Congressional Record, Volume 148 Issue 130 (Monday, October 7, 2002)

[Congressional Record Volume 148, Number 130 (Monday, October 7, 2002)]
[House]
[Pages H7153-H7164]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

MEDICAL DEVICE USER FEE AND MODERNIZATION ACT OF 2002

Mr. BURR of North Carolina. Mr. Speaker, I move to suspend the rules
and pass 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.
The Clerk read as follows:

H.R. 3580

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

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;

[[Page H7154]]

``(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

[[Page H7155]]

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

[[Page H7156]]

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

[[Page H7157]]

``(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--

[[Page H7158]]

``(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,

[[Page H7159]]

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:

[[Page H7160]]

``(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).''.

The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
North Carolina (Mr. Burr) and the gentleman from Ohio (Mr. Brown) each
will control 20 minutes.
The Chair recognizes the gentleman from North Carolina (Mr. Burr).

General Leave

Mr. BURR of North Carolina. Mr. Speaker, I ask unanimous consent that
all Members may have 5 legislative days within which to revise and
extend their remarks and include extraneous material on this
legislation, H.R. 3580.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from North Carolina?
There was no objection.
Mr. BURR of North Carolina. Mr. Speaker, I yield myself such time as
I may consume.

[[Page H7161]]

Mr. Speaker, I rise today in strong support of H.R. 3580, the Medical
Device User Fee and Modernization Act. This bill represents a
bipartisan agreement reached after months of negotiation. I commend the
sponsors of this legislation, the gentleman from Pennsylvania (Mr.
Greenwood) and the gentlewoman from California (Ms. Eshoo), as well as
the gentleman from Louisiana (Mr. Tauzin), the gentleman from Florida
(Mr. Bilirakis), the gentleman from Michigan (Mr. Dingell), the
gentleman from Ohio (Mr. Brown), and the gentleman from California (Mr.
Waxman) for their efforts in reaching an agreement on this very
important legislation.
Further, I would like to thank our highly skilled legislative
counsel, Pete Goodloe, for his tireless work in drafting this bill.
The medical device industry is one of the most innovative industries
regulated by the Food and Drug Administration. Whereas other regulated
industries have products with life cycles measured in decades, the life
cycles for medical devices are measured, in many cases, in months. In
this industry, the rule is simply innovate or die.
When an industry is innovative, we need to ensure that their devices
receive an efficient review by the Food and Drug Administration. The
best ways we can help is to provide the agency with more resources.
This bill will do just that, by providing the FDA with more than $200
million over the next 5 years. With this new money, the agency will be
able to hire more reviewers and update information on technology.
The user fee approach used in this bill is similar to the initial
version of the very successful Prescription Drug User Fee Act. Under
this proposal, the industry will pay application fees to the FDA in
exchange for the FDA's promise to meet performance goals. We have also
built in protections for smaller businesses, exempting many from fees
for their first pre-market application.
Also included in the bill are needed regulatory reforms, the most
important of which is the creation of a third-party inspection. Under
third-party inspection, companies with good inspection records will be
able to select an independent FDA-accredited third party to perform
their FDA inspection. This will provide FDA with more inspectional
information. Further, by adopting this approach, we empower companies
to schedule their various international inspections along with their
FDA inspections. By allowing third-party inspections, we are sending a
signal to the rest of the world that they are an acceptable
alternative, hopefully leading to a more mutual recognition.
Importantly, this provision also requires FDA to maintain their current
level of effort for FDA inspections.
Finally, this bill includes medical device processing reforms which
ensure that device end-users always know if the devices they use have
been reprocessed. Let me be perfectly clear. There is absolutely no
hard evidence that reprocessing devices are unsafe or ineffective.
Nonetheless, because these devices can be different than original
devices, we empower the FDA to collect better data. It is good policy,
good public policy; and it deserves the support of this House, just as
it has the support of the affected manufacturers and the hospitals.
Again, I would urge my colleagues to offer a strong ``yea'' vote in
favor of this bipartisan legislation. The spirit of this bill reflects
the House at its finest.
Mr. Speaker, I reserve the balance of my time.
Mr. BROWN of Ohio. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, the medical device legislation we are considering today
is the product of lengthy, bipartisan negotiations. It is a good
compromise bill. I appreciate the majority's willingness to work with
us to ensure the legislation promotes timely access to medical devices
without compromising FDA's ability to do its job, that is, to ensure
medical products, both drugs and devices, are safe and effective for
their intended uses and to make sure these products are promoted to the
medical community and to the public in an accurate manner, and for the
benefit of the FDA's general counsel, who has repeatedly questioned
FDA's authority to regulate the advertising associated with drugs and
devices. When I say promoted in an accurate manner, I mean accurate
labeling and accurate balanced advertising. After all, a product is no
longer safe and effective if it is being marketed as something it is
not.
I mentioned Dan Troy, who is not unlike other Bush appointees to FDA,
HHS, OMB, former drug company employees, people like Ann Marie Lynch,
who was with PhRMA and now is a deputy assistant of HHS; Mitch Daniels,
in the cabinet, OMB, a former executive with Eli Lilly; Linda Skladany,
a deputy commissioner for the Food and Drug Administration; all people
from PhRMA, all people from the big drug industry who are positioned
throughout this administration, unfortunately making drug policy and,
frankly, turning the FDA into a little bit too cozy an agency in its
relationship with drug companies when it is supposed to be protecting
the public interests.

