The small-business qualification threshold was boosted to $100 mil. in MDUFMA "trigger-fix" legislation marked up by the Senate Health Committee July 20.

Currently, under the Medical Device User Fee & Modernization Act, small businesses are eligible for user fee reductions only if they generate $30 mil. or less in annual sales.

A draft of the "Medical Device User Fee Stabilization Act of 2005" (S 1420) circulating a week before the markup pegged the small-business revenue threshold at $75 mil.

The Medical Device Manufacturers Association reports that figures as high as $200 mil. in annual sales were floated during discussions between industry, Congress and FDA on small business relief.

Nonetheless, the trade group says the $100 mil. threshold is a satisfactory short-term fix until MDUFMA reauthorization takes place in 2007.

In a July 20 letter to stakeholders, MDMA claims responsibility for the upped threshold, which would grant fee discounts to a greater portion of the group's membership.

"MDMA's ongoing efforts to stabilize the device user fee program and provide greater fee relief for smaller companies was acted on this morning on Capitol Hill," the letter states.

Prior to the markup, AdvaMed Chairman and Medtronic CEO Art Collins said he supported small-business thresholds up to $75 mil., so long as other elements of the trigger-fix legislation proved agreeable (¹ Also see "MDUFMA “Trigger-Fix” Draft Bill Expands Small-Biz User Fee Discounts" - Medtech Insight, 18 July, 2005., p. 3).

The association initially said in a June 16 release that it would be "willing to re-evaluate...the definition of 'small business,' following the successful enactment of trigger-fix legislation."

However, in a release following the July 20 markup, AdvaMed says it is "pleased that the legislation will increase the number of small businesses eligible to pay substantially reduced fee rates." The group adds that roughly 80% of its members generate less than $100 mil. in annual domestic sales.

MDMA notes that language has been removed from the bill that would have given FDA the authority to adjust the small-business threshold in the event of a user fee deficit.

Beyond the new small-business criterion, MDMA and AdvaMed cite the elimination of the workload and compensating adjustments. The bill modifies existing branding law so that labeling requirements for single-use devices apply solely to third-party reprocessors.

Finally, the bill caps year-over-year user fee hikes at 8.5%, while salvaging the overall user fee program - which otherwise would have expired in September - by forgiving both industry and Congress' $32 mil. funding shortfalls. The bill also guarantees congressional funding for FYs 2006 and 2007.

The 8.5% year-over-year fee increase departs from earlier industry proposals. AdvaMed and MDMA initially had sought fee hikes held to the inflationary rate alone, and later had targeted a cap in the low-to-middle single-digit range.

However, the figure represents a compromise on FDA's part, as well. The agency formerly had expressed reluctance about a cap in general, indicating its desire to retain flexibility for the program (² Also see "AdvaMed 2005 Annual Meeting In Brief" - Medtech Insight, 14 March, 2005., p. 27).

MDMA credits House Energy & Commerce Committee Chairman Joe Barton (R-Texas) with "shaping these reforms" and ensuring "that smaller companies were granted fee relief."

In fact, the jump from $75 mil. to $100 mil. was possibly a concession to House demands, according to one stakeholder.

AdvaMed and MDMA are pushing for the legislation to be finished before Congress adjourns for the August recess. Congressman Joe Pitts (R-Penn.) will introduce the bill in the House July 25, staffers say. The language will be identical to the Senate version.

Comments from Sen. Barbara Mikulski (D-Md.) during the markup seem to support that sense of urgency. She congratulated Chair Mike Enzi (R-Wyo.) and the committee for moving the legislation "so expeditiously," noting that failure to approve a bill could have led to resource reductions in the device center. "Thanks to your action, we're going to stabilize this," she said.

Small Biz Threshold Stretched As “Trigger-Fix” Bill Clears Senate Committee

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