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Update on Pending Congressional Medtech Legislation


When Congress returns to session this September, it is expected to begin addressing a number of bills that directly affect the medtech industry. Legislation already introduced includes bills relating to medical device safety, transparency with regard to both physician relationships with medtech manufacturers and the pricing of devices, and consumer advertising.

Medical Device Safety Act of 2008 (HR 6381; S 3398)

Generally considered to be the pending legislation of greatest concern to medtech manufacturers is the Medical Device Safety Act of 2008, which, if it became law, would set aside the recent Supreme Court decision upholding the federal preemption clause contained in the Medical Device Amendments of 1976. The preemption clause stipulates that a state cannot enact device requirements that are different from the federal standards imposed by FDA. In the case of Riegel v. Medtronic Inc., the Supreme Court, in an 8–1 decision, ruled that FDA was the exclusive authorizing body for the market approval of medical devices, thereby preempting product liability lawsuits in state courts.

Scalia

In his majority opinion, Justice Antonin Scalia said that permitting state courts to impose liability on the manufacturer of an approved device "disrupts the federal scheme" which stipulates that FDA has the sole responsibility for evaluating the safety and efficacy of a new device. Justice Scalia wrote that state tort law, in effect, was an additional and different requirement from that authorized by FDA.

Opponents of the court's interpretation of the federal preemption clause assert that it limits the right of injured patients to sue medical device manufacturers and that corrective legislation is needed. The proposed Medical Device Safety Act explicitly preserves the right of medical product liability lawsuits to be adjudicated in state courts: "Nothing in this section shall be construed to modify or otherwise affect any action for damages or the liability of any person under the law of any State."

Pallone
Pallone: Reversing the Court.

The House bill was introduced on June 26, by representatives Frank Pallone (D–NJ), chairman of the House Energy and Commerce Subcommittee on Health, and Henry Waxman (D–CA), chairman of the House Oversight and Government Reform Committee. In introducing the bill, Pallone said, "Congress should pass this legislation to help protect patients from defective and dangerous medical devices. This bill reverses the [Supreme Court] decision that denied victims any legal recourse and gave medical device makers blanket immunity for the life of a product."

At the time the bill was introduced, Waxman sent a letter to FDA commissioner Andrew C. von Eschenbach, MD, requesting all agency records and correspondence relating to the preemption doctrine dating back to January 21, 2001.

On July 31, Senator Patrick Leahy (D–VT) introduced similar legislation in the Senate (S 3398) on behalf of Senator Edward M. Kennedy (D–MA) and himself. Leahey is chair of the Senate Judiciary Committee; Kennedy is chair of the Senate Health, Education, Labor and Pensions Committee.

Kennedy
Kennedy: Basic fairness.

Commenting through a spokesperson, Kennedy said, "The issue is a matter of basic fairness. Medical device companies should responsibly design and manufacture safe products and they should be held accountable when these products injure consumers. Congress never intended in the 1976 Act to protect manufacturers from liability for injuries caused by flawed devices. This bill rightly protects consumers and makes Congressional intent crystal clear."

The proposed legislation has the support of several public interest and consumer groups, including the Alliance for Justice (Washington, DC) and Public Citizen (Washington, DC).

Zieve
Zieve: Invaluable incentive.

"The possibility of being held liable for injuries their products cause creates an invaluable incentive for manufacturers to make their products as safe as they can, to revise labels as soon as they become aware that they are inadequate, and to remove unsafe products from the market," said Public Citizen lawyer Allison Zieve.

Both national medtech industry associations oppose the legislation.

Ubl
AdvaMed's Ubl: Needless delays.

"This bill will not improve patient safety but will result in needless delays in patient access to essential medical technologies, more lawsuits, and ultimately higher healthcare costs," said Stephen Ubl, president and CEO of AdvaMed (Washington, DC). "If enacted, this legislation would create a patchwork approach to medical device approvals where state courts would effectively review and regulate medical devices. It would likely result in a dizzying array of conflicting labeling and indications for use and ultimately may result in lifesaving, life-enhancing technologies simply not being available for patients. Congress provided express authority relative to FDA device approvals in 1976 because lawmakers recognized that a central, expert authority at the federal level would best serve the interests of public health and safety for all Americans."

