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Articles from 2001 In December


Shape-memory alloy constructed without nickel.

A titanium-based alloy is made without nickel to increase its manufacturability and reduce concerns about biocompatibility. The material, produced by Memry Corp. (Bethel, CT; 203/739-1100), offers elasticity in applications for which allergies prohibit the use of conventional shape-memory metals. It is also easy to weld and join, and it has a strain recovery of 3.5%. The material can be used for orthodontic devices, implantable surgical devices, and nonimplantable surgical devices. Because it is biocompatible and more elastic than regular titanium, it can be used to make orthopedic devices as well.

Biosynthetic Material Offers Versatility

Biosynthetic Material Offers Versatility

Absorbable biomaterial suitable for use in diverse applications. A biosynthetic material from Tepha Inc. (Cambridge, MA; 617/492-0505) offers a wide range of physical capabilities for various applications. It can be formed into myriad shapes using melt or solvent processes, it liquefies at temperatures of 50°–180°C, and it has a tensile strength of 20–90 MPa in its unoriented form. The polyester material offers flexibility, pliability, and absorbency, which render it useful for a number of medical device and tissue-engineering applications. These applications include use in surgical meshes, nerve guides, skin-substitute patches, heart valves, stents, grafts, internal fixation devices, bulking agents, and sutures.

Industry Snapshot

Originally Published MDDI December 2001

Industry Snapshot

This year's statistical glimpse at the medical device and diagnostics industry from manufacturing, regulatory, and business perspectives.

Compiled by the editors of Medical Device & Diagnostic Industry

One year ago, the suggested that the future “never looked brighter” for industry. But the events of September 11 and the weeks that followed created an unanticipated business environment. Despite a sense of uncertainty, a reassessment of priorities has been initiated in many sectors. As we present this year-end look at the industry, we must note that these data reflect its performance and expectations prior to that critical juncture in time.

Copyright ©2001 Medical Device & Diagnostic Industry

Adhesive designed for bonding metal.

A methacrylate adhesive provides a combination of high strength, fatigue endurance, impact resistance, and toughness. Developed for use on metal and other substrates, the MA820 two-part adhesive requires no primer and little or no surface preparation on most substrates. It takes the form of a low-odor, nonsagging gel with good tolerance to off-ratio mixing and offers a working time of 4–6 minutes. In 30–35 minutes, the gel achieves 75% of its ultimate strength. It cures with no surface tack. MA820, manufactured by ITW Plexus (Danvers, MA; 978/777-1100), can be used on stainless steel, aluminum, thermoplastics, and composites.

Salary Increases Continue despite Business Uncertainties

Gregg Nighswonger

Not sure what you're worth? Use our salary approximation worksheet to get an idea.

The medical device and in vitro diagnostics (IVD) industry is going through a period of significant change. The increasing prevalence of mergers and acquisitions are affecting job security and changing common business practices. The dramatic events that took place this autumn are also having an impact on various aspects of the industry—from the way products are shipped to the reassessment of key technologies.

Despite the current uncertainties, the results of MD&DI's 13th annual salary survey indicate that salaries of medical device and IVD industry professionals have increased nearly 4.9% compared with last year, and 64% of all respondents received bonuses in the 12 months prior to the survey.

A GLIMPSE AT THE AVERAGE MEDICAL DEVICE AND IVD PROFESSIONAL

Each year, the editors of MD&DI present a statistical portrait of compensation and benefits, responsibilities, and perspectives of the medical device and IVD industry. The annual salary survey is intended to represent the magazine's current readership based on a number of key factors, such as job segment.

This year, most respondents (89%) are employed by organizations that produce medical devices only, 6% work for manufacturers making only in vitro diagnostic products, and 5% are employed by companies that produce both. These figures are generally unchanged from the survey conducted in 2000.

The typical respondent to this year's salary survey is a white male who is 44.4 years old. He holds a bachelor's degree, usually works 48 hours a week, supervises 4.6 employees, earns $80,800 annually, and received a 7.0% salary increase with his last raise. He has worked for the same company for approximately 8 years and has been involved in the industry for nearly 12 years.

SALARY AND TOTAL COMPENSATION

Figure 1. Industry average salary for each region is shown in yellow, total compensation in black, and percent increase of last raise in white.

