Q1: I am hearing about changes for the registration and listing of manufacturers with the FDA. How does this impact me?

PB: On October 1st, 2012, all medical device manufacturers must report all proprietary names and combination products (device/biological product/drug) to the FDA at time of listing or during the annual update. All proprietary names currently being used to market in the USA must be reported at the owner operator level, not the establishment level.

In addition, all manufacturers, contract manufacturers, and contract sterilizers of finished devices must register and they must list the proprietary names of the devices they fabricate or sterilize, even if they do not market the devices. The FDA defines a “finished device,” as “any medical device or accessory that is suitable for use or capable of functioning, whether or not it is packaged, labeled, or sterilized.”

This is applicable to initial importers whose devices were manufactured outside of the USA and to all foreign establishments that import into the USA. The device must be listed by the manufacturers before a foreign exporter, domestic importer, contract manufacturer, or contract sterilizer can list it.

Now, more establishments, such as those that only handle complaints and those are located in foreign trade zones, must also register. See the full list here.

Lastly, new requirements include an annual registration fee that must be paid by all establishments required to register.

Updates to your listings can be made electronically through the FDA website. All updates must be completed by March 31st, 2013.

Q2: Will my information, such as alternate proprietary names and contract manufacturers, be made public?

PB: No, you can mark certain information as “confidential”.

Q3: What is the Medical Device Excise Tax?

PB: Though the tax is not enforced, collected, or implemented by the FDA, after December 31st, 2012, certain devices are subject to a 2.3 percent excise tax on the sale price of a product regardless of whether a profit is made. Manufacturers, including importers and any establishment that processes, manipulates, combines, or assembles the device in any way, are subject to the tax. Manufacturers and importers are responsible for payment.

Q4: Which devices are exempt from the tax?

PB: Devices are exempt from the tax if they are deemed “generally designed and sold for personal use,” and are usually sold over-the-counter (i.e. “the retail exemption”). This includes devices such as eyeglasses and hearing aids.

Devices are also exempt if they:

(a) are not designed or sold for human use;
(b) used solely for research and are not listed with the FDA;
(c) used for the manufacture of another device.

The tax does not apply to exports of the device from the United States.

Q5: The new MD excise tax law, as written by the IRS, does not allow manufacturers to recapture the taxes from the users of the device, and I have heard that the IRS will be reviewing US based tax returns to make sure they do not. Is this true?

PB: Yes, but the IRS will not have access to review the tax returns of foreign-based establishments and will not be able to determine if the foreign-based manufacturers are passing the added costs on to the users.

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