Leahey
MDMA's Leahey: Congressional intent.

Mark Leahey, executive director of the Medical Device Manufacturers Association (MDMA; Washington, DC), said, "MDMA continues to believe that the FDA approval process, as intended by Congress, should determine the safety and effectiveness of medical devices. The Waxman-Pallone legislation would open up the regulatory process to multiple state entities, leading to inconsistent product indications and labeling. The legislation would also prohibit patient access to innovative and lifesaving medical technologies." In connection with the Riegel v. Medtronic Inc. case, MDMA filed an amicus curiae brief with the Supreme Court in support of preemption.

The preemption of lawsuits in state courts does not apply to 510(k) products, or to PMA products that have been adulterated or misbranded.

The House bill, currently with 67 cosponsors, has been referred to the House Committee on Energy and Commerce, where there has been no further action since the date of introduction.

The Senate bill currently has 13 cosponsors. Following introduction, it was referred to Senate committee, where it was read twice and subsequently referred to the Committee on Health, Education, Labor, and Pensions.

Transparency in Medical Device Pricing Act of 2007 (S 2221)

The Transparency in Medical Device Pricing Act of 2007 would amend Title XVIII (Medicare) of the Social Security Act to require manufacturers of implantable medical devices to report annually to the Secretary of Health and Human Services on sales prices and related data about such devices.

Specter
Specter: Show us your prices.

The pending legislation was cointroduced on October 23, 2007, by senators Charles Grassley (R–IA) and Arlen Specter (R–PA). If the bill becomes law, it would require medtech manufacturers seeking payment under Medicare and related programs to issue quarterly reports about the average and median sales prices for all of their implantable medical devices used in inpatient and outpatient procedures. Manufacturers that misrepresent or fail to report pricing data would be subject to fines up to $100,000.

In introducing the legislation, Grassley said, "Both parties to a transaction need information in order for the free market to properly work. If only one party has information, the market does not properly function because you have a one-sided negotiation. The purpose of this legislation is to bring transparency to medical device pricing so that there will be sufficient information available for market forces to truly work."

The bill would require that medical device pricing information be posted on a Web site maintained by the Department of Health and Human Services (HHS; Washington, DC). "By making important information available in a readily useable manner and in collaboration with similar initiatives in the private sector and nonfederal public sector, we can help control government spending on healthcare," said Specter. "This bill says that if you want to do business with the federal government, you have got to show us your prices."

AdvaMed (Washington, DC) said it was extremely concerned with the proposal, asserting that it would not assist patients, interferes with free-market negotiations between device makers and hospitals, and offers no discernible benefit in reducing healthcare costs. AdvaMed also noted that a study it commissioned and reported on earlier this year revealed that overall medical device prices grew at a slower rate than either the consumer price index (CPI) for medical services or the overall CPI during the study period. The study found that medical device prices have increased about 1.2% annually from 1989 through 2004, compared with 5% for the medical consumer price index and 2.8% for the CPI.

"Medical device prices, on average, have grown at less than half the rate of overall CPI and less than one-quarter the rate of other medical goods and services," said Stephen Ubl, AdvaMed's president and CEO.

Commenting on the proposed legislation, Mark Leahey, executive director of the Medical Device Manufacturers Association (Washington, DC), said, "Medical devices represent—at most—about 4–6% of healthcare costs. The proposed legislation no doubt has populist appeal, particularly in an election year, but if the concern is truly about healthcare costs, then we need to look at Medicare and private insurance funding."

Since its introduction on October 23, 2007, the bill has been read twice and referred to the Committee on Finance. There has been no other action reported.

Most industry analysts believe that this bill is dead in the water, since it has no other sponsors and there is no companion legislation in the House.

Physician Payments Sunshine Act of 2007 (S 2029; HR 5605)

This bill would amend Part A of Title XI of the Social Security Act to require quarterly transparency reports to the Secretary of Health and Human Services of payments to physicians or their employers by manufacturers of covered drugs, devices, or medical supplies under titles XVIII (Medicare), XIX (Medicaid), or XXI (State Children's Health Insurance Program [SCHIP]) of the Social Security Act.

