Yet Another Hearing on FDA Device Approvals

Yet Another Hearing on FDA Device Approvals

Lawmakers on Capitol Hill continue to dig into the U.S. Food and Drug Administration’s (FDA) medical device review process—primarily the 510(k) program, the method by which the majority of medical technology is approved in the United States. This most recent inquiry was conducted by the Oversight and Government Reform Subcommittee in the House of Representatives. The volleys lobbed at the agency came from both Republicans and Democrats. The theme for the meeting was “Pathway to FDA Medical Device Approval: Is There a Better Way?”

Among the witnesses to appear before the committee were David Gollaher, Ph.D., president and CEO of the California Healthcare Institute (CHI); U.S. Rep. Erik Paulsen (R-Minn.); FDA Center for Devices and Radiological Health (CDRH) Director Jeffrey Shuren, M.D.; Rita Redberg, M.D., professor of medicine and director of women’s cardiovascular services in the division of cardiology at the University of California, San Francisco; and Jack Lasersohn, a general partner at The Vertical Group, a medical technology venture capital firm headquartered in Summit, N.J.

“The FDA and its regulatory policies profoundly influence the current state and future strength of the medtech industry,” said Gollaher. “But its regulatory processes have become unpredictable and slow, which, when combined with the impact of the “great recession,” the capital markets crisis, and more efficient regulatory processes in Europe, are having enormous and far-reaching effects on American competitiveness.”

According to a recent CHI report, 510(k) clearances have slowed by 43 percent and approval times for more complex premarket approval (PMA) devices have lengthened by 75 percent. Complex medical devices approved via the PMA process at the FDA are approved in Europe on average nearly four years ahead of the United States, up from just over a year earlier in the millennium.

Those who addressed the committee discussed the importance of the medical device industry to the United States, focusing on improvements to patient care, job creation, and economic competitiveness.

In California, for example, the medical device industry employs 107,000 people, more than any other state in the nation. Approximately 1,300 medical technology companies are located in the Golden State, the majority with fewer than 50 employees.

“Today, Congress, the FDA, medical innovators, patient groups and other stakeholders can come together with the will and ideas to restore agency performance—to rejuvenate, support and sustain a strong, science-based FDA and efficient, consistent and predictable review processes to ensure safe and innovative technologies and devices for patients in need,” Gollaher said during his testimony.

Paulsen said the FDA’s premarket review process lacks “consistency, predictability, and transparency,” which is making it difficult for medtech companies to release their products in the United States. One of the concerns that Paulsen cited is that reviewers often “shift endpoints” midway through the device review process. He said many companies report that FDA reviewers make new, seemingly arbitrary demands late in the product review process. Small companies, according to Paulsen, are hit the hardest by the problems with the FDA approval process.

“If this trend continues, more companies will look for greener pastures and take their innovations and their 400,000 high-paying jobs with them,” Paulsen said.

Paulsen cited Acorn Cardiovascular based in his home state of Minnesota as an example of the current “inconsistency” at CDRH.

According to Paulsen, Acorn Cardiovascular had several conversations with FDA staff about how to test its device. The company performed a randomized trial, met its targets, and, in the end, thought the device would be approved.

“But reviewers at the FDA moved the goalposts and required a new trial,” Paulsen accused.
“Because of this, investors shied away [and] Acorn couldn’t raise the capital to perform another multi-million dollar trial and had to close its doors.”

In January, the FDA released new guidelines to update the 510(k) approval process. The plan contained 25 actions that the FDA intends to implement this year. A handful of those actions already have been put into practice, but most of them are scheduled to be implemented later this year. In addition to the 25 actions that already are being implemented, the FDA has identified seven more controversial recommendations that have not yet been resolved. Those recommendations are being reviewed by the Institute of Medicine (IOM), and the FDA expects to receive feedback from the IOM sometime this summer.

“FDA recognizes that it can do a better job at managing its premarket review programs,” Shuren countered during the hearing. “And we agree that, in many areas, insufficient clarity, consistency, and predictability on our part contributes to [medical device development] expenses. This is why we’ve undertaken a number of initiatives to improve our review processes.”

Paulsen, who also serves as the co-chairman of the bipartisan House Medical Technology Caucus, told lawmakers on Thursday that he’s working on legislation to simplify the approval process for medical devices.

“We’re throwing some ideas together right now to help streamline the [FDA],” Paulsen told reporters after testifying at the hearing, adding that he wants to ensure a more “predictable and transparent process.”

