FDA Medical Device User Fees Rise as Part of Reauthorization

On Oct. 1, the new 2018 U.S. Food and Drug Administration (FDA) user fees go into effect. Diagnostics manufacturers will notice increased medical device user fees, including a doubling of 510(k) fees and the introduction of a new fee for de novo 510(k) applications. However, small diagnostics companies are eligible for some significant discounts.

The FDA Reauthorization Act of 2017 reauthorizes the user fees for five years— through fiscal year 2022. G2 assessed some of the significant features of the reauthorization including the fee increases and the FDA's new performance goals.

Rising User Fees
On Aug. 29, the FDA published the fee rates for fiscal year 2018 (effective Oct. 1, 2017). Increases were seen for all registration-related categories. The standard user fee for 510(k) applicants is $10,566; $310,764 for premarket approval (PMA) user fees; and $93,229 for the entirely new de novo classification request user fee

For de novo classification requests, the reauthorization sets the new user fee at 30 percent of the PMA user fee set each year, which is significantly more than the a 510(k) premarket notification submission, which will be 3.4 percent of the PMA user fee (and was 2 percent of the PMA user fee in the 2012-2017 reauthorization). Some experts fear the de novo classification requests may slow efforts to bring innovations to market.

The reauthorization eliminates the FDA's ability to grant user fee waivers or fee reductions, even if it is in the interest of public health. The existing fee waiver for a small business (defined as gross sales of $30 million or less) submitting its first PMA remains. Small businesses (defined overall as having gross sales of less than $100 million) do see discounts for all registrationrelated categories, even if it is not their first submission. These discounts are substantial, but reduced from previous years.

There are, however, no waivers or reductions for small business establishment registration fee, which was announced to be $4,624.

Speedier Reviews
Along with the new user fee, FDA has committed to new performance goals for the review of de novo classification requests. Under the new performance goals, between 2018 and 2022 the FDA plans to increase the percent of decisions within 150 "FDA days" from 50 percent to 70 percent of requests. It has been reported that in practice, the FDA takes an average of 10 months to a year to issue a decision. The new de novo user fee should enable the FDA to commit additional resources to these reviews and significantly reduce the time to decision. However, the number of de novo classification requests is likely to increase over the next several years with the rise of new technologies potentially entering the marketplace.

Takeaway: The diagnostics industry will see increased medical device user fees starting Oct. 1 as part of the five-year reauthorization of the agency's fees.