Originally Published MDDI August 2002

WASHINGTON WRAP-UP

CDRH director also discusses budget woes, user fees at AdvaMed forum.

James G. Dickinson

Device User Fees Soar, Fade | Abbott Fires Quintiles, Pays Feds $112 Million | Medtronic Hits FDA on Document Release | Help Sought on 501(k) Template

The U.S. medical device industry deserves high marks for its "innovation," "rapid growth," and "vibrancy," but needs to give serious attention to raising its design and manufacturing standards to match international competition.

That diagnosis was given in June by CDRH director David Feigal. He was speaking at the twelfth annual Device Submissions Workshop, which was sponsored by AdvaMed, in Rockville, MD.

Although the positive balance of trade that the U.S. medical device industry enjoys is testament to the quality of many American-made devices, Feigal told the meeting participants that the quality of some devices is lacking.

"The biggest complaint about American medical devices I have heard from foreign users—particularly from South America—is lack of quality," he said. He attributed this in part to the statutory language in Sec. 510(k) of the FD&C Act that says certain new devices reaching the market must merely establish their "substantial equivalence" to devices manufactured before 1976.

As he has in other recent forums, Feigal also outlined the budgetary difficulties currently facing CDRH: "The budget actually shrank during the Clinton years, in real terms, because of the need to absorb mandated personnel pay increases." Despite modest increases in the Bush administration's proposal for next fiscal year, the CDRH budget remains essentially "flat," since any increase will also go toward increased pay for staff.

Although Feigal declined to say if CDRH or FDA favors user fees to compensate for budgetary shortfalls (similar to those authorized under the Prescription Drug User Fee Act), he nevertheless stipulated several "guiding principles" if user fees become a legislative reality. These include administrative simplicity, contribution to improvement to the whole product life cycle, and consideration of current budgetary shortfalls. Finally, he said user fees should serve as groundwork for the future of both the agency and the industry.

Device User Fees Soar, Fade

In the waning hours before the floor vote in Congress on the bioterrorism bill at the end of May, FDA and AdvaMed reached a crucial but ill-fated agreement on user fees for medical device reviews.

For a week, it seemed the agency and AdvaMed would succeed in attaching device user-fee authorizing language to the prescription drug user-fee reauthorization, which was appended to the terrorism legislation—but it was not to be. Criticism from the Medical Device Manufacturers Association that user fees would disadvantage smaller companies produced hesitation among congressional backers of the fast-moving bill. Device user-fee authorization was subsequently removed, for later consideration.

The device measure became publicly visible on May 20, when the AdvaMed board approved what it called the Medical Technology Enhancement Act, intended to pump about $225 million in user fees and increased appropriations into CDRH's review operations over a five-year period. In a statement, AdvaMed said that the user-fee agreement would pour an additional $40 million into device review activities in the first year ($25 million from user fees and $15 million from an increase in appropriations). It also would establish performance goals for review decisions and review cycles.

Under the proposed agreement, initial PMA applications would be charged $125,000 and PMA supplements, $25,000. In addition, 510(k)s would require a $2500 fee and real-time PMA supplement reviews a $10,000 fee. Key details of the proposed agreement included:

Under the agreement, CDRH would be required to reach a decision on 50% of all PMA applications within 180 days by year five (current performance is 208 days). The center would also provide a 30-day processing goal on responses to 90% of CDRH-issued approvable letters.

For 510(k)s, the agreement seeks a 30% improvement by year five in issuing "substantially equivalent" or "not substantially equivalent" decisions, from the current 125 days to 90 days for 80% of submissions. Firms using a third-party reviewer would be granted an exemption.

The program would also apply to CDRH-reviewed biologic licensing applications (BLAs). By year five, 90% of BLAs and BLA efficacy supplements would be acted on in 10 months. In addition, 90% of BLA manufacturing supplements would be reviewed and acted upon in four months.

