H. R. 5651
One Hundred Seventh Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Wednesday,
the twenty-third day of January, two thousand and two
An Act
To amend the Federal Food, Drug, and Cosmetic Act to make improvements in
the regulation of medical devices, and for other purposes.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; 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. Debarment of accredited persons.
Sec. 204. Designation and regulation of combination products.
Sec. 205. Report on certain devices.
Sec. 206. Electronic labeling.
Sec. 207. Electronic registration.
Sec. 208. Intended use.
Sec. 209. Modular review.
Sec. 210. Pediatric expertise regarding classification-panel review of premarket ap-
plications.
Sec. 211. Internet list of class II devices exempted from requirement of premarket
notification.
Sec. 212. Study by Institute of Medicine of postmarket surveillance regarding pedi-
atric populations.
Sec. 213. Guidance regarding pediatric devices.
Sec. 214. Breast implants; study by Comptroller General.
Sec. 215. 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.
Sec. 303. MedWatch.
H. R. 5651—2
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 making additional
funds available for the purpose of augmenting the resources
of the Food and Drug Administration that are devoted to the
process for the review of devices and the assurance of device
safety and effectiveness so that statutorily mandated deadlines
may be met; and
(3) the fees authorized by this title 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 Com-
mittee on Health, Education, Labor, and Pensions of the Senate,
as set forth in the Congressional Record.
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 sec-
tion 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 515(c)(2).
‘‘(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 supple-
ment, or an efficacy supplement, means a request to the Sec-
retary to approve a change in a device for which—
‘‘(i) an application or report has been approved under
section 515(d), or an application has been approved 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 supple-
ment to an approved premarket application or premarket report
under section 515 that requests a significant change in design
or performance of the device, or a new indication for use of
H. R. 5651—3
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 or premarket report
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 or premarket report
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 pre-
market applications, premarket reports, supplements, and
premarket notification submissions.
‘‘(B) The issuance of action letters that allow the mar-
keting 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 inves-
tigational device exemption under section 520(g) and activi-
ties 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, con-
sensus 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.
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‘‘(I) Any activity undertaken under section 513 or 515(i)
in connection with the initial classification or reclassifica-
tion 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, pre-
market 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 Adminis-
tration, advisory committees, and costs related to such
officers, employees, and committees and to contracts with
such contractors;
‘‘(B) management of information, and the acquisition,
maintenance, and repair of computer resources;
‘‘(C) leasing, maintenance, renovation, and repair of
facilities and acquisition, maintenance, and repair of fix-
tures, furniture, scientific equipment, and other necessary
materials and supplies; and
‘‘(D) collecting fees and accounting for resources allo-
cated 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, SUPPLE-
MENT, 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.
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‘‘(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 1.42 percent of the fee that applies under
clause (i), subject to any adjustment under subsection
(c)(3) and any adjustment under subsection (e)(2)(C)(ii).
‘‘(B) EXCEPTIONS.—
‘‘(i) 
HUMANITARIAN
DEVICE
EXEMPTION.—An
application under section 520(m) is not subject to any
fee under 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, supple-
ment, 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
PAR-
TIES.—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 applica-
tion, premarket report, or premarket notification
submission if the proposed conditions of use for
the device involved are solely for a pediatric popu-
lation. 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 CONDI-
TIONS OF USE.—In the case of a person who sub-
mits a premarket application or premarket report
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
H. R. 5651—6
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 Sec-
retary 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 sub-
sections (c), (d), (e), (g), and (h), 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 the Medical Device User Fee and
Modernization Act of 2002 requiring the Secretary to fund addi-
tional 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 estab-
lished, 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
H. R. 5651—7
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 sub-
section.
‘‘(2) WORKLOAD ADJUSTMENT.—After the fee revenues estab-
lished in subsection (b) are adjusted for a fiscal year for inflation
in accordance with paragraph (1), the fee revenues shall, begin-
ning 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 Sec-
retary 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 Reg-
ister the fee revenues and fees resulting from the adjust-
ment 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, begin-
ning 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).
‘‘(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 estab-
lished 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 estab-
lishing fee revenues and fees for fiscal year 2007. If the Sec-
retary has carryover user fee balances for such process in
excess of three months of such operating reserves, the adjust-
ment 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 and subsection (e)(2)(C)(ii),
H. R. 5651—8
except that the fees established for fiscal year 2003 shall be
based on a premarket application fee of $154,000.
