FDA proposes waiving annual registration fees for small MedTech manufacturers

The US Food and Drug Administration (FDA) is proposing to use recently granted authority from Congress to waive annual registration fees for small medtech manufacturers making $1 million or less annually and who are in active bankruptcy. The agency also proposes to apply the waiver to small businesses without a national taxing authority (NTA) on a case-by-case basis.

When Congress passed the Food and Drug Omnibus Reform Act of 2022 (FDORA), it included language that gave FDA the discretion to waive annual registration fees for small companies who otherwise would have to pay the fee under the Medical Device User Fee Amendments (MDUFA V) deal. The agency published a draft guidance on 22 February proposing how it would determine whether a small business is facing financial hardship and qualifies for a fee waiver.

In its draft guidance, FDA notes that while it is not obligated to grant an annual registration fee waiver to small businesses that it determines may face financial hardship, it will consider waiving the fees for businesses that can prove they make less than $1M in gross receipts or sales a year. An important criterion for the agency is that the business needs to provide clear evidence of its hardship, and the only way it says it can do so is based on whether the company is undergoing bankruptcy proceedings.

“FDA intends to grant waivers only where financial hardship is shown by a clear and objective standard, the meeting of which is publicly transparent,” said FDA. “The only situation we are currently aware of that meets this is where the small business is in active bankruptcy.”

“FDA believes that active bankruptcy represents financial hardship that is shown by a clear, objective standard, the meeting of which is a matter of public record,” the agency added.

If a business wants to apply for the fee waiver, FDA says they need to provide their most recent US federal income tax returns showing they made $1M or less in gross receipts or sales, evidence that they have paid the initial registration fee, and documentation that they have filed for bankruptcy in the US bankruptcy court and their case is currently active.

For small businesses facing hardship who do not have an NTA, FDA says they can submit documents such as financial statements and shareholder reports that prove that they made $1M or less in gross receipts or sales. The agency says it will look at each application on a case-by-case basis to determine if there is enough evidence to qualify the company for the waiver program.

Stakeholders can comment on the draft guidance on www.regulations.gov under docket no. FDA-2018-D-1873 until 22 April. RAPS.org