Washington Editor

The 21st Century Cures initiative is still in its formative stages, but Rep. Fred Upton (R-Michigan), chairman of the House Energy and Commerce Committee, appeared at a briefing in Washington between votes to discuss the program. Upton indicated that Congress may finally recognize the predicament FDA faces, stating, "you don't want to come before a committee and raise that right hand" when things go wrong. He said, "we want to change it so that instead of bringing them up" for problems, he would like to bring FDA managers to Congress "and say 'nice job'."

Upton appeared at a briefing sponsored by the Advanced Medical Technology Association (AdvaMed; Washington), and he said the 21st Century Cures initiative represents an idea that has been brewing on the Hill "for a couple of years." He said the central theme of the initiative is to "expedite the approval of drugs and devices," remarking of devices in Europe, "approvals are happening there and not necessarily here."

Between investor and clinical trial flight, Upton said, device makers leave and "we never get them back." He acknowledged that he and the other authors of the initiative "don't know where we're going yet," and that the committee members are still getting a perspective on the roadblocks to a leaner regulatory review mechanism.

Addressing corporate tax reform, Upton said, "we have to lower that tax rate," and he laid out a timeline for the 21st Century Cures roadmap. He said Congress will "listen for the balance of the year," then after the elections, "we'll be ready to put pen to paper." He said he hopes legislation will be ready early in 2015 and that the House will be able to "move a bill that should have strong bipartisan support." Upton also praised the top Democrat on the program, Diana DeGette (Colorado).

Upton said the House has had "a lot of discussions" with the Senate on the program, and he pointed to the looming problem of neurodegenerative states, remarking that he has recently heard "a lot of news about Alzheimer's," in reference to a recent identification of a protein that may play a central role in the disease process. "By 2025, this is going to impact us by hundreds of billions of dollars," Upton said of Alzheimer's disease.

Upton responded to a query about whether the Independent Payment Advisory Board stands in the way of expanded utilization of medical technology via the 21st Century Cures program, stating, "we don't have anything that's locked into this or locked out." He seemed to hint at Democratic antipathy toward the idea of scuttling IPAB, remarking, "we're going to keep it bipartisan."

Milken report; med-tech adds to economy

AdvaMed hosted the briefing during which Upton made his remarks to discuss a report authored by the Milken Institute (Santa Monica, California), the results of a study of the economic impact of med-tech diagnosis and treatment of four disease categories. The report's authors conclude that the net annual benefit of the technologies deployed in those disease areas in 2010 came to nearly $24 billion when adding net health system cost and GDP impact, but the U.S. Treasury was reportedly better off in 2010, too, to the tune of $7.2 billion "due to improved labor market outcomes."

AdvaMed president Steve Ubl said the report "fills a gap in the current research landscape" on the savings brought about by med tech. Ubl offered a few metrics associated with med tech, including that industry generates two million jobs with salaries that are 40% higher than the national average. Ubl concluded his remarks by stating that the report "further drive discussions . . . about the kinds of public policies we need to spur incentives" for device and diagnostics makers.

Ross DeVol, chief research officer at Milken, reviewed the report's high-level numbers, including that the benefits of med tech could be amplified or attenuated, depending on the decisions made by policymakers. After noting the impact of technologies for diabetes, musculoskeletal disease, heart disease and colorectal cancer, he said the report projects "a cumulative $1.4 trillion gain under increased incentives" over a quarter century (using 2010 dollars), but a $3.4 trillion loss in the decreased incentives scenario.

DeVol said that diabetic use of insulin pumps imposes higher up-front cost, but noted that the study suggested "about $600 lower [healthcare cost] per pump user," savings that are derived from less frequent use of emergency rooms as well as lower rates of amputation, kidney failure and blindness.

The analysis relied in large part on the use of Markov models to calculate the effects of lowered and elevated incentives to invest in med-tech for each disease group, but the authors remark that while they "do not tie the scenarios to explicit policy changes," such as the device tax or the rules of coverage/reimbursement, "these types of policies were indirectly considered in constructing" the scenarios.

DeVol said a lack of longitudinal data on patient-level outcomes hampers the ability of government to track the benefits of an intervention, a remark applied to spending forecasts supplied by the Congressional Budget Office. DeVol added that he has conferred with former CBO chiefs on this topic and remarked, "I've found that anyone who sits in that seat begins to believe medical technology adds to the cost" of medical care.

The statistical tools at CBO's disposal "don't allow you to do dynamic analyses," DeVol observed. Still, he argued, "on the other hand, you can't ignore the dynamic benefit. If we're going to do a static analysis, allow a dynamic one to be done as well" and perhaps split the difference for the purposes of CBO forecasts, DeVol said.

DeVol indicated that private payers see the impact of med-tech, too, but enrollee churn is still the sticking point. "If 25%-30% of them turn over every year, you don't reap all the benefits," and shareholders would likely abandon the first insurer to take up a more proactive coverage approach, he shrugged.

Also on the panel was Jim Blankenship, the president-elect at the Society for Cardiovascular Angiography and Interventions (SCAI; Washington), who remarked, "we are consistently about two generations behind Europe in terms of what kinds of devices we can use on our heart patients. We don't see that improving at the present time," he said. DeVol responded by pointing out that the second and succeeding generations of a device type can be incrementally more expensive than the original, but those newer versions are ordinarily much more efficacious. //

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