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Articles from 2012 In March

Weekly Vitals: Medical Device Tax and Healthcare Reform Cause Tensions to Run High

The medical device tax has been the subject of heated controversy since it was signed into law as part of Obama's proposed healthcare reform two years ago. Tensions ran especially high and opinions were spouted freely for both sides this week, however, as the Supreme Court heard arguments regarding the constitutionality of the hotly contested Affordable Care Act. Read the various views and reports on the medical device tax and healthcare reform in our roundup from around the Web below.

The X Prize Foundation: Redefining What Is Possible in Life Sciences

The X Prize Foundation: Redefining What Is Possible in Life Sciences

X PrizeThe founder of the X PRIZE Foundation, Peter H. Diamandis, MD, came up with the idea for the X PRIZE competition after reading the account of Charles Lindbergh’s flight across the Atlantic for a $25,000 prize. Lindbergh’s transatlantic flight was not only meaningful in itself, but it greatly helped to popularize aviation.

Diamandis sought to take the same basic principle behind the Orteig Prize, which inspired Lindbergh to cross the Atlantic, and bring it into a contemporary context. Diamandis's X PRIZE Foundation accelerates innovation and entrepreneurship by promoting “radical breakthroughs for the benefit of humanity” through large cash awards. The point of the prizes is to not simply choose a winner but to help create paradigm shifts around technology.

The first of many X PRIZE competitions organized by the Foundation was the $10 million Ansari X PRIZE for private spaceflight, which was awarded in 2004 after a suborbital air-launched spacecraft successfully broke the 100-km barrier. Twenty-six teams spent a collective $100 million chasing the prize. In the end, Mojave Aerospace Ventures, led by Burt Rutan and backed by Paul Allen, won the prize with their spacecraft, SpaceShipOne. Following that, Sir Richard BransonJeff Bezos, and others began working to establish a personal spaceflight industry

The X PRIZE Foundation's Involvement in Life Sciences

At present, there are three active X PRIZE competitions, the $10 million Archon Genomics X PRIZE presented by Medco to define a “medical grade genome”; the $10 million Qualcomm Tricorder X PRIZE, inspired by technology from Star Trek, is fueling the development of a portable, wireless device that monitor and diagnose health conditions; and the $30 million Google Lunar X PRIZE incentivizing private exploration of the lunar surface. A number of other life science prizes are under development.

Eileen Bartholomew
Eileen Bartholomew

To gain some perspective on the X PRIZE Foundation’s work in the life sciences arena, UBM Canon’s editor-at-large Brian Buntz spoke with Eileen Bartholomew, Vice President of Prize Development, at the X PRIZE Foundation. Bartholomew previously worked across the life sciences and healthcare industry, helping identify and launch a range of medical products, from blockbuster drugs to niche medical devices.

At the X PRIZE Foundation, she develops prizes to foster breakthroughs in a wide range of areas including not just life sciences, but also energy and environment, education and global development, as well as oceanic and space exploration. In the life sciences arena, awards like the Archon Genomics X PRIZE and the Qualcomm Tricorder X PRIZE have the potential to fundamentally change the medical landscape by fostering the development of technology that was previously unthinkable. 

MD+DI: It seems that the field of medical technology, despite continuous breakthroughs, is slower to evolve than, say, the consumer electronics industry. The way most people basically interact with their physician in a doctor’s visit has remained largely unchanged for a very long time. 

How do you see medicine being practiced once there is a medical-grade genome and tricorder-like devices on the market that will enable people to diagnose themselves?  

 X PRIZE Visioneering team comes up with the ideas for new prizes in sessions like this one. (Image shared by X PRIZE on twitter). 

Bartholomew: There are still a lot of unknowns in medicine and in healthcare, and many would argue that medicine itself is still somewhat of an art as much as it is a science. In many cases, we’re making decisions about information that is, at best, somewhat knowledgeable and, at worst, sometimes even a guess. I think everyone has unlimited number of examples or experiences where diagnoses have failed or the healthcare systems themselves have struggled to meet the needs of a consumer or a patient. But overall we see in the field of medicine a trend towards evolving from intuitive-based diagnosis and care to precision diagnosis and care.

Looking at the history of disease, thinking of something like tuberculosis, that was a disease at one point in time that was thought to be and actually called "sheep shearer’s disease." Physicians thought it actually was transmitted from sheep because a lot of individuals who worked in that industry ended up getting tuberculosis. It was only many, many years later that we identified the bacteria, the bacillus, that is associated with tuberculosis, and now have definitive kind of precision-based means to diagnose diseases. We think that over time, that level of precision has been improved and increased, and a big part of that is not just learning more about disease, but also learning more about data sets. 

MD+DI: In the tech sector, we've seen "deskilling" at work where, decades ago, you basically had to be an expert to operate a computer, but now, even kids can easily use devices such as iPads. How do you see this basic trend of deskilling affecting healthcare? 