Total compensation includes both the salary and benefits an individual receives. This year, salaries made up 76% of the value of total compensation packages reported by survey respondents. The average salary level for 2001 of $80,800 represented a 4.9% increase over levels in 2000. Eighty-nine percent of all respondents indicated that their organizations offer annual salary reviews. The same number reported receiving raises from their employers, and the average increase was 7.0%. In the clear majority of cases—nearly 75% of all respondents—these increases were not the result of a promotion or change in job responsibilities.

Aside from salary, health, dental, and life insurance are the most common form of added compensation. A significant portion of employers, however, continues to include stock options, education benefits, and pension plans. This year, the average value of total compensation packages was found to be $106,000. Sixty-four percent of all respondents indicated that they had received bonuses in the past year. The typical bonus amounted to $10,800.

LOOKING NATIONWIDE

Figure 2. Levels of reported decision-making influence in the selection of supplies.

Figure 1 depicts compensation levels and salary increases among the major regions of the United States. The highest salary and total compensation levels were reported in the West, and the lowest averages were found in the South. The highest average salary increases (7.6%) were also found in the West; the lowest were in the Midwest (6.3%).

This year's survey again looked at the levels of decision-making influence reported by individuals in each job category. Figure 2 compares the level of influence among respondents nationwide. The results reflect responses from individuals who are actively involved in such decisions as well as those with limited or no involvement.

ASSESSING THE INFLUENCE OF MERGERS AND ACQUISITIONS ON FEELINGS OF JOB SECURITY

Figure 3. Involvement in a merger or acquisition.

Like other sectors of the U.S. economy in recent years, medical device manufacturers have been involved in an increasing number of mergers and acquisitions. This year, salary survey respondents were asked whether or not the organization they work for has been involved in such an action within the past year. As indicated in Figure 3, nearly 40% of all respondents indicated that their company had either been acquired by another firm or had been involved in a merger.

Respondents were also asked to indicate their feelings of job security this year, compared with one year ago—do they feel more secure now, less secure, or about the same? Figure 4 provides a graphical representation of the respondents' opinion of job security and compares responses of those who had been involved in either a merger or acquisition with those who had not. While nearly 15% of all respondents reported feeling less secure in their jobs this year, the figure increases to 22% for individuals who had been involved in a merger or acquisition.

JOB PROFILES

Figure 4. Involvement in a merger or acquisition within the previous year appears to influence feelings of job security among this year's survey respondents.

The following pages provide a more detailed profile for each of the seven job categories included in the survey. The categories include general and corporate management, marketing, product design engineering, production and manufacturing (including packaging and sterility assurance), quality assurance and quality control, regulatory and legal affairs, and research and development.

The profile for each job category includes median salary and total compensation, average raise and bonus, experience with mergers and acquisitions in the past year and indications of job security, average number of firms worked for, and job-seeking status. Salary averages are also provided in relation to gender, years in the industry, number of employees supervised, and company size by sales volume.

SURVEY METHODS

The data for this year's report were obtained from a mail survey designed jointly by MD&DI and Readex Research Inc. (Stillwater, MN) and conducted by Readex between June and August of this year. A total of 1375 surveys were mailed to medical device professionals. Of this number, 610 surveys were returned with usable responses, which provided a 44% response rate.

The survey results are based on the responses of 547 individuals who identified themselves as full-time professionals working for companies that manufacture medical devices or in vitro diagnostics. These responses were weighted during tabulation to reflect accurate population proportions representative of the 26,937 MD&DI recipients. In addition to being segmented according to the seven job functions outlined earlier, segments also reflected the respondents' level of responsibility as follows: CEOs and presidents, vice presidents and directors, department heads and supervisors, and engineers and scientists. The margin of error for percentages based on the 547 responses used is ±4.1% at the 95% confidence level.

SURVEY REPRINTS

The 13th Annual MD&DI Salary Survey is available as a bound reprint that contains a copy of this article, tabular breakdowns for the industry as a whole, and previously unpublished tabular breakdowns for the seven surveyed job functions.
Copies cost $60 each. For more information or to place an order, contact the Reprints Desk, Canon Communications llc, 11444 W. Olympic Blvd., Los Angeles, CA 90064; 310/445-4200, fax 310/445-4299.

Copyright ©2001 Medical Device & Diagnostic Industry

High-consistency elastomers available for a wide range of applications.

