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New FDA Chief Intent on Streamlining Review Process for Medical Devices
Dr. Margaret Hamburg admitted to “some problems” at the Center for Devices and Radiological Health (CDRH), the FDA branch that handles premarket approval of all medical devices. In an interview published in the Wall Street Journal, Hamburg promised to address reported discontent at the CDRH, an organization deemed “dysfunctional” and “in meltdown” mode by former FDA Commissioner David Kessler. The two have talked about the discontent among CDRH employees, the Journal reported.
The device center has been a lightning rod for controversy since a group of FDA scientists pleaded with President-Elect Barack Obama in January to restructure the agency. In a letter they wrote to Obama’s transition team, the scientists accused FDA managers of ordering, intimidating and coercing scientists to “manipulate data” during product reviews. The letter’s authors were not reported.
The scientists claimed that CDRH managers “failed to follow the laws, rules, regulations and Agency Guidance to ensure the safety and effectiveness of medical devices and consequently…corrupted the scientific review of medical devices. This misconduct reaches the highest levels of CDRH management including the center director and director of the Office of Device Evaluation.
Under the banner of regulatory ‘precedent,’ managers at CDRH have demanded that physicians and scientists review regulatory submissions employing methods, and accepting evidence and conclusions, that are not scientifically proven and clinically validated.”
Such claims prompted Hamburg to tell reporters in mid-June that she would take a “hard look” at the decision-making within the CDRH and the 510(k) approval process, a system designed to facilitate the sanction of low- or moderate-risk devices that are similar to those already on the market. FDA scientists have claimed the agency gave 510(k) clearance to devices that needed further scrutiny or did not have adequate safety or efficacy data.
While industry groups such as the Advanced Medical Technology Association (AdvaMed) laud Hamburg’s intentions to overhaul the FDA, they caution that revisions to approval standards could harm patients and companies by delaying the market release of new products.
In a statement he released after a June 18 hearing of the House Energy & Commerce Health Subcommittee on medical device regulation, AdvaMed President and CEO Stephen J. Ubl reminded politicians that the FDA’s current approval system has served the public effectively for more than 30 years.
Ubl noted that the FDA’s approval requirements are calibrated so the level of regulation is appropriate to the individual device. He also told the Congressional subcommittee members that premarket approval applications for breakthrough medical technology must be supported by “exhaustive clinical and preclinical data that takes years and millions of dollars to gather.” Lower-risk products are subject to a “stringent regulatory framework,” he added.
“Once a medical technology is allowed to go to market, companies must follow strict manufacturing controls to ensure that the devices continue to be safe and effective,” Ubl’s statement read. “These controls are structured so that quality is built into a medical technology at every phase of a device’s life—from design to pre-production to full-scale production to market commercialization. It is important to remember that millions of Americans benefit from advanced medical technologies each year, and the FDA’s regulatory system should continue to ensure that American patients have timely access to life-sustaining and life-enhancing innovations.”
Balancing the need to protect the public from potentially dangerous devices with the responsibility to streamline the review process is not going to be an easy task. But it is one Hamburg is ready to tackle as she assumes the reins of the FDA.
“We cannot allow all of the opportunities in modern science and technology to fade away because the barriers to drug and new product approvals are too high,” she told Reuters in an interview. “On the other hand, we really have a sacred trust with the American people to assure safety. We have a real responsibility to make sure these devices are being appropriately reviewed. I think a proper balance can be achieved.”
In addition to restoring confidence to the FDA and addressing discontent among scientists within the CDRH, Hamburg said she would work to establish a “global footprint” that would enable the FDA to work with other governments and industries to improve oversight of the numerous overseas facilities that provide food and medical products to the United States.
Medtronic Recalls Insulin Infusion Sets
Medtronic Inc. has voluntarily recalled an infusion set used with its MiniMed Paradigm insulin pumps because they may fail to operate properly.
No injuries have been linked to the flawed pumps, but Medtronic officials are not taking any chances: They initiated the recall due to the possibility the defect could result in a serious injury or death. The company stated in a news release that the defect could cause the device to deliver too much or too little insulin to a patient by preventing air from properly venting.
The infusion sets in question have the reference numbers MMT-396, MMT-397, MMT-398 and MMT-399, and lot numbers that begin with 8. Most of the affected sets were distributed in the United States, though “very limited quantities” also were sent to the Bahamas, Bermuda, Brazil, Canada, Ecuador, El Salvador, Germany, Kuwait, Mexico, Paraguay, Turkey and the United Kingdom.
