The Food and Drug Administration (FDA) has published an updated fee schedule for medical device users – the companies applying for FDA approval for their medical devices. According to the Medical Device User Fee Amendments (MDUFA), most of the entities submitting the medical device applications should pay a user fee. At the same time, if the applicant entity is qualified and certified as a small business, it may benefit from a significant fee reduction.

FDA Fees FY 2020 and 2021

The official announcement published by the FDA in August 2020 provides the medical device manufacturers and other parties applying for marketing authorization of medical devices with the details regarding the FDA fees to be applied in FY 2020 and 2021.

The fees described in the announcement include fees for various types of applications, as well as general registration fees. It is important to mention that fees payable for the application will vary depending on the type of the entity submitting the application – the FDA implements reduced fees for small business entities to simplify access to the market. 

In particular, the FDA registration fees for medical devices include the following ones:

The FDA additionally emphasizes that there are no exclusions, waivers or reductions related to the annual establishment registration fees for small business entities – they should pay the full price as any other entities irrespectively of their type. 

At the same time, small business entities having their sales of USD 30M or less may waive the fees for their first applications of certain types (PMA, PDP, PMR, BLA).

It is also important to mention that in order to be eligible for the small business fee reduction, an entity shall have an approved SBD.

FDA Small Business Concept

The Agency has published a guidance document describing the requirements an entity should meet in order to be able to benefit from the small business fee reduction. It is also important to mention that due to its legal nature, the aforementioned FDA guidance on small business qualification and certification does not provide any mandatory requirements – the document contains only non-binding recommendations to be considered by all the parties involved. In particular, the FDA guidance provides recommendations for US and foreign businesses, and also for the National Taxing Authority. 

First of all, the Agency outlines the small business eligibility criteria to be used when determining whether the particular entity falls within the scope of the small business concept. In particular, the Agency states the following:

  • In order for the entity to be eligible for the small business fee reductions, the sales of such an entity should not exceed $100 million for the preceding tax year. In case if the entity has affiliates, the overall sales of the group should not exceed $100 million. 
  • The establishment registration fee actually falls outside the scope of the exemption. Thus, if the entity does not intend to submit an application, it should not apply for the small business fee reduction. 
  • A Small Business Certification will remain valid only within one financial year. Upon its expiration, the entity should apply for the new Small Business Certification. 
  • The Agency will accept the applications for a Small Business Certification only for a limited period of time. In particular, the entity may submit such an application between August 1 and October 1 for the next financial year, while the applications submitted at any other time would not be considered by the authority.

The FDA guidance also describes step-by-step the procedure to be followed by the US-based or the foreign entity when applying for the Small Business Certification, including the indication of all forms to be filled and submitted depending on the legal status of the applicant entity.

FDA Guidance for US-based Companies 

The FDA guidance provides domestic medical device manufacturers with detailed recommendations regarding the way they should pay fees for the applications, including the use of reductions and waivers, providing that the particular company is eligible for such benefits. The rules for US business are applicable to the companies having their headquarters in the USA. 

The set of documents to be submitted to the FDA by the small business entity includes:

  • An MDUFA Small Business Certification Request (a form FDA 3602),
  • A complete and signed copy of the income tax return,
  • Separate tax returns for all affiliated companies,
  • Certified Section III of Form FDA 3602A for the foreign-affiliated companies.  

Upon receipt of the documents listed here above, the Agency will review the application and provide the response within 60 calendar days. The response will contain a final determination stating whether the applicant company is eligible for the small business qualification under MDUFA and thus – for the reduction of fees and first premarket application/report fee wavier. If the FDA confirms the eligibility, it will assign a Small Business Decision number to be used each time when applying for the fee reduction or waiver. 

Summarizing the information provided here above, the current regulatory framework implemented by the FDA contains certain benefits for the small business entities and for the companies filing their first premarket applications/reports. Despite the fact that all fees payable in 2021 would slightly increase (in comparison to the same payable in 2020), the small business certification allows the company intended to submit the application to reduce its expenses substantially. These rules are applicable to both foreign and domestic companies.

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