Device industry, FDA ink $595M user-fee deal

After more than a year of negotiations, medical device industry groups have tentatively agreed to a new 5-year, $595 million user-fee agreement with FDA--about double the old deal. Congress must sign off on the new agreement by Sept. 30 before it becomes official.

Bloomberg initially broke the story of a rumored deal, which AdvaMed and others officially announced Feb. 1. While the industry is paying more, the FDA's part of the deal includes new performance goals sought by the industry for years. These include reductions in total review time, a greater rate of both pre-market and 510(k) approvals and more communication with companies during the review process. The agency will also hire an independent consultant to examine its regulatory review process and develop a long-term plan to correct problems.

"It is in the interests of patients and the American economy that this agreement functions well and we will work with FDA to make that happen," AdvaMed president and CEO Steve Ubl said in a statement.

Regulators had wanted to boost the device industry's fees to $805 million, according to minutes cited by Bloomberg from an earlier negotiating session. The device industry most recently countered with a $447 million offer, according to the story. Even though the device industry agreed to pay higher fees, it is still paying a much smaller portion of FDA's review budget compared to the drug industry. Pharma companies pay approximately 60% of the FDA's review budget for new or expanded-use drugs. The device industry, by contrast, estimated its $447 million offer would cover 26% of the FDA's device review budget by 2017, according to Bloomberg.

Regulators have been criticized in recent years for slow approval times, and for asking for last-minute safety data and other information that can be costly to companies seeking to launch new technology. The FDA has said it is trying to ensure safety, but the industry has argued the existing process has become cumbersome and hampers innovation due to unexpected costs.

- here's the AdvaMed release
- read the Bloomberg story

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