDA and Medical Device Review
In order to understand the significance of MDUFMA, a basic introduction to
FDA and the medical device review process is useful. The United States Food and
Drug Administration (FDA) is the agency responsible for ensuring the safety and
effectiveness of medical devices in the United States. 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. (Federal
Food, Drug and Cosmetic Act, 21 U.S.C. 301 §201(h)) (FFDCA).
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 manufacturing requirements. In
part due to the diversity of medical devices, compared to the drug industry, the device
industry is more fragmented, smaller (estimated earnings of $80 billion in 2004
compared to the drug industry’s estimated $222 billion), and dominated by smaller
companies.
FDA is divided into six centers, each charged with regulating 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 treatments). Jurisdiction of the centers’ medical device review is governed by
the FDA Intercenter Agreement between CBER and CDRH (October 31, 1991).¹

¹ FDA, “Devices Regulated by CBER,” (updated March 15, 2007), at [http://www.fda.gov/

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, increase from Class I to Class III. The device
classification regulation defines the regulatory requirements for a general device type.
Most Class I devices are exempt from Premarket Notification (510(k)) and require
only registration with FDA before marketing; most Class II devices require a 510(k)
before marketing; and most Class III devices require Premarket Approval (PMA).
Most PMAs and some 510(k)s require clinical trials,² which are conducted with FDA
permission via an investigational device exemption (IDE) that allows a device to be
used in a study to gather information on its safety and effectiveness. Devices are
reviewed by CBER under a biological license application (BLA).
Table 1. Medical Device Approval Basics
DeviceExamplesSafety /EffectivenessRequired
Cl assif i cation Cont r o l s Subm i ssi on
elastic bandages,-Registration only
Class Iexamination gloves,and hand-heldGeneral Controls³unless 510(k)
surgical instrumentsspecifically required
powered-510(k) clearance
Class IIwheelchairs,infusion pumps, andGeneral Controls &Special Controls⁴unless exempt
surgical drapes-IDE possible
heart valves,-PMA approval
silicone gel-filledGeneral Controls &unless 510(k)
Class IIIbreast implants, andPremarket Approvalspecifically permitted
implanted cerebella-IDE probable

stimulators
¹ (...continued)
cber/dap/devlst.htm] .
² For more information on the regulation and sharing of results from clinical trials, see CRS
Report RL32832, Clinical 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.
³ General controls include five elements: establishment registration (use FDA Form 2891)
of companies which are required to register under 21 CFR part 807.20, such as
manufacturers, distributors, repackagers and relabelers, and foreign firms; medical device
listing (use FDA Form 2892) with FDA of devices to be marketed; manufacturing devices
in accordance with the Quality Systems regulation (GMPs) in 21 CFR Part 820; labeling
devices in accordance with labeling regulations in 21 CFR Part 801 or 809; and submission
of a premarket notification 510(k) before marketing a device. (Most Class I devices are
exempt from the premarket notification and/or the Quality System Regulation).
⁴ Special controls may include special labeling requirements, mandatory and voluntary
performance standards and postmarket surveillance.

To supplement a PMA when there are changes in safety and effectiveness data,
FDA may require one of four types of submissions: 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. As 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.
FDA offers one alternative that can be used in place of a PMA: the Product
Development Protocol (PDP). A PDP is based upon 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 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 is a 513(g) request, 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.
Of all device-related submissions, a PMA (or Panel Track Supplement) is the
most rigorous and time consuming application process for manufacturers and review
process for the FDA. A 510(k) is significantly less rigorous, and is much more
common. The majority of medical devices that come to market do so with 510(k)
clearance rather than PMA approval. (See Table 2.)

Table 2. Premarket Approvals (PMAs), Panel-Track
Supplements, and Premarket Notification (510(k)s),
FY2003-FY2006
PMAs and Panel-Track510(k)s^a
Supplements
FY2003503,795
FY2004483,383
FY2005583,415
FY2006513,732
^Source:^M^D^U^F^M^A^q^u^a^r^t^e^r^l^y^r^e^p^o^r^t^,^a^t^[^h^t^t^p^:^/^/^www.^f^d^a^.^g^o^v^/^c^d^r^h^/^m^d^u^f^m^a^/^r^e^p^o^r^t^s^%⁵^C^q^u^a^r^t^e^r^l^y
^s^u^m^m^a^ry^.pdf^].
^a.^T^h^e^c^h^a^r^t^ex^cl^u^d^es^510(k⁾^s^t^h^at^w^e^{re cl}^os^{ed f}^o^{r an}^y^reas^on^ot^h^e^{r t}^h^an^an^F^D^A^det^e^rmⁱⁿ^atⁱ^oⁿ^of
^su^b^s^tan^{tial eq}^uⁱ^v^a^len^{ce (}^SE^{, w}^h^ich^r^e^su^{lts in}^FDA^clear^ance)^o^r^a^fi^ndⁱ^{ng o}^f^no^n-sub^s^t^a^ntⁱ^a^l
^e^q^ui^va^l^e^nc^e⁽^NS^E^,^w^h^ich^doesⁿ^o^{t res}^u^{lt in}^FDA^clearan^{ce), f}^o^{r ex}^am^{ple, w}^h^en^FDA^fⁱⁿ^d^s^th^at
^a^510(k⁾^w^a^sⁿ^o^t^requⁱ^r^{ed. T}^h^{e n}^u^m^{ber of}^510(k⁾^sⁱⁿ^t^h^{e MD}^U^F^MA^C^o^h^o^rtⁱ^s^s^u^bj^ect^t^o^ch^an^g^e
^uⁿ^{til th}^{e co}^h^o^r^t^{is co}^m^p^lete.
In the years prior to MDUFMA’s enactment, FDA’s resources for its device and
radiological health programs had increased at a lower rate than its costs.⁵ 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 the⁶
sense of the Committee that adequate funding for the program is essential.
In addition to filing applications for clearance or approval with FDA, device
manufacturers must be registered with FDA and file annual reports. In addition,
FDA inspects establishments where medical devices that are marketed in the United
States are manufactured to assess compliance with FDA’s quality system
requirements for ensuring good manufacturing practices (GMP) and other applicable
requirements. According to the Government Accountability Office (GAO):
During quality system inspections, FDA investigators examine manufacturing
controls, processes, and records. These inspections are FDA’s primary means