{time} 2145

But that is a story and a battle for another day.
I want to thank the gentleman from Louisiana (Chairman Tauzin); the
gentleman from Florida (Chairman Bilirakis); the ranking member, the
gentleman from Michigan (Mr. Dingell); the gentleman from Pennsylvania
(Mr. Greenwood); and my friend, the gentlewoman from California (Ms.
Eshoo); for their work on this bill and extend a special thanks to
Brent Delmonte and Steve Tilton with the majority and John Ford and
David Nelson on our staff.
It is clearly in the public's interest for Congress to promote timely
access to safe and effective medical devices. This bill advances that
goal. This legislation establishes a user fee to provide FDA added
funds for the review of medical devices.
It is no secret that resource shortfalls have hindered the review
process in the past, and additional resources are crucial to ensure the
timeliness and quality of device reviews. However, as we learned in the
Prescription Drug User Fee Act, it is crucial to couple expedited
review of new medical products with effective postmarket surveillance
of these products.
When we speed up approval of medical products, be they prescription
drugs or medical devices, we owe it to the people of the country, the
users of these products, the medical devices and the prescription
drugs, to make sure these products are watched for safety and
effectiveness problems after approval.
Again, under the Bush administration, under Republican control of
FDA, we have seen an agency that has gotten cozier with the industry,
from its statements to our committee, from its public statements and,
most importantly, from the appointees to that agency from the industry.
It is particularly important we have this postmarket surveillance so we
can see how these drugs and medical devices operate once in the general
population.
While I believe a portion of the device user fees should be used to
support postmarket surveillance activities, I appreciate the majority's
willingness to try to accommodate the underlying concern by
establishing an increased authorization specifically for postmarket
surveillance activities.
This legislation initiates third-party inspection of medical device
facilities. Allowing device manufacturers to pay private parties to
carry out required inspections of their plants, rather than be
inspected by the FDA, is controversial. Like the user fee program, it
raises, again, with an FDA that is a little bit too cozy with industry,
it raises significant conflict of interest issues.
Ideally, FDA would be given sufficient resources to carry out its
review and inspection responsibilities without needing to rely on
either user fees or delegation of its responsibilities to private
parties.
I recognize, however, that FDA has not received sufficient resources
to carry out all their responsibilities that we have given it. In the
absence of adequate appropriations, the agency is not conducting
required inspections in a timely manner, nor meeting statutory deadline
lines for some device reviews.
Given this reality, it is appropriate to explore alternatives. While
Congress and FDA will need to carefully monitor the user fee and third-
party inspection