‘‘(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 BUSINESSES; FEE WAIVER
AND FEE REDUCTION
REGARDING PREMARKET APPROVAL FEES.—
‘‘(1) IN GENERAL.—The Secretary shall grant a waiver of
the fee required under subsection (a) for one premarket applica-
tion, or one premarket report, where the Secretary finds that
the applicant involved is a small business submitting its first
premarket application to the Secretary, or its first premarket
report, respectively, for review. In addition, for subsequent
premarket applications, premarket reports, and supplements
where the Secretary finds that the applicant involved is a
small business, the fees specified in clauses (i) through (vi)
of subsection (a)(1)(A) may be paid at a reduced rate in accord-
ance with paragraph (2)(C).
‘‘(2) RULES RELATING TO PREMARKET APPROVAL FEES.—
‘‘(A) DEFINITION.—
‘‘(i) IN GENERAL.—For purposes of this subsection,
the term ‘small business’ means an entity that reported
$30,000,000 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, and parent firms.
‘‘(ii) ADJUSTMENT.—The Secretary may adjust the
$30,000,000 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 supple-
ments that is 16 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, and a copy
of such returns of its affiliates, partners, and parent firms.
which show an amount of gross sales or receipts that
is less than the maximum established in subparagraph
(A). The applicant, and each of such affiliates, partners,
and parent firms, shall certify that the information pro-
vided is a true and accurate copy of the actual tax forms
they submitted to the Internal Revenue Service. If no tax
forms are submitted for affiliates, partners, or parent firms,
the applicant shall certify that the applicant has no affili-
ates, partners, or parent firms, respectively.
‘‘(C) REDUCED FEES.—Where the Secretary finds that
the applicant involved meets the definition under subpara-
graph (A), the fees established under subsection (c)(5) may
H. R. 5651—9
be paid at a reduced rate of 38 percent of the fee established
under such subsection for a premarket application, a pre-
market report, or a supplement.
‘‘(D) REQUEST
FOR
FEE
WAIVER
OR
REDUCTION.—An
applicant seeking a fee waiver or reduction under this
subsection shall submit supporting information to the Sec-
retary at least 60 days before the fee is required pursuant
to subsection (a). The decision of the Secretary regarding
whether an entity qualifies for such a waiver or reduction
is not reviewable.
‘‘(e) SMALL
BUSINESSES; FEE
REDUCTION
REGARDING
PRE-
MARKET NOTIFICATION SUBMISSIONS.—
‘‘(1) IN
GENERAL.—Where the Secretary finds that the
applicant involved is a small business, the fee specified in
subsection (a)(1)(A)(vii) may be paid at a reduced rate in accord-
ance with paragraph (2)(C).
‘‘(2) RULES RELATING TO PREMARKET NOTIFICATION SUBMIS-
SIONS.—
‘‘(A) DEFINITION.—For purposes of this subsection, the
term ‘small business’ means an entity that reported
$30,000,000 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,
and parent firms.
‘‘(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
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, and a copy of such returns
of its affiliates, partners, and parent firms. which show
an amount of gross sales or receipts that is less than
the maximum established in subparagraph (A). The
applicant, and each of such affiliates, partners, and parent
firms, shall certify that the information provided is a true
and accurate copy of the actual tax forms they submitted
to the Internal Revenue Service. If no tax forms are sub-
mitted for affiliates, partners, or parent firms, the applicant
shall certify that the applicant has no affiliates, partners,
or parent firms, respectively.
‘‘(C) REDUCED FEES.—
‘‘(i) IN GENERAL.—Where the Secretary finds that
the applicant involved meets the definition under
subparagraph (A), the fee for a premarket notification
submission may be paid at 80 percent of the fee that
applies under subsection (a)(1)(A)(vii), as adjusted
under clause (ii) and as established under subsection
(c)(5).
‘‘(ii) ADJUSTMENT PER FEE REVENUE AMOUNT.—For
fiscal year 2004 and each subsequent fiscal year, the
Secretary, in setting the revenue amount under sub-
section (c)(5) for premarket notification submissions,
shall determine the revenue amount that would apply
if all such submissions for the fiscal year involved
paid a fee equal to 1.42 percent of the amount that
applies under subsection (a)(1)(A)(i) for premarket
H. R. 5651—10
applications, and shall adjust the fee under subsection
(a)(1)(A)(vii) for premarket notification submissions
such that the reduced fees collected under clause (i)
of this subparagraph, when added to fees for such
submissions that are not paid at the reduced rate,
will equal such revenue amount for the fiscal year.
