MDUFMA Public Stakeholder Meeting Transcript - April 30, 2007 PARTICIPANTS:
FOOD AND DRUG ADMINISTRATION STAFF:
DANIEL SCHULTZ
Director, Center for Devices and Radiological Health
JEFFREY SHUREN
Assistant Commissioner for Policy
REGISTERED SPEAKERS:
FRED FREEDMAN
Director of Marketing, Dental Trade Alliance
MARK B. LEAHEY, ESQUIRE
Executive Director, Medical Device Manufacturers Association
KELLY SLONE
Director, Medical Industry Group, National Venture Capital Association
JANET TRUNZO
Executive Vice President, Technology and Regulatory Affairs, Advanced Medical Technology Association
ANDREW WHITMAN
Vice President, Medical Imaging and Technology Alliance, a division of NEMA
SIBYLLE ZITKO
Legal Advisor, Delegation of the European Commission
PUBLIC SPEAKERS:
NORMAN LANPHEAR
Manager, Public Health and Manpower, American Academy of Ophthalmology
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C O N T E N T S
Welcome -- Jeffrey Shuren
Opening Remarks -- Daniel Schultz
MDUFMA II Legislative Recommendations -- Jeffrey Shuren
Andrew Whitman, MITA/NEMA
Sibylle Zitko, European Commission
Fred Freedman, Dental Trade Alliance
Mark Leahey, Esquire, MDMA
Janet Trunzo, AMTA
Norman Lanphear, AAO
Kelly Slone, NVCA
Open Public Session
Closing Remarks -- Jeffrey Shuren
Adjournment
* * * * *
P R O C E E D I N G S
(12:04 p.m.)
DR. SHUREN: Go ahead and get started. Good afternoon. I'm Jeff Shuren, the Assistant Commissioner for Policy at the Food and Drug Administration, and I'd like to invite you to the Medical Device User Fee and Modernization Act public meeting. On behalf of the FDA, we look forward to a very informative and constructive meeting.
Before I begin, I'd like to review a few housekeeping issues. We have our FDA panel here at the front of the room. We've also set aside some seats for our registered speakers in the front as well. Each speaker will give presentations during the afternoon session. These presentations will last no longer than 15 minutes.
For efficiency, we're just asking that folks hold any of their questions until the public session, and we'll address them at that time. We also ask that those who do wish to speak sign up by 1:30 for the open public session. And lastly, I want to remind everyone that the docket will remain open until May 18th, and you can submit written comments on the issues discussed today until that date.
Let me ask, are folks hearing an echo in the room or is the sound okay? The sound is okay? Okay. All right. There will be a transcript available, and copies of the presentation will be posted up on our website on the dockets website. Bear with us. It will be certainly a few days before the transcript gets posted.
Now I'd to introduce our FDA panel. Working down from the end is Anne Kirchner, Don St. Pierre, Donna-Bea Tillman, Linda Kahan, Dan Schultz, Diane Maloney, and Martha Louviere, all from the FDA. The registered speakers for today are Andrew Whitman from the Medical Imaging and Technology Alliance, a division of NEMA; Sibylle Zitko, Delegation of the European Commission; Fred Freedman from the Dental Trade Alliance; Kelly Slone from National Venture Capital Association; Mark Leahey from the Medical Device Manufacturers Association; and Janet Trunzo from the Advanced Medical Technology Association.
I'd like to begin our meeting now by introducing the director of the Center for Devices and Radiological Health at FDA, Dr. Daniel Schultz. Dr. Schultz will be giving the opening remarks. Following that, I will come back up to the podium and walk you through the legislative recommendations that we have presented to Congress. Dr. Shultz?
DR. SCHULTZ: A little tight quarters up here. Not so tight out there. I mean, you're lucky.
(Laughter)
DR. SCHULTZ: Good afternoon. It's my pleasure to be here and my goal today is basically to say thank you. I want to say thank you to all the people that worked so hard in getting this proposal together for what we hope will be a smooth and rapid reauthorization of the MDUFMA legislation, and I also want to say thank you to the people that implemented this legislation, namely those in the Center for Devices and Radiological Health, as well as those in the Center for Biologics.
I can say, at least from my vantage point, that this legislation has been an unqualified success. And let me tell you why I say that. Number one, we met almost all of the goals. The 77 goals that were put forward have all been met during the first part of this legislation. And number two, and perhaps even more importantly, we managed to keep the financial part of this separate from the review part. So the agency continues to carry out its mission of ensuring safe and effective medical products, as well getting the resources necessary to accomplish those goals.
But more importantly, I think that there are certain things that have happened that may not be quite so obvious, and I'd like to touch on a few of those. I believe that this legislation has really allowed us to set the groundwork for what this center, what the two centers, and what the agency are going to look like in the years to come in terms of being able to deal with the increasingly complex and diverse technology that we're going to be looking at. A big part of this is our ability to hire experts throughout the Center in all areas of the scientific enterprise and at all different levels. That has been critical to making the program a success thus far and will continue to be critical to fulfilling our mission in the future.
The second aspect is our ability to bring expertise in from outside the Center. This was something that a number of constituents expressed a lot of interest in. And using the resources provided by MDUFMA, we've created a medical device fellowship which continues to thrive, and I believe will be a model for how this type of use of outside expertise will be done by the entire agency and perhaps even beyond the FDA. This fellowship has allowed us to bring in a number of experts again at various levels and various area of scientific expertise that we may not have in house that will allow us to address specific scientific problems and regulatory problems and questions.
The other thing that I think again goes a little bit unnoticed is the fact that we have made incredible progress in terms of shoring up our IT infrastructure. A couple of examples: We've begun to address the issue of electronic submissions through our Turbo 510(k) program. We have created a tracking system, which has allowed us to track submissions when they come in the door to the time then they're acted upon. And this tracking system not only has allowed us to do a more efficient job in terms of device review, but it has also served as a model for other tracking systems throughout the Center. Again, the idea is that we build something that can be useful for one enterprise and then be able to use that model for other things as well.
Another area that we've made significant progress is in the area of communication. Communication involves a number of different aspects. One of those is providing adequate guidance to the industry. We've put into place a guidance priority system which is working, which is allowing us to put out more guidances and provide the information necessary for people to submit the right information so that we don't have to go multiple rounds on every submission. That's of critical importance. We've also upgraded our website to the extent that we now have a much more user-friendly website, and will continue to have a much more user-friendly website to provide information to industry as well as to the general public.
So that's what we've done so far. But I think a large part of what this meeting is about is to talk about the future, and, again, I want to thank those who have worked terribly hard over the last few months to put this proposal together, and a couple of things again from my perspective as to why we can look forward to building on what we've done through the first five years into the second phase of this program.
