FDA Reforms Are Rolling, so It's Time to Focus on Going Global

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An MD&DI  March 1998 Column

HIMA's chairman-elect suggests new issues the industry should tackle following the enactment of the FDA Modernization Act.

John W. Galiardo

Watching President Clinton sign the FDA Modernization Act of 1997 was a memorable experience. It was a rare privilege to be present at the White House when the stroke of a pen formalized the culmination of tremendous effort by so many dedicated people in our industry.

As a member of the delegation from HIMA, I stood in a crowd of onlookers that included members of other industry groups, officials from FDA and HHS, members of Congress, and Vice President Al Gore when the president gave his official endorsement to the legislation that will speed up product reviews and streamline the regulatory process and postmarket controls.

Hailed as a major legislative achievement in Congress and at the White House, the Modernization Act is the first major food and medical products reform legislation in 35 years. The president called it "critical legislation that will improve the regulation of food, medical products, and cosmetics and prepare the FDA for the 21st century." Those of us in the industry who breathed a deep sigh of relief upon its enactment couldn't agree more.

Working for passage of this vital piece of legislation was a demanding but rewarding experience. However, I believe the value of our efforts will become even more apparent when our nation's patients and physicians begin to see the benefits of the new law as they gain access to the latest and best medical technology more quickly than in the past. In the long run, that change is going to save many lives and improve countless others.

Our industry can be proud of this landmark, forward-looking legislation. With the completion of a nearly three-year, high-profile effort to enact these reforms, it might seem that the job is done, and it's time to rest easy. But rest at a time like this is only for those who want to be left behind. The world is moving on. While the president's signature on the bill defined an end to one effort, it opened the door to a number of other challenges and opportunities that the device industry would be foolish to neglect.

WORKING WITH FDA

Certainly we should enthusiastically embrace the opportunity to work with FDA as it begins the complex process of interpreting and implementing the new law. Having effectively advocated many FDA reforms incorporated into the new statute, the medical industry should continue to define and represent its interests and those of patients during the law's implementation phase. To cite a few examples, Congress gave the agency one year to mobilize the third-party review program and one year to define when devices under investigational device exemptions may be changed without agency approval. Many other areas also need our close attention, especially cases in which differing interpretations of the law may be possible.

In an equally important effort, the industry should engage in extensive discussions with FDA about administrative actions that may further streamline and improve the premarket and postmarket processes, which Congress has clearly said FDA must continue to do. Last year, CDRH established internal staff teams as part of a reengineering process to evaluate its regulatory and enforcement procedures and to make recommendations to improve their efficiency. To their credit, a number of people at FDA recognize the challenges facing the device industry and are trying to make the agency more responsive. On the other hand, many of the new legislative initiatives are open to interpretation, and we must be vigilant in our efforts to ensure that congressional intent is upheld.

IMPROVING PRODUCT CYCLES

Manufacturers should look for opportunities to work with FDA to fine-tune its policies, procedures, regulations, and processes that relate to product cycle time—the time from design and development of a product through its review and approval. According to the results of a 1997 HIMA survey of member companies, product cycle time is increasing even as product review times diminish. Respondents to the survey said that FDA has hindered the product development process by changing requirements and producing unclear guidance documents. The survey results showed an average product cycle of 6.3 years for a Class III device, 2.2 years for a Class II device, and less than a year for a Class I product.

Industry representatives and senior FDA officials are currently reviewing the early stages of design and development within the product development process. The device industry is helping reengineer the center by providing information to FDA officials about how the agency can help accelerate the total development of a product and not just its review time.

This initiative has special relevance to the smaller companies in the medical device industry, the source of many breakthrough products and much of its innovative thinking. Historically, the U.S. regulatory environment has been difficult for small companies, which have had to negotiate the same complicated maze of FDA requirements that the larger companies do but without the benefit of the well-resourced regulatory affairs staffs that large companies can afford. Safeguarding the industry's future means protecting the process of innovation, and that often translates into looking out for the special needs of creative small companies.

CHANGES IN THE MARKETPLACE

While the industry examines the roadblocks to innovation imposed by the regulatory process, it can't ignore the effects of a cost-conscious marketplace that is often hostile to reimbursing patients for new therapies and products. To cite just one challenge, massive changes in the $200-billion-a-year Medicare program, enacted as part of the Balanced Budget Act of 1997, raise significant questions regarding the future of innovation in the device industry. Manufacturers are concerned that current Medicare approaches could also dampen the payment process for certain FDA-approved clinical trials.

With the Medicare program in the midst of a major transition—and HCFA in the midst of a major reorganization—the goal should be to protect the process of technological innovation within the medical device industry by making certain that everyone understands the importance of technological development and is willing to invest in it. New bridges of understanding must be built by communicating with HCFA, managed-care organizations, and the general public. Manufacturers must intensify their efforts and continue to make a case for the role of technology in providing quality health care and in controlling costs.

The industry needs a decision-making process for Medicare reimbursement that is timely, fair, rational, and accountable to both patients and technology developers. Technological innovation must be valued by HCFA and reflected in its coverage as well as in payment policies and procedures.

While asking HCFA to meet its obligations to patients and purchasers, manufacturers must do the same by assuming the responsibility to document and verify the benefits of the new technologies that are introduced to the health-care marketplace. By embracing this responsibility, medical device manufacturers can demonstrate leadership as well as gain the continued trust and confidence of purchasers, providers, and the public.

To further protect innovation, the industry must help to ensure that there are raw materials available for its new products. After a number of suppliers stopped selling biomaterials to implant manufacturers because of product liability concerns, HIMA began working with other groups to persuade Congress to enact the proposed Biomaterials Access Assurance Act, which is under consideration on Capitol Hill. The effort has won considerable support in Washington, and there's a chance that by the time this appears in print, the legislation may already have been passed and signed by the president.

THINK GLOBALLY

Last but not least, the device industry must address the globalization of the medical technology marketplace. Innovation has revolutionized the way medicine is practiced in the United States, and it will continue to do so into the next millennium. The increased worldwide demand for U.S. medical technology is both a tribute to and a consequence of the medical miracles the device industry makes possible.

Although recent economic turmoil in Asia has created concern about the prospects for growth in that region, on a global scale, the industry has performed well in the past and expects to continue to do so despite some challenges.

One such challenge is a recent development that threatens to undermine Europe's CE marking system. The European Union Medical Devices Directive requires that by June 14, 1998, medical devices carry a CE mark, certifying that they meet pan-European essential requirements for safety, before they can be placed on the EU market. However, a number of French lawmakers have been seeking to establish an additional requirement for certain medical products that would create an additional barrier to the French market. HIMA is concerned about other governments likewise establishing additional standards for product approval and marketing.

Each international market poses its own unique and complex challenges in terms of trade barriers. FDA reform in the United States was just a warm-up for larger tasks, including those that affect the global marketplace, which is, after all, the future for U.S. manufacturers.

While the outlook is bright, it is not inscribed in stone. The industry will have to work hard to make the vision a reality. Such a task will require the continued involvement and dedication of those who believe that such a future is possible.

John W. Galiardo is chairman-elect of HIMA and vice chairman of the board and general counsel, Becton Dickinson and Co. (Franklin Lakes, NJ).

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