[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4728 Introduced in House (IH)]

103d CONGRESS
  2d Session
                                H. R. 4728

To amend the Federal Food, Drug, and Cosmetic Act to authorize a device 
                application fee, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 12, 1994

Mr. Waxman (for himself and Mr. Dingell) introduced the following bill; 
       which was referred to the Committee on Energy and Commerce

_______________________________________________________________________

                                 A BILL


 
To amend the Federal Food, Drug, and Cosmetic Act to authorize a device 
                application fee, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE AND REFERENCE.

    (a) Short Title.--This Act may be cited as the ``Medical Device 
User Fee Act of 1994''.
    (b) Reference.--Whenever in this Act an amendment or repeal is 
expressed in terms of an amendment to, or repeal of, a section or other 
provision, the reference shall be considered to be made to a section or 
other provision of the Federal Food, Drug, and Cosmetic Act.

SEC. 2. 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 3 
        will be dedicated--
                    (A) toward expediting the review of device 
                applications, supplements, and substantial equivalence 
                submissions, and
                    (B) for related activities as defined in section 
                741(3) of the Federal Food, Drug, and Cosmetic Act,
        as set forth in goals identified in the letter of July 8 , 
        1994, from the Commissioner of Food and Drugs to the Committee 
        on Energy and Commerce of the House of Representatives and the 
        Committee on Labor and Human Resources of the Senate.

SEC. 3. FEES RELATING TO DEVICES.

    Chapter VII is amended by adding at the end of subchapter C the 
following:

                   ``PART 3--FEES RELATING TO DEVICES

``SEC. 741. DEFINITIONS.

    ``For purposes of this subchapter:
            ``(1) The term--
                    ``(A) `device application' means an application for 
                approval of a device submitted under section 515(c) or 
                section 351 of the Public Health Service Act, a 
                supplement to such an application, or a device 
                substantial equivalence submission made under section 
                510(k); and
                    ``(B) `section 351 application' means a device 
                application submitted under section 351 of the Public 
                Health Service Act.
            ``(2) The term `supplement' means a request to the 
        Secretary to approve a change in a device application which has 
        been approved under section 515(d) or section 351 of the Public 
        Health Service Act.
            ``(3) The term `process for the review of device 
        applications and related activities' means the following 
        activities of the Secretary with respect to the review of 
        device applications and related activities:
                    ``(A) The activities necessary for the review of 
                device applications and related activities.
                    ``(B) The issuance of action letters which allow 
                marketing of devices or which set forth in detail the 
                specific deficiencies in such applications and, where 
                appropriate, the actions necessary to place such 
                applications in condition for approval.
                    ``(C) The inspection of device establishments and 
                other facilities undertaken as part of the Secretary's 
                review of pending device applications.
                    ``(D) Activities necessary for the review of 
                applications for licensure of devices subject to 
                section 351 of the Public Health Service Act, for the 
                licensure of establishments where such devices are 
                manufactured, and for the release of lots of such 
                devices.
                    ``(E) Review of device applications for an 
                investigational new drug exemption under section 505(i) 
                and for an investigational device exemption under 
                section 520(g) and activities conducted in anticipation 
                of the submission of an application under sections 
                505(i) and 520(g).
                    ``(F) The development of guidance and policy 
                documents to improve the process for the review of 
                device applications.
                    ``(G) The development of test methods and standards 
                in connection with the review of device applications 
                and related activities.
                    ``(H) The provision of technical assistance to 
                device manufacturers in connection with the submission 
                of a device application.
                    ``(I) Activities undertaken in connection with the 
                export of a device.
                    ``(J) Activities undertaken under sections 513 and 
                515(i) in connection with the initial classification 
                and reclassification of a device and under section 
                515(b) in connection with any requirement for premarket 
                approval of a device.
                    ``(K) Monitoring of research.
                    ``(L) Activities undertaken under sections 519(a) 
                and 519(b).
                    ``(M) Postmarket studies required as a condition of 
                an approval of a device application under section 
                515(d) or section 351 of the Public Health Service Act.
                    ``(N) Postmarket surveillance required under 
                section 522.
            ``(4) The term `costs of resources allocated for the 
        process for the review of device applications and related 
        activities' means the expenses incurred in connection with the 
        process for the review of device applications and related 
        activities for--
                    ``(A) officers and employees of the Food and Drug 
                Administration, employees under contract with the Food 
                and Drug Administration, advisory committees, and costs 
                related to such officers, employees, and committees,
                    ``(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, services, and supplies, and
                    ``(D) collecting fees under section 742 and 
                accounting for resources allocated for the review of 
                device applications and related activities, including 
                activities related to the review of applications for 
                fee exceptions, waivers, and reductions.
            ``(5) The term `adjustment factor' applicable to a fiscal 
        year is the lower of--
                    ``(A) the Consumer Price Index for all urban 
                consumers (all items; United States city average) for 
                August of the preceding fiscal year divided by such 
                Index for August 1994, or
                    ``(B) the total budget authority provided for 
                discretionary programs for the immediately preceding 
                fiscal year (as reported in the Office of Management 
                and Budget sequestration preview report, if available, 
                required under section 254(d) of the Balanced Budget 
                and Emergency Deficit Control Act of 1985) divided by 
                such budget authority for fiscal year 1994 (as reported 
                in the Office of Management and Budget final 
                sequestration report submitted after the end of the 
                103d Congress, 2d Session).
        The term `budget authority' in subparagraph (B) is as defined 
        in the Balanced Budget and Emergency Deficit Control Act of 
        1985, as in effect as of January 1, 1994.

