IB
Union Calendar No. 413
103D CONGRESS
2D SESSION
H. R. 4864
[Report No. 103–751]
To amend the Federal Food, Drug, and Cosmetic Act to authorize a device
application fee, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
AUGUST 1, 1994
Mr. WAXMAN (for himself and Mr. DINGELL) introduced the following bill;
which was referred to the Committee on Energy and Commerce
SEPTEMBER 26, 1994
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed in italic]
[For text of introduced bill, see copy of bill as introduced on August 1, 1994]
A BILL
To amend the Federal Food, Drug, and Cosmetic Act to
authorize a device application fee, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND REFERENCE.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Medical Device User Fee Act of 1994’’.
(b) REFERENCE.—Whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment to,
or repeal of, a section or other provision, the reference shall
be considered to be made to a section or other provision
of the Federal Food, Drug, and Cosmetic Act.
SEC. 2. FINDINGS.
The Congress finds that—
(1) prompt approval and clearance of safe and
effective devices is critical to the improvement of the
public health so that patients may enjoy the benefits
of devices to diagnose, treat, and prevent disease;
(2) the public health will be served by furnishing
additional funds for the review of devices so that
statutorily mandated deadlines may be met, and
(3) the fees authorized by the amendment made
by section 3 will be dedicated—
(A) toward expediting the review of device
applications, 
supplements, 
and 
substantial
equivalence submissions, and
(B) for related activities as defined in the
amendment,
as set forth in goals identified in the letter of July 8,
1994, from the Commissioner of Food and Drugs to
the Committee on Energy and Commerce of the House
of Representatives.
SEC. 3. FEES RELATING TO DEVICES.
Chapter VII is amended by adding at the end of sub-
chapter C the following:
‘‘PART 3—FEES RELATING TO DEVICES
‘‘SEC. 741. DEFINITIONS.
‘‘For purposes of this subchapter:
‘‘(1) The term—
‘‘(A) ‘device application’ means an applica-
tion for approval of a device submitted under
section 515(c) or section 351 of the Public Health
Service Act, a supplement to such an applica-
tion, or a submission for a device made under
section 510(k) claiming the devise is substan-
tially 
equivalent 
as 
described 
in 
section
513(f)(1)(A) (in this part referred to as a ‘device
substantial equivalence submission’); and
‘‘(B) ‘section 351 application’ means a de-
vice application submitted under section 351 of
the Public Health Service Act.
‘‘(2) The term ‘supplement’ means a request to
the Secretary to approve a change in a device appli-
cation which has been approved under section 515(d)
or section 351 of the Public Health Service Act.
‘‘(3) The term ‘process for the review of device
applications and related activities’ means the follow-
ing activities of the Secretary with respect to the re-
view of device applications and related activities:
‘‘(A) The activities necessary for the review
of device applications and related activities.
‘‘(B) The issuance of action letters which
allow marketing of devices or which set forth in
detail the specific deficiencies in such applica-
tions and, where appropriate, the actions nec-
essary to place such applications in condition for
approval.
‘‘(C) The inspection of device establishments
and other facilities undertaken as part of the
Secretary’s review of pending device applica-
tions.
‘‘(D) Any activity necessary for the review
of applications for licensure of devices subject to
section 351 of the Public Health Service Act, for
the licensure of establishments where such devices
are manufactured, and for the release of lots of
such devices.
‘‘(E) Review of device applications for an
investigational new drug exemption under sec-
tion 505(i) and for an investigational device ex-
emption under section 520(g) and activities con-
ducted in anticipation of the submission of an
application under sections 505(i) and 520(g).
‘‘(F) The development of guidance and pol-
icy documents to improve the process for the re-
view of device applications.
‘‘(G) The development of test methods and
standards in connection with the review of device
applications and related activities.
‘‘(H) The provision of technical assistance
to device manufacturers in connection with the
submission of a device application.
‘‘(I) Any activity undertaken in connection
with the export of a device.
‘‘(J) Any activity undertaken under sections
513 and 515(i) in connection with the initial
classification and reclassification of a device and
under section 515(b) in connection with any re-
quirement for premarket approval of a device.
‘‘(K) Monitoring of research on devices.
‘‘(L) Any activities undertaken under sec-
tions 519(a) and 519(b).
‘‘(M) Postmarket studies required as a con-
dition of an approval of a device application
under section 515(d) or section 351 of the Public
Health Service Act.
‘‘(N) 
Postmarket 
surveillance 
required
under section 522.
‘‘(4) The term ‘costs of resources allocated for the
process for the review of device applications and re-
lated activities’ means the expenses incurred in con-
nection with the process for the review of device appli-
cations and related activities for—
‘‘(A) officers and employees of the Food and
Drug Administration, employees under contract
with the Food and Drug Administration, advi-
sory committees, and costs related to such offi-
cers, employees, and committees,
‘‘(B) management of information, and the
acquisition, maintenance, and repair of com-
puter resources,
‘‘(C) leasing, maintenance, renovation, and
repair of facilities and acquisition, maintenance,
and repair of fixtures, furniture, scientific equip-
ment, and other necessary materials, services,
and supplies, and
‘‘(D) collection fees under section 742 and
accounting for resources allocated for the review
of device applications and related activities, in-
cluding activities related to the review of appli-
‘‘SEC. 742. AUTHORITY TO ASSESS AND USE DEVICE USER
FEES.
