Leveraging Documents in Medical Device Development


Alpaslan Yaman
In the development process of any new medical device, time to market is a key variable. Navigating through the design control process, it is likely that some aspects of a new product can leverage research that has been done in the past. Unless the platform is completely new, most products are designed within the areas of a company's core competency. Leveraging knowledge of the organization and its previous work minimizes redocumenting known technology.

However, the company needs to fully understand what aspect of the leveraged document applies, and also how it applies to the specific project under development. The term leveraging documents means that concepts or studies that were executed for a previous like product, whether in design, development, or verification and validation phases, can be applied to the next project of similar or like design.

Another interpretation of leveraging may be using knowledge from previous studies or experiments in a sort of “lessons learned” approach. However, that more-general approach, even though it may be an expected and a welcome part of any development or business growth, may not be applied to a specific document.

Reinterpreting Documents

Merely referencing (leveraging) like-titled documents, based on subject or sameness of the device, creates a state of being outside of the design control system.

A document may be leveraged in one case for which it was a viable application, but that document now takes on a different interpretation of the original document's foundation. As the next project is completed, the documents that were leveraged need to be at a minimum, updated in the design history file, with descriptions of how they were leveraged and whether any of their final conclusions may have been affected. If such a process is not done accurately and consistently, then subsequent projects that use the leveraged documents will be yet another level removed from the original documents.

For example, assume that a company has a product line that has been on the market for several years. The products have always had a basic structure, both in design and materials of fabrication. This product line has always been terminally sterilized using ionization attack. All of the sterilization validation, including product integrity, has been completed some years ago. Every subsequent project leverages the original sterilization cycle development and validation data without reassessing the assumptions and conclusions from the original work. Now a project from this existing platform is being progressed into another new product, but one of the key materials of fabrication is slightly different than those from the past. An assessment is done to show that the standard (midpoint) sterilization cycle is acceptable for this new product. Thus the company decides to leverage the existing sterilization cycle development and validation without more-detailed assessment.

A further review of the original sterilization cycle work would show that the operational range goes beyond the standard cycle midpoint that was used in the assessment of this new project. So, would the leveraged data from the original qualification, including the product shelf-life study, apply for this new product's operational range? Without a comprehensive study to show whether the product is viable for that same range, one could not say for sure, and thus the project may acquire a serious deficiency.

Even more problematic, within this file would now be a leveraged document and a tie to an unconfirmed conclusion. And the next project, which is a slight modification of this new product form, would be leveraged against this interpretation and may further weaken the position of the original study.

Another situation to avoid is using a conclusion from a report or study without understanding how the data were analyzed. It is imperative to understand how the study data were acquired, whether the method used may have been changed since that time, or whether the method is still in use. Data acquired by an alternative method may not be equivalent to the original method; an equivalency analysis can determine how the data can be comparable.

During the planning phase for a project, at its onset, and at the initiation of each design phase, it is essential to review all documents being considered for leverage to confirm their suitability. Reviewing what can be leveraged is typically part of the design control process. That does not mean just a cursory review of the title and perhaps the summary and conclusion of the documents. It means a thorough read of the objectives, the assumptions, and the acceptable criteria of the documentation. It also includes a technical assessment by subject matter experts. They can determine the viability of technical leverage to a particular project.

Documents that are being leveraged as a whole should include a cover memo that summarizes exactly what aspect of the document applies and how it applies. If such a memo is not attached, then there's a possibility that during a review of the project, the reviewer may conclude that all aspects of the leveraged document apply. If the leveraged data and documentation do not explicitly apply, the gaps that exist create a condition of potential nonconformity and noncompliance.

Having a validation master plan for a project helps the process go smoothly. If the leveraged document is for a product that shares a similar process but is not exactly the same as the previous one, then the summary review document should discuss the differences between the leveraged validation master plan as well as how the leveraged document does apply. If there are significant differences between the two products and processes, then review of the leveraged documents may prove to the development team that it may be more time-efficient and cost-effective not to leverage. It may be better to prepare a new document for that project.

Medical Device Leverage

Leveraging documents can be prudent in the area of medical device manufacturing. Multiple products may share the same process, and in performing the installation qualification, operational qualification, and performance qualification for that equipment, the worst-case approach is employed. If a new product fits within that assumption of worst case (i.e., the product does not present a new worst case) and the work that was previously performed can appropriately be leveraged. A simple, short memo to the file should state that the new product uses the same process and falls within the original worst-case scenario qualification.

If, however, the new product does not fit the original qualification in some way, then the areas of disparity need to be addressed through original documents. It could be in the form of a study protocol and report addressing those critical areas. Consider requirements in every phase of development for the new innovative product.

Another example of leveraging documents may be in the case of failure mode and effects analysis (FMEA). If an official FMEA plan exists for a specific product platform the project development team may decide that the work done in the past is sufficient to be leveraged. But a truly new product is not likely to be identical to a previous one. The new product should be assessed against the same caveats or assumptions used in the first FMEA exercise before deciding that the original conclusions apply as well to the new product.


One cannot assume that leveraged documentation and technical knowledge is adequate to pass a new product through the design control process. An independent review may conclude that leveraging such documents was erroneous. Even if this rejection does not halt design development, it may cost the company time and money. A project may have to go back into a preceding development phase to redo or initiate work that had not been anticipated. That could cause a delay to the eventual filing and commercialization date.

If a company chooses to go forward with a project that may have a qualification gap, assuming that the situation will be fixed after filing or commercialization, it will have to consider more than a possible delay. Such behavior could cause a loss of good faith on the part of the regulatory establishment.

Regardless of the path taken, the key to any project development approach is to know what risks are prudent for a project and which are not. This is ultimately dependent on the technical experience and knowledge of the company. Having the knowledge to determine what documents or parts of documents may be leveraged for a particular project at a particular time is a key to improving cost-effective and time-efficient product development.

Alpaslan Yaman, PhD, is a principal consultant for Biotech, Pharma & Device Consulting LLC (Parsippany, NJ). He is a certified black belt and has a PhD in pharmaceutics with a minor in physical chemistry from the University of Missouri. Contact him at ayaman@biopharmadvice.com.

Copyright ©2009 Medical Device & Diagnostic Industry

The Custom Device Exemption: What Is It And Does It Ever Apply?


Jennifer Davis
Jeffrey Gibbs
In 1976, Congress enacted the Medical Device Amendments (MDA). This law, now part of the Federal Food, Drug, and Cosmetic Act (FD&C Act), generally requires FDA clearance or approval before a new device can be marketed in the United States. Congress enacted an exception, however, for custom devices. A device that qualifies as a custom device is exempt from FDA premarket clearance or approval.

The custom device exemption states that a device “which, in order to comply with the order of an individual physician or dentist. . .necessarily deviates from an otherwise applicable performance standard or [premarket approval requirement],” is not subject to performance standards or premarket approval.

However, to be considered custom, a device has to meet certain criteria. According to the FD&C Act, the device should not generally be “available in finished form for purchase or for dispensing upon prescription and is not offered through labeling or advertising.” The device must also be intended for use by an individual patient who is named. In addition, the device must be made in a specific form for that patient, or intended to meet special needs “in the course of the professional practice” of a specific physician or dentist but is “not generally available to or generally used by other physicians or dentists.”1

FDA has also published a regulatory definition of custom device. The definition essentially restates the statutory criteria in list format, although with some subtle but potentially significant differences. According to FDA, a custom device is one that:

• Necessarily deviates from devices generally available or from an applicable performance standard or premarket approval requirement in order to comply with the order of an individual physician or dentist.
• Is not generally available to, or generally used by, other physicians or dentists.
• Is not generally available in finished form for purchase or dispensing upon prescription.
• Is not offered for commercial distribution through labeling or advertising.
• Is intended for use by an individual patient named in the order of a physician or dentist, and is to be made in a specific form for that patient, or is intended to meet the special needs of the physician or dentist in the course of professional practice.2

In exempting devices from the approval requirements to accommodate the special needs and circumstances of patients and physicians, the custom device provision is both compassionate and humanitarian. Custom devices, however, should not be confused with the separate and distinct FDA categories of compassionate use and humanitarian use devices. Compassionate use occurs in the context of a device clinical study and requires prior approval from FDA allowing patients who do not meet the study's inclusion criteria to have access to the device when there is no other alternative to address a serious disease or condition. A humanitarian use device (HUD) is one that is expected to benefit fewer than 4000 patients per year and meets other criteria. HUDs require prior FDA review and approval through the submission of a Humanitarian Device Exemption.

Although there is no dispute that it exists under the law, there has been controversy over what products—if any—actually fall into the custom device category. The drafters of the MDA thought the exemption was needed “so that innovation is not stifled and so that custom fitting or sizing would not be prohibited.”3 They noted that “[a]mong examples of devices in which important features are customized are orthopedic and other prosthetic devices, dental devices, and specially-designed orthopedic footwear.”4

The House Conference Report for the bill that became the MDA explained that the exemption applied only to devices intended for use by an individual patient named in an order by an individual physician, dentist, or other qualified person. Further, to be eligible, the device needed to be made in a specific form for such patient or intended to meet the special needs of such physician, dentist, or other specially qualified person in the course of his professional practice.5

A Lack of Application

Despite Congress carefully defining the term, reaching a consensus on how the custom device definition should be applied has proved elusive. From FDA's perspective, some manufacturers have abused the category. Over the years, the agency has sent warning letters to several companies alleging that their programs to offer custom devices—even if designed to meet the unique needs of a patient—were unlawful. For example, in a June 2003 letter to Inter-Os Technologies Inc. (Lone Tree, CO), the agency objected that “[t]wo patients received implants of the same prototype. . .device. Although you ‘customized' the device to fit each patient, the [device] was the same design and not made specifically for each patient.”6

Industry maintains that FDA's interpretation is unduly cramped. Critics say that FDA confers custom device status only under the rarest of circumstances, e.g., a physician who needs special equipment because of thalidomide-associated birth defects. In their view, FDA has largely written the custom device provision out of the law.

Many years ago, FDA said it would issue guidance to explain its narrow interpretation, but no guidance has yet been issued.7 In 2004, the law firm of Klepinski & Duval submitted a proposed guidance document attempting to clarify the criteria. The status of this document within the agency is unclear. FDA assigned the document a public docket number, but the draft remains the only entry in the docket, and the agency has not responded.

Until recently, the only judicial decision to address the custom device exemption, and briefly at that, was the 1985 case Contact Lens Manufacturers Association v. FDA.8 There, as a side issue, the court deferred to FDA's view that widely prescribed rigid gas permeable contact lenses, while tailored to patients, could not be custom devices because they were generally available to, or generally used by, other physicians.

Endotec—Round One

More than 20 years after the contact lens case, came the Endotec case.9 In 2006, FDA sued Endotec Inc., an Orlando, FL-based orthopedic device manufacturer, seeking to permanently enjoin the company and its officers from manufacturing and distributing various ankle, knee, and jaw implants as custom devices. The agency had previously issued Endotec a warning letter and placed the company on its Application Integrity Policy (AIP) list, rejecting the company's claims that such implants were custom devices exempt from the premarket approval and investigational device exemption (IDE) requirements.

According to Endotec, the ankle devices in question had a three-piece, mobile-bearing design that was not commercially available in the United States. Although similar to a standardized mobile-bearing design then being studied under an FDA-approved IDE, “each had differences because each was designed for an individual patient, according to that patient's physiology and pathology. . . . [S]ome ankles required a custom talus to account for bone loss, some required side walls on the tibial component, and some required flanges on the talar component.”9

The knee devices in question were one-part mobile bearings supplied to a single surgeon, who used them in revision surgeries for another manufacturer's knee device. According to Endotec, this elderly surgeon “was concerned about performing revisions . . .because revisions required stretching the tibia and it was very awkward and difficult for him. [He] was also worried about causing ligament damage to the patient.” Endotec claimed its one-part knee bearing was designed to avoid this problem.

The jaw implant at issue was a part of a multicomponent implant then being studied under an FDA-approved IDE. According to Endotec, it was made “specifically for [a] patient. . .who had a tumor and was missing bone. The device was different from a regular fossa component because it did not have a plastic barrier. . . .[T]here was no device available off-the-shelf that would have fit [the] patient.”

During a district court trial in Florida, FDA contended that Endotec's ankle implants were not custom devices. FDA argued that although each device had been specially tailored and sized for a particular patient, the basic design of the implant did not necessarily deviate from ankle implants that were generally available. Thus, the implant was capable of being studied in a clinical trial. The agency also claimed Endotec's knee implants were not custom devices because they could be clinically studied, had been advertised for distribution, were available in finished form, and were not designed to meet the anatomical needs of the implanting physician. FDA argued that the jaw implant provided for a single patient was not a custom device because it was a finished device and had the same basic design as other available jaw implants.

The district court, calling FDA's interpretation “so narrow as to make the definition useless,” held that Endotec's ankle and jaw implants, but not its knee implants, were exempt custom devices. With regard to the ankle implants, the court found that this was “not a case where there was a standard deviation from a basic design because each patient had unique needs according to his or her pathology and each ankle device was manufactured according to the doctor's order for that patient. [The] ankle devices were not ‘merely a variation' within a range of sizes.” The court similarly found that Endotec's jaw implant was “manufactured specifically to account for the bone loss suffered by patient Robinson as a result of a tumor and thus, it was intended to meet the patient's specific needs” and “was not generally available to or used by other physicians.”

With regard to the knee implants, however, the court sided with FDA. It ruled that “Defendants have been unable to identify any ‘special need' of [the surgeon] that would bring the device within the custom device exemption” and that “the same bearing was implanted repeatedly in different patients.”

Endotec—The Appeal

Both FDA and Endotec appealed to the United States Court of Appeals for the Eleventh Circuit in Atlanta. Again, the central issue was whether Endotec's ankle, knee, and jaw implants qualified as custom devices. Reflecting the narrowness of FDA's interpretation, FDA argued that its interpretation of the custom device exemption was that a medical need had to be so rare or unique that clinical investigations were impossible. That is, an adequate population for a well-conducted study essentially could not exist.10

It also argued that a device meets the “not generally available in finished form” requirement only if it is one that the physician has created to treat a particular patient for a novel situation. Further, the device has to be made in a specific form for a specifically named patient, and it can be used only with that patient. FDA defined specific needs to mean designed to suit one individual, and not a group of patients with similar pathologies or a condition that appears in patient populations. Finally, custom status does not depend on whether the device is “in physical existence and in inventory,“ but rather on whether the manufacturer is able to accommodate the request based on a basic device.

On March 30, 2009, the Eleventh Circuit affirmed in part and reversed in part. It concurred that Endotec's jaw implant was a custom device, but not the company's knee or ankle implants.11

Disappointing those who had hoped for some conclusive analysis of the custom device provision, the Eleventh Circuit issued a very narrow decision. In ruling on the status of Endotec's products, it did not set out any broad-based criteria. Instead, finding that Endotec had commercially advertised its custom ankle devices, the court concluded that “the district court erred with respect to [that] prong of the custom device definition and, because a device must meet all five prongs of the custom device definition, we decline to address the remainder.” On May 14, 2009, Endotec filed a petition for rehearing by the court of appeals. The petition was denied June 23.

With respect to Endotec's knee implants, the court held that Endotec failed to show an abuse of discretion by the district court, failed to demonstrate a special need on the part of the implanting surgeon for these devices, and had advertised some of the knee implants in violation of the commercial distribution prong. The Court of Appeals did side with Endotec on the jaw implant. It said that FDA failed to demonstrate an abuse of discretion by the lower court in determining that such device was “not generally available to, or generally used by, other physicians or dentists.”


For three decades, the scope of the custom device definition has been a source of controversy. The Endotec case offered hope that clarity would at last be achieved. Those hopes have been dashed. The Eleventh Circuit did not provide sweeping guidance.

