Medical Device User Fees and User Fee Acts
Medical Device User Fees and User Fee Acts
July 14, 2008
Erin D. Williams
Specialist in Public Health and Bioethics
Domestic Social Policy Division
Medical Device User Fees and User Fee Acts
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.
Background: FDA and Medical Device Regulation.......................3
Medical Devices and the Device Industry...........................3
FDA Device Regulatory Structure.................................4
Approval or Clearance of Medical Devices..........................4
FDA Postmarket Activities......................................7
Medical Device User Fee Acts........................................7
Medical Device User Fees..........................................11
User Fees and the Device Review Budget..........................12
Activities Requiring Fees.......................................13
Fee Exceptions, Reductions, Refunds.............................16
Humanitarian Use Devices (HUDs)...........................16
Devices Intended for Pediatric Use...........................16
Applications from Federal or State Government Entities..........16
Premarket Notification by Third Parties.......................17
Modular PMA Refunds....................................17
Use of Fees..................................................18
Performance Goal-Setting Process................................20
Quarterly Performance Reports..................................20
Annual Reports to Congress....................................23
Non-User Fee Provisions Regarding the Regulation of Medical Devices
Established in User Fee Acts....................................23
Non-user Fee Topics in MDUFA 2007............................23
Third-Party Review of Premarket Notification..................23
Required Registrations and Filings...........................24
Unique Device Identification System.........................24
Reporting for Devices Linked to Serious Injuries or Death.........25
Accredited Third-Party Inspections...........................25
Non-user Fee Topics Only in MDUFMA..........................27
Appendix A. Acronyms Used in This Report...........................28
User Fees and the Device Review Budget..........................29
Activities Requiring Fees.......................................29
Fee Exceptions, Reductions, Refunds.............................30
Humanitarian Use Devices (HUDs)...........................30
Devices Intended for Pediatric Use...........................30
Applications from Federal or State Government Entities..........31
Premarket Notification by Third Parties.......................31
Modular PMA Refunds....................................31
Performance Goal-Setting Process................................31
Quarterly Performance Reports..................................32
Annual Reports to Congress....................................32
List of Tables
Table 1. Medical Device Approval Basics...............................5
Table 2. Premarket Approvals (PMAs), Panel-Track Supplements, and
Premarket Notification (510(k)s), FY2003-FY2008 Cohorts............6
Table 3. Medical Device Review Process Funding: Total Program Level and
User Fee Funding, FY2003-FY2012..............................13
Table 4. Full Time Equivalents (FTEs) in the Medical Device Review
Table 5. MDUFMA/MDUFA 2007 Fee Schedule, FY2007-FY2012.........15
Table 6. The Process for the Review of Device Applications...............19
Table 7. Comparison of Performance Goals in MDUFMA and
Table 8. Appropriations Authorized for Postmarket Safety Information,
Table 9. CDRH Warning Letters Issued in Total and Under the MQSA,
Table 10. MDUFMA Base Fees (PMA), FY2003-FY2007................29
Medical Device User Fees and
User Fee Acts
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 ensure devices’ safety and
effectiveness. 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.1 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.
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).2
1 See CRS Report RL33914, The Prescription Drug User Fee Act (PDUFA): Background
and Issues for PDUFA IV Reauthorization, by Susan Thaul, and CRS Report RL34459,
Reauthorization of the Animal Drug User Fee Act (ADUFA), by Sarah A. Lister.
2 See CRS Report RL34465, FDA Amendments Act of 2007 (P.L. 110-85), by Erin D.
Williams and Susan Thaul.
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
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 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
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.3 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.4 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.
3 See “Prescription Drugs: FDA Could Issue Layoff Notices Without Prescription Drug User
Fee Act Reauthorization,” Kaiser Daily Health Policy Report (September 17, 2007), at
[ h t t p : / / www.ka i s er net wor k.or g/ dai l y_r epor t s / r ep_i ndex.cf m?DR_ID=47555] .
4 See CRS Report RL34334, The Food and Drug Administration: Budget and Statutory
History, FY1980-FY2007, by Judith A. Johnson, Donna V. Porter, Susan Thaul, and Erin
The remainder of this report contains the following information. The first
section presents background information about 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 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 being5
metabolized for the achievement of its primary intended purposes.
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,
with estimated earnings of $274 billion in 2007 compared with the drug industry’s
estimated $712 billion.6 It is also dominated by smaller companies. These
5 FFDCA 201(h); 21 U.S.C. 321(h).
6 “Industry Profile,” Standard and Poor’s Industry Survey Healthcare: Pharmaceuticals
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 treatments). Jurisdiction of the centers’ medical device review is governed by
the FDA Intercenter Agreement between CBER and CDRH (October 31, 1991).7
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)8) 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.
