An Agenda for Innovation

At the beginning of the year, the powers that be at the Washington, D.C.-based Advanced Medical Technology Association (commonly called AdvaMed)—the medical device industry’s largest advocacy group—invite medtech reporters to the group’s headquarters on Pennsylvania Avenue to discuss their plans for the year ahead. The heads of the association’s different departments, along with its CEO and chairman, sit down with the press for an hour or so over lunch. They’ve done this—or something close to it—for at least as long as I’ve covered medtech topics in our nation’s capital (11 years—wow when did that happen? [minus a stretch while I worked for AdvaMed’s friendly competition, MDMA]).

For 2015, AdvaMed’s brass released a comprehensive set of policy proposals designed to renew the innovation ecosystem for medical technologies and diagnostics.

The honchos at AdvaMed call it their “Innovation Agenda,”and it’s a plan outlining a series of specific policy initiatives—regulatory, reimbursement, tax, international and research—that they claim will help speed patient access to the next generation of life-changing innovations.

“Advanced medical technology can provide solutions to the challenges facing global healthcare systems—improving patient access to high-quality, efficient care,” said AdvaMed Board Chairman Vincent Forlenza (his day job is as chairman, CEO and president of Becton Dickinson & Co.). “Our industry is committed to the development of new diagnostics, treatments and cures that improve public health. Policies that promote a sustainable health innovation ecosystem are required in order to put these technologies in the hands of the public.”

“The medical technology sector has the potential to drive the new innovation economy, developing the next generation of cures and treatments and creating well-paying jobs—the types of middle-class jobs the president and Congress want,” said Stephen J. Ubl, president and CEO of AdvaMed. “Our Innovation Agenda lays out a clear framework to make that potential a reality.

Implementation of the agenda will make regulatory and reimbursement procedures more efficient and transparent, speed patient access to breakthrough technologies, create a tax system that fosters innovation, and ensure fair access to world markets and continued investment in R&D.”

The plan includes recommendations under five policy pillars:

• Improving the regulatory processes at the U.S. Food and Drug Administration (FDA) so the cost and time of development and approval of devices and diagnostics is reduced, and the mission statement of the FDA’s Center for Devices and Radiological Health that American patients will be the first in the world to have access to new devices is achieved, while maintaining the highest standards of safety and efficacy;

• Restructuring coverage and payment processes at the Centers for Medicare & Medicaid Services (CMS) to support development of new technologies that improve treatment, diagnosis, or prevention and provide prompt patient access to these technologies;

• Reforming the U.S. tax system to promote innovation, starting with repeal of the medical device excise tax;

• Improving access to international markets by insisting on free and fair trade in medical technology and working with foreign governments to achieve innovation-friendly regulatory and payment policies; and

• Supporting the maintenance and growth of an infrastructure that fosters research and development.

Recent draft legislation being kicked around on Capitol Hill includes a provision for automatic Medicare coverage for FDA-approved medical device trials falls under AdvaMed’s second bullet point. AdvaMed claims the current CMS reimbursement framework for trials is unnecessary because the agency usually decides to support them, and that automatic coverage would bring medical device trials in line with the payment systems for drug trials. The proposal is part of the 21st Century Cures Act—a bipartisan bill that would significantly alter the way pharmaceuticals and medical devices are regulated. In fact, many of the association’s legislative goals noted above are tied to the comprehensive 393-page draft legislation, including the development of a “breakthrough pathway” by the FDA for faster approval of some medical devices. Fred Upton (R-Mich.), the chair of the House Energy and Commerce Committee, said his goal is to have a bill in the House of Representatives before Memorial Day and on President Obama’s desk by the end of the year.  “We really don’t want it to get caught up in the presidential politics of 2016,” he told an audience at the recent BIO CEO & Investor Conference in New York, N.Y.

Any innovation pathway that helps companies thrive in an evolving healthcare marketplace is welcome. Right now, medtech firms are turning to consolidation to compete (see Top of the News on page 12) in an increasingly commoditized sector with shrinking margins and fewer—and more involved—hospital buyers.

It might not be the magic bullet, but it’s a solid try.

Christopher Delporte
Editorial Director
[email protected]