Medical Device Industry Getting Attention on Capitol Hill

For better or worse—depending on one’s perspective—it seems the medical device industry is attracting a lot of attention from lawmakers in both houses of Congress. From 510(k) reform to allegations of device overuse, the machinations of the device industry are not escaping Washington’s gaze.

Weighing in on the proposed reform to the U.S. Food and Drug Administration’s 510(k) clearance process are lawmakers from one of the nation’s medical device hotbeds—Minnesota. Democratic Sens. Amy Klobuchar and Al Franken along with Republican Rep. Erik Paulsen have written a letter to FDA Commissioner Margaret Hamburg about upcoming device review changes.

The Minnesota three were not alone, however. They recruited a significant number of their colleagues—from both sides of the aisle—to share their concerns as well. The bipartisan group of 15 senators urged Hamburg to, among other things, adopt a more deliberate, cautious approach to amending 510(k) versus the radical wholesale restructuring that many medical device firms have expected.

In addition to Klobuchar and Franken, other co-signers included: Massachusetts Sens. Scott Brown (R) and John Kerry (D); Sen. Pat Roberts (R-Ks.); Nebraska Sens. Ben Nelson (D) and Mike Johanns (R); Sen. Kay Hagen (D-N.C.); Republican Texas Sens. John Cornyn and Kay Bailey Hutchinson; Sen. Olympia Snowe (R-Maine); Sen. Evan Bayh (D-Ind.), Debbie Stabenow (D-Mich.), Sen. Bob Casey Jr. (D-Pa.); and Sen. John Barrasso (R-Wy.). Clearly, representatives from large medical device clusters throughout the United States are represented—though voices from California are noticeably absent.

“Given the potential for enormous disruption in the innovation process, we believe FDA must proceed cautiously,” the senators wrote. “We believe FDA should focus first on non-controversial proposals, but before any proposed change to the 510(k) is implemented, it is essential that FDA provide stakeholders ample notice and opportunity for comment.”

Signers of the letter also urged the FDA to operate in “a transparent fashion and provide greater detail on the specifics of each proposal before moving forward.”

Lawmakers also asked the FDA to “carefully consider” the impact of any proposed change to the 510(k) process on firms’ ability “to innovate in a predictable and consistent regulatory environment so they can continue to bring medical advances to patients.”

From protection to crosshairs, one top Republican in the U.S. House of Representatives is targeting the orthopedic industry. For people who think the medical device industry might get a better deal from a Republican Congress, this could make them think again. Rep. Darrell Issa of California is the incoming chairman of the powerful House Oversight and Government Committee. In early December, he told the Wall Street Journal that he wants to cut Medicare spending on orthopedic devices that doctors overuse.

According to Issa, his own doctor informed him that surgeons have an incentive under Medicare to implant many joint and bone screws to support patients’ spines, when fewer implants, or perhaps none at all, might be equally effective and safer.

“They have got to come up with a system that doesn’t reward people for putting more metal in somebody’s spine,” Issa told the WSJ. “My committee can help by looking at whether the government is answering and informing about the lowest-cost, least-invasive procedures.”

Issa said it may be time for the Centers for Medicare and Medicaid Services to consider cost-effectiveness in coverage decisions for medical devices, as long as the decisions are made by physicians, not by government “bureaucrats.” In the past, Republicans have been opposed to government panels making cost-effectiveness decisions, but Issa seemed to be OK with medical panels of “people who care about what’s best for their patients.”

In yet more medical device industry “in the crosshairs” news, according to a report released on Dec. 7, a Senate investigation found that Medicare spent millions of dollars for stents implanted by a Maryland doctor—Dr. Mark Midei—accused of putting them in patients who didn’t need them.

Senate Finance Committee Chairman Max Baucus (D-Mont.) and ranking member Chuck Grassley (R-Iowa) released a report detailing the case of a doctor who reportedly implanted nearly 600 potentially medically unnecessary stents from 2007 through mid-2009 at St. Joseph Medical Center in Towson, Md., and his relationship with the manufacturer of the stents, Abbott Labs. The Senators’ report found that the questionable stent implantations cost the Medicare program $3.8 million during that period. Baucus and Grassley initiated their inquiry as part of the Committee’s oversight role of the Medicare and Medicaid programs and the Senators’ efforts to protect taxpayer dollars from waste, fraud and abuse after media reports unveiled the alleged improper procedures.

“Hospital patients expect their care to be based on medical need, not profits. This report sets forth alarming evidence that patients at St. Joseph Medical Center received unnecessary and potentially harmful stent implants time and again—a pattern that is shocking, disturbing and shameful. Doctors should not be performing invasive medical procedures patients don’t need, and taxpayers certainly shouldn’t be paying for these wasteful and improper implantations,” said Baucus. “Even more disconcerting is that this could be a sign of a larger national trend of wasteful medical device use, which is why we included aggressive new tools in the new health care law to fight fraud, waste and abuse. The health care law improves screening of medical providers and increases oversight to root out fraud, waste and abuse like this, shining a spotlight on problems like these and helping ensure cases like this don’t happen again.”

According to Grassley: “The best response to these concerns is total transparency and effective peer review.”

The healthcare oversight report also examined the response of St. Joseph Medical Center to the discovery of the questionable implantations. The report notes that Abbott Labs placed the Maryland doctor on its “Project Victory” list of top stent volume cardiologists and paid for at least two social events at the doctor’s home, including a barbeque and crab dinner, in 2008. After St. Joseph Medical Center barred the doctor from practicing, Abbott Labs hired the doctor to promote and prepare safety reports on its stents in China and Japan, according to internal documents the company provided to the Committee.

From fiscal year 2004 to fiscal year 2009, the Medicare Part A program paid an estimated $25.7 billion for cardiac stent procedures and approximately $108.9 billion for 6.9 million procedures related to medical devices, according to the report. Fraud, waste and abuse in the health care system cost Americans at least $60 billion a year—3 percent of total healthcare spending. Other similar cases of apparently improper cardiac procedures have been uncovered at medical facilities across the country. Baucus and Grassley launched their review of this case to look for patterns that might have implications for preventing waste, fraud and abuse in Medicare and Medicaid.

Midei’s attorney, Stephen L. Snyder, said the committee’s investigation was not thorough because it relied on documents that were not supported through subpoenas from his client.

“I don’t believe they made any findings and to suggest that having a barbecue at one’s house implies some type of favoritism is ridiculous,” Snyder said. “It’s done all the time, it’s not a big deal.”

Abbott spokesman Jonathon Hamilton said the company’s consulting relationship with Midei ended early this year. He said the e-mails and actions mentioned in the report were being addressed internally, adding that the company recognizes “there were some inappropriate individual communications.”

Hamilton said that patient treatment is the company’s highest priority.