Number one, the fee structure. The fee structure is more stable and more equitable. And I think this will allow all of us to do the kind of planning that we need to be able to do moving forward, both from the industry side as well as from the agency side.
Number two, the performance goals. The performance goals that were constructed the first time around, while I think well intentioned, I think were overly complex. I think one of the things that we've learned is that simple is probably better, and the goals that we've put forward for the second proposal are much simpler, and I think really get to the core of what we're all about, which is to get safe and effective new technologies to the marketplace as quickly as possible.
What about third-party inspections? Well, I think again we learned a lot from the first five years of this program, and I think the proposals that are being put forth now will simplify this, make it more user-friendly, and still allow FDA to do those inspections which it needs to do to ensure the safety and effectiveness of medical devices.
You're going to be hearing a lot this afternoon about the details of the legislation, so I'm certainly not going to do that. But I wanted to give you a little bit of perspective again from where I sit as director of the Center for Devices and Radiological Health, and to tell you a little bit about what we've done and what we plan to do. As I see it, the future for medical devices and medical device regulation is extremely bright, and this legislation has helped us to ensure that it will be bright moving forward, and I just want to say thank you to all of those who've worked so hard to make this happen. Thanks very much.
DR. SHUREN: Thanks, Dan. Clearly, Dan and I need more rehearsal time together.
(Laughter)
DR. SCHULTZ: Get rid of the pole.
DR. SHUREN: That's right. Well, again, welcome everyone. What I'd like to do is to give you a little bit of background on MDUFMA, walk you through the proposed legislative recommendations we put out in a Federal Register notice, and then talk to you about the next steps we'll take to finalize those recommendations before we send the final package over to Congress for their consideration.
So, MDUFMA I, the goals here were to develop a sustainable review program to increase predictability in review times and increase timeliness in the review process. And the overall goal was to get safe and effective medical devices to patients and practitioners more quickly.
Critical here is that the FDA standards do not change. What MDUFMA is about is providing additional resources to the agency to make improvements in its review process. But the review standards do not change. Now MDUFMA I was amended, a big amendment in 2005 called MDUFSA, another acronym. But what I want to do is just give you the basic mechanics of what the law looks like today and then tell you about some of the challenges we've encountered and what our recommendations are to address those challenges.
So first off, what MDUFMA does is it gives the agency additional resources through appropriations and user fees. And right now, about 83 percent of the costs of our device review program are covered by appropriations, and 17 percent of it comes from user fees. The historical experience in our appropriations has been that they've gone up for the device program at an annual rate of about 3-1/2 percent each year. And user fees under MDUFSA got locked in at an increasing rate of 8-1/2 percent for 2006 and 2007. MDUFMA provided a variety of fee waivers and fee discounts for small businesses, and we'll come back to that in a few minutes. There were also some other waivers that anyone can take advantage of, such as if you are manufacturing a device for a pediatric indication.
There are triggers that actually require that the agency receive a certain amount of money and that the agency spend a certain amount of money on device review and inspection to keep the program going. There are many performance goals. As you heard from Dr. Schultz, it was fairly complex. We had 77 quantitative goals and eight qualitative goals. MDUFMA created a third-party inspection program for surveillance inspections for good manufacturing practices. There were a number of provisions that pertain to the reprocessing of single-use devices, and it created an Office of Combination Products.
You can think about MDUFMA I as ramping up the program. Essentially it was about increasing the size of the review program through an increasing amount of resources, funding provided to the agency, and in return there would be improved timeliness of review. And, in fact, the goals for MDUFMA I got progressively more challenging.
In MDUFMA II, now that we've built up that critical mass, the plan for MDUFMA II is to maintain a stable program, ensure there are adequate resources to keep the program that we have today in 2007. We would continue to have improved performance, and we would essentially fine tune the user fee program.
The key challenge from FDA's perspective is that the performance goals have been complex, and they've had some unintended consequences. And I'll walk you through that in just a minute. The third-party inspection program has not been the success we would like for it to have been. And the agency currently lacks predictable and stable user fee funding. So to address that, the goals that the agency had walking into reconsideration of MDUFMA were to simplify the performance goal structure, to make the third-party program workable, and to provide adequate and predictable funding for FDA to maintain a stable device review program.
So our recommendations for legislation, as you'll see in the Federal Register notice we put out just about two weeks ago, cover performance goals. They're broken out into quantitative and qualitative. We address funding through user fee revenues, the amount we get, and the user fee structure, how those fees are actually apportioned. There are some additional small business fee reductions, and there are some recommendations for changes in the third-party inspection program.
We think MDUFMA II will have some very important benefits to the public health. First off, patients and practitioners will have access to safe and effective medical devices more quickly. And we'll get there through continued improvement in device review times, as well as greater transparency in the review process. We plan to be a lot more open about what we are doing, to the entire public, not just to industry.
MDUFMA II will also give the agency the resources it needs to maintain cutting-edge scientific expertise necessary to provide the timely review, and to ensure the safety of increasingly complex devices of tomorrow, because also the funding we talk about of an appropriations does not just go for device review. It's also for device safety. It goes for the whole program. In fact, the scope of MDUFMA covers a variety of device safety activities. So we'll get there through adequate and stable funding for the agency.
And then lastly, MDUFMA II would allow the FDA to better focus its inspectional resources on the higher-risk devices, and we would get there by enhancing our third-party inspection program.
So let me first turn to the performance goals. This chart is just to give you a flavor of what we've been dealing with. Current performance goals fall into two buckets. There are decision goals. That's what we decide at the very end of the day. For example, are we going to approve an application or not approve it? And then there are cycle goals. Those are sort of interim steps along the way. For example, if we send out a formal request for more information, if it's for a pre-market approval application, those are the applications for the higher-risk, more complex devices, we would send out a major deficiency letter. So there's actually a goal for when we would send out that letter. That's a cycle goal.
And the problem we ran into with these is that by focusing on trying to meet the cycle goals, sometimes that interfered with our ability to have a back and forth, an interaction, with the sponsor, try to work out some of the information requests we needed, some of the additional analysis we may need, in a more informal way. And in an effort to meet those cycle goals, we really cut down on that interaction. We don't think that that was very productive -- something we want to change in MDUFMA II. Also because there are so many goals we're trying to focus on, we're really missing the big picture, which is ultimately the decision goals, because that's what makes the difference for timely review.
