[House Report 107-728]
[From the U.S. Government Publishing Office]
107th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 107-728
======================================================================
MEDICAL DEVICE USER FEE AND MODERNIZATION ACT OF 2002
_______
October 7, 2002.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Tauzin, from the Committee on Energy and Commerce, submitted the
following
R E P O R T
[To accompany H.R. 3580]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 3580) to amend the Federal Food, Drug, and
Cosmetic Act to make improvements in the regulation of medical
devices, and for other purposes, having considered the same,
report favorably thereon with an amendment and recommend that
the bill as amended do pass.
CONTENTS
Page
Amendment........................................................ 1
Purpose and Summary.............................................. 21
Background and Need for Legislation.............................. 21
Hearings......................................................... 22
Committee Consideration.......................................... 22
Committee Votes.................................................. 22
Committee Oversight Findings..................................... 22
Statement of General Performance Goals and Objectives............ 22
New Budget Authority, Entitlement Authority, and Tax Expenditures 22
Committee Cost Estimate.......................................... 23
Congressional Budget Office Estimate............................. 23
Federal Mandates Statement....................................... 23
Advisory Committee Statement..................................... 23
Constitutional Authority Statement............................... 23
Applicability to Legislative Branch.............................. 23
Section-by-Section Analysis of the Legislation................... 23
Changes in Existing Law Made by the Bill, as Reported............ 47
Amendment
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Medical Device User
Fee and Modernization Act of 2002''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--FEES RELATED TO MEDICAL DEVICES
Sec. 101. Findings.
Sec. 102. Establishment of program.
Sec. 103. Annual reports.
Sec. 104. Postmarket surveillance.
Sec. 105. Consultation.
Sec. 106. Effective date.
Sec. 107. Sunset clause.
TITLE II--AMENDMENTS REGARDING REGULATION OF MEDICAL DEVICES
Sec. 201. Inspections by accredited persons.
Sec. 202. Third party review of premarket notification.
Sec. 203. Designation and regulation of combination products.
Sec. 204. Report on certain devices.
Sec. 205. Electronic labeling.
Sec. 206. Electronic registration.
Sec. 207. Intended use.
Sec. 208. Modular review.
Sec. 209. Pediatric expertise regarding classification-panel review of
premarket applications.
Sec. 210. Internet list of class II devices exempted from requirement
of premarket notification.
Sec. 211. Study by Institute of Medicine of postmarket surveillance
regarding pediatric populations.
Sec. 212. Guidance regarding pediatric devices.
Sec. 213. Breast implants; study by Comptroller General.
Sec. 214. Breast implants; research through National Institutes of
Health.
TITLE III--ADDITIONAL AMENDMENTS
Sec. 301. Identification of manufacturer of medical devices.
Sec. 302. Single-use medical devices.
TITLE I--FEES RELATED TO MEDICAL DEVICES
SEC. 101. FINDINGS.
The Congress finds that--
(1) prompt approval and clearance of safe and effective
devices is critical to the improvement of the public health so
that patients may enjoy the benefits of devices to diagnose,
treat, and prevent disease;
(2) the public health will be served by furnishing additional
funds for the review of devices so that statutorily mandated
deadlines may be met; and
(3) the fees authorized by the amendment made by section 102
will be dedicated to meeting the goals identified in the
letters from the Secretary of Health and Human Services to the
Committee on Energy and Commerce of the House of
Representatives and the Committee on Health, Education, Labor,
and Pensions of the Senate.
SEC. 102. ESTABLISHMENT OF PROGRAM.
(a) In General.--Subchapter C of chapter VII of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 379F et seq.) is amended by adding at
the end the following part:
``PART 3--FEES RELATING TO DEVICES
``SEC. 737. DEFINITIONS.
``For purposes of this subchapter:
``(1) The term `premarket application' means--
``(A) an application for approval of a device
submitted under section 515(c) or section 351 of the
Public Health Service Act; or
``(B) a product development protocol described in
section 515(f).
Such term does not include a supplement, a premarket report, or
a premarket notification submission.
``(2) The term `premarket report' means a report submitted
under section 510(o)(3).
``(3) The term `premarket notification submission' means a
report submitted under section 510(k).
``(4)(A) The term `supplement', with respect to a panel-track
supplement, a 180-day supplement, a real-time supplement, or an
efficacy supplement, means a request to the Secretary to
approve a change in a device for which--
``(i) an application has been approved under section
515(d) or under section 351 of the Public Health
Service Act; or
``(ii) a notice of completion has become effective
under section 515(f).
``(B) The term `panel-track supplement' means a supplement to
an approved premarket application under section 515 that
requests a significant change in design or performance of the
device, or a new indication for use of the device, and for
which clinical data are generally necessary to provide a
reasonable assurance of safety and effectiveness.
``(C) The term `180-day supplement' means a supplement to an
approved premarket application under section 515 that is not a
panel-track supplement and requests a significant change in
components, materials, design, specification, software, color
additives, or labeling.
``(D) The term `real-time supplement' means a supplement to
an approved premarket application under section 515 that
requests a minor change to the device, such as a minor change
to the design of the device, software, manufacturing,
sterilization, or labeling, and for which the applicant has
requested and the agency has granted a meeting or similar forum
to jointly review and determine the status of the supplement.
``(E) The term `efficacy supplement' means a supplement to an
approved premarket application under section 351 of the Public
Health Service Act that requires substantive clinical data.
``(5) The term `process for the review of device
applications' means the following activities of the Secretary
with respect to the review of premarket applications, premarket
reports, supplements, and premarket notification submissions:
``(A) The activities necessary for the review of
premarket applications, premarket reports, supplements,
and premarket notification submissions.
``(B) The issuance of action letters that allow the
marketing of devices or which set forth in detail the
specific deficiencies in such applications, reports,
supplements, or submissions and, where appropriate, the
actions necessary to place them in condition for
approval.
``(C) The inspection of manufacturing establishments
and other facilities undertaken as part of the
Secretary's review of pending premarket applications,
premarket reports, and supplements.
``(D) Monitoring of research conducted in connection
with the review of such applications, reports,
supplements, and submissions.
``(E) Review of device applications subject to
section 351 of the Public Health Service Act for an
investigational new drug application under section
505(i) or for an investigational device exemption under
section 520(g) and activities conducted in anticipation
of the submission of such applications under section
505(i) or 520(g).
``(F) The development of guidance, policy documents,
or regulations to improve the process for the review of
premarket applications, premarket reports, supplements,
and premarket notification submissions.
``(G) The development of voluntary test methods,
consensus standards, or mandatory performance standards
under section 514 in connection with the review of such
applications, reports, supplements, or submissions and
related activities.
``(H) The provision of technical assistance to device
manufacturers in connection with the submission of such
applications, reports, supplements, or submissions.
``(I) Any activity undertaken under section 513 or
515(i) in connection with the initial classification or
reclassification of a device or under section 515(b) in
connection with any requirement for approval of a
device.
``(J) Evaluation of postmarket studies required as a
condition of an approval of a premarket application
under section 515 or section 351 of the Public Health
Service Act.
``(K) Compiling, developing, and reviewing
information on relevant devices to identify safety and
effectiveness issues for devices subject to premarket
applications, premarket reports, supplements, or
premarket notification submissions.
``(6) The term `costs of resources allocated for the process
for the review of device applications' means the expenses
incurred in connection with the process for the review of
device applications for--
``(A) officers and employees of the Food and Drug
Administration, contractors of the Food and Drug
Administration, advisory committees, and costs related
to such officers, employees, and committees and to
contracts with such contractors;
``(B) management of information, and the acquisition,
maintenance, and repair of computer resources;
``(C) leasing, maintenance, renovation, and repair of
facilities and acquisition, maintenance, and repair of
fixtures, furniture, scientific equipment, and other
necessary materials and supplies; and
``(D) collecting fees and accounting for resources
allocated for the review of premarket applications,
premarket reports, supplements, and submissions.
``(7) The term `adjustment factor' applicable to a fiscal
year is the Consumer Price Index for all urban consumers (all
items; United States city average) for April of the preceding
fiscal year divided by such Index for April 2002.
``(8) The term `affiliate' means a business entity that has a
relationship with a second business entity if, directly or
indirectly--
``(A) one business entity controls, or has the power
to control, the other business entity; or
``(B) a third party controls, or has power to
control, both of the business entities.
``SEC. 738. AUTHORITY TO ASSESS AND USE DEVICE FEES.
``(a) Types of Fees.--Beginning on the date of the enactment of the
Medical Device User Fee and Modernization Act of 2002, the Secretary
shall assess and collect fees in accordance with this section as
follows:
``(1) Premarket application, premarket report, supplement,
and submission fee.--
``(A) In general.--Except as provided in subparagraph
(B) and subsection (d), each person who submits any of
the following, on or after October 1, 2002, shall be
subject to a fee established under subsection (c)(5)
for the fiscal year involved in accordance with the
following:
``(i) A premarket application.
``(ii) For a premarket report, a fee equal to
the fee that applies under clause (i).
``(iii) For a panel track supplement, a fee
equal to the fee that applies under clause (i).
``(iv) For a 180-day supplement, a fee equal
to 21.5 percent of the fee that applies under
clause (i), subject to any adjustment under
subsection (c)(3).
``(v) For a real-time supplement, a fee equal
to 7.2 percent of the fee that applies under
clause (i).
``(vi) For an efficacy supplement, a fee
equal to the fee that applies under clause (i).
``(vii) For a premarket notification
submission, a fee equal to 1.75 percent of the
fee that applies under clause (i), subject to
any adjustment under subsection (c)(3).
``(B) Exceptions.--
``(i) Humanitarian device exemption.--A
device for which a humanitarian device
exemption has been granted is not subject to
the fees established in subparagraph (A).
``(ii) Further manufacturing use.--No fee
shall be required under subparagraph (A) for
the submission of a premarket application under
section 351 of the Public Health Service Act
for a product licensed for further
manufacturing use only.
``(iii) State or federal government
sponsors.--No fee shall be required under
subparagraph (A) for a premarket application,
premarket report, supplement, or premarket
notification submission submitted by a State or
Federal Government entity unless the device
involved is to be distributed commercially.
``(iv) Premarket notifications by third
parties.--No fee shall be required under
subparagraph (A) for a premarket notification
submission reviewed by an accredited person
pursuant to section 523.
``(v) Pediatric conditions of use.--
``(I) In general.--No fee shall be
required under subparagraph (A) for a
premarket application or premarket
notification submission if the proposed
conditions of use for the device
involved are solely for a pediatric
population. No fee shall be required
under such subparagraph for a
supplement if the sole purpose of the
supplement is to propose conditions of
use for a pediatric population.
``(II) Subsequent proposal of adult
conditions of use.--In the case of a
person who submits a premarket
application for which, under subclause
(I), a fee under subparagraph (A) is
not required, any supplement to such
application that proposes conditions of
use for any adult population is subject
to the fee that applies under such
subparagraph for a premarket
application.
``(C) Payment.--The fee required by subparagraph (A)
shall be due upon submission of the premarket
application, premarket report, supplement, or premarket
notification submission except that invoices for
applications submitted between October 1, 2002, and the
date of the enactment of the Medical Device User Fee
and Modernization Act of 2002 shall be payable on
October 30, 2002. Applicants submitting portions of
applications pursuant to section 515(c)(3) shall pay
such fees upon submission of the first portion of such
applications. The fees credited to fiscal year 2003
under this section shall include all fees payable from
October 1, 2002, through September 30, 2003.
``(D) Refunds.--
``(i) Application refused for filing.--The
Secretary shall refund 75 percent of the fee
paid under subparagraph (A) for any application
or supplement that is refused for filing.
``(ii) Application withdrawn before filing.--
The Secretary shall refund 75 percent of the
fee paid under subparagraph (A) for any
application or supplement that is withdrawn
prior to the filing decision of the Secretary.
``(iii) Application withdrawn before first
action.--After receipt of a request for a
refund of the fee paid under subparagraph (A)
for a premarket application, premarket report,
or supplement that is withdrawn after filing
but before a first action, the Secretary may
return some or all of the fee. The amount of
refund, if any, shall be based on the level of
effort already expended on the review of such
application, report, or supplement. The
Secretary shall have sole discretion to refund
a fee or portion of the fee under this
subparagraph. A determination by the Secretary
concerning a refund under this paragraph shall
not be reviewable.
``(b) Fee Revenue Amounts.--Except as provided in subsections (c),
(d), (f), and (g), the fees under subsection (a) shall be established
to generate the following revenue amounts: $25,125,000 in fiscal year
2003; $27,255,000 in fiscal year 2004; $29,785,000 in fiscal year 2005;
$32,615,000 in fiscal year 2006, and $35,000,000 in fiscal year 2007.
If legislation is enacted after the date of the enactment of this Act
requiring the Secretary to fund additional costs of the retirement of
Federal personnel, fee revenue amounts under this subsection shall be
increased in each year by the amount necessary to fully fund the
portion of such additional costs that are attributable to the process
for the review of device applications.
``(c) Adjustments.--
``(1) Inflation adjustment.--The revenues established in
subsection (b) shall be adjusted by the Secretary by notice,
published in the Federal Register, for a fiscal year to reflect
the greater of--
``(A) the total percentage change that occurred in
the Consumer Price Index for all urban consumers (all
items; U.S. city average) for the 12 month period
ending June 30 preceding the fiscal year for which fees
are being established, or
``(B) the total percentage change for the previous
fiscal year in basic pay under the General Schedule in
accordance with section 5332 of title 5, United States
Code, as adjusted by any locality-based comparability
payment pursuant to section 5304 of such title for
Federal employees stationed in the District of
Columbia.
The adjustment made each fiscal year by this subsection shall
be added on a compounded basis to the sum of all adjustments
made each fiscal year after fiscal year 2003 under this
subsection.
``(2) Workload adjustment.--After the fee revenues
established in subsection (b) are adjusted for a fiscal year
for inflation in accordance with paragraph (1), the fee
revenues shall, beginning with fiscal year 2004, be adjusted
further each fiscal year to reflect changes in the workload of
the Secretary for the process for the review of device
applications. With respect to such adjustment:
``(A) The adjustment shall be determined by the
Secretary based on a weighted average of the change in
the total number of premarket applications,
investigational new device applications, premarket
reports, supplements, and premarket notification
submissions submitted to the Secretary. The Secretary
shall publish in the Federal Register the fee revenues
and fees resulting from the adjustment and the
supporting methodologies.
``(B) Under no circumstances shall the adjustment
result in fee revenues for a fiscal year that are less
than the fee revenues for the fiscal year established
in subsection (b), as adjusted for inflation under
paragraph (1).
``(3) Compensating adjustment.--After the fee revenues
established in subsection (b) are adjusted for a fiscal year
for inflation in accordance with paragraph (1), and for
workload in accordance with paragraph (2), the fee revenues
shall, beginning with fiscal year 2004, be adjusted further
each fiscal year, if necessary, to reflect the cumulative
amount by which collections for previous fiscal years,
beginning with fiscal year 2003, fell below the cumulative
revenue amounts for such fiscal years specified in subsection
(b), adjusted for such fiscal years for inflation in accordance
with paragraph (1), and for workload in accordance with
paragraph (2). Only fees for 180 day supplements and premarket
notification submissions shall be increased to generate
compensating adjustment revenues.
``(4) Final year adjustment.--For fiscal year 2007, the
Secretary may, in addition to adjustments under paragraphs (1)
and (2), further increase the fees and fee revenues established
in subsection (b) if such adjustment is necessary to provide
for not more than three months of operating reserves of
carryover user fees for the process for the review of device
applications for the first three months of fiscal year 2008. If
such an adjustment is necessary, the rationale for the amount
of the increase shall be contained in the annual notice
establishing fee revenues and fees for fiscal year 2007. If the
Secretary has carryover user fee balances for such process in
excess of three months of such operating reserves, the
adjustment under this paragraph shall not be made.
``(5) Annual fee setting.--The Secretary shall, 60 days
before the start of each fiscal year after September 30, 2002,
establish, for the next fiscal year, and publish in the Federal
Register, fees under subsection (a), based on the revenue
amounts established under subsection (b) and the adjustment
provided under this subsection, except that the fees
established for fiscal year 2003 shall be based on a premarket
application fee of $139,000.
``(6) Limit.--The total amount of fees charged, as adjusted
under this subsection, for a fiscal year may not exceed the
total costs for such fiscal year for the resources allocated
for the process for the review of device applications.
``(d) Small Business Fee Waiver and Fee Reduction.--
``(1) In general.--The Secretary shall grant a waiver of the
fee required under subsection (a) for one premarket
application, or one premarket report, where the Secretary finds
that the applicant involved is a small business submitting its
first premarket application to the Secretary, or its first
premarket report, respectively, for review. In addition, for
subsequent premarket applications, premarket reports, and
supplements where the Secretary finds that the applicant
involved is a small business, the fees specified in clauses (i)
through (vi) of subsection (a)(1)(A) may be paid at a reduced
rate in accordance with paragraph (2)(C).
``(2) Rules relating to small businesses.--
``(A) Definition.--
``(i) For purposes of this subsection, the
term `small business' means an entity that
reported $10,000,000 or less of gross receipts
or sales in its most recent Federal income tax
return for a taxable year, including such
returns of all of its affiliates, partners, or
parent firms.
``(ii) The Secretary may adjust the
$10,000,000 threshold established in clause (i)
if the Secretary has evidence from actual
experience that this threshold results in a
reduction in revenues from premarket
applications, premarket reports, and
supplements that is 13 percent or more than
would occur without small business exemptions
and lower fee rates. To adjust this threshold,
the Secretary shall publish a notice in the
Federal Register setting out the rationale for
the adjustment, and the new threshold.
``(B) Evidence of qualification.--An applicant shall
pay the higher fees established by the Secretary each
year unless the applicant submits evidence that it
qualifies for a waiver of the fee or the lower fee
rate. The applicant shall support its claim that it
meets the definition under subparagraph (A) by
submission of a copy of its most recent Federal income
tax return for a taxable year, which shows an amount of
gross sales or receipts that is less than the maximum
established in subparagraph (A). The applicant shall
certify that the information provided is a true and
accurate copy of the applicant's actual tax forms as
submitted to the Internal Revenue Service.
``(C) Reduced fees.--Where the Secretary finds that
the applicant involved meets the definition under
subparagraph (A), the fees established under subsection
(c)(5) may be paid at reduced rates as follows:
``(i) 38 percent of the fee established under
subsection (c)(5) for a premarket application,
a premarket report, a panel-track supplement,
or an efficacy supplement.
``(ii) 44 percent of the fee established
under subsection (c)(5) for a 180-day
supplement to a medical device application.
``(iii) 25 percent of the fee established
under subsection (c)(5) for a real-time
supplement to a premarket application.
This subsection may not be construed as authorizing any
reduction in the fee established under subsection
(c)(5) for a premarket notification submission.
``(D) Request for fee waiver or reduction.--An
applicant seeking a fee waiver or reduction under this
subsection shall submit supporting information to the
Secretary at least 60 days before the fee is required
pursuant to subsection (a).
``(e) Effect of Failure to Pay Fees.--A premarket application,
premarket report, supplement, or premarket notification submission
submitted by a person subject to fees under subsection (a) shall be
considered incomplete and shall not be accepted for filing by the
Secretary until all fees owed by such person have been paid.
``(f) Conditions.--
``(1) Performance goals through fiscal year 2005; termination
of program after fiscal year 2005.--With respect to the amount
that, under the salaries and expenses account of the Food and
Drug Administration, is appropriated for a fiscal year for
devices and radiological products:
``(A)(i) For each of the fiscal years 2003 and 2004,
the Secretary is expected to meet all of the goals
identified for the fiscal year involved in any letter
referred to in section 101(3) of the Medical Device
User Fee and Modernization Act of 2002 (referred to in
this paragraph as `performance goals') if the amount so
appropriated for such fiscal year, excluding the amount
of fees appropriated for such fiscal year, is equal to
or greater than $205,720,000 multiplied by the
adjustment factor applicable to the fiscal year.
``(ii) For each of the fiscal years 2003 and 2004, if
the amount so appropriated for the fiscal year
involved, excluding the amount of fees appropriated for
such fiscal year, is less than the amount that applies
under clause (i) for such fiscal year, the following
applies:
``(I) The Secretary is expected to meet such
goals to the extent practicable, taking into
account the amounts that are available to the
Secretary for such purpose, whether from fees
under subsection (a) or otherwise.
``(II) The Comptroller General of the United
States shall submit to the Congress a report
describing whether and to what extent the
Secretary is meeting the performance goals
identified for such fiscal year, and whether
the Secretary will be able to meet all
performance goals identified for fiscal year
2005. A report under the preceding sentence
shall be submitted to the Congress not later
than July 1 of the fiscal year with which the
report is concerned.
``(B)(i) For fiscal year 2005, the Secretary is
expected to meet all of the goals identified for the
fiscal year if the total of the amounts so appropriated
for fiscal years 2003 through 2005, excluding the
amount of fees appropriated for such fiscal years, is
equal to or greater than the sum of--
``(I) $205,720,000 multiplied by the
adjustment factor applicable to fiscal year
2003;
``(II) $205,720,000 multiplied by the
adjustment factor applicable to fiscal year
2004; and
``(III) $205,720,000 multiplied by the
adjustment factor applicable to fiscal year
2005.
``(ii) For fiscal year 2005, if the total of the
amounts so appropriated for fiscal years 2003 through
2005, excluding the amount of fees appropriated for
such fiscal years, is less than the sum that applies
under clause (i) for fiscal year 2005, the following
applies:
``(I) The Secretary is expected to meet such
goals to the extent practicable, taking into
account the amounts that are available to the
Secretary for such purpose, whether from fees
under subsection (a) or otherwise.
``(II) The Comptroller General of the United
States shall submit to the Congress a report
describing whether and to what extent the
Secretary is meeting the performance goals
identified for such fiscal year, and whether
the Secretary will be able to meet all
performance goals identified for fiscal year
2006. The report under the preceding sentence
shall be submitted to the Congress not later
than July 1, 2005.
``(C) For fiscal year 2006, fees may not be assessed
under subsection (a) for the fiscal year, and the
Secretary is not expected to meet any performance goals
identified for the fiscal year, if the total of the
amounts so appropriated for fiscal years 2003 through
2006, excluding the amount of fees appropriated for
such fiscal years, is less than the sum of--
``(i) $205,720,000 multiplied by the
adjustment factor applicable to fiscal year
2006; and
``(ii) an amount equal to the sum that
applies for purposes of subparagraph (B)(i).
``(D) For fiscal year 2007, fees may not be assessed
under subsection (a) for the fiscal year, and the
Secretary is not expected to meet any performance goals
identified for the fiscal year, if--
``(i) the amount so appropriated for the
fiscal year, excluding the amount of fees
appropriated for the fiscal year, is less than
$205,720,000 multiplied by the adjustment
factor applicable to fiscal year 2007; or
``(ii) pursuant to subparagraph (C), fees
were not assessed under subsection (a) for
fiscal year 2006.
``(2) Authority.--If the Secretary does not assess fees under
subsection (a) during any portion of a fiscal year because of
subparagraph (C) or (D) of paragraph (1) and if at a later date
in such fiscal year the Secretary may assess such fees, the
Secretary may assess and collect such fees, without any
modification in the rate for premarket applications,
supplements, premarket reports, and premarket notification
submissions, and at any time in such fiscal year,
notwithstanding the provisions of subsection (a) relating to
the date fees are to be paid.
``(g) Crediting and Availability of Fees.--
``(1) In general.--Fees authorized under subsection (a) shall
be collected and available for obligation only to the extent
and in the amount provided in advance in appropriation Acts.
Such fees are authorized to be appropriated to remain available
until expended. Such sums as may be necessary may be
transferred from the Food and Drug Administration salaries and
expenses appropriation account without fiscal year limitation
to such appropriation account for salaries and expenses with
such fiscal year limitation. The sums transferred shall be
available solely for the process for the review of device
applications.
