Device Companies Explore the Competitive Advantages Of Regulation

Medical Device & Diagnostic Industry Magazine
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An MD&DI November 1997 Column

In the long run, competitive challenges, whatever form they take, are good for all concerned.

Ever since the passage of the 1976 amendments to the Federal Food, Drug, and Cosmetics Act, medical device companies have had conflicting feelings about FDA regulations. On the one hand, they've hated the delays, excess paperwork, bureaucratic bungling, and other symptoms of imperfectly conceived and implemented rules. On the other hand, they've been quick to use these rules when dealing with competitors. Ironically, as the regulatory environment improves, device companies are likely to look increasingly to the regulatory system for competitive ammunition.

One example of this phenomenon is discussed in this issue's News & Analysis section. On page 20, MD&DI staff editor Daphne Allen writes about the unusually large number of citizen petitions filed with FDA this year by manufacturers or their representatives against other manufacturers. The purpose of these petitions, generally, is to urge FDA to reconsider a product approval given to a competitor. Even though FDA has never done so in response, such petitions can still be effective tools for diverting and delaying the competition.

Is there anything wrong with such a use of regulations? Probably not. In the long run, competitive challenges, whatever form they take, are good for all concerned.

This is not to say that ill effects might not be felt. The industry as a whole has generally fought hard against regulatory creep--the tendency for regulations to expand to cover more and more types of products and companies. But now that the tendency to regulate is receding rather than expanding, some device manufacturers may find themselves in the strange position of regretting the improvement. After all, a company that has worked hard to overcome regulatory hurdles and establish a strong position in a market might resent a new competitor breezing in with half of those hurdles removed. If the established company can find a legitimate way to restore a few of them for the newcomer, why not?

A broader example of this tendency is represented by another citizen petition filed with FDA on September 5, 1997, by the Health Industry Manufacturers Association. In that petition (available at http://www.himanet.com), HIMA requests that commercial reprocessors of medical devices, now exempt from FDA oversight, be required "to comply with all applicable FDA regulations governing medical device manufacturing."

As in the case of other petitions, there are certainly valid issues of public health and safety involved here. But HIMA's member companies clearly know a useful competitive tool when they see one.

The ironic effect of this use of petitions is to create more regulation rather than less and to increase the workload that FDA has been working hard to trim. The overall impact, so far, is minor, but it is curious nonetheless to see manufacturers actually trying, intentionally or not, to increase regulation.

This may not be bad. Indeed, it may signal an awareness that some level of regulation is in fact good for industry and in the end a boon to competition.

POINT COUNTERPOINT

Reprocessing of medical devices labeled for single-use only will be the topic of a November 7 meeting in Dallas sponsored by the Association for the Advancement of Medical Instrumentation. A point-counterpoint presentation is scheduled with representatives from HIMA and a newly formed group, the Association of Medical Device Reprocessors. MD&DI will cover the meeting and provide more news about the new association in coming issues. For more on the meeting, call AAMI at 703/525-4890. For information on the Association of Medical Device Reprocessors, call executive administrator Heather Hopkins at 202/667-0901.

John Bethune

[email protected]

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