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Focus on Regulation

Congress Clarifies the Custom Device Exemption, But Questions Remain

Congress has passed The Food and Drug Administration Safety and Innovation Act (FDASIA) reauthorizing existing FDA user fee programs and extending these programs to generic drugs and biosimilars, which is now headed to the President’s desk to be signed into law. In addition to authorizing user fee programs that are expected to cover 60% of the agency’s 2013‒2017 premarket review costs and calling for a range of other FDA reforms, FDASIA includes a “new” definition of “custom device.”  

The custom device exemption is an existing pathway that allows a device firm, in limited circumstances, to craft a unique medical device to meet the specific needs of an individual patient or physician, without needing to obtain premarket clearance or approval. Although the definition of a custom device is set forth in Section 520(b) of the Federal Food, Drug, and Cosmetic Act (FDCA) and FDA’s implementing regulations, the interpretation of these provisions over the years has been anything but clear. Indeed, several manufacturers who have called their devices “custom devices” have received warning letters indicating their products do not meet the definition of a custom device.

As previously reported, the Act will codify FDA’s interpretation of the current definition of a custom device. The “new” definition of a custom device incorporates language from the existing statutory definition, implementing regulations, FDA warning letters, and court opinions. It also imposes new limitations on the definition of a custom device, including an absolute limit on custom devices: no device produced more than five times per year can qualify.

While helpful in clarifying FDA’s existing interpretation of the custom device exemption, FDASIA falls short of addressing the major points of uncertainty surrounding the current regulation of custom devices. Although the new five-device limitation on the number of units of a given custom device that may be produced annually provides a clear threshold for when a device cannot qualify for the exemption, the Act does nothing to provide additional insights into what what makes a device the “same” as one that was previously sold. Thus, it may still be difficult for companies to determine whether the five-unit threshold has been met. For example, do the specifications of the units have to be exactly the same to be the “same” device, or are some differences so minimal that they do not actually amount to a “different” device? It appears that this determination will continue to depend on the nature of the devices, their similarities and differences, and the level of regulatory risk that the company is willing to accept.

Despite FDASIA’s limitations, many in industry applaud the five-device limit as a statutory expansion of FDA’s current one-of-a-kind interpretation of what qualifies as a custom device. That said, device firms should be cognizant that, under the “new” definition, the mere fact that a device is produced no more than five times per year does not automatically mean it will qualify for the custom device exemption. To appropriately be considered a custom device, all prongs of the statutory definition must be met.

On a positive note, the Act includes a Congressional mandate for final FDA guidance on custom devices within two years of its enactment. Thus, the additional guidance on these issues that FDA has been promising since early 2000 should be forthcoming.