[[Page H7162]]

programs to ensure that the public is being well served by them, it
makes sense to give these programs a chance.
I urge my colleagues' support for the bill.
Madam Speaker, I reserve the balance of my time.
Mr. BURR of North Carolina. Madam Speaker, I yield myself such time
as I may consume.
Madam Speaker, I appreciate the remarks from the gentleman from Ohio
(Mr. Brown). I think that, clearly, there will be a continuing debate
in Washington around whether we fund agencies at an adequate level. The
reality is that agencies have the determination to decide where they
put their funding, and in many cases it is our responsibility to make
sure that we bring them back focused on their core mission. In the case
of the FDA, it is on food safety, it is on the approval of
pharmaceutical applications, and it is on the approval of medical
devices. I think we enhance that likelihood with the passage of this
bill.
Madam Speaker, I reserve the balance of my time.
Mr. BROWN of Ohio. Madam Speaker, I yield 5 minutes to the
gentlewoman from California (Ms. Eshoo).
Ms. ESHOO. Madam Speaker, I thank our ranking member of the
Subcommittee on Health for yielding time to me.
Madam Speaker, I am so pleased, I am really very excited, that the
House is considering this evening H.R. 3580, legislation which I
introduced with my wonderful colleague, the gentleman from Pennsylvania
(Mr. Greenwood), and worked with so many others on.
It has been over a long period of time, not a short period of time,
so I think that is why we are very excited that we have finally made it
to the floor in the culmination of our work. It is a bipartisan bill,
and it really is ultimately about patients, patients in our country,
about making sure that patients are able to safely benefit from the
wonders of medical technology in a very timely manner.
As medical technologies have become more advanced, it takes more
government resources to ensure that these products are safe and
effective. That falls to a Federal agency, and that is the Food and
Drug Administration. They regulate medical devices, and they have been
overwhelmed by the volume of new products that they must review.
So, number one, under this bill, and for the very first time in the
history of our country, the medical device industry has agreed and will
pay fees to the FDA for every product they propose to market. It is a
very important change, something that was fought several years ago, but
the industry has now moved to this position, and I think that it is a
wise one. The fees will help the FDA hire additional staff and purchase
needed equipment so that they can review the products on a timely
basis.
Number two, the bill also increases resources for additional
inspections of manufacturing plants and facilities.
I would just like to take a moment to say to my distinguished
colleague, the gentleman from Ohio, that in terms of third-party
inspections, these are not private sector people that companies just go
out and choose; in other words, put the fox in charge of the chicken
coop. Not so. The FDA will create a pool of inspectors who then will be
available to companies, and that is what we call third-party inspection
in the bill. I think there is a huge difference between the two.
The bill also creates an Office of Combination Products to shepherd
advanced products such as devices with drug coding through the approval
process, so this new administrative flexibility allows the FDA to
devote its resources to the devices that patients need most.
Number three, and finally, the bill creates a way to regulate
reprocessed devices. I have felt pretty strongly about this. I offered
a bill in the Congress some time ago on it. These are products such as
needles and catheters, and I think most people do not realize that this
is done, which are often used a second, third, or fourth time in
patients after they have been reprocessed. That does raise safety
concerns, so the bill requires that reprocessed products undergo
additional scrutiny by the FDA and that they be held to the highest
standards the FDA can apply.
I think that this is a real achievement. I have been after the FDA to
do this for some time, and the bill accomplishes that. I think it is a
win for the American people.
It also requires that doctors, who are often unaware that they are
using reprocessed devices, be informed about the reused device so they,
in turn, can advise their patients.
Now I want to close by saying my thanks to the gentleman from
Pennsylvania (Mr. Greenwood); to the gentleman from Louisiana (Chairman
Tauzin); to the gentleman from Florida (Chairman Bilirakis); to the
gentleman from Michigan (Mr. Dingell), the ranking member of the
Committee on Commerce; to the gentleman from California (Mr. Waxman);
and certainly to the gentleman from Ohio (Mr. Brown), the ranking
member of our subcommittee; for their highly cooperative work over the
last 6 months.
I also want to single out my own legislative director, Anne Wilson.
Anne Wilson has literally spent hundreds of hours on this issue. She
has negotiated on weekends, she has gone to meetings at night, gotten
home in the morning, and then come into the office. I think that it is
fair to say that we would not be here this evening were it not for the
extraordinary work that Anne has done, and we are all grateful to her.
I also would like to thank Pat Morrissey, Brent Delmonte, and Steve
Tilton of the staff of the gentleman from Louisiana (Chairman Tauzin);
Jenny Hansen of the office of the gentleman from North Carolina (Mr.
Burr), my friend, Mr. Burr; Allen Eisenberg of the office of the
gentleman from Pennsylvania (Mr. Greenwood); John Ford of the office of
the gentleman from Michigan (Mr. Dingell); Anne Witt of the office of
the gentleman from California (Mr. Waxman); and Jeremy Sharp of the
office of the gentlewoman from California (Mrs. Capps).
This is an important bill, and it would not have been completed
without the kind of work that we have all underscored this evening.
I think we have come a long way, Madam Speaker; and I think we have
created something that will serve the American people well. I urge the
entire House to support this important legislation.
Mr. BROWN of Ohio. Madam Speaker, I have no further requests for
time, and I yield back the balance of my time.
Mr. BURR of North Carolina. Madam Speaker, I yield myself such time
as I may consume.
Madam Speaker, let me add, before I yield back my time, the fabulous
commitment that the gentlewoman from California (Ms. Eshoo) has made to
this bill, as well as the gentleman from Pennsylvania (Mr. Greenwood)
on our side.
I think the gentlewoman from California stated it very well: It was
the ability of those who worked, staff and Members of the Committee on
Commerce, to stay focused on patients and, ultimately, the advantages
to those patients that a successful end to this legislation might bring
to the approval process on medical devices. That means that tonight
this bill will pass the House of Representatives. For that, I am
grateful to the gentlewoman from California.
Mr. GREENWOOD. Mr. Speaker, today, we consider in the House under
suspension H.R. 3580, a bill that I originally introduced with
congresswoman Anna Eshoo, but has become so much more. Thanks to a
cooperative and bi-partisan approach, this bill has now become a
vehicle for an array of reforms that are perhaps the most sweeping for
medical device reviews since the medical device amendments of 1976.
First, let me thank chairman Tauzin, chairman Bilirakis, and ranking
members Dingell and Brown, as well as Mr. Waxman and each of your
staffs. This has been an outstanding example of teamwork and
bipartisanship.
In particular, I want to recognize the following staff for their
outstanding work on this bill: Brent Delmonte; Patrick Morrisey; David
Nelson; Anne Wilson; Karen Nelson; John Ford; Ann Witt; Steven Tilton;
Jenny Hansen; Ellie DeHoney; and Alan Eisenberg. Also I want to thank
the legislative counsel, Pete Goodloe.
Mr. Speaker, last year many of us became much better versed in some
of the extraordinary new technologies developed by medical device
companies as we learned about the pacemaker and defibrilator that Vice
President