``SEC. 742. AUTHORITY TO ASSESS AND USE DEVICE USER FEES.

    ``(a)  Fees.--Beginning in fiscal year 1995, the Secretary shall 
assess and collect fees as follows:
            ``(1) General rule.--Except as provided in paragraph (2), 
        each person that submits, on or after 90 days before--
                    ``(A) the date of the enactment of the Medical 
                Device User Fee Act of 1994, or
                    ``(B) the date of the enactment of the first 
                appropriation under subsection (g)(4) for fees under 
                this section,
        whichever occurs later, a device application shall be subject 
        to the fee prescribed by subsection (b).
            ``(2) Exception.--
                    ``(A) Further manufacturing use.--No fee shall be 
                required for the submission of a section 351 
                application for a product licensed for further 
                manufacturing use only.
                    ``(B) Exception for previously filed application or 
                supplement.--If a device application was--
                            ``(i) submitted by a person that paid the 
                        fee for such application,
                            ``(ii) accepted for filing, and
                            ``(iii) not approved or withdrawn (without 
                        a waiver under subsection (d)),
                the submission of a device application for the 
                identical device by the same person (or the person's 
                licensee, assignee, or successor) shall not be subject 
                to a fee under paragraph (1).
            ``(3) Payment schedule.--
                    ``(A) General rule.--Except as provided in 
                subparagraph (B), the fee prescribed by subsection (b) 
                shall be due upon the submission of the application.
                    ``(B) Exceptions.--
                            ``(i) Pending.--In the case of a device 
                        application for which fees are required under 
                        paragraph (1) and which is pending on the later 
                        of--
                                    ``(I) the date of the enactment of 
                                the Medical Device User Fee Act of 
                                1994, or
                                    ``(II) the date of the enactment of 
                                the first appropriation under 
                                subsection (g)(4) for fees under this 
                                section,
                        the fee required by paragraph (1) shall be due 
                        90 days after such later date of enactment.
                            ``(ii) Excess of authorization.--A fee 
                        which is due after an amount of fees equal to 
                        the authorization of appropriations under 
                        subsection (g)(4) for the fiscal year in which 
                        the fee is imposed has been collected shall be 
                        due on November 1 in the following fiscal year.
            ``(4) Refund if application or supplement not accepted for 
        filing.--
                    ``(A) 515(c) and 351.--The Secretary shall refund 
                85 percent of the fee paid under paragraph (3) for any 
                application submitted under section 515(c) or section 
                351 of the Public Health Service Act which is not 
                accepted for filing.
                    ``(B) Supplements.--The Secretary shall refund 85 
                percent of the fee paid under paragraph (3) for any 
                supplement with required clinical data which is not 
                accepted for filing and shall refund the fee paid under 
                such paragraph for any supplement without required 
                clinical data which is not accepted for filing.
                    ``(C) 510(k).--The Secretary shall refund the fee 
                paid under paragraph (3) for any substantial 
                equivalence submission under section 510(k) which is 
                not accepted for filing.
    ``(b) Fee Amounts.--
            ``(1) Amount.--Except as provided in paragraph (2) and 
        subsections (c), (d), (f), and (g), the fees required under 
        subsection (a) are as follows:
                    ``(A) $52,000 for applications submitted under 
                section 515(c) and applications for devices submitted 
                under section 351 of the Public Health Service Act,
                    ``(B) $7,100 for a supplement with required 
                clinical data,
                    ``(C) $4,500 for a supplement without required 
                clinical data, and
                    ``(D) $3,200 for a submission under section 510(k).
