AdvaMed fights to keep user fees out of sequester cuts for FDA

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The medical device industry doesn’t want user fees paid by industry to be included in a series of cuts slated for the FDA’s budget this week.

The federal watchdog agency will have $210 million, or about 5.1% of its $4.1 billion budget, cut from its 2013 budget March 1 as a result of sequestration, the bargain between the White House and Congress.

Included in those cuts are the user fees medical device and pharmaceutical companies pay in order to insure timely reviews of new drugs and devices.

AdvaMed, the industry’s lobbying voice in Washington, D.C., said today that it’s prepared to stand "shoulder to shoulder" with the agency to protect the agency from those cuts.

"The fees voluntarily paid by industry in exchange for meeting certain performance goals are not tax payer dollars and should not be considered in the same light as appropriation funding," Zimmer (NYSE:ZMH) CEO and AdvaMed board chairman David Dvorak said during a conference call. "The FDA should have full access to fees paid by industry and the agency should be properly funded to meet its obligations under the new user fee agreement."

The medical device industry is prepared too "stand together, shoulder-to-shoulder with the FDA regarding negative impacts of sequestration and continuing resolution on the device center’s operations. Everyone knows how much effort we’ve put in towards improving performance in the device center and highlighting the role the agency plays in maintaining our global leadership," added AdvaMed president Steven Ubl. "Simply put, I think we’ve come too far to see these gains unraveled due to ill-considered approaches [to federal spending]."

Should the March 1 sequestration deadline pass, the fiscal 2013 impact will amount to an across-the-board cut of between 5.1% and 5.3% to the FDA’s appropriated budget, which includes the user fees, according to AdvaMed.

Unless Congress acts to change the rules of the sequester, those cuts will be applied across the board to all programs run by the FDA, according to the Alliance for a Stronger FDA. User fees are included in the cuts because of a decision by the Office of Management & Budget, last September, according to the Alliance.

Using a back-of-the-envelope calculation, J.C. Scott, AdvaMed’s senior executive vice president of government affairs, told MassDevice.com that sequestration could result in roughly $20 million being slashed from the budget of the Center for Devices & Radiological Health, including about $3 million worth of user fees paid by industry.

Those cuts are exacerbated by the fact that the agency is operating at its 2012 funding level, under the terms of a continuing resolution passed last summer by lawmakers to fund the federal government. The current federal budget continuing resolution, unless corrected, also limits FDA’s ability to access user fees, AdvaMed said.

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