Yet the Endotec opinion does shed light on a few points. First, companies cannot advertise custom devices directly or implicitly. Promoting a custom device even once may be fatal to its status. Although the court did not rule on the ability to advertise custom device departments under the exemption, the permissibility of this activity is questionable after Endotec.

In addition, although the Eleventh Circuit deliberately avoided discussing the bounds of the statutory custom device criteria, it did make abundantly clear—citing eight federal cases—that the burden of proof lies with the party claiming the exemption. The presumption is that a product is not a custom device. Because FDA, based on past precedent, is very unlikely to give companies the benefit of the doubt on custom device status, this suggests that companies need to devote more effort to document the rationale for why a device qualifies for custom device distribution.

On the other hand, Endotec also suggests that a product does not necessarily forfeit custom device status simply for lack of exhaustive data proving no commercially available product is available. A physician's declaration that nothing else would suffice may be adequate, without having to prove that there are no alternatives.

In responding to FDA's argument that Endotec “did not address the features of the commercially available [jaw implant] and demonstrate it was unsuitable for this patient,” the Eleventh Circuit stated: “The . . . argument amounts to one of degree. . . . [T]he government merely demands more evidence. . . . The district court concluded that the appellees met their burden and the government has failed to show that it abused its discretion.”

When Congress drafted the MDA, it did not foresee how its provisions would be implemented. Congress drafted a lengthy provision for banning unsafe devices, and yet, only one device has been banned. Product development protocols, although appealing in concept, have withered into futility. And, although the custom device exemption was deliberately incorporated and defined in detail, FDA has rarely found a custom device that it liked. The Endotec case is unlikely to change that.


1. United States Code, 21 USC 360j(b).

2. Code of Federal Regulations, 21 CFR 812.3(b).

3. Senate Report, no. 94-33, U.S.C.C.A.N. 1070, 1083 (1976).

4. House Conference Report, no. 94-853 (1976).

5. House Conference Report, no. 94-1090 (1976), U.S.C.C.A.N. 1103, 1113 (reprinted in 1976).

6. Warning letter from Timothy A. Ulatowski, Director, Office of Compliance, CDRH, FDA to Randolph C. Robinson, President, Inter-Os Tech. Inc. (June 20, 2003).

7. “Multiple Custom Orders Likely Trigger IDE Rules,” 24:6 Devices & Diagnostics Letter, at 1-2 (1997); FDA Semiannual Guidance Agenda, 64 Fed. Reg. 61,881, 61,885 (Nov. 15, 1999).

8. 766 F.2d 592 (D.C. Cir. 1985).

