How Much Does a 510(k) Device Cost? About $24 Million

It takes about $24 million on average for each 510(k). That is the latest from a report led by Stanford University researcher Josh Makower, MD, and sponsored by the Medical Device Manufacturers Association (MDMA), the National Venture Capital Association (NVCA), and others.  The study affixes an average price tag of $24 million to each successful 510(k) clearance in the United States.

For the report, called "FDA Impact on U.S. Medical Technology Innovation," Stanford researchers surveyed 204 medical technology companies about the U.S. regulatory process. The report, which is available online as a PDF, states that the average cost to take a 510(k) product from concept to market is $31 million, and that roughly 77% of that amount is spent on tasks related to FDA regulation. High-risk PMA costs averaged $94 million, the report states, with $75 million of that spent on "stages linked to the FDA."

FDA’s performance metrics for 510(k) submissions in FY 2008 and FY 2009. The agency has the potential to exceed both the tier 1 and tier 2 performance goals for FY 2009. Source: FY 2009 Performance Report to Congress.

Authors of the study pointed to unpredictable, inefficient, and expensive regulatory processes as a main cause of such a high cost. In general, survey respondents characterized the regulatory process as fraught with disruptions and delays. For example, 44% of participants indicated that part-way through the premarket regulatory process they experienced untimely changes in key personnel, including the lead reviewer and/or branch chief responsible for the product’s valuation. A total of 34% of respondents also reported that appropriate FDA staff or physician advisors to the FDA were not present at key meetings between the FDA and the company.

A table of FDA's reported averages for 510(k) review is included above. Check out the December issue of MD+DI (coming soon) to see more data collected by the editors.

Heather Thompson