U.S. regulators and generic drugmakers have reached a compromise agreement for a user-fee program that would require the companies to pay some $299 million in the first year to accelerate drug approvals.

The Food and Drug Administration has been in negotiations with the generic drug industry since February to establish a user-fee program similar to one in place for brand-name drugs and medical devices.

Through the program, companies would pay fees to give the FDA extra money to hire more staff and improve support systems in its drug review process. Some of the fees would pay for bulking up FDA inspection of U.S. and foreign manufacturing facilities.

The FDA and several industry groups met three times in July, according to meeting notes posted on the FDA's website, and agreed that the industry would fund the user-fee program in full starting in year one.

That would amount to $299 million a year or more, if adjusted for inflation, with some of the first-year money coming from a one-time payment by those companies whose drugs are pending review in FDA's application backlog.

More than two-thirds of all U.S. prescriptions are filled with generic drugs. They have become a formidable rival to brand-name drugs that are facing expiring patents.

With bigger revenues, the generic drug industry is becoming more willing to pay for faster approval of its products. It is also eager for the FDA to improve its inspections to avoid such scandals as the 2008 recall of blood thinning drug heparin after at least 149 people died from tainted ingredients tracked to China.

Similar to the other user-fee programs, Congress would have to give its approval before generic drug user fees are enacted.

The FDA-industry agreements reached in July continue to assume that congressional budget appropriations funding the generics review would remain relatively stable.

Industry representatives in the negotiations included the Generic Pharmaceutical Association, the European Fine Chemicals Group and the Society of Chemical Manufacturers and Affiliates Inc's Bulk Pharmaceuticals Task Force. They represent such companies as Watson Pharmaceuticals, Teva Pharmaceutical Industries and Mylan Labs.

The FDA is holding a public meeting on the issue on August 25. The notes from the July meetings between the FDA and are at: r.reuters.com/muz23s .