“We know more about the functions of our car than we do of our own bodies.

Bartholomew: This deskilling is also happening in medicine. So the combination of deskilling and precision diagnostics is really forming kind of a perfect storm for what we see happening with personalized medicine. We are finally at the point where the consumer, somebody not skilled in the art of medicine or even the science of medicine, is going to start to get access to information that doctors could only dream of, and it is these devices and tools and technologies that are going to enable consumers to start owning their healthcare in a way that they had never been able to do before. 

This idea of healthcare in the palm of your hand is very powerful because it moves healthcare from being an episodic event or a place you go to, to being a constant companion in your life, and that is ultimately the breakthrough that we see happening and we think will happen through personalized medicine and advanced genome sequencing technology as much as it will in tricorder-like devices.

MD+DI: Another important trend is the explosion of wireless sensors. Last year, ABI Research predicted that there would be more than 80 million wearable wireless sensors for health applications by 2016. How does that relate to what the X PRIZE Foundation is doing in the life sciences sector? 

Bartholomew: These sensors are tracking everything from respiratory rate to heartbeat. There are now researchers in India creating a means to measure dissolved oxygen in blood, pulse oximetry, through the use of lasers. There is a lot of advanced sensor research happening now.

And one of the things that the Qualcomm Tricorder X PRIZE is working to do is to create as much of a platform to convene these multiple breakthroughs into a device that could pave the way for creating a go-to solution for your health and health metrics. And we’re trying to harness this, what we would call the frenetic activity in that marketplace, to help start integrating that activity into things that are desirable, usable, and understandable as much as they are accurate and well-functioning. 

Speaking at TEDxBrussels last year, Eileen Bartholomew provided background on the X Prize Foundation. 

MD+DI: Can you tell us a little about the process you use to create prizes? 

Bartholomew: A big part of our prize design process we call visioneering. In visioneering, what we are constantly seeking to do is really envision what the future could be and try to identify where a prize can help us achieve that future.

In our visioneering sessions, which are two-day-long brainstorming sessions where we refine these prize ideas and ask for feedback input from people from all walks of life, such as gamers, hackers, medical device companies, novel wireless sensor manufacturers, and regulatory stakeholders as well as potential adopters, patients, and groups that are trying to create social networks among patients. And we reach out to all of these entities because inevitably, when a prize is launched, it’s not just a single-dimension problem. It’s oftentimes a multi-dimension problem. You can imagine that in the case of the tricorder, in the Qualcomm Tricorder X PRIZE, we’re looking to advance wireless sensing, we’re looking to advance integration of that into a platform that's usable, we’re looking to push the limits of how to make health information understandable and easy to use. And those skill sets reside in vastly different spheres, so a big part of our visioneering process is trying to get input from all of those components so that we’re creating the right prize to launch the right type of new industry or new opportunity.

MD+DI: What kind of role will regulation play in all of this? How do you see regulatory agencies like the FDA and the European CE Mark system affecting the rate of transformation in life sciences?

Bartholomew: A prize provides a unique forum to take risks, because you’re only betting on the ultimate outcome; you’re not necessarily putting a bet on the solutions. I think many of these regulatory bodies really understand the risks; it’s certainly what keeps them up at night, and empowering patient safety is first and foremost.

Scanadu is among the companies vying for the Qualcomm Tricorder X Prize, which officially launched early in 2012.

One of the things that we’ve observed in the regulatory system, particularly in the United States, is that groups like the FDA are actually starting to ask questions like 'what is the right balance between patient safety, risk and innovation?' And they’re coming up with unique pathways such as the Innovation Pathway, which enables the FDA to have a conversation with an innovative company around how to balance that risk versus reward or risk versus an innovation profile. And we’re really glad to see that.

So in many cases with a prize, we convene regulatory stakeholders to look at how to take the opportunity of the prize as a forum for which they can evaluate the tradeoff associated with their processes. For the Qualcomm Tricorder X PRIZE, we’re not asking teams to provide FDA-approved devices in order to compete in a competition or to win the prize. That's not a criteria component. But we are trying to work with groups like the FDA to understand where our prize can fit in with some of their new programs, whether that's the Innovation Pathway or some other program where the breakthroughs that are happening, even in the context of the prize, have a forum in which we can evaluate it and eventually, hopefully get it to market.

Grant Campany, who is the senior director and prize lead of the Archon Genomics X Prize, has worked with the FDA in defining a validation protocol for a medical-grade genome. The FDA is providing input to start to define what it means to be an accurate medical-grade genome sequence approach, and that helps to define the opportunity for both risk and innovation in that field.

A prize is such a unique platform for convening this ecosystem of innovators, funders, teams, and regulatory bodies, because it’s a space they can come to and ask the question “Why not?”