``(2) Collections and appropriation acts.--
``(A) In general.--The fees authorized by this
section--
``(i) shall be retained in each fiscal year
in an amount not to exceed the amount specified
in appropriation Acts, or otherwise made
available for obligation, for such fiscal year,
and
``(ii) shall only be collected and available
to defray increases in the costs of the
resources allocated for the process for the
review of device applications (including
increases in such costs for an additional
number of full-time equivalent positions in the
Department of Health and Human Services to be
engaged in such process) over such costs,
excluding costs paid from fees collected under
this section, for fiscal year 2002 multiplied
by the adjustment factor.
``(B) Compliance.--The Secretary shall be considered
to have met the requirements of subparagraph (A)(ii) in
any fiscal year if the costs funded by appropriations
and allocated for the process for the review of device
applications--
``(i) are not more than 3 percent below the
level specified in subparagraph (A)(ii); or
``(ii)(I) are more than 3 percent below the
level specified in subparagraph (A)(ii), and
fees assessed for a subsequent fiscal year are
decreased by the amount in excess of 3 percent
by which such costs fell below the level
specified in such subparagraph; and
``(II) such costs are not more than 5 percent
below the level specified in such subparagraph.
``(3) Authorization of appropriations.--There are authorized
to be appropriated for fees under this section--
``(A) $25,125,000 for fiscal year 2003;
``(B) $27,255,000 for fiscal year 2004;
``(C) $29,785,000 for fiscal year 2005;
``(D) $32,615,000 for fiscal year 2006; and
``(E) $35,000,000 for fiscal year 2007,
as adjusted to reflect adjustments in the total fee revenues
made under this section and changes in the total amounts
collected by application fees.
``(4) Offset.--Any amount of fees collected for a fiscal year
under this section that exceeds the amount of fees specified in
appropriation Acts for such fiscal year shall be credited to
the appropriation account of the Food and Drug Administration
as provided in paragraph (1), and shall be subtracted from the
amount of fees that would otherwise be authorized to be
collected under this section pursuant to appropriation Acts for
a subsequent fiscal year.
``(h) Collection of Unpaid Fees.--In any case where the Secretary
does not receive payment of a fee assessed under subsection (a) within
30 days after it is due, such fee shall be treated as a claim of the
United States Government subject to subchapter II of chapter 37 of
title 31, United States Code.
``(i) Written Requests for Refunds.--To qualify for consideration for
a refund under subsection (a)(1)(D), a person shall submit to the
Secretary a written request for such refund not later than 180 days
after such fee is due.
``(j) Construction.--This section may not be construed to require
that the number of full-time equivalent positions in the Department of
Health and Human Services, for officers, employees, and advisory
committees not engaged in the process of the review of device
applications, be reduced to offset the number of officers, employees,
and advisory committees so engaged.''.
(b) Fee Exemption for Certain Entities Submitting Premarket
Reports.--
(1) In general.--A person submitting a premarket report to
the Secretary of Health and Human Services is exempt from the
fee under section 738(a)(1)(A)(ii) of the Federal Food, Drug,
and Cosmetic Act (as added by subsection (a) of this section)
if--
(A) the premarket report is the first such report
submitted to the Secretary by the person; and
(B) before October 1, 2002, the person submitted a
premarket application to the Secretary for the same
device as the device for which the person is submitting
the premarket report.
(2) Definitions.--For purposes of paragraph (1), the terms
``device'', ``premarket application'', and ``premarket report''
have the same meanings as apply to such terms for purposes of
section 738 of the Federal Food, Drug, and Cosmetic Act (as
added by subsection (a) of this section).
SEC. 103. ANNUAL REPORTS.
Beginning with fiscal year 2003, the Secretary shall prepare and
submit to the Committee on Energy and Commerce of the House of
Representatives and the Committee on Health, Education, Labor and
Pensions of the Senate a report concerning--
(1) the progress of the Food and Drug Administration in
achieving the goals identified in the letters described in
section 101(3) during such fiscal year and the future plans of
the Food and Drug Administration for meeting the goals, not
later than 60 days after the end of each fiscal year during
which fees are collected under this part; and
(2) the implementation of the authority for such fees during
such fiscal year, and the use, by the Food and Drug
Administration, of the fees collected during such fiscal year,
not later than 120 days after the end of each fiscal year
during which fees are collected under the medical device user-
fee program established under the amendment made by section
102.
SEC. 104. POSTMARKET SURVEILLANCE.
(a) Additional Authorization of Appropriations.--For the purpose of
carrying out postmarket surveillance of medical devices, there are
authorized to be appropriated to the Food and Drug Administration the
following amounts, stated as increases above the amount obligated for
such purpose by such Administration for fiscal year 2002:
(1) For fiscal year 2003, an increase of $3,000,000.
(2) For fiscal year 2004, an increase of $6,000,000.
(3) For fiscal year 2005 and each subsequent fiscal year, an
increase of such sums as may be necessary.
(b) Study.--
(1) In general.--The Secretary of Health and Human Services
(referred to in this section as the ``Secretary'') shall
conduct a study for the purpose of determining the following
with respect to the medical device user-fee program established
under the amendment made by section 102:
(A) The impact of such program on the ability of the
Food and Drug Administration to conduct postmarket
surveillance on medical devices.
(B) The programmatic improvements, if any, needed for
adequate postmarket surveillance of medical devices.
(C) The amount of funds needed to conduct adequate
postmarket surveillance of medical devices.
(D) The extent to which device companies comply with
the postmarket surveillance requirements, including
postmarket study commitments.
(E) The recommendations of the Secretary as to
whether, and in what amounts, user fees collected under
such user-fee program should be dedicated to postmarket
surveillance if the program is extended beyond fiscal
year 2007.
(2) Report.--Not later than January 10, 2007, the Secretary
shall submit to the Committee on Energy and Commerce of the
House of Representatives, and the Committee on Health,
Education, Labor, and Pensions of the Senate, a report that
describes the findings of the study under paragraph (1).
SEC. 105. CONSULTATION.
(a) In General.--In developing recommendations to the Congress for
the goals and plans for meeting the goals for the process for the
review of medical device applications for fiscal years after fiscal
year 2007, and for the reauthorization of sections 737 and 738 of the
Federal Food, Drug, and Cosmetic Act, the Secretary of Health and Human
Services (referred to in this section as the ``Secretary'') shall
consult with the Committee on Energy and Commerce of the House of
Representatives, the Committee on Health, Education, Labor, and
Pensions of the Senate, appropriate scientific and academic experts,
health care professionals, representatives of patient and consumer
advocacy groups, and the regulated industry.
(b) Recommendations.--The Secretary shall publish in the Federal
Register recommendations under subsection (a), after negotiations with
the regulated industry; shall present such recommendations to the
congressional committees specified in such paragraph; shall hold a
meeting at which the public may present its views on such
recommendations; and shall provide for a period of 30 days for the
public to provide written comments on such recommendations.
SEC. 106. EFFECTIVE DATE.
The amendments made by this title shall take effect on the date of
the enactment of this Act, except that fees shall be assessed for all
premarket applications, premarket reports, supplements, and premarket
notification submissions received on or after October 1, 2002,
regardless of the date of enactment.
SEC. 107. SUNSET CLAUSE.
The amendments made by this title cease to be effective October 1,
2007, except that section 103 with respect to annual reports ceases to
be effective January 31, 2008.
TITLE II--AMENDMENTS REGARDING REGULATION OF MEDICAL DEVICES
SEC. 201. INSPECTIONS BY ACCREDITED PERSONS.
(a) In General.--Section 704 of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 374) is amended by adding at the end the following
subsection:
``(g)(1) Not later than one year after the date of the enactment of
this subsection, the Secretary shall, subject to the provisions of this
subsection, accredit persons who are not Federal employees for the
purpose of conducting the inspections required in section 510(h), or
pursuant to section 510(i), for establishments that manufacture,
prepare, propagate, compound, or process class II or class III devices.
The owner or operator of such an establishment that is eligible under
paragraph (6) may, from the list published under paragraph (4), select
an accredited person to conduct such inspections
``(2) Not later than 180 days after the date of enactment of this
subsection, the Secretary shall publish in the Federal Register
criteria to accredit or deny accreditation to persons who request to
perform the duties specified in paragraph (1). Thereafter, the
Secretary shall inform those requesting accreditation, within 60 days
after the receipt of such request, whether the request for
accreditation is adequate for review, and the Secretary shall promptly
act on the request for accreditation. Any resulting accreditation shall
state that such person is accredited to conduct inspections at
establishments identified in paragraph (1). The accreditation of such
person shall specify the particular activities under this subsection
for which such person is accredited. In the first year following the
publication in the Federal Register of criteria to accredit or deny
accreditation to persons who request to perform the duties specified in
paragraph (1), the Secretary shall accredit no more than 15 persons who
request to perform duties specified in paragraph (1).
``(3) An accredited person shall, at a minimum, meet the following
requirements:
``(A) Such person shall be an independent organization which
is not owned or controlled by a manufacturer, supplier, or
vendor of articles regulated under this Act and which has no
organizational, material, or financial affiliation (including a
consultative affiliation) with such a manufacturer, supplier,
or vendor.
``(B) Such person shall be a legally constituted entity
permitted to conduct the activities for which it seeks
accreditation.
``(C) Such person shall not engage in the design,
manufacture, promotion, or sale of articles regulated under
this Act.
``(D) The operations of such person shall be in accordance
with generally accepted professional and ethical business
practices, and such person shall agree in writing that at a
minimum the person will--
``(i) certify that reported information accurately
reflects data reviewed;
``(ii) limit work to that for which competence and
capacity are available;
``(iii) treat information received, records, reports,
and recommendations as confidential commercial or
financial information or trade secret information;
``(iv) promptly respond and attempt to resolve
complaints regarding its activities for which it is
accredited; and
``(v) protect against the use, in carrying out
paragraph (1), of any officer or employee of the
accredited person who has a financial conflict of
interest regarding any product regulated under this
Act, and annually make available to the public
disclosures of the extent to which the accredited
person, and the officers and employees of the person,
have maintained compliance with requirements under this
clause relating to financial conflicts of interest.
``(4) The Secretary shall publish on the Internet site of the Food
and Drug Administration a list of accredited persons to conduct
inspections under paragraph (1). Such list shall be periodically
updated to ensure that the identity of each accredited person is known
to the public. The updating of such list shall be no later than one
month after the accreditation of a person under this subsection or the
withdrawal of accreditation.
``(5)(A) To ensure that persons accredited under this subsection
continue to meet the standards of accreditation, the Secretary shall
audit the performance of such persons on a periodic basis through the
review of inspection reports and inspections by persons designated by
the Secretary to evaluate the compliance status of an establishment and
the performance of accredited persons.
``(B) The Secretary may withdraw accreditation of any person
accredited under paragraph (2), after providing notice and an
opportunity for an informal hearing, when such person is substantially
not in compliance with the standards of accreditation or poses a threat
to public health or fails to act in a manner that is consistent with
the purposes of this subsection. The Secretary may suspend the
accreditation of such person during the pendency of the process under
the preceding sentence.
``(6)(A) Subject to subparagraphs (B) through (C), a device
establishment is eligible for inspections by persons accredited under
paragraph (2) if--
``(i) the Secretary classified the results of the most recent
inspection of the establishment pursuant to subsection (h) or
(i) of section 510 as `no action indicated' or `voluntary
action indicated'; and
``(ii) with respect to each inspection to be conducted by an
accredited person--
``(I) the owner or operator of the establishment
submits to the Secretary a notice requesting clearance
to use such a person to conduct the inspection, and the
Secretary provides such clearance; and
``(II) such notice identifies the accredited person
whom the establishment has selected to conduct the
inspection, and the Secretary agrees to the selected
accredited person.
``(B)(i) The Secretary shall respond to a notice under subparagraph
(A) from an establishment not later than 30 days after the Secretary
receives the notice. Through such response, the Secretary shall (I)
provide clearance under such subparagraph, and agree to the selection
of an accredited person, or (II) make a request under clause (ii). If
the Secretary fails to respond to the notice within such 30-day period,
the establishment is deemed to have such clearance, and to have the
agreement of the Secretary for such selection.
``(ii) The request referred to in clause (i)(II) is--
``(I) a request to the establishment involved to submit to
the Secretary compliance data in accordance with clause (iii);
or
``(II) a request to the establishment, or to the accredited
person identified in the notice under subparagraph (A), for
information concerning the relationship between the
establishment and such accredited person.
The Secretary may make both such requests.
``(iii) The compliance data to be submitted by an establishment under
clause (ii) are data describing whether the quality controls of the
establishment have been sufficient for ensuring consistent compliance
with current good manufacturing practice within the meaning of section
501(h), and data otherwise describing whether the establishment has
consistently been in compliance with sections 501 and 502 and other
applicable provisions of this Act. Such data shall include complete
reports of inspections regarding good manufacturing practice or other
quality control audits that, during the preceding two-year period, were
conducted at the establishment by persons other than the owner or
operator of the establishment, together with all other data the
Secretary deems necessary. Data under the preceding sentence shall
demonstrate to the Secretary whether the establishment has facilitated
consistent compliance by promptly correcting any compliance problems
identified in such inspections.
``(iv) Not later than 60 days after receiving compliance data under
clause (iii) from an establishment, the Secretary shall provide or deny
clearance under subparagraph (A). The Secretary may not deny clearance
unless the Secretary provides to the establishment detailed findings
that the establishment has failed to demonstrate consistent compliance
for purposes of clause (iii). If the Secretary fails to provide such
findings to the establishment within such 60-day period, the
establishment is deemed to have such clearance.
``(v)(I) A request to an accredited person under clause (ii)(II) may
not seek any information that is not required to be maintained by such
person in records under subsection (f)(1). Not later than 60 days after
receiving the information sought by the request, the Secretary shall
agree to, or reject, the selection of such person by the establishment
involved. The Secretary may not reject the selection unless the
Secretary provides to the establishment the reasons for such rejection.
Reasons for the rejection may include that the establishment or the
accredited person, as the case may be, has failed to fully respond to
the request. If within such 60-day period the Secretary fails to agree
to or reject the selection in accordance with this subclause, the
Secretary is deemed to have agreed to the selection.
``(II) If the Secretary rejects the selection of an accredited person
by an establishment, the establishment may make an additional selection
of an accredited person by submitting to the Secretary a notice that
identifies the additional selection. Clauses (i) and (ii), and
subclause (I) of this clause, apply to the selection of an accredited
person through a notice under the preceding sentence in the same manner
and to the same extent as such provisions apply to a selection of an
accredited person through a notice under subparagraph (A).
``(vi) In the case of an establishment that under clause (iv) is
denied clearance under subparagraph (A), or whose selection of an
accredited person is rejected under clause (v), the Secretary shall
designate a person to review the findings of the Secretary under such
clause if, during the 30-day period beginning on the date on which the
establishment receives the findings, the establishment requests the
review. The review shall commence not later than 30 days after the
establishment requests the review, unless the Secretary and the
establishment otherwise agree.
``(C)(i) In the case of a device establishment for which the
Secretary classified the results of the most recent inspection of the
establishment by a person accredited under paragraph (2) as `official
action indicated', the establishment is eligible for further
inspections by persons accredited under such paragraph if (I) the
Secretary issues a written statement to the owner or operator of the
establishment that the violations leading to such classification have
been resolved, and (II) the Secretary, either upon the Secretary's own
initiative or a petition of the owner or operator of the establishment,
notifies the establishment that it has clearance to use an accredited
person for the inspections. The Secretary shall respond to such
petition within 30 days after the receipt of the petition.
``(ii) If the Secretary denies a petition under clause (i), the
establishment involved may, after the expiration of one year after such
denial, again petition the Secretary for a determination of eligibility
for inspection by persons accredited by the Secretary under paragraph
(2). If the Secretary denies such petition, the Secretary shall provide
the establishment with a detailed reason for such denial within 60 days
after the denial. If, as of the expiration of 48 months after the
receipt of the first petition, the establishment has not been inspected
by the Secretary in accordance with section 510(h), or has not during
such period been inspected pursuant to section 510(i), as applicable,
the establishment is eligible for further inspections by accredited
persons.
``(7)(A) Persons accredited under paragraph (2) to conduct
inspections shall record in writing their inspection observations and
shall present the observations to the device establishment's designated
representative and discuss each observation. Additionally, such
accredited person shall prepare an inspection report (including for
inspections classified as `no action indicated') in a form and manner
consistent with such reports prepared by employees and officials
designated by the Secretary to conduct inspections.
``(B) At a minimum, an inspection report under subparagraph (A) shall
identify the persons responsible for good manufacturing practice
compliance at the inspected establishment involved, the dates of the
inspection, the scope of the inspection, and shall discuss in detail
each observation identified by the accredited person, identify other
matters that relate to or may influence compliance with this Act, and
discuss any recommendations during the inspection or at the
inspection's closing meeting.
``(C) An inspection report under subparagraph (A) shall be sent to
the Secretary and the designated representative of the inspected
establishment involved at the same time, but under no circumstances
later than three weeks after the last day of the inspection. The report
to the Secretary shall be accompanied by all written inspection
observations previously provided to the representative of the
establishment.
``(D) Any statements or representations made by employees or agents
of a device establishment to persons accredited under paragraph (2) to
conduct inspections shall be subject to section 1001 of title 18,
United States Code.
``(E) If at any time during an inspection by an accredited person the
accredited person discovers a condition that could cause or contribute
to an unreasonable risk to the public health, the accredited person
shall immediately notify the Secretary of the identification of the
facility subject to inspection and the conditions of concern.
``(8) Compensation for an accredited person shall be determined by
agreement between the accredited person and the person who engages the
services of the accredited person, and shall be paid by the person who
engages such services.
``(9) Nothing in this subsection affects the authority of the
Secretary to inspect establishments pursuant to this Act.
``(10)(A) For fiscal year 2005 and subsequent fiscal years, no device
establishment may be inspected during the fiscal year involved by a
person accredited under paragraph (2) if--
``(i) of the amounts appropriated for salaries and expenses
of the Food and Drug Administration for the preceding fiscal
year (referred to in this subparagraph as the `first prior
fiscal year'), the amount obligated by the Secretary for
inspections of device establishments by the Secretary was less
than the adjusted base amount applicable to such first prior
fiscal year; and
``(ii) of the amounts appropriated for salaries and expenses
of the Food and Drug Administration for the fiscal year
preceding the first prior fiscal year (referred to in this
subparagraph as the `second prior fiscal year'), the amount
obligated by the Secretary for inspections of device
establishments by the Secretary was less than the adjusted base
amount applicable to such second prior fiscal year.
``(B)(i) Subject to clause (ii), the Comptroller General of the
United States shall determine the amount that was obligated by the
Secretary for fiscal year 2002 for compliance activities of the Food
and Drug Administration with respect to devices (referred to in this
subparagraph as the `compliance budget'), and of such amount, the
amount that was obligated for inspections by the Secretary of device
establishments (referred to in this subparagraph as the `inspection
budget').
``(ii) For purposes of determinations under clause (i), the
Comptroller General shall not include in the compliance budget or the
inspection budget any amounts obligated for inspections of device
establishments conducted as part of the process of reviewing
applications under section 515.
``(iii) Not later than March 31, 2003, the Comptroller General shall
complete the determinations required in this subparagraph and submit to
the Secretary and the Congress a reporting describing the findings made
through such determinations.
``(C) For purposes of this paragraph:
``(i) The term `base amount' means the inspection budget
determined under subparagraph (B) for fiscal year 2002.
``(ii) The term `adjusted base amount', in the case of
applicability to fiscal year 2003, means an amount equal to the
base amount increased by 5 percent.
``(iii) The term `adjusted base amount', with respect to
applicability to fiscal year 2004 or any subsequent fiscal
year, means the adjusted based amount applicable to the
preceding year increased by 5 percent.
``(11) The authority provided by this subsection terminates on
October 1, 2012.
``(12) No later than four years after the enactment of this
subsection the Comptroller General shall report to the Committee on
Energy and Commerce of the House of Representatives and the Committee
on Health, Education, Labor and Pensions of the Senate--
``(A) the number of inspections conducted by accredited
persons and the number of inspections pursuant to subsections
(h) and (i) of section 510 conducted by Federal employees;
``(B) the number of persons who sought accreditation under
this subsection, as well as the number of persons who were
accredited under this subsection;
``(C) the reasons why persons who sought accreditation, but
were denied accreditation, were denied;
``(D) the number of audits conducted by the Secretary of
accredited persons, the quality of inspections conducted by
accredited persons, whether accredited persons are meeting
their obligations under this Act, and whether the number of
audits conducted is sufficient to permit these assessments;
``(E) whether this subsection is achieving the goal of
ensuring more information about establishment compliance is
being presented to the Secretary, and whether that information
is of a quality consistent with information obtained by the
Secretary pursuant to subsection (h) or (i) of section 510;
``(F) whether this subsection is advancing efforts to allow
device establishments to rely upon third-party inspections for
purposes of compliance with the laws of foreign governments;
and
``(G) whether the Congress should continue, modify, or
terminate the program under this subsection.
``(13) The Secretary shall include in the annual report required
under section 903(g) the names of all accredited persons and the
particular activities under this subsection for which each such person
is accredited and the name of each accredited person whose
accreditation has been withdrawn during the year.''.
(b) Maintenance of Records.--Section 704(f) of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 374(f)) is amended--
(1) in paragraph (1), in the first sentence, by striking ``A
person accredited'' and all that follows through ``shall
maintain records'' and inserting the following: ``An accredited
person described in paragraph (3) shall maintain records'';
(2) in paragraph (2), by striking ``a person accredited under
section 523'' and inserting ``an accredited person described in
paragraph (3)''; and
(3) by adding at the end the following paragraph:
``(3) For purposes of paragraphs (1) and (2), an accredited person
described in this paragraph is a person who--
``(A) is accredited under subsection (g); or
``(B) is accredited under section 523.''.
(c) Conforming Amendment.--Section 510(h) of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 360(h)) is amended by inserting after
``duly designated by the Secretary'' the following: ``, or by persons
accredited to conduct inspections under section 704(g),''.
SEC. 202. THIRD PARTY REVIEW OF PREMARKET NOTIFICATION.
Section 523 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
360m) is amended--
(1) in subsection (c), by striking ``The authority'' and all
that follows and inserting the following: ``The authority
provided by this section terminates October 1, 2007.''; and
(2) by adding at the end the following subsection:
``(d) Report.--Not later than January 10, 2007, the Secretary shall
conduct a study based on the experience under the program under this
section and submit to the Committee on Energy and Commerce of the House
of Representatives, and the Committee on Health, Education, Labor, and
Pensions of the Senate, a report describing the findings of the study.
The objectives of the study shall include determining--
``(1) the number of devices reviewed under this section;
``(2) the number of devices reviewed under this section that
were ultimately cleared by the Secretary;
``(3) the number of devices reviewed under this section that
were ultimately not cleared by the Secretary;
``(4) the average time period for a review under this section
(including the time it takes for the Secretary to review a
recommendation of an accredited person under subsection (a) and
determine the initial device classification);
``(5) the average time period identified in paragraph (4)
compared to the average time period for review of devices
solely by the Secretary pursuant to section 510(k);
``(6) if there is a difference in the average time period
under paragraph (4) and the average time period under paragraph
(5), the reasons for such difference;
``(7) whether the quality of reviews under this section for
devices for which no guidance has been issued is qualitatively
inferior to reviews by the Secretary for devices for which no
guidance has been issued;
``(8) whether the quality of reviews under this section of
devices for which no guidance has been issued is qualitatively
inferior to reviews under this section of devices for which
guidance has been issued;
``(9) whether this section has in any way jeopardized or
improved the public health;
``(10) any impact of this section on resources available to
the Secretary to review reports under section 510(k); and
``(11) any suggestions for continuation, modification
(including expansion of device eligibility), or termination of
this section that the Secretary determines to be
appropriate.''.