So what we are proposing is the following: First off is continued improvements with current staffing. How do we get there? Well, MDUFMA I, as I mentioned, was about building up the program, bringing on more people. Well now those people have been on board, they have been trained, and so we now have a very well tailored, very expert set of staff, and we expect to see now return on the investments we've made in MDUFMA I. We'll also continue to put in place efficiencies through investments in our IT systems and other actions we would take.
For the goals themselves, first off, we'd eliminate the cycle goals. Secondly, we're going to create two-tiered decision goals, one goal that's earlier on, meaning that we'll make a decision within a certain number of days on a certain percent of those applications, and then a later goal, which is that we'll make a decision on a greater number of those applications at a later time. And lastly, there are some new goals for application types for which they weren't goals in the past.
What I've put up here, this is actually up on our website, so I'm not going to walk you through all the goals. I just want to highlight a few things. There's a comparison between MDUFMA I and MDUFMA II, and you'll see, some of these there were no goals in MDUFMA I and now there are new ones in MDUFMA II. But I just want to point out on the right side here, for example, you'll see some of these are a lot tougher than we had before. Three lines down you'll see for expedited PMAs that we would make a decision 50 percent of the time in 180 days. This goal wasn't there before. Before, we treated all PMAs the same.
Expedited PMAs are the ones for the most innovative devices. They're also often the most complex devices. But because they're the ones we know the least amount, they often take the most amount of work. But we're still going to try to make a decision in 180 days 50 percent of the time, and for the later goal, we're actually moving that down from 90 percent and 300 days to 90 percent and 280 days. And as you start to shave off more time, it becomes more and more challenging to get there, but we do think with the staff we have on board we can do that.
The other thing I want to point out on the goal here on 180 day PMA supplements, it may look a little confusing. The FDA is going from 90 percent making a decision 180 days to 85 percent? Doesn't it look like performance is getting worse? Well, the original goal was actually a combination of a decision goal and a cycle goal, and we're changing this so that the goal right now is only a decision goal. There's nothing really interim about it.
So in the past, if we would sort of ask for more information, we'd have to do that by essentially, if the supplement was incomplete, by making it not approvable. And in essence, we're resolving that issue now. We will go out and now put out a major deficiency letter, so the process would continue along, and the only thing we get credit for is making that final decision based on all the information. So we do think it is a more challenging goal.
For the qualitative goals, they break down as I've listed them here on the slide, and I'll just walk you through them very quickly. I talked a minute before about how in MDUFMA I, it was much more challenging to have informal interactions with the sponsor. And we think it is important to have that kind of dialogue because there may be a number of issues we can work out with a phone call or an e-mail rather than having to send a formal request for information. And that's what interactive review is. In fact, we'll put a guidance to lay out our thoughts in terms of how interactive review would actually be conducted.
Maintenance of performance means that for those activities where we don't have a goal, we will continue to at least maintain our current performance. Certainly, no one's going to be upset if we do better.
Guidance document development. Well, right now we have a fairly established process for getting input from the public on our guidance documents, but what we do is we put the guidance document out when drafting it for comment. What we're going to do now is actually put out a list of the guidances we think we may work on in the next year or so and ask for comment on that, namely does it makes sense to be working on these guidances? Is there another guidance we should work on, and do you have any preliminary thoughts on what the guidance would cover? And we'll take that into account. We'll still keep the same process we currently have in place, which is we'll develop a draft and we'll put that out for public comment before we go to a final. So this is in addition.
Quarterly updates. We will provide to the public a report card on our performance every quarter. We're also going to track our performance in total days, so not just how much time it took FDA for its review, but the total time for when the application came in to when, in fact, we made a final decision. So that also includes industry's time. It will be a better measure on how long it may be taking for products coming into the agency to actually to get the nod to go forward and go on the market.
For meetings, we find that meetings are incredibly helpful for working things out with sponsors. Industry finds it very helpful as well. When they're developing a product, what kind of information do they need to collect and other activities? What this simply is is a commitment to continue to try to schedule meetings in a timely fashion, because we're finding the number meetings were increasing due to what we industry find a valuable interaction.
And lastly, for reviewer training we will use user fees, if appropriate, and we have the funding to do it, to invest in training of our reviewers, because we think it's important and industry thinks it important that we maintain our reviewers with cutting-edge expertise.
We have a goal that pertains to imaging devices. A number of these will use a radiopharmaceutical or a contrast agent. We call these concomitant products, because it's one product being used with another product, and we are going to develop a guidance that sort of clarifies that process and the procedures that we use, including data for the review of those imaging devices when used with contrast agents or radiopharmaceuticals.
There are a number of goals that pertain to in vitro diagnostics, essentially lab tests. And why the focus? Well, you've heard a lot about personalized medicine, about being able to target treatments to individuals. But really the pathway to get there is that you need safe and effective tests to identify who are the people who are going to be high responders for treatment, who are the people who may be at greatest risk for adverse events. So there's a little bit more of a focus on qualitative goals for in vitro diagnostics this go around.
And the agency plans to put out a variety of guidances or revise some existing guidances in some important areas, including ones that address bio threats and pandemic influenza, and emerging infectious diseases. In addition, if you have a lab test in a laboratory, they're subject to two regulatory regimes, one by FDA, and we actually focus on the device and the manufacturing of the device, the test. And then there's the Clinical Laboratory Improvements Act that CMS, the Centers for Medicare and Medicaid Services oversees, and that actually goes to the quality of the lab itself and the laboratorium. Well, FDA has a function here in CLIA. We actually categorize the devices. We determine are they waived, are they moderate complexity or high complexity, and a variety of requirements are imposed depending on that categorization. Right now, when we make the determination, we do it after we've looked at the application. And so if we're going to do a waiver, and these tend to be when there's a 510(k), the devices that are of lower risk, we first want to know a lot more about that device before we make a decision. So we'll do the 510(k) and then we'll do the look at the waiver request. We're now going to conduct a pilot program to see if we can perform those activities simultaneously.
We will look at a number of low-risk IVDs to see if they might be exempted from pre-market review. This is pretty standard operating procedure for devices. But, you know, when something is brand new and comes on the market, we don't know a lot about it. It might be high risk. It may be a class III device. A lot of requirements go to it. As we gain more experience with it, we may downclassify it to class II. And for some devices where we have a lot of experience and it's very, very low risk, they wind up being exempted from pre-market review, although they still have to follow a variety of other requirements under the Act.
And then lastly, we're going to actually review our pre-IDE program, essentially where we are working with sponsors during the development of in vitro diagnostic, and we're going to look at that program in terms of its effectiveness and efficiency.
Third-party inspection program. Under third-party inspection, the agency can accredit a third party -- what we call an accredited person -- and they can conduct one of these surveillance good manufacturing practice inspections. Essentially, this is where there isn't necessarily a problem, but the law actually says we're supposed to conduct these inspections every other year, just to see if people are, in fact, compliant with GMPs.