Brian Buntz is the editor-at-large at UBM Canon's medical group. Follow him on Twitter at @brian_buntz.

Four Trends from the 2012 Medical Design Excellence Awards

Four Trends from the 2012 Medical Design Excellence Awards

Shortly after his death this past October, Steve Jobs was memorialized in The New Yorker magazine in a story provocatively titled, “The Tweaker.” The piece, written by author and journalist Malcolm Gladwell, hailed the visionary Apple CEO’s “real genius,” which Gladwell argued was not Jobs’s ability to invent new things but rather his knack for refining existing technologies. The iPhone, for example, wasn’t the first mobile phone; it was a better mobile phone. This year’s Medical Design Excellence Awards finalists seemed to follow his lead.

Click here to see a slideshow of all the 2012 MDEA finalists.

“It was really striking how there were very few really new things,” jury chairman Stephen B. Wilcox says of the submissions. “We didn’t really see any completely new technology, and by that I mean something to either address a condition that wasn’t addressed before or something that clinically was really unique.”
Instead, many of the devices entered into the competition were improved iterations of products and technologies that have been around for some time.

“People are inventing things to try and make healthcare more efficient and do more with what we have,” says juror Edward G. Chekan, MD. “We didn’t see a lot of new platforms or new developments. What we did see were people saying, ‘Let’s take what we have and make it better, lower the cost, or make it more efficient.’”
From an easier-to-use inhaler to smaller, cheaper, and more efficient versions of an x-ray machine, a ventilator, and a prosthetic foot, the 2012 finalist products included features to make existing medical device concepts better.

Designed for Affordability

In many ways, this year’s MDEA submissions reflected the realities that have confronted the healthcare industry over the past few years—from the Great Recession to healthcare reform. Because of medical device firms’ lengthy product development cycles, the effects of the recent past are just now making their way to the market.

“I think that we’re seeing the results of decisions that were made at the beginning of ’09, when the economy was tanking,” says Wilcox, principal at product development consultancy Design Science (Philadelphia). “It takes about three years to develop a product, so we’re seeing projects that were launched in late ’08 and early ’09, when the economy was at its depth and when everybody was interested in saving money.”

Many of this year’s finalists were relatively low-priced devices or technologies that cut costs for end users as opposed to products intended to dramatically improve therapy.

Medical Design Excellence Awards, DermScope
The DermScope enables an iPhone to capture dermatoscopic images.

One such device is the DermScope, a device that enables viewing and capture of dermatoscopic images using an iPhone. Manufactured by Canfield Scientific Inc. (Fairfield, NJ), the device consists of a machined-aluminum lens attached to a clamshell housing, which holds the phone. It also features a circuit board, mini USB input port, and a lithium-ion battery. Users of the DermScope can capture images of skin lesions or other conditions, zoom to 30× magnification, tag the images, and transmit them to remote locations.

At $895 for the device and $4.95 for the accompanying app, the jurors noted during judging that the DermScope could potentially replace equipment that costs thousands of dollars. That could open the door to its use by family physicians, who could send shots of suspicious skin spots to dermatologists for closer inspection.

Another device that aims to help cut healthcare costs is the CT-Guide Needle Guidance System. Made by ActiViews Inc. (Wakefield, MA), the surgical navigation system is designed to aid in procedures such as biopsies, marker placement, and soft-tissue ablation in cancer care.

Surgical navigation devices, of course, are nothing new. In fact, ActiViews president Christopher von Jako worked on one of the first such systems to hit the market back in 1993. But the CT-Guide improves upon models currently on the market, which are bigger, more expensive, and more complex.

Medical Design Excellence Awards, ActiViews, CT-Guide
The CT-Guide Needle Guidance System is smaller, simpler, and less expensive than other surgical navigation devices.

The CT-Guide consists of just a single-use miniature video camera, a sterile adhesive sticker with color-coded guides on one side and imaging reference markers on the other, and a computer workstation loaded with the company’s proprietary navigation software. At $80,000, it’s around half the price of similar navigation systems on the market.

“The beauty in CT-Guide navigation is its simplicity, which is real progress," von Jako says. “We don’t need the extra components that other navigation systems need in order to operate.”

CT-Guide navigation could also potentially improve the accuracy of the lung interventions for which it has received 510(k) clearance. Currently, most physicians perform such procedures freehand, a method whereby they insert the needle into the body and use CT scans to ensure it’s in the right place. That takes time and exposes the patient, and sometimes the doctor, to additional radiation. The more time the needle spends inside the lung might also increase the chance of complications such as collapsed lung, von Jako says.

Easing the Burden of Chronic Disease

Among the challenges looming large for healthcare providers are chronic diseases, such as diabetes, asthma, and chronic obstructive pulmonary disease (COPD). Nearly one in two Americans suffer from at least one chronic disease, and such conditions account for 70% of all American deaths each year, according to the CDC. Chronic disease is also the leading cause of mortality worldwide, according to the WHO.