[[Page H7163]]

Cheney had implanted. Smaller than a deck of cards, implantable under
the collarbone, and able to be implanted in a one-day outpatient
procedure, this is a truly remarkable device.
This is the type of technology that Congress needs to make sure is
being reviewed quickly and thoroughly by FDA--because these devices
hold out the promise of making a difference in people's lives.
Nearly five years ago, we made changes to the FDA when we passed
FDAMA, to improve the speed and responsiveness of the agency. The
response to those reforms by the FDA has been, for the most part,
positive.
But that is not to say we can't do better. The needs of patients
demand nothing less. Given that clinical practices are moving more and
more toward minimally invasive and increasingly complex devices,
performances improvement by the FDA is vital to our public health.
H.R. 3580 accomplishes this. It is comprehensive. It will permanently
alter the landscape for device reviews while maintaining and I believe
increasing the safeguards of devices as ``Safe and Effective.''
Let me just briefly mention a few of these provisions.
User Fee Program. The user fee program on which this committee has
labored so thoroughly, will provide $40 million to the FDA in 2003,
ramping up to $50 million in 2007 in new resources for speeding up the
approval of the medical devices. The user fee program at FDA has worked
wonders for the approval of drugs and biolgics--we just reauthorized a
third round of PDUFA earlier this year. This will finally give the
center for devices and radiological health (CDRH) access to similar
resources so that they can provide thorough, effective reviews, in less
time. And it will give CDRH the ability to make a commitment to meet a
complete set of performance goals.
This bill also incorporates many of the provisions that I introduced
earlier this year along with Congresswoman Eshoo:
Streamlined Approval of Combination Products: Combination products,
such as drug-coated stents, are one of the most exciting areas for this
industry and present challenges to the FDA's standard review
mechanisms, resulting in inefficiency and delay. To alleviate these
problems, this legislation creates a new office of combination products
and product jurisdiction. This new office will help avoid regulatory
logjams and ensure that combination products are promptly and correctly
assigned to centers with the FDA.
Third Party Inspection. H.R. 3580 also expands the role of third
parties and outside experts to augment the FDS resources to help FDA
meet its Bienniel Manufacturing Inspection Requirements. This will be
done in a carefully prescribed manner, to ensure the FDA's standards
for inspection are met and that the FDA receives sound information from
these outside experts.
Third Party Review. This legislation also extends the use of third
party review program for one year so that it expires in conjunction
with other device provisions.
Reuse Provisions. This bill responds to concerns that many ``Single-
Use'' devices are reprocessed and resold to hospitals, while regulated
as single-use devices, rather than as multiple-use devices. Concerns
have also been raised that there are not adequate safeguards to ensure
the safety and effectiveness of these devices. This legislation
responds to these concerns with several new provisions that will
require the FDA to examine reprocessed devices that are presently
exempt from review and requires labeling of reprocessed devices by the
reprocessors. Furthermore, under this language a new category of
devices is created, as well as a new type of application, to ensure
that complex reprocessed devices are safe and effective for use.
Medical devices are some of our health care systems' most remarkable
innovations. The provisions in this bill will allow the FDA to reduce
review times, increase efficiency of operations and allow these
technologies to be delivered to patients more quickly. I urge a ``yes''
vote on this bill
Mr. BILIRAKIS. Mr. Speaker, unfortunately due to an unexpected
passing of a close family friend I was unable to speak in person for my
strong support of H.R. 3580. However, I am very pleased that you
brought this legislation forward today and would ask all my colleagues
to strongly support, H.R. 3580, the Medical Device User Fee and
Modernization Act of 2002. I believe that this important legislation
will increase access to breakthrough medical technologies, and improve
efficiencies at the Food and Drug Administration (FDA).
This legislation, which enjoys broad bi-partisan support, contains
three main provisions. First, the legislation authorizes, for the first
time, a medical device user fee system. This user fee agreement was
negotiated between the Food and Drug Administration (FDA) and industry,
and it will provide FDA with the additional resources it needs to speed
the review of medical devices. I would note that the user fee structure