The law right now provides very strong protections against conflict of interest. The only firms who can participate are really the good players, those who have a good track record. And FDA still retains the ability to go in and inspect that firm for cause, if there is a need. And the value of third-party inspection is that it allows the agency to focus on those devices that are higher risk or the ones we may have the most concern about. So we think that there can be tremendous value if the program works out right. However, our experience to date has not been so positive. There's been limited industry participation. So far, only 14 medical device firms have petitioned FDA to use an accredited person, and 3 of those inspections have been conducted so far.
There's a cost involved to the agency. We've spent just shy of $3 million to actually set it up, to do the training, and of course there's also an auditing function here as well. Once an accredited person is out there, we're still going to do followup to make sure they're doing a good job.
And the reason we think there are problems is because there are number of disincentives currently built into the program. It's a fairly cumbersome process to go through. And the ability to use an accredited person is fairly limited. So we want to address those in MDUFMA II. And what we have proposed is first off to streamline the administrative burdens. Right now, if you want to use an accredited person, you have to ask the FDA, and we wind up having to clear that individual, even though there may not be an issue. What we're going to do instead is we're recommending that you notify the agency. If we have an issue, we may come back. But if no issue, certainly by 30 days, you could proceed and use that accredited person. You don't need to then wait for FDA to clear that petition.
Secondly, we would expand participation. Right now, you can only have two consecutive inspections by an accredited person. After that, you have to wait on FDA. We think we can provide a greater incentive if we allow an unlimited number of inspections as long as you continue to be a good player. If there's a big problem, then you wouldn't be able to use the program. And that's the way the program is designed right now. And, of course, the agency would still retain the ability to do for-cause inspections.
And then lastly, something a little bit new. This isn't exactly through accredited persons, but this is now to say, you know what, a lot of these companies, where they market in the U.S. and they market in another country, well, when they market to the other country, they have to follow the laws of those countries. And their requirements for manufacturing may be a little bit different than ours. However, the information gathered can be incredibly useful to the agency. So what we would allow now is that if you had one of those inspections and it was to a standard that the agency found acceptable, not equivalent, but one where the information may be useful, we would accept those reports, and we would use it in prioritizing which firms we would inspect. So it doesn't mean that you're completely out of getting an inspection, but by having more information, the agency may decide that you can move lower on the priority list.
Now let me just turn to funding and fee structure. Remember I mentioned before the agency needs adequate resources and stable resources. So funding is about adequacy, and the fee structure is how we instill stability. Let me just walk you through that. The challenge the agency has faced is that over the last five years the costs for an FTE, to actually have a person on board, has gone up 5.8 percent a year. And in fact the cost for device review programs, you take the people, you take the costs for infrastructure, you add it all together and that's been going up at a rate of 6.4 percent a year. A lot of that has to do with our costs of coming right here, to White Oak.
And the big drivers are really outside of the agency's control. They're first off statutorily mandated payroll and benefits, they're the rent we pay here at White Oak, and they're the contracts we have for security. Security costs have gone up in the post-9/11 era. So we don't have a lot of control on those increased costs, but we have to deal with it. And if those costs aren't met, then effectively we wind up downsizing the program. And what we have found is that our funding needs so far haven't really kept pace with our costs. So we're hoping to address that in MDUFMA II.
What we did in figuring out what we needed is we said, all right, what's the cost of the program we have, and if the costs are going up at 6.4 percent, what would they be over the five years of MDUFMA II. And that number is about $1.25 billion. And that's the five years of MDUFMA added together. And that would allow us to maintain the current program. So when we figured out how to apportion it, we said, all right, we know that historical average for appropriations, which was 3-1/2 percent, so if that continued the same, then from user fees we'd be expecting $287 million over the five years of MDUFMA II, so that's the total amount.
And what that would change is that -- remember I mentioned right now MDUFMA I appropriations make up 83 percent of our funding? Well now we'll just go to 77 percent, and user fees, instead of accounting for 17 percent of our costs, would now cover 23 percent of our costs on average.
So that's the funding amount. That's how much we need. How do we ensure stability? Well, one of the problems we've found is user fees right now are only tied to applications, and the number of applications can fluctuate from any given year, and therefore we're never sure how much fundings, how much revenues and user fees we would collect from one year to the next. Also, the applications that have user fees -- not all the applications have user fees. So we do work, but we don't necessarily have a fee tied to it. And we have found that the few revenues have been chronically short of our expectations. This is not a fault of anyone; it's just the nature of how we developed MDUFMA I.
So what we're recommending in MDUFMA II is to create some new fees. They'll go for applications that currently don't have fees, but the big change is this establishment registration fee. It's for each of those establishments that actually makes a device, would pay a fairly nominal fee. Starting in fiscal year 2008, we're proposing that fee would be $1,706. But because there are so many facilities we would expect that would pay that fee, roughly around 13,000, that can provide a lot of revenue, but also a lot of stability. And as a result, all the fees that currently apply to applications in MDUFMA I would go down in MDUFMA II. In fact, most of them would stay below the 2007 levels all the way through 2012.
We would also put in here predictability for industry. Just like the agency needs predictability as to the funding we receive, there's value to industry to have predictability on the fees that they pay so that they can manage their businesses more effectively.
I mentioned before, MDUFMA I has some breaks for small businesses. We're going to add to those. Right now, you can get a waiver if you're a small business defined as having $30 million or less in annual sales or receipts. Your very first PMA, that pre-market approval application, is waived, and we would continue that. But for small businesses as defined by $100 million in annual sales and receipts, you currently are eligible for a fee discount, and we're going to increase those in MDUFMA II. So, if you submit a PMA or related supplement, you used to pay 38 percent of the fee, it would now be 25 percent. And for 510(k)s, it used to be 80 percent of the total fee, now it's 50 percent. So you combine that with the lower fees, it's a fairly substantial break.
We will also make it easier for foreign businesses to qualify as small businesses. One of the problems is that if you're a small business, the way you qualify is you submit a federal tax return, and you pay federal taxes. But if you're a business in another country, you don't normally submit a tax return to the U.S. You'd wind up paying U.S. taxes, and you may not be doing business here. So what we are going to do to redress this is that we would allow the small business to get certified by their national taxing authority, and their chief financial officer would certify that all the affiliates had been certified by the national taxing authority, and send that information to the agency. We will provide more details on what, in fact, folks should do through a Federal Register notice, should this proposal be enacted into law.
