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What Will Keep Medtech up at Night in 2019?

We’ve offered a few predictions on what medtech developments could unfold this year. But what about the concerns that could preoccupy medtech professionals?

  • During the MD&M West 2019 panel discussion “What's In Store for Medtech in 2019?MD+DI news editor Amanda Pedersen asked the panelists, “What one issue will keep medical device executives and manufacturers up at night in 2019?” Here we recap their answers to this question as well as share other key points made during the discussion.

    Panelists included Mike Devereux, partner and director of manufacturing, distribution, and plastics industry services, Mueller Prost; Yarmela Pavlovic, partner, Hogan Lovells; Bryan O'Byrne, chief of international affairs and trade policy, U.S. Small Business Administration; and Vicki Barbur, senior director, IP and technology commercialization, commercial business, Battelle.

    [Image source: PIXABAY]

  • “The New Tax Law”

    “The new tax law has so much information in it,” said Mike Devereux, partner and director of manufacturing, distribution, and plastics industry services, Mueller Prost. “They’ve issued all sorts of guidance—some of which just came out in the last couple of weeks. So getting your arms around that and understanding how it’s going to impact your tax liability and ultimately cash flow would certainly keep me up at night.”

    Devereux pointed to benefits such as an enhanced R&D tax credit, a new enhanced flow-through deduction equal to 20%, bonus depreciation on some assets, and methods of accounting for companies with gross receipts less than $25 million.

    “Manufacturers were really the winners as a result of tax reform,” he said.

    There are some detrimental aspects, he said, pointing to amortization of research expenses and to parking no longer being deductible.

    [Image source PIXABAY]

  • “Cybersecurity”

    “Depending on the particular segment, cybersecurity is a really critical issue for the medtech industry,” said Yarmela Pavlovic, partner, Hogan Lovells. “I see companies at varying stages of adoption in cybersecurity policies, and for very young companies coming more from the tech industry, cybersecurity feels like a much more natural fit. . . But then there are a lot of companies grappling with legacy products and trying to implement cybersecurity controls based on more modern technology for products where those concerns were not part of the original design and development.”

    [Image source PIXABAY]

  • “Continued Reimbursement Challenges”

    “For some technologies . . . reimbursement or the business model is very straightforward,” said Pavlovic. “And for others, there are rapidly evolving reimbursement models that make it challenging for companies to figure out where [they] fit and [to] look ahead five years from now to what the business model is going to look like. ”

    [Image source PIXABAY]

  • “Constantly Changing Trade Policy”

    “As you know, we have an administration that is quite activist in trade policy,” said Bryan O'Byrne, chief of international affairs and trade policy, U.S. Small Business Administration. “There’s also a rethinking of trade policy and as a result there’s also a lot of friction, which you’ve probably heard about on the news. However, there’s also quite a bit of good news out there, especially for the medical device sector.”

    O'Byrne later told the audience that “U.S. medical firms export approximately $45 billion each year, and 95% of these firms are small businesses. Congress realized that small businesses are not well represented in Washington, and they are even less represented in trade negotiations. By statute [Congress] requires that SBA participate in trade negotiations and advocate for you, the small businesses.”

    O’Byrne said that small businesses face three big problems overseas:

    • The uniform application of foreign regulations.
    • Regulations that are poorly constructed and in many countries often based on pharmaceutical regulations.
    • Opaque reimbursement procedures.

    “Medical device firms are dealing in this really complex international market, with multiple foreign regulators regulating in very different ways. In our trade negotiations, we are trying to make sure that those regulations are compatible as best as possible. Because we are now involved in these negotiations, we are looking out for your interest to make sure small business interests in these negotiations—especially [medtech], what I call the vanguard, you people here today—need to be advanced and protected,” he told the audience.

    O’Byrne also highlighted that in “the new NAFTA or the USMCA, there are four chapters that deal with medical devices quite directly—chapters 11, 12, 28, 29—and there are significant benefits for U.S. small businesses like yours.”

    He also noted that the "Comprehensive and Progressive Trans-Pacific Partnership Agreement with 11 countries is quite aligned with what’s in those four ‘NAFTA’ chapters.” He added that as a result “there are a number of countries in the Pacific that have a trade regime related to medical devices that is fully aligned with U.S. FDA [practices]. And that is really good news.”

    Highlights of the USMCA include a single audit program, classifying medical devices by risk, and transparency in reimbursement.

    [Image source PIXABAY]

  • “The Fast Pace at which Technology is Changing”

    In terms of concerns that could keep medtech professionals up at night, Vicki Barbur, senior director, IP and technology commercialization, commercial business, Battelle, pointed to “keeping up with technological change and staying abreast of it and being leading edge.” She noted such trends as miniaturization and capturing information in the cloud for future analysis.