‘‘(D) REQUEST FOR REDUCTION.—An applicant seeking
a fee reduction under this subsection shall submit sup-
porting information to the Secretary at least 60 days before
the fee is required pursuant to subsection (a). The decision
of the Secretary regarding whether an entity qualifies for
such a reduction is not reviewable.
‘‘(f) 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.
‘‘(g) 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 Mod-
ernization 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 performance goals identified for the
fiscal year if the total of the amounts so appropriated
for fiscal years 2003 through 2005, excluding the amount
H. R. 5651—11
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 appro-
priated 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, supple-
ments, premarket reports, and premarket notification submis-
sions, and at any time in such fiscal year, notwithstanding
the provisions of subsection (a) relating to the date fees are
to be paid.
H. R. 5651—12
‘‘(h) 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 trans-
ferred 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 avail-
able 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 appro-
priation Acts, or otherwise made available for obliga-
tion, 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 Depart-
ment 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 Administra-
tion as provided in paragraph (1), and shall be subtracted
H. R. 5651—13
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.
‘‘(i) COLLECTION OF UNPAID FEES.—In any case where the Sec-
retary 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.
‘‘(j) WRITTEN REQUESTS FOR REFUNDS.—To qualify for consider-
ation 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.
‘‘(k) CONSTRUCTION.—This section may not be construed to
require that the number of full-time equivalent positions in the
Department of Health and Human Services, for officers, employees,
and advisory committees not engaged in the process of the review
of device applications, be reduced to offset the number of officers,
employees, and advisory committees so engaged.’’.
(b) FEE EXEMPTION FOR CERTAIN ENTITIES SUBMITTING PRE-
MARKET 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 sub-
mitted 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 pre-
market 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 Administra-
tion, 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,
H. R. 5651—14
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 Sec-
retary 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 Con-
gress 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 Com-
merce 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 nego-
tiations with the regulated industry; shall present such rec-
ommendations 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.
H. R. 5651—15
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 for the purpose of conducting
inspections of establishments that manufacture, prepare, propagate,
compound, or process class II or class III devices that are required
in section 510(h), or inspections of such establishments required
to register pursuant to section 510(i). 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 accredi-
tation shall state that such person is accredited to conduct inspec-
tions at device 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 fol-
lowing requirements:
‘‘(A) Such person may not be an employee of the Federal
Government.
‘‘(B) 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.
H. R. 5651—16
‘‘(C) Such person shall be a legally constituted entity per-
mitted to conduct the activities for which it seeks accreditation.
‘‘(D) Such person shall not engage in the design, manufac-
ture, promotion, or sale of articles regulated under this Act.
‘‘(E) The operations of such person shall be in accordance
with generally accepted professional and ethical business prac-
tices, and such person shall agree in writing that at a minimum
the person will—
‘‘(i) certify that reported information accurately reflects
data reviewed, inspection observations made, other matters
that relate to or may influence compliance with this Act,
and recommendations made during an inspection or at
an inspection’s closing meeting;
‘‘(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, except such
information may be made available to the Secretary;
‘‘(iv) promptly respond and attempt to resolve com-
plaints 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 avail-
able 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 persons who are accredited
under paragraph (2). Such list shall be updated to ensure that
the identity of each accredited person, and the particular activities
for which the person is accredited, 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 suspension
or withdrawal of accreditation, or the modification of the particular
activities for which the person is accredited.
‘‘(5)(A) To ensure that persons accredited under this subsection
continue to meet the standards of accreditation, the Secretary shall
(i) audit the performance of such persons on a periodic basis through
the review of inspection reports and inspections by persons des-
ignated by the Secretary to evaluate the compliance status of a
device establishment and the performance of accredited persons,
and (ii) take such additional measures as the Secretary determines
to be appropriate.
‘‘(B) The Secretary may withdraw accreditation of any person
accredited under paragraph (2), after providing notice and an oppor-
tunity 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.
H. R. 5651—17
‘‘(6)(A) Subject to subparagraphs (B) and (C), a device establish-
ment is eligible for inspections by persons accredited under para-
graph (2) if the following conditions are met:
‘‘(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’.
‘‘(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 pro-
vides 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.
‘‘(iii) With respect to the devices that are manufactured,
prepared, propagated, compounded, or processed by the
establishment, at least one of such devices is marketed in
the United States, and the following additional conditions are
met:
‘‘(I) At least one of such devices is marketed, or is
intended to be marketed, in one or more foreign countries,
one of which countries certifies, accredits, or otherwise
recognizes the person accredited under paragraph (2) and
identified under subclause (II) of this clause.
