House Energy and Commerce Hearing: Impact of Medical Device Regulation on Jobs and Patients

In light of many recent reports about the negative impact federal regulations are having on the medical device and technology industry in America, the House Committee on Energy and Commerce held a hearing last week to examine the state of the medical device industry and the impact of regulations on job creation and patient access.

At the hearing, entitled, “Impact of Medical Device Regulation on Jobs and Patients,” Committee Chairman Fred Upton (R-MI) noted in his opening statement that America’s leadership in medical innovation is being threatened by a lack of predictability, certainty, and transparency at the Food and Drug Administration (FDA). He asserted that these problems are hurting US innovation, costing US jobs and hurting American patients.

In addition, Mr. Upton cited recent reports and first-hand accounts from American small businesses, that device companies are being forced to market their devices first in Europe because the EU countries have predictable and consistent regulatory processes.  Because of this, medical devices are available to European patients two years ahead of when they’re available to U.S. patients. To make matters worse, American jobs are following too as U.S. firms move their operations overseas. 

Consequently, Mr. Upton noted the need to reauthorize the Medical Device User Fee Act, which expires in September of 2012. The Energy and Commerce committee is charged with leading its reauthorization. Accordingly, Mr. Upton recognized the need for FDA to fix its problems and to build more predictability and transparency into its process so that America can stay as the global leader in medical device innovation, so we can create good-paying jobs here at home and so we can improve the lives of patients.

Representative Joseph Pitts (R-PA), Chairman of the Subcommittee on Health, who chaired the hearing, echoed Mr. Upton’s comments. He pointed to a November 2010 study entitled “FDA Impact on U.S. Medical Technology Innovation,” which surveyed over 200 medical technology companies. Mr. Pitts noted how the companies in the study described the FDA process as “unpredictable and characterized by disruptions and delays.” The report also found that because of FDA’s “suboptimal execution,” U.S. patients had to wait two years longer to benefit from new devices as compared to patients in foreign countries.

The study also noted that companies are able to make their products available to patients faster and at a significantly lower cost in markets such as Europe. For example, in order to get clearance for low-risk devices, device companies had to spend $31 million, of which $24 million went to the FDA-related expenses. With respect to higher-risk devices, device companies had to spend $94 million and $75 million of that amount went toward FDA-related expenses.  As it gets more expensive for device firms to obtain FDA clearance or approval, the device sector becomes less attractive for venture capital. 

This trend is significant because according to the Lewin Group, the medical device industry employed 422,778 workers nationwide, paid $24.6 billion in earnings, and shipped $135.9 billion worth of products in 2008.

Mr. Pitts also pointed to a January 2011 Boston Consulting Group report “EU Medical Device Approval Safety Assessment: A comparative analysis of medical device recalls 2005-2009.” He noted how  “the results of this study suggest little difference between absolute number of serious recalls between the US and EU regulatory systems.  The distribution of the serious recalls is similar across therapeutic areas and reasons for recall, suggesting that differences between the two systems do not ultimately affect performance.

Another recent report from PwC found that the U.S. medical device environment is deteriorating, in part because of unpredictability and inconsistency in the regulatory process.  PwC explained that “[t]he innovation ecosystem for medical device technology, long centered in the United States, is moving offshore. 

Testimony from Panel

The Subcommittee on Health then heard testimony from:

• Jeffrey E. Shuren, M.D., J.D., Director of the Center for Devices and Radiological Health (CDRH), FDA
• Josh Makower, M.D., Consulting Professor of Medicine, Stanford University   CEO, ExploraMed Development, LLC  Venture Partner, New Enterprise Associates
• Mark Deem, Managing Partner and Chief Technology Partner The Foundry 
• Ralph F. Hall, Distinguished Professor and Practitioner of Law University of Minnesota Law School
• Dr. Rita Redberg, Director, Women’s Cardiovascular Services, University of California San Francisco Medical Center
• Dr. Steven E. Nissen, Professor of Medicine, Cleveland Clinic Lerner School of Medicine at Case Western Reserve University, Chairman, Department of Cardiovascular Medicine, Cleveland Clinic Foundation

Jeffrey E. Shuren (FDA)

Dr. Shuren’s written testimony gave a brief historical description of the regulation of medical devices. He also discussed some of the findings from the medical device reports noted above. In addition, Dr. Shuren emphasized the positive role FDA has had in meeting its device approval timelines. He stated that 95% of the over 4,000 medical device applications meet their timelines and that 90% of devices under the 510(k) program are approved in 90 days or less, and 98% in 150 days or less.

Nevertheless, Dr. Shuren recognized that FDA is not meeting its goals in a number of areas. He explained the causes for these problems to include increasing workloads, turnovers of key staff, growing device complexity, and poor-quality submissions.

Dr. Shuren also discussed differences between the EU and the FDA device regulatory system. In addition, Dr. Shuren also addressed why it takes so long for complex medical devices to get approval, pointing to the need for more clinical data and much earlier agency involvement with the company. Dr. Shuren also discussed the recent 510(k) plan of action and recommendations.

Dr. Josh Makower

As the founder of a number medical device companies, and inventor of hundreds of medical devices, Dr. Makower explained in his written testimony that over the past few years, it has been increasingly more difficult, more time consuming, more costly and less predictable to navigate the FDA approval process. As a result, investment is drying up, companies are moving overseas  or closing their doors and US patients are being denied timely access to safe and effective new  medical products.  If this situation does not improve immediately, a generation of innovation  and businesses will be lost, along with the jobs they would have created and the lives they would have saved or improved.

