Speeding Toward a Cure: Regulation in the 21st Century

Established in 1795, the Committee on Energy and Commerce is one of the oldest standing committees in the U.S.  House of Representatives. Included in its areas of legislative oversight are public health and the U.S. Food and Drug Administration (FDA). Late last year, committee chairman Rep. Fred Upton (R-Mich.) and Rep. Diana DeGette (D-Colo.) launched an initiative called “A Path to 21st Century Cures” with a multi-fold mission: discovery, development and delivery. Upton and his crew want to accelerate and upgrade development of “clues in basic science;” streamline drug and development processes; and “unleash the power of digital medicine and social media at the treatment delivery phase.”

“Over the next several months, members will take a comprehensive look at the full arc of this process—from the discovery to development to delivery—to determine what steps we can take to ensure we are taking full advantage of the advances this country has made in science and technology and use these resources to keep America as the innovation capital of the world,” the Path’s mission statement reads.

In May last year, the committee provided an updated document regarding President Obama’s 2012 Council of Advisors on Science and Technology report on propelling innovation—one of several documents related to the 21st century cures initiative. In an effort to create an innovation plan, the initiative has been fielding public comments for several months now, and the medtech industry is taking note. At least in this particular document, the focus has been heavy on the pharmaceutical side. In his response, President of the Heart Rhythm Society Richard Fogel, M.D., asked the initiative not to forget medical devices and their importance in the 21st century healthcare landscape.

“The HRS urges you to not only focus on pharmaceutical innovation but to also examine device innovation,” Fogel said. “As you know, many of our patients rely on key medical devices, such as implantable cardioverter defibrillators, or ICDs (implantable cardioverter defibrillators), to treat arrhythmias by shocking a dangerously racing heartbeat back into a normal rhythm. And, in our horizon scanning of key technologies for our patients, such as MRI (magnetic resonance imaging) compatible/conditional cardiac implantable electrical devices, we are particularly interested in quicker, more efficient regulatory pathways for these and similar breakthrough technologies.”

“FDA would benefit from increased communication and collaboration between offices within Center for Drug Evaluation and Research (CDER) and the Center for Devices and Radiological Health (CDRH)—in the context of specific applications as well as on overall policy approaches,” commented Peter P. Yu, M.D., president of the American Society of Clinical Oncology. “As the discovery and development of molecularly targeted treatment increases, there is a growing need for diagnostic tests that can identify subpopulations of patients that would benefit from these treatments. Currently, FDA lacks clear and structured mechanisms for the evaluation of devices used in combination with treatment. The investigational device exemption (IDE), which allows a nonapproved test or device to be used in a clinical trial, can be difficult or time consuming to acquire as there is confusion within the oncology community as to when the IDE requirements apply.”

These are only two perspectives out of dozens, but coming from arenas such as cardiac and cancer care, they illustrate the importance technology plays in diagnostics and treatments in the 21st century. As the clean-living movement in the United States (and much of the developed world) emerges, Americans have begun to view pharmaceuticals—whether over the counter or prescription—with caution and sometimes suspicion. The (problematic) anti-vaccination movement is symptomatic of this attitude. In this cultural phenomenon, the cost of drugs (and healthcare in general) is rising.

“We’re starting to see the term ‘financial toxicity’ being used in the literature. Individual patients are going into bankruptcy trying to deal with these [drug] prices,” Leonard Saltz, M.D., a Memorial Sloan Kettering gastrointestinal oncologist, told 60 Minutes correspondent Lesley Stahl in October last year.

A significant number of cancer drugs cost more than $100,000 for a year’s worth of medicine. And most cancer patients are not just on one drug. Medication bills can reach almost $300,000 a year, which does not include physician or hospital fees. That same 60 Minutes episode highlighted that Americans pay more for prescription drugs than citizens of any other nation. For instance, according to a 2013 report released by the International Federation of Health Plans, the acid reflux drug Nexium cost more than $200 for U.S. patients in 2013 and only $60 in Switzerland, the next-most-expensive price in the world for the same drug. In the Netherlands, it cost $23.

Meanwhile, entities such as the Bill and Melinda Gates Foundation have been working for years on providing accessible medtech to developing nations, where cost is of primary concern. President and CEO of healthcare and life-sciences consulting services company Health Connexions, Dawn Van Dam, told Medical Product Outsourcing that this activity is comparable to the work NASA did with the space program, the technologies from which eventually made their way into other markets in the form of cell phone cameras, freeze-dried foods and so on. Similarly, technology developed by nonprofit organizations with cost in mind can become truly innovative and useful in North America.

