BB&T Washington Editor and BB&T Staff Reports

FDA and Medtronic (Minneapolis) began discussions at least as early as December 2010 regarding at least some portion of the pivotal trial for the firm's CoreValve artificial aortic valve based on the question of whether it is any longer ethically legitimate to randomize the most profoundly ill patients to medical therapy. The development followed and was apparently prompted by returns from the pivotal trial for the Sapien valve, made by Edwards Lifesciences (Irvine, California), which were announced during last year's edition of Transcatheter Cardiovascular Therapeutics (TCT) in Washington.

Those data seem to have also fed an adjustment to the pivotal trial for the Sapien XT, a follow-on to the Sapien with a narrower diameter and presumably more facile delivery. Henceforth, Partners II will match the Sapien XT against its predecessor in at least the most diseased patients rather than force those patients onto medical therapy. One wild card in the discussion is the possibility that this development is forcing FDA to re-examine the question of how long it will accept medical management as the control treatment for this class of devices.

The data reported at TCT from the Partner (Placement of AoRTic TraNscathetER Valve Trial) trial indicated that mortality was down by 20 percentage points with the Sapien compared to medical therapy, which prompted an effusive response at TCT. Despite the resounding success of the trial, Bram Zuckerman, MD, chief of the cardiology devices branch at FDA's Center for Devices and Radiological Health, asserted that FDA's interest in randomized, controlled trials (RCTs) had not abated. He remarked that the mortality drop-off, derived from one-year data, offered only “very short-term results“ and noted that Partner was the first RCT in the U.S. for such a valve.

Zuckerman sought to dampen enthusiasm further by remarking that “the DES [drug-eluting stent] trauma“ was still on the minds of managers and reviewers at FDA.

The discussions between Medtronic and FDA could migrate to yet another firm in the cardiovascular space, namely St. Jude Medical (St. Paul, Minnesota), whose Trifecta valve is the subject of several international studies. St. Jude earned a CE mark for the Trifecta in March 2010, and the firm announced the Canadian launch of the Trifecta in a statement posted to the company website in December. St. Jude declined to comment on this development when contacted by BB&T, other than to indicate that the company had “not yet publicly disclosed details pertaining to the design“ of the U.S. trial for the Trifecta.

Medtronic reported in February 2010 that it had won a CE mark for the use of a subclavian approach for implanting the CoreValve, which the firm picked up in its acquisition of CoreValve in 2009 for $700 million, a sum that will eventually be dwarfed by the market for such therapies, which some have estimated currently stands at $400 million outside the U.S. The addition of the U.S. market and the impending addition of a retirement generation in virtually the entire developed world – and in several very populous developing nations, such as India and China – almost guarantees that Medtronic will see healthy returns on its investment in CoreValve. FDA gave Medtronic the go-ahead for the CoreValve pivotal trial in October and the company indicated that it expects to move into the market by 2014.

However, there have been indications that surgeons in the European market are migrating to valve replacement in the kinds of numbers suggestive of what was seen as the overly enthusiastic adoption of the DES, which suggests a potential whipsaw effect. According to registry data compiled in Germany, more than half of the valves implanted in the central European nation were for patients who did not exhibit the severity of disease indicated for the valve.

In an unattributed statement e-mailed to BB&T last year, Medtronic said that the Partner results “are clearly very compelling and the findings demonstrate just how desperately these patients need effective therapy, as patients receiving OMM (optimal medical management) fared dismally. The change in protocol . . . is a positive change for patients.“

Medtronic also said it was “having active discussions with the FDA to ensure that CoreValve can be studied fairly and effectively,“ and that updates will be provided. “We are activating clinical sites and expect a first implant in the CoreValve trial soon,“ the statement noted.

David Teicher of the regulatory consultancy Duval & Associates (Minneapolis), told BB&T that it is possible that Edwards anticipated the outcome of the Partner trial, even if the company did not have some sort of draft rewrite of the trial design to accommodate the change. “It is possible that the European data were looking very attractive and that some of these very sick patients would benefit“ sufficiently to prompt the company to make such a provision.

Still, the situation gave FDA something to crow about, Teicher said. “I'm wondering if these therapies are very cost effective“ compared to medical management, he said. If the valves are both life-saving and cost effective, “we have a new technology and its a win for FDA and for the patient,“ he observed.

“Nowadays, you are absolutely dealing with cost effectiveness as well,“ Teicher said of healthcare in the 21st century.