A family of versatile elastomers was designed for optimal performance. VersaSil3, produced by NuSil Technology (Carpinteria, CA; 805/684-8780), includes three base stocks, which, when vulcanized, produce tough, durable elastomers with nominal Shore-A durometers of 30, 50, and 70, respectively. The base stocks may also be blended to produce elastomers of intermediate durometer. VersaSil3 was developed for volume users who require maximum versatility. Its applications include extrusion, transfer and compression molding, and calendering. The elastomers' advantages include translucency, variable table life, wide processing parameters, high tear strength, low cure temperatures, and relatively low cost, among others.

FDA Takes a Closer Look at Advertising

Originally Published MDDI December 2001

WASHINGTON WRAP-UP

Although its purview is limited, FDA is paying more attention lately to device advertising that indicates a change in intended use. Manufacturers will be well advised to double-check with their reviewing division before claiming indications not specifically cleared, says the agency.

James G. Dickinson

Reprocessors Get More Time | Reprocessed SUDs Can Have OEM Marks | Feigal Accepts Dispute Panel Vote | Exemptions from MDR | Gliatech's FDA Action Plan

Most medical device advertising comes under the pur-view of the Federal Trade Commission, but increasingly the FDA is asserting its narrower jurisdiction.

According to Deborah Wolf, acting director of the Promotions and Advertising Policy staff at FDA's CDRH, most of the device advertising and promotion problems her office deals with involve a "change in intended use."

Wolf addressed this topic at a Food and Drug Law Institute marketing conference in Washington, DC, on October 17. She said that FDA identifies a change in intended use by reviewing labeling, advertising, oral and written statements, or circumstances surrounding the distribution of a journal article. Lately, she said, CDRH has been examining its interpretation of claims more closely. The center wants to provide more guidance to industry on what constitutes an intended-use claim and how comparative claims should be looked at. "It's an evolving area at the center," Wolf told the conference.

To illustrate, she discussed a recent untitled letter issued to a firm that had a microscope approved for detecting, counting, and classifying certain cells. The claims the company was making for the device were for diagnosis, staging, and prognosis of certain cancers, which was far more specific than the uses that had been cleared. In addition, the company had claimed that the microscope could be used with a number of assays that were not cited in the approval.

The main question that arose between the company and CDRH, Wolf said, was whether the clearance applied only to the limited number of assays cited or whether they were meant to be examples of a broader clearance. She stressed that when such issues arise during a premarket evaluation, companies need to make sure that the review division views a specific claim as an example of a broader use.

A CDRH guidance document was issued in 2000 on general- versus specific-use claims. As Wolf noted, however, it is a complicated matter and the guidance can be rather confusing. The document outlines what the center considers when determining whether a new specific indication is included as part of a device's earlier general claim for substantial equivalence purposes. It also addresses the addition of claims that could trigger the need for a PMA application. She emphasized that the guidance should not be viewed as a substitute for discussions with reviewers on the scope of claims.

Wolf also updated the conference on the center's recent decision to scrap its plans to allow device makers to include in their labeling and promotional materials language indicating that a device has 510(k) clearance. The decision seems to defy the spirit of an FDA Modernization Act provision that repealed a prohibition on such promotional language for devices covered by a PMA or an IDE. While the existing requirements appear to be inconsistent, Wolf said the Center had several reasons for making 510(k)-cleared devices a separate case.

Reprocessors Get More Time

CDRH director David Feigal says FDA will delay until August 14, 2002, the enforcement of certain postmarket requirements for hospital-based single-use device (SUD) reprocessors. In a letter dated September 25, 2001, Feigal told hospital administrators that the enforcement stay will affect requirements for medical device reporting, tracking, corrections and removals, quality systems, and labeling. Requirements for establishment registration and device listing remain unchanged.

FDA investigators will begin inspecting hospital SUD reprocessors "shortly" to verify compliance with all requirements, the letter continued. However, instead of taking traditional enforcement actions against hospital reprocessors for not complying with the stayed requirements, the agency intends to "educate" hospitals on complying with postmarket requirements.

"This policy will remain in effect until August 14, 2002, provided that the hospitals are taking steps to correct the violations noted during the inspections and that the violations do not pose a serious public health risk," Feigal wrote. He emphasized that this revised policy does not apply to third-party reprocessors.

He also stressed that FDA's previously announced policy of actively enforcing registration and device listing requirements for all hospital SUD reprocessors remains unchanged "and will be actively enforced by FDA immediately."

