Editor's note: The following articles are compiled from The Medical Device Daily Arthritis Report: Drug and Med-Tech Innovation and Economics. For more information or to order a copy of the report, please visit www.medicaldevicedaily.com.

MDD Arthritis Report 2009

Opportunities and Challenges in the Growing Arthritis Market

By Michael Harris
Market Report Executive Editor

Pain has a name! Fortunately so does opportunity, as arthritis is poised to escalate over the next 25 years into one of society's most ubiquitous diseases, creating the prospect for a corresponding clinical or med-tech solution, backed by visionary investment, to checkmate the looming epidemic.

Arthritis is a disease that is particularly apt to demand and sustain a vigorous and constructive therapeutics market that thrives in the research, development and delivery of drugs, devices and services to attend to the uncompromising disease indication that globally afflicts approximately 185 million people with at least one of the more than 100 forms of arthritis.

Who Wants to Live To Be 100 Years Old with This?

No one seems to be able to escape its scourge of scraping bones, worn-out useless appendages, scalding joints, detaching tissues, lifeless muscles, filched mobility and 24-7 pain that hangs around like your new BFF.

Although the elderly still represent the leading demographic for the disease, arthritis is no longer your grandparents' disease, as no population class is exempt from its symptoms:

• Newborns are susceptible to hereditary and infectious arthritis.

• Juvenile arthritis afflicts 500,000 children under 18.

• Young adult arthritis diagnoses have increased 38 percent in the last 25 years.

• Middle-age adults are now the arthritis onset gateway demographic.

• The elderly, in majority proportions, have arthritis.

The good news is, arthritis patients can expect to live very long lives with the affliction. The bad news is, they most often live that existence with unrelenting, excruciating pain.

Aging Boomers, WWII Class Combine to Create a Mature Market

Recent statistics from the Centers for Disease Control and Prevention revealed that approximately 47 million adults suffer with some form of arthritis. That is one in nearly five people living in the U.S. Arthritis is the No. 1 cause of disability in the country, costing more than $86 billion dollars annually to address the disease.

As ominous as those numbers are, prevailing projections based on relative trends such as obesity, aging, prevalence and therapeutic application imply that the prevalence of arthritis is on course to affect at least 33 percent of the U.S. population by 2025.

Society's powerlessness to control the natural process of growing old opens the door for the disease to largely continue to proliferate at its own raging rate of affliction, abetted by what will soon be the largest senior citizen demographic in U.S. history, as the entire baby boomer generation crowds into what promises to be a standing-room-only retirement-age sector of society.

The last-born baby boomer denizens will collectively reach 60 around the quarter-century mark and will bring with them a lifetime of enough physical wear-and-tear, mental stress, bad dietary habits and disregarded symptoms to make arthritis a market accountable for more than $200 billion in total costs, including medical technology, therapeutics and healthcare. Healthcare will include the wide-ranging, increasing need for assisted care, rehabilitation, surgery and hospitalization.

This figure is calculated with a significant consideration of R&D and disability outlay; however, if enough research and development companies turn their attention to tackling arthritis, and if the potential of the disease to disproportionately immobilize the masses in almost epidemic proportions is achieved, arthritis, the Great Disabler, would be capable of developing into one of the biggest, most opportunistic markets for drugmakers and medical technology developers and venture capitalists. Dynamics for growth abound in the arthritis market and not the least among them is the fact that the patient base is growing into the apex of its role, and no curative products that would abate the snowballing arthritis behemoth are even in figurative projections.

Unlike cancer and heart disease, arthritis is overwhelmingly a life sentence more so than a death sentence. As such, it will increase in relevance and prevalence through its propensity to persist as long as its patients live, without extremely contributing to their premature mortality. It doesn't end life; it just makes existence miserable.