For patients who suffer from chronic diseases managing their conditions becomes in some cases an everyday task. Many of this year’s MDEA finalists sought to lessen their burden.

“They weren’t curing the disease, they were facilitating the lives of patients with chronic disease,” says Chekan, who is director of medical education at device manufacturer Ethicon Endo-Surgery (Cincinnati).

Medical Design Excellence Awards, Combitide Starhaler
The Combitide Starhaler seeks to improve upon standard-of-care asthma and COPD inhalers.

The Combitide Starhaler is a drug-delivery device for patients with asthma or COPD. It was designed by Cambridge Consultants (Cambridge, UK) for Sun Pharmaceutical Industries (Mumbai) with the intention of improving upon standard-of-care inhalers, which present problems for users who have compromised lung function.

“People just can’t do it or don’t now how to do it, so they don’t get the full therapeutic benefit,” says Duncan Bishop, Cambridge Consultants program director.

The device is made up of a primary drug container, which holds the drug dose; a breath actuation mechanism; a piercing mechanism to open the sealed drug container; an airway/deaglommeration engine, a case and mouthpiece; and a cap and indexer. It delivers a steroid and beta agonist combination deep into the user’s lungs.

In designing the Starhaler, the team faced three challenges: It had to ensure delivery of the drug in the deep lung, overcome the user’s low lung power, and make the device easy to operate. To address the first, the drug particles had to be separated from a lactose carrier, enabling them to be inhaled into the lung while the larger lactose particles are confined to the back of the throat. It was also important to ensure as much of the drug as possible was emptied from the device and made its way into the patient. To accomplish that, Cambridge Consultants developed a punch-and-retreat piercing mechanism to open and clear the airway. To deagglomerate the drug, the team designed an airway that harnesses impact, shear, and centrifugal forces to separate the drug from the carrier. The breath actuation mechanism only dispenses a dose if the full inspiratory flow required to inhale a therapeutic dose is achieved.

“We made it pretty foolproof,” Bishop says. “If device works for you, you’ve got a therapeutic dose.”
Cambridge Consultants also incorporated a few human factors features into the Starhaler’s design. The device is small enough to slip into a pocket, includes a tactile dose counter that can be used by the visually impaired, and glows in the dark, so users can find it even with the lights out.

Products for Emerging Markets 

Medical Design Excellence Awards, Nomad PRO

The NOMAD Pro Handheld X-ray System could help improve dental care in underdeveloped countries.

Traditional markets for medical devices such as the United States, Europe, and Japan are starting to mature, while growing populations and rising middle classes in developing nations are resulting in greater demand for healthcare products in other parts of the world. That presents an opportunity for medical device makers.

“It’s tempting for these companies to say, ‘Gee, if we could get a little bit of this nontraditional market, the volume could be significant,’” Wilcox says.

Reflecting that trend, some of this year's MDEA finalists were devices retooled for use in underdeveloped countries.

One such device is the NOMAD Pro Handheld X-ray System, made by Aribex (Orem, UT). At just 5.5 lb and 6.25 × 10.75 × 10 in., this cordless, handheld x-ray device for intraoral dental use can be used outside of a traditional dental office, opening it up for use in humanitarian or other remote applications, according to the company.

“This could really make a difference in terms of dental care in underserved areas,” says juror Jay Goldberg, who directs the healthcare technologies management program at Marquette University and the Medical College of Wisconsin.

Another product aimed at improving the lives of people in developing countries is the Niagara Foot, a prosthetic foot that “anatomically mimics biological foot action by absorbing and releasing energy in a controlled way,” according to its manufacturer, Niagara Prosthetics and Orthotics International (Fonthill, ON, Canada).

President Rob Gabourie says he designed the product specifically as a low-cost option for people in underdeveloped areas, especially places like Cambodia, where there is a high rate of limb loss from land mines.

Medical Design Excellence Awards, Niagara Foot
The Niagara Foot is a cost-effective prosthetic option that could help people in developing countries who have lost a foot.

“There were no high-performance devices available for underdeveloped areas, period,” he says. “The one criticism I’ve heard over and over again is that they don’t stand up well to the environment, and the ones that do manage to stand up well, there’s really no energy return with these feet.”

The company field tested the product in Thailand and El Salvador, where conditions can be trying for prosthetics. Through the tests Gabourie, a certified prosthetist and orthotist, gained a deeper understanding of the unique needs of his target markets. Ease of use was the most important factor, so he designed the Niagara Foot to be field adjustable. It had to be durable and waterproof, but cosmetics were also important to users, so he gave the device a removable cosmetic sheath.