9. United States v. Endotec Inc., No. 6:06-cv-1281-Orl-18KRS, 2008 WL 1909164 (M.D. Fla. Apr. 30, 2008).

10. Brief for Appellant at 23, United States v. Endotec Inc., No. 08-13693-DD, 2009 WL 804399 (11th Cir. Aug. 25, 2008).

11. United States v. Endotec Inc., 563 F.3d 1187 (11th Cir. 2009).

Copyright ©2009 Medical Device & Diagnostic Industry

Twinkle, Twinkle Nanostars Aid Imaging

Purdue researchers pose with the gyromagnetic imaging equipment that enables them to spot gold nanostars. (Photo courtesy of Andrew Hancock/Purdue University)
The twinkling movement that makes stars stand out in the sky is a concept being applied to biomedical imaging. By developing gold nanostars that flicker, researchers can see the particles amidst the noisy backgrounds that are typically found during imaging. Due to their visibility at near infrared wavelengths, researchers have used gold nanoparticles as contrast agents in imaging.
The 100-nm gold nanostars, which contain an iron oxide core, spin when exposed to a rotating magnetic field. This process causes light to scatter and creates the twinkling effect. The method, called gyromagnetic imaging, was developed at Purdue University (West Lafayette, IN).
The researchers conduct the imaging by putting a sample of cells with nanostars under a standard microscope. A white light with a rotating magnet is sent into the cells via a polarizing beam splitter. The light reflects back into the splitter and to a camera that gathers images at 120 frames per second. It captures the nanostars' signal as they spin at about 5 rps. The twinkling is controlled by the speed of the magnetic field rotation.
“It was surprising how well this method enhanced the imaging,” says Kenneth Ritchie, associate professor of physics at Purdue. “It can improve the contrast of the particles to the background noise by more than 20 dB and can clearly reveal a gyrating nanostar, where[as] with existing direct imaging methods, in many cases you wouldn't be able to definitively find a particle.”
The imaging method allows researchers to focus on the nanostars by increasing signal strength. When a signal doesn't have a frequency that corresponds to the magnetic field, it is suppressed in the images.
“Gyromagnetic nanostars combine strong optical signaling with a unique mechanism for reducing noise, allowing one to pick out the proverbial needle from the haystack,” according to Alexander Wei, professor of chemistry at Purdue. “The key is to enable the nanostars to twinkle at a frequency of our choosing. Our analysis picks out signals at that frequency and translates that information into images of remarkable clarity.”
The imaging technique is also inexpensive compared with other specialized equipment. According to Ritchie, the Purdue method only requires a halogen lamp and a $10,000 camera.
During the course of the research, the nanostars were found to be biocompatible and mild cell growth stimulators. The researchers are examining whether the nanostars have biological effects inside cells. In a paper about their work, appearing in a July issue of the Journal of the American Chemical Society, they demonstrated using the gyromagnetic imaging of the nanostars inside tumor cells.
The National Institutes of Health provided research funding.
Copyright ©2009 Medical Device & Diagnostic Industry

Student-Designed Device Could Strengthen Hand Testing


The Peg Restrained Intrinsic Muscle Evaluator (PRIME) enables more-accurate hand strength evaluation than methods that are currently available. (Image courtesy of Rice University.)
A senior project completed by undergraduates at Rice University (Houston, TX) has earned them much more than a degree. Motivated by a challenge issued by an orthopedic hand surgeon, a group of bioengineering students has invented a device to measure intrinsic hand muscle strength.

According to Shuai Xu, coinventer of the device, hand strength is generally evaluated by having patients hold up a hand and push in different directions. This type of assessment, which is based on feel, lacks repeatability and fails to adjust for small hands or unique morphologies, Xu says.

Hoping to give physicians a more useful tool, the student team created the Peg Restrained Intrinsic Muscle Evaluator (PRIME). The device consists of a pegboard restraint, a force transducer enclosure, and a PDA custom-programmed to capture measurements, says a university press release.

Using PRIME, a doctor can test a patients' hands in five minutes. The pegs are used to isolate a patient's fingers, and a loop that is fitted around the fingers measures the amount of force that is generated when a patient moves it.

Xu says PRIME could help hospitals and rehabilitation clinics compare the effectiveness of surgical interventions and diagnose neuromuscular degenerative diseases. Neuromuscular disorders such as spinal cord injuries, Lou Gehrig's disease, diabetes, and multiple sclerosis all affect the intrinsic hand muscles, Xu says.

Rice graduates Caterina Kaffes, Matthew Miller, and Neel Shah are the coinventors of PRIME. The student group won first place and $10,000 at Ishow, an innovation competition in Palm Springs, CA, that was sponsored by the American Society of Mechanical Engineers. They were also one of five winners of a contest at the Rehabilitation Engineering and Assistive Technology Society of North America conference that was sponsored by the National Science Foundation.

The students have a patent pending for PRIME. The device is currently being validated at the Texas Medical Center Institution.

Copyright ©2009 Medical Device & Diagnostic Industry

Pigs’ Hearts Offer Inexpensive Testing Method


Speeding up the development of tools for heart surgery is the aim of a machine built at North Carolina State University (NCSU; Raleigh). The dynamic heart system pumps pressurized saline solution through a pig heart, enabling it to function similarly to a live heart.

The research team says that this machine can help medical device developers reduce the cost and time associated with multiple animal trials. In a university release, Andrew Richards, the designer of the machine and a PhD student at NCSU, said that, “Researchers can obtain pig hearts from a pork processing facility and use the system to test their prototypes.”

The machine is not intended as a replacement for animal trials, but rather as a way to streamline the trials process. “This system creates an intermediate stage of testing that did not exist before. It allows researchers to perform ‘proof of concept' evaluations and refine the designs, before operating on live animals,” says Greg Buckner, PhD, director of the project and an associate professor of mechanical and aerospace engineering at NCSU.