Clearly, a breakout product or technology is urgently needed, and drugs are not necessarily leading the race to assume the next-generation role of being the imminent medical redeemer that will deliver the millions of arthritically impaired sufferers from the distress they otherwise are likely to undergo for the rest of their lives. In fact, this is a rare application in which devices and non-drug applications such as artificial bone, man-made joints, wheelchairs, and reconstructive/replacement surgical procedures or pain management surgery are apt to be as facilitating, alleviating or remedial as therapeutic drugs.

Denosumab: A Future Standard for RA and Osteoporosis

By Amanda Lyle
Market Report Managing Editor

The RANK ligand is an essential regulator of osteoclasts, the cells that break down bone. Amgen Inc.'s denosumab is a monoclonal antibody designed to inhibit osteoclast formation by binding to the RANK ligand.

In addition to four Phase III and two Phase II trials in postmenopausal osteoporosis, Amgen has evaluated denosumab's effects on bone erosions in rheumatoid arthritis (RA) in a Phase II study. Amgen recently pulled together all the requisite data and filed with the FDA for a biologics license application in December 2008, for the following indications: treatment and prevention of postmenopausal osteoporosis (PMO) in women and treatment and prevention of bone loss in patients undergoing hormone ablation for either prostate or breast cancer.

Thousand Oaks, Calif.-based Amgen had said a new drug application for denosumab was expected in early 2009, which could put the drug on the market as early as the latter half of the year. The company will have to figure out how to get the drug to patients, as Amgen does not have its own primary care sales force. The company has not yet outlined its marketing plans for the drug, but is seeking a marketing partner. Partnering discussions are "comfortably right on track," said George Morrow, executive vice president of global commercial operations at Amgen, adding that there's "a lot of interest" in the product.

According to a January 2009 article in BioWorld Today, this year "looks to be all about [denosumab] in oncology," Cowen and Co. analysts wrote in a research note, as data from the drug's ongoing trials in skeletal-related events (SREs) are expected to be available in 2009, though a little later in the year than some investors had hoped.

In addition to the PMO and RA indications, Amgen also is pursuing denosumab in late-stage trials for oncologic indications, such as the prevention of cancer-related bone loss and the prevention of bone metastases.

Cowen analysts added that while the timelines for the SRE data were pushed from the first or second quarters to the third or fourth quarters, "our optimism for a successful result remains high" based upon the drug's "rapid onset of action" and its activity against new bone metastases.

The potential for denosumab in the $7 billion osteoporosis market also will depend on how it stacks up to existing therapies like bisphosphonates, such as the popular Fosamax (alendronate, Merck & Co. Inc.).

Amgen Files BLA for Denosumab in Bone Loss

By Trista Morrison

Amgen Inc.'s biologics license application (BLA) with the FDA seeking approval of denosumab included data from six Phase III trials in two types of bone loss: that associated with osteoporosis in postmenopausal women, and that induced by hormone ablation therapy in prostate or breast cancer patients.

On the osteoporosis side, much of the data came from the pivotal 7,868-patient FREEDOM trial, in which denosumab significantly reduced vertebral fractures by 68 percent, hip fractures by 40 percent and other nonvertebral fractures by 20 percent. The drug also showed a clean safety profile, all of which analysts said should stack up well against bisphosphonates, the current standard-of-care in osteoporosis.

While bisphosphonates inhibit the osteoclasts that break down bone, denosumab is a fully human monoclonal antibody designed to target RANK ligand, a primary mediator of the formation, function and survival of osteoclasts.

The BLA filing also included data from the pivotal 332-patient DEFEND trial, which met its endpoints of significantly increasing bone mineral density (BMD) at multiple sites but turned up concerns about infections concerns that subsequent trials have largely laid to rest.

Also included in the filing were data from a head-to-head study in which denosumab patients achieved higher hip BMD than those on Fosamax (alendronate, Merck & Co. Inc.), as well as data from a study showing improved BMD in patients switching from Fosamax to denosumab.

For the cancer-related bone loss indications, the BLA is supported by a pivotal Phase III breast cancer study showing that denosumab increased BMD and a pivotal Phase III prostate cancer study showing improvements in both BMD and fracture. Amgen spokeswoman Lisa Rooney said the prostate cancer study was the first Phase III trial of denosumab in men, adding that there are no drugs approved for that specific indication.

