US user fees: 510(k)s spared major hike as PMAs (Pre-market Approvals) rise 16%
This article was originally published in Clinica
The US FDA is raising device user fees by 15.7% in all categories except 510(k)s in fiscal year 2005, the agency disclosed in a closed door meeting with industry last week. The increase for 510(k)s will be a mere 0.6%, bringing the fee to $3,502 for large companies and $2,802 for small companies.
Every PMA submission for large companies will now cost $239,237. Small companies will pay $90,910. The FDA had initially forecast an 18.3% increase for most fees and a 2.9% increase for 510(k)s.
The change comes into effect on October 1 2004, the start of the federal fiscal year. The FDA said the slightly lower increase was made possible because it increased the number of PMAs expected for 2005 by three, based on last year's experience, when more full PMA fees came in the door in September.
Next year's user fee increase also takes into account an inflation adjustment of $26m. But next year's fees were not affected by two other adjustments allowed in statute - one for changes in workload and the other a mathematical calculation known as the compensating adjustment that ensures that revenue amounts remain stable from year to year.
The FDA has announced that these numbers cannot be calculated until all of the numbers are in on fiscal year 2004 and thus will not be applied until 2006. Although this forestalls a further increase of an estimated 16% in fees, it ensures that fees will go up by at least that much in 2006.
"While we appreciate FDA's efforts to try and minimise the impact by delaying the compensating adjustment, this strengthens our case that legislative modifications are needed to stabilise the fees permanently," said Mark Leahey, executive director of the Medical Device Manufacturers Association.
The trade group wants the Medical Device User Fee and Modernization Act (MDUFMA) altered to ensure "reasonable fees, true enhanced performance from FDA and additional Congressional appropriations", he said. "If these goals cannot be achieved, we will be forced to let the programme sunset," he added.
The numbers released last week "are going in the right direction," AdvaMed spokesman Jeff Ezell noted, but added that the trade group had been pushing for a single-digit increase based on its own estimate of likely fee collections next year. An internal poll of members suggests that a few more PMAs will be filed next fiscal year than has been projected by the FDA, which bases its forecast on historical trends.
The Medical Device Manufacturers Association (MDMA) reacted more strongly to the news on user fees. "While we appreciate FDA's efforts to try and minimise the impact by delaying the compensating adjustment, this strengthens our case that legislative modifications are needed to stabilise the fees permanently," MDMA executive director Mark Leahey said.
"Over the course of just two short years, the fees have risen over 55%. This simply cannot be sustained by the innovative sector of the marketplace," he said in an alert to members. He added: "If the FDA's performance goals cannot be achieved, we will be forced to let the programme sunset."