On July 9, 2012, President Obama signed into law the FDA Safety and Innovation Act (FDASIA). The new law implements nearly three dozen provisions relevant to the medical device industry, in addition to reauthorizing the Medical Device User Fee Act (MDUFA III). Reauthorization of MDUFA links higher device user fees with concrete and escalating goals for improving premarket review times, and implements significant changes to how FDA’s performance will be tracked and measured.

FDASIA key points:

  1. Reauthorizes MDUFA – through September 30, 2017 and includes:
  • Higher fees that rise annually
  • More demanding, concrete targets for FDA premarket review – 65% of 510(k) submissions in FY13 should receive substantive interaction within 60 calendar days
  • Quarterly and annual reports on whether FDA is meeting goals
  1. Curbs FDA’s attempt to redefine when new 510(k) filings are required for device modifications
  2. Streamlines the de novo process – companies can now apply  for de novo downclassification before receiving an NSE decision
  3. Halts FDA’s effort to reject IDEs where the study might not support clearance or approval
  4. Softens conflict of interest rules for Advisory Panel members
  5. Responds to modern technology – Guidance Document on promotion via the internet and social media expected within the next 2 years; risk-based framework on health IT, mobile medical apps, in next 1.5 years
  6. Gives FDA specific instructions on required policy actions:
  • 5 reports to Congress, plus annual MDUFA reports
  • 4 Guidance Documents
  • 2 rules
  • 4 additional strategies/programs
  • 1 Federal Register notice, 1 public meeting, 1 report on website

Adopts new user fees and escalating performance targets

After extensive negotiations between FDA and industry, MDUFA III reauthorizes medical device user fees in effect from October 1, 2012 through September 30, 2017. Under the new user fee law, FDA will collect at least US$595 million from industry. Higher fees will be required for Premarket Applications (PMAs), 510(k) notifications, and establishment registration fees, in addition to requests for classification and PMA supplements and annual reports. Although device firms will see fees rise each year, on top of expected annual inflation increases, these higher fees come with significant commitments from FDA to meet rigorous performance goals.

In a Commitment Letter specifically incorporated into the new law, FDA is expected to meet more stringent benchmarks for the amount of time it takes to review device premarket submissions. For both PMAs and 510(k)s, FDA’s MDUFA obligations require that it hit two new benchmarks: (1) for each fiscal year, FDA should provide substantive interaction to applicants for a minimum percentage of submissions within either 60 (510(k)) or 90 (PMA) actual, calendar days of filing; (2) for each fiscal year, FDA should render a substantive decision on a minimum percentage of submissions within 90 FDA Days for 510(k)s, 180 FDA Days for PMAs with no Advisory Panel meeting, and 320 FDA Days for PMAs with an Advisory Panel meeting. The minimum percentage targets are delineated in the Commitment Letter, with expectations on the agency increasing over time. Benchmarks are also spelled out for different types of PMA supplements, CLIA (Clinical Laboratory Improvement Amendments) waivers, and a variety of submissions associated with Biologics Licensing Applications (BLAs). MDUFA also establishes shared outcome goals with FDA and industry for the total time to a decision on PMAs and 510(k) submissions.

While extracting pledges from FDA may be a move in the right direction, it remains to be seen whether the agency can live up to its commitments. Requiring that FDA reach a substantive decision within a certain timeframe could in theory increase the agency’s willingness to issue Not Approvable or not substantially equivalent (NSE) decisions, with adverse effects on applicants. Based on prior experience, sponsors should still expect multiple rounds of questions on applications.

Even if a certain percentage of submissions receive decisions in a timely manner, some submissions seem to fall through the cracks. The new FDA-industry MDUFA commitments have a solution for this scenario: when FDA fails to render a decision on a submission in the expected number of FDA days, the agency must provide written comments and grant a meeting or teleconference to an applicant. Under this new “no submission left behind” policy, 510(k) submissions without a decision after 100 FDA Days can expect to receive feedback from FDA, with PMA submissions receiving feedback when a decision is overdue by 20 FDA days. At the very least, this new commitment should oblige the agency to provide some substantive feedback to applicants whose submissions seem to linger in FDA’s court. Of course, Congress cannot legislate the quality of the feedback that FDA will provide and it is hoped that these requirements do not lead to timely but unhelpful feedback.