In a statement, AdvaMed said user fees are necessary to help FDA with its scarce resources and lack of expertise in reviewing new medical technologies: "While the pharmaceutical and biologic review budgets have grown and review times fallen through user fees for these products, CDRH has lagged behind," AdvaMed president Pam Bailey was quoted as saying. "In fact, CDRH's actual budget has remained essentially flat over the last 10 years, and staffing levels have fallen by 10%." Moreover, with the 30% increase in the number of medical device patents and the doubling of investment in R&D by the industry, she added, the volume of work facing the agency is "expected to continue to grow substantially."

Although the group had been publicly opposed to user fees and sought device reforms under Congressman Jim Greenwood's (R–PA) Medical Device Amendments bill, Bailey said AdvaMed had been urged by senior lawmakers and Bush administration officials to explore device user fees. In response, "AdvaMed brought together a negotiating team that included representatives from a broad spectrum of member companies—including small start-ups—and quickly engaged leaders at HHS, FDA, and Congress to ensure that any user-fee proposal reflects our diverse and innovative industry," she told AdvaMed members.

Abbott Fires Quintiles, Pays Feds $112 Million

Abbott Diagnostics's ongoing manufacturing quality problems at the company's Lake County, IL, facility brought a $112 million profit "disgorgement" penalty in May. The payment resulted from Abbott's 1999 federal court consent decree with FDA. Including this sum, Abbott Diagnostics took a second-quarter charge of $140 million, the remainder being for inventory write-off and minor restructuring.

Abbott also announced a personnel shake-up at the Lake County facility and consequently ended its arrangement with Quintiles Consulting. Abbott had hired Quintiles to help bring the facility into compliance with FDA regulations; Quintiles had, in fact, certified Abbott to be in compliance before FDA investigators found otherwise.

A company news release said that senior vice president for Abbott's diagnostic operations Thomas Brown and vice president for diagnostic quality assurance, regulatory affairs, and compliance Marcia Thomas both would retire. The company announcement said the retirements had been planned for some time and were not associated with the ongoing FDA compliance problems. The retirements did free Abbott to turn to new leadership, however, as it continues to strive to comply with agency quality standards. The company was said to be searching for a permanent successor to Brown to run diagnostics and had shuffled some other executives into key roles during that search. The top executives were reporting directly to Abbott Medical Products Group president and chief operating officer Rick Gonzalez.

While declining to go into specifics about the work Quintiles Consulting did for Abbott Diagnostics, a Quintiles spokesperson said that both companies continued to have a high regard for each other. "Abbott's decision to use another consulting firm in no way reflects negatively on the performance of our company," the spokesperson said. "We maintain a positive relationship with Abbott."

Abbott Laboratories CEO Miles White said the problems with FDA were related to differences in interpretation between the agency and the company over what constitutes compliance, and said the company plans to stop debating with FDA and will simply do what needs to be done.

Abbott wasn't disappointed in the quality and caliber of Quintiles and other external staff working at Lake County, White added. But he believes it is important to retain a third-party company that can "properly interpret the work that has been done, and FDA's and our responses, and audit the current status. We need a consultant who is recognized by FDA as credible. We also need more direct communication between the third party and FDA. There has been a lot of direct communication between Abbott and FDA, but it's going to be important for the third party to communicate with FDA to the extent that the agency will accommodate that."

White said he didn't think there was much more advice available that hadn't been heard already. "We simply need to understand the agency's perspective and then act on it," he explained. He told analysts that FDA in recent months seemed to have raised the bar and had "put its focus on a high degree of quality and compliance and safety in practically everything they're doing." It is up to companies like Abbott to meet those requirements rather than debate them, he added.

"There can be different interpretations of good manufacturing practices and quality systems review," White declared. "And we've had a fair amount of debate with the agency about that."

White also said he had had some personal conversations with FDA acting commissioner Lester Crawford to make sure that personality problems weren't affecting the ongoing attempts to resolve the Lake County situation. He said Crawford assured him that while company representatives had been aggressive in pushing their points of view, there had been no unprofessional or offensive conduct.