The development does seem to constitute a slight loosening of the attitude conveyed by Zuckerman at TCT. “Basically what FDA may be doing is allowing Medtronic to deviate from the Holy Grail of a randomized, controlled trial,“ Teicher remarked. “At this juncture, FDA is extremely risk averse and is in a terrible position with Congress“ for the past few years, he commented, but he also noted, “in general, risk aversion fits in with the current administration's approach“ to private business.

As for whether FDA is taking a closer look at whether medical management should be dropped as a control sooner rather than later, Teicher said, “it is possible. If this technology is so advantageous, FDA could start thinking like that,“ he said.

Healthcare reform mandate ruled unconstitutional

A federal judge in Virginia ruled in December 2010 that the mandatory enrollment provision in the Patient Protection and Affordable Care Act of 2010 (PPACA) is unconstitutional in a decision announced Dec. 13, 2010. The development sets up a showdown between opponents and the federal government in the Supreme Court next, although the next normal judicial stopping point would ordinarily be the U.S. Court of Appeals for the Fourth Circuit.

In a 42-page document, Judge Henry Hudson of the U.S. District Court for the Eastern District of Virginia wrote that the enrollment mandate runs afoul of the Commerce Clause of the Constitution inasmuch as such a mandate is an unprecedented requirement to engage in commerce. In his ruling, Hudson states that while a number of issues were raised during the course of the proceedings, they “all seem to distill to the single question of whether or not Congress has the power to regulate – and tax – a citizen's decision not to participate in interstate commerce.“

Hudson states later in his decision that the government posits that the mandate serves as “the vital kinetic link that animates Congress's overall regulatory reform of interstate healthcare and insurance markets,“ but that this use of the Necessary and Proper Clause “is not without limitation“ and “must not violate an independent constitutional prohibition.“

According to the decision, Hudson states that in order for a law to survive a constitutional challenge, “the subject matter must be economic in nature and must affect interstate commerce,“ but “must also involve activity.“ He writes that the federal government had argued that every individual . . . will require healthcare at some point in their lifetime“ and that “purchasing insurance based on a future contingency is an activity that will inevitably affect interstate commerce.“ However, Hudson argues that “such a broad definition of the economic activity subject to congressional regulation lacks logical limitation and is unsupported by Commerce Clause jurisprudence.“ Hence, he decreed, the enrollment mandate “exceeds the constitutional boundaries of congressional power.

The ruling will not immediately affect the enforcement of any provisions of the law inasmuch as the enrollment mandate does not go into force until 2014, but the law has been under attack in several other states, some of which have failed. A legal action in Florida is still pending, but Virginia's attorney general Ken Cuccinelli, has suggested that the litigants bypass the Fourth Appeals Court and apply for a writ of certiorari immediately from the Supreme Court of the United States.

The decision drew the expected immediate reaction from various members of Congress. In a Dec. 13, 2010, statement, Sen. Tom Harkin (D-Iowa), criticized the lawsuit, making a point of noting the party affiliation of Cuccinelli, who is a member of the GOP. Harkin argued that “on the merits, the Virginia Attorney General's suit is clearly wrong,“ stating that a failure to buy insurance does not constitute opting out, but “instead ... adds more than $1,000 per year to the premiums of American families who act responsibly by having coverage.“ This, Harkin argued, “clearly affects interstate commerce and is thus within Congress' power to regulate.“

Rep. Henry Waxman (D-California), chairman of the House Energy and Commerce Committee, noted in another Dec. 13 statement that there have been “almost 20 cases filed challenging health reform,“ asserting that all other cases that have come to a decision “have been dismissed.“

Waxman continued: “We always knew that there was a chance that one or two judges would buck the clear legal consensus that the law is constitutional, just as some judges once ruled that Social Security was illegal. But one way or another, this question is clearly headed to the Supreme Court. When it gets there, I am confident that cooler heads will prevail and that the health reform law will be upheld in full.“

Paper finds generic devices 'closer than they appear'

A new white paper from Fuld (Cambridge, Massachusetts), a research and consulting firm in the field of business and competitive intelligence, suggests that generic medical devices are “closer than they appear.“ The paper, written by Laura Ruth, PhD, a director with Fuld's pharmaceutical and healthcare practice, concludes that several market forces, including changing distribution channels, increasing economic pressures, responsive legislation, patent expirations, and technology innovations, will act as catalysts toward the acceptance of device generics at a faster rate than ever before.

