More Than a Billion-Dollar Gap Between FDA and Industry User Fee Positions

article image
ARTICLE SUMMARY:

According to materials obtained by Market Pathways, FDA proposed about $2.5 billion in MDUFA V user fees over five years in the latest negotiation meeting with industry. That’s more than double what industry has recently proposed to reauthorize the program and FDA’s haul from the current user fee program. It’s a “non-starter” for industry, according to a source.

[Sign up for a free trial to Market Pathways here: www.mystrategist.com/trial

FDA is purportedly proposing about $2.5 billion in total user-fee collections from fiscal years 2023 to 2027, according to materials obtained from a closed-door negotiation with industry this week. The FDA MDUFA V offer, made during a September 22 meeting, includes the $1.117 billion inflation-adjusted baseline of user fee collections ($223.5 million per year) that is already authorized under the current MDUFA IV program, plus either about $1.319 billion or $1.567 billion in added fees, linked to two different scenarios posed by FDA, according to the documents.

This comes about a month after industry trade groups made a much different offer: keeping total fee collections at about the $1.117 billion (MDUFA IV inflation-adjusted) level, and also designating another $127.04 million in MDUFA IV leftover funds to help shore up the reauthorized program. FDA’s proposal is a “non-starter” for industry groups, according to a source close to negotiations who spoke on the condition of anonymity. (FDA and industry negotiators had agreed they wouldn’t speak to media during the negotiations.)

The source suggests that the agency’s proposal isn’t tied to any quantitative performance improvements. It is primarily aimed at 1) returning premarket review performance to “pre-COVID levels,” and 2) launching the TPLC Advisory Program (TAP) pilot.

The device center has made a major push for TAP, both in the closed-door meetings and in public. CDRH Director Jeff Shuren recently told Market Pathways that the program would be a “game changer” for device development in the US. According to CDRH, it would entail a concierge-style approach, with outsized, real-time engagement, and the ability to involve multiple stakeholders including payors and patient and provider groups in early discussions with FDA and with sponsors of participating devices. But industry representatives say they remain very skeptical that the program will deliver sufficient improvements to the review program to warrant the extra user fee costs.

The recent industry proposal allocates a total of $5 million from carryover funds to launch a “small TAP premarket pilot with defined success measures.” FDA’s proposal, meanwhile, appears to include more than $100 million in operating costs for the TAP pilot, and more than that in staffing salary costs, according to the materials obtained from the September 22 meeting. Of the agency’s two proposed scenarios, the more expensive one would make all devices that newly qualify for the Breakthrough Device Program or the Safer Technologies Program (SteP) eligible for TAP and the less expensive one would make up to 25% of those devices eligible.

Timeline Tightening

The upshot: a significant gap remains between the two sides seven months into the negotiations. Typically, FDA and industry try to wrap up the every-five-year negotiations by the fall so they can send a full agreement to Congress by January. For instance, for MDUFA IV, the two sides reached an “agreement in principle” in August 2016, before sending a final agreement to Congress in January 2017. The agreement was included in the FDA Reauthorization Act, enacted in August 2017.

The two sides started at a major disadvantage this year. Due to COVID-19 delays, they weren’t able to start negotiation meetings until February of this year, five months behind when talks got going for MDUFA IV. That delay, plus the far-apart positions, is making it increasingly likely that the talks could extend into 2022. But both sides remain committed to reaching an agreement for inclusion in FDA reauthorization legislation that would need to pass Congress by September 30, 2022, when MDUFA IV expires.

The next FDA-industry session is scheduled for October 7, according to the source. FDA typically posts time-delayed meeting minutes for the ongoing talks, but it has been several months since the agency posted minutes, and that was for an April 28 meeting.

×



This article is restricted to subscribers only.

Sign in to continue reading.

Questions?

We're here to help! Please contact us at: