Medical device industry, lawmakers unite to expedite FDA approval process

The medical device industry is at a crossroads as it prepares to enter a period of unprecedented growth while facing regulatory hurdles that some experts believe may stunt that growth. Some observers say the device review process needs a major overhaul, or at least a fine-tuning.

Jim Mazzo, former chairman of the Advanced Medical Technology Association (AdvaMed), the largest advocacy organization for the medical device industry, and president of Abbott Medical Optics, said he views the medical device industry as an innovative job-creator.

The device industry has generated more than 2 million jobs in the United States, many of which are lucrative, high-level positions, according to Mazzo, who plans to retire from AMO at the end of the year.

“We bring a number of highly prosperous positions from many different functional areas, including research and development, manufacturing, sales and marketing, among others,” he said. “We also pay an average of 40% more than the average wage of other industries.”

The device industry is a robust exporter, according to Rep. Erik Paulsen, R-Minn., who sponsored legislation designed to improve the U.S. Food and Drug Administration review process and ease bureaucratic burdens borne by device manufacturers.

“The medical device industry is clearly an American success story,” Paulsen said. “We are still a net exporter in this industry. We want to keep it that way as the global competition continues to become fierce. We want to keep innovation here and grow more jobs here.”

One major hurdle facing the device industry is a slow, cumbersome and expensive device approval process, according to Eric D. Donnenfeld, MD, OSN Cornea/External Disease Board Member.

“For the last decade, ophthalmology specifically and medicine in general have been plagued by a slow turnaround and an unresponsive device approval process,” Donnenfeld said. “The device industry has really been suffering because of the length of time, the cost and the bureaucracy that’s involved in the FDA approval process. Because of that, there’s drain on innovation in the United States. Most of the innovation that I see in industry today is going abroad to Europe. Once something leaves the United States, it’s very difficult to get it back.”

Mitchell A. Jackson, MD, described what he termed a fundamental flaw in the FDA approval process: a reliance on efficacy in addition to safety. In contrast, CE mark designation in Europe hinges only on safety, Jackson said.

The focus on efficacy slows the review process and delays the entry of new products into the market, Jackson said.

“Each company shouldn’t have to prove that, say, a toric lens works once one model is approved,” he said. “Glaukos iStent recently got approved, which took longer than it should have. Now you have many other stents in study, so why do they have to go through all the same type of approval process once the first model was proven effective? If there are no safety issues with them, just let surgeons start using them right away. If the technology has been proven, safety not efficacy issues should only have to be monitored going forward.”

In the last 2 years, with Mazzo at the helm, AdvaMed worked closely with Paulsen, the FDA, the Institute of Medicine and other agencies to fine-tune the review process and make it more conducive to the timely marketing of new devices.

AdvaMed leaders and members will discuss challenges and opportunities facing the device industry at the organization’s annual conference from Oct. 1 to 3 in Boston.

AdvaMed’s membership includes more than 400 companies ranging from small startups to large multinational corporations. It advocates for legal, regulatory and economic conditions that are conducive to the approval and marketing of safe and effective medical technology, according to an AdvaMed news release.

Increased FDA user fee

Aside from ongoing scrutiny of the 510(k) process (see sidebar below), tangible progress is being made regarding FDA clearance and approval processes. Donnenfeld said that recent federal legislation and internal changes at the FDA’s Center for Devices and Radiological Health are encouraging signs that much-needed improvements are in the works.

“For the first time, we’re in a position where we’re losing that competitive advantage,” Donnenfeld said. “Having said that, I have been impressed by changes that have taken place in the device industry. Because of that, we’re seeing a reduction for the first time in the backlog of FDA approvals and we’re seeing a movement in the right direction.”

Perhaps the most significant legislation is the Food and Drug Administration Safety and Innovation Act, which was signed into law on July 9. The law increases FDA user fees and includes various other provisions. Paulsen was the primary sponsor of the earlier House bill.

In a news release, AdvaMed applauded the new law, saying it “sets in place measures that should increase the efficiency and predictability of FDA’s medical device review process.”

Mazzo described the law as a win-win-win for industry, the FDA, physicians and patients.

“Simply, we need to have a healthy FDA. That’s always the premise,” Mazzo said. “We need to ensure we have reliability, but we have to ensure that we are able to bring out technologies in a consistent manner.”

Paulsen said that the bill passed with robust bipartisan support.

“There were no significant legislative hang-ups,” he said. “All is good news in terms of forward progress on that.”