Of course, to be a viable option for consumers in developing economies, all of this had to come at a low cost. To keep the price down, Gabourie used injection molding to create the prosthetic from DuPont’s Hytrel thermoplastic polyester elastomer. Thanks to the manufacturing technique, the donation of materials and expertise from many people who worked on the project, and the fact that Gabourie says he never intended the device to make a profit, the cost of the device is just $100 plus shipping.

Bringing Devices Down to Size

Bigger isn’t always better, as some of this year’s MDEA finalists proved. Shrinking existing technologies can yield benefits for both patients and physicians.

The Non-Invasive Open Ventilation (NIOV) System, from Breathe Technologies Inc. (Irvine, CA) is designed to facilitate ambulation for patients with respiratory insufficiency, such as COPD patients in the later stages of the disease.

Medical Design Excellence Awards, NIOV
At 1 lb, the NIOV Ventilation System is significantly lighter than most other ventilators.

“Patients go into a sedentary state of just sitting in their house,” says Joe Cipollone, vice president of R&D for Breathe Technologies. “It takes their breath away to walk, so they don’t go out and get their mail. They have trouble with vacuuming. A lot of them don’t wash dishes.”

Oxygen therapy increases the amount of oxygen in their lungs, but it doesn’t help them take deeper breaths. Ventilators combined with oxygen can do both, but at 20 lb and accompanied by large-bore 22-mm ID tubing, they’re heavy and cumbersome.

“The only practical way to use existing ventilators is if the patient is in a wheelchair,” Cipollone says.
Breathe Technologies knew to improve patients’ lives it had to reduce the size of the ventilation system, but in doing so it had to break the paradigm of 22-mm ID tubing associated with current ventilators.

To reduce the size of the tubing for the NIOV, the company developed an open ventilation system that differs from other ventilators, which deliver all of the patient’s breathing gases from the machine through the tubing. The NIOV delivers only a portion of the breathing gases through the tubing from the ventilator. The rest comes from harnessing the Venturi effect, which entrains ambient gases through a proprietary nasal pillows interface to make up the total breathing gas required by the patient. This enabled the use of 3-mm ID tubing.

Breathe Technologies also recognized that target users for the NIOV have access to 50 PSIG oxygen. It used that as a source, eliminating the need for a blower and its associated battery power. Additionally, the company eliminated the tubing inside the ventilator, replacing it with a structural pneumatic manifold. In all, the NIOV weighs just 1 lb.

The LS-1 is another product that cuts down the footprint of device technology. This portable intensive care unit combines a physiological monitor, ventilator, infusion pumps, and fluid warmer in one platform.

Medical Design Excellence Awards, LS-1
The LS-1 "suitcase" ICU is a new iteration of the LSTAT, a similar product in a stretcher platform that was an MDEA winner in 2001.

“If you go into an emergency department or ICU or any healthcare environment where you’ve got a lot of critical care patients, you’ll find a clutter of individual devices, with separate displays, conflicting alarms, and spaghetti of cables,” says Matthew Hanson, vice president of Integrated Medical Systems Inc. (Signal Hill, CA), the product’s manufacturer. “What’s grown up around the caregivers is just an unmanageable amount of equipment clutter and information overload.”

Integrated Medical Systems includes among its primary shareholders Northrop Grumman Corp., which develops systems for use in aerospace, defense, and other industries. The team that developed the LS-1 was familiar with miniaturization and integration from its work on the cockpit of the B-2 stealth bomber. The device components of the LS-1 are actually off-the-shelf devices and data systems. The innovation came in integrating all of the systems onto a common data bus and common power bus and packaging everything into a common structure.

“The architecture is the secret sauce that ultimately provides greater safety and efficiency for both caregiver and patient,” Hanson says.

The LS-1 also incorporates telemedicine capabilities, so care providers can monitor patients and controll the system from remote locations—a feature Chekan, a clinician, found especially exciting.

“As a physician, I can monitor my patients live via telemetry…and keep track of multiple patients with this device,” he says. “It’s nice to have real-time data as I’m measuring complex intensive care patients.”

The LS-1 is actually a new iteration of an MDEA winning product from 2001, the Life Support for Trauma and Transport (LSTAT), which combined a defibrillator, ventilator, suction unit, fluid-and-drug infusion pump, blood-chemistry analyzer, and patient monitor into a stretcher platform.

The lesson: It pays to keep tweaking.

Jamie Hartford is the associate editor of MD+DI and MED. Follow her on Twitter @readMED.

This Week in Devices: [3/30/12]: Supreme Court vs. Healthcare Reform, Consumer Reports is mad at the FDA, Thomas Fogarty to Receive MDEA Lifetime Achievement Award

  • The U.S. Supreme Court concluded three days of hearing arguments on the constitutionality of President Obama's heathcare reform law. We already know this has huge ramifications for healthcare, but what about the medical device industry specifically? Richard Park examines the issue and polls MD+DI readers.