Quarterly and annual reports required, along with an independent assessment of the device premarket review system

Apart from simply dictating that FDA meet concrete performance goals, the new law requires that FDA aggressively track and report on its MDUFA performance. Industry should expect to see quarterly and annual reports from the agency with detailed information on FDA Days, Industry Days, and total days to a decision on different types of premarket submissions, broken down by both averages and quintiles. Numerous other metrics will also be included in these periodic reports, including proportions of 510(k) submissions rendered NSE (not substantially equivalent), average number of IDE amendments prior to approval, and the number of pre-submissions that require a meeting. Congress also requires that FDA report annually on how it is applying its MDUFA-earned resources towards meeting negotiated performance goals.

More data on the specifics of FDA’s performance should provide Congress and industry with needed insight into areas requiring further improvement to ensure medical devices reach the market in a timely and predictable manner. In addition to more vigorous oversight, the new law also requires FDA to commission an independent assessment of its performance in the premarket review of medical devices. This added pressure should continue to enhance agency accountability for efficient, quality, and predictable outcomes.

Although much will depend on FDA reporting on its metrics in a prompt and accurate manner, this information could at the least give industry a better sense of what exactly is happening inside the agency. While FDA has had an uncanny ability to obfuscate data on device reviews in the past, it is hoped these new requirements will truly reflect what is occurring in the review process. Armed with additional information, stakeholders will theoretically have better prospects for holding FDA to hitting its promised targets. The new funds negotiated through MDUFA will reportedly allow CDRH to hire an additional 200 device reviewers, with fewer hurdles than the normal hiring process. Given the amount of time needed to hire, train, and acclimate this many new reviewers, stakeholders may not feel the impact of a larger FDA review staff until several years down the road.

FDA Safety and Innovation Act also includes wide range of provisions affecting industry

In addition to the user fees and associated commitments enacted under the MDUFA reauthorization, the FDA Safety and Innovation Act also promulgates a number of new provisions impacting the medical device industry. From allowing profits on non-pediatric Humanitarian Device Exemption devices to requiring that postmarket surveillance studies begin within 15 months of receiving a Section 522 order, these device provisions will have both welcome and less favorable impacts on industry.

Requires withdrawal of the 510(k) modifications Draft Guidance

While FDA had already signaled its intent to issue a new draft of the July 27, 2011 Draft Guidance on when changes made to a cleared device require a new 510(k) submission, the new law requires that FDA outright withdraw the previously issued draft. FDASIA also requires that FDA submit a report to Congress in the next year and a half on its 510(k) modification policies. FDA will be disallowed from issuing a new Draft Guidance or regulation on the topic until one year after its report to Congress.

In both premarket review and the compliance arena, the agency’s prior 1997 Guidance Document will be in effect for at least the next year, and possibly for several years to come. Given the major problems raised by FDA’s new proposed approach to assessing when a new 510(k) is needed for a device modification, this development will ensure that stakeholders have input before any major changes in the standard for requiring clearance after a device modification are put into effect. Observers should expect FDA’s report to Congress by January 2014.

Sanctions IDE approval short of trial supporting clearance or approval, but allows FDA to place a device trial on clinical hold

Repudiating FDA’s recent effort to deny Investigational Device Exemption (IDE) approval when a clinical trial in FDA’s view might not fully support a device clearance or approval, the new law explicitly prohibits the agency from disapproving an IDE application based on this reason alone. FDA may not reject an IDE solely because the investigation would not support device approval, a de novo finding, or substantial equivalence, or any data requirement associated with those decisions. This much needed change should allow sponsors the freedom to gather needed information in device trials. Nevertheless, most device sponsors do not readily initiate an expensive clinical study if FDA has indicated that the study may not support some type of marketing clearance. Therefore, whether this provision will actually lead to the initiation of more studies where FDA and the sponsors have not reached a consensus remains to be seen. 

