May 22, 2012 — The FDA has proposed a new plan to charge drug and medical device companies user fees. In exchange, the FDA will agree to speed up the review process. The proposed plan would also impose new requirements, such as enhanced surveillance of drugs and devices once they are on the market. The new plan is intended to benefit both the FDA and the drug and medical device companies, and it has garnered bipartisan support, as well as the support of several industry lobbying groups.


The problem is, the FDA is lacks the capacity to adequately review new applications in a timely manner. There is a massive backlog of applications, which delays the availability of life-saving drugs and devices. To speed up the review process, the companies have proposed new fees that would increase the staff on the FDA and expedite the approval process.

Brand-name drug companies have paid user fees since 1992, and their fees would increase 6% to $4.1 billion. Medical device companies have paid user fees since 2002, and their user fees would more than double to $609 million. Generic drug companies would begin paying user fees of $1.56 billion; they had previously been exempt from paying the fees. Furthermore, under passage of the Obama health law in 2010, companies will now be allowed to make generic versions of complex biologic drugs. These companies would pay user fees of $128 million through the year 2017. There would be more than $2 billion in new fees, bringing the total user fees imposed on the industry to $6.4 billion.

Even with billions in new fees, much of the FDA approval process is federally funded. Companies that make brand-name drugs pay around 60% of the cost of an FDA review. Companies that make medical devices pay approximately 35% of the cost of an FDA review.

Industry lobbying groups and bipartisan lawmakers support the new plan. It is widely seen as a compromise between the FDA and the drug and medical device industry.

Some aspects of the plan favor the medical device industry’s interests. For example, the FDA will no longer send rejection letters, but will first meet with company representatives to work out safety issues.

Another aspect involves a controversial loophole that allowed “similar” medical devices to be approved without providing the FDA with even preliminary safety information. The loophole had been widely decried by public advocacy groups, who say it places the public in unnecessary danger.

For example, transvaginal mesh is a medical device that is implanted in women who have incontinence due to sagging pelvic muscles, often following pregnancy. The mesh is implanted through the vagina, and it acts like a “sling” to support the muscles. Unfortunately, thousands of women who have been implanted with the device have suffered severe internal injury, scarring, pain during intercourse, and permanent incontinence.

Transvaginal mesh was fast-tracked through the FDA approval process based on a loophole that allows “similar” devices to be approved without providing additional safety data. The problem is, the “similar” device had been recalled more than a decade earlier due to safety concerns.

Lawmakers proposed closing this loophole in the new plan, but the medical device industry lobbyists successfully negotiated to keep the loophole in place. The Washington-bases lobbying group Advanced Medical Technology Association’s chief lobbyist, J.C. Scott, said that the prohibition would have “a pretty devastating impact on the ability of companies to make incremental improvements on existing products.”

Most aspects of the new plan, however, would likely enhance public safety. These new regulations include an electronic database to track devices, new requirements that drug manufacturers alert regulators about potential drug shortages, and requiring companies to conducts post-marketing studies.

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