Amgen's BLA submission sets the FDA's PDUFA clock ticking toward Oct. 19, 2009. Analyst Christopher Raymond, of Robert W. Baird & Co., wrote in a research note that he expects a "timely approval" given the solid supporting data.

Challenges and Solutions Await Musculoskeletal Procedures

By Kathleen Kite-Powell
Market Report Editor

Stuart Goodman, from Stanford University in California, says that new technology is the driver of healthcare inflation, as a lot of money is spent per patient. So far, in most cases, that money has been coming more from the private, rather than the public sector. There are political, policy, and even ethical questions involved, to do with healthcare costs. They revolve around the kind of cost involved in treatments and who will be paying for it.

Costs related to arthritis are no different, although there is a geriatric-related component involved. Goodman basically believes we are in a kind of epidemic of arthritis worldwide, with no real boundaries to do with sex or age. Apparently, total joint replacement surgeries related to arthritis are now being done in virtually every hospital in the world.

When people have motor-related arthritis problems, a certain percentage will opt to have hip or knee replacements, with the hope of getting a replacement joint that returns function to normalcy. However, this cannot be delivered at present. Indeed, the dual challenges of making a joint replacement yield normal function and last a lifetime are very much alive.

Surgeons do not want to have to redo procedures, as these are more difficult, and patients do not want to end up with degradation of the implant material, with the accompanying accumulation of debris that can threaten their health. Goodman said, speaking to Medical Device Daily at a medical device conference in late 2007, "we do need to take every opportunity to minimize both wear and wear debris." Even though great advances have been made, there is still ample room for improvement.

In terms of materials, the industry has come a long way; however, there is still an ongoing race to get improved materials. Of great interest is the use of a highly cross-linked, ultra-high molecular weight polyurethane plastic that has high wear characteristics, is biocompatible, and gives greater stability due to the size of femoral head that can be made out of it. Bearing surfaces are becoming increasingly important, as the average age of people getting joint replacements has gone down from 70 to 60 in the last 20 years. The quality of the implant matters more as people live longer and remain active longer, yet are getting the joint replacement operations earlier.

Many old people wish to remain much more active than the previous generation for much longer.

"The elderly population doesn't sit around in a rocking chair anymore," Goodman said. There will soon be many more mouths asking for improvements: The U.S. population that was about 13 percent over the age of 65 in 2007, will reach about 20 percent by 2030. The best way for them to have a happier old age and improved quality of life, while costing less in terms of money and burden to society, is for these people to remain mobile for as long as possible. Thus, implant material improvement should be a pressing priority.

Some improvements come not only with new designs, but with time to perfect them. At the 2007 Medical Innovation Summit, Bill Hawkins, CEO of Minneapolis-based Medtronic Inc., said that advances in medical technology will help stanch some of the wasted money in healthcare, providing "solutions along the entire continuum of care, from diagnostics to cure." As one example, he pointed out the 1990 cost of an implantable defibrillator was about $100,000 and was associated with 4 percent mortality. By 2007, the device was much smaller, the battery was made to last for years, the device can provide information remotely, its implantation is via a keyhole incision, its cost is down to about $35,000, and the associated mortality is finally less than 1 percent. He said, "Device innovation is a dynamic, complex, and often incremental process." He said he believes that device innovation is firmly rooted in the day-to-day interchange between clinicians and device manufacturers.

Hawkins said that to accomplish breakthroughs, the device industry will have to invest heavily in R&D. He said that in addition to this R&D expense, getting a product to market has become an "increasingly expensive proposition." Ultimately, though, these innovations can spur economic growth, by returning patients more quickly to their jobs, generating long-term productivity and attendant increases in tax revenues. He gave as an example the company's Bryan artificial cervical disc, which allows patients to return to work far sooner than those with fusion surgeries. Patient satisfaction is much higher than with fusion. He pointed out that often, the value of truly innovative devices plays out over years, so healthcare administrators should take care to not put too high of an emphasis on up-front costs, without considering lifetime benefits.