⁵ FDA, “Medical Device User Fee and Modernization Act; Public Meeting,” Federal
Register, vol. 72, no. 74, p. 19528, (April 18, 2007) at [http://frwebgate5.access.gpo.gov/
cgi-bin/waisga te.cgi ?WAISdocID=268837241492+0+0+0&WAISaction=retrieve ].
⁶ U.S. Congress, “House Committee on Energy and Commerce, Medical Device User Fee
and Modernization Act of 2002,” report to accompany H.R. 3580,107^th Cong., 2^nd sess., part

1 (Washington: GPO, 2002), pp. 23.)

of assuring that the safety and effectiveness of medical devices are not⁷
jeopardized by poor manufacturing practices.
In addition to issues raised by medical device review funding and inspection
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 as well as funding and
inspections paved the way for Congressional action in 2002 as described in the next
section.
MDUFMA and MDUFA 2007
Prior to the enactment of Medical Device User fee and Modernization Act ( P.L.
107-250, hereinafter referred to as MDUFMA), FDA officials met with industry
leaders, to agree upon mutually acceptable fee types, amounts, exceptions, and
performance goals.⁸ 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 Secretary of the
Department of Health and Human Services (HHS) to the Chairman and Ranking
Minority Members of the Committee on Health, Education, Labor and Pensions
Committee of the U.S. Senate and the Committee on Energy and Commerce of the
U.S. House of Representative.⁹
MDUFMA was enacted in order to provide FDA “with the resources necessary
to better review medical devices, to enact needed regulatory reforms so that medical
device manufacturers can bring their safe and 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.”¹⁰ 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 inspections to be conducted by
accredited persons (third parties); and (3) it instituted new regulatory requirements
for reprocessed single-use devices. FDA’s authority for the first of these (the
collection of user fees) will expire on October 1, 2007, unless Congress reauthorizes
it.

⁷ Government Accountability Office, “Medical Devices: Status of FDA’s Program for
Inspections by Accredited Organizations,” Report to Congress GAO-07-157 (January 2007).
⁸ 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): Background and Issues for PDUFA IV
Reauthorization,” by Susan Thaul.
⁹ This letter is generally referred to as the “FDA Commitment Letter.” See 148 Cong. Rec.
S11549-01(2002).
¹⁰ Medical Device User Fee and Modernization Act of 2002, H.Rept. 107-728 (October 7,

2002), p. 21.

MDUFMA was subsequently amended by two laws: 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). Unless otherwise noted, the
discussion of MDUFMA that follows incorporates the amendments made by
MDTCA and MDUFSA.
In preparation for reauthorization (MDUFA 2007), FDA and industry
representatives announced in April 2007 that they had reached a proposed mutual
agreement on terms (“FDA Agreement”). Pursuant to MDUFMA (§105), on April
30, 2007, FDA held a public meeting about the FDA Agreement. Attendees
expressed general satisfaction with its terms.
The terms of the FDA Agreement were, by and large, incorporated into the Food
and Drug Administration Revitalization Act (S. 1082), which the Senate passed on
May 9, 2007. They have also been generally incorporated into the Food and Drug
Administration Amendments Act of 2007 (H.R. 2900), which the House passed on
July 11, 2007. The two bills’ MDUFA 2007 provisions are similar, but not identical,
as explained below. Differences are expected to be addressed in conference. Like
MDUFMA, MDUFA 2007 proposals address both user fee authorities and third-party
inspection. The proposed MDUFA 2007 user fee provisions would sunset on
October 1, 2012. These as well as other MDUFMA provisions and other related
topics, such as the impact that MDUFMA has had on postmarket inspection and
enforcement, are discussed in the remainder of this report.
User Fees
Several important aspects of MDUFMA and MDUFA 2007 are related to user
fees, including statutory “triggers” that link FDA’s authority to collect and spend user
fees to levels of Congressional appropriations, as well as reductions and exemptions
to fees, performance goals, and allowable uses of fees.
Triggers. The authority to collect MDUFMA user fees is subject to statutory
triggers that prohibit the collection of the fees if direct Congressional appropriations
to FDA for salaries and expenses related to devices and radiological health fall below
a certain threshold. 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.
According to MDUFSA, FDA’s salaries and expense appropriation line for
Devices and Radiological Health, exclusive of user fees, must be not more than 1%
below $205,720,000, plus statutory adjustments for FY2005-FY2007.¹¹ For FY2007,
this translates into a minimum requirement of $229,334,000. (See Table 3.) No

¹¹ FDA Office of Management, “Funding For MDUFMA and ADUFA Triggers,” FY2007
Budget Formulation and Presentation, (February 22, 2006), at [http://www.fda.gov/
oc/oms /ofm/budget/2007/HT ML/7 UserFeeT rigge rsBCPPOM.htm] .

