Orange County medical device makers are awaiting the outcome of closed door talks between the Food and Drug Administration and industry officials about a user-fee program they contend hasn’t worked.
Device makers started paying fees in 2003 as a way to help improve the review process for their products by funding more FDA staffers.
Executives polled by the FDA earlier this year said the user fees haven’t resulted in faster, more reliable product approvals.
Industry officials and the FDA now are evaluating the program, in which fees have shot up more than 80% since it began in 2003.
That’s thanks to Congress, which saw a funding shortfall in covering about 80% of the cost of reviewing devices.
Starting in 2007, large companies are set to pay $281,000 per application, up from $154,000 in 2003. Small companies, device makers with less than $30 million in revenue, are expected to pay $107,008 per application.
Some have suggested scrapping the user-fee program. But some device makers say paying fees isn’t the issue.
“We expect improved performance,” said Andy Stapars, vice president of global public policy for Santa Ana-based eye products maker Advanced Medical Optics Inc.
Patricia Garvey, who recently retired from Irvine heart valve maker Edwards Lifesciences Corp. to become vice president at industry group AdvaMed, told the Associated Press that there was “a real consensus among industry that we haven’t seen the type of performance we expected.”
AdvaMed and another Washington, D.C.-based trade group, the Medical Device Manufacturers Association, are involved in an effort to reduce the fees.
AdvaMed represents more than 1,000 companies, including Edwards Lifesciences and Advanced Medical.
James Mazzo, Advanced Medical’s chief executive, is on AdvaMed’s board.
Some Gains
According to the FDA, the pace of approvals has picked up, ever so slightly, according to the Associated Press.
New medical device approvals took an average 294 days in 2004, the latest year for which numbers are available, the FDA said.
In 2001, approvals took an average of 346 days.
Then there’s the issue of timeliness in reviewing an application once it’s submitted.
Regulators aim to review at least half of all medical device applications within 180 days of submission. FDA data show that the number of applications being reviewed within six months of submission fell to 39% in 2004 from 49% in 2002.
Device makers are concerned that their regulatory program could become pricey like the one for drug makers, Garvey said.
Drug makers pay more than 60% of their approval process expenses.
They’re set to pay $896,000 for each new drug they submit to the agency next year. The regulatory process for drug makers is more complex than for most devices.
Device makers pay an estimated 15% to 18% of their approval expenses, according to Mark Leahey, executive director of the Medical Device Manufacturers Association, which mainly represents smaller device makers.
Joe Kiani, cofounder and chief executive of Irvine device maker Masimo Corp., is vice chairman of the group’s board.
“Our focus is making sure that (device makers) don’t fall into the trap of prescription drug user fees,” Leahey said.
Stablizing Funding
Statistics show that fees from drug companies are projected to make up two-thirds of the FDA’s review program budget next year, up from 7% in 1993, Leahey said.
Higher fees, he argued, “only add to the escalating cost of healthcare.”
AdvaMed,whose other members include Medtronic Inc., which has a Santa Ana heart valve plant, and Johnson & Johnson, whose local operations include Irvine’s Advanced Sterilization Products and Biosense Webster in Diamond Bar,has proposed a solution that it says would stabilize funding for the FDA with lower user fees.
The proposal calls for the agency to charge fees for some services it provides for free, including plant inspections.
The FDA would reduce product approval fees, with the idea that service fees would make up for the cut.
One FDA official interviewed in the Associated Press article was skeptical.
There’s been talk that the user-fee program could be killed. The program is due for federal budget reauthorization next year.
Congress has asked industry officials and the FDA come to an agreement by next summer. It has to vote to reauthorize the program before September 2007 for it to continue.
