An MD&DI February 1998 Column
MDMA's former executive director examines the medical device industry's history, recent legislative victories, and the challenges it faces.
In late 1994, CEOs and top regulatory affairs officers at U.S. medical device companies and trade associations began meeting in attempts to chart a new direction for FDAan agency that medical device manufacturers, by Congress's direction, must contend with every day. The task: change the unpredictable, subjective nature of this $1 billionbudget, 10,000-employee regulatory agency so it can "partner" with industry to deliver safe, efficacious medical technologies to patients more quickly. To say that people had differing views on how to accomplish this task is an enormous understatement. Three years laterafter struggling, debating, lobbying, and warring with self-proclaimed consumer groupsthe device industry succeeded: President Clinton signed the FDA Modernization Act of 1997 into law on November 21.
This is unquestionably the largest restructuring of FDA since the enactment of the Medical Device Amendments to the Federal Food, Drug, and Cosmetic Act in 1976 when Congress proclaimed that if a product was not a drug, a biologic, or a food, it was a medical device. Despite the vast differences between product lines (e.g., in vitro diagnostic test kits, IV catheters, linear accelerators, kidney dialysis machines, and automated external defibrillators), medical device manufacturers have been regulated under the same set of laws, for better or for worse, ever since. Now that the new law has been passed, the industry needs to examine how it is going to build on this recent success, revisit some of the lessons learned in the process, and identify what it is this industry seeks to accomplish in Washington in the years to come.
"It is not the writing of the lawsit is their execution" (Thomas Jefferson). Bruce Burlington, MD, and his staff at CDRH are to be commended for the improvements made in the management of the device program during the past two years. However, implementation of an entirely new law will be the ultimate test of their skills. Congress must continue to provide the constructive oversight that it has demonstrated in the past three years to ensure that the execution of the law is consistent with its intent. The national trade associations involved in the lobbying effort, namely the Medical Device Manufacturers Association (MDMA), Health Industry Manufacturers Association (HIMA), and National Electrical Manufacturers Association, also need to continue to provide leadership and direction.
The next FDA commissioner must take the same results-oriented approach Burlington has. Concepts like process improvement, reengineering, efficiency, and streamlining, often only mentioned following a management consultant's audit, should become part of the new FDA environment. With proper execution, this law will provide flexibility for each division in CDRH to further streamline the device approval process and, it is hoped, add consistency to the enforcement process.
The longer-term issues facing this industry are complex, including strengthening the relationship between industry and Congress, making sure that the next FDA commissioner is a strong manager by letting Congress know its needs, and identifying a leader on Capitol Hill to replace the retiring Senator Dan Coats (RIN), who learned about our industry, established a continual and aggressive public relations front, and kept companies committed to Washington representation.
GROWING INTO COOPERATION
Since the passage of the 1976 amendments, most device companies have been on the offensive, adapting to the ever-changing marketplace. Through well-calculated technology acquisitions and concentration on international growth, the industry has become one of the leading high-technology sectors in the United States, boasting an impressive $5.1 billion export manufacturing surplus. Yet, although it is a perfect exemplification of the type of business that is fueling U.S. economic growth, the industry has been mysteriously naive in the ways of Washington policy making.
For example, from 1994 to 1996, the leaders of the three national medical device trade associations rarely spoke to one another while working on FDA reform legislation and waging weekly press release wars. The industry leaders would not have been successful in 1997 either, had the three groups not united to work as a team. We learned from the pharmaceutical companies that speaking as one is far more effective. The marketplace is where competition should exist, not on Capitol Hill.
Despite early problems, the industry has managed to score a number of impressive legislative victories since 1994, including the following:
- Elimination of medical device user fees.
- Passage of the FDA Export Reform and Enhancement Act of 1996.
- Enactment of the FDA Modernization Act.
While these wins did not come easily, it will be far more difficult and much more expensive in the future if the industry does not maintain its present forward-thinking attitude and activity level.
EDUCATION IS PARAMOUNT
It is time to educate the people in Washington who make decisions that affect our bottom line about the medical device industryincluding congressmen, key senior staffers at HHS, FDA, HCFA, the U.S. Department of Commerce, the U.S. Trade Representative's office, and the domestic policy staff in the White House. Often, top policymakers only hear about medical devices when they're in the hospital or there is a product recall.
