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Articles from 2014 In April

FBI Warns on Medical Device Hacking Risk

Earlier this year, Business Week proclaimed: "Medical Hacking Poses a Terrifying Threat, in Theory," which observed that lethal hacking of medical devices is a real possibility, albeit still an abstract threat at this point.  

According to a recent Reuters article, FBI agrees that hacking of medical devices and hospital equipment is a very real risk. The article cites a private notice from the agency that alleges that "[th]e healthcare industry is not as resilient to cyber intrusions compared to the financial and retail sectors, therefore the possibility of increased cyber intrusions is likely."

Reuters also says that the FBI has warned healthcare providers about the problem and adds that health data "is far more valuable to hackers on the black market than credit card numbers because it tends to contain details that can be used to access bank accounts or obtain prescriptions for controlled substances."

Cybersecurity firm Dell SecureWorks told Finkle that cyber criminals were getting paid $20 for health insurance credentials on some underground markets, compared with $1 to $2 for US credit card numbers prior to the Target breach.

Wired's Kim Zetter conducted an in-depth interview with an information security expert who found that "It's Insanely Easy to Hack Hospital Equipment," after a two-year study at a large Midwest healthcare network. Zetter spoke with Scott Erven, who works as head of information security for Essentia Health, which operates about 100 facilities.

"We tested every single device in our environment ... We tested all of our lab systems, surgery robots, fetal monitoring, ventilators, anesthesia," Erven told Zetter.

One of the main problems they found involves the embedded web services that allow devices to communicate with one another and feed data directly to patients' Electronic Medical Records.

Erven says that vendors must do more to improve the security of medical devices with encryption and authentication before they sell them to customers, and should fix the ones that are already in the field. He told Zetter that FDA guidelines for medical devices now place the onus on vendors to ensure that their systems are secure and patched.

Zetter reports, "(A)lthough vendors often tell customers they can't remove hard coded passwords from their devices or take other steps to secure their systems because it would require them to take the systems back to the FDA for approval afterward, Erven points out that the FDA guidelines for medical equipment includes a cybersecurity clause that allows a post-market device to be patched without requiring recertification by the FDA."

Stephen Levy is a contributor to Qmed and MPMN.

Cellvizio Optical Biopsies Approved by Japanese Regulators

Mauna Kea Technologies; Cellvizio system (Courtesy Mauna Kea Technologies)

The technique of optical biopsy achieved another milestone when Paris-based Mauna Kea Technologies announced that their flagship Cellvizio product had been approved by Japan's Ministry of Health, Labor and Welfare (MHLW).

The approval includes Class 1 as well as Class 2 designations, which cover the use of Cellvizio probes in endoscopic use. The company says the approval applies to all current Cellvizio indications, including gastrointestinal, urologic, and respiratory applications.

Mauna Kea's website describes its Cellvizio system as an endomicroscopy system which generates optical biopsies. These provide physicians with microscopic images of tissue instantaneously and in a minimally-invasive manner. Based on simple pattern recognition, the company says, Cellvizio facilitates better decision-making and appropriate patient management.

According to Wikipedia, "(t)he Cellvizio system can be used during any endoscopy procedure, offering a cellular-level view of internal tissue. Large, international, multi-center clinical trials have demonstrated Cellvizio's ability to help physicians to more accurately detect disease in real time, confirm the absence of disease and make immediate treatment decisions.

"The Cellvizio system includes miniaturized optics, optical fiber bundles, high-speed scanning and advanced image processing components. The embedded real-time image processing software, combined with a high-speed Laser Scanning Unit (LSU), allows the Cellvizo system to produce sharp images at 12 frames per second."

"We already have Cellvizio at Fujita Health University and have seen firsthand the significant advantages that this advanced endomicroscopy technology provides to both clinicians and patients," said Ichiro Hirata, MD, chairman and professor in the Division of Gastroenterology, Fujita Health University. Hirata is also the incoming president of the Japan Gastroenterological Endoscopy Society (JGES).

"Cellvizio represents a great potential for the management of patients with peripheral, potentially cancerous nodules and diffuse lung diseases", said Kazuyoshi Imaizumi, MD, professor in the Division of Respiratory Medicine and Clinical Allergy at Fujita Health University. "We look forward to performing ground-breaking work in Japan where the need for better pulmonary care is important."

Mauna Kea first received US FDA approval in 2011 for its current Cellvizio 100 Confocal Laser Endomicroscopy (pCLE) system for biopsies of the gastrointestinal (GI) and pulmonary tracts. Just this past March, the company received 510(k) clearance from FDA for the expanded indications of the urology field. Cellvizio's Uroflex B and CystoFlex F Confocal Miniprobes are now approved for use "within anatomical tracts including but not limited to urethra, bladder, and ureter, accessed through an endoscope or endoscopic accessories."