I mentioned there are some triggers. There's an appropriation trigger and there's two spending triggers. We think that the success of MDUFMA II does depend on providing increased funding for the agency from appropriations and user fees, and the MDUFMA I trigger for appropriations can be helpful here for trying to ensure the agency gets adequate appropriated dollars. So we are proposing to extend the current triggers in MDUFMA I through the life of MDUFMA II.
So that's the package. Where do we go from here? Well, we've got the public meeting today. There's an opportunity to hear from you all about those recommendations. The public docket is open until May 18th, and we will review all the comments that are submitted, and then based on those comments, we may make some changes to those recommendations, and ultimately put out a final set of recommendations to Congress thereafter.
And as you know, there's already a bill on the Senate side that's going through and will actually hit the Senate floor very, very soon for consideration this week. But the House still has the opportunity to act, and if there are any differences, those will be addressed in conference. So for those who may wonder does it really matter if I provide input into these recommendations? Absolutely, because we're just in the beginning stages for the legislative process, so your comments really can make a difference. And I encourage you, if you do have an opinion, to please share it with the agency.
With that, let me stop, and we'll turn to our registered speakers. Let me first ask Andrew Whitman. All set?
MR. WHITMAN: Good afternoon. I'm Andrew Whitman, vice president of the Medical Imaging and Technology Alliance, a division of NEMA. Thank you for providing me the opportunity to address reauthorization of MDUFMA or MDUFMA II. MITA is the collective voice of medical imaging equipment manufacturers, innovators, product developers, representing 90 percent of the global market for X-ray imaging, computed tomography, radiation therapy, magnetic resonance, diagnostic ultrasound, nuclear imaging, and medical imaging informatics equipment.
Medical imaging modalities have played a critical role in advancing the quality of care for patients by speeding time to diagnosis and offering better treatment options with faster recovery.
Imaging has become a standard of modern care for virtually all major medical conditions and diseases, including cancer, stroke, heart disease, trauma, and abdominal and neurological conditions. For this reason, MITA believes that it is necessary to have a strong well-funded FDA with the necessary resources to approve these life-saving technologies in a timely manner.
The first thing I will discuss is the user fees. MDUFMA reauthorization achieves many goals that both the FDA and industry are seeking. The concept behind the device user fee program is to provide the agency with resources that enhance the device review program. MDUFMA II provides predictable funding for the FDA to maintain a stable device review program while at the same time providing reasonable and predictable user fees for the industry.
As was mentioned, under MDUFMA I and MDUFSA, there was uncertainty on part of the industry and the agency regarding the amount of user fees and whether there would be compensating adjusters, whether appropriation and user fees would cover the necessary costs of the device review program. Both parties sought predictability in user fees. Consequently, the agency and the industry recommended to Congress to extend the current trigger for appropriations and maintain the spending triggers for the review process. In addition, MDUFMA II provides a modest device establishment registration fee, as already was discussed, with reduced application fees, which the industry supports.
In terms of performance goals, the FDA has committed to ambitious performance goals under MDUFMA II. The industry has sought to simplify the performance goals while ensuring timely reviews. At the same time, one of the key new features of MDUFMA II is the institution of interactive review process as a qualitative goal, which was already discussed. As was discussed, this provides for informal communications between the reviewer and the applicant, which will avoid unnecessary delays in the review process. It will also lead to reduction in the number of review cycles. We are pleased with both the qualitative goals that the FDA has committed to as well as the quantitative goals. Other qualitative goals include quarterly performance reports and reviewer training, which the industry wholeheartedly supports.
In terms of third-party inspections, the Third-Party Inspection program was established in MDUFMA I to allow an agency with limited resources to utilize outside, accredited inspectors to conduct inspections and provide reports to the FDA. Under this program, a company can choose to have an inspection done by a third-party organization that is accredited by the FDA and reports from the inspection are submitted to the FDA.
Unfortunately, according to the January 2007 GAO report -- and that was discussed earlier -- Status of FDA's Program for Inspections by Accredited Organizations, manufacturers have been reluctant to participate in the program because of the number of statutory obstacles to participation. That's why the MDUFMA reauthorization proposal would make modest changes to the program to address the barriers to participation and will encourage greater industry participation in the program.
It is important to note that the statutory revisions to the third-party inspection program under MDUFMA II are intended to increase participation in the program while maintaining all of the stringent conflict of interest requirements and eligibility requirements for accredited persons that are in current law under MDUFMA I. Also, the Secretary's authority to inspect a facility at any time remains under MDUFMA II.
Some of the things that were just also discussed were the removal of use on third-party inspections. As was discussed, currently a company is limited on the number of times it may use a third-party inspector to two times. After two third-party inspections, the FDA must conduct an inspection, and this was an obstacle for manufacturers. MDUFMA II eliminates this limitation and allows a company to continue to use third-party inspectors as long as the company maintains a good inspectional record.
Also, as we discussed, acceptance of ISO certifications. In addition, while an official authority to conduct inspections and classify inspection results will remain with the Secretary, MDUFMA II now will allow the Secretary to expressly take into consideration the goals of international harmonization in quality systems standards. Specifically, it would allow the FDA to accept ISO reports of certifications, thus providing the agency with the opportunity to receive information on a facility for the purpose of setting its risk-based inspectional priorities. This is an extremely good benefit for the manufacturers.
Also it would streamline the notification and approval process for assignment of third-party inspections. MDUFMA II would streamline the approval process and allow companies to use a simplified application which notifies the FDA that it will use an inspector on the FDA's approved list, state the date of last inspection and its classification, and state the intent of the owner or operator to participate in the program and to certify that it markets at least one of the devices manufactured at the facility in a foreign country. The applicant will be deemed approved for participation in the program if the Secretary does not respond to the establishment within 30 days.
Also, there will be an elimination of duplicative data submission requirements. MDUFMA II eliminates the redundant reporting of compliance data by the establishment. The FDA keeps records on the past inspections and can review the establishment's compliance record without repetitive submissions. The statute still provides that the Secretary has the authority to request this data if the Secretary deems it necessary.
In terms of combination products, as also mentioned, diagnostic imaging is sometimes used concurrently with diagnostic drug and biological products, such as contrast agents or radiopharmaceuticals, in a way that does not meet the regulatory definition of a combination product. Nonetheless, such "concomitant use products" present important questions of efficient regulation and consultation between Centers that are similar to those raised by combination products. In particular, the industry wanted a clear guidance on the processes and procedures for approval or clearance of these devices, including the coordination of reviews by one or more Center on the data that should be submitted to support marketing the applications and labeling for new uses of imaging devices with contrast agents and/or radiopharmaceuticals approved for the same or different indications. To address these questions, the FDA will, after consultation with the affected parties, issue a guidance.