The system is inexpensive for researchers to use. After the machine is purchased and set up, Richards says that it costs about $25 to run an experiment on the system. An equivalent experiment performed on a live animal would cost approximately $2500, he says.

In addition to testing prototypes, the machine also makes it possible for researchers to study surgical techniques. The computer-controlled machine allows the inside of a pumping heart to be filmed, which helps researchers determine the best method for repairing heart valves.

This project was funded by The National Heart, Lung, and Blood Institute of the National Institutes of Health. The Annals of Biomedical Engineering recently published the researchers' findings.

Copyright ©2009 Medical Device & Diagnostic Industry

Industry Groups Question Foundation of Proposed Imaging Cuts

NEWS Trends
As President Obama travels to town halls across the country to push his healthcare reform, patients and industry groups travel to the Capitol to voice their dissent. Proposed reimbursement cuts to imaging was the subject of the Medical Imaging & Technology Alliance's (MITA) visit to the Hill on July 29.
The alliance protested the proposed cuts in partnership with patient advocacy groups. Those advocacy groups also submitted a letter to the Senate Finance and House Tri-Committees that expressed opposition to an increase in the use rate assumption for imaging equipment. The letter stated that the rate increase would result in “draconian cuts for imaging services.”
The utilization rate assumption, which the Medicare reimbursement formula for imaging procedures is based on, is “the amount of time that imaging equipment operates during the hours a physician's office is open for business,” according to a MITA release. CMS recently proposed that the utilization rate should be raised from 50% to 90% for equipment that costs more than $1 million. Additionally, President Obama recommended a 95% rate for advanced imaging equipment.
Both MITA and medical technology industry group AdvaMed have criticized the foundation for the proposed rate increases. They say that the Medicare Payments Advisory Commission (MedPAC) recommendation that shaped these suggested rates is flawed.
“The MedPAC recommendation to reduce imaging payments is not based on rigorous analytic finding,” said president and CEO of AdvaMed Stephen J. Ubl in a written statement. The survey MedPAC conducted on imaging equipment had a low response rate, lacked geographical representation in the sample section, and focused on only two imaging modalities (MR and CT equipment), Ubl said.
Echoing AdvaMed's concern, MITA says that the proposed increases fail to take into account the lower rate of use in rural areas. Due to this geographical disparity, Ilyse Schuman, managing director of MITA, says that it is difficult to create an accurate nationwide sample to base the rate on. She worries that, if enacted, the rates would prevent patients in rural areas from accessing imaging technologies.
Schuman says that a better alternative is to rely on physician-developed appropriateness criteria (see sidebar on p. 20). By performing “the right scan at the right time,” imaging costs could be reduced “without harming access to patient care,” she said.
Establishing a nationwide diagnostic imaging exchange network (DIEN) is another potential cost-cutting measure that MITA supports. The network would allow doctors to access past scans of patients, thus eliminating many duplicative procedures, the industry group says.
If the recommended rates are implemented, patients wouldn't be the only group affected. The change in reimbursement policy could also stifle innovation among medical equipment manufacturers, Schuman says. The increased rates would make it more difficult for providers to invest in new imaging technologies.
Copyright ©2009 Medical Device & Diagnostic Industry

New BU Program Encourages Innovation

NE Trends

Rosen says that BU's goal for the program is to talk to physicians about clinical problems that need to be solved.
Boston University (BU; Boston) has launched a new awards program that encourages collaboration between medical engineers and clinicians. A $150,000 has been provided by from the Johnson & Johnson Corporate Office of Science and Technology (COSAT) to help such partnerships develop new medical technologies that solve unmet clinical needs. The grant enables student teams from different backgrounds and from up to 17 schools and colleges at BU to work on solutions to technology challenges faced by clinicians.

The university's Institute for Technology Entrepreneurship and Commercialization (ITEC) announced the BU Clinical Innovation Awards Program (CIAP) in August. The CIAP is part of BU's initiative to promote campus collaboration and the commercialization of medical products that enhance patient care.