In the press release announcing the urologic indications approval, Joseph Liao, MD, associate professor of urology, Stanford University, and Chief of Urology at the Veterans Affairs Hospital in Palo Alto, CA, said, "This important approval is based on years of clinical research that has demonstrated the benefits of Cellvizio in a range of urological indications," Liao continued, "This technology offers urologists an exciting new window to visualize urological cancers, particularly bladder, and improve their detection and resection."

Stephen Levy is a contributor to Qmed and MPMN.

J&J Halts Sales of Surgical Tool Amid Potential Cancer Risks 

Johnson & Johnson's Ethicon subsidiary is suspending global sales of surgical cutting tools called power morcellators amid potential cancer concerns.

Gynecare Morcellex Tissue Morcellator Ethicon
The Gynecare Morcellex Tissue Morcellator, as shown on Ethicon's website.
The sales suspension, which J&J announced this week, includes the Gynecare Morcellex Tissue Morcellator, Morcellex Sigma Tissue Morcellator System and the Gynecare X-tract Tissue Morcellator. The announcement comes after the FDA recently discouraged power morcellators for removal of the uterus (hysterectomy) or uterine fibroids (myomectomy) because they pose a risk of spreading unsuspected cancerous tissue, notably uterine sarcomas, beyond a woman's uterus. J&J's Ethicon subsidiary said in a provided statement that suspending sales of the morcellators is the appropriate action:
"Since 1998, Ethicon's morcellator devices have enabled thousands of patients to have minimally-invasive surgical hysterectomy and myomectomy procedures, instead of more-invasive surgical procedures. Ethicon morcellation devices have always included cautions in their instructions for use (IFU) about the potential spread of malignant (or suspected malignant) tissue. However, interpretation of the available epidemiological evidence is complex and it is difficult to diagnose certain malignancies in advance of surgery. Therefore, we believe that suspending the commercialization of these products until their role is better understood and redefined by the medical community is the appropriate course of action at this time."
Refresh your medical device industry knowledge at MD&M East, June 9-12, 2014 in New York City.
The issues surrounding the morcellators have not only effected the companies that make them, such as Ethicon, but also companies such as Intuitive Surgical, which makes surgical robots for the early stages of hysterectomies, before morcellation takes place.

Chris Newmarker is senior editor of MPMN and Qmed. Follow him on Twitter at @newmarker.

HeartWare VAD Recalled over Faulty Driveline Connector

The FDA has issued a Class I designation over a voluntary recall involving the HeartWare Ventricular Assist System.

HeartWare VAS driveline
HeartWare's driveline cable, shown in this illustration from a company video, is constructed with fatigue-resistant conductor wires, connecting the implanted pump with an externally worn controller. 
Regulators think there is danger of serious injury or death because of a faulty driveline connector that could cause the heart pump to temporarily stop, the FDA said Tuesday. The driveline runs from the implanted pump, through the skin, and to an external controller worn on a belt. The specific problem involves the driveline connector locking mechanism failing to engage due to a faulty manufacturing assembly process. HeartWare says it issued a issued an Urgent Medical Device Correction in December 2013, following eight complaints that the locking mechanism failed to engage. Four of the eight cases resulted in a temporary pump stop. But none resulted in patient injury. A "VAD stopped" alarm sounds when the driveline disconnects. A patient is supposed to immediately reconnect the driveline and then contact a doctor or VAD coordinator. Such physicians or VAD coordinators are supposed to immediately contact a HeartWare clinical engineer to perform a permanent field repair. HeartWare letters to physicians, as well as letters to patients that physicians are expected to pass on, call for prompt follow-up visits to inspect the driveline.
Refresh your medical device industry knowledge at MD&M East, June 9-12, 2014 in New York City.
HeartWare has been trying to weather disappointed investors, who endured a roller-coaster ride in 2013. Over the past week, the company's stock has dropped nearly $3 per share, to around $83 on Wednesday.

Chris Newmarker is senior editor of MPMN and Qmed. Follow him on Twitter at @newmarker.

3-D Tissue-Repair Implants Call for Packaging in New Dimensions

A J-Pac Medical technician employs a precision thermal process in the manufacture of a custom-shaped implantable medical devices.