I want to thank you for your time today, and I commend the FDA for all the work that went into an agreement that benefits both the agency and the medical device industry.
DR. SHUREN: Thank you. Let me ask Sibylle Zitko to come forward.
MS. ZITKO: Thank you very much. Thank you. I would just like to make a very short statement on behalf of the European Commission. We had expressed some concern about the fact that small and medium-sized enterprise based in Europe so far have not been eligible to apply for fee discounts for pre-market approval filing, as the current law requires that only U.S. federal income tax returns may be used to show eligibility.
From the recent recommendations, as was just explained in the introduction, we understand that FDA is proposing that small business provisions be expanded to allow a way for small firms that do not file tax returns with the U.S. Internal Revenue Service to also qualify for small business rates.
Qualifications should be based on certifications from the national taxing authorities where the firm and each of its affiliates file their taxes and signed affidavits from the head of the firm or its chief financial officer and from each of its affiliates.
And so I just want to say we're very pleased with this proposal and would very much like to thank the FDA for taking our concerns into account, and we'd also like to thank the Commerce Department, which I understand has also supported the proposal, and we are, of course, looking forward to working with the FDA to make the proposals operational when the time comes to discuss it. So of course we want to make sure that the European national taxing authorities will in fact provide the appropriate certification forms which would satisfy the FDA requirements, and we will -- we're welcome to find out more about which information will be required and which forms will be necessary. Thank you very much.
DR. SHUREN: Thank you. Let me next ask Fred Freedman to come forward.
MR. FREEDMAN: Good afternoon. I'm Fred Freedman, representing the Dental Trade Alliance, the DTA. The Dental Trade Alliance is a trade association representing more than 200 manufacturers and distributors in the U.S. DTA is concerned about the new possible regulations and fees for the Medical Device and User Fee Modernization Act, MDUFMA II, that are now being considered by FDA.
Please be advised more than 80 percent of medical device manufacturers are small to medium in size, while more than 90 percent of the medical devices are classified as low- to medium-risk. Of 280 dental products classified by the FDA, our member devices fit precisely within the general medical device category. Furthermore, DTA surveys indicate DTA members comprise 43 percent of companies with fewer than 50 employees, and another 45 percent of the DTA members comprise businesses with between 50 and 300 employees.
MDUFMA II will redistribute the fees pertaining to revenue, benefiting more of the medical device industry with larger firms that make higher risk devices and have more 510(k) submissions. Smaller companies that typically build products around a single 510(k) will shoulder a greater burden. DTA asks FDA to reconsider its position.
With regard to third-party inspection elements of MDUFMA, the general medical device industry welcomes the use of the ISO 13485:2003 standard becoming a recognized standard on the FDA, which could accept results. This makes sense since FDA's Quality System Regulation Part 820 was originally written to be harmonized with ISO 13485:1996. Since FDA has participated in writing the newer, more robust ISO 13485:2003, it makes sense to acknowledge this work by making this the recognized standard.
For concerns about the confidence of audits performed to the standard in foreign countries, FDA should consider participation in co-developing an accreditation program for ISO 13485:2003 for which the International Accreditation Forum has now begun work. Accreditation bodies from Japan, Canada, the U.S., Singapore, the European Union, and China are all working through the International Accreditation Forum to create a certificate for ISO 13485:2003 to be accepted everywhere under an accreditation system that includes establishing independence and transparency to the audit.
MDUFMA II should focus on recognizing ISO 13485:2003 as part of the use of the third-party inspection system. The FDA should also consider participation with the IAF Working Group to co-create the Global Medical Device Conformity Assessment System -- that's a mouthful -- known as GeMDCAS, to have more access to the competency and independence of audits performed under the ISO 13485:2003 standard that FDA helped write. DTA believes this is not an harmonization issue. It is a recognition issue. That is why MDUFMA II should be considered the instrument for recognizing the standard. The DTA is available for more detailed discussions, since the Association is actively involved in this issue on many fronts.
Finally, DTA wishes to state for the record the following important statistics, which we believe merit consideration for developing new legislation. Quoting from a gathered government source: 80 percent of medical device manufacturers are considered small. More than 90 percent of medical devices are low to medium risk. We call this the 80 90 rule. Please keep this in mind as you move forward.
The Dental Trade Alliance is able to gauge and report on the impact of new regulations on the general medical device industry as a whole. This is especially true for low to medium medical devices. As we move forward, please involve DTA in the development of new regulations affecting the general medical device industry. And I want to thank you today for this opportunity, and we salute FDA for working so hard to simplify the medical device and user fee program. Thank you.
DR. SHUREN: Thank you. Since we're ahead of schedule, my suggestion is just we continue to move on with the next registered speaker. Is Kelly Slone here? Why don't we go to Mark Leahey?
MR. LEAHEY: Thank you, Jeff. On behalf of the Medical Device Manufacturers Association, I too want to thank FDA for all their efforts in both putting this proposal together and also conducting this important public stakeholder meeting.
My name is Mark Leahey. I'm the Executive Director of the Medical Device Manufacturers Association. We represent smaller entrepreneurial innovative companies in the medical technology industry, and I appreciate -- I think this is the fourth time that I've spoken at a MDUFMA stakeholder meeting, and just really wanted to take a few minutes to talk briefly about the MDUFMA II proposal.
As Jeff said at the beginning, MDUFMA I provided the initial foundation and framework to achieve I think the primary objective, which is to ensure that patients have timely access to safe and effective products. As we talked with FDA and other stakeholders and our membership on the MDUFMA II construction, we thought it was important to build on this program and make necessary improvements, again to ensure ultimately the patient is the primary focus, and at the end of the day they have access to these safe and effective products in a timely manner.
The first item I'd like to discuss as part of the MDUFMA II proposal is the issue of greater fee predictability. Those of you in the room representing medical technology companies understand that under MDUFMA I, there were significant fluctuations in the fees that companies paid. I think we saw a significant ramp up of about 60 percent for some fees. And as Jeff said, that was tied primarily to the fact that these fees were only associated for application fees.
In trying to represent the industry and determine a way to get greater predictability, the idea of having an establishment fee was something that was attractive to our membership. Doing so would provide again a greater source of revenues from FDA, a more predictable, stable source of revenues, and more importantly would provide greater fee relief for all those submitting applications in the future. So we certainly support that modification.
A second important modification under the proposal is for adding greater fee relief for smaller companies. MDMA strongly supported the two-tier structure that was implemented in MDUFMA I, and also supported the increased threshold under MDUFSA in 2005. And under the proposal MDUFMA II, the 510(k) fee for smaller companies, those under a $100 million in revenues, would be reduced from 80 percent of the full fee to 50 percent of the full fee, which we think is very important. And for the PMA and PMA supplements, those fees would be reduced. Instead of paying 38 percent of the full fee, they'd be paying 25 percent.