Hawkins stated that by the year 2014, the healthcare costs in the U.S. are projected to reach about 20 percent of the gross national product, instead of the 15 percent it was in 2007. As baby boomers age, they will drive a "silver tsunami" of spending in healthcare and chronic disease. That is because after the age of 60, people are more likely to have one or more chronic diseases. Already in 2007, 83 percent of U.S. healthcare spending on people of all ages was associated with chronic disease. It is said that one in four Americans have a chronic disease, and a quarter of these have more than one chronic disease.

New healthcare technologies generally do cost more than older ones; however, the only way to keep costs down is to spend on innovations that ultimately reduce spending and/or increase the productivity of a patient. Hawkins stated, "Any healthcare reform needs to foster and reward innovation."

Chronic disease is not all about age. Speaking at the Chronic Care Congress in Alexandria, Va., in June 2008, Emory University Professor of Health Policy Ken Thorpe pointed out that chronic care is at the center of healthcare cost problems. Half of the healthcare cost expenditures for chronic disease relate back to obesity. In the U.S., the rate of obesity has doubled since 1980, so that now "about 34 percent of the adult population is categorized as clinically obese," he said. Worse still, obesity has tripled among minors in the same time period. As a consequence, diabetes alone has gone up 45 percent. Many chronic disease situations are worsened by obesity and/or diabetes, including arthritis and musculoskeletal problems.

Thorpe believes much of this is preventable, because obesity is preventable. It is just a matter of designing programs that actually work. Until then, much of the burden for those with chronic diseases will fall on Medicare's pocketbook. He implied that obesity reduction programs would more than pay for themselves in several ways, when he mentioned a study on productivity by the Milken Institute, of Santa Monica, Calif., that concluded that healthcare spending is far less costly than loss of productivity. In fact, it turned out that loss of productivity was four times the amount spent on healthcare. He also cited several effective workplace programs that showed a return on investment of about 5:1. So some healthcare costs can be reduced in relatively simple ways that do not have to do with improving device design, by slowing the development of conditions that would require devices. It is yet another healthcare improvement that needs attention.

Then there is the case of doctor involvement. Some healthcare-related improvements do not have to do with devices, but with the surgeons and the techniques. Apparently, studies involving experienced surgeons working on cadavers have shown there is great variability in the ability to visually and physically align items properly. New advances in surgical navigation have begun to help surgeons place hip and knee prostheses more accurately. Now there is even image-free technology that allows for navigation using anatomical landmarks to guide surgeons as to where to cut bone.

Minimally invasive surgery also holds promise, conceptually, yet there have not been enough studies on outcomes, insofar as its effectiveness compared to other procedures. But the promise is huge and it is the latest craze. Hopefully, the data will eventually show that these kinds of surgeries are the best option, even though this area is still in its infancy.

Last, but not least, there is the problem of improving the increasing and dismal number of errors committed by doctors, interns in training, and nurses. (One self-reporting study on errors and near errors showed that during a month of surveying, 33 percent of nurses had these types of errors.)

Much to the benefit of malpractice attorneys, hospital deaths due to error are reported to be the eighth leading cause of death in the U.S. Those kinds of numbers are an embarrassment to the medical community. Moreover, a study by the Institute of Medicine estimated that 45,000 to 98,000 deaths a year in the U.S. are a result of medical error. Luckily, not all this damage is due to treatments for patients with arthritis.

At the North American Spine Society (NASS) meeting in late 2007, speaker Gail Morrison called on surgeons to act as "agents for change," to pursue a commitment to learn their techniques with consistency and care. Her talk, on the importance of simulation in adjunctive training for new and experienced practitioners, was very well attended. Indeed, although doctors have an increasing interest in medical simulation for training, so far there is no conclusive data that it is improving safety for patients. At this point, there is the hope that it will turn out to be highly beneficial.