For example, from 1980 to 2000, new diagnostic and treatment paradigms helped drive a 4 percent increase in life expectancy in the U.S., a 16 percent decrease in annual mortality rates, and a 25 percent decline in disability rates for the elderly.

After discussing the results from his study and some medical device industry details, Dr. Makower asserted that “FDA must balance the imperative  of assuring the safety, effectiveness, and quality of commercially available medical devices with its mission of fostering innovation by providing companies with a timely, predictable route to market.”

Ultimately, Dr. Makower concluded that serious device-related safety problems are extremely rare, and that data shows that the majority of these rare postmarket events stem from issues relating to quality systems and manufacturing processes and not issues that would have been most effectively detected through more expansive premarket clinical trials.

Mark Deem

As a founder of dozens of medical device startups, Mr. Deem asserted that medical device startups are currently struggling and that this is problematic because “startups are responsible for a huge percentage of paradigm-shifting breakthroughs in patient

care.” He noted that while startups “exist for patients, they live on venture capital.” He cited the PwC report and how between 2007 and 2010, venture capital investment in the medical device sector declined by over 37%, and that the primary risk factor affecting investment is the unpredictability of and delays by the FDA.  

He also gave examples of the many medical devices that have changed patient care, such as a catheter based procedure that only takes an hour to repair a valve, which ten years ago would have been major open heart surgery. He also discussed how patients can now have a blood clot removed with a tiny device threaded into the arteries in their brains.

In light of these advances, he pointed to the Boston Consulting Group study, which showed that the EU safety record is essentially identical to that of the US. Accordingly, he asked why, if we are not increasing safety, we should be satisfied with a system that is driving investment innovation and jobs overseas?  Why should we be satisfied with a system wherein US patients wait up to 4 years longer for access to care that was pioneered in the US? He answered the question by noting that “the sad fact is, many of those patients simply will not live that long” to wait.

Ralph F. Hall

Mr. Hall, a law professor at the University of Minnesota Law School used his testimony to discuss the findings of research he conducted as well. He told the committee that the findings from his research “suggest that reform of the regulatory process is needed to ensure the safety of medical devices.” Mr. Hall asserted that his study showed that “FDA has a very positive safety record in its 510(k) clearance decisions.”

For example, Mr. Hall pointed out that overall, 510(k) regulated medical devices have an excellent safety profile.  Over 99.5% of 510(k) submissions assessed during the study period did not result in a Class I safety recall, and over 99.7% of 510(k) submissions did not result in a Class I recall for any reason relevant to the 510(k) premarket system.

Additionally, Mr. Hall noted that less than 9% of Class I recalls during the study period involved possible undiscovered clinical risks.  As such, Mr. Hall concluded that “increased preapproval clinical testing would not have any meaningful impact on reducing the number of Class I recalls.”

Mr. Hall also recognized the need for people to remember that there are around 3,500 510(k) submissions per year compared to 20-40 PMA applications. Given these disparate numbers, “the fact that more recalls are for 510(k) products than PMA products is not meaningful or even a useful comparison.” Moreover, “the majority of all recalls (approximately 55%) are for post market issues.  For these recalls, no change in the premarket 510(k) or PMA process would affect the recall occurrence or frequency.” 

Dr. Rita Redberg

Dr. Redberg, Professor of Medicine and full time Faculty Member in the Division of

Cardiology at the University of California, San Francisco Medical Center, and editor of AMA’s Achieves of Internal Medicine expressed concern about the 510(k) approval process. She noted that while 510(k) clearance is appropriate in circumstances where low- and moderate-risk devices are substantially equivalent to previously approved devices, this approval pathway was not intended for, and should not be used for, high risk devices. 

She stated that too many high-risk devices are being cleared by a 510(k) mechanism without any clinical trial data; and second, after device approval there is little or no post-marketing surveillance that would detect serious adverse events in a timely fashion.  As a result, she called on the Committee to ensure that the risk from medical devices is minimized through proper use of evidence-based medicine and well-designed clinical tests before the devices are approved and clinical registries to track outcomes in real time after they are approved.

 

Dr. Steven E. Nissen

Dr. Nissen, Chairman of the Department of Cardiovascular Medicine at Cleveland Clinic, and a strong anti-industry critic, used his testimony primarily to discuss research he and his colleagues conducted about the safety of medical devices. His main concern stemmed from a finding that “71% of recalls for defects that could “cause serious

health problems or death” were originally approved using the 510(k) pathway.” As a result, Dr. Nissen recommended a more nuanced approach to device regulation that appropriately balances the need for timely approval with patient safety. He said that components of reform should include:

A more accurate definition of a high risk device, which takes into account the likely risks if the device is defective.

An intermediate regulatory category more rigorous than 510(k), but short of a full PMA process, for moderate risk devices.

Better funding for FDA Center for Devices to enable timely, but thorough, evaluation of the risks and benefits of medical devices.

Conclusion

Ultimately, people must remember that all devices carry risk. However, Congress and FDA must balance patient access to new technology with premarket processes by creating the standard that there must be “reasonable assurance” of product safety before the product should be marketed.

For decades, the American medical products industry has been responsible for innovations that have saved lives, reduced suffering, and sometimes even lowered medical costs. Moreover, this industry creates high-quality jobs that contribute to the nation’s economic health. Accordingly, Congress and the FDA must establish a way to strengthen the medical device industry to ensure that our advances, breakthroughs, jobs, and income stay here.