BB&T Washington Editor
WASHINGTON – The Advanced Medical Technology Association (AdvaMed; Washington) held its policy briefing on the first day of AdvaMed 2011 and the association's representatives offered a quick look at what AdvaMed sees as its concerns over pressure on U.S. device makers, but AdvaMed's leadership indicated that the concern over Medicare imaging seems to be easing.
The topic of Medicare Part B imaging arose a couple of times during the briefing, with most of the discussions having to do with the notions of pre-authorization and a utilization threshold of 90% for high-end imaging procedures in the out-patient setting. When asked whether Congress has lost enthusiasm for further cuts to imaging, Steve Ubl, President/CEO of AdvaMed said, “I agree that there has been concern“ about the pressure on imaging on Capitol Hill, stating further that AdvaMed is in contact with Congress in an effort to bolster opposition to further cuts to out-patient imaging.
The background to this policy discussion includes a letter sent from a bipartisan pair of members of the U.S. House of Representatives to the Medicare Payment Advisory Commission, which made the argument that the utilization rate for high-end imaging equipment be set at 90%. MedPAC has also argued in favor of pre-authorization for some imaging services, and the recent deficit reduction/jobs proposal by the Obama administration incorporated both these notions, although conventional wisdom has it that too many Senate Democrats are chary of the overall plan for it to have any chance of passage by Congress.
Jim Mazzo, president of Abbott Medical Optics (Santa Ana, California), who also serves as the chairman of the board at AdvaMed, opened his remarks by noting that the U.S. “is still the med-tech leader,“ adding that he sees “no reason we cannot continue to be the innovation leader.“
On the other hand, Mazzo said he sees “a number of red flags on the horizon,“ including that venture capital investment in med-tech is down from previous years, but he also highlighted delays in device applications at FDA's Office of Device Evaluation (ODE). “It's fair to say our engine is in danger of stalling,“ Mazzo remarked.
All the same, Mazzo seemed to believe that the med-tech message is getting through in Washington. “The agenda we've put forward is puncturing the [policy] din in Washington,“ he said, noting that there are strong signs of bipartisan interest “on the intersection of FDA regulation and jobs.“ He also made note of “a strong focus on competitiveness“ in Washington.
Mazzo offered a standard comment on the FDA budget, stating that he sees it as “important that we have stable FDA funding,“ mentioning that in AdvaMed's view, “any significant cuts would be counterproductive.“ He also said “we've made no secret of our concerns about the device center's performance,“ but that the White House and FDA “have acknowledged our concerns.“
Conversely, Mazzo was much less amenable to increases in user fees, which are virtually certain to rise. “I'm pleased we're seeing momentum“ in what have been protracted user fee negotiations, he said, but Mazzo also remarked, “I'm not a believer that you throw money at a problem.“ He said AdvaMed has communicated the view that before industry will agree to large increases in user fee levels, FDA must do something about the predictability of regulatory reviews and “proper training“ of device reviewers at the Office of Device Evaluation. “If you throw people and money at problems, you never solve the fundamental issue,“ Mazzo asserted.
Managers at FDA's Center for Devices and Radiological Health have sent out concessionary signals on these scores, rolling out a training program for ODE staff, which was recently expanded to all reviewers at ODE according to a Sept. 6 announcement by FDA.
Ubl opened his remarks with some numbers, including that the device industry contributes millions of jobs to the U.S. economy that pay 40% more in earnings than the U.S. average. Ubl also addressed the 2.3% device tax briefly, stating that AdvaMed's conversation with Congress includes some other tax policy topics. He said AdvaMed is “looking at the tax code in its entirety,“ adding that AdvaMed has in recent months encountered “a much more conducive environment for conversation“ on these subjects.