On the whole, the law reaffirms the FDA’s commitment to review devices in the “least burdensome manner,” as required by the FDA statute, Paulsen said.

The law is the culmination of hard work on the part of industry and the FDA, according to Thomas A. Gustafson, PhD, senior policy advisor at the law firm Arnold & Porter LLP.

“It doesn’t appear things were going so well for a while there, but at the end of the day, they did manage to achieve an agreement that was clearly satisfactory to both sides, one that Congress endorsed with uncharacteristic speed and vigor,” Gustafson said. “It got to the right place at the end of the day.”

The new law increases user fees for FDA review of devices. In exchange for the higher user fees, the FDA will increase staff and other resources to make the review process faster and more efficient.

The increased user fees benefit industry and the FDA, Paulsen said.

“It was all negotiated with industry, where they agreed that they would pay increased fees as long as they got a very relevant process and a finite pathway to having their devices approved,” he said. “In other words, the FDA has complained about the need for more resources. The medical device industry basically said, ‘Look, we’re willing to cough up some more resources, but we need to make sure that you’re listening to some of our concerns based on the challenges that we’re very legitimately feeling.’ We were able to bridge the agreement there.”

The law also allows an independent audit or review of the FDA review process by entities that are approved by the Secretary of Health and Human Services.

“This was a laborious process that took a lot of time and energy on behalf of our industry association AdvaMed and its member companies, but we are quite pleased, and I believe the FDA is pleased with the end result,” Mazzo said.

In the wake of the law’s passage, the FDA proposed the establishment of a unique device identifier (UDI) system, which is designed to permit the traceability of devices. A UDI is a numeric or alphanumeric code that works as a key to basic information such as the name of the manufacturer, type of device, expiration date, and batch or lot numbers, according to an FDA news release.

The UDI system “has the potential to improve the quality of information in medical device adverse events reports, which will help the FDA to identify product problems more quickly, better target recalls and improve patient safety,” the release said.

The law removes profit caps for humanitarian devices, Paulsen said.

“It essentially means that we’ve removed a profit cap now,” he said. “The FDA has agreed, as part of their reform measures, to allow device companies to really stretch their limits, to help these types of patients where there’s no other hope. Ultimately, that is going to be sort of the new frontier of developing medical technologies down the road for all patients.”

The law also includes a “leave no submission behind” provision, which requires the FDA to meet with companies if a performance goal on a premarket application is missed, Mazzo said.

“That open discussion, where it just doesn’t fall into a black hole, is positive for both [industry and the FDA],” Mazzo said. “To the FDA’s credit, they talked about how we need to have this constant communication. This relates to both big and small companies. But it’s extremely critical for the smaller entities who are dealing with just one product and it’s either a make or break.”

Device excise tax

In June, the House passed the Protect Medical Innovation Act of 2012 (H.R. 436), which would repeal a $2.3 billion excise tax on medical devices that is included in the Affordable Care Act (ACA). The bill, which was sponsored in the House by Paulsen, proceeded to the Senate, where it awaited discussion and a vote as of publication time. The tax is scheduled to take effect Jan. 1, 2013.

AdvaMed President and CEO Stephen J. Ubl praised the bill’s passage in a news release.

“AdvaMed commends the House for voting to repeal the device tax,” Ubl said. “[This] vote is a vote to protect high-wage American jobs, maintain our global competitive leadership and encourage the research and development needed to find tomorrow’s treatments and cures.”

The excise tax would hurt the device industry, Paulsen said.

“The medical device tax will stunt medical innovation,” he said. “It definitely harms U.S. global competitiveness. … This is not a tax on profit. It’s a new 2.3% tax on revenue. It makes it very difficult for companies to become profitable in an area where there are not a lot of startups and heavy investment in research and development. It makes the hurdle a lot higher for companies to achieve profitability.”

Gustafson echoed Paulsen’s observation.

“The tax, it is alleged, will lead to off-shoring some activities to Europe, Japan, maybe even further afield than that,” Gustafson said. “Since the ACA was passed, the device industry has been objecting very strenuously to this, saying, ‘Wait a minute. We’re not going to buy into this. We don’t like it. It’s going to have all these bad effects.’”

Mazzo said the tax could be a particularly severe blow to small device companies.

“It hurts all companies, but particularly the small company that is being taxed on its revenues rather than its profit. You can turn that company unprofitable based on this tax overnight,” Mazzo said. “Can they survive? Our industry can be the partner in job creation and obviously an engine for growth for our economic recovery. But we need to have public policies that support the growth.”

Device companies would be especially hard hit because, unlike drug companies, they are paid directly by physicians and hospitals, not by Medicare, Mazzo said.

“This is kind of a double hit on us,” he said. “We strongly support the repeal of the device tax. I think the House vote on 436 was a vote to protect high-wage American jobs, keep our competitive leadership, and encourage research and development.”

Physician Payments Sunshine Act

In December 2011, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule implementing the Physician Payments Sunshine Act, which is part of the ACA. The act will require industry to report payments, gifts or other transfers of value to physicians and physicians to disclose ownership and investment interests.

CMS will not require data collection by applicable manufacturers and group purchasing organizations before Jan. 1, 2013, with reporting likely to occur in 2014. A final rule on the act is expected to be released later this year, according to a CMS blog. CMS needs more time to address operational and implementation issues to ensure the accuracy of disclosed data, the blog said.

Mazzo said AdvaMed avidly supports the new disclosure requirements.

“AdvaMed and all our member companies already have a very strong code of ethics,” Mazzo said. “It’s quite rigorous in its definitions of appropriate and inappropriate payments to physicians. We’re more than willing to make the payment information available to the public.”

However, Mazzo warned that the disclosure requirement may go too far in stifling interaction between industry and its customers.

“Can you think of any other industry where you’re not able to get customer feedback to improve your products?” Mazzo said. “We don’t want to limit that. But we clearly support this as an industry and are ensuring that all of our companies have a strong code of ethics in which to comply.”

Jackson called for an equitable system in which physicians, lobbyists and elected officials play by the same rules.

“I don’t mind the new act as long as the lobbyists and politicians in Washington have to abide by the same rules,” Jackson said.

Donnenfeld voiced qualified support for the act.

“I happen to be a believer in the Sunshine Act,” he said. “I think it’s good to have an open discussion and understanding of consultants and where they are. I think that the minutia associated with it is a problem that I have. Declaring $10 meals, I think this is silly. But if a doctor is consulting with industry and making significant income, I think it’s OK to know that.”

However, Donnenfeld is opposed to a rule that prohibits physicians from discussing off-label indications for devices outside the context of a continuing medical education setting.

“Without industry, education becomes prohibitively expensive,” Donnenfeld said. “When we start putting regulations on what we can and can’t say, it becomes a gag rule. There’s never anything good about limiting what people can talk about. I’m completely in favor of free speech and the ability of doctors to have intelligent discussions, regardless of who is supporting the education.”

Gustafson noted that implementation of the Sunshine Act is lagging because of administrative burdens, a short timetable and a lack of leadership.

“It’s telling that CMS has not succeeded in implementing this according to the originally contemplated timetable,” Gustafson said. “Implementation didn’t need to be given to CMS, but the sense that I got was that everyone else at the Department of Health and Human Services ducked faster. … So, in terms of implementation and making this workable, it’s still a work in progress.”

Gustafson said he has reservations about the act.

“It’s obviously had some critical support in the Senate,” he said. “These are careful, thoughtful men who are doing their best. But they’ve imposed high overhead costs for implementation on the industry and on many physicians. I have to wonder if that’s the most effective way to go about this.”

Gustafson said he did not expect the Sunshine Act to be repealed; rather, it will undergo a slow, arduous implementation process, he said. – by Matt Hasson

Are higher user fees necessary to expedite the FDA review process for medical devices?

Timely review worth the cost

Medical device innovation is vital to the continued progress of medicine, particularly the field of ophthalmology, which has advanced significantly from the introduction of novel devices and equipment. However, there has been a noticeable slowing of medical device innovation in the United States due to regulatory requirements and the complexities involved in conducting good clinical research. There are a number of ways to make device innovation in this country more timely and streamlined, on the part of the public sector, in the private sector and/or with public/private partnerships. One of the ways the FDA proposes to enhance device innovation is a device user fee program.

This is similar to the user fees for prescription drugs that have resulted in speedier regulatory review and access to these products by the public. The FDA supports the added user fees as the vehicle to ensure that medical device review is a financially viable service for the government and to assure that performance commitments for faster medical device review are met. The added staffing and resources will go toward the FDA’s outreach and consultation with industry, improving the review process and shortening the time needed for review. With more help throughout the review process and a faster entry to market, industry will benefit and, ultimately, so will the ophthalmic community and our patients. The benefits seem to outweigh the costs, with the proviso that the FDA will fulfill its performance commitments for timelier review as well as other changes in approaches and processes that are under way to encourage medical device innovation in this country. 