Famed Inventor Thomas Fogarty, MD Wins MDEA Lifetime Achievement Award

  • Thomas Fogarty, MD, will be receiving a Lifetime Achievement Award in Philadelphia on May 23 at MD&M East. A prolific inventor, Dr. Fogary holds 135 patents on surgical instruments including the Fogarty embolectomy catheter.

The Human Intestine – on a Microchip

  • Researchers at Harvard University have created a gut on a chip designed to mimic the structural, absorptive, transport and pathophysiological properties of the human intestine. Researchers hope that the chip can be used to model internal diseases.

Microfluidic Chip to Diagnose the Flu

  • In an article published in the journal PLoS ONE, researchers from Boston University, Harvard, and the Beth Israel Deaconess Medical Center report that they have created a microchip, about the size of a microscope slide, capable of diagnosing influenza as accurately as current tests, but more cheaply.

Could the Medical Device Tax Generate more than $2 Billion a Year?

  • A study conducted by Mass Device claims that the Medical Device Tax could generate significantly more revenue than the $2 billion per year that was initially projected.

Consumer Reports takes on Medical Devices

  • Consumer Reports has a bone to pick with the FDA. Namely, the publication believes that approvals for medical devices are not stringent or thorough enough.







Senator Harkin Statement on Medical Device User Fees

Senator Tom Harkin (D-IA), chairman of the Senate Health, Education, Labor, and Pensions Committee, made the following statement on the medical device user fee agreements:

“Last summer, FDA Commissioner Margaret Hamburg testified before this Committee describing the history and importance of the user fee agreements between FDA and the industries it regulates. She detailed the impact user fees have had on FDA’s ability to ensure that new medical products get to American patients as quickly as possible. Since then, we have had hearings on a number of policy areas relating to FDA, including supply chain security, medical devices, and drug shortages.

“While we were engaged in those hearings and a lot of related behind-the-scenes work, FDA and industry were negotiating and finalizing this year’s user fee agreements. Today, in our last hearing of this reauthorization process, we turn the spotlight to those agreements. We will focus on how the Prescription Drug User Fee Agreement – PDUFA – will improve FDA’s review of the most novel drug products and enhance the agency’s commitment to regulatory science.  We’ll discuss the exciting new Generic Drug User Fee Agreement – GDUFA – which is expected to slash review times to a third of current levels, drastically improving the speed with which generic products are made available to patients. We will also hear about the new Biosimilars User Fee Agreement – BsUFA – which will shepherd the nascent generic biologics industry as it grows and matures. On the device side, we’ll discuss the importance of the hard-fought Medical Device User Fee Agreement – MDUFA – to improving the device review process while maintaining safety standards.

“In our first panel, Drs. Janet Woodcock and Jeff Shuren, the Directors of FDA’s drug and device centers, respectively, will discuss the critical role user fees play to helping them ensure that medical products are safe and effective and that they reach patients as quickly as possible.  In our second panel, Dr. David Wheadon from PhRMA, Ms. Sara Radcliffe from BIO, and Mr. David Gaugh from GPhA will discuss the drug user fee agreements. The device industry, including members of the Medical Device Manufacturers’ Association and the Medical Imaging Technology Association, will be represented by Dr. David Nexon of Advamed. Finally, Mr. Allan Coukell will join us from Pew to explain the benefits these agreements will have for patients and consumers.

“The testimony of all of today’s witnesses will reflect strong agreement on the following points: These agreements were carefully negotiated and it is essential that we pass them. They are critically necessary to FDA’s ability to do its job, to the medical products industry’s ability to survive these challenging economic times, and, most importantly, to the patients who are the primary beneficiaries of this long-standing and valuable collaboration between FDA and industry. After months of negotiation, FDA and industry have crafted win-win agreements that they stand behind. They have done their job.

“Now it is time for us to do ours. If we fail to authorize these agreements on time, FDA will have to fire nearly two thousand from its staff. Without adequate staff to review applications, the drug and device approval processes will grind to an unacceptably slow place. Patients whose health and lives depend on new medical treatments will suffer the devastating consequences.

“We can’t let that happen. We cannot let policy disagreements or Presidential election-year politics keep us from doing our part to translate into legislation the deal FDA and industry have struck for the benefit of American patients. As we have from the beginning of this process, Senator Enzi and I, and other members of this committee from both sides of the aisle, are continuing to work together to clear the path to authorization of the agreements that we’ll hear about today.”

-Richard Park

Most Medical Devices Don't Undergo Testing, Consumer Reports Says

Amid the din and clamor of reports bemoaning the long and laborious FDA process for approving medical devices, one would think that the medical device industry is so inundated by burdensome testing that it is being prevented from bringing ever-newer and ever-better products to market. But, exactly the opposite is the case, according to a Consumer Reports article that is destined to rock many an OEM's boat. Hardly a day old, the story has already been picked up by the mass media far and wide, from the Los Angeles Times to CBS news and ABC.