So again, when you look practically speaking at these small innovative companies -- and I would agree with the gentleman before that, you know, the majority of the industry are these small innovative companies -- they're going to see their fees, those in the PMA space drop close to $70,000, I'd say, and basically see their 510(k) fees cut in half.
So again we appreciate the efforts to provide greater fee stability for smaller companies. I think it is an important public policy goal, because unlike the pharmaceutical industry, where it's the large guys, again the engine of innovation here is the entrepreneurial sector.
I also want to talk briefly about the simplification of goals under the MDUFMA II proposal. I think it was discussed earlier there were dozens of goals, both cycle and decision under MDUFMA I, and I think that created some issues as it results to achieving the objective of, again, timely review of safe and effective products. And we too support the simplification of these goals. We think doing so will provide FDA with the tools to better manage their process internally, which I think is something that we all support, and along those lines, we also support the interactive review component that Jeff talked about.
I think again this is really an opportunity here for the industry and FDA to address issues as they arise in a real-time manner so that there's not this delay on the 89th day or later in the process, because again those delays often are detrimental to patient care. So to the extent that this program and this proposal can address those on the front end, patients will certainly benefit from those types of changes.
In addition to some of the fee structures that we've talked about -- and again, the guidance document that will come out obviously will be important -- other improvements that I want to express support on behalf of MDMA are the modifications through the third-party inspection program. As Andy spoke to earlier, obviously this is an important program I think for the industry and also quite frankly for FDA and the patients to ensure that -- I think this is a program, as Jeff said, that FDA has already invested millions in, and, if executed properly and structured properly, I think it really provides an opportunity to give greater assurance that companies are manufacturing consistent with the FDA framework, and we certainly believe that the modifications being proposed will provide a greater assurance that FDA's initial investment will be realized under MDUFMA II.
I also want to express our support for the modifications to the review of IBD products that exist in the MDUFMA II proposal. That's a growing industry, obviously, very important, and MDMA supports those proposals as well.
And then finally, I want to close by -- really I guess it's a call to all the stakeholders in the room, whether they be patient groups, consumer groups, industry folks. Jeff talked briefly about the budgetary issues facing FDA. And I think it's critically important that everybody come together and do what we can to ensure that as large a portion as possible from FDA's budget comes from the appropriations process. I know that there are coalitions out there actively pursuing that. They're bringing all stakeholders together, and, again, I think looking forward into MDUFMA III and IV, should that time arise, it's going to be important that everyone come together and ensure that FDA has the necessary resources from congressional appropriations so that we can continue to flourish as an industry, provide products that improve the quality of care for patients around this country and around the world, and also make sure that FDA has the necessary resources to conduct the critical role that they play in society and within our industry.
And so, again, I want to thank FDA for their tireless efforts over the last year and a half or so and I appreciate the opportunity to provide the remarks on behalf of MDMA. Thank you.
DR. SHUREN: Thank you. Let me ask Janet Trunzo to come forward.
MS. TRUNZO: Thanks. Thanks, Jeff. On behalf of AdvaMed, I am very pleased to be here today to make a statement at the FDA's public meeting on the reauthorization of MDUFMA.
Just a quick note about AdvaMed. We represent over 800 innovators in the industry. Over 70 percent of our members are small companies, and we represent 90 percent of the $68 billion of health care technology products consumed annually in the U.S. and 50 percent of that consumed worldwide.
We also believe that the user fee program that was enacted in 2002 has been successful in bringing important technologies to patients sooner, and that is the bottom line for what we're dealing with here today. The medical device industry is on the cutting edge of new technology development. We recognize the important statutory role that FDA plays in reviewing the scientific basis for new products prior to marketing. We believe in a strong FDA, and we also believe that FDA at the same time needs to have the necessary resources to fulfill that statutory function in a sound and effective way. And we are pleased that MDUFMA I was able to accomplish that.
Over the past five years, FDA has received significant increase in funding for the device review program, including necessary funds for CDRH, for CBER, and for ORA. This funding came from a combination of user fees and increased appropriations. With these added funds, the FDA has been able to hire and train additional staff, add scientific experts to the CDRH fellowship program, and to enhance the IT, the information technology systems that were discussed earlier.
The result is that today FDA has met the quantitative performance goals outlined in the goals letter under MDUFMA I, and that is good news because it means that patients are getting access rapidly to the newest, most proven technologies.
So to build on that successful start that we had in MDUFMA I, over the past year, together with my colleagues from MDMA and MITA, formerly NEMA, we have been working with FDA to develop a new reauthorization package that will strengthen the program even further. We believe we've accomplished that, and we are fully supportive of the entire package that FDA has presented earlier today.
I'm not going to go over the details of the package. Jeff did a nice job doing that already. But I would like to highlight some of the features of the program that I think are important. When Jeff reviewed the performance goals, he talked about the quantitative goals and then he talked about the qualitative goals, and then he talked about some of the enhancements in money.
I just want to make a few comments about the goals, because the quantitative goals and the qualitative goals work together, and we believe that when you put these two goal packages together, you come up with a process that's much more efficient, and it maintains the high quality associated with the review of medical device submissions.
So most important in these qualitative goals is FDA's commitment to an interactive review process. This is designed to build more interaction between FDA reviewers and the sponsors. FDA reviewers will have a mechanism to obtain clarifications or request additional information that's readily available while continuing the review process. This is designed to increase the efficiency of the review process, and, at the same time, increase the level of understanding between the applicants and the reviewers so that both parties understand FDA's expectations and it minimizes surprises at the end.
So we have the interactive review process. Coupled with that, we have FDA's commitment to meet on a timely basis, pre-submission, we have the increased commitment to add more guidance documents to FDA's repertoire of guidances, and we have the commitment to enhance the scientific expertise of the reviewers. So you take all of these together -- interactive review, more guidance documents, timely scheduling of pre-submission meetings, and well-trained reviewers with the appropriate scientific expertise, what you get at the end is a quality submission and a streamlined review. And I think that is an important bottom line here, because that means that these products will get to patients in a timely way.
So I'm not going to talk about fees. We've said a lot of things about the stable and predictable fee structure that's been created, which is very good, and I'm not going to go into details about the other elements of the goals. But I just want to make a closing statement that all of these things together we believe, AdvaMed strongly believes, that this program will enable FDA to further improve its performance, both qualitative and quantitative ways, which I said before work together, and at the same we've got this stable and predictable fee structure, and the benefits are both for FDA and for the device industry. But more importantly, at the end of the day, American patients will be the true beneficiaries of this program, because the patients will have timely access to this technology.