SEC. 203. DESIGNATION AND REGULATION OF COMBINATION PRODUCTS.
Section 503(g) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
353(g)) is amended--
(1) in paragraph (1)--
(A) in the first sentence, by striking ``shall
designate a component of the Food and Drug
Administration'' and inserting ``shall in accordance
with this subsection assign an agency center''; and
(B) in each of subparagraphs (A) through (C), by
striking ``the persons charged'' and inserting ``the
agency center charged'';
(2) by redesignating paragraph (4) as paragraph (5);
(3) by inserting after paragraph (3) the following paragraph:
``(4)(A) Not later than 60 days after the date of the enactment of
this paragraph, the Secretary shall establish within the Office of the
Commissioner of Food and Drugs an office to ensure the prompt
assignment of combination products to agency centers, the timely
premarket review of such products, and consistent and appropriate
postmarket regulation of like products subject to the same statutory
requirements to the extent permitted by law. Additionally, the office
shall, in determining whether a product is to be designated a
combination product, consult with the component within the Office of
the Commissioner of Food and Drugs that is responsible for such
determinations. Such office (referred to in this paragraph as the
`Office') shall have appropriate scientific and medical expertise, and
shall be headed by a director.
``(B) In carrying out this subsection, the Office shall, for each
combination product, promptly assign an agency center with primary
jurisdiction in accordance with paragraph (1) for the premarket review
of such product.
``(C) In carrying out this subsection, the Office shall ensure timely
and effective premarket reviews by overseeing and coordinating reviews
involving more than one agency center.
``(D) In carrying out this subsection, the Office shall ensure the
consistency and appropriateness of postmarket regulation of like
products subject to the same statutory requirements to the extent
permitted by law. Nothing in this paragraph shall be construed to limit
the postmarket regulatory authority of any agency center.
``(E) In order to ensure the timeliness of the premarket review of a
combination product, the agency center with primary jurisdiction for
the product, and the consulting agency center, shall be responsible to
the Office with respect to the timeliness of the premarket review.
``(F)(i) Any dispute regarding the timeliness of the premarket review
of a combination product may be presented to the Office for resolution,
unless the timeliness of the dispute is clearly premature.
``(ii) During the review process, any dispute regarding the substance
of the premarket review may be presented to the Commissioner of Food
and Drugs after first being considered by the agency center with
primary jurisdiction of the premarket review, under the scientific
dispute resolution procedures for such center. The Commissioner of Food
and Drugs shall consult with the Director of the Office in resolving
the substantive dispute.
``(G) The Secretary, acting through the Office, shall review each
agreement, guidance, or practice of the Secretary that is specific to
the assignment of combination products to agency centers and shall
determine whether the agreement, guidance, or practice is consistent
with the requirements of this subsection. In carrying out such review,
the Secretary shall consult with stakeholders and the directors of the
agency centers. After such consultation, the Secretary shall determine
whether to continue in effect, modify, revise, or eliminate such
agreement, guidance, or practice, and shall publish in the Federal
Register a notice of the availability of such modified or revised
agreement, guidance or practice. Nothing in this paragraph shall be
construed as preventing the Secretary from following each agreement,
guidance, or practice until continued, modified, revised, or
eliminated.
``(H) Not later than one year after the date of the enactment of this
paragraph and annually thereafter, the Secretary shall report to the
appropriate committees of Congress on the activities and impact of the
Office. The report shall include provisions--
``(i) describing the numbers and types of combination
products under review and the timeliness in days of such
assignments, reviews, and dispute resolutions;
``(ii) identifying the number of premarket reviews of such
products that involved a consulting agency center; and
``(iii) describing improvements in the consistency of
postmarket regulation of combination products.''; and
(4) in paragraph (5) (as redesignated by paragraph (2) of
this section)--
(A) by redesignating subparagraphs (A) and (B) as
subparagraphs (B) and (C), respectively; and
(B) by inserting before subparagraph (B) the
following subparagraph:
``(A) The term `agency center' means a center or alternative
organizational component of the Food and Drug
Administration.''.
SEC. 204. REPORT ON CERTAIN DEVICES.
Not later than one year after the date of enactment of this Act, the
Secretary of Health and Human Services shall report to the appropriate
committees of Congress on the timeliness and effectiveness of device
premarket reviews by centers other than the Center for Devices and
Radiological Health. Such report shall include information on the times
required to log in and review original submissions and supplements,
times required to review manufacturers' replies to submissions, and
times to approve or clear such devices. Such report shall contain the
Secretary's recommendations on any measures needed to improve
performance including, but not limited to, the allocation of additional
resources. Such report also shall include the Secretary's specific
recommendation on whether responsibility for regulating such devices
should be reassigned to those persons within the Food and Drug
Administration who are primarily charged with regulating other types of
devices, and whether such a transfer could have a deleterious impact on
the public health and on the safety of such devices.
SEC. 205. ELECTRONIC LABELING.
Section 502(f) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
352(f)) is amended by adding at the end the following: ``Required
labeling for prescription devices intended for use in health care
facilities may be made available solely by electronic means provided
that the labeling complies with all applicable requirements of law and,
that the manufacturer affords health care facilities the opportunity to
request the labeling in paper form, and after such request, promptly
provides the health care facility the requested information without
additional cost.''.
SEC. 206. ELECTRONIC REGISTRATION.
Section 510 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
360) is amended by adding at the end the following:
``(p) Registrations under subsections (b), (c), (d), and (i)
(including the submission of updated information) shall be submitted to
the Secretary by electronic means, upon a finding by the Secretary that
the electronic receipt of such registrations is feasible, unless the
Secretary grants a request for waiver of such requirement because use
of electronic means is not reasonable for the person requesting such
waiver.''.
SEC. 207. INTENDED USE.
Section 513(i)(1)(E) of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 360c(i)(1)(E)) is amended by striking clause (iv).
SEC. 208. MODULAR REVIEW.
Section 515(c) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
360e(c)) is amended by adding at the end the following:
``(3)(A) Prior to the submission of an application under this
subsection, the Secretary shall accept and review portions of such
applications that applicants and the Secretary agree are complete,
ready, and appropriate for review.
``(B) Each portion of a submission reviewed under subparagraph (A)
and found acceptable by the Secretary shall not be further reviewed
after receipt of an application that satisfies the requirements of
paragraph (1), unless issues of safety or effectiveness provide the
Secretary cause to review such accepted portion.
``(C) Whenever the Secretary determines that a portion of a
submission under subparagraph (A) is unacceptable, the Secretary shall
specifically identify, in writing, the deficiency of such portion and
describe in detail the means by which it may be made acceptable, unless
the sponsor is no longer pursuing the application.''.
SEC. 209. PEDIATRIC EXPERTISE REGARDING CLASSIFICATION-PANEL REVIEW OF
PREMARKET APPLICATIONS.
Section 515(c)(2) of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 360e(c)(2)) is amended by adding at the end the following: ``If
the Secretary determines that there is a reasonable likelihood that the
device involved will be used in a pediatric population, the Secretary
shall ensure that such panel includes, or consults with, one or more
pediatric experts.''.
SEC. 210. INTERNET LIST OF CLASS II DEVICES EXEMPTED FROM REQUIREMENT
OF PREMARKET NOTIFICATION.
Section 510(m)(1) of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 360(m)(1)) is amended by adding at the end the following: ``The
Secretary shall publish such list on the Internet site of the Food and
Drug Administration. The list so published shall be updated not later
than 30 days after each revision of the list by the Secretary.''.
SEC. 211. STUDY BY INSTITUTE OF MEDICINE OF POSTMARKET SURVEILLANCE
REGARDING PEDIATRIC POPULATIONS.
(a) In General.--The Secretary of Health and Human Services (referred
to in this section as the ``Secretary'') shall request the Institute of
Medicine to enter into an agreement with the Secretary under which such
Institute conducts a study for the purpose of determining whether the
system under the Federal Food, Drug, and Cosmetic Act for the
postmarket surveillance of medical devices provides adequate safeguards
regarding the use of devices in pediatric populations.
(b) Certain Matters.--The Secretary shall ensure that determinations
made in the study under subsection (a) include determinations of--
(1) whether postmarket surveillance studies of implanted
medical devices are of long enough duration to evaluate the
impact of growth and development for the number of years that
the child will have the implant, and whether the studies are
adequate to evaluate how children's active lifestyles may
affect the failure rate and longevity of the implant; and
(2) whether the amount of funds allocated for postmarket
surveillance by the Food and Drug Administration of medical
devices used in pediatric populations is sufficient to provide
adequate safeguards for such populations, taking into account
the Secretary's monitoring of commitments made at the time of
approval of medical devices, such as phase IV trials, and the
Secretary's monitoring and use of adverse reaction reports,
registries, and other postmarket surveillance activities.
(c) Report to Congress.--The Secretary shall ensure that, not later
than four years after the date of the enactment of this Act, a report
describing the findings of the study under subsection (a) is submitted
to the Congress. The report shall include any recommendations of the
Secretary for administrative or legislative changes to the system of
postmarket surveillance referred to in such subsection.
SEC. 212. GUIDANCE REGARDING PEDIATRIC DEVICES.
Section 520 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
360j) is amended by adding at the end the following subsection:
``Guidance Regarding Pediatric Devices
``(n) Not later than 270 days after the date of the enactment of the
Medical Device User Fee and Modernization Act of 2002, the Secretary
shall issue guidance on the following:
``(1) The type of information necessary to provide reasonable
assurance of the safety and effectiveness of devices intended
for use in pediatric populations.
``(2) Protections for pediatric subjects in clinical
investigations of the safety or effectiveness of such
devices.''.
SEC. 213. BREAST IMPLANTS; STUDY BY COMPTROLLER GENERAL.
(a) In General.--The Comptroller General of the United States shall
conduct a study to determine the following with respect to breast
implants:
(1) The content of information typically provided by health
professionals to women who consult with such professionals on
the issue of whether to undergo breast implant surgery.
(2) Whether such information is provided by physicians or
other health professionals, and whether the information is
provided verbally or in writing.
(3) Whether the information provided presents a fair and
balanced statement of the risks and benefits of receiving the
implants (taking into account the frequency of updates to the
information), and if so, at what point in the process of
determining whether to undergo surgery is such information
provided.
(4) Whether women understand the information that is provided
(including full appreciation of the risks), and whether and to
what extent the information influences the decision to receive
the implants.
(5) The number of adverse events that have been reported, and
whether such events have been adequately investigated.
(6) With respect to women who participate as subjects in
research being carried out regarding the safety and
effectiveness of breast implants:
(A) The content of information provided to the women
during the process of obtaining the informed consent of
the women to be subjects, and whether such information
is appropriately updated.
(B) Whether such process provides written
explanations of the criteria for being subjects in the
research.
(C) The point at which, in the planning or conduct of
the research, the women are provided information
regarding the provision of informed consent to be
subjects.
(D) Whether, before providing informed consent, the
women fully appreciate the risks of being subjects in
the research.
(b) Report.--The Comptroller General shall submit to the Congress a
report describing the findings of the study.
(c) Definition.--For purposes of this section, the term ``breast
implant'' means a breast prosthesis that is implanted to augment or
reconstruct the female breast.
SEC. 214. BREAST IMPLANTS; RESEARCH THROUGH NATIONAL INSTITUTES OF
HEALTH.
(a) Report on Status of Current Research.--Not later than 180 days
after the date of the enactment of this Act, the Director of the
National Institutes of Health shall submit to the Congress a report
describing the status of research on breast implants (as defined in
section 213(c)) being conducted or supported by such Institutes.
(b) Research on Long-Term Implications.--Part H of title IV of the
Public Health Service Act (42 U.S.C. 289 et seq.) is amended by adding
at the end of the following section:
``SEC. 498C. BREAST IMPLANT RESEARCH.
``(a) In General.--The Director of NIH shall conduct or support
prospective or retrospective research to examine the long-term health
implications of both saline and silicone breast implants. If
scientifically appropriate, such research studies may include the
following:
``(1) A multidisciplinary study of women who have received
silicone and saline implants and have had an implant for a
sufficient amount of time to allow for appropriate comparison
as to the long-term health consequences.
``(2) A comparison of women receiving implants for
reconstruction after mastectomy to breast cancer patients who
have not had reconstruction, including subsets of women with
saline implants and women with silicone implants.
``(b) Definition.--For purposes of this section, the term `breast
implant' means a breast prosthesis that is implanted to augment or
reconstruct the female breast.''.
TITLE III--ADDITIONAL AMENDMENTS
SEC. 301. IDENTIFICATION OF MANUFACTURER OF MEDICAL DEVICES.
(a) In General.--Section 502 of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 352) is amended by adding at the end the following:
``(u) If it is a device, unless it, or an attachment thereto,
prominently and conspicuously bears the name of the manufacturer of the
device, a generally recognized abbreviation of such name, or a unique
and generally recognized symbol identifying such manufacturer, except
that the Secretary may waive any requirement under this paragraph for
the device if the Secretary determines that compliance with the
requirement is not feasible for the device or would compromise the
provision of reasonable assurance of the safety or effectiveness of the
device.''.
(b) Effective Date.--The amendment made by subsection (a) takes
effect 18 months after the date of the enactment of this Act, and only
applies to devices introduced or delivered for introduction into
interstate commerce after such effective date.
SEC. 302. SINGLE-USE MEDICAL DEVICES.
(a) Required Statements on Labeling.--
(1) In general.--Section 502 of the Federal Food, Drug, and
Cosmetic Act, as amended by section 301 of this Act, is amended
by adding at the end the following:
``(v) If it is a reprocessed single-use device, unless all labeling
of the device prominently and conspicuously bears the statement
`Reprocessed device for single use. Reprocessed by ____.' The name of
the manufacturer of the reprocessed device shall be placed in the space
identifying the person responsible for reprocessing.''.
(2) Effective date.--The amendment made by paragraph (1)
takes effect 15 months after the date of the enactment of this
Act, and only applies to devices introduced or delivered for
introduction into interstate commerce after such effective
date.
(b) Premarket Notification.--Section 510 of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 360) is amended by inserting after
subsection (n) the following:
``(o)(1) With respect to reprocessed single-use devices for which
reports are required under subsection (k):
``(A) The Secretary shall identify such devices or types of
devices for which reports under such subsection must, in order
to ensure that the device is substantially equivalent to a
predicate device, include validation data, the types of which
shall be specified by the Secretary, regarding cleaning and
sterilization, and functional performance demonstrating that
the single-use device will remain substantially equivalent to
its predicate device after the maximum number of times the
device is reprocessed as intended by the person submitting the
premarket notification. Within one year after enactment of this
subsection, the Secretary shall publish in the Federal Register
a list of the types so identified, and shall revise the list as
appropriate. Reports under subsection (k) for devices or types
of devices within a type included on the list are, upon
publication of the list, required to include such validation
data.
``(B) In the case of each report under subsection (k) that
was submitted to the Secretary before the publication of the
initial list under subparagraph (A), or any revision thereof,
and was for a device or type of device included on such list,
the person who submitted the report under subsection (k) shall
submit validation data as described in subparagraph (A) to the
Secretary not later than nine months after the publication of
the list. During such nine-month period, the Secretary may not
take any action under this Act against such device solely on
the basis that the validation data for the device have not been
submitted to the Secretary. After the submission of the
validation data to the Secretary, the Secretary may not
determine that the device is misbranded under section 502(o),
adulterated under section 501(f)(1)(B), or take action against
the device under section 301(p) for failure to provide any
information required by subsection (k) until (i) the review is
terminated by withdrawal of the submission of the report under
subsection (k); (ii) the Secretary finds the data to be
acceptable and issues a letter; or (iii) the Secretary
determines that the device is not substantially equivalent to a
predicate device. Upon a determination that a device is not
substantially equivalent to a predicate device, or if such
submission is withdrawn, the device can no longer be legally
marketed.
``(C) In the case of a report under subsection (k) for a
device identified under subparagraph (A) that is of a type for
which the Secretary has not previously received a report under
such subsection, the Secretary may, in advance of revising the
list under subparagraph (A) to include such type, require that
the report include the validation data specified in
subparagraph (A).
``(D) Section 502(o) applies with respect to the failure of a
report under subsection (k) to include validation data required
under subparagraph (A).
``(2) With respect to critical or semicritical reprocessed single-use
devices that, under subsection (l) or (m), are exempt from the
requirement of submitting reports under subsection (k):
``(A) The Secretary shall identify such devices or types of
devices for which such exemptions should be terminated in order
to provide a reasonable assurance of the safety and
effectiveness of the devices. The Secretary shall publish in
the Federal Register a list of the devices or types of devices
so identified, and shall revise the list as appropriate. The
exemption for each device or type included on the list is
terminated upon the publication of the list. For each report
under subsection (k) submitted pursuant to this subparagraph
the Secretary shall require the validation data described in
paragraph (1)(A).
``(B) For each device or type of device included on the list
under subparagraph (A), a report under subsection (k) shall be
submitted to the Secretary not later than 15 months after the
publication of the initial list, or a revision of the list,
whichever terminates the exemption for the device. During such
15-month period, the Secretary may not take any action under
this Act against such device solely on the basis that such
report has not been submitted to the Secretary. After the
submission of the report to the Secretary the Secretary may not
determine that the device is misbranded under section 502(o),
adulterated under section 501(f)(1)(B), or take action against
the device under section 301(p) for failure to provide any
information required by subsection (k) until (i) the review is
terminated by withdrawal of the submission; (ii) the Secretary
determines by order that the device is substantially equivalent
to a predicate device; or (iii) the Secretary determines by
order that the device is not substantially equivalent to a
predicate device. Upon a determination that a device is not
substantially equivalent to a predicate device, the device can
no longer be legally marketed.
``(C) The initial list under subparagraph (A) shall be
published not later than 18 months after the effective date of
this subsection.
``(D) Section 502(o) applies with respect to the failure to
submit a report under subsection (k) that is required pursuant
to subparagraph (A), including a failure of the report to
include validation data required in such subparagraph.
``(E) The termination under subparagraph (A) of an exemption
under subsection (l) or (m) for a critical or semicritical
reprocessed single-use device does not terminate the exemption
under subsection (l) or (m) for the original device.
``(3) In the case of a reprocessed single-use device that is
classified in class III and for which a premarket application is
required, the following provisions apply with respect to such
reprocessed device in lieu of an application for premarket approval
under section 515:
``(A) The device shall not be introduced into interstate
commerce or delivered for introduction into interstate commerce
unless the person involved has submitted to the Secretary a
report in accordance with this paragraph and the Secretary,
after reviewing the report, issues an order determining there
is a reasonable assurance of the safety and effectiveness for
the device.
``(B) The report under subparagraph (A) shall contain the
following:
``(i) The device name, including both the trade or
proprietary name and the common or usual name.
``(ii) The establishment registration number of the
owner or operator submitting the report.
``(iii) Actions taken to comply with performance
standards under section 514.
``(iv) Proposed labels, labeling, and advertising
sufficient to describe the device, its intended use,
and directions for use.
``(v) Full reports of all information, published or
known to or which should be reasonably known to the
applicant, concerning investigations which have been
made to show whether or not a device is safe or
effective.
``(vi) A description of the device's components,
ingredients, and properties.
``(vii) A full description of the methods used in,
and the facilities and controls used for, the
reprocessing and packing of the device.
``(viii) Such samples of the device that the
Secretary may reasonably require.
``(ix) A financial certification or disclosure
statement or both, as required by part 54 of title 21,
Code of Federal Regulations.
``(x) A statement that the applicant believes to the
best of the applicant's knowledge that all data and
information submitted to the Secretary are truthful and
accurate and that no material fact has been omitted in
the report.
``(xi) Any additional data and information that the
Secretary determines is necessary to determine whether
there is reasonable assurance of safety and
effectiveness for the reprocessed device.
``(C) In addition to the information or data required in
subparagraph (B), the report under subparagraph (A) shall
include the validation data described in paragraph (1)(A) that
demonstrates that the reasonable assurance of the safety or
effectiveness of the device will remain after the maximum
number of times the device is reprocessed as intended by the
person submitting the report under this paragraph.''.
(c) Definitions.--Section 201 of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 321) is amended by adding at the end the following:
``(ll)(1) The term `single-use device' means a device that is
intended for one use, or on a single patient during a single procedure.
``(2)(A) The term `reprocessed', with respect to a single-use device,
means an original device that has previously been used on a patient and
has been subjected to additional processing and manufacturing for the
purpose of an additional single use on a patient. The subsequent
processing and manufacture of a reprocessed single-use device shall
result in a device that is reprocessed within the meaning of this
definition.
``(B) A single-use device that meets the definition under
subparagraph (A) shall be considered a reprocessed device without
regard to any description of the device used by the manufacturer of the
device or other persons, including a description that uses the term
`recycled' rather than the term `reprocessed'.
``(3) The term `original device' means a new, unused single-use
device.
``(mm)(1) The term `critical reprocessed single-use device' means a
reprocessed single-use device that is intended to contact normally
sterile tissue or body spaces during use.
``(2) The term `semi-critical reprocessed single-use device' means a
reprocessed single-use device that is intended to contact intact mucous
membranes and not penetrate normally sterile areas of the body.''.
(d) Prohibited Acts.--Section 301 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 331), as amended by section 321(b)(2) of Public
Law 107-188, is amended by adding at the end the following:
``(gg) The introduction or delivery for introduction into interstate
commerce of any device in violation of section 510(o)(3).''.
Purpose and Summary
The purpose of H.R. 3580 is to establish a medical device
user fee program at the Food and Drug Administration (FDA) in
order to provide FDA with the resources necessary to better
review medical devices, to enact needed regulatory reforms so
that medical device manufacturers can bring their safe and
effective devices to the American people at an earlier point in
time, and to ensure that reprocessed medical devices are as
safe and effective as original devices.
Background and Need for Legislation
There are more than 10,000 medical device manufacturers in
the United States, and these manufacturers submit nearly 5,000
device applications and submissions to the FDA on a yearly
basis. While the FDA has done a good job reviewing these
applications and submissions, there is recognition that FDA
resources are limited, and that without a new infusion of
funding, it is likely that review times will increase in the
future.
Providing FDA with new resources to review applications and
submissions is just one way to ensure expedited review times.
Another way to ensure swift approval of safe and effective
devices is to enact needed regulatory reforms. The medical
device industry is one of the most innovative industries in the
United States. The average life cycle for a new medical device
frequently lasts less than one year, compared with multi-year
life cycles for other FDA-regulated products. It is best for
American consumers to receive innovative, safe, and effective
medical devices at the earliest point in time, and regulatory
reforms will assist in accomplishing this objective.
Further, safe and effective reprocessed medical devices are
important to the American health care marketplace because they
cost less than original medical devices, thus reducing overall
health care costs. However, in certain situations reprocessed
medical devices raise questions of functionality and safety and
effectiveness that original medical devices may not. Therefore,
it is important to enact reforms which take into account the
differences between these two types of devices, where they
exist.
H.R. 3580 responds to these issues by enacting a medical
device user fee program which will provide FDA with more than
$200 million over the five year life of the program. Such new
money will allow FDA to hire more reviewers and improve its
infrastructure. The money, to be provided by medical device
manufacturers (in the form of application fees) and increased
appropriations, will be used by the FDA to meet agreed-upon
performance goals. H.R. 3580 further enacts needed regulatory
reforms such as third-party inspection and the statutory
creation of the Office of Combination Products, both of which
will address concerns raised by the medical device industry.
Last, this legislation enacts needed medical device
reprocessing reforms intended to provide end-users with
information about whether the medical devices they use are, or
are not, reprocessed, while at the same time providing FDA with
more information about whether medical devices can be cleaned,
sterilized, and reprocessed without affecting functional
performance.
Hearings
The Committee on Energy and Commerce has not held hearings
on the legislation.