It should also be recognized that the FDASIA also grants FDA new authority to place a clinical hold on device trials that pose an unreasonable risk to the safety of subjects, or for other reasons FDA may specify by regulation, similar to FDA’s authority regarding drug trials. This prevision presumably would not generally apply to devices regarded as non-significant risk (NSR), as those devices by definition would not normally be expected to generate unreasonable risks to patient safety. However, this provision theoretically could be used as the basis for denying an IDE study which FDA believes is not medically or scientifically sound.

Accelerating process improvements for de novo downclassification

While FDA proposed limited changes designed to streamline the de novo downclassification process in an October 2011 Draft Guidance, FDASIA actually substantively changes the existing process and may actually help improve what is clearly a broken procedure. Sponsors may now submit a de novo petition directly to FDA, without first submitting a 510(k) notification and then receiving a Not Substantially Equivalent (NSE) determination. De novo petitions should include a draft special controls document supporting downclassification to class II. Although the de novo process has been unfortunately underutilized due to agency delays and cumbersome procedures, under the new law, sponsors can directly file de novo petitions with the agency and expect a response within 120 days. With the rising number of NSE decisions, it is very important that the de novo process be made more user friendly and that the process for downclassification be expedited rather than taking the same amount of time as many PMA approvals.

Allows profit on HDEs not intended solely for pediatric populations

Previously, sponsors could only make profits on those Humanitarian Device Exemption (HDE) approvals for pediatric indications. FDASIA lifts that restriction, allowing profits on HDE devices without an applicable pediatric population for treatment or diagnosis, so long as the sponsor follows FDA’s procedures for determining the number of devices needed annually to serve a population of 4000 patients in the U.S. This practical change provides more financial incentive for manufacturers to develop devices serving small, targeted populations.

Emphasizes least burdensome standard for data requests and encourages use of clinical data from abroad

Despite escalating data requests from the agency, FDASIA reemphasizes Congress’ intent that the agency request the minimum amount of information that would support a premarket approval or substantial equivalence finding. The new law also attempts to increase FDA’s willingness to accept clinical data collected outside the United States (OUS). Under a new section of the Federal Food, Drug, and Cosmetic Act (FDCA), FDA should accept OUS clinical data, provided that a sponsor demonstrates those data are adequate. If FDA finds those data inadequate, it must provide the sponsor with a written justification. On the whole, these new provisions will hopefully decrease data burdens on sponsors. Sponsors should keep in mind, however, that FDA can still reject OUS data by relying on a finding that the OUS data inadequately reflect conditions in the U.S. Finally, it is clear that the term ”least burdensome” can never be generally defined and it means basically whatever FDA says it means at the time. Congress can only urge FDA to impose the least burdensome requirements but FDA’s stock answer has always been that the agency will not compromise safety or efficacy by allowing a less burdensome study. Thus, while Congress is commended once again for trying to set a path for FDA, it is clear that FDA has not in the past, and will likely in the future follow that path it perceives as necessary to demonstrate the safety and efficacy of a device based on valid scientific evidence.

Facilitating international engagement

FDASIA also authorizes FDA to enter into agreements with other countries seeking to harmonize regulatory standards on issues like inspections and common international labeling symbols. When FDA participates in the International Medical Device Regulators Forum, it must keep the public apprised of the forum’s activities and solicit comments, where appropriate. These provisions do not appear to radically change FDA’s ability to participate in international harmonization efforts.

