- FCC Modifies Cost Recovery Rules for Medical Device Tests and Proposes Greater Access to MedRadio Bands for Testing
- July 15, 2015 | Authors: Russell H. Fox; Stephen J. Wang
- Law Firm: Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. - Washington Office
- On July 6, 2015, the Federal Communications Commission (“FCC”) adopted a Memorandum Opinion and Order modifying its rules covering Experimental Radio Service (“ERS”) licenses, which permit research and testing of radio equipment. Notably, the FCC clarified that some cost recovery is permitted for the testing and operation of experimental medical devices in clinical medical trials that take place under the FCC’s ERS market trial rules. However, it rejected a request to expand eligibility to sponsors and sponsor-investigators for ERS medical testing licenses. The FCC also adopted a Further Notice of Proposed Rulemaking (“Further Notice”) proposing to permit use of the MedRadio bands under ERS “program” licenses. In addition, the FCC modified its rules to permit certain ERS licenses to use bands exclusively allocated to the passive services (e.g., the radio astronomy service and space research services) in some circumstances; and clarified that all participants in the Emergency Alert System (“EAS”) are “emergency notification providers” entitled to notification of program experiments that might affect them and protection from harmful interference from such experiments.
Cost Reimbursement for Clinical Trials Permitted
A sponsor or investigator, as defined by the Food and Drug Administration (“FDA”), may recover certain manufacturing, research, development, and handling costs associated with FDA-defined “investigational devices.” To do so, they may charge subjects for an investigational device but may not commercialize that device by charging a price larger than necessary to recover costs. The FCC was asked to clarify that such reimbursement does not violate the ERS rules, which generally prohibit “marketing” (i.e., offering for sale or lease) of a radiofrequency (“RF”) device prior to equipment authorization. In response, the FCC clarified that the exception for ERS market trials includes cost recovery under FDA rules. Medical testing licensees conducting clinical trials may therefore recover costs to the extent permitted by the ERS market trial rule, but reimbursement is not permitted for an ERS product development trial. (Market trials occur later in the development process and can engage in marketing activity, subject to greater equipment restrictions than for product development trials.)
Medical Testing License Eligibility Retained
However, the FCC rejected a request to expand eligibility for medical testing licenses to entities permitted by the FDA to sponsor or conduct clinical trial testing (e.g., “sponsors” and “sponsor-investigators” of clinical trials). The FCC explained that an ERS medical testing licensee is responsible for proper operation of experimental devices to avoid harmful interference; a sponsor under the FDA’s rules would not necessarily be directly responsible for the operation of experimental devices. The FCC noted that there are other options for conducting clinical trials that sponsors, investigators, and medical device manufacturers can use (e.g., ERS conventional experimental, program, or market trial licenses).
Additional Access to MedRadio Bands Proposed
Currently, FCC rules prohibit program license (i.e., a type of ERS license allowing the licensee to conduct multiple unrelated experiments within a broad range of frequencies) use of the 401-406 MHz band (the “Medical Device Radiocommunications Service” or “MedRadio” band), which is used for implanted and body worn medical devices, and other generally restricted bands listed in Section 15.205 of the FCC’s rules. In contrast, ERS medical testing licensees may use those restricted frequencies. To establish parity between all qualified medical device manufacturers for conducting basic research and clinical trials with RF-based medical devices, the FCC proposes to permit ERS program license operation on the restricted frequency bands, subject to applicable service rules. Interested parties may file comments and reply comments until 30 and 45 days, respectively, after publication of the Further Notice in the Federal Register (which has not yet occurred).
Other FCC Actions
Operation on Passive Service Bands. Clarifying an inconsistency between rules and policies, the FCC said it would continue prior practice regarding ERS conventional licenses (i.e., ERS licenses limited to a single experiment or a series of closely related experiments - previously, the only kind of ERS license) and not impose on ERS compliance testing licenses (i.e., a kind of ERS license available to FCC-recognized testing laboratories that test radiofrequency devices for certification purposes) most of the limitations imposed on program licensees. The FCC modified the rules to permit both ERS conventional and compliance testing use of the passive bands under limited circumstances.
Emergency Notification Providers. The FCC’s updated rules require that ERS program licensees provide notification of program experiments that might affect emergency notification providers, and develop specific plans to avoid causing harmful interference to those operations prior to commencing operations. The FCC did not previously specify that all EAS participants qualified as emergency notification providers under the new rules. The FCC accordingly adds to its rules a definition of emergency notification providers that includes all EAS participants.