is two-tiered, and effectively recognizes the needs of small device
manufacturers.
The second part of the bill contains several important regulatory
reform provisions. Most importantly, the bill authorizes the creation
of a new 3rd party inspection system for device manufacturing
facilities. Although required under law to inspect facilities every two
years, FDA currently only inspects facilities every five to seven
years. The new 3rd party inspection system will in no way supplant
resources FDA currently commits to inspect manufacturers--in fact, the
program will cease to exist if FDA dedicates less resources to
inspections than it currently does. What this new program will do is
ensure that more facilities get inspected more often, which is
beneficial for the public health. This program will also help to
harmonize international inspections.
Finally, the legislation contains modifications to FDA's current
regulatory scheme governing reprocessed single-use devices. I feel that
the changes represented in this bill strike the right balance between
respecting the rights of original equipment manufacturers while also
recognizing the important role for device reprocessors.
I want to emphasize that this bill is bipartisan, and is the result
of months of negotiations. Staffs on both sides of the aisle should be
commended for the good work they put into this product, and I urge all
Members to strongly support this legislation.
Ms. DeGETTE Mr. Speaker, I commend Chairman Tauzin and the Ranking
member of the full Energy and Commerce Committee, Mr. Dingell, as well
as Mr. Greenwood and Ms. Eshoo for their hard work on this bill. H.R.
3580 will go a long way toward ensuring that the Food and Drug
Administration has the necessary resources to quickly, yet efficiently
and carefully review medical device manufacturer applications.
Much like the Prescription Drug User Fee Act, reauthorized earlier
this year in the bioterrorism bill, the House's action today will
provide our constituents with the best of modern medicine in a more
timely fashion.
Passage of this bill will assist all Americans, including the
youngest Americans--our children. While I am very interested in
speeding the approval process for devices that treat and cure a range
of medical conditions in adults and children, I am equally as
interested in ensuring that these devices are safe and effective for
use by children.
That is why I want to thank Chairman Tauzin and Mr. Dingell for
including my provisions in this bill. My provisions will aid in
strengthening the bill by ensuring that medical devices are safe and
effective for use by children.
To achieve this goal, the bill--in Section 209--now requires the
Medical Devices Advisory Committee of the Center for Devices and
Radiological Health to include or consult with pediatric experts when
reviewing applications for devices that may be used by children.
The bill also requires, in Section 211, the Secretary of Health and
Human Services to commission an Institute of Medicine study to examine
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 children. The IOM is
requested to pay particular attention to the study length and adequacy
of FDA resources to monitor longterm studies, in a variety of areas
including shunts and other implanted devices used for infants and
children.
Lastly, the bill's report language will include language recommending
that a portion of new funds for post-marketing surveillance be used to
assess long-term use, safety and effectiveness of medical devices in
children. This language is key as children rapidly grow and a device
implanted at age eight, for example an implantable insulin pump for
diabetics, may not work as effectively or safely at age 12.
These additions to the bill will ensure that like adults, children
will receive the best health care possible. Again, I thank Chairman
Tauzin and Ranking Member Dingell for working with me to address these
issues.
Mr. DINGELL. Mr. Speaker, I support H.R. 3580, the ``Medical Device
User Fee and Modernization Act of 2002.'' This bill, for the first
time, creates a user fee program for the pre-market review of medical
devices. This is an important step toward providing the Food and Drug
Administration (FDA) with adequate resources to do the job of ensuring
that the vast and often complex array of medical device applications
the Agency receives each year are reviewed in a timely and competent
manner.
Important safeguards in this legislation ensure that timeliness of
product application review does not come at the cost of the Federal
Food, Drug, and Cosmetic Act's gold standard for ensuring that those
devices are safe and effective for their intended use. It also provides
a down payment on an increased level of post-market surveillance and
provides a process to increase this critical compliance activity when
we next authorize user fees.

