FDA Guidance Breakdown: Select Updates for the Medical Device User Fee Small Business Qualification and Certification
The FDA has published an updated guidance on the medical device user fees small businesses must pay, and the circumstances in which they may be exempt from such fees.
This guidance breakdown is available in full for paid subscribers. If you’re not already a paid subscriber, you can upgrade here.
On February 22, 2024, the FDA issued a revised draft guidance outlining proposed updates to the existing guidance on small business qualification and certification for medical device user fees. It’s intended for comment purposes and seeks to incorporate changes resulting from the Food and Drug Omnibus Reform Act of 2022 (FDORA), specifically the "Small Business Fee Waiver" provision.
In case your time is short, here's a quick summary of its policy contents:
Introduction and background
The guidance updates the "Medical Device User Fee Small Business Qualification and Certification" guidance document from August 1, 2018, incorporating feedback and considering public comments on these updates. The existing guidance remains the FDA's current thinking until this draft is finalized.
The FDORA, enacted on December 29, 2022, amends the Federal Food, Drug, and Cosmetic Act to allow the FDA discretion to waive the establishment registration fee for device establishments that are small businesses, starting in fiscal year 2025, if paying the fee represents a financial hardship.
Policy details
Small business definition and fee waivers: Small businesses, defined as those with $1,000,000 or less in gross receipts or sales on their most recent Federal income tax return, may qualify for a registration fee waiver if the fee payment represents a financial hardship.
This includes modifications to accommodate businesses in jurisdictions without a National Taxing Authority (NTA), allowing them to submit alternative financial documentation for fee waiver eligibility.
Documentation and process for fee waiver: The guidance details the proposed documentation and process for applying for a small business registration fee waiver. This includes submitting the most recent tax returns showing gross receipts or sales of $1,000,000 or less, evidence of prior paid registration fees, and evidence of active bankruptcy for those claiming financial hardship.
Applicants must submit their most recent Federal (U.S.) income tax return(s), including those of its affiliates, demonstrating that the gross receipts or sales do not exceed $1,000,000.
Proof is required that the establishment(s) for which the waiver is being sought have previously registered under the owner/operator's ID with the FDA and that associated registration fees have been paid. This requirement ensures that the waiver is granted to businesses already complying with FDA registration requirements.
Businesses claiming financial hardship need to provide evidence of active bankruptcy.
This includes:
Documentation that a bankruptcy petition has been filed in the United States Bankruptcy Court.
Evidence that the bankruptcy is currently active, meaning debts have not yet been discharged, or a reorganization plan has not been confirmed.
The FDA intends to update forms FDA-3602 and FDA-3602A to request the minimal information needed for an SBD (Small Business Determination) hardship determination and evidence of prior paid registration fees. This streamlined approach is designed to simplify the application process.
Applicants seeking a small business registration fee waiver must submit the required supporting information at least 60 days before the fee is due. This timeline ensures adequate time for the FDA to review the application and decide.
The guidance also specifies that the FDA's decision regarding whether an applicant may receive a registration fee waiver is not subject to review. This clause underscores the finality of the FDA's decision-making process in these matters.
Foreign businesses and financial hardship: The guidance specifies similar documentation requirements for businesses outside the United States and introduces provisions for businesses in jurisdictions without an NTA. It emphasizes the need for clear, objective evidence of financial hardship, such as active bankruptcy, for fee waiver eligibility.