Feigal told the hospital administrators that no changes have been made to the previously announced requirement that they must submit to FDA a PMA or 510(k) application for any Class III or nonexempt Class II or Class I device that they reprocess.

Reprocessed SUDs Can Have OEM Marks

FDA has denied an Association of Disposable Device Manufacturers (ADDM) petition aimed at curbing reuse. The petition asked the agency to require reprocessors of single-use devices to remove original equipment manufacturer (OEM) trademarks from such devices. The ADDM immediately called the denial "legally indefensible."

ADDM filed its petition on March 22, citing strong concerns about the agency's recent decision on labeling requirements for SUD reprocessors. It argued that the current labeling rules are misleading and cause devices to be misbranded. The organization requested that FDA require the OEM trade name be removed from reprocessed SUDs and a series of disclaimers be added to the labeling to counter "misinformation" about the devices.

FDA flatly refused these requests in its denial letter, saying that while it agrees with the group's concerns that an OEM's name on a reprocessed device may render the content misleading, "any potentially misleading implications . . . can and should be remedied by the disclosure of additional information." FDA also said that OEM references on reprocessed devices do not constitute trademark and trade name infringement. In addition, the agency said, there is no rule prohibiting the addition of items to the labeling, only that certain information must be present.

The agency also rejected the organization's request that reprocessed device labeling be required to state that the OEM opposes reprocessing of the device. "An OEM's determination about the fitness of a reprocessor's device is not relevant if a reprocessed device meets [the agency's] safety and effectiveness requirements," FDA said.

ADDM issued a blistering response to FDA's letter in a press release dated September 25. It said that the agency's decision "ignores or avoids the majority of substantive legal issues presented in the ADDM petition, and mischaracterizes the remaining arguments set forth therein." ADDM asserted that, using the logic put forth by the agency's denial, any device manufacturer could imprint another manufacturer's name on its device without fear of misbranding "so long as additional information is provided."

The release criticized FDA for its policies on SUD reprocessing, saying "despite the clear language of the FDA [Modernization] Act, representations to Congress, and implications for patient safety, FDA will twist or bend the Act beyond recognition to avoid enforcing the law in a manner that might halt some reprocessing."

Feigal Accepts Dispute Panel Vote

CDRH director David Feigal has concurred with the vote of his center's first-ever Medical Devices Dispute Resolution Panel meeting, which unanimously recommended approval of a PMA application for Lifecore Biomedical Corp.'s postsurgical adhesion prevention product, Intergel.

In his "letter of concurrence" stating that the application is approvable, Feigal told the Chaska, MN–based company that labeling and the summary of safety and effectiveness need to be finalized before FDA grants final approval.

CDRH had ruled the PMA "not approvable" earlier this year. Shortly thereafter, Lifecore decided to place the product's fate in the hands of the untested dispute resolution panel, which had been established under the 1997 FDA Modernization Act especially to resolve scientific disputes between manufacturers and the agency.

Exemptions from MDR

FDA says device manufacturers can request an exemption from its medical device reporting (MDR) regulations if they want to avoid reporting subsequent adverse events for products undergoing remedial action, according to a September 26 guidance document.

Such exemptions may be granted when manufacturers provide information indicating that additional MDR reports will not provide any new data. Manufacturers that submit a remedial action exemption notification must have met certain criteria, such as filing an initial MDR report and completing a complaint investigation under the quality system regulation.

The guidance can be obtained by visiting CDRH's Web site at http://www.fda.gov/cdrh/osb/guidance/188.html.

Gliatech's FDA Action Plan

Gliatech (Cleveland, OH) has submitted a corrective action plan to FDA for the GMP-troubled facilities that manufacture its scar-inhibiting Adcon-L barrier gel. The plan includes a switch to new packaging for raw materials used for the product and new manufacturing inspection and testing procedures. This action is Gliatech's latest effort to get FDA permission to resume Adcon-L production.

The company's ongoing difficulties with FDA began in October 1999, when the agency issued an import alert on contract-manufactured Adcon-L following an inspection and issuance of a warning letter to its supplier, Medical Contract Manufacturing B.V., located in The Netherlands.

A subsequent inspection found the company's manufacturing of the product to be out of compliance with GMPs. Further difficulties arose when FDA questioned company data and the process used in presenting the data in a supplemental PMA application for the product.

In October 2000, Gliatech withdrew the supplement, but fallout over those data concerns had already prompted Guilford Pharmaceuticals to walk away from a planned merger with Gliatech.