Customers with Lot 8 infusion sets should return the device to Medtronic. The lot number, according to the Minneapolis, Minn.-based company, is clearly marked on the product box label and on each infusion set package. Medtronic is providing replacement Quick-set infusion systems to customers at no additional charge; the company is mailing packages via UPS to all customers affected by the recall in stages.
“Our commitment to patient safety is our top priority,” said Chris O’Connell, president of the Diabetes business unit and senior vice president at Medtronic. “We are focused on ensuring that patients and clinicians have up-to-date information and access to replacement infusion sets. We are working closely with the FDA, and our goal is to make this product exchange as timely and as easy as possible for patients.”
The recall involves about 60,000 infusion sets out of an estimated 3 million in use, according to the company.
Synovis Life Spending $12.1M to Purchase Pegasus Biologics
Pegasus Biologics Inc. is getting a second shot at survival.
The Irvine, Calif.-based developer of biological solutions for soft tissue repair has been purchased for $12.1 million by Synovis Life Technologies, a St. Paul, Minn.-based manufacturer of surgical tools and implantable, biomaterial devices. The purchase price is substantially less than the $38 million in venture equity and debt Pegasus had garnered during its five-year lifespan. In 2008, the company generated $9.1 million in revenue and employed about 75 people, according to Synovis.
The company seemed poised for long-term growth last year as it bolstered its sales force and expanded its facility to incorporate new state-of-the-art laboratories designed to support its product development efforts and clinical education programs. Keith Myers, vice president of operations for Pegasus, said at the time that the expansion (announced in October) would enable the company to reach its “next stage of projected growth.” President and CEO Michael D. Will agreed, claiming the beefed-up sales force and expanded manufacturing and research capabilities would help the company “maintain a leadership role in both the orthopedics and wound care markets well into the future.”
That future, however, turned out to be short-lived. In May, Pegasus ceased operations after unsuccessful fundraising efforts and went into a sealed bid auction process for its assets. Synovis plans to maintain Pegasus’ manufacturing operations in Irvine and manage the acquired assets in a separate division.
Synovis executives said the purchase of Pegasus gives the company access to the orthopedic and wound care markets.
“Growth through acquisition, in addition to organic growth, is a strategic priority for Synovis,” said Richard W. Kramp, Synovis president and CEO. “We are pleased to combine the talent, technology and products of Pegasus with our own and to enter two additional high potential markets. Pegasus is an especially strong fit for Synovis; the company has complementary technologies and soft tissue repair products─already FDA cleared and CE Marked─giving Synovis access to the large and growing orthopedic and wound care markets. Pegasus products are consistent with our mission of providing surgical solutions that minimize risks, improve patient outcomes and reduce healthcare costs.”
Once the transaction is finalized (which was pending as this issue went to print), Kramp said Synovis will appoint leadership and rebuild the sales staff for its new division. Then, the company will have to formulate a strategy for growth, though executives predict it will take a few years for the new division to turn a profit. Synovis expects the division to generate an operating loss between $1 million and $2 million in the fourth quarter of fiscal 2009 and a potential $5 million shortfall in fiscal 2010 before breaking even in fiscal 2011.
“We have the knowledge and resources to drive the Pegasus technologies and products to a significant place in their respective markets, and this transaction is an important investment in our long-term growth,” Kramp noted.
ICU Medical Buys Critical Care Product Line From Hospira
ICU Medical Inc. is shelling out $35 million to purchase a critical care product line from its primary customer, Hospira Inc.
The transaction, expected to close in the third quarter, marks a reversal of roles for the two companies: ICU has made critical care products for Hospira since 2005, when it purchased a Salt Lake City, Utah-based facility from the company and moved most of its San Clemente, Calif.-based manufacturing to Utah.
Sales to Hospira, a Lake Forest, Ill.-based manufacturer of pharmaceuticals and drug delivery devices, accounted for 71 percent of ICU’s first-quarter revenue of $54 million. ICU makes needleless connectors and other devices used to deliver intravenous fluids, as well as cancer drug-delivery products. Its devices are designed to protect healthcare workers from needle jabs and other injuries.
In a prepared statement, ICU Chairman and President George Lopez said the purchase of Hospira’s critical care product line creates a long-term growth opportunity and will allow the company to control all aspects of the critical care line.
“We have been manufacturing the majority of Hospira’s critical care offerings for over four years and Hospira continues to be a very important partner for our company,” Lopez said. “Hospira’s recent internal initiatives have created a good opportunity for us to acquire this business. This transaction will enable us to completely control worldwide commercial responsibility for the critical care products including sales, marketing, customer contracting and distribution.”