Committee Consideration
On Wednesday, October 2, 2002, the Committee on Energy and
Commerce met in open markup session and favorably ordered
reported H.R. 3580, as amended, by a voice vote, a quorum being
present.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto.
There were no record votes taken in connection with ordering
H.R. 3580 reported. A motion by Mr. Tauzin to order H.R. 3580
reported to the House, as amended, was agreed to by a voice
vote.
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee has not held oversight
or legislative hearings on this legislation.
Statement of General Performance Goals and Objectives
The goals and objectives of this legislation are to
establish a medical device user fee program that enables the
FDA to better approve safe and effective medical devices; to
enact needed regulatory reforms; and to ensure that reprocessed
medical devices are safe and effective in all instances.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee finds that H.R.
3580, the Medical Device User Fee and Modernization Act, would
result in no new or increased budget authority, entitlement
authority, or tax expenditures or revenues.
Committee Cost Estimate
The Committee has reviewed this legislation for its
budgetary impact and has concluded that it will result in
increased discretionary spending of slightly less than $100
million over a five-year period. This score was developed in
close consultation with the Congressional Budget Office (CBO).
While CBO has not yet completed its score of this legislation,
we believe that their numbers will be comparable to the
Committee's estimate.
Congressional Budget Office Estimate and Federal Mandates Statement
The Congressional Budget Office estimate required pursuant
to clause 3(c)(3) of rule XIII of the Rules of the House of
Representatives and section 402 of the Congressional Budget Act
of 1974, and the estimate of Federal mandates required pursuant
to section 423 of the Unfunded Mandates Reform Act were
requested from the Congressional Budget Office, but were not
prepared as of the date of filing of this report. The
Congressional Budget Office estimate and accompanying materials
will be contained in a supplemental report.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds that the
Constitutional authority for this legislation is provided in
Article I, section 8, clause 3, which grants Congress the power
to regulate commerce with foreign nations, among the several
States, and with the Indian tribes.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Section 101. Findings
The medical device industry is growing rapidly. The
complexity of medical technology is increasing at an equally
rapid pace. Unfortunately, FDA's device review program lacks
the resources to keep up with the rapidly growing industry and
changing technology. Because prompt approval and clearance of
safe and effective medical devices is critical to improving
public health, it is the sense of the Committee that adequate
funding for the program is essential.
Section 102. Establishment of program
This title gives FDA the authority to collect user fees
from manufacturers seeking to market medical devices. In this
new program, manufacturers pay fees to FDA in exchange for
FDA's agreement to endeavor to meet device review performance
goals that will significantly improve the timeliness, quality,
and predictability of the agency's review of devices.
Under this new program, fees will be charged for certain
applications, reports, supplements and submissions sent to the
Food and Drug Administration for evaluation. Unlike the fees
assessed under the Prescription Drug User Fee Act (PDUFA), no
annual fees are charged for establishments and products. The
fees are based on the relative level of effort required for
reviews. The fees for each application category are prescribed
in section 738(a) as a percent of the fee for an original
premarket approval application (PMA), considered the most
resource-intensive type of review. Table 1 below shows the
types of applications for which fees will be assessed, the fee
as a percent of the fee for a premarket approval application,
and the fees that will be assessed for each type of application
in FY 2003.
TABLE 1.--APPLICATION FEE TYPES, PERCENT OF PMA FEE, AND FY 2003 AMOUNTS
------------------------------------------------------------------------
Fee as % of
Type of application PMA FY 2003 fee ($)
------------------------------------------------------------------------
Premarket Application (submitted under 100 139,000
section 515(c) or section 351 of the
Public Health Service Act).............
Panel-track Supplements to applications 100 139,000
approved under section 515.............
Efficacy Supplement to an application 100 139,000
approved under section 351 of the
Public Health Service Act..............
Premarket Report under section 510(o)(3) 100 139,000
180-day supplement to an approved PMA... \1\ 21.5 29,885
Real Time Supplements to applications 7.2 10,008
approved under section 515.............
Premarket Notification Submissions under \1\ 1.75 2,433
section 510(k).........................
------------------------------------------------------------------------
\1\ This is the percentage unless the compensating adjustments is
triggered in any year. Then the percentages for 180-day supplements
and premarket notification submissions would be higher, since these
fees will be increased to generate additional revenues associated with
the compensating adjustment.
Fees will be assessed for all applications submitted on or
after October 1, 2002. Certain applications are exempted from
these fees, including devices for which a humanitarian device
exemption has been granted, applications licensed solely for
further manufacturing use, noncommercial applications from
federal and state government sponsors, premarket notifications
reviewed by an accredited third party, as well as devices
solely intended for pediatric conditions of use.
Fees can be used by FDA for the ``process for the review of
device applications.'' The ``process for the review of device
applications'' is defined to include a number of activities,
including: activities necessary to review applications; the
issuance of action letters; preapproval inspections; monitoring
of research conducted in connection with reviews; review of
devices submitted pursuant to section 351 of the Public Health
Service Act; the development of guidance and policy documents
to improve the device review process; the development of
voluntary test methods and consistent standards; the provision
of technical assistance to device manufacturers; device
classification activities; evaluation of postmarket studies
required as a condition of device approval; and the compiling,
developing, and reviewing information on relevant devices to
identify safety and effectiveness issues for devices subject to
premarket applications, premarket reports, supplements, or
premarket notification submissions. The Committee believes that
FDA should ensure that adequate user fee resources are
dedicated to identifying safety and effectiveness issues for
devices subject to premarket applications, premarket reports,
supplements, and premarket notification submissions when
reviewing information on relevant devices.
Further, the Committee wishes to emphasize the importance
of the use of both fees and appropriated dollars to develop the
technological expertise available to the FDA for review
purposes. The changes in medical technology over the last
quarter of a century have been dramatic. The technologies
involved in today's medical devices were not even dreamed of 25
years ago. The ability of the Center for Devices and
Radiological Health to remain current and expert in these
rapidly evolving technologies will certainly be stressed as we
move toward devices based on advanced technologies such as
nanotechnology and tissue engineering. For this reason, the
Committee expects the Center for Devices and Radiological
Health to develop a pool of outside technical experts, who
would be available on short notice, to provide technical advice
on product reviews, pre-approval inspections, and other
technical issues for which the Center may need assistance. Such
outside expertise is to be funded by a combination of user fees
and appropriations and shall be pre-cleared through the
appropriate conflict of interest process. The Center's current
advisory committee members represent a source for developing
such a pool. The Committee intends that this section provides
the funds necessary to expand the current advisory committee
resource into a preeminent, multi-disciplinary scientific
resource the Center can draw on as it sees fit.
The bill uses a revenue model that is based on the latest
PDUFA reauthorization, enacted on June 12, 2002--referred to as
PDUFA III. The major features of this revenue model are
described below.
Statutory Revenue Amounts.--Like PDUFA III, the revenue
amounts FDA is expected to collect each year are stated in
section 738(b), not the amounts of application fees. The fees
will be established to generate $25.1 million in FY 2003, and
reaching $35 million in FY 2007, plus adjustments. Adjustments
are to be made to these statutory amounts for years after FY
2003. Most adjustment provisions follow in subsection 738(c).
However, one adjustment contingency is addressed in subsection
738(b). If, after the date of enactment, new legislation should
require the funding of additional Federal personnel retirement
costs, the fee revenue amounts in this section shall be
increased to fund the portion of those costs attributable to
the device review process. Each of the other specific
adjustment provisions set forth in subsection 738(c) is
discussed below.
Inflation Adjustment.--An inflation provision, subsection
738(c)(1), identical to the inflation adjustment provisions in
PDUFA III, adjusts statutory revenue levels each year after FY
2003. Fee revenues are adjusted each year by the greater of
either the increase in the CPI index for all urban consumers
for the most recent year, or for the most recent change in pay
for Federal employees stationed in the Washington, DC
metropolitan area. These adjustments assure that the personnel
resources acquired with additional fee revenue are not
diminished over time by inflation.
Workload Adjustment.--A workload adjustment provision,
subsection 738(c)(2), increases fee revenue if, over time,
there is an increase in aggregate in the major components of
FDA's device review work. This parallels the workload
adjustment provision included in PDUFA III. The components of
the device review workload that will be considered in making
this measurement are: (1) Premarket applications, whether or
not they pay fees; (2) supplements, whether or not they pay
fees; (3) investigational new device applications; and (4)
premarket notification submissions.
The workload adjuster for each component has as its base
the average number of applications of each particular type that
FDA received over the five-year period FY 1998 through FY 2002.
It requires calculation of a rolling average of submissions for
the latest five-year period that ends before the end of each
fiscal year beginning on or after October 1, 2002. The percent
change in the latest five-year average, compared to the base
year, would then be multiplied by the weighting factor for that
component. Then all 4 components of the workload adjuster are
added together, and the total percentage that results is the
workload adjuster that will be used to further adjust the
inflation-adjusted statutory revenue levels each year after FY
2003. Use of 5-year rolling averages in this process dampens
the impact of revenue fluctuations. The Secretary shall publish
in the Federal Register the fees resulting from this adjustment
and the supporting methodologies. Because a revenue target for
each year is set in the statute rather than specific fee
levels, this adjustment is essential to assure revenues remain
in balance with workload. If, over time, the number of
applications submitted to FDA for review increases, this will
generate additional revenue in proportion to such a workload
increase. If there were no workload increase, there would be no
increase in fee revenues as a result of this provision.
Compensating Adjustment.--A compensating adjustment
provision, subsection 738(c)(3), guarantees stability to the
device fee revenues in the absence of more stable annual
product and establishment fees that generate two-thirds of
PDUFA fee revenues. The compensating adjustment provision will
only be invoked if cumulative fee revenues account for less
than the statutory revenue levels, adjusted for inflation and
workload. If the compensating adjustment becomes necessary in
any year, it will impact only fees for the two highest volume
application types--180-day supplements and premarket
notification submissions. Fees for each of these two types of
application would be increased proportionally during the next
year by an amount sufficient to make up for this cumulative
shortfall in device fee revenue.
Final Year Adjustment.--Subsection 738(c)(4) also allows
FDA to make a one-time increase in fees in FY 2007, if
necessary, to assure that the agency will have no less than
three months of operating reserves on hand at the end of FY
2007 when this legislation will sunset. This will allow the
agency to operate for up to 3 months in FY 2008. Further,
delaying this payment until FY 2007 minimizes the need for FDA
to carry large balances over from year to year, reducing
industry outlays until they are necessary to support
operations.
Annual Fee Setting.--Subsection 738(c)(5) requires FDA to
publish the actual fees for each year in a notice in the
Federal Register 60 days before the beginning of the fiscal
year. This is the same process used for PDUFA fees. The fee
levels will be established to generate the revenue levels set
in the statute, plus adjustments in years after FY 2003 as
provided in the statute. This annual fee setting may also take
into account the most current information available about the
volume of each type of application forecast for the coming
year. However, since FY 2003 has already begun, the statute
sets the fees for FY 2003, based on a fee of $139,000 for a
premarket application fee. All of the other fees for FY 2003
flow from this amount, and are set out in Table 1 above.
The Committee also understands that the device industry is
very different from the drug and biologic industries, in that
the device industry is largely made up of companies with fewer
than 50 employees. Therefore, the Committee strongly believes
that the device user fee program should take into account that
some smaller companies will not be able to pay the full user
fee, due to their lack of revenues. Given that the Committee in
no way wants to create governmental barriers to entry into the
device marketplace, the user fee program contains a provision
to protect small device firms. For purposes of this
legislation, a small business is defined as an entity that
reported $10 million or less in ``gross receipts or sales'' in
its most recent Federal income tax return, including the
returns of its affiliates, partners, or parent firms. Federal
corporate and partnership tax forms all contain a fairly
standard line item for reporting the total of ``gross receipts
or sales.'' Firms wishing to take advantage of the small
business provisions will have to submit certified copies of
their most recent Federal income tax filings, including those
of their affiliate, partner and parent firms, to verify that
they qualify for the small business provisions. Firms that do
not submit accurate or complete information in their
submissions to qualify for the exemption or reduction will be
subject to penalties under 18 U.S.C. 1001.
A fee waiver is granted to a qualifying small business
submitting its first premarket application or premarket report.
In addition, for subsequent submissions, qualifying small
businesses will pay fees at the following reduced rates:
TABLE 2.--REDUCED RATES FOR QUALIFYING SMALL BUSINESSES
------------------------------------------------------------------------
Fee as a % FY 2003 reduced
Type of submission of full fee fee ($)
------------------------------------------------------------------------
Premarket Application, Premarket Report, 38 52,820
Panel-track Supplement, or Efficacy
Supplement.............................
180-Day Supplement...................... 44 13,149
Real Time Supplement.................... 25 2,502
------------------------------------------------------------------------
There is no reduction to the fee for a premarket
notification for small firms. The fee is set at a level that
all firms, regardless of size, will be able to pay.
Using this $10 million criterion, and the five-year average
number received for each type of submission, FDA estimated that
the following numbers of submissions would have been exempt
from fees or paid lower fees in each year:
TABLE 3.--ESTIMATED IMPACT OF SMALL BUSINESS CRITERION
------------------------------------------------------------------------
Submission type FY 2000 FY 2001
------------------------------------------------------------------------
Original PMA's/BLA's............ 11 Exempt, 1 Pays 11 Exempt, 5 Pay
Less (18.8%). Less (24.0%)
Panel Track Supplements......... None pay less 1 Pays Less (9.1%)
(0.0%).
180 Day Design Supps............ 14 Pay Less (7.4%) 9 Pay Less (4.6%)
Real Time Supplements........... 9 Pay less (9.5%). 4 Pay Less (4.1%)
------------------------------------------------------------------------
In developing this $10 million criterion for small businesses
and applying it to a number of scenarios, it caused the total
revenue FDA collected to be less than 13 percent less than it
would have been if there had been no waiver and reduced fees
for small businesses. Subsection 738(d)(2)(A)(ii) also allows
FDA to modify this $10 million small business criterion if it
develops evidence from experience that it results in revenue
loss to FDA of 13 percent or more, compared with revenue that
would be collected with no waiver or reduced rates for small
businesses. To effect a change in the $10 million level, the
data and analysis supporting a change must be published in a
notice in the Federal Register.
In order to meet the performance goals associated with
device user fees, it is understood that FDA will need
substantially increased resources--$40 million more in FY 2003,
increasing to $50 million more by FY 2007. The fees established
in this legislation provide only a portion of the resources
needed--$25.1 million in FY 2003, increasing to $35 million by
FY 2007. In addition to this fee revenue, FDA will need an
increase in its base appropriations of $15 million, and
adjustments for inflation, to meet the performance goals.
In FY 2003 the administration request for appropriated
budget authority for FDA's devices and radiological health
program (which funds the Center for Devices and Radiological
Health and related field activities of the Office of Regulatory
Affairs), exclusive of funds from fees, is $190,720,000. This
portion of the user fee legislation specifies that FDA must
receive appropriated budget authority of $15 million more than
this level, or $205,720,000, exclusive of user fees, each year
for the next five years, and that this base level must also be
increased each year for inflation. Further, consequences are
established if FDA's appropriated budget authority falls short
of this level.
In FY 2003 and FY 2004, if the $15 million in appropriated
funds is built into the base, the Committee expects that FDA
will meet all the performance goals specified in the letter
referred to in the Act. There is no statutory obligation to
meet the goals. Nevertheless, we expect FDA to strive to meet
the goals, not only in FY 2003 and FY 2004, but also throughout
the existence of this user fee program.
In FY 2003 and FY 2004, if appropriated budget authority
for FDA's devices and radiological health program falls short
of this level ($205,720,000 in FY 2003 and the same amount
adjusted for inflation in FY 2004), FDA will still collect user
fees, and will be expected to meet the performance goals to the
extent practicable. It is the Committee's intent that under
this language, a slight shortfall in funds will result in FDA
meeting the performance goals, or slightly missing the goals.
Of course, if the shortfall is great, FDA's ability to meet the
performance goals will decline correspondingly.
In FY 2005, the total budget appropriated budget authority
for the devices and radiological health program, exclusive of
fees, for the fiscal years 2003 through 2005 must equal the sum
of the minimum levels set for each of these years. In other
words, if there was a shortfall in appropriated budget
authority, exclusive of fees, in any year, it must be fully
made up by FY 2005. If this benchmark is reached, FDA will be
expected to meet the performance goals. If this benchmark is
missed, then FDA will continue to collect user fees in 2005,
but it will only be expected to meet the performance goals to
the extent practicable, taking into account the amounts that
are available to the Secretary for such purpose.
For each of Fiscal Years 2003, 2004, and 2005, if the
additional $15 million has not been built into the base of the
budget, and the FDA has not been made whole by being given a
total of 45 million new dollars over this three year period,
then the Comptroller General will be required to issue a report
to the Congress describing whether and to what extent the
Secretary is meeting the performance goals identified for such
Fiscal Years. The General Accounting Office will be expected to
report: the number of new employees hired to assist the FDA in
meeting the performance goals; a detailed utilization analysis
of user fee revenues to date; the impact of user fees on
review-related activity; the status of systems infrastructure
enhancement; actual performance of FDA in meeting the goals; an
FTE cost analysis; the use of contract resources for reviews;
and recommendations on management, systems, and other changes
that could be undertaken to enhance performance to ensure that
the goals will be met in FY 2006 and FY 2007.
In FY 2006, the total appropriated budget authority for the
devices and radiological health program, exclusive of fees, for
the fiscal years 2003 through 2006 must also equal the sum of
the minimum levels set for each of these years. In other words,
if there was a shortfall in appropriated budget authority,
exclusive of fees, in any of the previous three years, it must
be fully made up by FY 2006. If this benchmark is missed then
the consequences are more severe the program terminates. FDA
would no longer be able to collect device user fees, and all
associated performance goals would be dissolved.
For FY 2007, FDA's appropriated budget authority for the
devices and radiological health program, exclusive of fees,
must equal $205,720,000, adjusted for inflation, and user fees
must have been collected in fiscal year 2006, or the program
would terminate, fees would not be collected and performance
goals would be dissolved.
A failsafe mechanism is provided in the event that the
required appropriations are not in place on the first day of
each fiscal year. If the required appropriations are
subsequently made available, FDA can charge fees for
submissions received at any time in the fiscal year, even if
the required appropriations were not enacted at the time an
application was submitted.
Subsection 738(g)(1) provides standard language that
assures that the fees subsequently appropriated under this act
are treated as revenue generated and appropriated at the same
time, so that they are neutral in their budget impact. FDA is
also given the authority to transfer these fees to
appropriation accounts for specific fiscal years, in order to
pay for operations each year. This language parallels
provisions in PDUFA III.
Spending from Appropriations on Device Review.--Subsection
738(g)(2)(A) provides two further limitations, both parallel to
limitations in PDUFA III.
The first limitation, subsection 738(g)(2)(A)(i), is that
fees may be retained in each fiscal year only up to the amount
specified in each year for appropriation acts. FDA may begin
collecting fees in any year in which an appropriation for fees
for the year, or any portion of it, has been enacted. However,
the appropriation act itself sets the upper limit each year on
the amount of fees that may be kept and spent each year.
Subsection 738(g)(4) specifies that if, in any year, FDA
collects more fees than specified in appropriations, the excess
fees collected shall be used to reduce fees that would
otherwise be collected in a subsequent fiscal year. Those
excess fee revenues would then be used in such subsequent
fiscal year.
The second limitation, in subsection 738(g)(2)(A)(ii),
dissolves FDA's authority to collect and spend fees in any year
that FDA fails to spend on the process for the review of device
applications from appropriations as much as it spent on that
process from appropriations in FY 2002, adjusted for inflation.
The trigger is based on the amount FDA spends from
appropriations on the device review process each year. FDA's
accounting system measures spending by organization component.
Spending on the device review process, however, is usually only
a portion of spending of organization components in CDRH, CBER
and ORA. That determination can only be made definitively by
merging information from FDA's accounting system, after the
close of the fiscal year, with results from time reporting
systems that reflect the percent of time each organization
component spends on the device review process. This provides
the total dollar figure that FDA spent on the device review
process. From this total, FDA has to subtract the amount of fee
revenue that was spent to determine the amount of spending on
the process that came from appropriations. This process does
not finally identify exactly how much was spent from
appropriations until after the end of the fiscal year.
Like a similar provision in PDUFA III, subsection
738(g)(2)(B) provides FDA a margin of error in its effort to
meet this requirement. If FDA's spending is within 5 percent of
the amount required by this provision of law, the requirement
of this section is considered satisfied. If FDA under-spends by
3 percent or less, there is no penalty. If FDA under-spends by
more that 3 percent but not more than 5 percent, FDA will be
required to reduce collections in a subsequent year by the
amount in excess of 3 percent by which FDA under-spent from
appropriations. Spending from appropriations on the device
review process each year is expected to be at or very close to
the amount specified by this trigger, and may never be more
than 5 percent less than the trigger amount. Clearly, over
time, as FDA's appropriations increase in the future, as
required under subsection 738(f), FDA's spending above this
level is expected to increase.
Section 103. Annual reports
The annual reports included in this section replicate the
annual reports required by the Prescription Drug User Fee Act.
Section 104. Postmarket surveillance
The Committee understands that the overwhelming majority of
medical devices subject to FDA review need only demonstrate
substantial equivalence to a predicate device that was
previously found by the FDA to demonstrate a reasonable
assurance of safety and effectiveness, or the predicate device
was on the market prior to the Medical Device Amendments of
1976. Active postmarket surveillance is therefore critical to
confirming such an assurance of the reasonable assurance of
safety and effectiveness. The Committee strongly supports the
FDA's present postmarket surveillance efforts. Nonetheless, the
Committee recognizes that more monies need to be dedicated to
this very vital public health and safety function within FDA.
The Agency estimates that it spent roughly $18 million on
postmarket surveillance efforts in Fiscal Year 2002. Therefore,
this section authorizes an additional $3 million in Fiscal Year
2003 for this activity, and then another $3 million increase in
Fiscal Year 2004, for these purposes. Further, this section
includes a provision requiring the Secretary to conduct a study
identifying the impact of the new device user fee program on
its vital postmarket surveillance activities, the types of
improvements necessary for adequate postmarket surveillance,
and other important inquiries. When the Secretary issues this
study in January, 2007, the Congress will be in a better
position to determine whether user fees should be used
extensively for postmarket surveillance activities as they now
are in the Prescription Drug User Fee Act. While under the user
fee program established by this Act user fees can be used for
some postmarket surveillance (see section 737(5) (J) and (K)),
such uses are limited.
The Committee believes that the increase in authorized
funds should be employed by FDA (1) to do a better job
monitoring the long-term, safety, efficacy and reliability of
approved medical devices, especially implanted devices; (2) to
monitor, document and audit device postmarket studies; (3) to
improve adverse event reporting; (4) to facilitate prompt
recall of devices that because of unforeseen design flaws, or
failure to meet good manufacturing practices, are defective
(particularly those whose defects pose a threat to human
health); and (5) to better monitor and understand long-term
effects of the use of devices in pediatric populations.
Section 105. Consultation
This provision ensures that the Secretary will consult with
various stakeholders, both private and public, when developing
the next set of performance goals if the medical device user
fee act is to be reauthorized. Such consultation should result
in performance goals which take into account the concerns of
the Congress, academic and scientific experts, health care
professionals, patient and consumer advocacy groups, and the
regulated industry. Further, if and when the Secretary develops
recommendations for the reauthorization of the device user fee
program, the Secretary is required to hold a public meeting to
solicit input from affected stakeholders.
Section 106. Effective date
This section indicates that the effective date of the
device user fee program is October 1, 2002.
Section 107. Sunset
This section indicates the expiration date of device user
fee program.
