Christopher Delporte05.02.07
Celebrating Advocacy
In its 15th Year, the Medical Device Manufacturers Association Continues Protecting Small to Midsize Med-Tech Companies
Christopher Delporte
Group Editor
Inside Washington: Dan Schultz (left), head of the FDA’s Center for Devices and Radiological Health, talks policy with MDMA Executive Director Mark Leahey (center) and Board Member Paul Touhey during the association’s 2006 annual meeting. |
For members of the Medical Device Manufacturers Association (MDMA), that relationship provides a unique voice of advocacy in Washington, DC. This year, MDMA marks its 15th anniversary.
From its inception in 1992, the organization has positioned itself as the champion of the small to midsize medical technology company that may not have the resources or the savvy to navigate Washington’s shark-infested regulatory and legislative waters.
“The little guys don’t have the resources that the big guys do,” Thomas “Tommy” Thompson, president of Plano, TX-based Neuro Resource Group Inc. and founding MDMA member, told Medical Product Outsourcing. “We’ve done a good job of protecting our members’ turf. There’s absolutely no doubt that we’ve become a factor, way beyond our budget and way beyond our staff size.”
Thompson, along with a small group of device executives, founded the association in response to a perceived need for a group to play more of a watchdog role to protect smaller companies from being affected by FDA performance and device review issues.
“There was a time—around 1992 through 1994—that FDA review times for 510(k) products were taking up to nine months,” Thompson recalled. “Small companies can’t afford to wait that long. If you were trying to start a company with new technology, you were going to fail because you couldn’t deal with the agency or you didn’t have the time. At one point, the FDA even stopped picking up the phone.”
Around that time, the FDA began to push for a user-fee program to help fund additional resources to meet product approval backlogs. While Thompson and his group agreed the FDA needed to improve its approval process, they saw the proposed fee system as a “tax on innovation,” Thompson
said.
The MDMA hired its first executive director in 1993 and began lobbying efforts, which ultimately were successful, to help defeat the first iteration of a device user fee program.
“We shocked everyone. This be-came the rallying call that little guys could make a difference,” Thompson added. The newly formed group continued to focus its early efforts on FDA reform, working toward what became the Food and Drug Administration Modernization Act of 1997, introduced by Reps. Joe Barton (R-TX) and Anna Eshoo (D-CA).
Despite its best efforts early on to keep its membership from being “burdened” by user fees, MDMA—along with other industry stakeholders—participated in negotiations for the first version of the Medical Device User Fee and Modernization Act (MDUFMA) in 2002.
“Our job was to improve the bill as much as possible and get the two-tiered threshold in place for small companies,” explained Mark Leahey, who has been MDMA’s executive director since December 2002. “MDMA was the only association advocating reduced fees for small companies.
The threshold meant that companies with less than $30 million in sales paid reduced user fees for product applications submitted to the FDA. In 2005, spiraling increases in user fees were reigned in by legislation to stabilize MDUFMA. Fee increases were capped and the small-company threshold, as a result of MDMA’s advocacy efforts, was raised to $100 million.
“Many larger companies that weren’t particularly supportive of that kind of change, but at the end of the day, policymakers were in line with the perspective of the small company,” Leahey said. “Small companies drive innovation in
the medical device market.
Eamonn Hobbs, president and CEO of Queensbury, NY-based Angio-Dynamics, said he was “impressed from day one” with the clout that MDMA had on Capitol Hill. Hobbs, who also serves on the MDMA board as treasurer, said that much of the association’s “sway” in Washington’s power corridors comes from the dedication of its membership.
“Small medical device firms tend to be associated with a strong-willed and passionate management. So when they join MDMA, they bring the same passion and energy level forward on the lobbying side and they get a lot of things done considering the small size of the organization,” he explained. “The MDMA charter really plays very well on Capitol Hill. Legislators understand that small companies are sort of the American way—Mom and apple pie. And it’s critically important to give this group of small companies a huge voice.”
Beyond MDUFMA
While MDMA may be the device industry’s version of David taking on Goliath, there are only so many issues a small association can tackle. How does it choose which battles to wage?
“We look at each issue individually and determine the impact it may be having on member companies and the extent that others may or may not be dealing with a particular effort,” Leahey said.
One such issue with which the MDMA has distinguished itself, according to Leahey and many board members, is the pursuit of hospital group purchasing organizations (GPO) reform. GPOs are buying groups that hospitals use to purchase supplies and equipment. The association contends that a safe harbor from anti-kickback legislation granted by Congress in 1986 has allowed GPOs to legally collect excessive fees from suppliers to whom they award contracts, in turn excluding other competitive medical technologies.
“Small companies are hard pressed to gain access to the consumers because of road blocks the GPOs put up,” Hobbs said. “MDMA has had a tremendous impact on limiting, to some extent, the GPOs’ ability to inhibit innovative small companies from getting access to the marketplace, though we still have a long way to go and a lot of work to do.”
Since 2002, the Senate’s Judiciary Committee has held four hearings on the topic, largely driven by the MDMA’s vocal opposition to the issue.
“GPOs have a big impact on our membership,” said Paul Touhey, president and chief operating officer of Fujirebio Diagnostics and a former MDMA board chairman. “We make a difference because we’re passionate, we do our homework, and we dive deeply into an issue. The GPO issue is the perfect example.”
Thompson said that when MDMA initially took on the GPO reform issue, GPO executives called board members, threatening to pull business with MDMA member companies that supported the association’s efforts.
“We had to have the guts to stay the fight and keep this in front of Congress,” he said. “We’ve never said the theory of group purchasing is a bad one, but the way it’s currently structured and funded doesn’t make the playing field level.”
The Road Ahead
Leahey said the association would continue to lobby for GPO reform, in addition to its advocacy efforts to limit the negative effects of device contract gainsharing programs currently being explored by the Centers for Medicare & Medicaid Services (CMS). He also said MDMA would continue its work on the reimbursement front with CMS.
“We also will continue to explore other important issues that may have a critical bottom-line impact on our companies’ ability to succeed,” Leahey said, adding that “input and experience from a growing membership” helps.
“The opportunities and challenges ahead are significant and we look forward to continuing to represent the interests of innovative, entrepreneurial device companies in Washington,” he concluded.