FDA has indicated that the relaunch of Adcon-L is at least partly contingent on the results of an ongoing independent review of Gliatech's magnetic resonance imaging data from a U.S. clinical study.

Copyright ©2001 Medical Device & Diagnostic Industry

Fine wire is coated with PTFE.

California Fine Wire (CFW, Grover Beach, CA; 805/489-5144) coats very thin wire with PTFE for use in medical and other applications. Next-generation medical applications for PTFE-coated wire include catheters for inserting computer chips, probes, sensors, monitors, and remote devices into the body for treatment of brain or organ problems, according to the company. Because it is inert, PTFE does not react to chemical or biological agents. This characteristic renders PTFE-coated devices useful in invasive surgery because they are less prone to rejection by the human body than other devices. According to CFW, bone staples, wires, plates, and pacemaker wires can all be coated with PTFE.

Healthcare Flexes Its Muscle In A Flagging Economy

Originally Published MDDI December 2001

EDITOR'S PAGE

Healthcare Flexes Its Muscle In A Flagging Economy

Ten years ago, many feared an expansion of the healthcare sector of the economy. Now they are welcoming it.

Beginning on page 37 of this month's issue, we present our annual Industry Snapshot, one of the most popular features of the year. Our goal in these 11 pages is to give readers a concise but comprehensive overview of the medical device industry.

Statistics are all very well, of course, but they cannot adequately describe the overall state of the industry, particularly in comparison with the economy as a whole. As noted in the introduction to the Snapshot, these statistics are being presented in a highly uncertain time in the world economy, in the midst of a recession and an unprecedented war against terrorism.

As an industry, should we be worried? Probably not. As any regular reader of the financial press can attest, the healthcare sector is now widely seen as the main engine of growth in the U.S. economy. As noted in a November 11 article in the New York Times, this would once have been seen as a problem. Back in 1990, when healthcare spending accounted for 13% of the gross domestic product, few people outside of the industry wanted to see that number go any higher.

Despite predictions that healthcare's share of the GDP would reach 20% by the end of the decade, the number remained flat. This seeming success was gained in large part through the imposition of managed care. (Many in the medical device industry would argue that the increasing efficiencies of their technologies had something to do with containing costs as well, but this point of view is unfortunately rare among the pundits.)

At the start of the new century, predictions are that the healthcare share of the GDP will grow to 16% by 2010, and to more than 20% by 2040. Once, this possibility would have set off all kinds of alarms. Now, however, views about the dominance of healthcare in the economy are changing. Consumer products are fine, the argument goes, but if you had to choose, which would you rather have—a better computer, or better healthcare? If we spend more of our money on increased longevity, is it such a bad thing?

The spread of this new outlook may be one reason why the initial public offerings for two medical equipment makers last October were received so enthusiastically. Given Imaging, the maker of a "camera-in-a-pill" that travels through the intestines, and TheraSense, manufacturer of blood glucose monitoring devices, were the first IPOs to come to market in seven weeks, the longest period without one since 1976. More medical IPOs are on the way. According to one estimate in October, of 55 companies preparing for IPOs, 35 were related to healthcare.

These trends are good news for manufacturers of medical technology. But the industry must be careful not to repeat the mistakes of the dot-com era, when many weak business ventures were wildly overvalued in the general enthusiasm for the technology. To avoid a backlash, the healthcare sector must continue to focus on profitability, not just promising technologies.

The Editors

Copyright ©2001 Medical Device & Diagnostic Industry

Bone-bonding material receives CE mark.

Bone-bonding material receives CE mark. A high-strength material designed to aid in the treatment of patients with osteoporotic fractures has earned European regulatory approval. Cortoss, a product of Orthovita (Malvern, PA; 610/640-1775), mimics the strength and flexibility of human cortical bone. The synthetic bone material is suited for the fixture of bone screws that have difficulty maintaining stability in weak bone. Cortical bone is often surgically repaired using wires, hooks, metal plates, and screws, which help align the bone and keep it anchored. When bone strength is impaired—as is the case in osteoarthritic-fracture patients—the screws and hardware normally used in treatment may be unable to remain in place in the bone. Traditionally in such cases, a larger screw or longer device is used to replace a loose screw. Cortoss was developed to help bone screws maintain stability in osteoporotic bone, with the goal of helping patients heal faster and avoid repeated surgery.