Senators Propose Legislation to Allow for Profits on Devices for Rare Diseases, Lifting Limitations on Experts to Serve on Advisory Panels

By Jennifer D. Newberger –

On Tuesday, November 15th, Senator Al Franken (D-MN) announced the introduction of S. 1865, the “Patient Access to Medical Innovation Act.”  The bill is intended to accomplish two goals:  first, to allow manufacturers of products granted a humanitarian device exemption ("HDE") to profit from development of devices used in both adult and pediatric populations and, second, to ease conflict of interest restrictions on FDA advisory committee members.

Manufacturers may obtain an exemption from the effectiveness requirements for a device if (1) the device is “designed to treat or diagnose a disease or conditions that affects fewer than 4,000 individuals in the United States,” (2) the device would not be available to a person with the disease or condition unless FDA granted the exemption, and there is no comparable device available to treat or diagnose the condition, and (3) “the device will not expose patients to an unreasonable or significant risk of illness or injury and the probable benefit to health from the use of the device outweighs the risk of injury or illness from its use.”  FDC Act § 520(m)(2). 

Senator Franken’s bill retains these requirements for obtaining an HDE.  What it changes is the manufacturer’s ability to profit from sale of an HDE device.  Currently, the law prohibits a manufacturer from selling the device “for an amount that exceeds the costs of research and development, fabrication, and distribution of the device,” unless the device “is intended for the treatment or diagnosis of a disease or condition that occurs in pediatric patients or in a pediatric subpopulation, and such device is labeled for use in pediatric patients or in a pediatric subpopulation in which the disease or condition occurs.”  FDC Act §§ 520(m)(3), 520(m)(6)(A)(i)(I).  Senator Franken’s proposal would allow manufacturers to profit from the sale of any device granted an HDE, regardless of the intended patient population. 

Senator Franken’s bill also includes language that would make the legislation retroactive.  This means that manufacturers who currently market a product under an HDE, and who are unable to profit from the sale of such device, will be able to profit after the legislation is enacted, even if they obtained the HDE prior to its enactment.

In addition to changes to the HDE legislation, Senator Franken’s bill proposes changes to FDC Act Section 712, Conflicts of Interest.  Currently, section 712 limits the number of conflict-of-interest waivers that FDA may provide to experts that it would like to serve on its advisory committee.  The result of this restriction has been that FDA is often unable to obtain industry’s most qualified experts to serve.  The language in Senator Franken’s bill would require FDA to “ensure that each [waiver] considers the scope and magnitude of the financial interest at issue with the public health need for the expertise of the member on the advisory committee.”  This is intended to allow FDA to access a broader range of experts who would be unable to serve under the current legislation, and balance the potential conflict-of-interest against the need for participation by experts in a particular field.  Such expert consultation can play a critical role in bringing products to market.  If Congress enacts Senator Franken’s legislation, hopefully FDA will take advantage of the newly available expertise.