Today, the FDA published a draft guidance document titled Select Updates for the Medical Device User Fee Small Business Qualification and Certification Guidance (here) regarding the annual registration fee. When this draft is finalized, it will supplement the Medical Device User Fee Small Business Qualification and Certification Guidance and address the waiver provisions of the annual establishment registration fees with a highly defined quantitative measure for determining eligibility. In addition, the draft guidance addresses a number of questions about foreign facilities that may not have a National Taxing Authority (NTA) for purposes of providing federal income tax information to support the waiver.

The draft provides statutory authority to the FDA, giving it discretion, “beginning in fiscal year (FY) 2025, to waive the establishment registration fee for device establishments that are small businesses, if FDA determines that paying such fee represents a financial hardship.” This waiver does not, however, apply to initial establishment registration but may cover an annual registration fee associated with the establishment.

The FDA does not expect this type of waiver to be used very often and has set criteria for determining small business status and a definitive quantitative requirement for assessing how the “FDA determines that paying the annual registration fee represents a financial hardship to the applicant.” The criteria follow:

    1. “Applicants that report $1,000,000 or less in gross receipts or sales in their most recent Federal (U.S.) income tax return (including the returns of its affiliates) may be eligible to receive a waiver of the fee required for their annual registration (excluding the initial registration).”
    2. “[E]vidence that the establishments for which you are seeking a waiver have, under your owner/operator ID with FDA, previously registered and that the associated registration fees have been paid.”
    3. “Evidence that you have filed a petition for bankruptcy in United States Bankruptcy Court and that the bankruptcy is currently active (debts have yet to be discharged or a reorganization plan has not been confirmed).”

 

The third point, which comprises the trifecta for FDA consideration is likely the limiting factor in deciding whether a waiver may be granted for the annual establishment registration fee. As the draft guidance states, the “FDA intends to grant waivers only where financial hardship is shown by a clear and objective standard, the meeting of which is publicly transparent. The only situation we are currently aware of that meets this is where the small business is in active bankruptcy.”

The guidance goes on to answer additional questions regarding the eligibility for the waivers and what to do if the facility does not have an NTA. The FDA has taken a hard quantitative line (bankruptcy) on the small business waiver for the annual establishment registration fee in a rather definitive manner. Once the guidance is finalized, it will be incorporated into the Agency’s decision-making regarding these waivers.