As I reflect on the past year, the top buzzwords that come to mind are these: uncertainty, FDA restrictions, and threats to innovation. I don’t mean to be a downer, but these words have set the tone for 2010.

Heather Thompson

November 23, 2010

3 Min Read
2010: A Year in Review

On the uncertainty front, the main concern is a new healthcare system. In March, President Obama signed the healthcare reform bill into law. The Patient Protection and Affordable Care Act brought on a slew of questions and concerns about the excise device tax, which was instituted to help pay for healthcare reform measures. It will cost device makers $20 billion over the course of 10 years. How healthcare reform will change medical devices is unclear, but companies should start rethinking how to design, fund, gain approval for, and market their products.

Not everything was uncertain, though. In many ways, industry got more answers from FDA about what to expect for the future. For example, questions about 510(k) were addressed with FDA’s proposed reform recommendations. In August, the agency published a 120-page report to define which devices are appropriate for the 510(k) pathway and when those applications would require additional evidence of both safety and efficacy. These efforts to increase consistency and predictability should be applauded, but industry should also be concerned about the volume of changes proposed.

Of course, efforts to reform 510(k) were a direct result of criticism of CDRH (often by its own employees, who cited examples of corruption). Problems concerning the appropriateness of approving ReGen Biologics Menaflex through 510(k) are now on the way to being rectified.


FDA also released guidance on infusion pumps this year. And greater oversight of CT scanning, radiation levels, and defibrillators are next on the agency’s list. FDA’s romance with industry is on the rocks.

Given the uncertainties about healthcare policies, coupled with the certainty of ever more expensive and arduous regulatory pathways, what concerned many people in 2010 is the survival of U.S. innovation. Threats to homegrown innovation also include comparative effectiveness, postmarket trial requirements, and greater incentives to offshore R&D. It is clear that medtech companies can expect greater levels of scrutiny, which could easily dissuade them from pushing for new gold standards of medicine, and instead content themselves with incremental improvements. One could easily argue that industry has been heading this way for a long time, becoming increasingly risk-averse as firms consolidate and expectations for profit become more demanding.

So what to do? Well, there is no one answer. Regulatory pathways are evolving. Industry should resign itself to increased oversight, but also demand increased transparency and consistency from CDRH.

When it comes to funding, device manufacturers will have to get creative to entice venture capital and other funding. To do so, industry needs to put more—not less—into innovation. They should also be willing to experiment outside the traditional concepts of innovation.

For example, companies may find success by increasing customization for patients and for practitioners. Another option is introducing simpler versions of devices into emerging markets, such as rural China. Companies may also find that they can cater to patients willing and able to pay for a higher level of healthcare, regardless of coverage through insurance.

Although I really hate the term “a perfect storm,” in many ways, the description is apt. All of the challenges faced by industry are tied together, one informing and feeding off the other until we have a virtual tidal wave of change coming our way. We’d better be ready.

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