Ubl seemed to indicate that some relief from the total tax burden – which might at least partially offset the device tax – might be in the legislative offing, but when asked whether AdvaMed might be in a mood to barter, he said “I can't conceive of an environment where we're comfortable with [the device tax] remaining in place.“ Ubl mentioned the R&D tax credit and unspecified manufacturing tax credits in this context, and when pressed for further detail, said “it's too early to get into that“ because the association's managers “want to see where corporate tax reform will go in the coming weeks.“
As for the potential for a tax on device components to amount to a doubling of the 2.3% device tax, Mazzo said “we're concerned about double taxation,“ stating further that the federal government “has been receptive to our technical input on that question.“
Ubl addressed the emphasis on deficit reduction in Washington, stating that AdvaMed's managers have met with members of the congressional super-committee charged with coming up with trillions of dollars in cuts from federal spending. Addressing Part B imaging and durable medical equipment, Ubl said, “we're very concerned about those sectors coming under additional scrutiny,“ and while he acknowledged that “deficit reduction is going to be with us for the foreseeable future,“ AdvaMed would prefer “fewer meat-axe cuts“ and more appropriately targeted work on the federal budget.
Regarding whether the section 513(g) review of a device application is still seen as the biggest bottleneck in the de novo review process, Ubl said, “we support“ a streamlined process that eliminates the step of obtaining a determination of not substantially equivalent. He also remarked, “everyone believes you shouldn't have to be turned down first“ to get a de novo application in queue.
Mexico streamlining its drug/device registration
The turbulence in the U.S. healthcare market has makers of devices and diagnostics scrambling for emerging markets, and the government of the United Mexican States sent a representative to AdvaMed 2011 to talk about recent regulatory developments in the world's 11th most populous nation.
Mikel Arriola Peñalosa now serves as the chief administrator at the Federal Commission for Protection against Health Risks (Cofepris), a title he assumed toward the beginning of this year after the departure of his predecessor, Miguel Angel Toscano. According to a March 2 story in the online edition of La Prensa, Mexico's Secretary of Health José Córdova Villalobos asked the legislature at around the same time to “continue to promote the modernization of“ Cofepris, but Arriola's appointment seems equally suggestive of another policy push in Mexico City: Arriola's previous position was as the director of an office at the Ministry of Finance charged with administering tax law.
Arriola spoke in the main hall on the second day of AdvaMed 2011, and told attendees that his agency has sped things up considerably, surely music to industry's ears. In the past six months, “we have authorized about 4,300 registrations, compared with 150 last year,“ he said.
Arriola said his home nation “has been very responsible in terms of economic policy“ compared to some countries experiencing significant fiscal distress. He cited “two fiscal reforms“ implemented over the past five years that he said have added two percentage points to Mexico's GDP. “Fiscal income is permanent and it's predictable“ in Mexico, he said, stating further, “our public finances are working very well. We also have one of the lowest deficits in terms of balance of payments“ among OECD nations, which “we're very proud of.“
GDP growth is at roughly 4%, Arriola said, adding that Mexico City is “expecting to sustain“ growth of 3.5% or better over the next couple of years. “We are a very sustainable country in terms of economic policy,“ he continued, adding that the federal government in Mexico is “also supporting many market reforms.“ He also pointed out that Mexico has a “very successful free trade agreement with Canada and the U.S.“ in the form of the North American Free Trade Agreement, but mentioned a free-trade agreement with the European Union as well. These, he said, “are putting Mexico in a strategic position for investment.“
Arriola might not have been trying to compare-and-contrast the regulatory environment in Mexico with that in the U.S., but he remarked, “what we can offer to foreign investors are three important things: Legal certainty, predictability and responsibility in terms of administrative authorities.“ He said the mission of Cofepris beyond regulatory scrutiny “is to send messages for investments, and [consequently] we have to be responsible in terms of administrative behavior, and we have to be predictable.“ He also hinted at a more secure intellectual property environment than is reputed to be available in mainland China, remarking, “many of our thoughts are around legal certainty,“ including “property rights.“
Arriola addressed a backlog of drug and device applications that had piled up due to regulatory drag as well as the efforts at Cofepris to clear out that backlog. “The first key element is communication with industry. When we started to analyze the backlog, we needed the opinion of industry“ to find out where the worst bottlenecks were. He said Cofepris at one point had 8,000 pending applications, but that he and his agency “were very successful“ in getting the backlog cut back, adding that by “the end of March, we had liberated $250 million in market value.“
Arriola implicitly addressed the upcoming federal election in Mexico, which could trigger a change in administrative positions in Mexico City. He said that beyond the current efforts to streamline the regulatory apparatus, “we have to institutionalize [those] change[s], so we've started to modernize“ Cofepris' operations in an effort to make those modernizations permanent, including how the agency communicates with industry. As for the agency's human resources, he said, “we identified where the bad people were and took immediate action,“ although he offered no details regarding personnel matters other than to say “we had some public officials who were not doing their job and were very subjective“ about marketing applications.