            ``(2) Small business exception.--
                    ``(A) Applications and submissions.--Any person 
                employing fewer than 20 employees, including employees 
                of affiliates, and which does not have a device 
                introduced or delivered for introduction into 
                interstate commerce under a device application--
                            ``(i) shall pay one-half the amount of the 
                        fee prescribed by paragraph (1)(A) one year 
                        after the date of final action by the Secretary 
                        on an application of such person which is 
                        subject to such fee, and
                            ``(ii) shall pay the fee prescribed by 
                        paragraph (1)(D) for a submission made by such 
                        person under section 510(k) one year after the 
                        date of final action by the Secretary on such 
                        submission.
                    ``(B) Certification.--The Secretary shall require 
                any person who applies to pay a fee in accordance with 
                subparagraph (A) to certify such person's qualification 
                under such subparagraph. The Secretary shall 
                periodically publish in the Federal Register of list of 
                persons making such certification.
                    ``(C) Definition.--For purposes of this paragraph, 
                a person is an affiliate of another person when--
                            ``(i) directly or indirectly, one person 
                        controls, or has the power to control, the 
                        other person,
                            ``(ii) directly or indirectly, a third 
                        party controls, or has the power to control, 
                        both persons, or
                            ``(iii) an identity of interest between or 
                        among such persons exists such that affiliation 
                        may be found.
    ``(c) Adjustments.--
            ``(1) Fee adjustment.--Subject to the amount appropriated 
        for a fiscal year under subsection (g), the Secretary shall, in 
        a fiscal year beginning after fiscal year 1995, adjust the fees 
        due in the fiscal year following the fiscal year in which the 
        adjustment is made to reflect the greater of--
                    ``(A) the total percentage increase that occurred 
                during the preceding fiscal year in the Consumer Price 
                Index for all urban consumers (all items; U.S. city 
                average) that exceeds 3.5 percent, or
                    ``(B) the total percentage increase for such 
                preceding 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 that exceeds 3.5 percent.
        The Secretary shall, by notice published in the Federal 
        Register, make an adjustment under this paragraph within the 
        first 60 days of a fiscal year.
            ``(2) Limit.--The total amount of fees charged, as adjusted 
        under paragraph (1), 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 and related 
        activities.
    ``(d) Fee Waiver or Reduction.--The Secretary shall grant a waiver 
from or a reduction of a fee for a person under subsection (a) if the 
person has submitted an application under section 515(c) or section 351 
of the Public Health Service Act and if the Secretary finds--
            ``(1) that such application is a device application for a 
        device which has a humanitarian device exemption under section 
        520(m), or
            ``(2)(A) such waiver or reduction is necessary to protect 
        the public health, and
            ``(B) the assessment of the fee would present a significant 
        barrier to innovation because of limited resources available to 
        such person or other circumstances.
    ``(e) Effect of Failure To Pay Fees.--A device application or 
supplement submitted by a person subject to fees under subsection (a) 
shall be considered incomplete and shall not be accepted for review by 
the Secretary until all fees owed by such person under subsection (a) 
have been paid. The Secretary may discontinue review of any device 
application submitted by a person if such person has not paid all fees 
owed by such person under subsection (a).
    ``(f) Assessment of Fees.--
            ``(1) Limitation.--Fees may not be assessed under 
        subsection (a) for a fiscal year beginning after fiscal year 
        1995 unless appropriations for salaries and expenses of the 
        Food and Drug Administration for such fiscal year (excluding 
        the amount of fees appropriated under chapter 7, chapter 97 of 
        title 31, United States Code, or other authority for such 