‘‘(II) The owner or operator of the establishment sub-
mits to the Secretary a statement that the law of a country
in which such a device is marketed, or is intended to
be marketed, recognizes an inspection of the establishment
by the Secretary, and not later than 30 days after receiving
such statement, the Secretary informs the owner or oper-
ator of the establishment that the owner or operator may
submit a notice requesting clearance under clause (ii).
‘‘(iv)(I) In the case of an inspection to be conducted pursuant
to 510(h), persons accredited under paragraph (2) did not con-
duct the two immediately preceding inspections of the establish-
ment, except that the establishment may petition the Secretary
for a waiver of such condition. Such a waiver may be granted
only if the petition states a commercial reason for the waiver;
the Secretary determines that the public health would be served
by granting the waiver; and the Secretary has conducted an
inspection of the establishment during the four-year period
preceding the date on which the notice under clause (ii) is
submitted to the Secretary. Such a waiver is deemed to be
granted only if the petition states a commercial reason for
the waiver; the Secretary has not determined that the public
health would be served by granting the waiver; and the owner
or operator of the device establishment has requested in
writing, not later than 18 months following the most recent
inspection of such establishment by a person accredited under
paragraph (2), that the Secretary inspect the establishment
and the Secretary has not conducted an inspection within 30
months after the most recent inspection. With respect to such
a waiver that is granted or deemed to be granted, no additional
such waiver may be granted until after the Secretary has
conducted an inspection of the establishment.
H. R. 5651—18
‘‘(II) In the case of an inspection to be conducted pursuant
to 510(i), the Secretary periodically conducts inspections of
the establishment.
‘‘(B)(i) The Secretary shall respond to a notice under subpara-
graph (A) from a device 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 device 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 establish-
ment and such accredited person, including information about
the number of inspections of the establishment, or other
establishments owned or operated by the owner or operator
of the establishment, that have been conducted by the accred-
ited person.
The Secretary may make both such requests.
‘‘(iii) The compliance data to be submitted by a device establish-
ment 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 compliance 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 compli-
ance problems identified in such inspections.
‘‘(iv) Not later than 60 days after receiving compliance data
under clause (iii) from a device establishment, the Secretary shall
provide or deny clearance under subparagraph (A). The Secretary
may deny clearance if the Secretary determines that the establish-
ment has failed to demonstrate consistent compliance for purposes
of clause (iii). The Secretary shall provide to the establishment
a statement of such reasons for such determination. If the Secretary
fails to provide such statement 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 device establishment involved. The Secretary may reject
H. R. 5651—19
the selection if the Secretary provides to the establishment a state-
ment of 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, or
that the Secretary has concerns regarding the relationship between
the establishment and such accredited person. 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 a device 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 pre-
ceding 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 a device 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 establish-
ment 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, if otherwise eligible
under subparagraph (A), is eligible for further inspections by per-
sons 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
device 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 such reasons 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 describe each observation. Addition-
ally, such accredited person shall prepare an inspection report
H. R. 5651—20
(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 device establishment, the dates
of the inspection, the scope of the inspection, and shall describe
in detail each observation identified by the accredited person, iden-
tify other matters that relate to or may influence compliance with
this Act, and describe 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 to the designated representative of the
inspected device establishment 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 des-
ignated representative of the establishment.
‘‘(D) Any statement or representation made by an employee
or agent of a device establishment to a person 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 device establishment subject to inspection and
such condition.
‘‘(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 any device establishment pursuant to this
Act.
‘‘(10)(A) For fiscal year 2005 and each subsequent fiscal year,
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 pre-
ceding the first prior fiscal year (referred to in this subpara-
graph 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
H. R. 5651—21
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 Comp-
troller 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 applica-
bility to fiscal year 2003, means an amount equal to the base
amount increased by 5 percent.
‘‘(iii) The term ‘adjusted base amount’, with respect to
applicability to fiscal year 2004 or any subsequent fiscal year,
means the adjusted based amount applicable to the preceding
year increased by 5 percent.
‘‘(11) The authority provided by this subsection terminates on
October 1, 2012.
‘‘(12) No later than four years after the enactment of this
subsection the Comptroller General shall report to the Committee
on Energy and Commerce of the House of Representatives and
the Committee on Health, Education, Labor and Pensions of the
Senate—
‘‘(A) the number of inspections pursuant to subsections
(h) and (i) of section 510 conducted by accredited persons and
the number of inspections pursuant to such subsections con-
ducted 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 device establishment compli-
ance 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.
