By Mary Vanac

Steris Corp. (NYSE:STE) settled its beef with the Food & Drug Administration, addressing the “violating device” status of its System 1 liquid chemical sterilizer and setting up a transition plan that will enable U.S. customers — mostly hospitals and surgical centers — to trade in their System 1s for rebates.

The terms of the consent decree resolve a two-year dispute with the FDA, which said Steris had changed the System 1 so much since its 1988 launch that the regulator no longer considered it a device approved for sale. A December 2009 safety alert about System 1 from the FDA had cast the pall of financial uncertainty over the Mentor, Ohio-based firm.

The decree also prohibits Steris from selling liquid chemical sterilization or disinfection products that don’t have FDA clearance, formalizes a transition plan for Steris customers and describes other process and compliance issues, according to a press release. The decree is subject to approval by the U.S. District Court for Northern Ohio.

“We are pleased that our plans for financial assistance and other support we will provide System 1 customers during this transition are now final,” said Walt Rosebrough, the company’s president and CEO, in the release.

“We apologize to our customers for the uncertainty this situation created over the last several months. However, we believe the transition plan will allow healthcare providers the time, financial support and information necessary to make the best possible decisions for patients and caregivers,” Rosebrough said. “We also appreciate the FDA’s efforts to accommodate the needs of health care providers and the patients they serve during this transition.”

Two weeks ago, the FDA cleared the company’s next-generation liquid chemical sterilizing system — the Steris System 1E — after reviewing the company’s marketing application for more than a year. Steris hopes to deliver the first System 1Es by the end of the third quarter.