“In the 21st century, healthcare innovation is happening at lightning speed,” Rep. Upton said in a video describing the 21st Century Cures initiative. “From the mapping of the human genome to the risks of personalize medicine that are linked to advances in molecular medicine, we’ve seen constant breakthroughs that are changing the face of disease treatment, management and certainly cures. If we want to save more lives—and we do—and keep our country the leader in innovation and keep the jobs here, we’ve got to make sure there isn’t a major gap between the science of cures and the way we actually regulate these therapies.”

“America can be—it must be—the healthcare innovation capital of the world,” Rep. DeGette added. “Health research is moving quickly, but the federal drug and device approval apparatus is still, in many ways, the relic of another era. We have dedicated scientists and bold leaders at agencies like the National Institutes of Health and the U.S. Food and Drug Administration. But when our laws don’t keep pace with innovation, we all lose out.”

CDRH Update
The Center for Devices and Radiological Health’s 2014-2015 strategic priorities document begins with a simple statement: “Patients are at the heart of what we do.” While medical device companies also, by and large, keep this mission at heart, they also are dependent on making a profit to survive and necessarily have to grapple with issues of cost, price and efficiency of production, which veers away from the simple question: “What is good for the patient?” Our regulatory bodies, however, are the gatekeepers of that mission, which is why their activity is of particular interest not only to medtech firms but to every person to ever have an interaction with healthcare.

Medical device companies all have teams, or at least a person, responsible for interacting with the FDA and any international regulatory authorities it deals with. Part of the job is to make sure the company is compliant with every regulation set forth by the authorities, and to remain up to date with changing regulations.

“We are up-front with the FDA in regulatory situations and work hard to keep things clean and up to date with the agency,” Alan Schwartz, executive vice president at MDI Consultants Inc., a Great Neck, N.Y.-based provider of quality assurance, regulatory compliance and clinical services, told MPO. “We take a very aggressive approach with dealing with the FDA and working with them to show our intentions for full compliance.”

This aggressive approach is necessary on the side of the medical device manufacturer (MDM), but it is important to keep in mind that the reasons for aggression on both the MDM and regulator’s side are good ones. It only benefits lives.

The first two goals set forth by the CDRH in its 2014-2015 strategic priorities document are to improve the efficiency, consistency, and predictability of the IDE process to reduce the time and number of cycles needed to reach appropriate IDE approval for medical devices, especially devices of public health importance; and to increase the number of early feasibility/first-in-human IDE studies submitted to the FDA and conducted in the United States. These goals address one of the most frequent complaints against the FDA, which is lack of speed in getting devices to market. As noted by Yu, IDEs are of particular importance in arenas such as oncology, where clinical trials are frequent and of much urgency to certain patient populations.

CDRH aimed to reduce the number of IDEs requiring more than two cycles for a decision by 25 percent by Sept. 30, 2014. In 2013, 45 percent of IDEs received a full approval decision within two cycles and median time to full IDE approval was 174 days. Also by Sept. 30, the CDRH aimed for companies that were denied an IDE approval to have a teleconference or an in-person meeting within 10 days of the decision.

In addition to speeding up important IDE decisions, the CDRH proposed to do the same for actual device premarket approvals (PMAs), especially high-risk devices of high public health importance. By the end of 2015, the agency aims to review 100 percent of device types subject to a PMA that have been on the market to determine whether or not to shift some premarket data requirements to the postmarket setting or to pursue down-classification, and communicate those decisions to the public.

Perhaps more ambitiously, the CDRH also set lofty goals for customer satisfaction last year: It hoped for 70 percent customer satisfaction in 2014, and 90 percent by the end of this year. Many commentators in the industry pointed out that a 90 percent customer satisfaction rate is unrealistic considering the differing priorities of MDMs, industry advocacy groups and regulators. But a survey conducted by the CDRH that to date has had 678 respondents showed a whopping 83 percent customer satisfaction rating as of Dec. 31. Since the beginning of the year, that number has grown to 87 percent, showing that the agency seems to be on its way to achieving that goal of 90 percent by the year’s end.