The level of ignorance among our policymakers is epitomized by some of their comments, such as, "Just how long does it take to get a 401(k) approved?" (a veteran member of the Senate Labor and Human Resources Committee in early 1997) and "Medical devices? . . . You mean like rubbers and stuff?" (a senior senator two days before a scheduled vote on FDA reform). Unfortunately, the primary congressional committees that create legislation that affects our industry and appropriate money to FDA every year have little comprehension of what medical device companies do. Lawmakers typically have little knowledge of the specialized needs of the medical device industry when enacting laws that protect intellectual property and control medical research, medical device approval times, marketing, and reimbursement. Moreover, without adequate congressional oversight, regulations promulgated by FDA often ignore the needs of the medical device industry.
The industry must decide how to best manage its Washington presence. Politicians must be aware that medical device manufacturers help save lives, introduce new technologies, provide high-paying jobs, and are true entrepreneurs. Manufacturers must also align themselves more closely with patients and physicians who use their technologies. Policymakers need to recognize the true value of this industrynot just in dollars and cents but in human value.
Further, the management of the leading companies needs to take at least two days each year to come to Washington to encourage the adoption of regulatory and legislative policies that benefit the industry and ultimately the patients. CEOs should not come to Washington only when they need something from Congress. Medical technology and innovation fairs could show off our technologies on Capitol Hill, and congressional hearings could examine the benefits of new, innovative technologies and how they positively affect patients.
By educating the young lawmakers who will one day be leaders and committee chairs, such as Congresspersons Joe Barton (RTX) and Anna Eshoo (DCA), the industry protects itself now and positions itself for future efforts. Education must be conducted by the industry as a whole, not by individual segments, e.g., orthopedic manufacturers versus IVD manufacturers.
When policymakers in Congress, the White House, and the executive branch contemplate issues critical to the bottom line of every medical device company, they need to understand that establishing uniform product liability laws, getting predictable FDA product approval times, assuring consistent reimbursement rates at HCFA, guaranteeing future access to biomaterials, preserving research and development tax credits, and the breaking down of trade barriers are all critical elements of this industry's future. The device industry needs to be on the offensive and participate in the debate when the federal government considers policies that affect its core businesses.
THE NEXT COMMISSIONER
A strong manager is needed in the commissioner's office to run FDA. I believe this is possible only if an individual is brought in from outside the federal government. A background in science/medicine may be important, but identifiable success as a manager of a large, multidivisional organization should be the primary criterion. The next commissioner should audit FDA's budget, thoroughly review potential conflicts of interest at the deputy commissioner level, and hire a third-party auditor to analyze the work flow at each center. A CEO-level medical device advisory committee that is representative of the device industry (80% of companies have fewer than 50 employees) should be established to report industry issues directly to the commissioner. David Kessler's lack of interest in medical technology issues was not acceptable.
FINDING A NEW ALLY
Without Senator Coats, who is retiring this year, the medical device industry would not have any FDA reform legislation. Coats, Barton, and Eshoo have been the biggest Capitol Hill supporters of this industry for the past three years. Regardless of one's partisanship, these three individuals must be supported. It is unclear who is going to step up to the plate in Coats's absence after 1998. No clear favorite comes to mind other than perhaps Senator Bill Frist (RTN). As a rising political star in the Republican party, Frist has already been tapped as its primary spokesperson for all health-care-related matters, from slowing the growth of Medicare and Medicaid to reimbursing doctors and debating cloning issues. If Frist can make the time, he is the candidate. One way or another, the void that will be created when Coats retires must be filled quickly.
COMMITMENT FROM CEOS
The device industry has been given an opportunity to build upon its newly established foundation with key leaders in Congress. If, however, it becomes complacent with this recent victory, it will once again struggle to keep up with its counterparts in the pharmaceutical industry. We will never be able to compete head-on with pharmaceuticals in terms of media exposure, but with a cooperative campaign targeted to congressional leaders and committees, we can be effective. The leadership is going to have to come from withinCEOs willing to take the time to come to the nation's capital to keep the industry on the offensive. I hope you all choose to be a part of it.
Jeffrey J. Kimbell was executive director of MDMA from the fall of 1994 through January 1998. He is now CEO of Jeffrey J. Kimbell & Associates, based in Washington, DC.