statutory trigger has been set for years beyond FY2007. MDUFA 2007 proposes that
the MDUFSA trigger language be maintained through FY2012.
Table 3. Statutory Triggers for MDUFMA
(FDA’s Salaries and Expense Appropriation Line for Devices
and Radiological Health, Exclusive of User Fees)
Appropriated Levels
FY2005 Actual$214,966,000
FY2006 Minimum Requirement$222,654,000
FY2007 Minimum Requirement$229,334,000
^Source:^F^D^A^O^f^fⁱ^{ce of}^M^a^nag^e^m^eⁿ^t^{, “}^F^uⁿ^dⁱⁿ^g^F^o^{r MD}^U^F^MA^an^{d A}^D^U^F^A^T^rⁱ^g^g^e^rs^{,” F}^Y²⁰⁰⁷
^B^u^dg^{et Form}^u^l^ation^an^{d P}^r^es^en^tation^,^{(Feb. 22, 2006), at}^[^h^t^t^p^://^www.^f^d^a^.^g^o^v^/^o^c^/^o^ms^/^o^f^m^/^b^u^d^g^e^t^/
^2007/^H^T^ML^/⁷^U^s^erF^eeT^ri^g^g^e^rs^BC^PPO^M.h^t^m^]^.
User Fees, Device Review Budget and FTEs. The amount of FDA’s
device review budget derived from MDUFMA user fees (private money) has
increased almost every year since the act became law. Over the period of FY2003
to FY2008, MDUFMA funding has increased at a much faster rate (220.1%) than
direct appropriations from Congress (24.1%).¹² MDUFMA fees comprised less than
7% of FDA’s program level device review budget in FY2003, and estimates are that
they will comprise over 16% in FY2008. (See Table 4.) According to the
President’s FY2008 budget request, MDUFMA fees would translate into 200 FTEs
for that year, or 13% of the FTEs in the device review process (See Table 5).
Table 4. Funding for the Device Review Process Salaries and
Expenses, FY2003-FY2008
⁽^d^o^llar^sⁱⁿ^th^o^u^san^d^s)
Total ProgramMDUFMA User MDUFMA /
LevelFees Total
FY2003 Actual$217,285$14,8386.8%
FY2004 Actual$179,245$23,875 13.3%
FY2005 Actual$244,282$27,16111.1%
FY2006 Actual$255,041$32,06912.6%
FY2007 Pres. Budget$271,571$43,72616.1%
FY2008 Pres. Budget$285,376$47,50016.6%
^S^o^u^rce:^F^ood^aⁿ^d^D^r^u^g^A^d^mⁱⁿⁱ^s^t^r^a^tⁱ^oⁿ^t^a^b^l^e^s^f^o^r^F^Y^{2005 -}^F^Y^{2008, “}^A^L^L^PU^R^P^O^S^{E T}^A^BL^{E -}
^T^o^t^a^l^P^r^o^g^r^a^{m L}^e^v^e^l^,^”^a^t^[^h^t^t^p^:^/^/^www.^f^d^a^.^g^o^v^/^o^c^/^o^ms^/^o^f^m^/^b^u^d^g^e^t^/^d^o^c^u^m^eⁿ^t^a^tⁱ^oⁿ^.^h^t^m]^.

¹² Calculation is based upon FY2003 Actuals (MDUFMA: $14,838,000, FDA budget
authority: $193,350,000), and the FY2008 President’s Budget Request (MDUFMA:
$47,500,000, FDA budget authority: $240,122,000).

Table 5. Full Time Employees (FTEs) in
the Device Review Process, FY2003-FY2008
Total DeviceMDUFMA-MDUFMA-
Review FTEsFunded FTEsFunded / Total
FY2003 Actual1,485332.2%
FY2004 Actual1,06113712.9%
FY2005 Actual1,51615310.1%
FY2006 Actual1,49818412.2%
FY2007 Pres. Budget1,53419612.8%
FY2008 Pres. Budget1,53920013.0%
^Source:^F^{ood an}^d^D^r^ug^A^d^mⁱⁿⁱ^s^t^ratⁱ^oⁿ^t^a^bl^es^f^o^{r F}^Y^{2005 -}^F^Y^{2008, “}^A^L^L^PU^R^P^O^S^{E T}^A^BL^{E -}
^T^o^t^a^l^P^r^o^g^r^a^{m L}^e^v^e^l^,^”^a^t^[^h^t^t^p^:^/^/^www.^f^d^a^.^g^o^v^/^o^c^/^o^ms^/^o^f^m^/^b^u^d^g^e^t^/^d^o^c^u^m^eⁿ^t^a^tⁱ^oⁿ^.^h^t^m]^.
MDUFA 2007 would increase the amount of fees and resulting FTEs each year
until FY2012. Total fee revenues in FY2008 would increase by approximately 31%
over estimated FY2007 fee revenues, and by 8.5% per year each subsequent year
through FY2012, generating a total of $287 million over five years. (See Table 6.)
Table 6. Proposed MDUFA 2007 User Fee Revenue (S. 1082,
H.R. 2900, and FDA Agreement) and Total Dollars Needed for
the Device Review Process, FY2008-FY2012
Total Device Review^aMDUFMA User Fee^bMDUFMA /
Program RequirementAuthorised AppropsTotal
FY2008$220,000$ 48,43122.0%
FY2009$ 234,000$ 52,54722.5%
FY2010$ 249,000$ 57,01422.9%
FY2011$ 265,000$ 61,86023.3%
FY2012$ 281,000$ 67,11823.9%
^Source:^FDA^,^“^M^{edical Dev}ⁱ^{ce Us}^{er Fee an}^{d Modern}^ization^A^c^{t; P}^u^{blic Meetin}^g^,^”^Feder^a^{l Regis}^t^er^,
^v^o^{l. 72, n}^o^{. 74, p.}¹⁹⁵^{28, (A}^{pril 18, 2007) at [h}^ttp://f^rw^ebg^a^te5.acces^s^.^g^po.g^o^v^/
^cgⁱ^-^biⁿ^/^w^aⁱ^s^g^a^t^e^.cgⁱ^?^W^A^I^S^docID^{=268837241492+0+0+0&}^WA^IS^actⁱ^oⁿ⁼^ret^rⁱ^e^v^e^].

