I had the opportunity to speak with Terry Sweeney of Philips Healthcare about the upcoming changes in the Medical Device User Agreement. With MDUFA going up in 2018, this information is essential to anyone in the medical device community.
Terry Sweeney: The current budget proposal for 2018 the administration has sent in proposes a significant 31 percent cut to the FDA overall budget 234 million out of the medical device budget for device reviews. So that’s going to have a significant impact on the review process, and the timing of reviews. The availability of reviewers to interact with the agency from the agency, with the industry.
Joe Hage: That’s because they’re doing it so quickly we can afford the extra room, right?
Terry Sweeney: Well, right now they’re fully staffed.
Joe Hage: That was a joke.
Terry Sweeney: Ha, yes. It’s a question of user fees going up, if this budget proposal goes through as it is, the user fees will go up by 71 percent starting in 2018. If there’s a shortfall, that’ll go up even higher.
Joe Hage: So, can I think of it as pay for service?
Terry Sweeney: Oh yes, it’s a user fee, definitely.
Joe Hage: If I don’t need their counsel for clearance I don’t need to pay?
Terry Sweeney: You know, you don’t pay unless you need a clearance, but the question is most products coming to the market do require the FDA review. Very few do not, that are exempt from that review process. PMA pre-market approval, typically our new innovation technologies, could go up to almost $500,000 per submission. To pay for the review of the submission, no guarantee you’ll get it cleared. But likewise, the De Novo and further 510(k) submission cost will go up right along with that.
Joe Hage: Any idea what those are?
Terry Sweeney: De Novo could go up close to $90,000, 510(k) could be up on the order of $20,000.
Joe Hage: Sounds like a start-up will need to do a seed round.
Terry Sweeney: Start-ups should be able to get some reduction in that was based on the size of their company. FDA will cut them a break on that, but larger companies, mid-sized, companies will be looking at those fees.
Joe Hage: Do you believe that this will impact small companies, and actually hinder innovation?
Terry Sweeney: Well again the availability of the reviewers and the ability for a small company to interact with those reviewers, will be impacted negatively if that budget goes through.
Joe Hage: As a counselor to Phillips but perhaps if you were engaging for small clients, how would you help them navigate this new reality?
Terry Sweeney: Not an easy question, they definitely have to get a regulatory adviser to help them out, whether it be on staff or somebody to consult with them that is knowledgeable these new areas. It’s going be a brave new world out there for them, to go through this regulatory scheme. All bets are off! Things are looking good right now in 2017, but 2018 will be totally different.
Joe Hage: Will it be less expensive to get clearances overseas?
Terry Sweeney: Yeah, but it won’t help you get to the United States, which is the big market so it’s the most problematic situation.
Joe Hage: Does it further the argument that it’s better to innovate in Europe first?
Terry Sweeney: You still have to pay for your product clearances in Europe. The industry pays a hundred percent of those, it’s just that we’re not used to having to pay these high fees to the US FDA.