The Senate draft legislation for FDA user fee reauthorization, released March 16, includes a compromise to expand the profit incentive for humanitarian-use devices in response to concerns from advocates for pediatric device development.

The device section of the bipartisan draft legislation from the Senate Health, Labor, Education & Pensions Committee includes several provisions that aim to streamline or add incentives to the device regulatory pathway, including changes to the humanitarian-use device program, as well as policies to improve device safety oversight. (See Also see "Draft User Fee Bills Aim To Streamline And Strengthen Device Regs" - Medtech Insight, 19 March, 2012..) The Committee is accepting comments on the discussion draft until April 1.

To gain a humanitarian device exemption, manufacturers must show proof that their device is safe, but a company does not need to firmly establish effectiveness. HDE-approved products are intended to treat, diagnose or cure a condition that impacts a maximum of 4,000 patients annually.

Currently, devices on the market with an HDE can only be priced for profit if they include a pediatric indication. The exemption was carved out in the FDA Amendments Act of 2007 to add more incentive for companies to develop and study devices in kids – an area that typically does not provide large market opportunities.

Since then, industry has argued that additional incentives are needed to develop devices for rare disorders for all patients. (See Also see "Industry Seeks Reforms To FDA Humanitarian Device Exemption Program" - Medtech Insight, 5 July, 2010..)

The compromise in the draft Senate bill would maintain the profit allowance for pediatric HDE devices, but also would allow profits on a device approved under an HDE for adult-only indications when intended to diagnose or treat conditions that do not occur in children or where the numbers are so small that pediatric device development would be “impossible, highly impracticable or unsafe.” Under the provision, adult-indicated HDEs already on the market at the time of the bill’s enactment could apply for a profit allowance based on the restrictions.

The language alters a bill introduced last November by Sen. Al Franken, D-Minn., that would retroactively expand the profit incentive for all current and future HDE devices. But the American Academy of Pediatrics said such an unrestricted profit expansion would have the unintended consequence of removing special incentives to develop pediatric devices. (See Also see "Franken Bill Offers Retroactive Profit Incentive For Humanitarian Devices" - Medtech Insight, 21 November, 2011..)

AAP says it has been working with Franken’s office since last fall to come up with an approach that would benefit both pediatric patients and the device industry as a whole. The pediatric group says it is pleased with the new language.

The Senate legislation “would expand the humanitarian device profit allowance to adults without creating a disincentive for device development in pediatric populations” – AAP President Robert Block

“This legislation would expand the humanitarian device profit allowance to adults without creating a disincentive for device development in pediatric populations. We thank you for your commitment to working with us to address our concerns,” AAP President Robert Block wrote in a Feb. 28 letter to Franken.

Franken says the revised bill was the result of several months of meetings between multiple stakeholders, including the AAP, the National Organization of Rare Diseases and device maker Medtronic, which have all publicly supported the policy.

“I worked hard to bring stakeholders to the table so that we could come to a consensus on the language that would best serve patients and doctors,” Franken said in a March 16 statement. “I can’t imagine why both the House and Senate wouldn’t adopt this language when it has such broad stakeholder support.”

Rep. Charles Bass, R-N.H., introduced a bill in the House last fall which, like Franken’s November legislation, would expand the profit allowance for all HDE devices. (See Also see "Humanitarian Device Bill Would Gut Incentives For Pediatric Devices, AAP Says" - Medtech Insight, 24 October, 2011..) Provisions from Bass’ bill were also included in a Republican-generated House user-fee discussion draft bill without compromises sought by AAP.

The pediatric group says it plans to work with Bass’ staff to include a consensus approach in the House version of the user fee legislation.

Humanitarian-Use Device Guidance Comments

As the HDE program is receiving attention on the Hill, FDA is developing new guidance for manufacturers on preparing requests for humanitarian-use device designation, the first step in the process of submitting humanitarian device exemption applications. (See Also see "FDA Draft Guidance: How To Claim Humanitarian Device Status" - Medtech Insight, 19 December, 2011..)

The public comment period for a draft guidance issued last December closed March 12.

Cook Group, in its comments, urged FDA to support efforts in Congress to remove the profit restriction on HDEs. It also pushed FDA to petition Congress to address another current statutory limitation on the program – the annual limit of 4,000 patients that can be diagnosed or treated with a humanitarian-use device. That number should be expanded, the company says.

This matter is already addressed in the House draft user fee bill, which would expand the HDE patient limit beyond 4,000 per year if the “severity of the disease or condition is such that public health requires a greater availability of the device to treat or diagnose such patients.”

In other comments, Johnson & Johnson said that current regulations do not require data to support a humanitarian-use device designation. The firm said it is unclear that such data that are stipulated in the guidance – including pre-clinical, clinical, published or proof-of-principle data – are necessary to make this determination, and therefore recommends that this data requirement be removed.

Both J&J and AdvaMed also told FDA that the guidance should explicitly state that an HDE is an FDA approval. They explained that private insurers typically refuse to reimburse for pediatric humanitarian-use devices. Since the current statute says that these devices can only be administered in facilities with functioning institutional review boards, they say that insurers assume the devices are investigational and not eligible for reimbursement.

AdvaMed stated that providing this clarification that an HDE is an FDA approval could “assist physicians and facilities in seeking reimbursement, improve patient access to needed HUDs, and help patients avoid unnecessary out-of-pocket costs.”

Senate Draft Bill Compromises On Profit Incentive For Humanitarian Devices

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