(April 24, 2008); “Industry Profile,” Standard and Poor’s Industry Survey on Healthcare:
Products and Supplies (March 13, 2008).
7 FDA, “Devices Regulated by CBER” (updated March 15, 2007), at [http://www.fda.gov/
8 510(k), which is short hand for Premarket Notification, refers to the governing section of
Table 1. Medical Device Approval Basics
De vi c e Saf ety/Ef f ectiveness
Class Ielastic bandages,General Controlsa-Registration only
examination gloves,unless 510(k)
and hand-heldspecifically required
Class IIpowered wheelchairs,General Controls &b-510(k) clearance
infusion pumps, andSpecial Controlsunless exempt
surgical drapes-IDE possible
Class IIIheart valves, siliconeGeneral Controls &-PMA approval
gel-filled breastPremarket Approvalunless 510(k)
implants, andspecifically permitted
implanted cerebella-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 (or Panel Track Supplement, which
is described below) 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. Most PMAs and some 510(k)s require clinical
trials,9 which are conducted with FDA 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
9 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.
Table 2. Premarket Approvals (PMAs), Panel-Track
Supplements, and Premarket Notification (510(k)s),
PMAs and Panel-Tracka
Source: FDA Office of Legislation. Counts include both CDRH and CBER workloads received
through March 31, 2008.
a. The receipt cohort is defined to exclude 510(k)s that were closed for any reason other than a
decision to clear or not to clear a product under the 510(k) (e.g., when FDA finds that a 510(k)
was not required). For this reason, some 510(k)s currently awaiting a decision may ultimately
be excluded from the 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 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.10 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
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
10 The regulations governing FDA’s quality system requirements for ensuring good
manufacturing practices can be found at 21 CFR 820.
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.11
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 the12
sense of the Committee that adequate funding for the program is essential.
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.13 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 and14
Commerce of the U.S. House of Representatives.
11 FDA, “Medical Device User Fee and Modernization Act; Public Meeting,” Federal
Register, vol. 72, no. 74, p. 19528, (April 18, 2007) at [http://frwebgate6.access.gpo.gov/
cgi-bin/PDFgate.cgi?WAISdocID=40432151607+2+ 1 + 0 & W A IS a c t i o n =retrieve ],
(hereinafter, “Public Meeting”).
12 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, 107thnd
Cong., 2 sess., part 1 (Washington: GPO, 2002), p. 23.
13 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
14 This letter is generally referred to as the 2002 “FDA Commitment Letter.” See 148 Cong.
MDUFMA was enacted in
order to provide FDA “with the
resources necessary to betterKey MDUFMA Provisions: device user fees authorized through FY2007
review medical devices, to enact establishment inspections by third parties allowed
needed regulatory reforms so that reprocessed single-use devices regulated
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.”15 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.
MDUFMA enabled FDA to collect over $133 million from medical device
companies during the first five years of the program (FY2003-FY2007).
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.16 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.
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.
15 Medical Device User Fee and Modernization Act of 2002, H.Rept. 107-728 (October 7,
16 For further information about MDTCA, see FDA, “Summary of the Medical Devices
Technical Corrections Act (MDTCA),” (November 2004), at [http://www.fda.gov/
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”).17 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.
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 inKey MDUFA 2007 Provisions:
MDUFA 2007 was the reauthorization device user fees authorized through FY2012
of FDA’s authority to collect user fees new fee types added
from medical device manufacturers. fee amounts reduced
FDA’s authority to collect these fees qualification as a small business made easier
would have expired on October 1,
MDUFA 2007 extended the authority through October 1, 2012. The pending
expiration of this authority was one of the primary drivers of MDUFA 2007 and
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.18 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
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
17 Public Meeting.
18 Public Meeting.
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, 2007.19 The contents of the letter are incorporated into the law by
reference.20 The requirements of the law, as supplemented by the Commitment
Letter, are summarized below.
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),
!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.
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%21
below $205,720,000 multiplied by an inflation adjustment factor. For FY2007, the
19 “Commitment Letter” from Michael O. Leavitt to Edward M. Kennedy, September 27,
20 FDAAA §201(c).
21 FFDCA 738(g); 21 USC 379j(g).
year that user fees were last reauthorized, this translated into a minimum requirement
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
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
22 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] .