More advanced simulators are being developed in the form of test mannequins and simulated environments. Some have the express goal of increasing physician competency in spinal procedures.

In some places, there is an availability of simulators on which to practice. Other places are planning how to get them, and yet others have no plans to do so. Lamentably, there are cost-based reasons for not implementing programs: It can cost about $1 million to create infrastructure for training, $2 million for a test mannequin, and more for maintaining these systems.

Although clinics may be fain to establish simulation programs without hard data that the systems do greatly improve patient safety, the FDA is beginning to require that physicians who will use certain devices be trained via simulation.

So altogether, it appears that simulation slowly will gain momentum. The members of NASS, consisting of a multidisciplinary community dedicated to spinal medicine (from rheumatologists, orthopedic and neurosurgeons to nurses and physical therapists) will no doubt welcome the ability to use simulation to improve live patient safety by mastering techniques on inert dummies. But patients will be the greatest beneficiaries. No doubt every future patient in the country will help breathe a collective sigh of relief when they can be significantly more sure about not being harmed by a procedure or treatment that was meant to provide help and hope for a better quality of life.

Regulatory and Legal Issues in the Medical Device Market

By Kathleen Kite-Powell
Market Report Editor

There has been a lot of news related to medical devices and regulation, whether it is due to American agencies or international issues. In general, many issues have come to light and the ensuing corrections have begun or already have been completed.

For example, not all discs have had good press. When a device fails, it tends to make the user angry. In February 2008, Medical Device Daily reported that Calvin Timberlake sued Solothum, Switzerland-based Synthes GmbH, New York-based Spine Solution, plus the investment firm Viscogliosi Brothers LLC, of New York, for having a hand in getting the Prodisc approved by the FDA. The investment firm already was under investigation by the Manhattan District Attorney, and more recently by the New Jersey Attorney General's office, for issues related to embezzlement and the clinical development of Prodisc. The patient's lawyers suspected foul play in FDA submissions. The patient's concern related to the disc's safety and effectiveness stemmed from the fact that his Prodisc had come apart once implanted, requiring re-opening and surgical removal that left him in much pain.

Another story does not involve device failure, but does involve defrauding of the Medicare system. Formed in 1994 to treat spinal fractures created by osteoporosis, Sunnyvale, Calif.-based Kyphon Inc. became a huge success not just for its gap-filling cement, but because it convinced hospitals to let patients stay overnight instead of treating them for an hour and releasing them, as outpatients should be. A pair of employees closely involved with Kyphon's practices brought suit on Medicare's behalf against the company, under the False Claims Act. Following the purchase of highly profitable Kyphon by Minneapolis-based Medtronic Inc. in 2007 (for $4.2 billion), the federal government was paid a multimillion dollar settlement fine in 2008 ($75 million), and the company was ordered to sign a corporate integrity agreement with the U.S. Department of Health and Human Services and agree to provide correct advice to customer hospitals in the future. The whistleblowers got to share $14.9 million of the settlement for their efforts. In May 2008 Medical Device Daily reported that Medtronic did not agree that wrongdoing occurred, but it expects the product will do very well now that the suit is settled. Patients will continue to receive the benefits of kyphoplasty. If left untreated, small fractures of the spine due to osteoporosis, cancer or lesions could end up creating serious complications. Medtronic projected its total fiscal 2009 revenue to add up to about $15 billion.

As can be imagined, the device industry is changing due to the evolution of the industry itself, the state of the economy, and the surfacing news stories that often harm the reputation of the industry, overshadowing the exciting news promoting futuristic accomplishments. The industry is maturing, so basic simple devices often are being replaced by much more complex ones that involved far more research dollars. In addition, totally different alternatives to what is already common are still shaking things up in terms of innovation. So there is still plenty of freshness in the air, whether it is coming from improvements to existing devices or entirely new devices. Lamentably, instead of there being relative ease in finding investors, it is getting harder. Instead of companies being able to make it on their own, they are being bought up by bigger companies. Last, but definitely not least, instead of being lightly regulated, they are being scrutinized more.