Requiring written justification for significant decisions (when requested) and setting timelines for appeals

In a new FDCA provision, FDASIA requires that CDRH provide written documentation of its scientific and regulatory rationale for “significant decisions” on 510(k)s, PMAs, or HDEs, when requested by a sponsor. The rationale should document resolution of any controversies or differences of opinion. The practical effect of this provision will depend heavily on how FDA defines which of its decisions are significant, as well as on whether provided rationales are sufficiently robust and timely. Ideally, this additional mechanism for increasing agency accountability would promote consistent decision-making. In practice, it may encourage more timely informal feedback. The new law creates statutory timelines for appeals of such “significant decisions” which are more stringent than the recent appeals Draft Guidance. Under FDASIA, requested appeal meetings of “significant decisions” should be scheduled within 30 days. Decisions on “significant decision” appeals should be expected 30 days following an appeal meeting or teleconference, or 45 following an appeal with no meeting. Agency adherence to these new timelines will again depend on how FDA defines “significant decisions” on 510(k)s, PMAs, and HDEs. This provision is a clear reaction to the present appeals process within CDRH where companies can wait for up to a year or longer for appeals of important decisions on clinical study requirements, NSE decisions, PMA disapprovals, and other critical issues. Hopefully, these provisions can help expedite the present frustrating appeals process.

Encouraging postmarket monitoring, assessment, and unique device identifier improvements

First, FDASIA creates a new program for FDA to: more systematically track information regarding device recalls, streamline recall audits, and develop more detailed criteria for evaluating recall corrective action plans. The new law also formally expands the Sentinel postmarket monitoring system to medical devices, subject to stakeholder input on appropriate implementation. Finally, FDASIA puts pressure on the agency to finalize the newly proposed Unique Device Identifier (UDI) regulation within 6 months of when the public comment period closes, setting additional timelines for actual implementation. Taken together, these postmarket provisions should put stakeholders on alert that FDA will be increasing its attention on postmarket compliance and enforcement even more than its heightened focus in recent years.

Mandates Section 522 postmarket surveillance begin within a set timeframe

Boosting FDA’s Section 522 postmarket surveillance authority, FDASIA now requires that sponsors begin postmarket surveillance within 15 months of receiving a Section 522 order. While the new provision acknowledges that the negotiation and study initiation process will not be instantaneous, a hard 15 month deadline may not be realistic in all cases. FDA has shown its willingness to increasingly rely on postmarket surveillance to address agency concerns, including recently for metal on metal implants and surgical mesh for certain indications. Manufacturers should be prepared to begin negotiations with the agency promptly after receiving any Section 522 order.

Allows reclassification by administrative order and clarifies standards on custom devices

Attempting to encourage FDA to finally complete the task of reclassifying all preamendment devices, FDASIA now allows the agency to reclassify a device by administrative order, rather than by regulation. As appropriate, stakeholders will still have input in the reclassification process, as FDA will need to publish any proposed reclassification order in the Federal Register, complete with a discussion of valid supporting scientific evidence, as well as hold an advisory panel meeting and consider public comments. Additionally, as discussed in a recent Device Alert, the new law clarifies standards regarding the custom device exemption, which in its enacted form no longer explicitly excludes oral facial devices from custom device exemption eligibility.

Reauthorizes third party inspections and review, with reaccreditation for reviewers

Encouraging the use of resources outside FDA to meet agency goals, FDASIA reauthorizes both the third party review and third party inspection programs. Third party reviewers will now need to be reaccredited every 3 years. In the next several months, FDA is expected to publish criteria in the Federal Register for reaccreditation. To the extent that third party review helps improve the efficiency and effectiveness of the premarket review program, stakeholders should endeavor to ensure that the reaccreditation process is appropriately streamlined.

Requires guidance on health IT, mobile medical apps, and promotion via the internet and social media

Under the new law, stakeholders should expect FDA to work with the FCC to propose a risk-based strategy for regulating health information technology (HIT), including mobile medical applications, by 2014 in a manner that “promotes innovation, protects patient safety, and avoids regulatory duplication.” This new strategy should be more comprehensive than last year’s controversial Draft Guidance on mobile medical apps, and may include the input of a diverse working group to include start-up companies and venture capital investors. In addition to a new strategy on HIT, stakeholders should also expect FDA to issue guidance in the next 2 years on the promotion of FDA regulated products via the internet and social media. Although FDA policies in this realm have rarely kept pace with new technologies, more agency direction should be forthcoming and will be highly anticipated.