Activities Requiring Fees, and Exceptions to the General Rule.
MDUFMA gives FDA the authority to collect user fees from manufacturers seeking
to market medical devices. All of the fees charged under MDUFMA are for types of
applications required for FDA approval or clearance of a product. According to
FDA, there were fluctuations in the number of applications submitted from year to
year, and fee revenues repeatedly fell short of expectations.¹³
To remedy the situation, MDUFA 2007 would introduce three new types of fees,
which would generate about 50% of the total fee revenue and that would be more
stable than application fees. The new fees are an annual establishment registration
fee (paid once each year by each manufacturer), an annual fee for filing periodic
reports (applicable to Class III devices approved under PMAs, premarket reports, and
PDP processes), and a fee for filing a 30-Day Notice. The FDA Agreement states
that the implementation of these new fees would allow for significant reduction in
MDUFA 2007 of existing application fees. (See Table 7.) Generally, fees would
increase each year by 8.5%, which, according to FDA’s recommendation, would
ensure that fee revenues contribute their expected share to total program costs, and
provide industry with stability and predictability in the fee revenues it would expect
to pay. For the newly created establishment fee, the Secretary could increase the fee
amount in FY2010 up to an additional 8.5% over the annual 8.5% increase if fewer
than 12,250 establishments paid the fee in FY2009. This measure is designed to
ensure that the fees collected from this source total 45% of total fee revenues.
Both MDUFMA and proposals for MDUFA 2007 set fees as a percentage of the
full fee for a PMA, also called the base fee, which is generally the most involved type
of application that a device manufacturer could make to FDA (FFDCA §
738(a)(2)(A)).¹⁴ During the course of MDUFMA, the amount of the base fee (and
thus the amounts of all of the other fees) rose each year, from $154,000 in FY2003
to $281,600 in FY2007 (FFDCA § 738(c)(1)). (See Table 8). The percentages of the
base fee assigned to various types of submissions have changed slightly from
MDUFMA to MDUFA 2007, but the concept is the same. The following is one
example from MDUFA 2007: a 30-day notice fee is equal to 1.6% of the base fee.
MDUFA 2007 would strike a provision that enables the Secretary to adjust the
premarket notification fee amount annually so that, in aggregate, these fees comprise
a target amount. However, H.R. 2900 would maintain a reference to this deleted
provision in the Fee Amounts section (21 U.S.C. 379j(a)(2)(A)).

¹³ FDA, “Medical Device User Fee and Modernization Act; Public Meeting,” Federal
Register, vol. 72, no. 74, p. 19528, (April 18, 2007) at [http://frwebgate5.access.gpo.gov/
cgi-bin/waisga te.cgi ?WAISdocID=268837241492+0+0+0&WAISaction=retrieve ].
¹⁴ For more information, see the PMA subsection of the Device Approval Process portion
of this report.

Table 7. MDUFMA Fee Schedule, Current FY2007,
Proposed FY2008-FY2012
CurrentProposed MDUFA 2007
Fees Structure
2007 2008 2009 2010 2011 2012
PMA/BLA $ 281,600$ 185,000 $ 200,725 $217,787$ 236,298 $ 256,384
Sm. Bus.^a$ 107,008$ 46,250$ 50,181 $ 54,447$ 59,075 $ 64,096
Panel Track$ 281,600 $138,750$ 150,544 $163,340$ 177,224 $192,288
Supplements
Sm. Bus.^a$ 107,008$ 34,688$ 37,636 $ 40,835$ 44,306 $ 48,072
180-Day$ 60,544$ 27,750$ 30,109$ 32,668$ 35,445 $ 38,458
Supplements
Sm. Bus.^a$ 23,007 $6,938$ 7,527 $ 8,167$ 8,861$ 9,614
Real Time$ 20,275 $ 12,950$ 14,051$ 15,245$ 16,541$ 17,947
Supplements
Sm. Bus.^a$ 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
Sm. Bus.^a$ 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
Sm. Bus.^a$ 1,480$ 1,606 $ 1,742$ 1,890$ 2,051
513(g) $ 2,498 $ 2,710$ 2,940$ 3,190$ 3,461
Sm. Bus.^a$ 1,249$ 1,355$ 1,470$ 1,595 $ 1,731
Establishmt.$ 1,706$ 1,851$ 2,008$ 2,179$ 2,364
Registration
Annual Report$ 6,475$ 7,025$ 7,623$ 8,270$ 8,973
Filing
Sm. Bus.^a$ 1,619$ 1,756$ 1,906$ 2,068$ 2,243
^Source:^F^D^A^,^“^P^ropos^{ed In}^du^s^t^ry^U^s^{er F}^{ee S}^c^h^e^du^l^e^f^o^{r MD}^U^F^A^2007,”^C^e^nter^for^Devices^and
^Ra^dⁱ^o^l^o^gⁱ^ca^{l Hea}^lth^web^s^ite^{, (Updated A}^p^{ril 16, 2007), at [h}^ttp://^www.^f^d^a^.^g^o^v^/^c^d^r^h^/^m^d^u^f^m^a^/
^m^d^u^f^m^a^ii-^co^m^p^ar^isoⁿ^.h^tm^l]^.
^a.^Sm^{. B}^u^s^.ⁱⁿ^dicates^th^{e redu}^{ced s}^m^{all bu}^sⁱⁿ^e^s^s^f^{ee as}^s^o^{ciated w}^ith^w^h^atev^er^item^is^lis^ted^abov^e.
⁽^F^o^r^m^o^r^e^oⁿ^th^{e sm}^{all b}^u^sin^e^{ss f}^{ee r}^e^d^u^ctioⁿ^,^{see th}^{e sm}^{all b}^u^sin^e^{ss su}^b^s^ectioⁿ^b^e^lo^w⁾^.