"For most implants and other high-risk devices brought to market, manufacturers do nothing more than file some paperwork and pay the Food and Drug Administration a user fee of roughly $4,000 to start selling a product that can rack up many millions of dollars in revenue," writes Consumer Reports. "Often, the only safety 'testing' that occurs is in the bodies of unsuspecting patients." While a smaller number of high-risk products require advance safety studies, government rules, according to Consumer Reports, allow them to be sold based on studies that are smaller and less rigorous than those required for prescription drugs. Instead of instituting more-rigorous testing to ensure medical device safety, Congress is debating a new law that would maintain the present system virtually unchanged while making it easier for companies to get an FDA green light to market their products even faster.

The Consumer Reports article homes in on three types of devices: transvaginal mesh used for prolapse repair and bladder support, lap-bands used to treat obesity, and metal hip replacements. In all three cases, testing was either nonexistent or minimal.

In the case of cervical mesh, manufacturers took advantage of a loophole that allowed them to grandfather their products onto the market without safety testing. In 1976, a new law established a three-tier system for medical devices, requiring that only Class III devices had to be test. Seizing on that loophole, manufacturers of transvaginal mesh cleared their products based on their "substantial equivalence" to an earlier mesh that had been used to repair abdominal hernias. The two types of devices, were different, both in terms of the parts of the body they were designed for and in terms of how they were implanted. Only in 2010 was cervical mesh pulled from the market, pending an FDA order that its manufacturers subject their products to postmarket safety studies.

Supreme Court Hearings on Obamacare and the Impact on the Medical Device Industry

The U.S. Supreme Court concluded three days of hearing arguments on the constitutionality of President Obama's heathcare reform law. Throughout the hearings, the arguments focussed primarily on health insurance requirements. There is considerable speculation that the Supreme Court's eventual ruling could be a sharply split decision, with Chief Justice John Roberts and Justice Anthony Kennedy potentially holding the key decisive swing votes. Legal experts have expressed various opinions on how the Court's decision in this case could affect the medical device industry.

"I really don't see much at stake that would specifically impact the medical device industry," said Courtenay Brinckerhoff, JD, a partner at Foley & Lardner LLP (Washington, DC). "If the individual mandate is struck down and the requirement to cover individuals with pre-existing conditions also is eliminated, and/or if the increased demands on state Medicare/Medicaid programs are struck down, then I would imagine that any net loss in covered individuals could impact the market for medical devices, and so could potentially impact the bottom line of medical device companies."

"Heading into this week's hearings, the beltway pundits and mainstream media certainly underestimated the compelling arguments to be made against Obama's healthcare act," said Daniel F. Donovan III, JD, a partner with King & Spalding's Government Advocacy & Public Policy Practice Group (Washington, DC). "Now conventional wisdom has swung the other way. Personally, I'm skeptical that the fifth vote on the Supreme Court was decided or swung by the oral arguments this week. Nonetheless, the arguments regarding the severability of the act were interesting, especially when considered in light of their implications for the medical device industry. There are major fraud, abuse, and transparency provisions in the law that the Supreme Court may decide are not severable from the mandate and may also strike down."

It will certainly be interesting to see what decision the Supreme Court hands down and whether or not it rules that the entire healthcare reform law (along with all of its provisions including the medical device tax) should be struck down. The Supreme Court's ruling on the healthcare law is due in June.

The Medical Device Tax? No Big Deal, According to Executive Panel at Bay Area Biomedical Device Conference

The Medical Device Tax? No Big Deal, According to Executive Panel at Bay Area Biomedical Device Conference

At yesterday’s Bay Area Biomedical Device Conference held at San Jose State University, an audience member asked a panel of three medtech executives how harmful the medical device tax would be to their business. The 2.3% tax is scheduled to go into effect next year.

 Image from Flickr user 401k.

There is a lot of price pressure in the medical device sector, acknowledged Adam Elsesser, CEO and founder of Penumbra Inc. (Alameda, CA). “But we have more than enough leeway. So, of all the things I worry about, I am not that worried about the [medical device tax]. Elsesser went on to say that, of course, he rather not spend money on the tax but called it “utterly irrelevant.” Penumbra would continue to have enough to spend on R&D, clinical trial work, and so forth, he said.

Julian Nikolchev, founder of Pivot Medical (Sunnyvale, CA), agreed with Elsesser’s assessment. “There are a lot of things that are going on in the industry that are putting pressure on the medical device [companies]. [The device tax] is only one aspect to it,” he said. “I would rather see more-rationalized decision making at the FDA level than worry about the tax.” Nikolchev said that he did not think that venture investors were making decisions based on the device tax, adding that it is “really not a concern.”