Hospira’s decision to sell its critical care product line to ICU follows a non-strategic assets rationalizing plan the company announced in May titled “Project Fuel.” The plan is designed to improve Hospira’s operational efficiency by optimizing product offerings, rationalizing non-strategic assets and streamlining the organizational structure of the company.
Project Fuel is going to cost Hospira $140 million to $160 million. The company expects to incur nearly $90 million to $100 million of that expense this year, but also anticipates annualized pre-tax savings of nearly $8 million to $10 million in 2009. Executives said the plan will save Hospira up to $140 million on an annualized run-rate basis by the second quarter of 2011.
“This agreement advances Hospira’s Project Fuel optimization efforts to simplify our product line,” said Christopher B. Begley, Hospira chairman and CEO. “It will enable an even greater focus on Hospira’s core strategic areas of specialty injectable pharmaceuticals and medication management systems, driving innovation and growth in these key businesses. The strong partnership between Hospira and ICU Medical, combined with ICU Medical’s strength in the critical care market, will also make this transition a smooth one for customers, and will facilitate continued availability and future investment in these critical care products.”
St. Jude Receives Warning Letter from FDA
St. Jude Medical Inc. has received a warning letter from the U.S. Food and Drug Administration (FDA) for non-conformities with Good Manufacturing Practice at the company’s Texas and New Jersey facilities, according to a regulatory filing from the firm.
The letter, dated June 26, said the FDA would not clear premarket approval applications for the company’s Class III devices until the violations are corrected, according to St. Paul, Minn.-based St. Jude Medical.
Firm officials said the company has initiated efforts to address the FDA’s concerns, and the Neuromodulation division provided written responses to the FDA detailing proposed corrective actions at its Plano, Texas, and Hackettstown, N.J., facilities.
Baxter Buys Kidney Filtration Products from Edwards
Edwards Lifesciences Corporation has sold its renal replacement therapy business to Baxter International Inc. for $56 million.
Under terms of the deal, Edwards could receive an additional $9 million in the next two years, depending on product sales. The purchase is expected to close in the third quarter.
Baxter is purchasing hemofiltration products, or continuous renal replacement therapy. The devices work 24 hours a day and are intended to help patients with kidney disease by gradually filtering out waste and fluid from the kidneys.
About 60 Edwards employees will join Deerfield, Ill.-based Baxter as part of the deal. Executives with Irvine, Calif.-based Edwards said the sale will not change the company’s 2009 profit outlook.
Baxter officials said the purchase will enable the company to expand its continuous renal replacement therapy business.
“As an experienced leader in dialysis including CRRT, this acquisition represents an extension of our existing renal business,” said Bruce McGillivray, president of Baxter’s renal business.
SIDEBAR:
Slowdown in Ortho Device Market Expected to Continue
Lost health insurance, hefty co-payments and concerns about recovery time (translation: forced time off from work) have slowed growth in hip and knee replacement procedures in the United States so far this year. Overall, the industry is forecasting 2009 growth to be a few percentage points below the typical pace of market expansion, which usually hovers in the high single digits.
“That’s pretty much what we’ve seen,” David Illingworth, Smith & Nephew’s CEO, said in an interview with Dow Jones Newswires. “I think we’re going to see a few more quarters of pressure on volumes. I don’t think it’s played out yet.”
What also hasn’t played out yet is people’s attitudes toward their own health. Illingworth believes that candidates for joint replacement procedures will not abandon their quest for new hips or knees. The problems and pain associated with deteriorating joints typically worsen over time, a factor Illingworth claims will enable companies such as Smith & Nephew to recapture many of those postponed procedures.
“I really don’t think that we’re ultimately going to lose those procedures,” Illingworth told Dow Jones. “I think it’s people saying ‘look, there’s uncertainty in my life and this is not the time to be going and taking three months off of work and getting a knee replaced.’ ”
Illingworth’s assessment of the slowdown in the orthopedic devices market is a stark contrast to a report released by Global Markets Direct that forecast an annual 9 percent growth rate in the global joint replacement market through 2012.
“The demand for hip and knee replacement procedures is increasing with a rise in the aging population and a growing number of younger patients going for joint arthroplasty procedures,” stated the report, released in December 2008. “New product innovations, newer procedure techniques and positive clinical outcomes of products introduced in the past four years are some of the key growth drivers in this sector.”
While product innovations are certainly key drivers of growth, ground-breaking devices also tend to be expensive, a factor that could work against companies as economic uncertainty lingers and U.S. lawmakers push for healthcare reform. In such a cost-conscious environment, orthopedic manufacturers will have to show that high-priced products also yield premium results, Illingworth said.