        fiscal year) are equal to or greater than the amount of 
        appropriations for the salaries and expenses of the Food and 
        Drug Administration for the fiscal year 1994 (excluding the 
        amount of fees appropriated under chapter 7, chapter 97 of 
        title 31, United States Code, or other authority for such 
        fiscal year) multiplied by the adjustment factor applicable to 
        the fiscal year involved.
            ``(2) Authority.--If the Secretary does not assess fees 
        under subsection (a) during any portion of a fiscal year 
        because of paragraph (1) and if at a later date in such fiscal 
        year the Secretary is authorized to assess such fees, the 
        Secretary may assess and collect such fees, without any 
        modification in the rate to account for the time in which the 
        Secretary could not collect such fees.
    ``(g) Crediting and Availability of Fees.--
            ``(1) In general.--Fees collected for a fiscal year 
        pursuant to subsection (a) shall be credited to the 
        appropriation account for salaries and expenses of the Food and 
        Drug Administration and shall be available in accordance with 
        appropriation Acts until expended, without fiscal year 
        limitation.
            ``(2) Availability.--Not more than 5 percent of the 
        projected fee receipts in any fiscal year may be used for 
        activities described in subparagraphs (L) and (N) of section 
        741(3), except that up to 15 percent of the projected fee 
        receipts in any fiscal year may be used for such activities 
        after the Commissioner of the Food and Drug Administration 
        issues a public notice that the Food and Drug Administration 
        has met the applicable goals referenced in section 2(3) of the 
        Medical Device User Fee Act of 1994. If subsequent to such 
        public notice the Food and Drug Administration is not meeting 
        such goals--
                    ``(A) the Commissioner shall issue a public notice 
                of the Food and Drug Administration's actual 
                performance level, and
                    ``(B) not more than 5 percent of projected fee 
                receipts may be used for such activities until the 
                Commissioner issues a subsequent notice that the Food 
                and Drug Administration is again meeting such goals.
            ``(3) Collections and appropriation acts.--The fees 
        authorized by this section--
                    ``(A) shall be collected in each fiscal year in an 
                amount equal to the amount specified in appropriation 
                Acts for such fiscal year, and
                    ``(B) 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 and related activities (including 
                increases in such costs for an additional number of 
                full-time equivalent employees in the Department of 
                Health and Human Services to be engaged in such 
                process) over such costs for fiscal year 1994 
                multiplied by the adjustment factor.
            ``(4) Authorization of appropriations.--There are 
        authorized to be appropriated for fees under this section--
                    ``(A) $23,000,000 for fiscal year 1995,
                    ``(B) $21,300,000 for fiscal year 1996,
                    ``(C) $23,000,000 for fiscal year 1997,
                    ``(D) $24,000,000 for fiscal year 1998, and
                    ``(E) $24,000,000 for fiscal year 1999,
        as adjusted to reflect the percentage adjustment of fees 
        authorized under subsection (c)(1).
    ``(h) Collection of Unpaid Fees.--In any case where the Secretary 
does not receive payment of a fee for a pending application 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) Positions.--
            ``(1) General rule.--The number of full-time equivalent 
        employees in the Department of Health and Human Services not 
        engaged in the process of the review of device applications and 
        related activities, may not be reduced by the Secretary to 
        offset the number of officers, employees, and advisory 
        committees so engaged.
            ``(2) Executive order and other limits.--The number of 
        full-time equivalent employees engaged in the process of the 
        review of device applications and related activities are not 
        subject to counting or inclusion in the limits on hiring 
        Civilian Personnel set out in Executive Order 12839 of February 
        10, 1993, any other current limit, or any limit that may be 
        implemented through September 30, 1999. The full-time 
        equivalent employees not so engaged may not be reduced by the 
        Secretary to offset the number of full-time equivalent 
        employees exempt from such limit.''.