Section 201. Inspections by accredited persons
This section represents a very carefully crafted compromise
between Members of the Committee with widely disparate views on
the benefits and risks of permitting third parties, compensated
by regulated companies, to perform inspections for the
government. As a result of extensive examination of the
relevant risks inherent in any imperfect inspection program
(whether it be a FDA or third party inspection program), the
Committee concludes that the potential improvement in the
safety of medical devices outweighs the risk associated with
creation of a third party inspection program. One of the
critical tools at the FDA's disposal to achieve its goal of
protecting the public from unsafe or ineffective medical
devices is the authority to conduct inspections of all medical
device establishments, foreign or domestic, that market their
products in the United States.
There are a number of salient facts not in dispute. Over
the last several years the number of medical device firms,
domestic and international, has grown dramatically from 9,061
in FY 1997 to 13,701 in FY 2001. The FDA expects this growth to
continue, projecting the total number of device firms to exceed
15,000 in FY 2003. The sharp growth of the medical device
industry, combined with resource constraints at the FDA, has
made it difficult for the FDA to meet its statutory obligation
of inspecting each medical device establishment at least once
every two years. For this reason it is not surprising to find
that the FDA's 2002 Annual Performance Plan ``scorecard'' rated
the ``Device Inspection'' area as one of those areas at the
Agency that is ``Not Working Well.''
The domestic inspections coverage was only 20 percent in FY
2001 compared to the statutory requirement of 50 percent. This
means that the Agency was only inspecting 40% of the number of
firms domestically that they are required to inspect under the
law. The situation for FDA foreign inspections is even worse.
The Agency indicates that the inspection coverage for foreign
firms that market their products in the United States was only
11 percent in FY 2001.
It is concerning to the Committee that the Agency does not
project improvement in their inspections coverage for the
device industry. For FY 2002 and FY 2003 the Agency has
targeted domestic inspection coverage to continue at 20 percent
and foreign inspection coverage at only 9 percent.
It is also a matter of fact that this poor inspectional
record is a function of inadequate resources. Further, the
threat of bioterrorism, particularly from abroad, to our food
and drug supplies, forces the Committee to conclude that it is
highly likely that FDA will not be able to provide the
requisite resources or priority to ensuring an adequate level
of device inspections, at least for the near future.
While the FDA struggles to meet its statutory mandate of
conducting a routine inspection of each domestic medical device
firm at least once every two years, some segments of the
medical device industry have faced a significant growth in the
total number of inspections being required by foreign health
agencies and departments. According to information from one
large U.S. medical device company, the number of total
inspections of their medical device facilities almost doubled
from 16 in the period July 1997-June 1998 to 29 in the period
July 1999 to June 2000. During this same period the number of
FDA inspections for this company declined from nine to six.
Other medical device companies have reported a similar dramatic
growth in the number of foreign inspections taking place in
their facilities.
Ironically, this proliferation of the total number of
medical device inspections is taking place at a time when
significant progress is being made to harmonize inspectional
requirements around the world. The Global Harmonization Task
Force (GHTF) has been working since 1992 to harmonize a wide
range of medical device regulatory requirements, with important
successes to date. In addition, in 1996 the FDA rewrote its GMP
regulation to align it as much as possible with the growing
quality systems approach being used by European public health
regulatory agencies. Also a widespread system of voluntary
quality systems verification and validation such as those of
the International Standards Organization (ISO) has developed to
provide confidence to original equipment manufacturers,
customers, consumers and users of medical devices. As a result
of these activities, there has been a significant and
substantial international convergence and agreement on the
nature of the manufacturing quality system requirements
necessary to ensure the production of safe medical devices.
Despite this progress, however, the increase in the total
number of inspections is causing the FDA and companies alike to
look for new ways to streamline systems and avoid duplicative
inspections. It has become clear that if each country insists
on its own individual medical device inspections then
harmonization, while important, is not enough.
Congress has already taken steps to address this situation.
In the 1997 FDA Modernization Act (FDAMA) a section is included
which provides ``[t]he Secretary shall support the Office of
the United States Trade Representative, in consultation with
the Secretary of Commerce, in efforts to move toward the
acceptance of mutual recognition agreements relating to the
regulation of drugs, biological products, devices, foods, food
additives, and color additives, and the regulation of good
manufacturing practices, between the European Union and the
United States.'' In addition, Congress mandated in this same
provision: ``The Secretary shall, not later than 180 days after
the date of enactment of the Food and Drug Administration
Modernization Act of 1997, make public a plan that establishes
a framework for achieving mutual recognition of good
manufacturing practices inspections.''
Mutual recognition, unlike harmonization, does not require
similar or identical regulatory requirements. A mutual
recognition arrangement provides that each party is capable of
verifying and validating the requirements of the other party,
and for that activity to be acceptable in lieu of each party's
own activities. In other words, a mutual recognition agreement
between the United States and the European Union would permit a
properly trained and accredited European entity to inspect a
European-based manufacturer which intends to market its product
in the United States to FDA standards, and for the FDA to
recognize that inspection as though it had conducted it itself.
Such a Mutual Recognition Agreement (MRA) between the
United States and the European Union was signed on May 18,
1998. The FDA published a final rule on November 6, 1998 for
medical devices and pharmaceuticals under the MRA. The MRA
became effective on December 7, 1998. Under this MRA, the FDA
approves accredited European third party organizations
(referred to under the MRA as ``conformity assessment bodies''
(CAB)) to perform quality systems inspections on EU
manufacturers that export devices to the United States.
Likewise, under the MRA, the EU is approving accredited U.S.
third parties to evaluate U.S. manufacturers against EU
requirements for devices to be exported to the EU. Earlier this
year the FDA notified the EU that the first European third
party had been accredited to conduct independent inspections to
FDA standards under the MRA. The Committee understands further
that the FDA has just accredited a second third party to
conduct inspections to FDA standards under the MRA.
Consequently, for the past five years, through the
development and implementation of the MRA, the FDA has gained
some experience in establishing a third party-based system for
conducting quality systems inspections and other regulatory
activities. Additionally, the FDA third party review program
has given the Agency experience in establishing a third party
program, in training and accrediting third parties, in
operating in a system where initial actions are conducted by
third parties but final action is required by the Agency, and
in working through important conflict of interest issues.
The affirmative case for third party inspections rests on
the view of the Agency's experience with third party programs,
plus the fact that FDA resources do not allow for an adequate
rate of biennial and foreign inspections. Thus, a program
specifically aimed at utilizing third party services in the
context of medical device quality systems inspections is
appropriate.
There are numerous potential advantages to the public in
implementing a third party inspections program. Such a program
may increase the number of inspections of medical device firms
which market their products in the United States and thereby
increase the amount of information that the Agency has on the
quality systems program at certain specific companies and on
the industry as a whole. If the quality of third party
inspections is consistently comparable to that of FDA
inspections, this should lead to an improvement in the public
health and companies' compliance with existing inspectional
requirements. Such a program should also provide the FDA with
important new and timely information on more medical device
companies than is now possible given the resource constraints
at the Agency. Under such a third party inspections system the
FDA would retain final say on the status of the company's
quality system at the completion of the third party inspection.
In addition, third parties would be obligated to notify the FDA
immediately in the event that they find a significant public
health risk in the course of an investigation.
With the establishment of a voluntary third party
inspection program in the United States, the Committee
anticipates that at some time in the future, more and more
countries would move towards mutual recognition. The Committee
believes that at some point a medical device company that
markets its products in the European Union, Canada, the United
States, China, Brazil, Mexico and other countries should be
able to contract with a single independent third party which
has sought and received accreditation from each of these
countries to conduct inspections to each of their national
standards. Under these circumstances, the third party could
perform a single inspection that would cover each nation's
medical device quality systems requirements. Such a system
would ease the threat of the improper use of unnecessary
regulatory requirements to stifle legitimate international
trade.
In crafting the compromised embodied in section 201, the
Committee carefully analyzed the potential risks that an
improperly crafted third party inspection program could
present. FDA inspections of device manufacturing facilities are
the primary means of assuring that postmarket device safety and
effectiveness is not jeopardized by poor manufacturing
practices. The Committee examined entrusting this
responsibility to private parties, compensated by the device
manufacturer, and the potential conflicts of interest raised by
such arrangements. Further, the Committee examined the risks
associated with inspections performed by entities lacking
experience or expertise. The Committee addressed the most
serious of these legitimate concerns by giving FDA the ability
to determine appropriate candidates for participation in the
third party program, the ability to disagree with a third party
selection based due to conflicts of interest, and by empowering
FDA to only accredit third parties with appropriate experience
or expertise. And, of course, FDA retains full authority to
inspect at will.
No manufacturer seeks to sell defective products, and most
are willing to expend the capital necessary to implement
meaningful quality control systems. Inherent in any business,
however, is the legitimate aim of maximizing profits. The
specter of inspection by governmental bodies (in this case the
FDA) with the authority to take prompt remedial action with
potential consequence to profit ensures that meaningful quality
control systems are not compromised in the effort to maximize
profits. To ensure that the specter of governmental inspection
is maintained, section 201 ensures that FDA must maintain its
present level of inspectional resources for biennial, for
cause, and international inspections.
The Committee reconciled these disparate views of the third
party device inspection question by providing a third party
inspection program that is entirely additive to existing FDA
efforts to inspect medical device manufacturing facilities for
compliance with good manufacturing practices. The cornerstones
of the compromise are no dimunition of either FDA authority to
conduct such inspections, or of the resources that the Agency
must devote to such inspections. Under such a third party
inspection system FDA would retain final say on the status of a
company's quality system at the completion of the third party
inspection. In addition, third parties would be obligated to
notify FDA immediately in the event they find a significant
public health risk in the course of an investigation.
Section 201 establishes a third party inspection program
that will permit eligible firms to select, from a list
established by FDA, an accredited non-government entity to
perform quality system inspections, other than preapproval
inspections. FDA determines which persons can qualify to be
third party inspectors. A device establishment which had its
most recent FDA-inspection characterized as ``no action
indicated'' or ``voluntary action indicated'' are eligible to
use FDA-accredited third parties, after the FDA clears its
participation in the program and does not disagree with the
establishment's selection of an accredited third party. The
purpose of this provision is to increase inspection activity
for medical devices so that the public and firms benefit from
regular inspections, and to permit FDA to focus government
inspection resources on firms that have greater problems and
devices that present higher risks. In addition, the third party
inspection program is intended to help qualified firms schedule
inspections in a manner that will help them meet the multiple
inspection requirements of a global market.
Section 201 describes the minimum requirements a person
must meet to qualify to conduct inspections under the program.
It establishes stringent conflict of interest standards to
ensure that any person qualified to do third party inspections
will not have a financial interest in the firm or products
being inspected. The provisions of this subsection describe
minimum criteria, and the FDA may publish additional criteria
for acceptance of third parties including, for example,
satisfactory completion of training designed to ensure that the
inspections conducted by these third parties are equivalent to
the inspections federal employees currently conduct. Once the
FDA establishes the criteria it will use to accredit third
parties to conduct inspections, the FDA must then promptly
respond to accreditation requests by potential third parties.
Because the accreditation process will consume FDA resources,
in order to allow the process to unfold in an orderly manner
this provision limits the number of entities which can be
accredited in the first year after the criteria are published
to no more than 15 such entities. In addition, FDA is required
to audit and monitor the work of accredited third parties and
may withdraw accreditation from those that no longer qualify.
The third party has the opportunity for an informal hearing
prior to withdrawal of its accreditation, but FDA may suspend
the accreditation while the matter is being resolved.
Third party inspectors will be expected to conduct
inspections that are equivalent to quality system inspections
performed by federal employees. Because these accredited
persons will be conducting inspections on behalf of FDA, any
statement or representations establishment employees make to
these accredited persons will be subject to section 1001 of
title 18, which provides criminal penalties for making false
statements to the government.
The accredited person will also be required to prepare an
inspection report for each inspection in a form and manner
consistent with reports prepared by federal employees. At a
minimum, these reports will identify the persons responsible
for GMPs at the establishment, the date and scope of the
inspection, the observations identified, and any other
information that may be relevant. FDA may develop additional
elements that will be part of these reports and may revise the
format and content of what will be required as the program
gains experience. The accredited party's observations and
report will be sent to FDA no later than three weeks following
the last day of the inspection. FDA is to be notified
immediately any time an accredited person discovers a condition
that could cause or contribute to an unreasonable risk to
public health.
Compensation for inspection by an accredited third party
will be determined by an agreement between the firm and the
third party and will be paid by the person who engages the
third party. The Congress will receive a report detailing how
the third party program has performed, and the program will
terminate in ten years unless reauthorized by Congress.
The program is designed to be available to establishments
that have been able to demonstrate in the past that they are
capable of ``consistent compliance'' with the quality system
regulations. Accordingly, only if FDA has classified the most
recent inspection of a device establishment as ``no action
indicated,'' or as ``voluntary action indicated,'' is that firm
eligible to participate in the program. If an establishment's
most recent inspection by FDA was classified as ``official
action indicated,'' that establishment is not eligible to
participate in this program. Eligible firms must submit a
notice to FDA that (1) requests clearance to participate in the
program and (2) identifies the third party the firm intends to
employ. FDA can provide clearance and agree to the selection of
the identified third party or can ask for additional
information. The additional information may relate to the
compliance history of the firm or it may relate to the
relationship between the firm and the identified third party,
or it may relate to both. The statute sets forth deadlines for
FDA action on a request or following the receipt of additional
information. If FDA fails to meet these deadlines, a request is
deemed cleared and/or agreed to. Only those device
establishments which have a good history of compliance with
good manufacturing practice requirements will be eligible to
participate. Further, FDA will be able to deny an
establishment's selection of a third party upon a finding a
conflict of interest, such as a financial relationship (other
than the third party arrangement) between the device
manufacturer and the third party inspector, exists.
Clearance for an establishment to participate in the
program remains in the discretion of FDA. Firms wishing to
participate must not be subject to a finding of ``official
action indicated'' in its last FDA inspection. Further, upon a
request by FDA within 30 days of notification for clearance,
the Secretary can require the establishment to demonstrate
``consistent compliance'' with cGMPs. By ``consistent
compliance'' the Committee understands that the management of
the establishment applying for inspections by an accredited
third party has put into effect a rigorous system of quality
assurance and quality control designed to detect breakdowns in
the production, inspection, and other processes vital to the
safety and effectiveness of the product and is in full
conformance with the requirements under the Act. This does not
mean that the production system must be fail-safe. Rather, it
means that the system must be able to detect any significant
problems, and the management must move quickly to determine the
cause, and affect a solution. Demonstration of such
``consistent compliance'' would be either a history of recent
inspections by FDA and/or third parties that resulted in ``no
action indicated'' findings or prompt and effective attention
to any findings of ``voluntary action indicated.'' Usually,
such information about ``consistent compliance'' will be based
upon all cGMP or other quality control inspections by FDA and
outside parties within the previous two years. Such information
may or may not be sufficient to demonstrate ``consistent
compliance'' as the Committee understands the term. This
judgment is reserved to FDA.
The Committee instructs FDA to prioritize the focus the
program on those qualified firms subject to multiple,
duplicative inspections owing to their extensive sales outside
of the United States. The Committee relies upon the judgment of
FDA to detect any firm that may attempt to abuse the program.
An establishment that has been denied clearance or whose
selection of an accredited person has been rejected may request
a review of FDA's findings. The review may be conducted by a
designee of FDA who is part of the Food and Drug
Administration, such as the FDA's Ombudsman, or by another
person within or outside the agency that FDA chooses.
Section 201 also addresses the situation where an
establishment that has previously been cleared to participate
in the program receives an inspection report from an accredited
person that FDA has classified as ``official action
indicated.'' In this case, the establishment will continue to
be eligible for future third party inspections only if (1) FDA
issues a written statement that the violations leading to the
classification have been addressed and (2) FDA notifies the
establishment, either on FDA's own initiative or in response to
a petition from the establishment, that the establishment has
clearance to use an identified third party for an inspection.
If FDA denies a petition from a firm for further participation
in the program following an adverse inspection report by an
accredited person, the firm may submit an additional petition
one year following the first denial. If FDA does not inspect
the establishment within 48 months following the denial of the
firm's initial petition, the establishment will become eligible
for inspection by accredited persons. The Committee has
included this provision because it intends to facilitate
responsible inspections of device establishments and seeks to
avoid creating incentives for conflicts of interest that might
result from negative findings by a third party inspection.
The Committee intends the accredited person inspection
program to supplement funds currently dedicated to biennial
GMP, international, and for cause inspections of medical device
establishments. It is very important to the Committee that the
establishment of an accredited person inspection program does
not undermine or decrease any of the resources currently being
directed to such inspections. In order to avoid the possibility
that current inspectional resources will be diminished or
diverted to other activities, section 201 provides that the
program will remain in effect so long as the amount of monies
presently dedicated to biennial, for cause, and international
device establishment inspections is maintained. This will be
accomplished by having the Comptroller General determine the
amount of monies obligated by the Secretary in 2002 for
biennal, international and for cause device inspections. This
amount will be determined by examining FDA's compliance budget
for devices. Once this figure is determined, in order for the
third party inspection program to continue this figure must not
only be maintained, but must also increase by five percent per
year. The Committee understands that a five percent growth rate
will allow FDA to maintain its present level of biennial, for
cause, and international device establishment inspections. Due
to certain budgetary vagaries which at times arise, such as
Continuing Resolutions, the maintenance of effort provision
allows FDA to miss the base amount in any given year without
causing the expiration of the program. However, if the base
amount is missed for two consecutive years, this program
terminates.
Most importantly, it must be noted that nothing in this
section in any way limits FDA's authority to inspect a device
manufacturer at any time, regardless of whether the
manufacturer has also been inspected by a third party. This
program is intended to be entirely additive to FDA's present
commitment to inspections.
Section 202. Third party review of premarket notification
Under current law, independent third parties accredited by
the Secretary are permitted to review certain devices subject
to the premarket notification requirements under Section
510(k). When a device is reviewed by a third party under
Section 523 of the Federal Food, Drug, and Cosmetic Act, the
Secretary retains the authority to accept or reject the
recommendation of the third party. Presently, Section 523 will
sunset in 2006.
This section delays the sunset of Section 523 until October
1, 2007. Further, in order to provide better evidence about
whether this provision should be extended in 2007, this section
requires the Secretary to submit to the Congress a study
analyzing whether the program is working to bring devices to
the market in a more timely manner, or whether this provision
is in any way jeopardizing the public health. Specifically,
this section requires the Secretary to recommend to Congress by
January, 2007 whether Section 523 should be continued,
modified, or terminated.
Section 203. Designation and regulation of combination products
The Committee intends to establish within the Office of the
Commissioner of Food and Drugs an Office of Combination
Products to promptly assign, and to oversee and coordinate the
reviews of combination products. Under this section, the
Committee intends for the Office to designate a lead center
based upon the product's primary mode of action, as is required
under present law.
FDA recently established a Combination Products Program
within the Office of the Ombudsman. This Program develops
policies, procedures and processes to facilitate the
intercenter review process; develops guidance to clarify the
regulation of combination products; serves as a focal point to
resolve issues arising during premarket review of combination
products; and serves as an advocate for combination products.
It is the intent of the Committee that these efforts continue
under this new Office.
The Office shall consult with the component of the FDA
within the Office of the Commissioner responsible for
determining whether a product is to be designated (i.e.,
classified under section 563 of the Act) a combination product.
Since the agency's product classification function applies to
all FDA-regulated products that may present questions about
regulatory jurisdiction, not just combination products, it is
the Committee's intent that the product classification function
remain intact within an umbrella component of FDA, currently
the Office of the Ombudsman, though consultation with the new
Office is required in making this determination. Once a
combination product is so classified, the new Office shall
assume responsibility for its assignment to an agency center.
The existing criteria in 503(g)(1) for determining a product's
primary mode of action and assigning a product to an agency
center with primary jurisdiction shall apply. Also, this
provision does not upset the current practice wherein
manufacturers are allowed to submit their products to the
Agency Centers they believe should be responsible for the
review.
Further, this section ensures that the postmarket
regulation of combination products will be consistent and
appropriate. By using the word ``consistent,'' the Committee
intends that like products will be treated in a like fashion.
If the FDA is not being consistent presently in their
postmarket regulation of combination products, this section is
not intended to codify the present inconsistency. Nothing in
this section is intended to limit current postmarket regulatory
authorities. Rather, the Committee intends that combination
products be regulated appropriately after marketing under the
currently applicable provisions of the law.
A major function of this Office will be ensuring the
timeliness of review by coordinating the performance of the
reviews in the responsible Agency Centers. The Committee does
not intend for the new Office to be micro-managing line
reviewers within the different Agency Centers. The bill instead
contemplates that, with respect to the timeliness of reviews,
the Centers themselves will be responsible to the new Office.
The Office will resolve disputes regarding the timeliness of
reviews unless the timeliness question is clearly premature.
Generally, disputes regarding timeliness are ``premature'' when
the statutory time frame for approval has not yet passed.
Disputes regarding the substance of a premarket review that
arise during the review process may be presented to the
Commissioner after first being considered by the Center with
primary jurisdiction under established scientific dispute
resolution procedures. The Commissioner shall consult with the
Director of the Office in resolving the dispute. It is the
Committee's intent that this avenue not be available to resolve
disputes regarding the outcome (i.e., approval or denial of
approval) of a review, as there exist sufficient mechanisms to
address such disputes for all products, including those that
are combination products.
The Secretary, acting through the Office, and after
consulting with stakeholders and agency center directors, shall
review each agreement, guidance or practice specific to the
assignment of combination products to Centers to determine
whether each is consistent with the requirements of new
subsection 503(g)(4). The Secretary shall determine whether to
continue, modify, revise, or eliminate each such agreement,
guidance or practice and shall publish a Notice of Availability
in the Federal Register of such modified or revised agreement,
guidance or practice. It is the Committee's intent that the
Office shall not be bound by any existing agreement, guidance
or agency practice in determining whether to continue, modify,
revise or eliminate any such agreement, guidance or practice,
or in ensuring the consistent and appropriate postmarket
regulation of combination products. Existing agreements,
guidances, or practices shall continue in effect until
continued, modified, revised, or eliminated.
The Secretary shall report to The Committee within one year
of enactment, and annually thereafter, on the activities and
impact of the Office. The Committee recognizes that one year
may not be sufficient time to realize significant and
measurable improvements in some activities related to
combination products.
Section 204. Report on certain devices
The Committee is aware of concerns from regulated persons
that centers at FDA other than the Center for Devices and
Radiological Health review original device submissions and
supplements. Comments have been made about the failure to
conduct timely and effective reviews. Concerns have also been
raised about the risks to the safety of the blood supply if the
review of devices critical to assuring blood safety is removed
from the Center responsible for the integrated blood safety
program. As a result, section 204 requires the Secretary to
submit a report to the appropriate committees of Congress
analyzing key aspects of the performance of the Centers other
than CDRH in conducting premarket device reviews. As part of
that report, the bill states that the Secretary is required to
include a specific recommendation about whether the review
responsibility of devices outside of CDRH should be transferred
to persons ``who are primarily charged with regulating other
types of devices, . . .'' This reference is intended to
identify CDRH. In other words, if the review of devices, or
certain types of devices, by CBER or CDER is inadequate, and
the Secretary determines that review by CDRH would provide
adequate assurance of safety and effectiveness, the Secretary
may recommend a transfer of those device reviews to CDRH, if
the transfer will not have a deleterious impact on the public
health.
Section 205. Electronic labeling
The Internet and increased computer usage have created a
preference in many users for information for use applicable to
prescription devices in electronic form. Even casual users of
computers have become used to receiving electronic information.
The bill conforms FDA practice to the norm by allowing
manufacturers to provide health care facilities (such as
hospitals, doctors' offices and clinics) labeling in this
alternative medium, so long as the labeling complies with
applicable requirements of law. This will better allow
manufacturers to provide such facilities with information that
is more robust, up-to-date, and user-friendly.
There may be some purchasers of prescription devices,
however, that are not computer literate or who lack the
necessary equipment to receive electronic information. For
these limited cases where a purchaser needs labeling in a more
traditional format, this provision allows the purchaser to
request such labeling. The Committee intends that manufacturers
will respond to such a request promptly and at no cost to the
user.
