What are the 2024 FDA user fee costs for a small business 510k submission?

Navigating the FDA Small Business User Fee Process: A Deep Dive for 2024 For medical device companies, particularly startups and small businesses, preparing a 510(k) submission involves navigating significant regulatory and financial hurdles. Among the most critical is the FDA user fee required for a premarket notification. While substantial, this fee can be significantly reduced for companies that qualify under the FDA's Small Business Determination (SBD) program. However, securing this status is not automatic; it requires a separate, detailed application process with specific documentation, strict definitions, and critical timelines that can impact a product's path to market. Successfully qualifying involves much more than simply having revenue below a certain threshold. Sponsors must understand the FDA's broad definition of "affiliates," provide precise tax documentation for all related entities, and secure their Small Business Decision Number *before* submitting their 510(k). Missteps in this process, such as miscalculating affiliate revenue or submitting an incomplete application, can lead to rejection, payment of the full standard fee, and costly delays in the 510(k) review timeline. Because user fee amounts are updated annually for each fiscal year (beginning October 1st), sponsors must always consult the official FDA source for the most current information. **For the latest fee schedules, forms, and official guidance, sponsors should always refer to the FDA's Medical Device User Fee Amendments (MDUFA) webpage at https://www.fda.gov/industry/fda-user-fees.** This article provides a detailed guide to the procedural and documentation requirements of the SBD program to help sponsors avoid common pitfalls. ### Key Points * **Separate and Prior Application:** The SBD application is an entirely separate process from the 510(k) submission. It must be submitted and approved *before* you submit your 510(k) to the FDA. * **Plan for a 60-Day Review:** The FDA has up to 60 calendar days to review a complete SBD application. Sponsors should submit their application at least 60-90 days before their planned 510(k) submission to avoid delays. * **Affiliate Revenue is Critical:** Eligibility is based on the gross receipts or sales of the applicant *and all of its affiliates combined*. The FDA’s definition of an affiliate is broad and includes parent companies, subsidiaries, and other commonly controlled entities worldwide. * **Precise Documentation is Non-Negotiable:** The application requires specific, official tax documentation (e.g., a signed U.S. federal income tax return) to substantiate the revenue claims for the applicant and every single affiliate. * **Approval is Not Retroactive:** If a company submits a 510(k) and pays the standard fee, it cannot receive a refund later if its SBD application is subsequently approved. The SBD Decision Number must be included at the time of the 510(k) submission. * **Annual Renewal Required:** SBD status is granted for a specific fiscal year. Companies must reapply each year to maintain their small business status for future submissions. --- ### ## Understanding the Small Business Determination (SBD) Program The SBD program is part of the broader framework established by the Medical Device User Fee Amendments (MDUFA). Under MDUFA, medical device companies pay fees to the FDA when submitting certain applications, which helps fund the agency's review process. Recognizing the financial burden on smaller companies, the program allows qualifying businesses to pay significantly reduced user fees. #### Who is Eligible? A "small business" is defined by the FDA as a business, including all of its affiliates, with gross receipts or sales of no more than $100 million for the most recent tax year. The most critical and often misunderstood part of this definition is the inclusion of affiliates. The SBD application process is managed by the Center for Devices and Radiological Health (CDRH) and is entirely distinct from the scientific and regulatory review of a medical device. Its sole purpose is to verify a company's financial eligibility for reduced user fees. ### ## The Step-by-Step SBD Application Process Navigating the SBD process requires careful planning and attention to detail. A mistake at any stage can lead to rejection and force the payment of the standard, much larger fee. #### Step 1: Identify All Affiliates and Consolidate Financials Before filling out any forms, the first step is to create a complete map of the company's corporate structure. This includes identifying every entity that meets the FDA's definition of an affiliate. Under 13 CFR 121.103, an affiliate is any business entity that controls, is controlled by, or is under common control with the applicant. This includes: * Parent companies (domestic or foreign) * Subsidiaries (domestic or foreign) * "Brother-sister" companies (firms owned by the same parent company) * Any entity that holds 50% or more ownership of the applicant * Any entity whose formation was funded by the applicant Once all affiliates are identified, the sponsor must obtain the gross receipts or sales from the most recent tax year for each one and sum them together with the applicant's revenue. If this total is at or below the $100 million threshold, the company is likely eligible. #### Step 2: Complete the FDA Form 3602 The official application is FDA Form 3602 (or Form 3602A for foreign companies). This form requires: * **Applicant Information:** The legal name and address of the company submitting the 510(k). * **Affiliate