Medtronic Hits FDA on Document Release

"Please—no surprises!" That was the message delivered to FDA from medical device industry representatives at a session on a draft FDA guidance. The guidance specifies how and what information can be released to the public from FDA advisory committees.

Speaking at AdvaMed's twelfth annual Device Submissions Workshop, Medtronic Inc. (Minneapolis) senior legal counsel Robert Klepinski took FDA severely to task for the "surprise"—and even "coerced"—release of sensitive information from agency advisory committees, and for "going outside the statute" that governs the selection of advisory committee members.

In addition to the so-called surprise release of information, Klepinski said that in the past, the composition of some advisory committees has been unnecessarily contentious, and perhaps even illegal. He pointed out that the Federal Advisory Committee Act is quite specific with regard to the makeup of committees.

He noted that FDA—legitimately and in conformance with the act—includes a consumer representative on advisory committees. But he objected that the consumer representative is often "supplemented by a patient representative."

"Nothing in the act says we can have a patient representative," he said. "A patient representative may be logical—even useful—but we should have a discussion and come to some agreement concerning what and who a patient representative really is."

Klepinski also objected to the frequent inclusion of a bioethicist on advisory committees. "On an evenly divided panel, bioethicists might cast a deciding vote on an other-than-statutory basis," Klepinski said. He claimed that bioethicists have sometimes argued the merits of a particular position on the basis of what they consider a "cost to society," or other considerations that may fall within the purview of ethics but which are not appropriate within the scientific or technical charter of advisory committees.

Klepinski said that there may be good reason to include a bioethicist on an advisory panel, but a discussion on the issue (and the conditions under which such a member would be appropriate) is needed.

Help Sought on 501(k) Template

FDA has issued a call to medical device manufacturers to cooperate with CDRH in developing a template for preparing abbreviated 510(k) summary reports for certain types of devices. The invitation was announced in June by CDRH director of premarket notifications Heather Rosecrans, speaking to attendees at AdvaMed's twelfth annual Device Submissions Workshop, in Rockville, MD.

Rosecrans explained that the invitation to work interactively with FDA staff is limited to preparing a report format for devices covered by Class II special controls guidance documents, which have been issued by FDA and which outline the agency's recommendations for abbreviated 510(k)s. These include indwelling blood gas analyzers, ingestible telemetric gastrointestinal-capsule imaging systems, automated differential-cell counters for immature or abnormal blood cells, hip-joint metal/polymer constrained cemented or uncemented prostheses, and endolymphatic shunt tubes with valves.

Addressing device manufacturers, Rosecrans said that by participating in the project, companies can provide input on the format for their generic type of device. "Moreover," she said, "by working with us, you can increase the likelihood that the summary report template resulting from our efforts will be most useful to you—and you may very well reduce the preparation time required for your own future abbreviated 510(k) submissions."

Rosecrans also said program participants will help ensure that FDA is able to identify the most appropriate methods of addressing risks associated with medical devices. In addition to benefiting from industry's technical experience, Rosecrans said, the agency should be able to reduce the review time for summary reports when templates are developed and disseminated among submitters and reviewers.

Abbreviated 510(k)s continue to attract little industry interest. Although they have been available to manufacturers for the past five years, FDA has been surprised—and frankly, disappointed—that more manufacturers have not taken advantage of this simplified approval mechanism. According to CDRH Office of Science and Technology director Donald Marlowe, a survey of 169 510(k) applications to FDA revealed that only about 2% were submitted in the abbreviated format, although half or more of the applicants might have qualified. "I am an unabashed cheerleader for the use of consensus standards," he said. "They represent a powerful resource for leveraging our knowledge of risk management as applied to medical devices."

Ann Hawthorne, guidance development officer with the Office of Device Evaluation, is the FDA liaison for manufacturers wishing to participate in the interactive template project. She may be contacted by telephone at 301/594-1190, or by e-mail at [email protected].

Copyright ©2002 Medical Device & Diagnostic Industry