23 FFDCA 738(h)(2)(B); 21 USC 379j(h)(2)(B).
24 FFDCA 738(h)(3); 21 USC 379j(h)(3).
Table 3. Medical Device Review Process Funding: Total
Program Level and User Fee Funding, FY2003-FY2012
(dollars in thousands)
Total ProgramMedical Device User Fee/
Fiscal YearLevelUser Fees Total
FY2010 Authorizednot available$57,014 —
FY2011 Authorizednot available$61,860 —
FY2012 Authorizednot available$67,118 —
Sources: FY 2003-FY2009: Food and Drug Administration tables for FY2005-FY2009, “ALL
PURPOSE TABLE — Total Program Level,” at [http://www.fda.gov/oc/oms/ofm/budget/
documentation.htm]; FY2010-FY2012: MDUFA 2007.
Table 4. Full Time Equivalents (FTEs) in the Medical Device
Review Process, FY2003-FY2009
Total DeviceDevice User FeeDevice User Fee
Fiscal YearReview FTEsFunded FTEsFunded/Total
Source: Food and Drug Administration tables for FY2005-FY2009, “ALL PURPOSE TABLE —
Total Program Level,” at [http://www.fda.gov/oc/oms/ofm/budget/documentation.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.25 (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 FY2008-26
The amount of each type of user fee, other than the establishment fee, is set as
a percentage of the PMA fee,27 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
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.28 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 10 in Appendix B for
MDUFMA Base Fee Amounts.)
Unlike the other fees, the amount of the establishment fee (also known as the29
establishment registration fee) is set in its own section of the law. 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 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.
25 FFDCA 738(a); 21 USC 279j(a).
26 Public Meeting.
27 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.
28 Public Meeting.
29 FFDCA 738(a)(3); 21 USC 379j(a)(3).
Table 5. MDUFMA/MDUFA 2007 Fee Schedule, FY2007-FY2012
P M A/ B L A/ P D P
(i.e., base fee) $281,600$185,000 $200,725 $217,787$236,298 $256,384
Business$107,008$46,250$50,181 $54,447$59,075 $64,096
Supplements $281,600 $138,750$150,544 $163,340$177,224 $192,288
Business$107,008$34,688$37,636 $40,835$44,306 $48,072
Business$23,007 $6,938$7,527 $8,167$8,861$9,614
Supplements $20,275 $12,950$14,051$15,245$16,541$17,947
510(k) $4,158$3,404$3,693$4,007$4,348 $4,717
Business$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
Annual Fee for
B usine ss $1,619 $1,756 $1,906 $2,068 $2,243
Source: FDA, “Proposed Industry User Fee Schedule for MDUFA 2007,” Center for Devices and
Radiological Health website, updated April 16, 2007, at [http://www.fda.gov/cdrh/mdufma/
md ufma ii-co mp ar iso n.html] .
a. Small Business indicates the reduced small business fee associated with whatever item is listed
above. (For more on the small business fee reduction, see the small business subsection below.)
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 authorized for the same
period.30 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 certain31
fees, and small businesses pay a reduced rate. These fee reductions, exemptions,
and refunds are explained below.
Humanitarian Use Devices (HUDs). HUD applications are exempt from
user fees other than establishment fees.32 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
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.
30 FFDCA 738(h)(4); 21 USC 379j(h)(4).
31 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).
32 FFDCA 520(m); 21 USC 360j(m).
Further Manufacturing. In order to avoid the charging of multiple fees for
a device that has multiple manufactured components, any application for a product
licenced exclusively for further manufacturing use, is exempt from fees other than
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.33 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.34
These fee reductions and exemptions are important, because the majority of device
establishments are small businesses.35 According to the Government Accountability
Office (GAO), the vast majority of companies that paid medical device user fees in
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 subject36
to user fees that were submitted to FDA in fiscal year 2006.
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 most37
other user fees, and 50% of premarket notification fees. 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
33 FFDCA 523(c); 21 USC 360m(c).
34 FFDCA 738(d),(e); 21 USC 379j(d),(e).
35 Public Meeting.
36 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].
37 FFCCA 738(d); 21 USC 379j(d).
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.38
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.”39 The law specifies the elements of the “process for the review
of device applications.”40 (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 and41
effectiveness of devices.” 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.
38 FFDCA 738(a)(2)(D); 21 USC 379j(a)(2)(D).
39 Emphasis added. FFDCA 738(h)(2)(A)(ii); 21 USC 379j(h)(2)(A)(ii).
40 Emphasis added. FFDCA 737(5); 21 USC 379i(5).
41 Emphasis added. 21 USC 379i note.
Table 6. The Process for the Review of Device Applications
The USC defines the process for the review of device applications as the following:
!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
!technical assistance to applicants;
!initial classification or reclassification of a device;
!actions required to call 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;
!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).