‘‘(a) FEES.—Beginning in fiscal year 1995, the Sec-
retary shall assess and collect fees as follows:
‘‘(1) GENERAL
RULE.—Except as provided in
paragraph (2), each person that submits, on or after
90 days before the date of the enactment of the first
appropriation under subsection (g)(4) for fees under
this section, a device application shall be subject, in
accordance with paragraph (3), to the fee prescribed
by subsection (b). Before April 30, 1995, the Secretary
shall establish guidelines for the combination of mul-
tiple device applications in those situations where it
is appropriate to combine the applications and assess
a single fee. A single fee shall be assessed upon an ap-
plication which is such a combination.
‘‘(2) EXCEPTION.—
‘‘(A) FURTHER MANUFACTURING USE.—No
fee shall be required for the submission of a sec-
tion 351 application for a product licensed for
further manufacturing use only.
‘‘(B) PREVIOUSLY FILED APPLICATION OR
SUPPLEMENT.—If a device application was—
‘‘(i) submitted by a person that paid
the fee for such application,
‘‘(ii) accepted for filing, and
‘‘(iii) not approved or withdrawn
(without a waiver under subsection (d)),
the submission of a device application for the
identical device by the same person (or the per-
son’s licensee, assignee, or successor) shall not be
subject to a fee under paragraph (1).
‘‘(3) PAYMENT SCHEDULE.—
‘‘(A) GENERAL RULE.—Except as provided
in subparagraph (B)—
‘‘(i) in the case of an application sub-
mitted under section 515(c), an application
for a device submitted under section 351 of
the Public Health Service Act, or a supple-
ment submitted with required clinical data,
15 percent of the fee prescribed by sub-
section (b) shall be due upon submission of
such application or supplement and the re-
mainder within 30 days of receipt of notice
from the Secretary of acceptance of such ap-
plication or supplement for filing or review,
and
‘‘(ii) in the case of the submission of a
supplement for which clinical data are not
required or a submission under section
510(k), the fee prescribed under subsection
(b) shall be due within 30 days of receipt of
notice from the Secretary of acceptance of
such supplement or submission for filing or
review.
‘‘(B) EXCEPTIONS.—
‘‘(i) PENDING APPLICATIONS.—In the
case of a device application for which fees
are required under paragraph (1) and
which is pending on the date of the enact-
ment of the first appropriation under sub-
section (g)(4) for fees under this section, the
fee required by paragraph (1) shall be due
90 days after such date of enactment.
‘‘(ii) EXCESS OF AUTHORIZATION.—A
fee which is due after an amount of fees
equal to the authorization of appropriations
under subsection (g)(4) for the fiscal year in
which the fee is imposed has been collected
shall be due on November 1 in the following
fiscal year.
‘‘(b) FEE AMOUNTS.—
‘‘(1) AMOUNT.—Except as provided in para-
graph (2) and subject to subsections (c), (d), (f), and
(g)(3)(A), the fees required under subsection (a) are as
follows:
‘‘(A) $52,000 for an application for a device
submitted under section 515(c) or under section
351 of the Public Health Service Act.
‘‘(B) $7,100 for a supplement for which
clinical data are required.
‘‘(C) $4,500 for a supplement for which
clinical data are not required.
‘‘(D) $3,200 for a device substantial equiva-
lence submission under section 510(k).
‘‘(2) SMALL BUSINESS EXCEPTION.—
‘‘(A) APPLICATIONS
AND
SUBMISSIONS.—
Any person employing fewer than 20 employees,
including employees of affiliates, which does not
have a device introduced or delivered for intro-
duction into interstate commerce under a device
application—
‘‘(i) shall pay one-half the amount of
the fee prescribed by paragraph (1)(A) one
year after the date of final action by the
Secretary on an application of such person
which is subject to such fee, and
‘‘(ii) shall pay the fee prescribed by
paragraph (1)(D) for a submission made by
such person under section 510(k) one year
after the date of final action by the Sec-
retary on such submission.
‘‘(B) CERTIFICATION.—The Secretary shall
require any person who applies to pay a fee in
accordance with subparagraph (A) to certify
such person’s qualification under such subpara-
graph. The Secretary shall periodically publish
in the Federal Register a list of persons making
such certification.
‘‘(C) DEFINITION.—For purposes of this
paragraph, a person is an affiliate of another
person when—
‘‘(i) one person controls, or has the
power to control, directly or indirectly, the
other person,
‘‘(ii) a third party controls, or has the
power to control, directly or indirectly, both
persons, or
‘‘(iii) an identity of interest between or
among such persons exists such that affili-
ation may be found.
