Industry pitches FDA with 26% rise in user fee funding in MDUFA V negotiations

Dive Brief:

The medical device industry has pitched a 26% increase in user fee funding to FDA as part of MDUFA V negotiations, according to analysts at Cowen.
The fifth version of the Medical Device User Fee Amendments program will shape how much the industry pays for FDA product reviews from 2023 to 2027 and what goals the agency aims to achieve. The industry's offer tops $1.2 billion.
FDA and industry, which have uncovered "fundamentally different" views in the negotiations, are expected to provide an agreement to Congress in January. At that point, lawmakers are expected to start tying other reforms including the new 21st Century Cures Act to the bill. Medtech lobby AdvaMed declined to comment on the negotiations.

Dive Insight:

The public meetings from MDUFA V negotiations held earlier in the year touch on the question of how much user fee funding FDA will receive without providing a figure. Industry has now reportedly put the figure at $1.2 billion, opening a new front in the negotiations with FDA.

While the figure is up on the almost $1 billion agreed for MDUFA IV, a sizable slice of the extra cash is accounted for by carryover balance. Removing the carryover from MDUFA IV shrinks the industry offer to $1.1 billion. The use of the carryover balance was a focal point of MDUFA meetings earlier in the year, with FDA seeking industry feedback on how to allocate the funds.

The Cowen analysts report the industry is most likely to propose using the funds to hire additional FDA reviewers. Industry negotiators have repeatedly hit on the need for FDA to fill open positions in the rounds of talks, including by setting "appropriate vacancy thresholds."

Even with the carryover, the 26% increase represents a sharp slowdown in the rate of user fee rises. The agreed amount more than doubled between MDUFA II and MDUFA III, and increased a further 68% for MDUFA IV. Industry has pushed back in MDUFA V talks, calling for congressional funding to remain the main source of FDA cash and the limiting of user fees to the premarket review process.

Zach Rothstein, AdvaMed's vice president for technology and regulatory affairs, declined to comment on MDUFA V. "Under the ground rules we set with FDA, I can't discuss what occurs at the negotiation until we have a final package," Rothstein said in an emailed statement.

The full effects of MDUFA V will only become clear once the bill gets to Congress. As the Cowen analysts note, MDUFA's status as a must-pass bill means lawmakers try to piggyback other reforms on the legislation.

This time around, the second version of the 21st Century Cures Act could be among the changes to secure a passage through Congress hitched to MDUFA. The Cowen analysts expect the final version of Cures 2.0 to include the Medicare Coverage of Innovative Technology initiative, which was set to give breakthrough devices automatic Medicare reimbursement before opponents derailed the policy.