Darin Buxbaum, CEO and cofounder of Hourglass Technologies (Redwood City, CA) chimed in, stating that he completely agreed with the other two panelists’ assessments. He, however, acknowledged that the tax “is one of those topics that can really rile people up. How many industries get taxed on their top-line sales rather than their profits?” But the medtech industry is often a high-margin business he said, so the tax is “less impactful” for medtech than it would be for other industries. “Our focus is on making our top line growth grow so fast that this 2.3% device tax is a rounding error.”

Brian is the editor-at-large at UBM Canon's medical group. Follow him on Twitter at @brian_buntz.

For a different take, check out what ExploraMed CEO Josh Makower, MD had to say about on the tax, which he described as being "horrible for small companies."

Correction: An earlier version of this story incorrectly attributed Adam Elsesser's quotes to Julian Nikolchev and vice versa. 

FDA Releases Guidance on Considerations Used in Medical Device Approval, De Novo Decisions

FDA published a first-of-a-kind guidance for medical device manufacturers, describing how the benefits and risks of certain medical devices are considered during premarket review.

The guidance includes a worksheet for medical device reviewers that incorporates the principal factors that influence benefit-risk determinations, such as the type, magnitude and duration of a risk or benefit, the probability that a patient will experience the risk, patient tolerance for risk, availability of alternative treatments, and the value the patient places on treatment.

The guidance:

-outlines the systematic approach FDA medical device reviewers take when making benefit-risk determinations during the premarket review process;

-provides medical device manufacturers a helpful tool that explains the various principal factors considered by the agency during the review of PMA applications, the regulatory pathway for high-risk medical devices, and de novo petitions;

-describes an approach that takes into account patients’ tolerance for risks and perspectives on benefits, as well as the novelty of the medical device.

“This guidance clarifies this process for industry, which will provide manufacturers with greater predictability, consistency and transparency in FDA decision-making while allowing manufacturers and FDA to use a common framework for benefit-risk determinations,“ said Jeffrey Shuren, MD, director of FDA’s Center for Devices and Radiological Health (CDRH).

FDA will also increase the transparency of the decision-making processes by describing the worksheet analysis in the Summary of Safety and Effectiveness Data for PMAs and the decision summary review memos for de novo decisions.

“In addition to bringing clarity to our decision making for industry, this guidance will provide our reviewers with uniform and consistent guidelines to assess probable benefits and risks,” said Shuren.

CDRH will train medical officers, review staff managers and medical device reviewers on the guidance to assure the guidance is applied consistently to submissions and petitions. CDRH reviewers will begin applying the guidance to incoming PMA and de novo submissions and to submissions already under review with decisions beginning on May 1.

FDA is also developing external training modules to help the medical device industry and medical device sponsors understand how CRDH will apply the guidance.

-Richard Park

Could the Device Tax Pull More than $2 Billion? Numbers To Assess Impact Vary Wildly

For more than 75% of the other companies on our list, the tax means lower profits by between 5% and nearly 50%. Take Integra LifeSciences which posted U.S. medical device sales of about $593 million last year, according to Integra's annual report. A 2.3% whack would have taken $14 million off the top line – exactly half of Integra's 2011 profits.

At the other end of the spectrum, there's Sirona Dental Systems and the $256 million it logged in domestic medical device sales last year. Its tax tab, had the measure been in effect, would have been $6 million, or about 5% of its $122 million in profits.

Disparity among the payers was the intention of the tax's authors...the more sales made, the more it costs. However, based on MassDevice's analysis, it seems pretty clear that although many companies will be mildly affected, others—particularly third-tier firms—could easily be in danger of going out of business.

The analysis comes on the heels of Bloomberg Government analyst Christopher Flavelle questioning the credibility of the AdvaMed's device tax analysis issued September 2011 [pdf]. The study notably concluded that the device tax would put approximately 43,000 jobs at risk and net employment compensation losses in excess of $3.5 billion.

But Flavelle says "It's assumptions are flawed ... because it exaggerates the degree to which spending on health is affected by price increases." Flavelle also says that sales drops will be far less that the AdvaMed study predicts.

Assessing the true impact of the device tax will be difficult, according to Senator Scott Brown. He told Mass Device:"We can't get any accurate numbers and the numbers that are coming out now are all over the place. It's very frustrating that it's so tough to get a straight answer."

Another study from Battelle and AdvaMed released March 26, 2012 concludes that for every $1 billion change in industry output, total employment would increase or decrease by nearly 13,000 workers [pdf]. That is slightly less than the study from September, but it is still significant.

I'm becoming skeptical that any models can accurately predict the true influence of the device tax. But considering that four bills issued (S. 262, S.17, H.R. 436, and H.R. 488) to repeal the tax haven't made it off the floor, I find myself hoping that Flavelle is right.

Of course, if the Supreme Court finds the Healthcare Reform Act unconstitutional, we have a whole new set of problems to consider.

Heather Thompson is editor-in-chief of MD+DI.