The paper highlights one company in particular, Generic Medical Device (GMD; Gig Harbor, Washington), that launched the Universal Sling System for female stress urinary incontinence, a class II medical device, during the summer of 2009. In 2007, GMD reported FDA clearance of a universal surgical mesh, also a class II device, intended to support tissue growth in open or laparoscopic procedures common for hernia repair. Earlier that same year the company received a CE mark and an EC Declaration of Conformity allowing it to sell its universal circumcision clamp in all European Union countries.

Shawn Lunney, GMD's VP of sales and marketing, is quoted in the white paper stating that GMD's mission is to develop and bring to market “cost-effective equivalent medical devices that provide equivalent outcomes at substantially lower cost.“ Lunney says GMD looks for products in the hospital that have a bad price/value balance and the next innovation in life cycle doesn't gain any significant patient value. He adds that generic devices are possible in all device classes but simpler ones become commodities and physicians have more brand preference with sophisticated high-end devices.

The FDA says there is no such thing as a generic medical device that is equivalent to the meaning of generic drugs. A generic medical device does not have a regulatory pathway like a generic drug and it is not a commonly used term in healthcare, according to the paper. But the paper suggests that despite the lack of FDA acknowledgment or an official label, lower-cost generic devices are one sector of the healthcare industry that is likely to grow due to economic pressures.

A generic asthma albuterol inhaler is an example of a generic medical device that manufacturers have developed, Ruth notes in the paper. There are other types of devices, such as the female urinary incontinence sling, that are likely to grow in their respective markets. GMD's Universal Sling System competes with existing brand devices, such as the Gynecare TVT Obturator System by Ethicon Endo-Surgery (Blue Ash, Ohio), Boston Scientific's (Natick, Massachusetts) Lynx System, Caldera's (Agoura Hills, California) Desara, and Coloplast's (Minneapolis) Aris and Supris.

“The doctors seem interested and we are building commercialization,“ Lunney says. After a year on the market, GMD says organizations can save 25% to 50% by using their slings vs. a branded sling. One Texas hospital reports a $50,000 savings after one year and other organizations are saving roughly $20,000 in a period of less than a year, according to the white paper.

GMD launched in December 2006 calling itself the first to offer commonly used and efficacious surgical products as generic products. GMD plans to follow the same formula used by the generic drug industry to develop and distribute alternatives to standard-of-care devices, offering payors, clinics, hospitals and physician-owned surgical centers the benefit of medical devices with equivalent safety and efficacy, but at lower prices.

Richard Kuntz, president/CEO of GMD, told BB&T in 2006 shortly after the company made its official launch that he got the idea for the company a couple years earlier while he was traveling and found a newspaper article slipped under his hotel room door about Medicare predicting bankruptcy by 2019, seven years earlier than previously predicted. “I didn't understand why the medical device industry had not followed in the pharmaceutical industry's path of when a product patent expires offering a generic alternative,“ Kuntz said. “It was sort of a 'duh' – as my kids say – and a 'Why not?'“

So that's exactly what GMD set out to do.

“Many of the medical devices commonly used in today's healthcare organizations have undergone few, if any, changes in the decades since they were first introduced to the market,“ Kuntz said. “Nevertheless, purchasers of medical devices continue to pay a premium for these commoditized products and are demanding alternatives. As with generic pharmaceuticals, GMD will be offering medical devices that are equivalent, if not better, than their branded counterparts and at prices that will be attractive to hospitals, physician-owned surgery centers, Medicare and third-party payors.“

In the pharmaceutical industry, once the patent on a brand name drug expires, competitors are allowed to develop, market and sell generic alternatives as long as they offer the same safety and efficacy as their branded counterparts, thus avoiding the standard high development costs: R&D expenses, costly clinical trials, protracted governmental approval and marketing costs. As a result, these companies are able to sell equivalent versions of brand name products at significantly reduced prices. And by reducing the costs of some drugs, generics make room in the system for new products, the generic manufacturers contend.In Fuld's white paper, Ruth notes that one reason generic devices have failed to achieve market acceptance is group purchasing organizations (GPOs). According to the paper, the funding relationship between the hospital GPO medical device distribution channel and medical device manufacturers has historically been a market force that can prevent lower-cost alternative treatments from entering the market. Typically, manufacturers who are selling products to a GPO can also be paying a GPO's operating expenses, which creates a conflict of interest.