Bloomberg News

FDA Misses Deadline in Clash With Device-Makers Over Reviews

January 23, 2012

(Updates with review times in 13th paragraph.)

Jan. 17 (Bloomberg) -- U.S. regulators haggling with medical-device makers over how much it will cost to speed up product reviews starting this year missed a legal deadline to submit a proposal for congressional approval.

Under a 2007 law, the companies, led by Johnson & Johnson and Medtronic Inc., were charged $295 million over five years to get products such as hip implants and heart stents reviewed in a timely manner. The law, set to be reauthorized this year, mandates that the agency submit a new agreement to U.S. lawmakers by Jan. 15.

They missed that mark and may not strike a pact by Feb. 15, when a U.S. House hearing is set on the law. The FDA is seeking as much as $805 million over five years to add staff, responding to industry and congressional criticism its’ approval system is too slow. The industry said on Dec. 6 it’s only prepared to pay $447 million, according to the latest minutes available.

If there’s no agreement by Feb. 15, the FDA “will have the wrath of a bunch of exercised politicians on them who are running for re-election and want their pictures on T.V. that night,” said Ira Loss, senior health policy analyst at Washington Analysis, in a telephone interview.

While there’s no sanction in the law for missing the Jan. 15 filing deadline, it is the second the agency has blown by.

Senators Thomas Harkin, Democrat of Iowa, and Michael Enzi, Republican of Wyoming, asked the FDA in July to submit a reauthorization plan by Dec. 31 so the panel overseeing the agency would have adequate time to review the plan before any hearings. Timing is sensitive because current negotiations are the first to occur during an election year, when Congress typically leaves Washington by the end of July.

No Decision Yet

Lawmakers haven’t yet decided what to do if a deal isn’t reached soon, said Debbee Keller, a spokeswoman for Republicans on the House Energy and Commerce Committee, which shares oversight over the process with the Senate panel.

“We have not reached that point yet, but it is quickly approaching,” Keller said in an e-mail.

Loss said the FDA and the industry will probably reach an agreement by Feb. 15 to avoid Congress taking over negotiations.

Wanda Moebius, a spokeswoman for the Advanced Medical Technology Association, the Washington lobby for the industry, said progress is being made in negotiations. She wouldn’t say if the industry had raised its offer, or discuss details of two meetings for which minutes were unavailable.

Last-Minute Requests

Karen Riley, a spokeswoman for the FDA, said minutes from Dec. 13 and Jan. 5 meetings won’t be released until they’re approved by both sides. She declined to discuss the meetings.

The industry has complained that regulators increasingly make 11th-hour requests for more information, slowing review times, even with the fee system.

The FDA took 73 days on average in 2010 to complete less-stringent reviews of devices that pose a low to moderate risk to patients, down from 80 days before companies paid fees in 2001, according to a Bloomberg Government study. More than 90 percent of devices are reviewed under the less-stringent process, known as 510(k).

The FDA most recently proposed a user fee increase between $730 million and $805 million over five years depending on how often companies seek consultations with regulators, according to minutes from a Nov. 29 meeting. The agency may need between 225 and 321 employees to do reviews, according to meeting minutes.

Haggling Over Fees

The industry estimates its $447 million offer would account for 26 percent of the agency’s medical-device review budget by fiscal 2017, the final year of the proposed pact. It suggested the rest could be covered by congressional appropriations, according to the meeting minutes.

Manufacturers paid $35.2 million in fees in fiscal 2007, or about 13.2 percent of the agency budget for reviews, according to a Congressional Research Service report. In contrast, drugmakers fund about 60 percent of the cost of agency reviews, according to the FDA.

Device makers pay $4,049 per submission for expedited reviews typically used for products that post a moderate risk to patients. Companies with less than $100 million in sales pay $2,024, according to the FDA.

--Editors: Adriel Bettelheim, Reg Gale

To contact the reporter on this story: Anna Edney in Washington at aedney@bloomberg.net.

To contact the editor responsible for this story: Adriel Bettelheim at abettelheim@bloomberg.net.


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