Examining FDA IT infrastructure and requiring electronic copies of submissions

In the next year, FDASIA requires FDA to issue a report to Congress on inventorying and improving FDA’s own information technology systems. A GAO report by 2016 will assess FDA’s effort to implement a strategic plan for IT improvement. Although CDRH seems far away from operating with an all-electronic submission system, in the meantime, most submissions to FDA will require an electronic copy, pending final guidance from FDA on standards and exemptions. Submissions requiring electronic copies will include: presubmissions, de novo classification petitions, and submissions and supplements for 510(k)s, PMAs, HDEs, and IDEs.

Clarifies Notice to Industry letters still have to follow Good Guidance Practices

Although CDRH had recently suggested it might make important policy pronouncements in “Notice to Industry” letters, FDASIA requires that Notices to Industry creating or changing polices be treated as Guidance Documents, subject to the same expectations about notice and public comments. While this represents an important move towards agency accountability, the proposed House bill would have gone even farther, requiring agency notice before the issuance of any Draft Guidance, and mandating that Draft Guidance Documents be finalized within a set time period.

Attending to pediatric device needs

FDASIA adopts three provisions potentially related to pediatric devices. First, it authorizes continued demonstration grants to nonprofit consortia for increasing pediatric device availability, with US$5.25 million annual funds through FY17, slightly below previous rates. Second, FDA is required to issue a proposed rule by the end of 2012 regarding tracking pediatric subpopulations for PMA and HDE devices, with a final rule expected by 2013. Third, in the next year and a half, under FDASIA the agency should hold a public meeting to discuss developing new therapies for pediatric rare diseases, then issue a strategic plan 180 days later.

Requiring reports on advancing regulatory science and management

FDASIA attempts to bolster FDA performance within and across centers. In the next year, FDA must prepare a strategy and implementation plan to promote efficient, consistent, predictable, and science-based decisions. A separate report in the next year will outline a strategic integrated management plan for the drug, device, and biologics centers. Both reports are expected to be results and metrics-oriented, centering in part on goals negotiated in MDUFA. While Congress is attempting to steer FDA towards improving from within, to better serve both industry and the public, the speed and quality of these increased efforts remains to be seen.

Rolls back strict Advisory Committee conflict of interest rules, while increasing access for patient representatives in review process

In contrast to the detailed, rigid conflict of interest rules previously in effect for FDA Advisory Committees, FDASIA softens financial conflict of interest rules significantly. The law no longer seeks to track and limit the number of waivers granted for conflicts of interest, and potential conflicts should no longer be a factor in evaluating candidates' suitability for service on an Advisory Committee. FDASIA also increases the role of patient representatives in the premarket review process, allowing non-financially-interested patient participation, as special government employees, in agency meetings with industry on medical product reviews. Given recent controversy regarding the exposure of sponsors’ confidential or trade secret information, it will be interesting to observe how FDA implements this new provision, which is not intended to expose such information or increase the number of product review cycles.

Assessing impacts on small business, mandating increased efforts on nanotechnology, and preventing LDT regulation without notice

An upcoming agency report is expected outlining the impact of the agency’s activities on small businesses. FDASIA also requires FDA to intensify efforts to increase scientific knowledge regarding nanotechnology and its application to medical products. Additionally, the new law requires that FDA report to Congress 60 days prior to issuing a draft or final guidance regarding the regulation of Laboratory Developed Tests (LDTs) under the FDCA, ensuring that industry will have some notice of any changes in the agency’s regulatory stance in this arena. The FDA has indicated that it intends to regulate LDTs at some level, and this provision allows the device industry and clinical laboratories to prepare their positions to either support or fight the FDA initiatives and guidances related to LDT regulation.