FDA does allow products under Human Device Exemption (HDE) to be sold for profit, but limited to a quantity known as the Annual Distribution Number (ADN)
https://www.fda.gov/medical-devices/premarket-submissions/humanitarian-device-exemptionProhibition on Profit
The Food and Drug Administration Amendments Act of 2007 (FDAAA) contained incentives to facilitate development of medical devices for pediatric populations (defined as patients who are younger than 22 years of age).
Under section 520(m)(6)(A)(i) of the FD&C Act, an HUD isonly eligible to be sold forprofit after receiving an HDE approval if the device is intended for the treatment or diagnosis of a disease or condition that either:
- occurs in pediatric patients or in a pediatric subpopulation, and such device is labeled for use in pediatric patients or in a pediatric subpopulation in which the disease or condition occurs; OR
- occurs in adult patients and does not occur in pediatric patients or occurs in pediatric patients in such numbers that the development of the device for such patients is impossible, highly impracticable, or unsafe.
HDE applicants whose devices meet one of the eligibilitycriteria and wish to sell their HUD for profit should provide adequate supporting documentation to FDA in the original HDE application. HDE holders who wish to sell their devices for profit and who did not submit the request in the original HDE application may submit a supplement and provide adequate supporting documentation to demonstrate that the HUD meets the eligibility criteria.
Annual Distribution Number
The number of HDE devices that may be sold for profit is limited to a quantity known as the Annual Distribution Number (ADN). If the FDA determines that an HDE holder is eligible to sell the device for profit, FDA will determine the ADN and notify the HDE holder.
The ADN is calculated by taking the number of devices reasonably necessary to treat or diagnose an individual per year and multiplying it by 8000. For example, if the typical course of treatment using an HDE device, in accordance with its intended use, requires the use of two devices per patient per year, then the ADN for that HDE device would be 16,000 (i.e., 2 x 8000).
If the number of devices distributed in a year exceeds the ADN, the sponsor can continue to sell the device but cannot earn a profit for the remainder of the year.
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