[[Page H7164]]

This Act also addresses standards for reuse of devices that have been
approved for a single use. This practice, while widespread, was largely
unregulated until recently. Unfortunately, the FDA's attempt to correct
the matter was, to put it charitably, controversial and, from the
perspective of protecting the consuming public, lacking. The bill
before us strikes a balance among competing interests, while
strengthening FDA's role with respect to assuring the safety of these
products.
This bill also establishes a program that for the first time will
allow third parties to inspect medical device facilities. The guiding
principle for me in going down this road is that the program must
supplement--and not supplant--FDA's legal authority, responsibility,
and resources for conducting inspections and otherwise ensuring the
safety of device facilities. I remain concerned about the proper
implementation of this third-party inspection program and will closely
watch its development.
Finally, the bill contains a number of regulatory reforms. These
include electronic labeling, establishment of an office of combination
products, provision for modular review of product applications, and
important incentives for the industry to study the application of their
devices to children.
The Medical Device User Fee and Modernization Act deserves our
support. It is a bipartisan product in the best tradition of the
Committee on Energy and Commerce. Members on both sides of the aisle
have worked hard on this bill. In addition to my colleagues
Representatives Brown and Waxman, particular credit should go to
Representatives Capps, Eshoo, Luther, and Towns who have long sought
these reforms. And, of course, Chairman Tauzin and Chairman Bilirakis
are to be commended for their efforts and their commitment to a
bipartisan product. This bill is good for both consumers and industry,
and I urge its support.
Mr. BURR of North Carolina. Madam Speaker, I yield back the balance
of my time.
The SPEAKER pro tempore (Ms. Hart). The question is on the motion
offered by the gentleman from North Carolina (Mr. Burr) that the House
suspend the rules and pass the bill, H.R. 3580, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of
those present have voted in the affirmative.
Mr. BURR of North Carolina. Madam Speaker, on that I demand the yeas
and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.

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