So I want to thank my industry colleagues. I want to thank the FDA staff who we've all worked with -- worked many, many meetings over a course of many months. Some of the meetings were difficult; some were not. But at the end of the day, we worked well together to come up with a package that we believe is going to improve the program for the next five years, and we look forward to continuing to work with the FDA in the future. Thank you.
DR. SHUREN: Thank you. I didn't see the door open, but I'll check again. Is Kelly Slone here?
It is now just about 1:15. Why don't we go ahead and just take a 15-minute break? We'll start up again. I'll ask all the registered speakers to certainly please stay. We will then open up -- if Kelly is here, we'll have Ms. Slone present. If not, we'll move straight into the open public session.
(Recess)
DR. SHUREN: I'll ask everyone to take their seats. We'll go ahead and get started. Let me ask if Ms. Slone is here? Kelly Slone?
All right. Well, then, we'll move to our open public session, and let me ask if there any members of the public who wish to make a statement or have any questions for the panel? Go ahead. And I ask when you come up to please introduce yourself and to give your affiliation.
MR. LANPHEAR: Good afternoon. My name is Norman Lanphear. I am the manager for public health and manpower for the American Academy of Ophthalmology.
The American Academy of Ophthalmology is the world's largest association of eye physicians and surgeons -- eye MD's -- with more than 27,000 members worldwide. More than 93 percent of the over 17,000 practicing eye MD's in the United States are members of our Academy.
U.S. Food and Drug Administration approved ophthalmic devices such as intraocular and contact lenses have contributed significantly to our members' ability to help their patients, therefore, in the rapidly growing device industry, it is important to ophthalmology that the FDA continue to have a well-resourced ophthalmic device program. The user fee program is one way of providing additional and necessary resources to improve timely device review and ensure that safe and effective products get to market as quickly as possible. The Academy commends the FDA for fostering a process that encourages interaction between the Agency and medical device manufacturers on device product reviews.
The American Academy of Ophthalmology supports the U.S. Food and Drug Administration's proposed recommendations to Congress, which represent a compromise that involved key stakeholders for reauthorizing the Medical Device User Fee and Modernization Act, MDUFMA II. Thank you very much.
DR. SHUREN: Thank you. Are there other members of the public who wish to make a statement or have questions? Hi, you wouldn't happen to be Kelly Slone?
(Laughter)
MS. SLONE: Yes. You're running early here.
DR. SHUREN: We're very efficient. This is new and improved MDUFMA II, FDA.
MS. SLONE: Are you ready for me?
DR. SHUREN: Oh, we're ready for you. Come on up.
MS. SLONE: Good afternoon, everybody. This is really impressive that FDA we're ahead of schedule here. That's really wonderful. My name is Kelly Slone, and I'm the director of the Medical Industry Group for the National Venture Capital Association, and, although we weren't part of the negotiations as a stakeholder from that perspective, the venture capital industry feels like we're a very huge stakeholder in medical innovation and feel that this work is really important and that's why we're here.
Venture capital plays a very important role in medical innovation. In the life science sector itself, which includes biotech and medical devices, this sector set pace for investing in 2006 for the venture capital industry, investing over $7.2 billion compared to $6 billion in 2005. And you can see the breakout. Biotech has historically been much larger than medical device at $4.5 billion. But in the medical technology area $2.7 billion were invested in 2006, which is a significant jump and an area that continues to grow significantly in venture capital investing.
As you can see, between 1998 and 2006, life sciences were about 17 percent of investments, and now it's up to 28 percent of investments. But just in the first quarter of this year, it's jumped up to 39 percent, so you can really see the growing trend here in this sector.
The venture capital industry, again, is really committed to this space. We're committed to finding the cures to combat major diseases and advancing medical innovation. The venture capital industry drives usually typically the next generation of medical technologies, typically focusing on real novel/disruptive technologies, first-ever-seen types of technologies.
Venture-backed life sciences companies produce enormous health gains, cost savings, and also create jobs. The future of investment in advancing medical innovation depends on a balanced, predictable regulatory environment. Venture-backed life science investments, again, it's really important that we have a balanced, predictable regulatory environment. Some of the key priorities for NVCA in the life science space is to really look at where regulatory changes can take place to help advance medical innovation, and those three areas are obviously FDA, a more recent CMS payment, and patents. But over the last several years, the main priority has been improving the FDA review process.
And the main reason why is when venture capitalists look at an investment, and especially now that technologies are getting more complicated, they really have to look at, you know, the risk of assessment is looking at the regulatory environment. They have to look at the predictability. And if the regulatory process is unpredictable, that really weighs in their decision making to invest in a complicated technology, even though, from their perspective, it looks like a promising technology.
The market and technology risk are intrinsically more assessable than the regulatory risk. Understanding the regulatory risk early in the process is critical to health care investors. The result is that high value technologies will not receive investment, because of the unpredictability of a product approval process of a complex technology.
The novel technologies of challenges at the FDA include that most of these technologies that are disruptive and truly novel are technologies that the FDA has never seen before. Because they're uniquely complex, they're much harder to get your arms around about where should the agency put it, who should approve it, you know, what agencies should approve it. And so due to the novelty, there's a lack of unclear precedent in all these challenges, and this often creates a mutual frustration between the sponsor and the FDA because of this novelty.
So, again, we were not part of the negotiations, but looking at the recommendations, one thing that was real positive for us looking at this, and something that actually have been working with the FDA on, is that we're encouraged that we're seeing a goal structure that is both qualitative and quantitative. And I think the main recommendation that we were most pleased to see is that the willingness to have pre-submission interaction between the sponsor and the FDA without having the review clock stopping and starting. We feel this is very, very important, especially for novel technologies, given the complexity. And the most upfront, most predictable point would really help investors make a determination as to whether or not to invest in these types of technologies.
And then, as a note, we'd encourage senior-level staff at CDRH to also be involved and have oversight over those pre-meetings, and a dedicated review team on the onset of that review process to sort of manage it through we think could be beneficial for everybody, FDA and the applicant. And we believe that by doing this will help assess the risk of investment for future novel technologies. Thank you.
DR. SHUREN: Thank you. Any other statements or questions from the public?
Well, with that again, let me thank all of you for participating in today's public meeting. Again, the public docket will be open until May 18th. If you do have comments, please feel free to submit them to the docket. We will review everything that is sent to us. Again, thank you and have a good day.
(Whereupon, at 1:40 p.m., the MEETING was adjourned.)
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