Section 206. Electronic registration
Given the increased reliance on computer usage, this
provision requires manufacturers to provide registration
information required under section 510 by electronic means, but
only upon a finding by the Secretary that electronic receipt of
such information is feasible. In assessing the feasibility of
electronic registration, the Secretary shall consider whether
there are sufficient resources available to FDA to develop and
maintain such a system. Once electronic registration is
feasible, under this section the Secretary is given the
authority to waive the requirement of electronic submission of
registration information for manufacturers who cannot
reasonably comply with the requirements in this section, and
permit them to register through submission to FDA of a hard
copy of the required information.
Section 207. Intended use
This provision eliminates the current law sunset on
``intended use'' for substantial equivalence determinations
found within section 513 of the Federal Food, Drug, and
Cosmetic Act.
Section 208. Modular review
This provision allows manufacturers to apply for review of
portions of their premarket applications, but only when both
the Secretary and the applicant agree that such portions, or
modules, are complete, ready, and appropriate for review. Under
this provision, once a module is reviewed and found acceptable
to the Secretary, the Secretary will not be allowed to review
the determination again, unless issues of safety or
effectiveness cause the Secretary to review such determination.
Section 209. Pediatric expertise regarding classification-panel review
of premarket applications
The Committee believes that it is important for advisory
committees providing recommendations to the Secretary on
devices likely to be used in children to have access to
appropriate pediatric expertise. This section requires these
advisory committees to either include, or consult with, one or
more pediatric experts when the device considered by the
advisory committee is reasonably likely to be used in the
pediatric population.
Section 210. Internet list of class II devices exempted from
requirement of premarket notification
Under the Food and Drug Administration Modernization Act of
1997 (FDAMA), the Secretary was required to publish in the
Federal Register a list of each type of class II device exempt
from the premarket notification reporting requirements under
section 510(k). This section ensures that the list of class II
devices exempt from the reporting requirements under section
510(k) is also published on the internet site of the FDA, and
that such list be updated not later than 30 days after
revisions to the list.
Section 211. Study by Institute of Medicine of postmarket surveillance
regarding pediatric populations
This section requires the Secretary to request that the
Institute of Medicine contract with the Secretary for the
conduct of a study analyzing the adequacy of postmarket
surveillance of devices used in, or implanted into, the
pediatric population. Of especial importance to the Committee
is analysis reviewing the long-term effects, if any, of devices
implanted in children. The Secretary is required to ensure that
the report is transmitted to the Congress no later than four
years after the enactment of this Act.
Section 212. Guidance regarding pediatric devices
This section requires the Secretary to issue guidance about
the type of information necessary to meet the reasonable
assurance of safety and effectiveness of devices intended for
use in the pediatric populations. In no way is the provision
intended to lower, change, or heighten the current law standard
for approval of pediatric devices. Instead, this provision is
meant to encourage the development of safe and effective
devices intended for pediatric populations by having the
Secretary specifically and clearly delineate what type of
information is necessary to meet the current standard of
approval. In developing this guidance, the Committee intends
for the Secretary to abide by all current law requirements,
including ``least burdensome'' requirements.
Section 213. Breast implants; study by the Comptroller General
This section requires the General Accounting Office to
conduct a study to determine the content of information
typically provided to women who consult with health
professionals on the issue of whether to undergo breast implant
surgery; whether this information is provided in oral or verbal
form; whether the information provided is fair and balanced;
whether women understand the information that is provided; and
adverse event information, among other things.
The Committee believes that it is vital that women
considering an implant procedure be provided objective,
understandable information about the risks and benefits of
implant surgery. Therefore, the Committee strongly encourages
the Food and Drug Administration to ensure that women receive
such information in a timely fashion, particularly if the
procedure is elective. In particular, the agency should
consider working with an advisory panel, patients, consumer
groups, implant manufacturers, plastic surgeons, and other
interested parties to ensure such information is updated
correctly, and as soon as possible when new information about
adverse events becomes available. The agency should consider
writing product guides if it believes it could help communicate
fair and balanced information, and if so ensure that such
guides are appropriately updated.
The agency should also work with patients, consumer groups,
manufacturers, plastic surgeons, and other interested parties
to ensure that women enrolling in clinical trials for silicone
breast implants are provided with up-to-date, easy to
understand informed consent documents, early in the clinical
trial enrollment process. The agency should also take
appropriate steps to ensure that clinical trial participants
receive information on how to report problems about their
participation or continued enrollment in a study or a
particular clinical trial.
Section 214. Breast implants; research through the National Institutes
of Health
The Committee is aware of conflicting research as to the
long- term health implications of breast implants. Therefore,
the Committee has asked the NIH to report on all of its
research in this area. Furthermore, we urge the NIH continue
and expand research programs that examine the long-term health
implications of breast implants. If scientifically appropriate,
such a study should allow for comparisons of women receiving
implants for reconstruction after mastectomy to breast cancer
patients who have not had reconstruction. The committee
believes that it is important for these studies to include
women who have had implants for at least eight years,
separately analyzing women with saline implants and those with
silicone gel implants. Such a study should include the rate of
local complications, which may include capsular contracture,
leakage, loss of nipple sensation, problems in breast feeding,
deflation and rupture as well as systemic health problems which
may include neurological and/or auto-immune irregularities that
show possible links to silicone migration, or other leakage or
breakage related issues.
The Committee is aware of conflicting research as to the
long-term health implications of breast implants. Therefore,
the Committee has asked the NIH to report on all if its
historical research in this area. Furthermore, we would suggest
that the NIH continue and expand research programs that examine
the long-term health implications of breast implants. If
scientifically appropriate, such a study should allow for
comparisons of women receiving implants for reconstruction
after mastectomy to breast cancer patients who have not had
reconstruction. If appropriate, the agency should also consider
comparisons of mastectomy patients with those women receiving
implants through elective augmentation procedures, and
comparisons with patients who have received other types of
plastic surgery. The committee believes that it is important
for these studies to include women who have had implants for at
least eight years. Such a study might also focus on the rate of
local complications, which may include capsular contracture,
leakage, loss of nipple sensation, problems in breast feeding,
deflation and rupture as well as systemic health problems which
may include neurological and/or auto-immune irregularities that
show possible links to silicone migration, or other leakage or
breakage related issues.
Section 301. Identification of manufacturer of medical devices
Title III makes changes to the regulatory scheme for single
use devices that are reprocessed. A single use device is a
device that is intended for use by the end user on only one
patient during a single procedure. A device has been
reprocessed when the original device has been used on a patient
and then subject to additional processing and manufacturing so
that it can be used again (one time) on a patient.
The changes being effected by Title III reflect a balancing
of competing concerns. The Committee recognizes that there are
cost savings associated with using devices that have been
reprocessed. Therefore, we want to ensure access to safe and
effective reprocessed devices. FDA's current regulatory scheme
creates certain barriers for those in the business of
reprocessing devices. We want to eliminate those barriers in a
way that does not undercut the FDA's ability to protect the
public health. The Committee also recognizes that the
reprocessing of a single-use device may raise issues that are
not addressed and need not be addressed when the device is
originally manufactured. The Committee wants to ensure that
devices that undergo reprocessing continue to be safe for use
on patients and continue to work as intended. We want to ensure
that FDA has adequate tools to do this.
Section 301 requires all devices (or permanent attachments
thereto) prominently and conspicuously to bear the name of the
manufacturer, a generally recognized abbreviation of such name,
or a unique and generally recognized symbol that identifies
such manufacturer. It permits FDA to waive the requirements if
it is not feasible or would compromise the provision of
reasonable assurance of the safety or effectiveness of the
device. For example, if a manufacturer believes that the
medical device is too small or too fragile to bear the name or
attachment, the manufacturer may petition the agency to waive
this requirement. Further, the Secretary should consider
waiving this requirement when compliance with the requirement
would heighten the clearance/approval burden for the
manufacturer. Such a situation exists where compliance would
obligate the manufacturer to conduct additional
biocompatibility testing in order to obtain clearance/approval.
The Committee intends for FDA to post on its website or publish
in the Federal Register any waivers it grants to provide the
information to similarly situated manufacturers. This section
applies to all devices, not just reprocessed single use
devices.
Section 302. Single-use medical devices
Section 302 includes a requirement that all of the labeling
of reprocessed single-use devices bear a statement indicating
that the device has been reprocessed and who has done the
reprocessing. This new requirement, combined with the new
requirement in Section 301, is important for several reasons.
Both requirements let the end user know which company is
responsible for manufacturing or reprocessing the device.
Section 302 allows users of reprocessed devices to know that
they are using a reprocessed device as well as who has done
such reprocessing. This disclosure is important not only to
ensure that the user has all relevant information about the
device, but also to help ensure that any reports about the
device, particularly those related to problems with the device,
will accurately identify the manufacturer and whether the
device was reprocessed. The Committee understands that FDA has
not been able to compile information regarding adverse events
associated with reprocessed devices and whether this is a
problem, in part, because reports may not be identifying
certain devices as reprocessed.
Section 302 also gives FDA authority to identify (by
publishing a list in the Federal Register), reprocessed single-
use devices for which it determines that validation data
regarding cleaning and sterilization, and functional
performance are needed to ensure that the device will remain
substantially equivalent to its predicate after the maximum
number of times the device is reprocessed as intended by the
reprocessor. FDA can also require such information for a device
not included on the list if it is for a device or type of
device for which FDA has not previously received a 510(k).
The type of validation data that is necessary for clearance
will vary. In some cases FDA may be able to rely primarily on a
sound scientific rationale that the reprocessing does not
adversely affect device integrity or function. In other cases
it will be necessary for the manufacturer to provide test data
demonstrating that the reprocessed device continues to meet its
specifications. The Committee intends that the Secretary have
flexibility in determining the type of validation data required
under Section 510(o)(1)(A), and that the Secretary only require
the type or types of validation data that are necessary to
protect the public health. In determining the type or types of
data to be submitted for FDA's review, the Secretary should be
mindful of FDAMA, which obligates FDA to impose the least
burdensome requirements on companies seeking premarket
clearance/approval for their devices. Additionally, the
Committee recognizes there is a difference between validation
and verification. The former involves a level of rigor and
statistical probability that a device or a process will
consistently perform as intended; the latter demonstrates
through testing or observation that a specific requirement has
been fulfilled.
Section 302 also gives FDA the authority to terminate an
exemption from the requirement to submit a 510(k) for a
critical or semi-critical reprocessed single use device if FDA
determines that such termination is needed to provide a
reasonable assurance of safety and effectiveness. The Committee
is providing this authority in recognition of the fact that
although a single use device as originally manufactured may be
of sufficiently low risk to warrant an exemption from the
requirement to submit a 510(k), reprocessing may, in certain
circumstances, raise issues (e.g., related to appropriate
cleaning and/or sterilization, and functional performance) to
warrant review by FDA. The definitions for critical and semi-
critical devices are adopted from the criteria established by
E.H. Spaulding (Proceedings of International Conference on
Nosocomial Infections, 1970. American Hospital Association,
Chicago 1971; 254-274).
In order to permit reprocessors to submit validation data
for single use devices listed by the Secretary, the Committee
included in the legislation a grace period in which the
Secretary would not take an enforcement action against the
reprocessor or a listed device until certain events occurred,
if the reprocessor timely submitted validation data. The
Committee believes that the Secretary shall take action
promptly if the Secretary finds that the data shows a
reprocessed single use device is not substantially equivalent
to its predicate device. Certainly if a party fails to submit
data to the Secretary according to the timeframes in this
legislation, the Secretary should issue an order determining
the single use reprocessed device is not substantially
equivalent to its predicate, thus resulting in its removal from
commercial distribution.
Finally, section 302 creates a new type of application for
class III reprocessed single use devices that previously would
have required submission of a PMA. New section 510(o)(3)
requires the manufacturer of such devices to submit a report in
accordance with the paragraph. The device cannot be marketed
unless after reviewing such report, the Secretary issues an
order determining that there is a reasonable assurance of
safety and effectiveness for the device. The information
required to be submitted in such report tracks the information
required to be submitted in a PMA, except that the manufacturer
need not supply certain information about the manufacture and
operation of the original device. It is the inability to
provide this information (because it is available only from the
original equipment manufacturer) that has made it difficult for
reprocessing manufacturers to get PMA approval. The only way
for reprocessing manufacturers to obtain this information is to
get a right of reference from the original equipment
manufacturers (OEMs) and the OEM's have been unwilling to
provide it. FDA still is able to require all, or some, of the
other information needed to establish a reasonable assurance of
safety and effectiveness that would have been required in a
PMA, including clinical data. The Committee intends that the
new process for approval of premarket reports allows FDA the
flexibility to decide precisely what specific data requirements
for a particular Class III reprocessed single use device are
appropriate, depending on the specific safety and/or
effectiveness issues presented by the device under review.
However, the Committee intends that the standard for approval
of a premarket report be identical to the standard for a PMA
approval under section 515: a reasonable assurance of safety
and effectiveness. Nothing in this section is to be construed
as lowering this standard. Section 302 also provides that the
report must include validation data that are appropriate for
evaluating these devices. Because section 302 is creating a new
type of application, it also adds a new prohibited act to
ensure that FDA has adequate enforcement authority.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
FEDERAL FOOD, DRUG, AND COSMETIC ACT
* * * * * * *
CHAPTER II--DEFINITIONS
Sec. 201. For the purposes of this Act--
(a) * * *
* * * * * * *
(ll)(1) The term ``single-use device'' means a device that is
intended for one use, or on a single patient during a single
procedure.
(2)(A) The term ``reprocessed'', with respect to a single-use
device, means an original device that has previously been used
on a patient and has been subjected to additional processing
and manufacturing for the purpose of an additional single use
on a patient. The subsequent processing and manufacture of a
reprocessed single-use device shall result in a device that is
reprocessed within the meaning of this definition.
(B) A single-use device that meets the definition under
subparagraph (A) shall be considered a reprocessed device
without regard to any description of the device used by the
manufacturer of the device or other persons, including a
description that uses the term ``recycled'' rather than the
term ``reprocessed''.
(3) The term ``original device'' means a new, unused single-
use device.
(mm)(1) The term ``critical reprocessed single-use device''
means a reprocessed single-use device that is intended to
contact normally sterile tissue or body spaces during use.
(2) The term ``semi-critical reprocessed single-use device''
means a reprocessed single-use device that is intended to
contact intact mucous membranes and not penetrate normally
sterile areas of the body.
* * * * * * *
CHAPTER III--PROHIBITED ACTS AND PENALTIES
PROHIBITED ACTS
Sec. 301. The following acts and the causing thereof are
hereby prohibited:
(a) * * *
* * * * * * *
(gg) The introduction or delivery for introduction into
interstate commerce of any device in violation of section
510(o)(3).
* * * * * * *
CHAPTER V--DRUGS AND DEVICES
Subchapter A--Drugs and Devices
* * * * * * *
MISBRANDED DRUGS AND DEVICES
Sec. 502. A drug or device shall be deemed to be misbranded--
(a) * * *
* * * * * * *
(f) Unless its labeling bears (1) adequate directions for
use; and (2) such adequate warnings against use in those
pathological conditions or by children where its use may be
dangerous to health, or against unsafe dosage or methods or
duration of administration or application, in such manner and
form, as are necessary for the protection of users, except that
where any requirement of clause (1) of this paragraph, as
applied to any drug or device, is not necessary for the
protection of the public health, the Secretary shall promulgate
regulations exempting such drug or device from such
requirement. Required labeling for prescription devices
intended for use in health care facilities may be made
available solely by electronic means provided that the labeling
complies with all applicable requirements of law and, that the
manufacturer affords health care facilities the opportunity to
request the labeling in paper form, and after such request,
promptly provides the health care facility the requested
information without additional cost.
* * * * * * *
(u) If it is a device, unless it, or an attachment thereto,
prominently and conspicuously bears the name of the
manufacturer of the device, a generally recognized abbreviation
of such name, or a unique and generally recognized symbol
identifying such manufacturer, except that the Secretary may
waive any requirement under this paragraph for the device if
the Secretary determines that compliance with the requirement
is not feasible for the device or would compromise the
provision of reasonable assurance of the safety or
effectiveness of the device.
(v) If it is a reprocessed single-use device, unless all
labeling of the device prominently and conspicuously bears the
statement ``Reprocessed device for single use. Reprocessed by
____.'' The name of the manufacturer of the reprocessed device
shall be placed in the space identifying the person responsible
for reprocessing.
EXEMPTIONS AND CONSIDERATION FOR CERTAIN DRUGS, DEVICES, AND BIOLOGICAL
PRODUCTS
Sec. 503. (a) * * *
* * * * * * *
(g)(1) The Secretary [shall designate a component of the Food
and Drug Administration] shall in accordance with this
subsection assign an agency center to regulate products that
constitute a combination of a drug, device, or biological
product. The Secretary shall determine the primary mode of
action of the combination product. If the Secretary determines
that the primary mode of action is that of--
(A) a drug (other than a biological product), [the
persons charged] the agency center charged with
premarket review of drugs shall have primary
jurisdiction,
(B) a device, [the persons charged] the agency center
charged with premarket review of devices shall have
primary jurisdiction, or
(C) a biological product, [the persons charged] the
agency center charged with premarket review of
biological products shall have primary jurisdiction.
* * * * * * *
(4)(A) Not later than 60 days after the date of the enactment
of this paragraph, the Secretary shall establish within the
Office of the Commissioner of Food and Drugs an office to
ensure the prompt assignment of combination products to agency
centers, the timely premarket review of such products, and
consistent and appropriate postmarket regulation of like
products subject to the same statutory requirements to the
extent permitted by law. Additionally, the office shall, in
determining whether a product is to be designated a combination
product, consult with the component within the Office of the
Commissioner of Food and Drugs that is responsible for such
determinations. Such office (referred to in this paragraph as
the ``Office'') shall have appropriate scientific and medical
expertise, and shall be headed by a director.
(B) In carrying out this subsection, the Office shall, for
each combination product, promptly assign an agency center with
primary jurisdiction in accordance with paragraph (1) for the
premarket review of such product.
(C) In carrying out this subsection, the Office shall ensure
timely and effective premarket reviews by overseeing and
coordinating reviews involving more than one agency center.
(D) In carrying out this subsection, the Office shall ensure
the consistency and appropriateness of postmarket regulation of
like products subject to the same statutory requirements to the
extent permitted by law. Nothing in this paragraph shall be
construed to limit the postmarket regulatory authority of any
agency center.
(E) In order to ensure the timeliness of the premarket review
of a combination product, the agency center with primary
jurisdiction for the product, and the consulting agency center,
shall be responsible to the Office with respect to the
timeliness of the premarket review.
(F)(i) Any dispute regarding the timeliness of the premarket
review of a combination product may be presented to the Office
for resolution, unless the timeliness of the dispute is clearly
premature.
(ii) During the review process, any dispute regarding the
substance of the premarket review may be presented to the
Commissioner of Food and Drugs after first being considered by
the agency center with primary jurisdiction of the premarket
review, under the scientific dispute resolution procedures for
such center. The Commissioner of Food and Drugs shall consult
with the Director of the Office in resolving the substantive
dispute.
(G) The Secretary, acting through the Office, shall review
each agreement, guidance, or practice of the Secretary that is
specific to the assignment of combination products to agency
centers and shall determine whether the agreement, guidance, or
practice is consistent with the requirements of this
subsection. In carrying out such review, the Secretary shall
consult with stakeholders and the directors of the agency
centers. After such consultation, the Secretary shall determine
whether to continue in effect, modify, revise, or eliminate
such agreement, guidance, or practice, and shall publish in the
Federal Register a notice of the availability of such modified
or revised agreement, guidance or practice. Nothing in this
paragraph shall be construed as preventing the Secretary from
following each agreement, guidance, or practice until
continued, modified, revised, or eliminated.
(H) Not later than one year after the date of the enactment
of this paragraph and annually thereafter, the Secretary shall
report to the appropriate committees of Congress on the
activities and impact of the Office. The report shall include
provisions--
(i) describing the numbers and types of combination
products under review and the timeliness in days of
such assignments, reviews, and dispute resolutions;
(ii) identifying the number of premarket reviews of
such products that involved a consulting agency center;
and
(iii) describing improvements in the consistency of
postmarket regulation of combination products.
[(4)] (5) As used in this subsection:
(A) The term ``agency center'' means a center or
alternative organizational component of the Food and
Drug Administration.
[(A)] (B) The term ``biological product'' has the
meaning given the term in section 351(i) of the Public
Health Service Act (42 U.S.C. 262(i)).
[(B)] (C) The term ``market clearance'' includes--
(i) * * *
* * * * * * *
REGISTRATION OF PRODUCERS OF DRUGS AND DEVICES
Sec. 510. (a) * * *
* * * * * * *
(h) Every establishment in any State registered with the
Secretary pursuant to this section shall be subject to
inspection pursuant to section 704 and every such establishment
engaged in the manufacture, propagation, compounding, or
processing of a drug or drugs or of a device or devices
classified in class II or III shall be so inspected by one or
more officers or employees duly designated by the Secretary, or
by persons accredited to conduct inspections under section
704(g), at least once in the 2-year period beginning with the
date of registration of such establishment pursuant to this
section and at least once in every successive 2-year period
thereafter.
* * * * * * *
(m)(1) Not later than 60 days after the date of enactment of
the Food and Drug Administration Modernization Act of 1997, the
Secretary shall publish in the Federal Register a list of each
type of class II device that does not require a report under
subsection (k) to provide reasonable assurance of safety and
effectiveness. Each type of class II device identified by the
Secretary as not requiring the report shall be exempt from the
requirement to provide a report under subsection (k) as of the
date of the publication of the list in the Federal Register.
The Secretary shall publish such list on the Internet site of
the Food and Drug Administration. The list so published shall
be updated not later than 30 days after each revision of the
list by the Secretary.
* * * * * * *
(o)(1) With respect to reprocessed single-use devices for
which reports are required under subsection (k):
(A) The Secretary shall identify such devices or
types of devices for which reports under such
subsection must, in order to ensure that the device is
substantially equivalent to a predicate device, include
validation data, the types of which shall be specified
by the Secretary, regarding cleaning and sterilization,
and functional performance demonstrating that the
single-use device will remain substantially equivalent
to its predicate device after the maximum number of
times the device is reprocessed as intended by the
person submitting the premarket notification. Within
one year after enactment of this subsection, the
Secretary shall publish in the Federal Register a list
of the types so identified, and shall revise the list
as appropriate. Reports under subsection (k) for
devices or types of devices within a type included on
the list are, upon publication of the list, required to
include such validation data.
(B) In the case of each report under subsection (k)
that was submitted to the Secretary before the
publication of the initial list under subparagraph (A),
or any revision thereof, and was for a device or type
of device included on such list, the person who
submitted the report under subsection (k) shall submit
validation data as described in subparagraph (A) to the
Secretary not later than nine months after the
publication of the list. During such nine-month period,
the Secretary may not take any action under this Act
against such device solely on the basis that the
validation data for the device have not been submitted
to the Secretary. After the submission of the
validation data to the Secretary, the Secretary may not
determine that the device is misbranded under section
502(o), adulterated under section 501(f)(1)(B), or take
action against the device under section 301(p) for
failure to provide any information required by
subsection (k) until (i) the review is terminated by
withdrawal of the submission of the report under
subsection (k); (ii) the Secretary finds the data to be
acceptable and issues a letter; or (iii) the Secretary
determines that the device is not substantially
equivalent to a predicate device. Upon a determination
that a device is not substantially equivalent to a
predicate device, or if such submission is withdrawn,
the device can no longer be legally marketed.
(C) In the case of a report under subsection (k) for
a device identified under subparagraph (A) that is of a
type for which the Secretary has not previously
received a report under such subsection, the Secretary
may, in advance of revising the list under subparagraph
(A) to include such type, require that the report
include the validation data specified in subparagraph
(A).