“The purpose of this program is slightly different from other grants that are designed to work with people who have novel solutions or inventions,” says Jonathan Rosen, PhD, executive director of ITEC. “What we wanted to do was [get involved] even earlier in the process and talk directly with physicians about what problems they felt needed to [be] solved.”

Based on the ideas and suggestions of clinicians, ITEC can use the grant to assemble teams of student and faculty to work on solutions to specific problems. “The output of that effort will be the beginning of a traditional translational process where those solutions will compete for grant money within the university and outside and eventually result in commercialized products,” says Rosen. “This really is helping identify new problems to work on and getting more of the clinical community involved in the process of improving care for the patient.”

Rosen expects to be able to fund 5–10 research teams during the first year of the pilot program. He hopes that this number increases, along with the grant support. The CIAP will also facilitate collaboration between BU and local medical device companies.

Copyright ©2009 Medical Device & Diagnostic Industry

MedTech Sales Staffs Feel Economic Stress

News Trends

When patients and hospitals cut back on spending for medical products, the effects are felt throughout a manufacturer's business. As a result, some companies may need to cut their medical device sales representatives some slack, according to a market research report by ZS Associates (Boston).

With the economy still mired in a recession, the report found that medical products companies have tried to lessen its effect on product sales. For example, 36% of the firms surveyed have decreased sales quotas for their workers. But some salespeople may not be around to see the drops. The report also found that involuntary turnover among sales forces has increased four percentage points (from 3% to 7%) over the past year. Sales employees that have not been let go are staying put, however. The voluntary turnover rate has declined to 9% (from 12%) over the same period.

“While markets for medically necessary products have held firm, spending on medical products tied to discretionary or consumer-driven procedures, such as cosmetic surgery, has declined in the current economy,” says Chad Albrecht. He is an associate principal with ZS Associates and the lead researcher on this study.

Even manufacturers of equipment for common medical procedures have felt a pinch. For example, hospitals are reducing capital spending by holding off on big MRI and CT scanner purchases. Consequently, device firms are adjusting quotas for sales reps and tweaking their incentive programs to corral costs.

Executives cited setting fair sales quotas as their top concern, according to the study. However, just more than one-third of the companies are making changes to quotas to mitigate the effects of the current economic climate. Albrecht warns that companies that stick to unrealistic national forecasts may experience a decrease in sales, an increasingly apathetic sales force, and more employee turnover.

Although healthcare reform is still in its infancy on Capitol Hill, observers say industry can expect further medical reimbursement reductions. If that goes as planned, downward pressure on product prices will continue, the market research firm says.

ZS Associates' study surveyed employees from 42 U.S.-based medical companies. For an executive summary of the study, e-mail whitepapers@zsassociates.com.

Copyright ©2009 Medical Device & Diagnostic Industry

KMC Systems Boosts Contract Manufacturing Capabilities

KMC Systems Inc. (Merrimack, NH) is enhancing its contract manufacturing services with advanced proprietary software that is specifically designed for medical devices and instruments. The company’s manufacturing execution system (MES) lets customers outsource critical manufacturing projects and strengthens quality control. In addition to letting customers view project information, it manages documentation for traceability and regulatory compliance. The picture-based software system is customized to meet the requirements of each client program and provides step-by-step visual instructions to the manufacturing team. It automatically creates and stores regulatory documentation, including device history records, reports on calibration procedures, and test data for FDA audits. The MES allows rapid communication between assemblers, engineers, and customers to optimize production and management work flow. It features an automated serial assignment tool and bar code function for configuration management. The serial numbers can be assigned for modules, subassemblies, instruments, and critical components to provide a detailed record of each instrument’s production configuration. The company’s contract manufacturing services are part of KMC 360, a program created for contract design manufacture and field maintenance. KMC is an Elbit Systems of America (Fort Worth, TX) company. 

Physik Instrumente Improves Services at Headquarters

The company says that it expanded its capabilities to take advantage of the relatively low manufacturing costs in the United States compared with the European Union. PI also wants to make the company more competitive in the North American market.