Table 8. MDUFMA Base Fee Rates, FY2003-FY2007
F Y 2003 F Y 2004 F Y 2005 F Y 2006 F Y 2007
$154,000 $206,811 $239,237 $259,600 $281,600
^Source:^“^F^ees^{” s}^ection^,^MDUFMA^w^e^bs^{ite of}^FDA^’^s^C^eⁿ^t^{er f}^o^{r B}ⁱ^olog^ics^Ev^alu^a^tion^an^{d R}^e^s^earch
^(u^{pdated A}^u^g^.^{2, 2006), at [h}^ttp://^www.^f^d^a^.^g^o^v^/^c^b^e^r^/^m^d^u^f^m^a^/^md^u^f^ma^.^h^t^m^]^.
Fee-Collection Offset. MDUFMA requires FDA to reduce fees in a
subsequent year if collections in any year exceed the amount authorized, but does not
have a parallel provision to increase fees in a subsequent year if collections fall short
of amounts appropriated from fees. MDUFA 2007 would allow FDA to aggregate
all fees collected from FY2008 through FY2011 and compare that amount to the
aggregate amount authorized for the same period. A reduction would be made in fees
in the final year only if the amount collected in the four-year period exceeded the
amount authorized for the same period. According to the FDA Agreement, FDA
believes 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 activities qualify for exceptions to certain fees, small businesses are charged a
reduced rate.¹⁵ These fee reductions, exemptions, and refunds are explained below.
These are the same for MDUFMA and proposals for MDUFA 2007, except that the
latter would qualify only federal or state Government Entities for an exemption from
the new annual establishment registration fee, would expand and enhance the small
business fee reduction, and would allow a partial refund for withdrawal of a
particular kind of PMA, as explained below.
Humanitarian Use Devices (HUDs). HUD applications are exempt from
MDUFMA fees. 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 manufacturer’s research and development costs could exceed its market
returns for diseases or conditions affecting small patient populations. FDA, therefore,
developed and published this regulation to provide 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.
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 any fee. 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.

¹⁵ Federal Food Drug and Cosmetic Act, sec. 738(a)(2)(B).

Applications from Federal or State Government Entities. Any application
from a state or federal government entity is exempt from any fee, unless the device
is to be distributed commercially. H.R. 2900 would include Indian tribes in the
definition of government entities and thus exempt them from paying establishment
fees; S. 1082 would not.
Further Manufacturing. In order to avoid the charging of multiple fees for
single devices that have multiple manufactured components, any application for a
product licenced for further manufacturing use only is exempt from any fee.
Premarket Notification by Third Parties.Under authority created by the
Food and Drug Administration Modernization Act (P.L. 105-115), FDA has
accredited third parties, authorizing them to conduct the primary review of 510(k)s
for eligible devices. 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. For FY2007 (MDUFMA, as modified by MDUFSA¹⁶),
firms with annual gross sales or receipts of $30 million or less, including the gross
sales and receipts of all affiliates, partners, and parent firms, qualify for a fee waiver
for their first PMA. Firms with annual gross sales or receipts of $100 million or less,
including the gross sales and receipts of all affiliates, partners, and parent firms,
qualify for lower rates for all applications that are subject to a fee.¹⁷
The small business discounted fee schedule is important to the medical device
industry; according to GAO, the vast majority of companies that paid MDUFMA 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 subject¹⁸

to user fees that were submitted to FDA in fiscal year 2006.
¹⁶ MDUFSA increased the annual gross receipts or sales threshold below which businesses
are eligible for reduced fees or a waiver of fees by the Secretary.
¹⁷ Dan Schultz, “All-Hands Notice from Dan Schultz about MDUFA 2007,” FDA website
(April 16, 2007), at [http://www.fda.gov/cdrh/mdufma/041607-letter.html].
¹⁸ 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].

MDUFA 2007 would no longer consider the assets of partners and parent firms
in the small business qualification calculation, and would further reduce the
application fees paid by small business — the majority of device manufacturers.¹⁹
For example, a small business would pay 50% of the standard fee when it submits a
510(k), compared with 80% at present, and 25% of the standard fee when it submits
a PMA, compared with 38% at present. FDA would also continue to provide a fee
waiver for the first PMA submitted by a qualified small business applicant. In
addition, MDUFA 2007 would allow foreign businesses to qualify for small business
fees and fee waivers.
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, both bills provide that the Secretary may make a partial refund of the
filing fee. S. 1082 specifies that the Secretary would have the sole authority to make
refund decisions, and that such decisions would not be reviewable.
Use of Fees. According to the terms of MDUFMA, FDA may only use fees
collected under MDUFMA for specified purposes (FFDCA § 737(5)). Most of these
are related to decreasing the time required for FDA to determine whether a medical
device should reach the marketplace. (See Table 9.) The payment of a MDUFMA
premarket review fee is not linked in any way to FDA’s final decision on whether a
product should reach the market.²⁰

¹⁹ FDA, “Medical Device User Fee and Modernization Act; Public Meeting,” Federal
Register, vol. 72, no. 74, p. 19528, (April 18, 2007) at [http://frwebgate5.access.gpo.gov/
cgi-bin/waisga te.cgi ?WAISdocID=268837241492+0+0+0&WAISaction=retrieve ].
²⁰ CDRH, “Summary of the Medical Device User Fee and Modernization Act of 2002
Including Changes Made by the Medical Devices Technical Corrections Act (April 1,

2004),” FDA website, (November 1, 2004), p. 2, at [http://www.fda.gov/cdrh/mdufma/

mdufmasummary.pdf]. Visited January 22, 2007.

Table 9. Use of MDUFMA Fees
FDA may use MDUFMA fees for the following elements of
the “process for the review of device applications”
^!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 call for PMAs for pre-Amendments Class III
devices;
^!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 U}^.^S^.^C^.³⁷⁹ⁱ^(5);^F^F^D^C^A^§737(5).
MDUFA 2007 makes no change to MDUFMA’s use of fees provision. The
FDA Agreement had proposed that, as resources permit, FDA would apply user fee
revenues to support reviewer training that is related to the process for the review of
devices, including training to enhance scientific expertise. FDA would, in turn,
provide summary information on the types of training provided to staff on an annual
basis.
Performance Goals. In addition to enabling the collection of user fees,
MDUFMA set performance goals for FDA. These goals were summarized in the
FDA Commitment Letter, incorporated by reference in MDUFMA (§101(3)). (See
Table 10.) The performance goals, but not the letter, are also included in the FFDCA
(§738(g)(1)(A)-(D)). According to the FDA Agreement, FDA is on track to meet
nearly all of the MDUFMA performance goals, which will sunset on October 1,

2007, along with FDA’s MDUFMA user fee authority.

For purposes of MDUFA 2007, the FDA Agreement proposes to meet fewer and
more rigorous goals that 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.
MDUFMA performance goals set general time tables for certain types of
activities (such as PMA reviews), but allow for some flexibility that may be prudent,

given different types of PMAs and other applications may vary in complexity.
Therefore, performance goals generally state that, a certain percentage of the time
FDA will complete a particular type of activity within a given time period (see Table

10).