(D) Section 502(o) applies with respect to the
failure of a report under subsection (k) to include
validation data required under subparagraph (A).
(2) With respect to critical or semicritical reprocessed
single-use devices that, under subsection (l) or (m), are
exempt from the requirement of submitting reports under
subsection (k):
(A) The Secretary shall identify such devices or
types of devices for which such exemptions should be
terminated in order to provide a reasonable assurance
of the safety and effectiveness of the devices. The
Secretary shall publish in the Federal Register a list
of the devices or types of devices so identified, and
shall revise the list as appropriate. The exemption for
each device or type included on the list is terminated
upon the publication of the list. For each report under
subsection (k) submitted pursuant to this subparagraph
the Secretary shall require the validation data
described in paragraph (1)(A).
(B) For each device or type of device included on the
list under subparagraph (A), a report under subsection
(k) shall be submitted to the Secretary not later than
15 months after the publication of the initial list, or
a revision of the list, whichever terminates the
exemption for the device. During such 15-month period,
the Secretary may not take any action under this Act
against such device solely on the basis that such
report has not been submitted to the Secretary. After
the submission of the report to the Secretary the
Secretary may not determine that the device is
misbranded under section 502(o), adulterated under
section 501(f)(1)(B), or take action against the device
under section 301(p) for failure to provide any
information required by subsection (k) until (i) the
review is terminated by withdrawal of the submission;
(ii) the Secretary determines by order that the device
is substantially equivalent to a predicate device; or
(iii) the Secretary determines by order that the device
is not substantially equivalent to a predicate device.
Upon a determination that a device is not substantially
equivalent to a predicate device, the device can no
longer be legally marketed.
(C) The initial list under subparagraph (A) shall be
published not later than 18 months after the effective
date of this subsection.
(D) Section 502(o) applies with respect to the
failure to submit a report under subsection (k) that is
required pursuant to subparagraph (A), including a
failure of the report to include validation data
required in such subparagraph.
(E) The termination under subparagraph (A) of an
exemption under subsection (l) or (m) for a critical or
semicritical reprocessed single-use device does not
terminate the exemption under subsection (l) or (m) for
the original device.
(3) In the case of a reprocessed single-use device that is
classified in class III and for which a premarket application
is required, the following provisions apply with respect to
such reprocessed device in lieu of an application for premarket
approval under section 515:
(A) The device shall not be introduced into
interstate commerce or delivered for introduction into
interstate commerce unless the person involved has
submitted to the Secretary a report in accordance with
this paragraph and the Secretary, after reviewing the
report, issues an order determining there is a
reasonable assurance of the safety and effectiveness
for the device.
(B) The report under subparagraph (A) shall contain
the following:
(i) The device name, including both the trade
or proprietary name and the common or usual
name.
(ii) The establishment registration number of
the owner or operator submitting the report.
(iii) Actions taken to comply with
performance standards under section 514.
(iv) Proposed labels, labeling, and
advertising sufficient to describe the device,
its intended use, and directions for use.
(v) Full reports of all information,
published or known to or which should be
reasonably known to the applicant, concerning
investigations which have been made to show
whether or not a device is safe or effective.
(vi) A description of the device's
components, ingredients, and properties.
(vii) A full description of the methods used
in, and the facilities and controls used for,
the reprocessing and packing of the device.
(viii) Such samples of the device that the
Secretary may reasonably require.
(ix) A financial certification or disclosure
statement or both, as required by part 54 of
title 21, Code of Federal Regulations.
(x) A statement that the applicant believes
to the best of the applicant's knowledge that
all data and information submitted to the
Secretary are truthful and accurate and that no
material fact has been omitted in the report.
(xi) Any additional data and information that
the Secretary determines is necessary to
determine whether there is reasonable assurance
of safety and effectiveness for the reprocessed
device.
(C) In addition to the information or data required
in subparagraph (B), the report under subparagraph (A)
shall include the validation data described in
paragraph (1)(A) that demonstrates that the reasonable
assurance of the safety or effectiveness of the device
will remain after the maximum number of times the
device is reprocessed as intended by the person
submitting the report under this paragraph.
(p) Registrations under subsections (b), (c), (d), and (i)
(including the submission of updated information) shall be
submitted to the Secretary by electronic means, upon a finding
by the Secretary that the electronic receipt of such
registrations is feasible, unless the Secretary grants a
request for waiver of such requirement because use of
electronic means is not reasonable for the person requesting
such waiver.
* * * * * * *
CLASSIFICATION OF DEVICES INTENDED FOR HUMAN USE
Device Classes
Sec. 513. (a) * * *
* * * * * * *
Substantial Equivalence
(i)(1)(A) * * *
* * * * * * *
(E)(i) * * *
* * * * * * *
[(iv) This subparagraph has no legal effect after the
expiration of the five-year period beginning on the date of the
enactment of the Food and Drug Administration Modernization Act
of 1997.]
* * * * * * *
PREMARKET APPROVAL
General Requirement
Sec. 515. (a) * * *
* * * * * * *
Application for Premarket Approval
(c)(1) * * *
(2) Upon receipt of an application meeting the requirements
set forth in paragraph (1), the Secretary--
(A) * * *
* * * * * * *
refer such application to the appropriate panel under section
513 for study and for submission (within such period as he may
establish) of a report and recommendation respecting approval
of the application, together with all underlying data and the
reasons or basis for the recommendation. If the Secretary
determines that there is a reasonable likelihood that the
device involved will be used in a pediatric population, the
Secretary shall ensure that such panel includes, or consults
with, one or more pediatric experts.
(3)(A) Prior to the submission of an application under this
subsection, the Secretary shall accept and review portions of
such applications that applicants and the Secretary agree are
complete, ready, and appropriate for review.
(B) Each portion of a submission reviewed under subparagraph
(A) and found acceptable by the Secretary shall not be further
reviewed after receipt of an application that satisfies the
requirements of paragraph (1), unless issues of safety or
effectiveness provide the Secretary cause to review such
accepted portion.
(C) Whenever the Secretary determines that a portion of a
submission under subparagraph (A) is unacceptable, the
Secretary shall specifically identify, in writing, the
deficiency of such portion and describe in detail the means by
which it may be made acceptable, unless the sponsor is no
longer pursuing the application.
* * * * * * *
GENERAL PROVISIONS RESPECTING CONTROL OF DEVICES INTENDED FOR HUMAN USE
General Rule
Sec. 520. (a) * * *
* * * * * * *
Guidance Regarding Pediatric Devices
(n) Not later than 270 days after the date of the enactment
of the Medical Device User Fee and Modernization Act of 2002,
the Secretary shall issue guidance on the following:
(1) The type of information necessary to provide
reasonable assurance of the safety and effectiveness of
devices intended for use in pediatric populations.
(2) Protections for pediatric subjects in clinical
investigations of the safety or effectiveness of such
devices.
* * * * * * *
SEC. 523. ACCREDITED PERSONS.
(a) * * *
* * * * * * *
(c) Duration.--[The authority provided by this section
terminates--
[(1) 5 years after the date on which the Secretary
notifies Congress that at least 2 persons accredited
under subsection (b) are available to review at least
60 percent of the submissions under section 510(k), or
[(2) 4 years after the date on which the Secretary
notifies Congress that the Secretary has made a
determination described in paragraph (2)(B) of
subsection (a) for at least 35 percent of the devices
that are subject to review under paragraph (1) of such
subsection,
whichever occurs first.] The authority provided by this section
terminates October 1, 2007.
(d) Report.--Not later than January 10, 2007, the Secretary
shall conduct a study based on the experience under the program
under this section and submit to the Committee on Energy and
Commerce of the House of Representatives, and the Committee on
Health, Education, Labor, and Pensions of the Senate, a report
describing the findings of the study. The objectives of the
study shall include determining--
(1) the number of devices reviewed under this
section;
(2) the number of devices reviewed under this section
that were ultimately cleared by the Secretary;
(3) the number of devices reviewed under this section
that were ultimately not cleared by the Secretary;
(4) the average time period for a review under this
section (including the time it takes for the Secretary
to review a recommendation of an accredited person
under subsection (a) and determine the initial device
classification);
(5) the average time period identified in paragraph
(4) compared to the average time period for review of
devices solely by the Secretary pursuant to section
510(k);
(6) if there is a difference in the average time
period under paragraph (4) and the average time period
under paragraph (5), the reasons for such difference;
(7) whether the quality of reviews under this section
for devices for which no guidance has been issued is
qualitatively inferior to reviews by the Secretary for
devices for which no guidance has been issued;
(8) whether the quality of reviews under this section
of devices for which no guidance has been issued is
qualitatively inferior to reviews under this section of
devices for which guidance has been issued;
(9) whether this section has in any way jeopardized
or improved the public health;
(10) any impact of this section on resources
available to the Secretary to review reports under
section 510(k); and
(11) any suggestions for continuation, modification
(including expansion of device eligibility), or
termination of this section that the Secretary
determines to be appropriate.
* * * * * * *
CHAPTER VII--GENERAL AUTHORITY
Subchapter A--General Administrative Provisions
* * * * * * *
FACTORY INSPECTION
Sec. 704. (a) * * *
* * * * * * *
(f)(1) [A person accredited under section 523 to review
reports made under section 510(k) and make recommendations of
initial classifications of devices to the Secretary shall
maintain records] An accredited person described in paragraph
(3) shall maintain records documenting the training
qualifications of the person and the employees of the person,
the procedures used by the person for handling confidential
information, the compensation arrangements made by the person,
and the procedures used by the person to identify and avoid
conflicts of interest. Upon the request of an officer or
employee designated by the Secretary, the person shall permit
the officer or employee, at all reasonable times, to have
access to, to copy, and to verify, the records.
(2) Within 15 days after the receipt of a written request
from the Secretary to [a person accredited under section 523]
an accredited person described in paragraph (3) for copies of
records described in paragraph (1), the person shall produce
the copies of the records at the place designated by the
Secretary.
(3) For purposes of paragraphs (1) and (2), an accredited
person described in this paragraph is a person who--
(A) is accredited under subsection (g); or
(B) is accredited under section 523.
(g)(1) Not later than one year after the date of the
enactment of this subsection, the Secretary shall, subject to
the provisions of this subsection, accredit persons who are not
Federal employees for the purpose of conducting the inspections
required in section 510(h), or pursuant to section 510(i), for
establishments that manufacture, prepare, propagate, compound,
or process class II or class III devices. The owner or operator
of such an establishment that is eligible under paragraph (6)
may, from the list published under paragraph (4), select an
accredited person to conduct such inspections
(2) Not later than 180 days after the date of enactment of
this subsection, the Secretary shall publish in the Federal
Register criteria to accredit or deny accreditation to persons
who request to perform the duties specified in paragraph (1).
Thereafter, the Secretary shall inform those requesting
accreditation, within 60 days after the receipt of such
request, whether the request for accreditation is adequate for
review, and the Secretary shall promptly act on the request for
accreditation. Any resulting accreditation shall state that
such person is accredited to conduct inspections at
establishments identified in paragraph (1). The accreditation
of such person shall specify the particular activities under
this subsection for which such person is accredited. In the
first year following the publication in the Federal Register of
criteria to accredit or deny accreditation to persons who
request to perform the duties specified in paragraph (1), the
Secretary shall accredit no more than 15 persons who request to
perform duties specified in paragraph (1).
(3) An accredited person shall, at a minimum, meet the
following requirements:
(A) Such person shall be an independent organization
which is not owned or controlled by a manufacturer,
supplier, or vendor of articles regulated under this
Act and which has no organizational, material, or
financial affiliation (including a consultative
affiliation) with such a manufacturer, supplier, or
vendor.
(B) Such person shall be a legally constituted entity
permitted to conduct the activities for which it seeks
accreditation.
(C) Such person shall not engage in the design,
manufacture, promotion, or sale of articles regulated
under this Act.
(D) The operations of such person shall be in
accordance with generally accepted professional and
ethical business practices, and such person shall agree
in writing that at a minimum the person will--
(i) certify that reported information
accurately reflects data reviewed;
(ii) limit work to that for which competence
and capacity are available;
(iii) treat information received, records,
reports, and recommendations as confidential
commercial or financial information or trade
secret information;
(iv) promptly respond and attempt to resolve
complaints regarding its activities for which
it is accredited; and
(v) protect against the use, in carrying out
paragraph (1), of any officer or employee of
the accredited person who has a financial
conflict of interest regarding any product
regulated under this Act, and annually make
available to the public disclosures of the
extent to which the accredited person, and the
officers and employees of the person, have
maintained compliance with requirements under
this clause relating to financial conflicts of
interest.
(4) The Secretary shall publish on the Internet site of the
Food and Drug Administration a list of accredited persons to
conduct inspections under paragraph (1). Such list shall be
periodically updated to ensure that the identity of each
accredited person is known to the public. The updating of such
list shall be no later than one month after the accreditation
of a person under this subsection or the withdrawal of
accreditation.
(5)(A) To ensure that persons accredited under this
subsection continue to meet the standards of accreditation, the
Secretary shall audit the performance of such persons on a
periodic basis through the review of inspection reports and
inspections by persons designated by the Secretary to evaluate
the compliance status of an establishment and the performance
of accredited persons.
(B) The Secretary may withdraw accreditation of any person
accredited under paragraph (2), after providing notice and an
opportunity for an informal hearing, when such person is
substantially not in compliance with the standards of
accreditation or poses a threat to public health or fails to
act in a manner that is consistent with the purposes of this
subsection. The Secretary may suspend the accreditation of such
person during the pendency of the process under the preceding
sentence.
(6)(A) Subject to subparagraphs (B) through (C), a device
establishment is eligible for inspections by persons accredited
under paragraph (2) if--
(i) the Secretary classified the results of the most
recent inspection of the establishment pursuant to
subsection (h) or (i) of section 510 as ``no action
indicated'' or ``voluntary action indicated''; and
(ii) with respect to each inspection to be conducted
by an accredited person--
(I) the owner or operator of the
establishment submits to the Secretary a notice
requesting clearance to use such a person to
conduct the inspection, and the Secretary
provides such clearance; and
(II) such notice identifies the accredited
person whom the establishment has selected to
conduct the inspection, and the Secretary
agrees to the selected accredited person.
(B)(i) The Secretary shall respond to a notice under
subparagraph (A) from an establishment not later than 30 days
after the Secretary receives the notice. Through such response,
the Secretary shall (I) provide clearance under such
subparagraph, and agree to the selection of an accredited
person, or (II) make a request under clause (ii). If the
Secretary fails to respond to the notice within such 30-day
period, the establishment is deemed to have such clearance, and
to have the agreement of the Secretary for such selection.
(ii) The request referred to in clause (i)(II) is--
(I) a request to the establishment involved to submit
to the Secretary compliance data in accordance with
clause (iii); or
(II) a request to the establishment, or to the
accredited person identified in the notice under
subparagraph (A), for information concerning the
relationship between the establishment and such
accredited person.
The Secretary may make both such requests.
(iii) The compliance data to be submitted by an establishment
under clause (ii) are data describing whether the quality
controls of the establishment have been sufficient for ensuring
consistent compliance with current good manufacturing practice
within the meaning of section 501(h), and data otherwise
describing whether the establishment has consistently been in
compliance with sections 501 and 502 and other applicable
provisions of this Act. Such data shall include complete
reports of inspections regarding good manufacturing practice or
other quality control audits that, during the preceding two-
year period, were conducted at the establishment by persons
other than the owner or operator of the establishment, together
with all other data the Secretary deems necessary. Data under
the preceding sentence shall demonstrate to the Secretary
whether the establishment has facilitated consistent compliance
by promptly correcting any compliance problems identified in
such inspections.
(iv) Not later than 60 days after receiving compliance data
under clause (iii) from an establishment, the Secretary shall
provide or deny clearance under subparagraph (A). The Secretary
may not deny clearance unless the Secretary provides to the
establishment detailed findings that the establishment has
failed to demonstrate consistent compliance for purposes of
clause (iii). If the Secretary fails to provide such findings
to the establishment within such 60-day period, the
establishment is deemed to have such clearance.
(v)(I) A request to an accredited person under clause
(ii)(II) may not seek any information that is not required to
be maintained by such person in records under subsection
(f)(1). Not later than 60 days after receiving the information
sought by the request, the Secretary shall agree to, or reject,
the selection of such person by the establishment involved. The
Secretary may not reject the selection unless the Secretary
provides to the establishment the reasons for such rejection.
Reasons for the rejection may include that the establishment or
the accredited person, as the case may be, has failed to fully
respond to the request. If within such 60-day period the
Secretary fails to agree to or reject the selection in
accordance with this subclause, the Secretary is deemed to have
agreed to the selection.
(II) If the Secretary rejects the selection of an accredited
person by an establishment, the establishment may make an
additional selection of an accredited person by submitting to
the Secretary a notice that identifies the additional
selection. Clauses (i) and (ii), and subclause (I) of this
clause, apply to the selection of an accredited person through
a notice under the preceding sentence in the same manner and to
the same extent as such provisions apply to a selection of an
accredited person through a notice under subparagraph (A).
(vi) In the case of an establishment that under clause (iv)
is denied clearance under subparagraph (A), or whose selection
of an accredited person is rejected under clause (v), the
Secretary shall designate a person to review the findings of
the Secretary under such clause if, during the 30-day period
beginning on the date on which the establishment receives the
findings, the establishment requests the review. The review
shall commence not later than 30 days after the establishment
requests the review, unless the Secretary and the establishment
otherwise agree.
(C)(i) In the case of a device establishment for which the
Secretary classified the results of the most recent inspection
of the establishment by a person accredited under paragraph (2)
as ``official action indicated'', the establishment is eligible
for further inspections by persons accredited under such
paragraph if (I) the Secretary issues a written statement to
the owner or operator of the establishment that the violations
leading to such classification have been resolved, and (II) the
Secretary, either upon the Secretary's own initiative or a
petition of the owner or operator of the establishment,
notifies the establishment that it has clearance to use an
accredited person for the inspections. The Secretary shall
respond to such petition within 30 days after the receipt of
the petition.
(ii) If the Secretary denies a petition under clause (i), the
establishment involved may, after the expiration of one year
after such denial, again petition the Secretary for a
determination of eligibility for inspection by persons
accredited by the Secretary under paragraph (2). If the
Secretary denies such petition, the Secretary shall provide the
establishment with a detailed reason for such denial within 60
days after the denial. If, as of the expiration of 48 months
after the receipt of the first petition, the establishment has
not been inspected by the Secretary in accordance with section
510(h), or has not during such period been inspected pursuant
to section 510(i), as applicable, the establishment is eligible
for further inspections by accredited persons.
(7)(A) Persons accredited under paragraph (2) to conduct
inspections shall record in writing their inspection
observations and shall present the observations to the device
establishment's designated representative and discuss each
observation. Additionally, such accredited person shall prepare
an inspection report (including for inspections classified as
``no action indicated'') in a form and manner consistent with
such reports prepared by employees and officials designated by
the Secretary to conduct inspections.
(B) At a minimum, an inspection report under subparagraph (A)
shall identify the persons responsible for good manufacturing
practice compliance at the inspected establishment involved,
the dates of the inspection, the scope of the inspection, and
shall discuss in detail each observation identified by the
accredited person, identify other matters that relate to or may
influence compliance with this Act, and discuss any
recommendations during the inspection or at the inspection's
closing meeting.
(C) An inspection report under subparagraph (A) shall be sent
to the Secretary and the designated representative of the
inspected establishment involved at the same time, but under no
circumstances later than three weeks after the last day of the
inspection. The report to the Secretary shall be accompanied by
all written inspection observations previously provided to the
representative of the establishment.
(D) Any statements or representations made by employees or
agents of a device establishment to persons accredited under
paragraph (2) to conduct inspections shall be subject to
section 1001 of title 18, United States Code.
(E) If at any time during an inspection by an accredited
person the accredited person discovers a condition that could
cause or contribute to an unreasonable risk to the public
health, the accredited person shall immediately notify the
Secretary of the identification of the facility subject to
inspection and the conditions of concern.
(8) Compensation for an accredited person shall be determined
by agreement between the accredited person and the person who
engages the services of the accredited person, and shall be
paid by the person who engages such services.
(9) Nothing in this subsection affects the authority of the
Secretary to inspect establishments pursuant to this Act.
(10)(A) For fiscal year 2005 and subsequent fiscal years, no
device establishment may be inspected during the fiscal year
involved by a person accredited under paragraph (2) if--
(i) of the amounts appropriated for salaries and
expenses of the Food and Drug Administration for the
preceding fiscal year (referred to in this subparagraph
as the ``first prior fiscal year''), the amount
obligated by the Secretary for inspections of device
establishments by the Secretary was less than the
adjusted base amount applicable to such first prior
fiscal year; and
(ii) of the amounts appropriated for salaries and
expenses of the Food and Drug Administration for the
fiscal year preceding the first prior fiscal year
(referred to in this subparagraph as the ``second prior
fiscal year''), the amount obligated by the Secretary
for inspections of device establishments by the
Secretary was less than the adjusted base amount
applicable to such second prior fiscal year.
(B)(i) Subject to clause (ii), the Comptroller General of the
United States shall determine the amount that was obligated by
the Secretary for fiscal year 2002 for compliance activities of
the Food and Drug Administration with respect to devices
(referred to in this subparagraph as the ``compliance
budget''), and of such amount, the amount that was obligated
for inspections by the Secretary of device establishments
(referred to in this subparagraph as the ``inspection
budget'').
(ii) For purposes of determinations under clause (i), the
Comptroller General shall not include in the compliance budget
or the inspection budget any amounts obligated for inspections
of device establishments conducted as part of the process of
reviewing applications under section 515.
(iii) Not later than March 31, 2003, the Comptroller General
shall complete the determinations required in this subparagraph
and submit to the Secretary and the Congress a reporting
describing the findings made through such determinations.
(C) For purposes of this paragraph:
(i) The term ``base amount'' means the inspection
budget determined under subparagraph (B) for fiscal
year 2002.
(ii) The term ``adjusted base amount'', in the case
of applicability to fiscal year 2003, means an amount
equal to the base amount increased by 5 percent.
(iii) The term ``adjusted base amount'', with respect
to applicability to fiscal year 2004 or any subsequent
fiscal year, means the adjusted based amount applicable
to the preceding year increased by 5 percent.
(11) The authority provided by this subsection terminates on
October 1, 2012.
(12) No later than four years after the enactment of this
subsection the Comptroller General shall report to the
Committee on Energy and Commerce of the House of
Representatives and the Committee on Health, Education, Labor
and Pensions of the Senate--
(A) the number of inspections conducted by accredited
persons and the number of inspections pursuant to
subsections (h) and (i) of section 510 conducted by
Federal employees;
(B) the number of persons who sought accreditation
under this subsection, as well as the number of persons
who were accredited under this subsection;
(C) the reasons why persons who sought accreditation,
but were denied accreditation, were denied;
(D) the number of audits conducted by the Secretary
of accredited persons, the quality of inspections
conducted by accredited persons, whether accredited
persons are meeting their obligations under this Act,
and whether the number of audits conducted is
sufficient to permit these assessments;
(E) whether this subsection is achieving the goal of
ensuring more information about establishment
compliance is being presented to the Secretary, and
whether that information is of a quality consistent
with information obtained by the Secretary pursuant to
subsection (h) or (i) of section 510;
(F) whether this subsection is advancing efforts to
allow device establishments to rely upon third-party
inspections for purposes of compliance with the laws of
foreign governments; and
(G) whether the Congress should continue, modify, or
terminate the program under this subsection.
(13) The Secretary shall include in the annual report
required under section 903(g) the names of all accredited
persons and the particular activities under this subsection for
which each such person is accredited and the name of each
accredited person whose accreditation has been withdrawn during
the year.
* * * * * * *
Subchapter C--Fees
* * * * * * *
PART 3--FEES RELATING TO DEVICES
SEC. 737. DEFINITIONS.
