Public policy and how it is set can have a dramatic effect on how an industry fares in terms of leadership and competitiveness in the world. This is particularly evident with an industry like ours that relies on innovation and on getting products to market ahead of the competition. Such factors can sometimes make or break a small medical device company.
David Nexon, senior executive vice president at AdvaMed, submitted testimony at the President’s Council of Advisors on Science and Technology meeting on May 21, emphasizing the importance of setting U.S. policy that helps ensure that leadership position.

“While the medical technology industry is a genuine American success story,” he said, “our world leadership is not guaranteed to continue. Without sound public policy, it is increasingly likely that the U.S. will fall behind not only in medical devices and diagnostics but in other industries based on the life sciences.”

Nexon pointed to a number of indicators that show a narrow gap between United States and foreign competitors. While the U.S. has maintained a favorable balance of trade, he said, “The surplus of exports over imports has been narrowing both in absolute terms and relative to the size of the export-import sector. In 1998, imports and exports together totaled $24.6 billion and the trade surplus was $6.6 billion—more than one-quarter of total trade. By 2009, the trade surplus had shrunk by more than half—to $3 billion, and the surplus was only 4.7% of total trade.”

He stressed the impact of federal policies on a regulated industry. “All medical technology products sold domestically are regulated by [FDA], and most must receive clearance or approval before they can be marketed and all are subject to quality systems and good manufacturing practices regulations. Further, products are monitored for adverse events once marketed to the public and are subject to recall authority. Accordingly, FDA policies are critical to the health and growth of the industry.”
The U.S. government could and should pursue policies that ensure that the United States retains its position and is poised to take advantage of  growth opportunities. As an industry made up of primarily small companies, such policies are essential. Although he stopped short of calling them recommendations, Nexon proposed a number of ideas for the council to consider. I’ve highlighted a few of them here.

Nexon said that the predictability and speed of FDA decision-making, as well as reasonable, risk-based standards of evidence to show the safety and effectiveness of medical technology products are essential. He noted, “It is not a good omen for the future of the U.S. device industry—or for American patients—that an increasing proportion of complex products appear to be undergoing clinical trials and entering the market abroad before they are introduced in the U.S.”
Regarding payment policy and health reform, Nexon pointed out that “a reliable expectation of adequate payment for products offering clinical benefit is obviously a prerequisite for stimulating investment in technological innovation.”

He also suggested that innovation should be built into government policy. “One option for ensuring that innovation is considered as policies are implemented across the government would be to create a dedicated, adequately staffed office within the White House with the specific mission of making sure that government policies are sensitive to innovation and support the president’s goals of ensuring that America leads the world in science and technology,” he said.

He proposed a couple of ideas to strengthen U.S. trade policy. First, he suggested that the Office of the United States Trade Representative “must have sufficient authority to lead negotiations involving these issues in negotiations with foreign governments to preserve and expand export opportunities for U.S. manufacturers.” Second, he encouraged the council to consider that one of the goals of regulatory agencies should be to improve U.S. international competitiveness.

To read all of Nexon's testimony and the rest of his ideas, see Nexon.pdf. As the economy recovers, the U.S. device industry will need to know that the U.S. government is doing all it can to support it.

Sherrie Conroy
sherrie.conroy@cancom.com