FDA rules to benefit medical device firms

The United States Congress is close to approving new rules that will ease access to the US market for small Irish firms in the medical device sector.

Companies with annual turnover of less than $100 million will be able to save up to $210,000 on applications to the Food and Drug Administration (FDA) to bring innovative new products to the US market.

The full $281,400 pre-market approval application fee will be exempted in the case of companies with annual sales of less than $30 million, making their first such application to the US regulator.

Small businesses will also benefit from substantial reductions on other FDA fees.

Until now, only companies that filed federal income tax returns in the US were eligible for the reduced fee structure. However, under the revised Medical Device User Fee Modernisation Act, non-US companies will for the first time be able to avail of the more favourable terms.

The changes follow a two-year campaign by the IMDA, the Irish Medical Devices Association, to end what it saw as a discriminatory regime that gave US businesses "a massive competitive advantage over their European counterparts", according to association director Sharon Higgins.

"We want small business to have access to the US market on a level playing field."

She said the US move was good news.

"The proposed general reduction in fees will benefit the larger multinationals, many of which have operations in Ireland," she said, "but the really big news is for small non-US firms."

While the majority of medical device companies operating in Ireland would be owned by US or other foreign firms, there are a number of indigenous companies growing and developing.

There are around 200 life sciences companies in Ireland "but many of these are start-ups making little or no money", said Ms Higgins.

"They are simply not in a position to pay $281,000 in fees for an application to launch a new product in the US, regardless of how innovative it may be."

Ms Higgins praised the work of the European Commission which lobbied the US extensively on the issue after being approached by IMDA.

"The US is clearly a key market - both because it is so big and so rich in itself and because of the access it opens to other markets.

"Basically, if you can get your brand recognised in the US, it makes entry to other markets much easier."

Companies will have to certify to the FDA that they qualify as a small company under its rules. The precise mechanism for doing this will be communicated by the FDA when the new regime comes into force from the start of October.