Each time the arrangement has been renewed, the FDA has gained new funding. In return, industry has wrung concessions. In the 1997 deal, the review time for a standard application dropped from 12 months to 10 months. In 2002, the FDA agreed to a number of changes, including a new deadline for how fast the agency would respond to companies' requests for meetings about their drug applications.

In the latest talks with the FDA, industry representatives -- several of them former FDA officials -- have been sitting across the table from current government officials at the agency's offices in suburban Washington in closed-door meetings that have been going on for months. (FDA rules don't let the industry pay for refreshments, though insiders said agency officials did eat chocolate truffles brought by one industry official after assurances they were home-made.)

WSJ points out that while other regulatory agencies also rely on user fees, the regulators don't generally negotiate their fees directly with industry:

Regulators usually don't negotiate their budgets with the industries they oversee. Other agencies such as the Federal Communications Commission and the Securities and Exchange Commission rely on user fees for at least some funding, but don't generally haggle over the fees. Instead, they typically impose changes through formal rule-making or by implementing formulas set by Congress.

The new agreement is likely to emerge in the next few weeks and will require congressional approval. So stay tuned for more developments.

Posted by Genevieve Smith, 09:14:17 AM