By Camilla Andersson

Contract manufacturers serving the medical device industry often produce 2-D implants, but these implants are not ideally formed for tissue repair or transcatheter delivery, Crane notes, because they don’t conform to the anatomical shapes of the body. Instead, the surgeon typically fashions the implant in the operating room.

In other cases, the medical device manufacturer needs to make adjustments to the products on its manufacturing floor. Because J-Pac’s implants are customized to a specific application, however, they offer benefits not only to the manufacturer, but also to the patient and surgeon, according to Crane.

“[For customized hernia-repair implants] the support for the placement of the product comes from the hernia or the hole itself, not from the surrounding tissue,” Crane explains. “In the past, they needed to put a patch over it and either staple or suture it in place. That created a tension repair and the possibility of having tissue tear and the risk that the implant tears.”

With the 3-D implant, however, surgeons are actually placing the device within the failed area. “It is that structure that is keeping it in place without any need for attachment,” Crane says. “It allows for much less tension in the repair, which has a much better surgical outcome for the patient.”

But a 3-D implant requires 3-D packaging. While flat implants often are packaged in peelable medical pouches, a 3-D implant is typically placed in a rigid tray. The tray helps to maintain and protect the shape of the product. Depending on the material, protecting the implant can create some packaging challenges, Crane says.

“It will only create difficulties if you are dealing primarily with an absorbable polymer in a 3-D shape,” Crane notes. “You have to provide a barrier package for that product. The barrier package materials for a tray are a little more inventive than the barrier package you would include for a pouch… If you have a tray you are going to move into some more exotic forming plastics like Barex in order to get the barrier properties that you need. From the material perspective there can be some challenges when you move into a tray.”

J-Pac makes tissue repair implants in materials such as textiles and polymers. While the products are customized to specific applications, not individual patients, Crane looks to the orthopedic industry for inspiration for the future. He sees potential in the industry’s trend to cut, shape, and personalize implants to a patient’s individual anatomy and says J-Pac’s technology is transferable to such scenarios.

“People have been living in two dimensions for a long time,” Crane says. “If you think of any product that is out there that is provided in a length-and-width shape, if it’s used in surgical repair, wound care, burn treatment, plastic surgery, you name it –literally all of those products could be shaped to fit some sort of anatomical need.”

Get access to medical packaging-related webinars, white papers, and resources in the Medical Packaging Community.

Camilla Andersson is a contributor to MD+DI.

Zimmer-Biomet Deal Unlikely to Cause Mass Layoffs, Upheaval

The news that Zimmer Holdings, Inc. has agreed to acquire Biomet Inc. was called by the Wall Street Journal "The Deal That Shook Warsaw, Ind."

The $13.35 billion acquisition solidifies Zimmer's position as the second-largest orthopedic company in the world. And it left many people wondering how secure their jobs are.

Zimmer's press release announcing the merger used the word 'complementary' four times. David Dvorak, Zimmer's CEO, was quoted in the WSJ article as saying that the combined firm would go through a "methodical planning process" to "retain the best talent in both organizations." Dvorak told the WSJ that the merged company would "work very hard" to maintain its sales employees and skilled production workers, but said there would likely be opportunities to reduce costs in other areas.

The operative word here seems to be integration, not restructuring.

Refresh your medical device industry knowledge at MD&M East, June 9-12, 2014 in New York City.

Zimmer has said it expects to realize cost synergies of $270 million annually by the third year after closing. Larger purchasers can negotiate better deals with all of their suppliers, from suppliers of raw materials to the companies that make and print the packaging, and these savings will be a significant percentage of that number.

More savings will come from rationalization of that certain amount of inevitable overlap in product lines, but that's where the repeated use of 'complementary' becomes meaningful. In other words, there isn't much overlap.

While the merger of two large companies inevitably means a certain amount of redundancy, particularly in administrative functions, the fact that the two groups of employees, making complementary, not competing, products are also merging means that there is still about the same amount of production and administrative work to be done. Therefore it seems likely that most of those who do the actual work, both on assembly lines and in offices, will be safe.

At the very top, the usual case is for an extra layer of management to materialize. In a friendly takeover situation like this, executives aren't out on the street, they just get a new title.

Some middle and upper-middle management may find themselves called upon to justify their continued employment and doubtless there will be some slimming down in some sales offices, although that's where that word 'complementary' comes in again. Significant additional savings may also be found in the consolidation of support services such as distribution and advertising.

But by and large, particularly for those who punch a time clock, it may be that the biggest change they will notice will be the company name on their paycheck.

Stephen Levy is a contributor to Qmed and MPMN.