Paul Sternberg Jr., MD, is president-elect of the American Academy of Ophthalmology. Disclosure: Sternberg has no relevant financial disclosures.

Paid more to do less

To raise application fees for expedited review of new devices would be like the FDA asking to be paid more to do less. In fact, the FDA is doing way too much already, acting out of fear rather than opportunity on potentially life- or sight-saving new treatments for conditions we face every day. The FDA’s review process has become so onerous for new technologies that many inventors and companies, who prefer to remain nameless because of their fear of repercussions from an already hostile FDA, cannot gain approval for technologies that have been well proven and approved outside the U.S.

If the FDA were truly working for better health care, we would see many of these devices and drugs approved already. Instead, we as doctors wait years, telling our patients that they can go to Canada or Europe or Mexico for truly modern treatments.

So does it make sense to pay more to get less? Not at all, but our “supersized” government will not have it any other way.

John A. Hovanesian, MD, FACS, is OSN Cataract Surgery Section Editor. Disclosure: Hovanesian has no relevant financial disclosures.

Review of 510(k) process

Over the last 2 years, AdvaMed, the U.S. Food and Drug Administration and the Institute of Medicine have been engaged in an effort to enhance the FDA’s 510(k) premarket notification process. In September 2011, the IOM released the report “Medical devices and the public health: The FDA 510(k) clearance process at 35 years.”

The FDA asked the IOM to review the 510(k) process and address two questions: “Does the current 510(k) process protect patients optimally and promote innovation in support of public health? If not, what legislative, regulatory or administrative changes are recommended to achieve the goals of the 510(k) clearance process?”

During the course of the IOM review, the FDA’s Center for Devices and Radiological Health (CDRH) made seven recommendations on the 510(k) process. The recommendations included CDRH expanding its authority to consider off-label use when determining the intended use of a device; CDRH issuing guidance on when a device should no longer be available for use as a predicate; and CDRH seeking greater authority to require postmarket surveillance studies as a condition of clearance for certain devices.

Going well beyond the FDA’s proposed changes, the IOM committee concluded its report by suggesting that the FDA revamp the 510(k) review process.

“The committee finds that the current 510(k) process is flawed based on its legislative foundation,” the report said. “Rather than continuing to modify the 35-year-old 510(k) process, the committee concludes that the FDA’s finite resources would be better invested in developing an integrated premarket and postmarket regulatory framework that provides a reasonable assurance of safety and effectiveness throughout the device life cycle.”

In the report, the IOM committee said that the new regulatory framework should “be based on sound science; be clear, predictable, straightforward and fair; be self-sustaining and self-improving; facilitate innovation that improves public health by making devices available in a timely manner and ensuring their safety and effectiveness; use relevant and appropriate regulatory authorities and standards throughout the life cycle of devices to ensure safety and efficacy; and be risk-based.”

The committee called for the FDA to design a new medical device regulatory framework and for Congress to enact legislation to implement it.

“A new regulatory framework will benefit everyone — patients, healthcare providers, the medical device industry, payers and the FDA,” the committee said.

The FDA did not embrace the IOM’s controversial conclusion. Although the FDA opened up a docket to accept public comments on the report, Jeffrey E. Shuren, MD, JD, director of the CDRH, said, “FDA believes that the 510(k) process should not be eliminated but we are open to additional proposals and approaches for continued improvement of our device review programs.”

He further noted that, “Many of the IOM findings parallel changes already under way at the FDA to improve how we regulate devices. These actions, plus a sufficiently funded device review program, will contribute to a stronger program. Any major modifications made to the agency’s premarket review programs should be based on sound science and through thoughtful and transparent discussion.”

In a letter to the FDA, Sharon A. Segal, PhD, AdvaMed’s vice president of technology and regulatory affairs, also said the 510(k) process should be enhanced rather than replaced.

“AdvaMed is a strong supporter of the 510(k) program and believes that, as with any program that has existed over time, while it can be enhanced to make it more effective and efficient … it should not be replaced,” Segal said. “This approach would neither serve to protect or promote the public health because it would be untried and could potentially create delays in safe and effective products reaching the public. … Replacing the current 510(k) program with an untried, unproven and unspecified new legal structure is not in the best interest of public health.”