Arriola made a point on a couple of occasions to emphasize his interest in ensuring that patients in Mexico have access to modern drugs and devices. “One of the most important instruments to offer Mexican consumers the best products is the equivalence agreements we have“ with Health Canada and FDA. He said there are about 13,000 products registered in Mexico and that about 1,700 products that weren't medical devices were nonetheless regulated as such. Consequently, they were “required to pass onerous procedures with no scientific standard,“ he said, adding that the de-classification of these products means that about 12% “of this universe has been de-regulated.“
Arriola indicated that his agency wants to recruit outside talent where its regulatory review is concerned. “We are going forward with another project,“ using third parties “in order to revise documents“ related to risk determinations, he said. He also told attendees, “we're going to create a new market“ in pharmaceuticals and devices that will be worth $200 million in market terms. “We're going to cut the procedures in two thirds“ of product categories as well, he noted.
Arriola emphasized that his agency previously had little real experience where device-specific regulations are concerned. “We didn't start from zero. We started from minus-800,“ when it comes to dealing with device marketing applications.
When asked whether Cofepris is inclined to adopt large chunks of the framework built up by the Global Harmonization Task Force in any device-specific regime versus a piecemeal adoption of ISO standards, Arriola said “we have a special branch in our office that is taking care of that,“ but he said the priority right now is food additives.
“We are working in a special task force ... in order to de-regulate a lot of procedures“ that are double-regulated by internal rules, Arriola commented, but he also promised more internal scrutiny on a quality system/GMP framework. “At the end of this year we are going to be able to diagnose“ what his agency needs in order to start developing a set of device regulations, he promised. “Our inspiration is going to be international,“ he said, but “we have to cancel the kinds of regulations that are making life harder for investors“ before trying to assemble a full-blown regulatory architecture.
“We lifted last year several barriers“ to outside firms, such as import restrictions, Arriola said, adding that the task force “is very committed to cutting red tape.“
Regarding inspection standards, Arriola said he and his colleagues are “committed with APEC,“ the Asian-Pacific Economic Cooperative, regarding those standards. He also said Cofepris recognized the manufacturing certificates issued by six other national regulatory agencies about six months ago, including FDA, the European Medicines Agency, Brazil's National Health Surveillance Agency (Anvisa), Australia's Therapeutic Goods Administration, and Japan's Ministry of Labor, Health and Welfare. “This saves a lot of time and money,“ he said. Noting again that his agency is focused on working on harmonization via APEC, he remarked further, “if we ask for the same requirements“ as these other nations, “we'll be sending the right message“ to investors.
Shuren promises to screen out ad hoc bar raising
Jeff Shuren, MD, made the obligatory stop at AdvaMed 2011 at a time when industry is reacting sharply to several guidances, including the when-to-file guidance for 510(k) submissions.
That's not the entirety of the items Shuren combed through, but one item of interest to industry is that reviewers at the Office of Device Evaluation (ODE) will no longer be able to raise the standards for device clearances and approvals without the approval of managers at the Center for Devices and Radiological Health.
Shuren, director of CDRH, told attendees that among the predictability/consistency imperatives at CDRH is that the Center Science Council will now review any efforts by reviewers to change the standard for approving a PMA device, but the device branch is also putting together a standard operating procedure for when reviewers want to raise the regulatory bar for 510(k) reviews “so that when a new person comes in, they can't change that level“ unilaterally. In the case of PMAs, the drift of standards has proven to be a conspicuous issue at advisory committee hearings, particularly when the lead reviewer role changes hands.