Teleflex To Cut Jobs, Close Plants As Part of 2014 Restructuring Plan

Teleflex To Cut Jobs, Close Plants As Part of 2014 Restructuring Plan

Teleflex, a supplier of medical devices to hospitals, announced Wednesday that it will reduce its workforce and consolidate plants as part of a new restructuring plan.

The announcement was made as part of its first-quarter earnings results. In describing the restructuring, Teleflex acknowledged that continuing cost pressures drove the decision to eliminate jobs and to move certain manufacturing plants to lower cost areas.

The news release did not specify how many jobs would be eliminated and which plants would close. An email and a call to a Teleflex representative was not immediately answered. The restructuring will start in the second quarter and will end by 2017. The company expects to take a a pre-tax charge of $42 million to $53 million associated with the restructuring.

Learn more about controlling supplier costs at the MD&M Conference & Exposition, June 9-12, New York City. 

While no details were available on the exact nature of restructuring, Teleflex clearly stated its benefits: the Wayne, Pennsylvania company expects to save $28 million to $35 million annually once the plan is fully implemented with some savings kicking in as early as next year.

“We think a restructuring was widely expected at some point in [first half of 2014], and believe investors were looking for savings that would generate $0.20-$0.40 in annual savings, Richard Newitter, an analyst with healthcare investment bank Leerink Partners, wrote in a research note Wednesday.

Newitter added that he views Teleflex’s quarterly performance as “solid” especially given the challenging environment where hospitals are scrutinizing purchases, using less equipment and reducing costs.

In the quarter ended March 30, the company garnered revenue of $438.6 million, up from a $411.9 million in the same period a year ago. Profits climbed to $35 million, or 76 cents per diluted share, up from $27 million, or 63 cents in the comparable period last year.

[Image Credit: user MarsBars]

-- By Arundhati Parmar, Senior Editor, MD+DI

FDA Shells Out $500K for MDIC Patients' Perspective Study

FDA Shells Out $500K for MDIC Patients' Perspective Study

What role should patients play in the development and approval of medical devices? FDA is handing the Medical Device Innovation Consortium (MDIC) half a million dollars to try to answer that question.

Stay on top of the newest developments at FDA by attending the Regulatory Report conference session at MD&M East on June 9, 2014.

The MDIC, a public-private partnership formed in 2012 with the goal of advancing regulatory science, will use the money awarded by the agency to fund its Patient-Centered Benefit-Risk Project, an effort that will bring together patient's advocates, industry representatives, regulators, and academics to find ways to bring patients’ perspective into benefit-risk determinations for medical devices.

“FDA has emphasized that ‘patient tolerance of risk and perspective on benefits’ is an important consideration, and the tools studied in this project will help both industry and the FDA to assess patient preferences for benefit and risk in a meaningful way,” Bill Murray, president and CEO of the MDIC wrote in an e-mail.

The consortium plans to conduct a yearlong study to compile a catalog of methods for assessing patient preferences about medical devices, develop a framework for incorporating that data into medical device development and benefit-risk determinations, and set an agenda for further research. The MDIC will publish the findings of its research on its Web site and possibly in peer-reviewed publications, Murray said. The project is slated for completion in the first half of 2015.

“We anticipate that the catalog and framework developed as a part of this project will help regulators and industry integrate patient perspectives in a meaningful way,” Murray said.

But MDIC’s research could also have an impact in areas outside the medical device industry.

“While the project is the result of efforts to make the medical device regulatory approval process more patient-centered, this collection of methods reviewed in the report are the same methods for assessing patient preferences that can have value in pharmaceutical regulation, reimbursement coverage decisions by public and private payers, healthcare resource allocation decisions by providers as well as public entities, and the development of tools for shared medical decision making,” Murray said. “Although being developed to address the specific needs of CDRH and industry, MDIC hopes that this effort will become the first step in an ongoing effort to catalog methods available for assessing patient preferences, and will thereby become a core resource for a range of researchers, analysts, and decision makers in the healthcare field.”

Stay on top of the newest developments at FDA by attending the Regulatory Report conference session at MD&M East on June 9, 2014.

Jamie Hartford, managing editor, MD+DI


FDA Says Stop Using Shasta GenStrip Glucose Test Strips


Blood glucose test strips sold in these packages have been declared misbranded by FDA and should not be used. (Courtesy FDA)

FDA has announced the recommendation that use of Shasta Technologies' GenStrip Glucose Test Strips be discontinued immediately and remaining stocks be removed from store shelves.