Information:** A complete list of all affiliates, including their legal names, addresses, and relationship to the applicant. If there are no affiliates, this must be explicitly stated. * **Financial Declaration:** A statement of the total gross receipts or sales for the most recent tax year for the applicant and all affiliates combined. * **Contact Information:** Details for the person responsible for the application. #### Step 3: Gather and Prepare Supporting Tax Documentation This is the most critical step and the most common source of application errors. The FDA requires objective, official evidence to verify the revenue claims. The primary document required is the **most recently completed U.S. Federal Income Tax Return**. * The return must be signed and dated. * The business name on the tax return must match the applicant's name on Form 3602. * A separate tax return (or equivalent official documentation for foreign entities) must be provided for **every affiliate** listed. * If an affiliate does not file a U.S. tax return, the sponsor must provide a translated, signed statement from a certified public accountant or government tax agency in that country, certifying the affiliate's gross revenue. #### Step 4: Submit the Application via Email The completed Form 3602 and all supporting tax documentation must be scanned and submitted as a single PDF file to the FDA's SBD program email address, which is available on the FDA's MDUFA webpage. #### Step 5: Receive the Small Business Decision Number If the application is complete and approved, the FDA will email a letter confirming the company's small business status for the current fiscal year. This letter will contain a unique **Small Business Decision Number**. This number is essential—it must be provided in the 510(k) submission (e.g., in the eSTAR application) and referenced when paying the user fee to ensure the correct, reduced amount is charged. --- ### ## Scenario-Based Examples The complexity of the SBD process varies greatly depending on a company's corporate structure. #### Scenario 1: The Self-Funded Startup * **Structure:** A single U.S.-based LLC, founded and funded by its owners, with no parent company or subsidiaries. * **SBD Process:** This is the most straightforward case. The company completes Form 3602, lists "None" under affiliates, and submits its most recent signed federal tax return. As long as its revenue is under the threshold, approval is likely. #### Scenario 2: The Venture-Backed Company * **Structure:** A U.S.-based C-Corporation that has received funding from several venture capital (VC) firms. * **What FDA Will Scrutinize:** The key question is whether any of the VC firms qualify as an "affiliate." This typically depends on the level of ownership and control. If a single VC firm owns 50% or more of the company's stock or has the power to control its management and policies, the FDA will likely consider it an affiliate. The VC firm's own revenue would then need to be included in the calculation. * **Critical Documentation:** The sponsor must provide its own tax return and may need to provide legal documentation (e.g., capitalization table, shareholder agreements) to demonstrate that no single entity has majority control. If a VC firm is determined to be an affiliate, its tax documents are also required. #### Scenario 3: The U.S. Subsidiary of a Foreign Parent * **Structure:** A U.S. company that is a wholly-owned subsidiary of a large European corporation. * **What FDA Will Scrutinize:** Even if the U.S. subsidiary has very low revenue, its parent company is an affiliate. The FDA will require the combined global revenue of both the U.S. subsidiary and the European parent. * **Critical Documentation:** The U.S. company must submit its U.S. tax return. For the foreign parent, it must provide official tax documentation from its home country, along with a certified translation and a statement from a qualified accountant or tax authority verifying its annual revenue. In most cases, the large parent company's revenue will make the U.S. subsidiary ineligible for small business status. --- ### ## Strategic Timeline and Planning Considerations Timing is everything with the SBD application. Because the FDA has up to 60 days for review and the approval must be in hand *before* the 510(k) is submitted, sponsors must plan well in advance. **Recommended Timeline:** Submit the SBD application **at least 90 days** before the target 510(k) submission date. This buffer accounts for the 60-day review period and provides an extra 30 days to correct any potential deficiencies the FDA may identify in the application. A 510(k) submission will be placed on hold during the administrative acceptance review if the sponsor claims small business status but cannot provide a valid SBD Decision Number. This can delay the start of the substantive review by weeks or even months, disrupting the entire regulatory timeline. While the SBD process is administrative, its timeline is a critical component of the overall regulatory strategy and should be managed with the same diligence as the technical documentation for the 510(k) itself. This process is entirely separate from scientific engagement with the FDA via the Q-Submission program, which is used to gain feedback on testing plans and regulatory pathways. ### Key FDA References - FDA Guidance: general 510(k) Program guidance on evaluating substantial equivalence. - FDA Guidance: Q-Submission Program – process for requesting feedback and meetings for medical device submissions. - 21 CFR Part 807, Subpart E – Premarket Notification Procedures (overall framework for 510(k) submissions).