This article is a reminder that the new FDA User Fees FY2020 have been announced, and it is time for you to re-apply for small business qualification.
In 2016 the FDA and industry negotiated revised user fees to achieve faster decision timelines. In return for higher user fees, the FDA promised faster decision timelines. This agreement ultimately became the Medical Device User Fee Amendments of 2017 (i.e., MDUFA IV). This new higher fee structure was implemented in FY 2018 (i.e., October 2017). The MDUFA IV agreement also included plans for inflation adjustments each year. Therefore, on July 31, 2019, the FDA announced the new inflation-adjusted pricing for FDA User Fees FY2020 in the Federal Register.
This new pricing for the medical device user fees is published in Table 5 of the July 31 announcement. All of the fees increased. The 510k standard user fee, for example, increased from $10,953 to $11,594–and an increase of 5.85%. The FDA also sent out an email update about the increased user fees last week.
Before FY 2019, companies were not able to apply for small business status until October 1. However, in August 2018, the FDA changed the forms, guidance, and policies to allow companies to apply for small business status as soon as August 1. The form also now allows the applicant to fill in the applicable fiscal year. This eliminates the need for the FDA to update the application form each year.
The approval of small business status by the FDA can take up to 60 days. Therefore, every small business planning to submit a regulatory submission to the FDA in FY 2020 should apply for small business status now–instead of waiting until October or when they are planning to submit. This will reduce the possibility of a company needing to submit their submission before they have been qualified by the FDA as a small business and paying the higher standard user fee.
When you submit your application, make sure that you send an original application, because the FDA will not accept a copy–especially for international submissions. Companies located outside the USA, or companies with subsidiaries outside the USA, must obtain verification of the taxes paid by the national tax authority in each country. This extra step makes it even more critical for device companies to start the application process immediately.
In parallel with these annual user fee increases, Medical Device Academy increased our flat-fee pricing for preparing submissions on August 1. The new higher consulting fee increased from $12,000 to $14,000. This fee does not include our flat-fee for each FDA eCopy of $150/eCopy–typically averaging $600/project. However, we now include any time required to respond to RTA Hold Letters and requests for additional information. This typically ranges from 5-10 hours of consulting time at $300/hour. Therefore, the net change is from $14,250 to $14,600 (i.e., an increase of 2.46%). More importantly, it makes the total cost of hiring our firm more predictable and less time consuming for our firm to quote. Our firm’s hourly rates have not changed.
If you are interested in learning more about applying for small business status, please visit our webinar page on this topic or contact us for help. If you are interested in our new pricing, please click on the download button found on our home page.