Unmet Needs
The emphasis on unmet needs and high-risk (i.e., high stakes) devices is becoming stronger, emphasized by the CDRH’s acknowledgement that it is these devices that most require the agencies to speed up review processes. While the FDA always is working to increase efficiency and speed, particularly for such life-saving devices, it is pairing that need for speed with better, wider pools of expertise as well as better clinical proof to provide the kind of high-level scrutiny needed to green-light such technology.
“An increased level of scientific and clinical evidence may be required to support a submission today as compared to prior years,” Lynn Jensen, Angela Mallery and Marcia Palma, senior medical research managers at Northwood, Ohio-based contract research organization NAMSA, explained to MPO. “FDA can utilize a wide range of top-level technical and medical experts during review of device submissions for new and novel technologies. The agency has increased the use of the interactive review, which has greatly improved the efficiency of the review process. FDA has also been very active in developing new guidance documents to help industry prepare submissions more efficiently and effectively.” 

The FDA issued a draft guidance in April last year titled “Expedited Access for Premarket Approval Medical Devices Intended for Unmet Medical Need for Life Threatening or Irreversibly Debilitating Diseases or Conditions.” The proposed voluntary program, called Expedited Access PMA (EAP), is aimed at helping patients “have more timely access to these medical devices by expediting their development, assessment and review.” According to the document, the EAP program contains features of the Innovation Pathway (an initiative for quicker approval times begun in 2011), such as earlier interactions between FDA and sponsors, and, where appropriate, senior management involvement and the use of a case manager. The EAP program focuses specifically on devices that address unmet needs, unlike the Innovation Pathway, which is for all devices. To be considered such a device, the technology must meet one of the following conditions:

1. Breakthrough technologies that have the potential to lead to a clinical improvement in the diagnosis, treatment, cure, mitigation, or prevention, including monitoring of treatment, of a life-threatening or irreversibly debilitating condition. Examples include a transcatheter heart valve that is delivered transcutaneously and does not require open-heart surgery, thereby decreasing the risks of the procedure. This breakthrough technology provides a clinically meaningful option in a patient population with few choices. Another example would be a genetic test capable of identifying DNA variants using blood from patients that may be less sensitive than standard testing of surgically removed tumors or bone marrow, but offers patients a convenient, non-invasive sampling method.
2. No approved alternative treatment or means of diagnosis exists. A good example is an ablation catheter which offers the ability to treat atrial fibrillation. Catheters were approved for atrial flutter and there was no legally marketed ablation catheter indicated for the treatment of atrial fibrillation. Therefore, at the time of review, the ablation catheter met the criteria for “no approved alternative.” Another example from the recent past would be continuous glucose monitoring (CGM) devices, which report glucose values continuously or at short intervals (i.e., every five minutes) for several days. They have built in alarms that can be programmed to alert the user if the results fall outside pre-set low and high thresholds. The first CGM displaying real-time glucose data from which trends or patterns in the glucose levels of a diabetes patient may be detected and the first CGM with pediatric indications would qualify for the criterion “no approved alternative.”
3. The device offers significant, clinically meaningful advantages over existing approved alternatives. One example would be a diagnostic product intended to improve diagnosis or detection of a life-threatening or irreversibly debilitating disease or condition in a way that would lead to improved outcomes (e.g., an in-vitro diagnostic device for earlier diagnosis of preeclampsia). Another would be a product that addresses a serious treatment-related side effect associated with an available product for treating a life-threatening or irreversibly debilitating disease or condition.
4. The availability of the device is in the best interest of patients—that is, the device provides a specific public health benefit or addresses an unmet medical need of a well-defined patient population. For instance, an in-vitro diagnostic assay that detects a genomic variant for the purposes of identifying patients with certain cancers that are eligible for treatment with a specific drug. In some situations the use of the drug may be detrimental for patients who do not possess the variant. For this reason, use of the assay is necessary for safe and effective use of the drug, and therefore is in the best interest of patients.

“The metrics-driven approach to review and approval of medical devices regulated by CDRH and medical devices regulated by CDER needs to be modified to allow for better access to reviewers,” said Diane Tiernan, principal at DCT Ltd., where she is a regulatory consultant to the medical device and combination product industries. “For DCT’s part, medical device manufacturers must understand that the information that once supported regulatory submissions will no longer be sufficient; should the manufacturers continue to follow this strategy, they can be assured that their review process and time to approval will be long, arduous and extremely painful.”

