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Resellers, manufacturers brace for new user fees

by Loren Bonner, DOTmed News Online Editor | December 13, 2012
Some medical manufacturers might be surprised to see an invoice from the U.S. Food and Drug Administration this month.

The FDA Safety and Innovation Act that President Obama signed into law this summer, includes new fees and payment procedures for medical device manufacturers for fiscal year 2013, which began Oct. 1.

"The fee was a shock to us," Joyce McCrary from St. Petersburg, Fla.-based Choice Medical Systems Inc. told DOTmed News.

Choice Medical buys and sells new and pre-owned ultrasound equipment. Its main market is in the U.S. and according to McCrary, because there are a couple of products, like probes, that they bring in from overseas, they are required to register every year with the FDA.

But until now, they have never been asked to pay a registration fee.

One of the key amendments in the law is the expanded definition of the types of manufacturers that must pay a registration fee. In the new law, all registered medical device manufacturers are required to submit an annual fee of $2,575. Small companies, like Choice Medical, that haven't paid such fees in the past, are worried about how it could affect their business.

"We're not a GE. It's going to impact us as a smaller player," said McCrary.

Understanding the law

Device user fees for both registration and submissions are not new. The Medical Device User Fee and Modernization Act of 2002 established the fees, and they were revised in the 2012 Medical Device User Fee Amendments, or MDUFA III, which is part of the FDA Safety and Innovation Act.

Medical Imaging and Technology Alliance (MITA), an OEM lobby that worked closely with the FDA and other industry partners, like AdvaMed, to negotiate the reauthorization of the user fees with Congress, agreed as a whole that the vast majority of facilities that are registered with the FDA should be required to pay a fee.

"Before it was only a subset that was paying, and now it's larger amount of that group because there are costs associated with the FDA monitoring and running that program," said Brian Connell, director government relations at MITA. "So the general thought is that all establishments should be subject to that fee."

The bill gives the FDA the power to collect user fees that will total approximately $595 million (plus some adjustments for inflation) over the next five years. The additional funding will help offset the costs to the FDA for application reviews and inspections. Specifically, the added revenue will go toward hiring more than 200 full-time equivalent employees, according to FDA literature.

Ted Huss

Fees not new, but they sure are More! Productive Spending?

December 13, 2012 10:41

Just a start of more food for the government rathole of spending and funding employment and pensions of the bureaucracy. I guess a real optimist would expect highly productive results. Measured how?

Oh, sure, the FDA is necessary and logical, but the additional funding just permits a larger shell game. Any guarantee these funds will be spent directly for what they are intended?

Pardon my cynicism.

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