The proposed legislation would require drug and device manufacturers with at least $100 million in annual revenue to disclose to the Secretary of Health and Human Services (HHS), on a quarterly basis, any gifts, payments, travel, honoraria, or other items valued at $25 or more, that are given to doctors. Companies would be required to disclose the amount or value of the gift or payment, the name of the receiving physician, the date and purpose of the activity, and what, if anything, was received in exchange.

The bill would also require the Department of Health and Human Services to make the information available to the public through a searchable Web site.

The Senate bill was introduced on September 6, 2007, by senators Charles Grassley (R–IA) and Herb Kohl (D–WI).

"This bill sheds light on these hidden payments and obscured interests through the best disinfectant of all: sunshine," said Grassley. "This is a short bill, and a simple one. And this bill has some teeth, too. If a company fails to report, the Physician Payments Sunshine Act imposes a penalty ranging from $10,000 to $100,000 for each violation."

The House bill was introduced by representatives Peter De Fazio (D–OR) and Pete Stark (D–CA) on March 14, 2008.

Stark
Stark: Changing behavior.

"Patients deserve to know if doctors are on the take," said Stark. "Gifts and payments change doctors' behavior. If they didn't, drug, device, and medical supply companies wouldn't bother. The Sunshine Act will help enable Medicare beneficiaries to determine if their doctors are acting in patients' best interests. It may even convince doctors to quit taking what can only be described as industry kickbacks."

Keenly aware of the popular perception that manufacturers and physicians seem to sometimes enjoy an all too cozy relationship, both AdvaMed and MDMA support the transparency aspects of the legislation. Concerns remain, however, and each organization is recommending changes to the legislation that would decrease the burden of manufacturer compliance and increase the level of context in which information regarding physician payments is reported.

White
White: Qualified support.

Christopher White, AdvaMed's executive vice president, general counsel, and secretary, said, "With some reasonable modifications to ensure a fair and level playing field for our companies, to provide clear, meaningful information to patients, and to preserve the relationships beneficial to patients and continued medical innovation, we believe our industry could support this legislation."

Both industry organizations are pleased with some revisions in the bill, which would override physician sunshine laws at the state level by establishing national rules and regulations for ensuring and facilitating uniform compliance.

The Senate bill currently has six sponsors. It was referred to Senate committee following its introduction and is undergoing review and analysis by the Committee on Finance.

The House bill has 18 cosponsors and is currently at the Subcommittee on Health.

Responsibility in Drug and Device Advertising Act of 2008 (HR 6151)

DeLauro
DeLauro: The rush to promote.

Introduced on May 22, 2008, by representatives Rosa L. DeLauro (D–CT), and Jo Ann Emerson (D–MO), this bill would immediately implement safeguards in direct-to-consumer advertising following FDA approval of a new drug or device.

"While we recognize the livesaving capabilities of new drugs and devices, the rush to promote new drugs and devices often occurs before there is any opportunity to examine potential public health and safety risks," said DeLauro. "This is about ensuring that physicians and patients have scientific evidence—collected from a larger population, rather than the small clinical trials—about the drugs and devices on the market. The FDA has important drug oversight responsibilities; and the push to promote new drugs and devices should not get in the way. Public relations should never trump public health."

The Responsibility in Drug and Device Advertising Act of 2008 would:

  • Establish a three-year moratorium on DTC ads with a possible waiver if the secretary of HHS agrees that the product is of affirmative value to public health.
  • Provide authority to require corrective materials to be distributed if the companies violate the advertising moratorium.
  • Include strong civil penalties that apply to the first and subsequent violations of the ad provisions or other requirements of the act.
  • Require DTC advertising to prominently display information about potential drug and device side effects.
  • Call for a public education campaign on the risks of certain drugs.
  • The bill has five cosponsors, but does not yet have companion legislation in the Senate. It was referred to House committee following introduction, and is currently with the House Committee on Energy and Commerce.

    For the latest information on Congressional legislation, go to either of these sites: GovTrack at www.govtrack.us/congress/; or Thomas Library of Congress, at http://thomas.loc.gov/home/bills_res.html.

    © 2008 Canon Communications LLC

    Return to MX: Issues Update.

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