Tax Repeal Hope Still Alive(?)
Hopes for repeal of the 2.3 percent medical device excise tax, a part of the Patient Protection and Affordable Care Act, remain alive—perhaps vainly. Ever since the tax went into effect in 2013, efforts for repeal have consistently earned bipartisan support in Congress (a rare feat), but to no avail.

The Advanced Medical Technology Association (AdvaMed) has been, as expected, on the forefront of repeal efforts. Despite many failed efforts for repeal in Congress, the advocacy organization has kept working hard to at least make the industry’s interests and opinions known on the Hill. In February last year, the organization released a study on the impact of the medical device excise tax based on an electronic survey of member companies. Data collected showed that the tax had, until then, resulted in employment reductions of approximately 14,000 industry workers and forgone hiring of 19,000 workers. The total job impact of the tax on industry employment was approximately 33,000. According to AdvaMed, independent data estimated that there are about four indirect jobs per directly related job to the medical device industry affected by the tax. Applying this ratio to jobs lost or foregone suggests that the impact of the tax on indirect employment would be approximately 132,000 jobs, for a total job loss of as many as 165,000 jobs.

Thirty percent of respondents said they had reduced their R&D due to the pressures of the tax. Almost 10 percent of respondents said they had relocated manufacturing outside of the United States or expanded manufacturing abroad rather than in the United States because of the tax. Other reported consequences of the tax were deferred or cancelled capital investments; deferred or cancelled plans to open new facilities; reduced investment in start-up companies; some startups found it more difficult to raise capital (among startup companies); and reduced or deferred increases in employee compensation.

In April 2014, Sen. Al Franken (D-Minn.), an advocate for device tax repeal from its inception, wrote a letter to Sen. Ron Wyden (D-Ore.) upon Wyden’s  then-appointment as chairman of the Senate Finance Committee (he’s now ranking member) asking him to leverage his position to aid in repeal efforts. “A culture of reduced venture capital investment, regulatory challenges at the FDA, and the enactment of the medical device tax have contributed to an increasingly harsh environment,” he wrote.

In January this year, AdvaMed wrote a coalition letter imploring lawmakers to hear them once and for all and consider repeal. In reality, the letter is more of a notice that industry is still paying attention, rather than a realistic effort towards actual repeal, which seems increasingly unlikely. Shortly after that, AdvaMed released data from yet another electronic survey, the January 2015 Status Report. If repeal is never achieved, lawmakers at least cannot ignore the noise made not just from advocacy organizations but also senators and representatives from states where medtech is a major revenue source—Minnesota, Massachusetts and Pennsylvania, to name a few.

Also in January, Jane G. Gravelle, senior specialist in economic policy and Sean Lowry, analyst in public finance for the Congressional Research Service (CRS) released an economic analysis of the medical device excise tax. While the report did conclude that there is little justification for the tax’s enactment, it also pointed out that job loss is not nearly as catastrophic as industry players claim it has been. “Opponents of the tax claim that the medical device tax could have significant, negative consequences for the U.S. medical device industry and on jobs,” the report reads. “The estimates in this report suggest fairly minor effects, with output and employment in the industry falling by no more than two-tenths of 1 percent. This limited effect is due to the small tax rate, the exemption of approximately half of output, and the relatively insensitive demand for health services. The analysis suggests that most of the tax will fall on consumer prices, and not on profits of medical device companies. The effect on the price of healthcare, however, will most likely be negligible because of the small size of the tax and small share of healthcare spending attributable to medical devices.”

“The CRS analysis is fundamentally flawed,” countered AdvaMed. “It assumes that most of the cost of the tax will simply be passed on to customers, based on the literature suggesting inelastic demand for healthcare services. However, this literature looks only at elasticity of demand at the level of the individual patient. Medical devices and diagnostics, however, are not generally purchased by individual patients. Rather, the buyers are institutions such as hospitals, clinical labs, and physician practices. In a highly competitive market such as the one for medical devices, such purchasers have the ability to refuse to accept price increases. In addition, they can delay or cancel large capital purchases or substitute less expensive for more expensive product alternatives.”
Now that there is a Republican majority in both houses of Congress, hopes for repeal run high. However, President Obama has promised to veto repeal even if it does pass. The best industry can do is keep making noise and hope to be heard.