Shuren reminded attendees that when he took the job on an interim basis in 2009, “one of the issues we had heard a lot of concern about was the performance of our pre-market review programs,“ with the central complaint being that they were “not sufficiently predictable, consistent and transparent.“ On the other hand, he also reminded attendees that other stakeholders had argued “that we may be letting some unsafe products on the market.“
“Even my own staff was talking about how the current limitations of the program“ made it difficult for ODE personnel to deal with relatively novel technologies,“ Shuren remarked. He also said FDA had data already in 2002 or so that “were showing an increase in the number of [review] cycles“ for device applications. He conceded a point to industry in the on-and-off rhetorical wrestling match over the cause of the increase in review cycles, stating, “much of the cause resides with FDA,“ a sore spot that drives “much of what we have announced in the past year [toward] how we can improve those programs.“
Still, Shuren asserted also, “we do receive from some companies poor quality submissions,“ but unlike the Center for Drug Evaluation and Research, which sends them back to the sponsor, “we continue to work on them.“ The tone between FDA and industry on this score has eased a bit from the beginning of the year, when Shuren said increased review times were “all on industry“ after a hearing in the House Energy and Commerce Committee in February.
Shuren also discussed the user fee negotiations, which the agency's published notes indicate have been a sore spot. “Having adequate resources“ is vital, he said, but Shuren seemed to echo comments heard earlier in the conference with the remark, “throwing resources will not solve the problem.“
AdvaMed's board chairman Jim Mazzo, president of Abbott Medical Optics (Santa Ana, California) remarked that he is “not a believer that you throw money at a problem“ during a press briefing on the first day of the conference. The similarity of their observations about resources suggests that the difference between the positions of the two sides on user fees is narrowing.
Shuren said of user fee negotiations that even if mere money cannot solve the problems at ODE, the absence of sufficient resources is of no help, either. To solve the problems with device reviews, “we're going to need the funding,“ he said.
Shuren highlighted the situation at the Center for Drug Evaluation and Research several years ago, remarking that during a prior iteration of drug user fee negotiations, “they and the drug industry were at the same crossroads“ as CDRH and industry occupy now. Seeming to refer to the controversial bonuses paid to key CDER employees several years ago as an example of one way that a bigger checking account can fix the ills of device reviews, Shuren said, “you can pay critical people to come to and stay at the agency.“
“I will tell you we need to find a comfortable place where we are all in agreement“ on user fees, Shuren emphasized further. Noting that pharmaceutical user fee levels are substantially higher than those paid by device makers, he said CDRH is not asking for the kinds of staffing and user fee levels seen at CDER, but he nonetheless asserted, “not having the right cadre of experts hurts patients and industry.“
As part of his discussion about what he described as an effort to impose a change of culture at CDRH, Shuren said “some efforts for better engagement with industry,“ such as interactive review, “need to be better structured.“ To this end, CDRH will start making use of a tracking system to address industry complaints that reviewers at the Office of Device Evaluation are not always eager to return calls and respond to e-mails.
Shuren said a guidance on investigational device exemption (IDE) meetings is in the works as well. “One of the concerns that we get is that you get input“ on an IDE application “and the Center doesn't stand behind it,“ Shuren observed. The guidance will address a number of issues, “including where getting advice is written down and we stand behind it,“ he said, although he stated that this is not an ironclad guarantee because the standard for an IDE could change because of external circumstances.
“We're going to release our SOP (standard operating procedure) for a network of experts for our managers to reach out to,“ Shuren said, “to get help in addressing important scientific questions.“ He said this guidance “will be out in the next couple of days and will be a critical step“ in beefing up the center's efforts to bring the appropriate scientific talent to bear on some of the more technologically challenging applications.
Regarding the recent guidance on risk/benefit determinations, Shuren said “we have been inconsistent“ in dealing with this question, so the factors going forward will include a patient's tolerance for risk as well as any lack of alternative treatments. The guidance “will also require our reviewers to fill out a template“ with this kind of information in a device application “so that there's an opportunity for a more consistent dialogue with sponsors.“
In another concession to industry's concerns about the IDE process, Shuren mentioned briefly a guidance on early feasibility studies, including first-in-human studies. “We would like to see these start first in the U.S.“ rather than outside the U.S., he said, adding that the device branch is looking for a mechanism to allow a sponsor to make modifications to a design at an early stage “without having to come back to FDA.“
Shuren also let the audience know of another impending guidance, which will address “better use and collection of post-market data,“ including unique device identifiers (UDIs). This guidance will at least attempt to address criticism that the agency's post-market tracking mechanisms are deficient, and Shuren said his hope is that this draft guidance “will come out in the next few weeks. If done right, it can reduce new pre-market data requirements for some technologies,“ he said.