‘‘(c) ADJUSTMENTS.—
‘‘(1) FEE ADJUSTMENT.—Subject to the amount
appropriated for a fiscal year under subsection (g)(4),
the Secretary shall, in each fiscal year beginning after
fiscal year 1995, adjust the fees due in the fiscal year
following the fiscal in which the adjustment is made
to reflect the greater of—
‘‘(A) the total percentage increase that oc-
curred during the preceding fiscal year in the
Consumer Price Index for all urban consumers
(all items; United States city average) that ex-
ceeds 3.5 percent, or
‘‘(B) the total percentage increase for such
preceding fiscal year in basic pay under the
General Schedule in accordance with section
5332 of title 5, United States Code, as adjusted
by any locality-based comparability payment
pursuant to section 5304 of such title for Federal
employees stationed in the District of Columbia
that exceeds 3.5 percent.
The Secretary shall, by notice published in the Fed-
eral Register, make an adjustment under this para-
graph before December 1 of each year.
‘‘(2) LIMIT.—The total amount of fees charged,
as adjusted under paragraph (1), for a fiscal year
may not exceed the total costs for such fiscal year for
the resources allocated for the process for the review
of device applications and related activities.
‘‘(d) FEE WAIVER OR REDUCTION.—The Secretary
shall grant a waiver from or a reduction of a fee for a per-
son under subsection (a) if the person has submitted an ap-
plication under section 515(c) or section 351 of the Public
Health Service Act and if the Secretary finds—
‘‘(1) that such application is a device applica-
tion for a device which has a humanitarian device ex-
emption under section 520(m), or
‘‘(2)(A) such waiver or reduction is necessary to
protect the public health, and
‘‘(B) the assessment of the fee would present a
significant barrier to innovation because of limited
resources available to such person or other cir-
cumstances.
‘‘(e) EFFECT OF FAILURE TO PAY FEES.—A device
application or supplement submitted by a person subject
to fees under subsection (a) shall be considered incomplete
and shall not be accepted for review by the Secretary until
all fees owed by such person under subsection (a) have been
paid. The Secretary may discontinue review of any device
application submitted by a person if such person has not
paid all fees owed under subsection (a).
‘‘(f) ASSESSMENT OF FEES.—
‘‘(1) LIMITATION.—Fees may not be assessed
under subsection (a) for a fiscal year beginning after
fiscal year 1995 unless—
‘‘(A) appropriations for salaries and ex-
penses of the Food and Drug Administration for
such fiscal year (excluding the amount of fees
appropriated under chapter 7 of this Act, chap-
ter 97 of title 31, United States Code, or other
authority for such fiscal year) are equal to or
greater than the amount of appropriations for
the salaries and expenses of the Food and Drug
Administration for fiscal year 1994 (excluding
the amount of fees appropriated under chapter 7
of this Act, chapter 97 of title 31, United States
Code, or other authority for such fiscal year)
multiplied by the adjustment factor applicable to
the fiscal year involved, and
‘‘(B) the number of full-time equivalent po-
sitions at the Food and Drug Administration for
such year, whose salary is not paid for by fees
authorized under this section, is equal to or
greater than the number of full-time equivalent
positions during fiscal year 1994 multiplied by
the employee adjustment factor. For purposes of
this paragraph, the term ‘employee adjustment
factor’ applicable to a fiscal year is the number
of full-time equivalent positions for such fiscal
year permitted under section 5(b) of the Federal
Workforce Restructuring Act of 1994 (5 U.S.C.
3101 note) divided by the number of such posi-
tions for fiscal year 1994.
‘‘(2) AUTHORITY.—If the Secretary does not as-
sess fees under subsection (a) during any portion of
a fiscal year because of paragraph (1) and if at a
later date in such fiscal year the Secretary is author-
ized to assess such fees, the Secretary may assess and
collect such fees, without any modification in the rate
to account for the time during which the Secretary
could not collect such fees.
‘‘(g) CREDITING AND AVAILABILITY OF FEES.—
‘‘(1) IN
GENERAL.—Fees collected for a fiscal
year pursuant to subsection (a) shall be deposited in
an escrow account established by the Secretary of
Health and Human Services and shall be available
and credited to the appropriation account for salaries
and expenses of the Food and Drug Administration as
provided in paragraph (2)(A), and shall be available
in accordance with appropriation Acts until ex-
pended, without fiscal year limitation.
‘‘(2) USE OF FUNDS.—
‘‘(A) ESCROW.—
‘‘(i) 15 PERCENT.—15 percent of the
fee assessed for the submission of an appli-
cation under section 515(c), an application
for a device under section 351 of the Public
Health Service Act, or a supplement with
required clinical data shall be immediately
available upon receipt by the Secretary.
‘‘(ii) 35 PERCENT.—35 percent of the
fee assessed on an application or supple-
ment described in clause (i) shall be avail-
able upon receipt of the fee after acceptance
of such application or supplement for filing.
‘‘(iii) 50 PERCENT.—50 percent of the
fee assessed on an application or supple-
ment described in clause (i) shall be avail-
able upon completion of a comprehensive
substantive review of such application or
supplement.
‘‘(iv) OTHER SUPPLEMENTS AND SUB-
MISSIONS.—50 percent of the fee assessed for
the submission of a supplement for which
clinical data are not required or a submis-
sion under section 510(k) shall be imme-
diately available upon receipt by the Sec-