Time is Money and Money is Time…What is an SBD Worth?

We have written many posts (here, here, here, and more) about the impact of the reductions in force (RIFs) on various activities across FDA. One area where the RIFs are beginning to have an impact is with respect to Small Business Determination (SBD) requests submitted to CDRH. The Office of Management, which was eliminated in the April 1 RIF, was responsible for processing these requests, and generally did so within 60 days of receipt. It is unclear which group is now reviewing and processing these requests, and the time it will take to do so. (We note that the webpage for the Office of Management is still functional, but has not been updated since January 2024.)

On June 4, CDRH sent out an email stating that it would be updating the CDRH Portal to add new functionality to the SBD feature to allow communications between CDRH and industry in the portal rather than via email. This indicates that CDRH is still reviewing SBDs and looking for ways to facilitate communications. It does not, however, help industry understand how long they can expect to wait for a response.

The SBDs are critically important for many medical device manufacturers. A “small business” is defined as a business, including its affiliates, whose gross receipts and sales are less than $100 million for the most recent tax year. Being granted an SBD provides discounted user fee rates for 510(k)s, de novos, and PMAs, among other submission types. The table below highlights the standard fee versus the small business fee for FY2025 for product authorization submissions.

There are many small start-up companies developing novel, innovative devices that will go through the de novo process. For these entities, the difference between the standard fee and the small business fee is not trivial. Indeed, for companies for whom every dollar is hard earned and every investor is closely watching the spend, a difference of over $120,000 for a de novo submission is significant.

If a small business submits an SBD request relying on the 60-day turnaround in advance of submitting an application to CDRH, and the SBD is delayed, the company may be forced to choose between paying the standard user fee payment or waiting for the granting of the SBD. To make this decision the company will likely need to weigh, among other matters, the strength and complexity of the submission, available funds, and timelines promised to investors and/or Boards of Directors. Companies would also likely need to consider the certainty of starting the review clock, with an eye to having a commercially viable product and being better positioned financially down the road, versus saving money on the submission now but potentially delaying commercial availability. (We acknowledge, of course, that a later submission does not necessarily delay commercial availability-this takes us back to the strength and complexity of the submission.)

We recognize that these decisions are unique to each company and would be happy to help weigh options to determine the best path forward.