For purposes of this subchapter:
(1) The term ``premarket application'' means--
(A) an application for approval of a device
submitted under section 515(c) or section 351
of the Public Health Service Act; or
(B) a product development protocol described
in section 515(f).
Such term does not include a supplement, a premarket
report, or a premarket notification submission.
(2) The term ``premarket report'' means a report
submitted under section 510(o)(3).
(3) The term ``premarket notification submission''
means a report submitted under section 510(k).
(4)(A) The term ``supplement'', with respect to a
panel-track supplement, a 180-day supplement, a real-
time supplement, or an efficacy supplement, means a
request to the Secretary to approve a change in a
device for which--
(i) an application has been approved under
section 515(d) or under section 351 of the
Public Health Service Act; or
(ii) a notice of completion has become
effective under section 515(f).
(B) The term ``panel-track supplement'' means a
supplement to an approved premarket application under
section 515 that requests a significant change in
design or performance of the device, or a new
indication for use of the device, and for which
clinical data are generally necessary to provide a
reasonable assurance of safety and effectiveness.
(C) The term ``180-day supplement'' means a
supplement to an approved premarket application under
section 515 that is not a panel-track supplement and
requests a significant change in components, materials,
design, specification, software, color additives, or
labeling.
(D) The term ``real-time supplement'' means a
supplement to an approved premarket application under
section 515 that requests a minor change to the device,
such as a minor change to the design of the device,
software, manufacturing, sterilization, or labeling,
and for which the applicant has requested and the
agency has granted a meeting or similar forum to
jointly review and determine the status of the
supplement.
(E) The term ``efficacy supplement'' means a
supplement to an approved premarket application under
section 351 of the Public Health Service Act that
requires substantive clinical data.
(5) The term ``process for the review of device
applications'' means the following activities of the
Secretary with respect to the review of premarket
applications, premarket reports, supplements, and
premarket notification submissions:
(A) The activities necessary for the review
of premarket applications, premarket reports,
supplements, and premarket notification
submissions.
(B) The issuance of action letters that allow
the marketing of devices or which set forth in
detail the specific deficiencies in such
applications, reports, supplements, or
submissions and, where appropriate, the actions
necessary to place them in condition for
approval.
(C) The inspection of manufacturing
establishments and other facilities undertaken
as part of the Secretary's review of pending
premarket applications, premarket reports, and
supplements.
(D) Monitoring of research conducted in
connection with the review of such
applications, reports, supplements, and
submissions.
(E) Review of device applications subject to
section 351 of the Public Health Service Act
for an investigational new drug application
under section 505(i) or for an investigational
device exemption under section 520(g) and
activities conducted in anticipation of the
submission of such applications under section
505(i) or 520(g).
(F) The development of guidance, policy
documents, or regulations to improve the
process for the review of premarket
applications, premarket reports, supplements,
and premarket notification submissions.
(G) The development of voluntary test
methods, consensus standards, or mandatory
performance standards under section 514 in
connection with the review of such
applications, reports, supplements, or
submissions and related activities.
(H) The provision of technical assistance to
device manufacturers in connection with the
submission of such applications, reports,
supplements, or submissions.
(I) Any activity undertaken under section 513
or 515(i) in connection with the initial
classification or reclassification of a device
or under section 515(b) in connection with any
requirement for approval of a device.
(J) Evaluation of postmarket studies required
as a condition of an approval of a premarket
application under section 515 or section 351 of
the Public Health Service Act.
(K) Compiling, developing, and reviewing
information on relevant devices to identify
safety and effectiveness issues for devices
subject to premarket applications, premarket
reports, supplements, or premarket notification
submissions.
(6) The term ``costs of resources allocated for the
process for the review of device applications'' means
the expenses incurred in connection with the process
for the review of device applications for--
(A) officers and employees of the Food and
Drug Administration, contractors of the Food
and Drug Administration, advisory committees,
and costs related to such officers, employees,
and committees and to contracts with such
contractors;
(B) management of information, and the
acquisition, maintenance, and repair of
computer resources;
(C) leasing, maintenance, renovation, and
repair of facilities and acquisition,
maintenance, and repair of fixtures, furniture,
scientific equipment, and other necessary
materials and supplies; and
(D) collecting fees and accounting for
resources allocated for the review of premarket
applications, premarket reports, supplements,
and submissions.
(7) The term ``adjustment factor'' applicable to a
fiscal year is the Consumer Price Index for all urban
consumers (all items; United States city average) for
April of the preceding fiscal year divided by such
Index for April 2002.
(8) The term ``affiliate'' means a business entity
that has a relationship with a second business entity
if, directly or indirectly--
(A) one business entity controls, or has the
power to control, the other business entity; or
(B) a third party controls, or has power to
control, both of the business entities.
SEC. 738. AUTHORITY TO ASSESS AND USE DEVICE FEES.
(a) Types of Fees.--Beginning on the date of the enactment of
the Medical Device User Fee and Modernization Act of 2002, the
Secretary shall assess and collect fees in accordance with this
section as follows:
(1) Premarket application, premarket report,
supplement, and submission fee.--
(A) In general.--Except as provided in
subparagraph (B) and subsection (d), each
person who submits any of the following, on or
after October 1, 2002, shall be subject to a
fee established under subsection (c)(5) for the
fiscal year involved in accordance with the
following:
(i) A premarket application.
(ii) For a premarket report, a fee
equal to the fee that applies under
clause (i).
(iii) For a panel track supplement, a
fee equal to the fee that applies under
clause (i).
(iv) For a 180-day supplement, a fee
equal to 21.5 percent of the fee that
applies under clause (i), subject to
any adjustment under subsection (c)(3).
(v) For a real-time supplement, a fee
equal to 7.2 percent of the fee that
applies under clause (i).
(vi) For an efficacy supplement, a
fee equal to the fee that applies under
clause (i).
(vii) For a premarket notification
submission, a fee equal to 1.75 percent
of the fee that applies under clause
(i), subject to any adjustment under
subsection (c)(3).
(B) Exceptions.--
(i) Humanitarian device exemption.--A
device for which a humanitarian device
exemption has been granted is not
subject to the fees established in
subparagraph (A).
(ii) Further manufacturing use.--No
fee shall be required under
subparagraph (A) for the submission of
a premarket application under section
351 of the Public Health Service Act
for a product licensed for further
manufacturing use only.
(iii) State or federal government
sponsors.--No fee shall be required
under subparagraph (A) for a premarket
application, premarket report,
supplement, or premarket notification
submission submitted by a State or
Federal Government entity unless the
device involved is to be distributed
commercially.
(iv) Premarket notifications by third
parties.--No fee shall be required
under subparagraph (A) for a premarket
notification submission reviewed by an
accredited person pursuant to section
523.
(v) Pediatric conditions of use.--
(I) In general.--No fee shall
be required under subparagraph
(A) for a premarket application
or premarket notification
submission if the proposed
conditions of use for the
device involved are solely for
a pediatric population. No fee
shall be required under such
subparagraph for a supplement
if the sole purpose of the
supplement is to propose
conditions of use for a
pediatric population.
(II) Subsequent proposal of
adult conditions of use.--In
the case of a person who
submits a premarket application
for which, under subclause (I),
a fee under subparagraph (A) is
not required, any supplement to
such application that proposes
conditions of use for any adult
population is subject to the
fee that applies under such
subparagraph for a premarket
application.
(C) Payment.--The fee required by
subparagraph (A) shall be due upon submission
of the premarket application, premarket report,
supplement, or premarket notification
submission except that invoices for
applications submitted between October 1, 2002,
and the date of the enactment of the Medical
Device User Fee and Modernization Act of 2002
shall be payable on October 30, 2002.
Applicants submitting portions of applications
pursuant to section 515(c)(3) shall pay such
fees upon submission of the first portion of
such applications. The fees credited to fiscal
year 2003 under this section shall include all
fees payable from October 1, 2002, through
September 30, 2003.
(D) Refunds.--
(i) Application refused for filing.--
The Secretary shall refund 75 percent
of the fee paid under subparagraph (A)
for any application or supplement that
is refused for filing.
(ii) Application withdrawn before
filing.--The Secretary shall refund 75
percent of the fee paid under
subparagraph (A) for any application or
supplement that is withdrawn prior to
the filing decision of the Secretary.
(iii) Application withdrawn before
first action.--After receipt of a
request for a refund of the fee paid
under subparagraph (A) for a premarket
application, premarket report, or
supplement that is withdrawn after
filing but before a first action, the
Secretary may return some or all of the
fee. The amount of refund, if any,
shall be based on the level of effort
already expended on the review of such
application, report, or supplement. The
Secretary shall have sole discretion to
refund a fee or portion of the fee
under this subparagraph. A
determination by the Secretary
concerning a refund under this
paragraph shall not be reviewable.
(b) Fee Revenue Amounts.--Except as provided in subsections
(c), (d), (f), and (g), the fees under subsection (a) shall be
established to generate the following revenue amounts:
$25,125,000 in fiscal year 2003; $27,255,000 in fiscal year
2004; $29,785,000 in fiscal year 2005; $32,615,000 in fiscal
year 2006, and $35,000,000 in fiscal year 2007. If legislation
is enacted after the date of the enactment of this Act
requiring the Secretary to fund additional costs of the
retirement of Federal personnel, fee revenue amounts under this
subsection shall be increased in each year by the amount
necessary to fully fund the portion of such additional costs
that are attributable to the process for the review of device
applications.
(c) Adjustments.--
(1) Inflation adjustment.--The revenues established
in subsection (b) shall be adjusted by the Secretary by
notice, published in the Federal Register, for a fiscal
year to reflect the greater of--
(A) the total percentage change that occurred
in the Consumer Price Index for all urban
consumers (all items; U.S. city average) for
the 12 month period ending June 30 preceding
the fiscal year for which fees are being
established, or
(B) the total percentage change for the
previous fiscal year in basic pay under the
General Schedule in accordance with section
5332 of title 5, United States Code, as
adjusted by any locality-based comparability
payment pursuant to section 5304 of such title
for Federal employees stationed in the District
of Columbia.
The adjustment made each fiscal year by this subsection
shall be added on a compounded basis to the sum of all
adjustments made each fiscal year after fiscal year
2003 under this subsection.
(2) Workload adjustment.--After the fee revenues
established in subsection (b) are adjusted for a fiscal
year for inflation in accordance with paragraph (1),
the fee revenues shall, beginning with fiscal year
2004, be adjusted further each fiscal year to reflect
changes in the workload of the Secretary for the
process for the review of device applications. With
respect to such adjustment:
(A) The adjustment shall be determined by the
Secretary based on a weighted average of the
change in the total number of premarket
applications, investigational new device
applications, premarket reports, supplements,
and premarket notification submissions
submitted to the Secretary. The Secretary shall
publish in the Federal Register the fee
revenues and fees resulting from the adjustment
and the supporting methodologies.
(B) Under no circumstances shall the
adjustment result in fee revenues for a fiscal
year that are less than the fee revenues for
the fiscal year established in subsection (b),
as adjusted for inflation under paragraph (1).
(3) Compensating adjustment.--After the fee revenues
established in subsection (b) are adjusted for a fiscal
year for inflation in accordance with paragraph (1),
and for workload in accordance with paragraph (2), the
fee revenues shall, beginning with fiscal year 2004, be
adjusted further each fiscal year, if necessary, to
reflect the cumulative amount by which collections for
previous fiscal years, beginning with fiscal year 2003,
fell below the cumulative revenue amounts for such
fiscal years specified in subsection (b), adjusted for
such fiscal years for inflation in accordance with
paragraph (1), and for workload in accordance with
paragraph (2). Only fees for 180 day supplements and
premarket notification submissions shall be increased
to generate compensating adjustment revenues.
(4) Final year adjustment.--For fiscal year 2007, the
Secretary may, in addition to adjustments under
paragraphs (1) and (2), further increase the fees and
fee revenues established in subsection (b) if such
adjustment is necessary to provide for not more than
three months of operating reserves of carryover user
fees for the process for the review of device
applications for the first three months of fiscal year
2008. If such an adjustment is necessary, the rationale
for the amount of the increase shall be contained in
the annual notice establishing fee revenues and fees
for fiscal year 2007. If the Secretary has carryover
user fee balances for such process in excess of three
months of such operating reserves, the adjustment under
this paragraph shall not be made.
(5) Annual fee setting.--The Secretary shall, 60 days
before the start of each fiscal year after September
30, 2002, establish, for the next fiscal year, and
publish in the Federal Register, fees under subsection
(a), based on the revenue amounts established under
subsection (b) and the adjustment provided under this
subsection, except that the fees established for fiscal
year 2003 shall be based on a premarket application fee
of $139,000.
(6) Limit.--The total amount of fees charged, as
adjusted under this subsection, for a fiscal year may
not exceed the total costs for such fiscal year for the
resources allocated for the process for the review of
device applications.
(d) Small Business Fee Waiver and Fee Reduction.--
(1) In general.--The Secretary shall grant a waiver
of the fee required under subsection (a) for one
premarket application, or one premarket report, where
the Secretary finds that the applicant involved is a
small business submitting its first premarket
application to the Secretary, or its first premarket
report, respectively, for review. In addition, for
subsequent premarket applications, premarket reports,
and supplements where the Secretary finds that the
applicant involved is a small business, the fees
specified in clauses (i) through (vi) of subsection
(a)(1)(A) may be paid at a reduced rate in accordance
with paragraph (2)(C).
(2) Rules relating to small businesses.--
(A) Definition.--
(i) For purposes of this subsection,
the term ``small business'' means an
entity that reported $10,000,000 or
less of gross receipts or sales in its
most recent Federal income tax return
for a taxable year, including such
returns of all of its affiliates,
partners, or parent firms.
(ii) The Secretary may adjust the
$10,000,000 threshold established in
clause (i) if the Secretary has
evidence from actual experience that
this threshold results in a reduction
in revenues from premarket
applications, premarket reports, and
supplements that is 13 percent or more
than would occur without small business
exemptions and lower fee rates. To
adjust this threshold, the Secretary
shall publish a notice in the Federal
Register setting out the rationale for
the adjustment, and the new threshold.
(B) Evidence of qualification.--An applicant
shall pay the higher fees established by the
Secretary each year unless the applicant
submits evidence that it qualifies for a waiver
of the fee or the lower fee rate. The applicant
shall support its claim that it meets the
definition under subparagraph (A) by submission
of a copy of its most recent Federal income tax
return for a taxable year, which shows an
amount of gross sales or receipts that is less
than the maximum established in subparagraph
(A). The applicant shall certify that the
information provided is a true and accurate
copy of the applicant's actual tax forms as
submitted to the Internal Revenue Service.
(C) Reduced fees.--Where the Secretary finds
that the applicant involved meets the
definition under subparagraph (A), the fees
established under subsection (c)(5) may be paid
at reduced rates as follows:
(i) 38 percent of the fee established
under subsection (c)(5) for a premarket
application, a premarket report, a
panel-track supplement, or an efficacy
supplement.
(ii) 44 percent of the fee
established under subsection (c)(5) for
a 180-day supplement to a medical
device application.
(iii) 25 percent of the fee
established under subsection (c)(5) for
a real-time supplement to a premarket
application.
This subsection may not be construed as
authorizing any reduction in the fee
established under subsection (c)(5) for a
premarket notification submission.
(D) Request for fee waiver or reduction.--An
applicant seeking a fee waiver or reduction
under this subsection shall submit supporting
information to the Secretary at least 60 days
before the fee is required pursuant to
subsection (a).
(e) Effect of Failure to Pay Fees.--A premarket application,
premarket report, supplement, or premarket notification
submission submitted by a person subject to fees under
subsection (a) shall be considered incomplete and shall not be
accepted for filing by the Secretary until all fees owed by
such person have been paid.
(f) Conditions.--
(1) Performance goals through fiscal year 2005;
termination of program after fiscal year 2005.--With
respect to the amount that, under the salaries and
expenses account of the Food and Drug Administration,
is appropriated for a fiscal year for devices and
radiological products:
(A)(i) For each of the fiscal years 2003 and
2004, the Secretary is expected to meet all of
the goals identified for the fiscal year
involved in any letter referred to in section
101(3) of the Medical Device User Fee and
Modernization Act of 2002 (referred to in this
paragraph as ``performance goals'') if the
amount so appropriated for such fiscal year,
excluding the amount of fees appropriated for
such fiscal year, is equal to or greater than
$205,720,000 multiplied by the adjustment
factor applicable to the fiscal year.
(ii) For each of the fiscal years 2003 and
2004, if the amount so appropriated for the
fiscal year involved, excluding the amount of
fees appropriated for such fiscal year, is less
than the amount that applies under clause (i)
for such fiscal year, the following applies:
(I) The Secretary is expected to meet
such goals to the extent practicable,
taking into account the amounts that
are available to the Secretary for such
purpose, whether from fees under
subsection (a) or otherwise.
(II) The Comptroller General of the
United States shall submit to the
Congress a report describing whether
and to what extent the Secretary is
meeting the performance goals
identified for such fiscal year, and
whether the Secretary will be able to
meet all performance goals identified
for fiscal year 2005. A report under
the preceding sentence shall be
submitted to the Congress not later
than July 1 of the fiscal year with
which the report is concerned.
(B)(i) For fiscal year 2005, the Secretary is
expected to meet all of the goals identified
for the fiscal year if the total of the amounts
so appropriated for fiscal years 2003 through
2005, excluding the amount of fees appropriated
for such fiscal years, is equal to or greater
than the sum of--
(I) $205,720,000 multiplied by the
adjustment factor applicable to fiscal
year 2003;
(II) $205,720,000 multiplied by the
adjustment factor applicable to fiscal
year 2004; and
(III) $205,720,000 multiplied by the
adjustment factor applicable to fiscal
year 2005.
(ii) For fiscal year 2005, if the total of
the amounts so appropriated for fiscal years
2003 through 2005, excluding the amount of fees
appropriated for such fiscal years, is less
than the sum that applies under clause (i) for
fiscal year 2005, the following applies:
(I) The Secretary is expected to meet
such goals to the extent practicable,
taking into account the amounts that
are available to the Secretary for such
purpose, whether from fees under
subsection (a) or otherwise.
(II) The Comptroller General of the
United States shall submit to the
Congress a report describing whether
and to what extent the Secretary is
meeting the performance goals
identified for such fiscal year, and
whether the Secretary will be able to
meet all performance goals identified
for fiscal year 2006. The report under
the preceding sentence shall be
submitted to the Congress not later
than July 1, 2005.
(C) For fiscal year 2006, fees may not be
assessed under subsection (a) for the fiscal
year, and the Secretary is not expected to meet
any performance goals identified for the fiscal
year, if the total of the amounts so
appropriated for fiscal years 2003 through
2006, excluding the amount of fees appropriated
for such fiscal years, is less than the sum
of--
(i) $205,720,000 multiplied by the
adjustment factor applicable to fiscal
year 2006; and
(ii) an amount equal to the sum that
applies for purposes of subparagraph
(B)(i).
(D) For fiscal year 2007, fees may not be
assessed under subsection (a) for the fiscal
year, and the Secretary is not expected to meet
any performance goals identified for the fiscal
year, if--
(i) the amount so appropriated for
the fiscal year, excluding the amount
of fees appropriated for the fiscal
year, is less than $205,720,000
multiplied by the adjustment factor
applicable to fiscal year 2007; or
(ii) pursuant to subparagraph (C),
fees were not assessed under subsection
(a) for fiscal year 2006.
(2) Authority.--If the Secretary does not assess fees
under subsection (a) during any portion of a fiscal
year because of subparagraph (C) or (D) of paragraph
(1) and if at a later date in such fiscal year the
Secretary may assess such fees, the Secretary may
assess and collect such fees, without any modification
in the rate for premarket applications, supplements,
premarket reports, and premarket notification
submissions, and at any time in such fiscal year,
notwithstanding the provisions of subsection (a)
relating to the date fees are to be paid.
(g) Crediting and Availability of Fees.--
(1) In general.--Fees authorized under subsection (a)
shall be collected and available for obligation only to
the extent and in the amount provided in advance in
appropriation Acts. Such fees are authorized to be
appropriated to remain available until expended. Such
sums as may be necessary may be transferred from the
Food and Drug Administration salaries and expenses
appropriation account without fiscal year limitation to
such appropriation account for salaries and expenses
with such fiscal year limitation. The sums transferred
shall be available solely for the process for the
review of device applications.
(2) Collections and appropriation acts.--
(A) In general.--The fees authorized by this
section--
(i) shall be retained in each fiscal
year in an amount not to exceed the
amount specified in appropriation Acts,
or otherwise made available for
obligation, for such fiscal year, and
(ii) shall only be collected and
available to defray increases in the
costs of the resources allocated for
the process for the review of device
applications (including increases in
such costs for an additional number of
full-time equivalent positions in the
Department of Health and Human Services
to be engaged in such process) over
such costs, excluding costs paid from
fees collected under this section, for
fiscal year 2002 multiplied by the
adjustment factor.
(B) Compliance.--The Secretary shall be
considered to have met the requirements of
subparagraph (A)(ii) in any fiscal year if the
costs funded by appropriations and allocated
for the process for the review of device
applications--
(i) are not more than 3 percent below
the level specified in subparagraph
(A)(ii); or
(ii)(I) are more than 3 percent below
the level specified in subparagraph
(A)(ii), and fees assessed for a
subsequent fiscal year are decreased by
the amount in excess of 3 percent by
which such costs fell below the level
specified in such subparagraph; and
(II) such costs are not more than 5
percent below the level specified in
such subparagraph.
(3) Authorization of appropriations.--There are
authorized to be appropriated for fees under this
section--
(A) $25,125,000 for fiscal year 2003;
(B) $27,255,000 for fiscal year 2004;
(C) $29,785,000 for fiscal year 2005;
(D) $32,615,000 for fiscal year 2006; and
(E) $35,000,000 for fiscal year 2007,
as adjusted to reflect adjustments in the total fee
revenues made under this section and changes in the
total amounts collected by application fees.
(4) Offset.--Any amount of fees collected for a
fiscal year under this section that exceeds the amount
of fees specified in appropriation Acts for such fiscal
year shall be credited to the appropriation account of
the Food and Drug Administration as provided in
paragraph (1), and shall be subtracted from the amount
of fees that would otherwise be authorized to be
collected under this section pursuant to appropriation
Acts for a subsequent fiscal year.
(h) Collection of Unpaid Fees.--In any case where the
Secretary does not receive payment of a fee assessed under
subsection (a) within 30 days after it is due, such fee shall
be treated as a claim of the United States Government subject
to subchapter II of chapter 37 of title 31, United States Code.
(i) Written Requests for Refunds.--To qualify for
consideration for a refund under subsection (a)(1)(D), a person
shall submit to the Secretary a written request for such refund
not later than 180 days after such fee is due.
(j) Construction.--This section may not be construed to
require that the number of full-time equivalent positions in
the Department of Health and Human Services, for officers,
employees, and advisory committees not engaged in the process
of the review of device applications, be reduced to offset the
number of officers, employees, and advisory committees so
engaged.
* * * * * * *
----------
SECTION 498C OF THE PUBLIC HEALTH SERVICE ACT
SEC. 498C. BREAST IMPLANT RESEARCH.
(a) In General.--The Director of NIH shall conduct or support
prospective or retrospective research to examine the long-term
health implications of both saline and silicone breast
implants. If scientifically appropriate, such research studies
may include the following:
(1) A multidisciplinary study of women who have
received silicone and saline implants and have had an
implant for a sufficient amount of time to allow for
appropriate comparison as to the long-term health
consequences.
(2) A comparison of women receiving implants for
reconstruction after mastectomy to breast cancer
patients who have not had reconstruction, including
subsets of women with saline implants and women with
silicone implants.
(b) Definition.--For purposes of this section, the term
``breast implant'' means a breast prosthesis that is implanted
to augment or reconstruct the female breast.