H. R. 5651—22
‘‘(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 per-
son is accredited and the name of each accredited person whose
accreditation has been withdrawn during the year.
‘‘(14) Notwithstanding any provision of this subsection, this
subsection does not have any legal effect on any agreement
described in section 803(b) between the Secretary and a foreign
country.’’.
(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 main-
tain 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) CIVIL MONEY PENALTY.—Section 303(g)(1)(A) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 333(g)(1)(A)) is amended
by adding at the end the following: ‘‘For purposes of the preceding
sentence, a person accredited under paragraph (2) of section 704(g)
who is substantially not in compliance with the standards of accredi-
tation under such section, or who poses a threat to public health
or fails to act in a manner that is consistent with the purposes
of such section, shall be considered to have violated a requirement
of this Act that relates to devices.’’.
(d) PROHIBITED ACTS.—Section 301 of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 331) is amended by adding at the
end the following:
‘‘(gg) The knowing failure of a person accredited under para-
graph (2) of section 704(g) to comply with paragraph (7)(E) of
such section; the knowing inclusion by such a person of false
information in an inspection report under paragraph (7)(A) of such
section; or the knowing failure of such a person to include material
facts in such a report.’’.
(e) 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 pro-
vided 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
H. R. 5651—23
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 para-
graph (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 guid-
ance 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 contraction or expansion of device eligibility), or
termination of this section that the Secretary determines to
be appropriate.’’.
SEC. 203. DEBARMENT OF ACCREDITED PERSONS.
Section 306 of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 335a) is amended by adding at the end the following sub-
section:
‘‘(m) DEVICES; MANDATORY DEBARMENT REGARDING THIRD-
PARTY INSPECTIONS AND REVIEWS.—
‘‘(1) IN
GENERAL.—If the Secretary finds that a person
has been convicted of a felony under section 301(gg), the Sec-
retary shall debar such person from being accredited under
section 523(b) or 704(g)(2) and from carrying out activities
under an agreement described in section 803(b).
‘‘(2) DEBARMENT PERIOD.—The Secretary shall debar a per-
son under paragraph (1) for the following periods:
‘‘(A) The period of debarment of a person (other than
an individual) shall not be less than 1 year or more than
10 years, but if an act leading to a subsequent debarment
under such paragraph occurs within 10 years after such
person has been debarred under such paragraph, the period
of debarment shall be permanent.
‘‘(B) The debarment of an individual shall be perma-
nent.
H. R. 5651—24
‘‘(3) TERMINATION OF DEBARMENT; JUDICIAL REVIEW; OTHER
MATTERS.—Subsections (c)(3), (d), (e), (i), (j), and (l)(1) apply
with respect to a person (other than an individual) or an
individual who is debarred under paragraph (1) to the same
extent and in the same manner as such subsections apply
with respect to a person who is debarred under subsection
(a)(1), or an individual who is debarred under subsection (a)(2),
respectively.’’.
SEC. 204. DESIGNATION AND REGULATION OF COMBINATION PROD-
UCTS.
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 para-
graph:
‘‘(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 and effective premarket review of such products, and con-
sistent and appropriate postmarket regulation of like products sub-
ject 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 pri-
mary jurisdiction in accordance with paragraph (1) for the pre-
market review of such product.
‘‘(C)(i) In carrying out this subsection, the Office shall ensure
timely and effective premarket reviews by overseeing the timeliness
of and coordinating reviews involving more than one agency center.
‘‘(ii) In order to ensure the timeliness of the premarket review
of a combination product, the agency center with primary jurisdic-
tion for the product, and the consulting agency center, shall be
responsible to the Office with respect to the timeliness of the
premarket review.
‘‘(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.
‘‘(E)(i) Any dispute regarding the timeliness of the premarket
review of a combination product may be presented to the Office
for resolution, unless the dispute is clearly premature.
H. R. 5651—25
‘‘(ii) During the review process, any dispute regarding the sub-
stance of the premarket review may be presented to the Commis-
sioner 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.
‘‘(F) The Secretary, acting through the Office, shall review
each agreement, guidance, or practice of the Secretary that is spe-
cific 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 contin-
ued, modified, revised, or eliminated.
‘‘(G) 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 prod-
ucts under review and the timeliness in days of such assign-
ments, 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.
‘‘(H) Nothing in this paragraph shall be construed to limit
the regulatory authority of any agency center.’’; 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 Administra-
tion.’’.
SEC. 205. 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 rec-
ommendations on any measures needed to improve performance
including, but not limited to, the allocation of additional resources.