Earlier this month at the Cleveland Clinic Medical Innovation Summit, a panel of experts pointed out that innovation is missing from the healthcare reform debate. It seems that is about to change.

A brand new lobbying organization called Entrepreneurs for the Advancement of Medical Innovation (EAMI) has been set up just this month as a vehicle for small business owners in the healthcare sector to get their voice into the healthcare reform debate.

"It is clear that this issue – the medical device issue in particular – has tapped into a raw nerve in the entrepreneur healthcare sector," Doug Farry, managing director at the lawfirm McKenna Long & Aldridge (Washington), told Medical Device Daily. "The level of interest among the entrepreneur class in paying attention to what's going on in the Washington debate and mobilizing to have a voice in that debate is growing rapidly."

Farry emphasized that his firm is helping to organize the effort but is not leading it.

So far the group primarily consists of executives of small, early-stage companies but it has gained support from some people in the venture capital community. The early members of the group have started writing letters to their representatives and are beginning to get more actively engaged in the healthcare reform debate.

James Muller, MD, a cardiologist and former Harvard Medical School (Boston) professor who founded InfraReDx (Burlington, Massachusetts) and is an early member of EAMI, told MDD that he is involved with the group because he is "very concerned that the process of medical innovation is endangered in the United States."

"Medical innovation is a long-term process and it's not very visible in the early stages so it's easy for it to get trampled" in the healthcare reform debate, Muller said.

Although the group is in the very early stages of organizing, a few issues in the healthcare reform debate are likely to be part of its initial focus. To start with, the Boston Business Journal reported that the group's goals include killing a proposed $40 billion, 10-year-tax targeting devices. According to that report, the executives working with EAMI are worried about the proposal to tax revenue rather than income, saying that the measure could drive investors away.

For startup companies whose products aren't even on the market yet, such a tax could increase the cost of doing business, which in turn would impact their return on investment and possibly discourage investors from backing them all together.

A similar concern centers on the reimbursement debate. Entrepreneurs of small device companies are concerned that uncertainty about reimbursement would also make it tougher for them to bring new products to the market and may also drive investors away. If that happens, it could stifle innovation, they say. Those involved with EAMI say that the reimbursement rules don't take into account the cost of developing and commercializing new products.

Getting innovation into the healthcare reform debate was a hot topic during the recent Cleveland Clinic Medical Innovation Summit. On the final day of the meeting, a panel discussed ways healthcare reform will change life for medical innovators and determined that innovation is not at the healthcare reform table (Medical Device Daily, Oct. 12, 2009).

One member of that panel, David Nexon, senior executive VP at the Advanced Medical Technology Association (Washington), said that a "huge issue" in the healthcare reform debate is that innovation is not something people in Washington are paying much attention to. Innovation is a "huge blind spot" in the debate, he said.

When the discussion turned to comparative effectiveness another panel member, Beth Seidenberg, MD, a partner with Kleiner Perkins Caufield & Byers, said that venture capital investors won't invest in things for five to 10 years, until there is clarity on how things are going to play out, which in turn would stall innovation. Later, in response to a question from an audience member, she said that she is "hoping my comment will not come to fruition." She encouraged the summit attendees to "have a voice" in the healthcare reform debate. "It is important that physicians and scientists speak up and are active in the debate," Seidenberg said. "We all, as leaders in the industry, need to have a voice at the table."

Muller told MDD that innovation is "worse than missing" from the healthcare debate. "There's actually a mindset that technology is bad for healthcare and that's completely wrong . . . we would have much, much less to offer our patients without technology," he said. Using examples from the cardiology world, he said X-rays, defibrillators, cardiac stents would not exist if it weren't for technology.

"They didn't just appear fully formed," Muller said. All of these devices are the product of a long-term risk-filled process that requires time and money. People who see technology as bad see only the cost, not the benefit, he added.

To emphasize his point, Muller used an example of the Polio problem in the 1950s. "It's almost as if healthcare reform would say we don't want to spend any more effort developing a vaccine, we're just going to control the cost of these iron lungs."

As the CEO of a medical device company and a cardiologist, Muller says he has a lot of experience with using technology to treat patients. "I would hate to see the flow of technology turned off. It would be a very bad thing for patients in the future."

Amanda Pedersen; 229-471-4212