The strips are designed for use with LifeScan Inc.'s OneTouch family of glucose meters (including Ultra, Ultra 2 and Ultra Mini) but were made by Shasta Technologies LLC (Calistoga, CA), a third-party provider. They are available through online retailers and retail pharmacies. LifeScan is a subsidiary of healthcare giant Johnson & Johnson and has no business relationship with Shasta Technologies. According to FDA, the affected test strips have been manufactured and distributed since March 2013.

Refresh your medical device industry knowledge at MD&M East, June 9-12, 2014 in New York City.

Citing "extensive violations" of Quality Systems Regulations (QSRs) and Shasta Technologies' refusal to conduct a voluntary recall, the FDA Safety Communication advises people with diabetes and health care professionals to stop using GenStrip Blood Glucose Test Strips because the strips may report incorrect blood glucose levels. FDA recommends using alternative glucose test strips that are designed for use with the LifeScan OneTouch family of glucose meters.

These violations were detailed in an April 8 Warning Letter FDA sent the company. The Warning Letter lists 11 separate violations. Apparently the company's responses were insufficient to address FDA's concerns in the two-week window allowed for responses before the Safety Communication was issued.

While on the surface this announcement of FDA's recommendation that use of Shasta's GenStrip test strips be discontinued is a simple case of a company not paying sufficient attention to FDA regulations, a little scratching beneath the surface reveals a more complex, and interesting, tale. It seems that after FDA's December inspection, Shasta Technologies sold its GenStrip business lock, stock, and barrel to a company called Pharma Tech Solutions, Inc., which is a subsidiary of Decision Diagnostics Corp. (Westlake Village, CA). Decision Diagnostics announced the deal on April 16, eight days after the date on FDA's Warning Letter but almost two weeks before the Safety Communication.

In November 2013, Decision Diagnostics won a patent infringement action regarding Shasta's GenStrips that had been brought by LifeScan and J&J. They have also been engaged in an antitrust and false advertising countersuit against LifeScan and J&J.

In a February 18 press release describing the progress of their lawsuit, Decision Diagnostics describes itself as "the exclusive worldwide sales, service and regulatory processes agent for the popular Shasta GenStrip ... specifically designed to work with the Johnson & Johnson's LifeScan Ultra family of glucose testing meters." So they must have known what was going on at Shasta. 

Stephen Levy is a contributor to Qmed and MPMN.

Boston Scientific CEO “Disappointed” by Q1 Results in CRM Business

 Boston Scientific CEO “Disappointed” by Q1 Results in CRM Business

Shares of Boston Scientific slipped more than 6% Tuesday on the news that the company had a mixed quarter where revenue of its second-largest segment came in well short of Wall Street expectations.

The Natick, Massachusetts company said that its cardiac rhythm management business had revenue of $466 million, down from $478 million in the same period a year ago and lower than Wall Street estimates of $483 million, according to an analyst research note issued Tuesday.

In answering an analyst’s question Michael Mahoney, Boston Scientific’s CEO addressed the lower CRM revenue in the quarter, according to a transcript of the call.

“We are disappointed in the Q1 results. It’s really driven in the U.S. because we had some excellent performance outside the U.S. where we likely gained share in [defibrillators] outside the U.S. and also at minimum held share globally in [pacemakers], said Michael Mahoney, CEO, in a conference call with analysts on Tuesday.

In the U.S., revenue from sales of ICDs fell to $208 million in the quarter from $221 million a year ago. The weakness in ICDs stems from two sources - unlike St. Jude Medical, Boston Scientific didn’t have a quadripolar CRT-D device in the U.S. until recently. [In fact, on April 15, the company announced approvals of the Dynagen X4 and Inogen X4 CRT-Ds that allow quadripolar pacing]

And the second factor is better longevity of batteries ironically means that patients don’t immediately need replacement devices, which hurts revenue in the short term, Mahoney explained.

Learn more about designing next generation medical devices at the MD&M Conference & Exposition, June 9-12, New York City

An analyst with JPMorgan Chase believes that the poor results in U.S. ICDs mean that Boston Scientific is losing ground to a competitor.

“US revenues came in $15M below the Street at $208M (-6%) as Boston ceded market share to St. Jude despite the ongoing S-ICD launch, while [outside U.S.] sales of $131M (+2%) were in line,” wrote Michael Weinstein in a research note Tuesday.

S-ICD refers to the company’s novel subcutaneous ICD system that has no leads in the heart for which the company has had high hopes. In the call, Mahoney said that the device raked in more revenue in the quarter than expected.

He expects the device to add a minimum $75 million to overall revenue in 2014.

[Photo Credit: Boston Scientific]

-- By Arundhati Parmar, Senior Editor, MD+DI