Performance Goal-Setting Process. In FDA’s development of its
recommendations to the Congress for FDA performance goals and plans for meeting
those goals, MDUFMA required FDA 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. MDUFA

2007 contains parallel provisions. In addition, the Senate version of the bill, S. 1082,

specifies that the recommendations are to be revised upon consideration of public
comments. Furthermore, S. 1082 would require transmittal of the recommendations
to Congress and would write the relevant consultation requirements into the FFDCA.
Quarterly Performance Reports. The FDA Agreement specifies that FDA
will report quarterly its progress toward meeting the quantitative goals described in
this letter. 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 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 10. Comparison of
Quantitative Decision Performance Goals in
MDUFMA and MDUFA 2007
MDUFMAMDUFA 2007
PMA and Panel Track Supplements
50% of PMAs and panel track PMA60% of PMAs and panel track PMA
supplements in 180 days supplements in 180 days
90% of PMAs, panel track supplements,90% of PMAs and panel track
premarket reports in 320 days supplements in 295 days
N/A50% of expedited PMAs and expeditedpanel track PMA supplements in 180 days
90% of expedited PMAs in 300 days90% of expedited PMAs and expedited
panel track PMA supplements in 280 days
Modular PMA
N/A75% of PMA modules in 90 days
N/A90% 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/A98% of 510(k)s in 150 days
180-Day PMA Supplements
85% of 180-Day PMA supplements in 180
90% of 180-Day PMA supplements indays
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
Same as MDUFMA90% of BLA supplements in 10 months
90% of BLA resubmissions and BLA
supplement resubmissions in 2 months
^Source:^FDA^,^“^C^o^m^p^a^rⁱ^soⁿ^o^f^Qu^an^titativ^{e Decisio}ⁿ^Go^{als in}^MDUFMA^an^d^I^I^,^”^C^D^RH
^w^e^bs^{ite,(Updated A}^p^{ril 16, 2007) at [h}^ttp://^www.^f^d^a^.^g^o^v^/^c^d^r^h^/^m^d^u^f^m^a^/^md^u^f^maⁱⁱ^-^c^o^mp^a^rⁱ^s^oⁿ^.^h^t^m^l^]^.

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. FDA is required, by statute, to inspect certain domestic establishments where
medical devices are manufactured at least once every two years. According to the
GAO, FDA has not been meeting this requirement.²¹ Instead, five or six years
sometimes pass between FDA inspections at any one establishment.
GAO reports that FDA accredited the first third party on March 11, 2004. As
of October 31, 2006, of 23 organizations that had applied to conduct third-party
inspections of establishments, 16 had received FDA accreditation, and seven had
completed the necessary training and were cleared to conduct independent
inspections. As of October 31, 2006, two accredited organizations had conducted
independent inspections — one inspection of a domestic establishment and one
inspection of a foreign establishment. During that same period, 36 inspections of
domestic establishments and one inspection of a foreign establishment were
conducted by accredited organizations jointly with FDA officials as part of training
that FDA requires of accredited organizations. These 38 inspections represent just
over 1% of the 3,470 inspections that FDA reported to GAO it conducted between
March 11, 2004, and October 31, 2006.²²
GAO reports that several factors may influence manufacturers’ interest in
voluntarily requesting an inspection by an accredited organization:
According to FDA and representatives of affected entities, there are potential
incentives and disincentives to requesting an inspection, as well as reasons for
deferring participation in the program. Potential incentives 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. Some
manufacturers might be deferring participation. For example, manufacturers that
already contract with a specific accredited organization to conduct inspections
to meet the requirements of other countries might defer participation until FDA²³
has cleared that organization to conduct independent inspections.
MDUFA 2007 would change the third-party accredited person inspection
program in three major areas. According to the FDA Agreement, the proposals are
intended to increase the quantity of useful information FDA has about the

²¹ Government Accountability Office, “Medical Devices: Status of FDA’s Program for
Inspections by Accredited Organizations,” Report to Congress GAO-07-157 (January 2007).
²² This number includes both postmarket quality system inspections of domestic
establishments where a Class II or III medical device was manufactured, and inspections of
foreign medical device establishments.
²³ Government Accountability Office, “Medical Devices: Status of FDA’s Program for
Inspections by Accredited Organizations,” Report to Congress GAO-07-157 (January 2007).

compliance status of medical devices marketed in the United States and to permit
FDA to focus its inspectional resources on those firms and products posing the
greatest risk to public health.
The first change would be to streamline the administrative burdens associated
with qualifying for the program. For example, rather than having to petition FDA for
clearance to use a third party, the proposal would require only that firms provide
FDA with 30 days prior notice of their intent to use a third party listed on FDA’s
website.
The second change would be to expand participation in the program. For
example, the current third-party program restricts qualified manufacturers of Class
II and Class III medical devices to two consecutive third-party inspections, after
which FDA must conduct the next inspection, unless the manufacturer petitions and
receives a waiver. MDUFA 2007 would permit firms to use third parties for an
unlimited number of consecutive inspections without seeking a waiver. However,
FDA would continue to conduct “for cause” or follow-up inspections whenever it
deemed such inspections appropriate.
The third change would be to permit device companies to voluntarily submit to
FDA reports by third parties assessing conformance with an appropriate international
quality systems standard, such as those set by the International Standards
Organization. FDA would consider the information in these reports in setting its
inspection priorities.
Reprocessed Single-Use Devices
Some reprocessed SUDs are relatively simple items for external use, such as
inflatable sleeves to improve blood circulation, while others are complex and
invasive, such as catheters that are inserted into the heart to monitor cardiac
functioning. According to a GAO report issued in 2000 (prior to MDUFMA), some
devices, both SUDs and those marketed as reusable, had been reprocessed in-house
by hospitals and other treatment facilities, while others had been reprocessed by
companies formed for that purpose.²⁴ At that time, the practice of SUD reprocessing
raised public health concerns, primarily regarding the potential risks of infection and
device malfunction, and led to complaints by the original device manufacturers that
FDA had not maintained consistent regulatory standards for different types of
medical device companies.
Before MDUFMA, the regulatory requirements for manufacturers of
reprocessed single-use devices basically depended upon the class of the device.
Manufacturers of reprocessed Class I and II single-use devices were required to have
a 510(k), unless the device was exempt from 510(k). Reprocessors of Class III
devices were required to obtain premarket approval. MDUFMA made reprocessors