SEC. 4. ANNUAL REPORTS.

    (a) First Report.--Within 90 days after the end of each fiscal year 
during which fees are collected under part 3 of subchapter C of chapter 
VII of the Federal Food, Drug, and Cosmetic Act, the Secretary of 
Health and Human Services shall submit a report stating the Food and 
Drug Administration's progress in achieving the goals identified in 
section 2(3) of this Act during such fiscal year and that agency's 
future plans for meeting such goals. There shall be included in such 
report--
            (1) a specific statement from the Secretary concerning the 
        Food and Drug Administration's actions to reduce the backlog in 
        the review of device applications and meeting statutory review 
        times applicable to submissions for devices, and
            (2) the following data from the Center for Devices and 
        Radiological Health and the Center for Biologics Evaluation and 
        Research:
                    (A) The number of device submissions found not 
                fileable.
                    (B) Total elapsed time for review of device 
                submissions.
                    (C) Total time for review of device submissions as 
                calculated by such Center.
                    (D) Number of negative decisions for device 
                submissions.
                    (E) Number of non-approveable letters for device 
                submissions.
                    (F) Number of deficiency letters for device 
                submissions.
                    (G) Information for subparagraphs (A) through (F) 
                for fiscal year 1994.
    (b) Second Report.--Within 120 days after the end of each fiscal 
year during which such fees are collected, the Secretary of Health and 
Human Services shall submit a report on the implementation of the 
authority for such fees during such fiscal year and on the use the Food 
and Drug Administration made of the fees collected during such fiscal 
year for which the report is made.
    (c) Committees.--The reports described in subsections (a) and (b) 
shall be submitted to the Committee on Energy and Commerce of the House 
of Representatives and the Committee on Labor and Human Resources of 
the Senate.

SEC. 5. REGULATIONS.

    (a) General Rule.--This Act and the amendment made by section 3 
shall not be in effect after June 30, 1995, unless the Secretary of 
Health and Human Services, through the Commissioner of Food and Drugs, 
approves--
            (1) regulations described in subsection (b), and
            (2) regulations which identify devices in class II of the 
        device classes in section 513 of the Federal Food, Drug, and 
        Cosmetic Act which are appropriate for exemption from the 
        requirement of section 510(k) of such Act and exempts such 
        devices from such requirement following their reclassification 
        into class I.
    (b) Regulations.--
            (1) Proposed.--Not later than 30 days after the date of the 
        enactment of this Act, the Secretary shall issue proposed 
        regulations that--
                    (A) identify all devices in class I of the device 
                classes in section 513 of the Federal Food, Drug, and 
                Cosmetic Act which are exempt from the requirement of 
                section 510(k) of such Act, and
                    (B) identify the criteria for selecting devices for 
                such exemption.
        The Secretary shall provide an opportunity to comment on such 
        proposed regulations for 60 days after their publication.
            (2) Final.--Not later than 30 days after the close of the 
        comment period provided under paragraph (1), the Secretary 
        shall issue final regulations which grant an exemption to the 
        devices identified in the proposed regulations which clearly 
        meet the criteria for exemption from the requirement of such 
        section 510(k) of the Federal Food, Drug, and Cosmetic Act.
    (c) Other Regulations.-- Not later than June 30, 1995, the 
Secretary shall issue final regulations for the remainder of the 
devices from the list published in the proposed regulations which 
exempts such devices from such requirement or which continues the 
applicability of such requirement.
    (d) Fees.--An applicant under a substantial equivalence submission 
under section 510(k) of the Federal Food, Drug, and Cosmetic Act which 
the Secretary proposed to exempt from the requirement of such section 
under subsection (b)(1) shall not be required to pay a fee for such 
submission unless the Secretary issues a final regulation requiring 
such submission. An applicant under a substantial equivalence 
submission under such section 510(k) which the Secretary exempts from 
the requirement of such section under subsection (b) shall not be 
required to pay a fee for such submission.

SEC. 6. SUNSET.

    This Act and the amendment made by section 3 shall not be in effect 
after September 30, 1999.
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