    She also urges caution. “Do we have really the time and the diligence to do the research to make sure that these products are safe?” she asked. “I’m sure that that’s what we’re all concerned about. Any company CTO or president will be concerned about liability and obviously about having these products approved by FDA because they definitely need the rigor, [based on] scientific discovery, resilience, and repeatability.”

    Later during in a discussion on technology Pavlovic and Barbur touched upon some examples that could foster healthcare innovation.

    “For the last 10 years . . . we’ve been talking about big data . . . but not necessarily knowing how we’d make use of it,” noted Pavlovic. “But we are finally now getting to the point where we see actual medical solutions come out of big data repositories.” She pointed to image analysis tools that can speed up work flow for radiologists and to data analysis of electronic health records to predict which patients could develop sepsis. She also noted the development of miniaturized digital heath tools that can collect data that can be used with AI-based algorithms.

    Added Barbur: “The ability to extract information through sensors of one kind or another, collect, and then be able to interrogate it are actually accelerating capabilities in the medical space tremendously. However I think that any of us in the R&D area will understand that most of these models are actually probability models and they don’t necessarily tell you the truth. So that’s the caution I would like to [highlight] here—that as much as technologies can help us to deliver data-driven decisions, they shouldn’t be used in the absence of the information that a medical professional brings to the table. That’s the caution as well as we go forward—how do we balance the new capabilities with . . . conservative approaches?”

    Barbur also mentioned voice-enabled technology. “Voice-enabled devices, whether they are in the home or in the ER or where ever they may be, that will be the tech of the future.”

    [Image source PIXABAY]

  • “Regulations”

    “On the EU side of things we have the coming . . . Medical Device Regulations and IVD Regulations. Although these won’t go into effect until 2020 . . . in our experience we are already seeing notified bodies switch to a new paradigm,” said Pavlovic. “One impact it is having is that because it places a greater burden on notified bodies . . . we are seeing a reduction in the number of notified bodies. And then you throw into this Brexit—and increasingly it looks like a hard Brexit—so there are a lot of changes on the EU side of things.”

    Pavlovic added later that “one of the big challenges . . . is that a number of notified bodies are headquartered in the UK, making for a very interesting question about whether those CE marks would be recognized in the EU after Brexit. The biggest of these notified bodies is BSI. My understanding is that BSI did obtain a license in the Netherlands. . . . But I would say that any of you who use a notified body headquartered in the UK, if you haven’t already been engaging in discussions with them about what plan B is, I would do that immediately. . . . Even if your notified body is BSI, I would make sure you are in a position to have an enduring CE mark post Brexit.”

    “In the United States . . . there are an enormous number of changes happening,” added Pavlovic. “On the digital health side, FDA is actively trying to develop a precertification program for digital health companies, where we would shift the focus of regulation to the companies and the processes and procedures they use for development of products and . . . de-emphasize individual product reviews. So there would still be individual product reviews, but it would be more streamlined. That program is still very much in development—they have only just now begun piloting it with 9 pilot participants and are planning to continue to gather more information over the coming year. The jury is still out on whether it will truly bring significant benefit to the industry. I think it will probably be a rebalancing of burden, providing for more opportunity for faster iteration of products without FDA involvement but carrying some significant new burdens or costs for companies in terms of sharing postmarket information back to the agency.”

    There are also efforts to “modernize the 510(k) program,” she said. 

    It’s a “challenge for companies to keep abreast of changes,” she said.

  • “Pressure from Outside the Industry”

    “FDA has been getting an enormous amount of pressure from outside the agency from various sectors,” added Pavlovic, pointing to journalists’ efforts to describe problems with medical devices and to the documentary The Bleeding Edge.

    FDA has been under “an enormous amount of pressure to show they are willing to make some modernization efforts for the 510(k) program,” she added.

    [Image source PIXABAY]

  • “Patients”

    “Patients are becoming much more involved in their own care,” said Barbur. “We all want to know what’s happening, and we want to make decisions for ourselves. So, how do you involve the patient more in terms of moderating their care in the future?”

    [Image source PIXABAY]

  • “Physicians”

    “A significant focus in 2019 for medtech should actually be on the physician’s voice. We’ve been talking about the brave new world of data collection and analysis . . . workflow tools, etc., but with that comes an enormous amount of burden and additional learning for physicians,” Pavlovic said. “Keep in mind the perspective of the physician who must deal with all these new data points and have something to do with them that will be meaningful for the patient and actually help to move the needle forward in terms of their care while working in 10-15-minute increments.

    “To the extent that we can ease that burden while also offering them real solutions to help their patients we’ll have a meaningful path forward. But without that we’ll continue to see increased resistance from the medical community in terms of adoption,” she added.

    [Image source PIXABAY]

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