²⁴ General Accounting Office, “Single-Use Medical Devices: Little Available Evidence of
Harm From Reuse, but Oversight Warranted,” GAO/HEHS-00-123 (June 2000), at
[http://frwebga te.access.gpo.gov/cgi -bin / u s e ftp.cgi ?IPaddress=162.140.64.21&
filename=he00123.pdf&directory=/diskb/wais/data/gao].

of some previously exempt devices no longer exempt from the 510(k) submission
requirements. It required reprocessors to submit 510(k)s that include validation data.
Validation data were also required for many reprocessors of single-use devices that
were previously the subject of cleared 510(k)s. Finally, reprocessors of Class III
devices needed to submit a premarket report (a new type of PMA) to FDA.
MDUSFA added the requirement that an SUD would be deemed as misbranded
(and thus not legally marketable in the United States) unless it identified the
manufacturer. MDUFSA allowed such information to be provided by a detachable
label intended to be affixed to the medical record of a patient.
MDUFA 2007 does not focus on SUDs, but does contain a requirement that
SUD reprocessors pay the proposed annual establishment fee.
Other MDUFA 2007 Provisions
In addition to the above provisions, as described below, MDUFA 2007 would
require the production of several annual reports, and H.R. 2900 would authorize
appropriations for postmarket surveillance and would require a study of nosocomial
infections (those acquired in hospitals) related to medical devices.
Annual Reports. MDUFMA requires the Secretary to submit annual progress
reports to relevant congressional committees regarding the progress of FDA in
achieving fee-related performance goals specified in a letter from the Secretary, and
regarding the implementation of the authority to collect such fees. H.R. 2900 would
continue this requirement and specifies that the implementation report should include
a description of the use of such fees for postmarket safety activities. S. 1082 would
also continue the requirement, but instead of requiring that a description of
postmarket safety activities be included in the implementation report, it would
require the inclusion of 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. S. 1082 would also require that
performance goal and implementation reports be made available to the public. In
addition, unlike MDUFMA and H.R. 2900, S. 1082 would write the report
requirements into the FFDCA.
Postmarket Safety Appropriations Authorization. MDUFMA contained
two provisions related to postmarket reviews (§104). One, a provision that will
cease to be effective on October 1, 2007, authorized additional appropriations for
postmarket surveillance — $3 million for FY2003, $6 million for FY2004, and “such
sums as may be necessary” in subsequent years. These sums were not appropriated.
The second provision required the HHS Secretary to conduct a study of the
postmarket review impact of the medical device user-fee program. MDUFMA also
specified that user fees may fund the evaluation of postmarket studies if they are
required as a condition of approval. (FFDCA §737(5)(J)).
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. This emphasis on premarket activities raised some questions

regarding whether this focus might have a negative impact on the postmarket and
enforcement activities.
Measuring the impact of MDUFMA on enforcement activities is not a
straightforward endeavor, and is beyond the scope of this report. For example, while
one set of metrics (the number of CRDH warning letters issued each year since
FY2000) shows that a decrease in the number of letters coincides with the start of
MDUFMA, coincidence in time does not prove cause and effect. As is shown in
Table 11, the recent decline in warning letters is due to a change in policy related to
the Mammography Quality Standards Act (MQSA, P.L. 102-539) .²⁵
H.R. 2900 contains a different requirement relating to postmarket safety. It
authorizes additional appropriations for FY2008-FY2012 of such sums as may be
necessary for the purpose of collecting, developing, reviewing, and evaluating
postmarket safety information on medical devices. S. 1082 contains no parallel
provision in the medical device user fee title.
Table 11. CDRH Warning Letters Issued in Total and
Under the MQSA, FY2000-FY2007
Non- MQ SA MQ SA Tot a l
FY2000191337528
FY2001105393498
FY200275206285
FY200312184205
FY20041935198
FY20051775182
FY20061495154
F Y 2007^a 47552
^Source:^FDA^Of^fⁱ^{ce of}^L^e^gⁱ^s^l^ation^.
^No^te:^A^cco^r^dⁱⁿ^g^t^o^FDA^’^{s Of}^fⁱ^{ce o}^f^L^e^gⁱ^slatioⁿ^,^th^{e n}^u^m^b^e^r^o^f^MQSA^w^a^rⁿⁱⁿ^g^letter^s^h^a^s
^sⁱ^gⁿⁱ^fⁱ^can^tly^decreas^ed^becau^s^e^of^{a ch}^an^g^eⁱⁿ^OR^A^an^{d C}^D^R^H^policy^.^En^f^o^rcem^en^{t s}^t^rategⁱ^es^f^o^r
^vⁱ^ol^a^tⁱ^oⁿ^s^of^t^h^e^M^Q^S^Aⁿ^o^w^f^o^c^u^s^on^opport^uⁿ^itie^s^{for c}^o^rre^c^tⁱ^oⁿ^aⁿ^{d re}^-ⁱⁿ^s^pe^c^tⁱ^oⁿ^s^(f^e^e^s^paⁱ^d^by
^f^acilities)^p^r^io^r^to^issuⁱⁿ^g^w^a^rⁿⁱⁿ^g^letter^s^.^T^h^ese^m^easu^r^{es h}^a^v^e^r^e^d^u^ced^th^{e n}^u^m^b^e^r^o^f^w^a^rⁿⁱⁿ^g^letter^s
^t^h^{e prog}^ram^h^a^s^h^a^{d t}^oⁱ^s^s^u^e.
^a^.^P^a^r^tⁱ^a^l^y^e^a^r^,^t^h^r^o^{ugh Fe}^b^r^ua^r^y¹^,²⁰⁰⁷.