Paulsen said he hopes to have a bill ready within the next month and a half. He also has sponsored legislation to repeal a 2.3 percent excise tax on medical devices that would begin in 2013, but the two issues would be kept separate. The tax is expected to raise $2 billion a year to pay for the healthcare reform law.

Critics of the current state of U.S. device approval claim that Europe approves devices two years faster than the U.S. does, and warn—as Paulsen did in his testimony—of a pending exodus of cutting-edge medical device companies that currently employ 400,000 workers at 8,000 U.S. firms.

The U.S. medical device sector’s supremacy is threatened not by “cheap overseas labor or countries with more competitive tax structures, but by the bureaucracy within our own borders,” Paulsen testified.

Following questions from Republican lawmakers regarding the European approval process and its perceived efficiency compared with the United States, Shuren said the recent recession created a more “risk-averse” investment environment that helped push medical device companies to launch in Europe, rather than its relatively easier path to market clearance.

“Over the past decade, most indicators of the medical device industry’s success have gone upward,” Shuren said. “However, the recession has changed the business model to be more risk adverse and more sensitive to changes at the FDA.”

The CDRH director said he was “astonished” that there have been calls for the FDA to lower its standards in order to compete with the European Union’s approval process. “It’s not in our best interest,” he added.

AdvaMed Unveils Plan For Protecting U.S. Device Industry

The Advanced Medical Technology Association (AdvaMed) recently unveiled a six-point plan for protecting the domestic medical device industry, calling for everything from increased funding for basic research to creating an innovation office at the White House and scrapping the medical device tax.

The “Competitiveness Agenda” comes as representatives from the device trade group say the industry is facing growing competition from developing countries, such as China, India and Brazil; slowing U.S. Food and Drug Administration (FDA) approval times for new devices; and pressures from healthcare reform.

The association advocated the following six steps:

• Innovation in life sciences must be a government priority, including requiring an innovation impact statement for significant new regulations that affect the health sector.

• The FDA review process must be reformed to reduce total review times.

• Payment policies of Medicare, Medicaid and private insurers must support medical innovation and not penalize early adopters of new treatments and cures. According to Steve Ubl, president and CEO of AdvaMed, medical device manufacturers are not the cause of rising healthcare costs. The average growth rate of prices for medical devices is half the rate of inflation, he said.

• A vigorous trade policy must support export growth and provide a level playing field for U.S.-based manufacturing. Foreign governments often block access to their burgeoning markets, Ubl said during a conference call with reporters. The industry had $36 billion in exports last year and a favorable balance of trade, according to AdvaMed, but the trade surplus has shrunk by more than two-thirds over the past 12 years.

• Strategic tax policies to level the playing field must be implemented, including improvements to the research and development tax credit to keep it competitive with other countries.

• The American research and development infrastructure must be sustained and improved. Special emphasis should be placed on creating research structures that support commercialization of R&D.

“We’re not making random stuff here, we’re improving peoples’ lives,” Stephen MacMillan, chairman, president and CEO of orthopedic giant Stryker Corp., said during the conference call. “Our industry plays such a great role in improving patients’ lives around the world, and we are a great source of producing good manufacturing jobs. As the markets for our products grow around the world, we want U.S. policies to be encouraging job creation here.”

AdvaMed also called for the establishment of an office of medical device innovation policy at the White House, which would have oversight on policies that affect medical innovation. As part of this proposal, the group also wants federal agencies to draft an “innovation impact” statement, which would be similar to an environmental impact statement—for any policy in the healthcare field.

A recent report by PricewaterhouseCoopers cited by the lobby found that America still beat the other nine major world economies on the five dimensions of medical device innovation analyzed, but that its lead was slipping.

“The innovation ecosystem for medical device technology, long centered in the United States, is moving offshore,” the study said.

Part of the problem is that FDA manages to the wrong metrics, AdvaMed officials claim. “What matters to industry and to patients is not time on the FDA clock, it is the total time from the time the product is submitted to FDA for review to the time it is cleared for market. Accordingly, FDA must set a goal of reducing total review times.”

Adoption and execution of these policies will not be easy, Ubl said, “But the pay-off will be great. Medical technology companies can be a driver of long-term economic growth and prosperity, as well as improved public health, but government must do its part by sustaining the innovation ecosystem that is essential for long-term success.”