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.42 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.
42 FFDCA 738(g); 21 USC 379j(g).
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 2012.43 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 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
43 FFDCA 738A(b); 21 USC 738A(b).
Table 7. Comparison of Performance Goals in
MDUFMA and MDUFA 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 track90% of PMAs and panel track supplements in
supplements, premarket reports in 320295 days
N/A50% of expedited PMAs and expedited paneltrack PMA supplements in 180 days
90% of expedited PMAs in 300 days90% of expedited PMAs and expedited panel
track PMA supplements in 280 days
N/A75% of PMA modules in 90 days
N/A90% of PMA modules in 120 days
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
Real-Time PMA Supplements
80% of Real-Time PMA Supplements in 60
N/A90% of Real-Time PMA Supplements in 90
Biological License Applications
90% of BLAs in 10 months
90% of BLA supplements in 10
Same as MDUFMAmonths
90% of BLA resubmissions and BLA
supplement resubmissions in two
Source: FDA, “Comparison of Quantitative Decision Goals in MDUFMA I and II,” CDRH website,
updated April 16, 2007, at [http://www.fda.gov/cdrh/mdufma/mdufmaii-comparison.html].
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.44 (See Table 8.)
Table 8. Appropriations Authorized for Postmarket Safety
F Y 2008 F Y 2009 F Y 2010 F Y 2011 F Y 2012
$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. 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 necessarily prove cause and effect. As is
shown in Table 9, some of 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).45
Table 9. CDRH Warning Letters Issued in Total and
Under the MQSA, FY2000-FY2008
FY2008 a 62163
Source: FDA Office of Legislation.
a. Partial year, through March 31, 2008.
44 FFDCA 738(h)(3); 21 USC 379j(h)(3).
45 For more information about CDRH enforcement statistics, see the CDRH Charts in FDA
Office of Enforcement, Office of Regulatory Affairs, “The Enforcement Story,” (FY2006),
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
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 timeliness of FDA’s 510(k) process, the
process by which most medical devices receive marketing clearance in the United
46 FFDCA 738A; 21 USC 379j-1.
47 FFDCA 523 (c); 21 USC 360m(c).
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 FY2005, 510(k)s
reviewed by Accredited Third Parties (ATPs) received FDA marketing clearance in
an average of 81 days after initial receipt by the ATP — 14% faster than comparable
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 penetrated the market to widely varying
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 ERG Final Report: Unique Identification for Medical Devices, prepared for FDA by
Eastern Research Group, Inc., March 22, 2006, at [http://www.fda.gov/cdrh/ocd/udi/erg-
degrees. Only a few hospitals were making use of identification systems in their
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 not55
jeopardized by poor manufacturing practices.
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 where56
medical devices are manufactured at least once every two years. 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 May 31, 2008,
23 organizations had applied to conduct independent third-party inspections of
establishments, of which 16 had received FDA accreditation. Since that time, 43
inspections of domestic establishments and one inspection of a foreign establishment
have been conducted by accredited organizations jointly with FDA officials as part
of training that FDA requires of accredited organizations. During this same period,
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
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).
were cleared to conduct independent inspections. As of May 31, 2008, these auditors
had conducted 11 independent inspections — 4 of domestic establishments and 7 of
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 an59
inspection to assess compliance with FDA requirements in the near future.
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
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].
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 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
!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.
Appendix A. Acronyms Used in This Report
513(g)Request for Information About Device Classification
ADUFAAnimal Drug User Fee Act
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
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)
MDUFAMedical Device User Fee Amendments of 2007 (P.L. 110-85,
MQSAMammography Quality Standards Act (P.L. 102-539)
MDUFSAMedical Device User Fee Stabilization Act of 2005 (P.L. 109-43)
OIVDOffice of In Vitro Diagnostic Device
PDPProduct Development Protocol
PDUFAPrescription Drug User Fee Act
USCUnited States Code
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.
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
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 10.
Table 10. MDUFMA Base Fees (PMA), 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: “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
61 Public Meeting.
513(g)s) to help establish a more consistent and predictable user fee revenue stream
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.
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
Fee Exceptions, Reductions, Refunds
The following is a history of the various device user fee exceptions, reductions
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)).
62 For more information about the Pediatric Medical Device Safety and Improvement Act
of 2007, see CRS Report RL34465, The 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.
Applications from Federal or State Government Entities. This
exemption was created by MDUFMA (§102). Unlike the other exemptions, MDUFA
Further Manufacturing. MDUFMA (§102) created this exemption.
MDUFA 2007 (§212(a)(5)) does not apply it to the newly created establishment
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
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 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.
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.