“I have an empty bench, ” Jeff Shuren, M.D., JD, the FDA’s medical device chief, told a large group of medical device companies during a town hall meeting in 2010. His comments followed an FDA panel’s assessment that the agency’s workforce is not positioned to meet regulatory responsibilities.
Too Many Rookies
What Shuren meant was that there were some seasoned and experienced reviewers at the agency who could competently and quickly review new devices from both scientific and legal perspectives. But as those experienced reviewers left the agency to work for industry, they left behind younger and less experienced staff not well versed in areas of science and the law.
When that happened and companies appealed, senior managers had to step in to adjudicate disagreements that should have been handled early in the process. This happened with Regen Biologics, Inc., as disagreements over the meaning of substantial equivalence was elevated to two advisory board meetings and the eventual rescission of the company’s 510(k) clearance for its collagen matrix product, called Menaflex. The consequences were lethal for the company as it was forced to declare bankruptcy and for the agency’s long-time device director, who resigned.
When senior managers did intervene, agency staffers went to Congress and the press as whistleblowers. It was a mess. “Everybody was fearful, ” said Mark DuVal a Minneapolis attorney who represents industry at the FDA and is a frequent critic of the agency.
Who’d Want This Job?
Replacing reviewers on the bench has been another problem.
According to a report released November 20, 2012, by the Partnership for Public Service, the agency’s “hiring process is broken and needs fixing” because it “remains slow and cumbersome.” The FDA says hiring times have been cut from 159 days to 80 days.
The report says almost half of the full-time permanent workforce earns more than $100, 000, yet the freeze on basic pay rates that affects all federal employees, and the lack of raises and retention bonuses, have contributed to the FDA’s troubles. Scientists and doctors “can often earn more money in private industry, and that has been a perennial problem.”
Money Talks – Even at the FDA
With $595 million in user fees as a result of MDUFA III (Medical Device User Fee Act), it looks like Shuren is going to get to fill his bench in 2013. The FDA promised to improve its medical device application review times when industry agreed to double user fees over the next five years.
While no official guidance documents or an organizational chart has been made public, an agency spokesperson confirmed to OTW that as of November 1, 2012, the Office of Device Evaluation (ODE) began operating under a new structure. There will be two newly created divisions (Division of Surgical Devices and the Division of Neurological and Physical Medicine Devices) and 12 new branches across all 7 review divisions.
New FDA Organizational Chart
Source: Confirmed by FDA
More Chiefs, Fewer Indians
The intent behind this reorganization, said the spokesperson, is to reduce the manager to staff ratios and better align product areas as well as accommodates the new MDUFA hires that will be coming into the medical device center. An official organizational chart will soon be posted on the FDA website along with a breakdown of where devices will be reviewed. The 32 pre-hires (20 of which went to ODE) were intended to help fill the newly created manager positions. “We will be advertising and interviewing in the coming weeks for the vacancies, ” said the spokesperson.
“The branch sizes that were created vary a little as the agency tried to balance workload along with product area break-outs that made sense. In some cases product areas it did not make sense to divide the product area further as the diversity of product would have been too limited.”
“The FDA is trying to reinvent itself. And they’re doing a good job of it, ” says DuVal. He adds that the changing of the manager to staff ration is really important.
Less Institutional Inertia?
While the reorganization has just started, he says he thinks he has noticed a change in the agency of late. In the past, according to DuVal, if a young reviewer made a mistake the FDA’s institutional inertia took over and staff would circle the wagons to fend off criticism. Only after complaints reached the appeals level did the Agency engage in an intelligent conversation about the law. “By having more managers involved early to help reviewers avoid missteps, the process should be smoother, ” said DuVal.
But not everyone expects smooth sailing.
