Reflections on the Past Year in Medtech

Thirteen is perhaps the most reviled number in Western society. Long associated with bad luck, the digit has been known to elicit illogical behavior in ordinarily rational, intelligent and fearless individuals. Nobel Prize winner and United Kingdom Prime Minister Winston Churchill—considered one of the 20^th century’s greatest wartime leaders—avoided Row 13 in theaters and airplanes. Christopher Columbus so feared the number that he deliberately changed the date of his arrival to the New World from Oct. 13 to Oct. 12, 1492, to avoid the stigma of such an evil omen, according to Italian scholars.
 
Some societies, however, associate 13 with good fortune. In prehistoric Israel, for instance, 13 was a sanctified number; it also represented regeneration for pre-Columbian Mexicans and was the doorway to eternal life for ancient Egyptians (they believed life has 13 stages, the last of which is death).
 
Few in the medical device industry would consider the past 12 months lucky, though. The controversial 2.3 percent device tax, venture capital funding drought, pricing pressures and never-ending regulatory rigmarole that impacted manufacturers throughout the year may have inadvertently reinforced their distrust of the number.
 
To better assess the past year in medtech and determine its general course in 2014, Medical Product Outsourcing spoke with Mark Leahey, president and CEO of the Washington, D.C.-based Medical Device Manufacturers Association (MDMA). He predicts an “extremely productive year” as provisions of the Affordable Care Act are finalized and implemented. His full conversation with MPO follows:

Medical Product Outsourcing: How would you characterize the past year (2013) in medtech?
Mark Leahey: 2013 continued to be a challenging year for the medical technology industry, but hopefully seeds for improvement have been planted. For example, we have begun to see some areas of improvement at FDA [U.S. Food and Drug Administration] as MDUFA III [Medical Device User Fee Amendments] is being implemented. MDMA is working closely with FDA and other stakeholders to ensure that milestones are being met and that there is more transparency and predictability in the regulatory process. In addition, there is growing bipartisan support to repeal the medical device tax. With the medical device tax in place since the beginning of the year, medical technology innovators have been making payments to the IRS [Internal Revenue Service] instead of investing in new breakthroughs and jobs, which clearly is a major hurdle for the industry. The good news is that more and more members of Congress are learning about just how harmful this policy is, and with 79 Senators and over 260 House members publicly supporting repeal, momentum continues to build to put an end to this policy once and for all.
 
MPO: What was the single biggest issue facing the industry in 2013?
Leahey: The complexity and range of our industry reflects how difficult it is to answer this question. Depending on one’s stage of growth and where an innovator finds themselves in the medtech ecosystem, it really could be one of many issues that is impacting your ability to grow. For many of our members and the industry, challenges with the regulatory process and a predictable pathway to commercialization continue to be the paramount issue. For others, it is the challenges of securing and maintaining a fair and adequate reimbursement for the technology they have developed. And unfortunately, the medical device tax continues to punish medical technology innovation, patient care and jobs. The diversity of our industry truly is reflected in the diversity of major issues a medtech innovator could be facing at any given point. This is why it is so important for us as an organization to be nimble and have rapid responses to the myriad of hurdles our members and the industry face.    
 
MPO: Please discuss some of the other issues impacting the medtech industry in 2013. How did they each impact the sector?
Leahey: Continued challenges with reimbursement and the regulatory process have impacted the industry, especially as investors today are looking at more and more industries to support. Medical technology is obviously a highly regulated field, and despite the important work being done, the longer timeframes towards profitability can deter venture capital and other critical resources for tomorrow’s innovations. In addition, as more and more attention is paid to the cost of care, it is important to recognize treatments and technologies that are bending the cost curve down and keeping patients out of hospitals and in productive lives. Large investments are made up-front for medical technology, and MDMA continues to work with CMS [Centers for Medicare & Medicaid Services] and other agencies and payors to ensure that fair and adequate reimbursement exists to reward innovation and support this proud ecosystem.
 
MPO: How will this year’s issues/challenges shape the medtech industry in 2014? Please explain.
Leahey: MDMA has a long, proud tradition of activating and coordinating the grassroots activities of the medical technology industry, and we will continue to do so in 2014. All of these challenges we’ve discussed highlight the need to explain just how delicate the medtech ecosystem is to policy makers and elected officials. Over the years, as more and more federal policies and regulations have impacted medical technology innovation, MDMA has seen an increased attention and involvement in outreach and grassroots activities by our members, and we will continue to mobilize these efforts. We know that medical technology is the solution to our nation’s health care system, not the problem, and we will continue to work with our members, the industry and all stakeholders to make sure 2014 is promising for patients and providers.
 
MPO: What specific issues will confront the industry next year? Why?
Leahey: Despite all of the challenges that face this vibrant industry, we are confident that 2014 will be extremely productive for this unique American success story. MDMA will continue to champion an efficient and effective regulatory process to ensure patients have timely access to safe and effective products. In addition, MDMA will continue our work with Congressional committees and CMS to ensure that medical technologies and devices receive appropriate and adequate reimbursement. As provisions of the Affordable Care Act continue to be implemented and finalized – such as Physician Sunshine, Accountable Care Organizations, and more – we will closely follow these to ensure they do not unnecessarily impact innovation. Finally, with ongoing changes to and focus on compliance by federal and state authorities, it is increasingly important for the medical technology industry to stay up to date.  MDMA is currently developing a compliance “toolkit” for our members that will include sample governance documents, training documents and auditing documents. The purpose of the toolkit is to provide members with a “one-stop” resource to assist them as they continue to build their compliance programs and benefit from the experiences of others.