²⁵ For more information about CDRH enforcement statistics, see the CDRH Charts in FDA
Office of Enforcement, Office of Regulatory Affairs, “The Enforcement Story,” (FY2006),
at [http://www.fda.gov/ora/about/enf_story/ch2/cdrh_charts.pdf].

Nosocomial Infections. H.R. 2900 would define 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
bill would require the Comptroller General to conduct and deliver to Congress a
study on the number of nosocomial infections attributable to new and reused medical
devices and the causes of such infections. S. 1082 contains no parallel provisions.
Other MDUFMA Provisions
MDUFMA contained several provisions that have not been raised in MDUFA

2007 proposals:

^!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 upon 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 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.
FDA Agreement Recommendations not in MDUFA 2007
While MDUFA 2007 generally followed the terms of the proposals made in the
FDA Agreement, there were some topics covered in the Agreement that are not
covered by MDUFA 2007. Their absence from the legislation does not preclude
FDA from following the terms of the recommendations.
Interactive Review. The FDA Agreement proposes that FDA continue to
incorporate an interactive review process to provide for, and encourage, informal
communication between FDA and sponsors to facilitate timely completion of the
review process based on accurate and complete information. Interactive review
entails responsibilities for both FDA and sponsors. Interactive review is intended to:
(a) prevent unnecessary delays in the completion of the review; (b) avoid surprises
to the sponsor at the end of the review process;(c) minimize the number of review
cycles and the extent of review questions conveyed through formal requests for
additional information; and (d) ensure timely responses from sponsors.
Guidance Document Development. The FDA Agreement proposes that
FDA continue to develop guidance documents to the extent possible without
adversely impacting the review timeliness for MDUFMA-related submissions. In
addition, FDA would post a list of guidance documents it is considering for

development and provide stakeholders an opportunity to provide comments and/or
draft language for those topics as well as suggestions for new or different guidances.
Diagnostic Imaging Products. Diagnostic imaging devices (e.g., CT scans)
that are sometimes used concurrently with diagnostic drug and biological products
(e.g., contrast agents and radiopharmaceuticals) — so-called “concomitant use
products” — present important questions of efficient regulation and consultation
between product Centers that are similar to those raised by combination products. In
response to these concerns, the FDA Agreement proposes that FDA develop a
guidance document to ensure timely and effective review of, and consistent,
appropriate postmarket regulation and product labeling requirements for, diagnostic
imaging devices used with approved imaging contrast agents and/or
radiopharmaceuticals. FDA proposes to publish draft guidance by the end of FY2008
and allow for a 90-day public comment period. FDA proposes to issue a final
guidance within one year of the close of the comment period.
In Vitro Diagnostics (IVDs). To facilitate the development of IVD devices
(lab tests), the FDA Agreement proposes that FDA continue to explore ways to
clarify regulatory requirements and to reduce regulatory burden, as appropriate. FDA
proposes to:
^!Draft or revise guidance on the conduct of clinical trials involving
deidentified leftover specimens, clinical trial design issues for
molecular diagnostic tests, migration studies, herpes simplex virus,
enterovirus, and influenza testing;
^!Conduct a pilot program to evaluate integrating the 510(k) review
and Clinical Laboratory Improvement Amendments (CLIA, (42
U.S.C. 263a) waiver review processes for possible increased
efficiencies. This pilot would include only voluntary participants
from industry, and the applications involved in the pilot would not
be counted toward the MDUFA 2007 performance goals;
^!Consider industry proposals on acceptable CLIA waiver study
protocols, develop acceptable protocol designs, and make them
available by adding appendices to the guidance or by posting
redacted protocols on the Office of In Vitro Diagnostic Device
(OIVD) website;
^!Track and report FDA performance on CLIA waiver applications
and share this information with industry annually and then evaluate,
at the end of year two, whether user fees and performance goals for
CLIA waivers should be considered for MDUFA 2007I;
^!Review an industry-provided list of Class I and II low risk IVD
devices to determine if any could be exempted from premarket
notification and allow interested parties to petition for exemptions
consistent with 510(m)(2) [provisions exempting certain devices
from 510(k) premarket notification requirements]; and
^!Conduct a review of the pre-IDE program to address issues raised by
industry.
Meetings. The FDA Agreement proposes that FDA make every effort to
schedule informal and formal meetings, both before and during the review process,

in a timely way, and industry would make every effort to provide timely and relevant
information to make the meetings as productive as possible.

Appendix A. Acronyms Used in This Report
510(k)Premarket Notification
513(g)Request for Information About Device Classification
BLABiological License Application
CBERCenter for Biologics Evaluation and Research
CDRHCenter for Devices and Radiological Health
CLIAClinical Laboratory Improvement Amendments (42 U.S.C. 263a)
FDAUnited States Food and Drug Administration
FFDCAFederal Food, Drug and Cosmetic Act (21 U.S.C., Chapter 9)
FTEFull Time Equivalent Employee
GAOGovernment Accountability Office (formerly General Accounting
Office)
GMPGood Manufacturing Practice
HHSUnited States Department of Health and Human Services
HUDHumanitarian Use Device
IDEInvestigational Device Exemption
INDInvestigational New Drug Application
IVDIn Vitro Diagnostic Device (Laboratory Diagnostic Test)
MDTCAMedical Device Technical Corrections Act (P.L. 108-214)
MDUFMAMedical Device User Fee and Modernization Act (P.L. 107-250)
MDUFA 2007Medical Device User Fee and Modernization Act, 2007
Reauthorization
MQSAMammography Quality Standards Act (P.L. 102-539)
MUDFSAMedical Device User Fee Stabilization Act of 2005 (P.L. 109-43)
NSENon-Substantial Equivalence
OIVDOffice of In Vitro Diagnostic Device
PDPProduct Development Protocol
PDUFAPrescription Drug User Fee Act
PLPublic Law
PMAPremarket Approval
SESubstantial Equivalence
SUDSingle-Use Device
USCUnited States Code