The “Cliff”
This is a very odd time for federal agencies says Ed Dougherty, a senior advisor with Washington, DC-based Arent Fox, LLP. “There are numerous statutory changes to be implemented, but until we get through the uncertainty of the fiscal cliff discussions, the agencies are operating on FY12 budgets. This becomes a challenge for industry because the message is that industry must abide by the new regulations that went into effect on October 1, 2012, but the agency can’t guarantee that it will meet its 2013 performance goals.”
Ed Dougherty/Arent Fox, LLPWhile the FDA reorganization plan has new manager positions to fill and does intend to reduce the ratio of staff to managers, Dougherty is hearing from clients that the pool of potential employees is very small, and that as the economy starts to pick up, scientists who might have gone into government service are choosing industry instead. “This is likely to extend the timeline for FDA being able to bring on board and train an expanded head count.”
“I’m hearing general satisfaction with MDUFA, but again, the volume of regulations to be written has meant that the agencies have been working overtime to develop them, but held them up until after the election. This has forced many companies to make ‘best guesses’ about the intent behind new laws and regulations and how to come into compliance with the new laws. I do think that FDA and other agencies are sensitive to this issue and are trying to work with individual companies, but they also have to hold the line on requirements and deadlines.”
Big Issue #1 and Big Issue #2
The two big issues likely to take up FDA staff time are reclassifying Class III 510(k)s to PMAs (Premarket Approvals) and expanding postmarket surveillance. “I think the 510(k) to PMA transition will have little impact on industry. The issue is not new. The postmarket surveillance and integration of device review across the lifecycle is more of an issue, I think. This will make it more expensive to bring innovative devices to market, I think. The UDI (Universal Device Identifier) issue isn’t a big deal, I don’t think, but connecting UDIs to EHRs (Electronic Health Records) is likely more complex and burdensome for industry than has been anticipated.”
Dougherty says the FDA believes its reorganization will improve the pipeline of innovative products while protecting the public health and safety. However, in the short term (12-18 months), Dougherty thinks it will actually be more difficult for companies to move through the FDA approval process because of new staff, new staff responsibilities, and not yet complete regulations.
“My own view would be that these changes are good ones and I hope the longer term view of FDA will prove that I’m right. Problem is that too few of my clients have the luxury of time. They are looking ahead one or two quarters at most. Industry restructuring to interface with agency restructuring won’t happen until companies move the restructuring to the top of the priority list.”
Swapping Deck Chairs on the Good Ship FDA?
As Dougherty notes, the FDA’s reorganization efforts take place in a broader federal budget and regulatory context.
Steven Grossman, publisher of FDA Matters, writes that year five of an incumbent President almost always stresses changes in personnel and policies. “The focus will shift toward new ways of dealing with budget and fiscal matters, jobs and unemployment, and stabilizing our nation’s global position while winding down our involvement in Afghanistan. Implementing Obamacare will likewise be a key priority, as major provisions of the law go into effect over the next few years.”
Grossman says the entire tenor of FDA Commissioner Hamburg’s tenure—public statements and actions—has been to try to create more science-based decision-making, publish more guidances for industry, and to listen to both Congress and industry about FDA’s role in supporting medical innovation.
“FDA is people-driven—not only by who leads, but also because over 80% of the agency’s costs are people-related. More money = more people = more capability and activity. Less money will have the opposite effect.”
The impending “fiscal cliff” could mean a potential 8.2% across-the-board federal budget cuts slated for January 2, 2013. Sequester, as the process is known, will leave FDA with about $320 million less to spend in FY13 than it did in FY12.
This includes cuts to taxpayer-funded FDA appropriations (about a $2.5 billion base) and user fee revenue (nearly a $1.4 billion base). “If the cuts were applied entirely to FDA personnel, the agency would have to lay-off or furlough about 1, 000 employees, ” added Grossman.
If It Walks Like a Lame Duck…
Jeff Shuren’s ability to build his bench will depend on budget decisions made by this lame-duck Congress. So, “Cliff” or not, the FDA is going to reorganize—the only question is whether it will be up or down.