As mentioned by David Cassak, FDC-Windhover Information Inc. publisher, at the annual meeting of the Medical Device Manufacturers' Association in June 2008, "clinical trials are getting larger and more burdensome." This is because of the news of failures, the increasing wariness of doctors about whether a device should be used, the doubts of investors that must be assuaged, and of course the interest of regulatory bodies in being perceived as doing their job in screening out harmful devices. One could say that if the device industry were a human, it would be performing well, making occasional mistakes, and being slightly stressed out as punishment is meted out and his reputation tarnished. But in theory, all this experience leads to a better, more mature man.

Despite all the industry woes, Bears Stearns' analyst Raj Denhoy predicted at the end of 2007 that the market for orthopedic implants would continue to grow at an average of 9 percent a year, because the demand for implants in baby boomer hips and knees and news of new technological solutions for old orthopedic problems holds greater power than negative news items about the industry. At that point, the global market for orthopedic devices was $23 billion and hip and knee implants made up 44 percent of this value. With that kind of money in play, irregularities will occur, and proper regulation of them to minimize physical damage to patients and fiscal damage to government pocketbooks is imperative.

Because of the recent transgressions, it is likely that device companies will remain under the microscope for a while to come. But the pot at the end of the rainbow is still there. At the 2008 Manufacturers' Association meeting, Cassak stated his view on opportunities in the device industry: "Whoever gets to the market with the right technology at the right time" is still quite capable of being a big winner.

Success and failure are both parts of R&D, and they will remain a part of any attempts to produce great devices. In effect, failure is part of the path to greatness. At the level of introduction into humans, however, patients expect that most kinks will have been worked out of a system and that a minimum number of people will have been risked to get a good device to market. Self-imposed and government-mandated quality control and regulation are simply the paths to get there.

Fees for Patent Applications

In mid-2008, the U.S. Patent Office issued a fee schedule that will be effective for FY09. Small entities or individuals will pay $185 for a basic filing fee and $510 for a filing that includes searches in Europe and Japan, while companies and others under contracts and license agreements will pay $370 and $1,020, respectively.

FDA Oversight and Warnings

It appears that the medical device section of the FDA may be overloaded, because FDA inspections of North American Medical Corp., of Marietta, Ga., a maker of spinal decompression devices, that occurred in September 2006 and that had company responses by November, engendered warning letters dated March 2 that were only posted in September 2007. For 2006, the Centers for Devices and Radiological Health took an average of 90 days for about 75 percent of its 510(k) applications, but the timelines for premarket approval (PMA) were taking too long. Deputy Director Linda Kahan acknowledged that letters of major deficiency that were 150 days late were not really working for the companies or the agency, even though this was the target number. Renewed attempts to meet timelines better were set. One goal was to wrap up 90 percent of PMA applications in 295 days, instead of 320, and 90 percent of PMA modules by 120 days. It is likely that the industry knows it is forced into a wait-and-see attitude, no matter what government officials state they will try to do. The government will continue to oversee itself in a different way than it oversees industry: without attached penalties.

In an interview in mid-2008 with the Washington editor of Medical Device Daily, Mark McCarty, the director of the Center for Devices and Radiological Health at the FDA, Daniel Schultz, said, "failure rates seen in bygone times are no longer considered to be acceptable." He said that all too often, medical device companies take a defensive approach to criticism. He was realistic in recognizing that some sort of failure rate would likely exist no matter what, and that agency personnel would make choices based on "best judgment." Schultz admitted that it was a very difficult task to assess the risk-versus-benefit of a particular procedure, compared to the previous method. He said the agency is "very cognizant of the public health fall-out" as well, when there are shortages and lack of alternatives. Even though there has been plenty of progress in improving the safety and efficacy of devices, companies still will have to face the fact that things will never again quite be the same as before. He said industry must be particularly careful to be transparent, because the public often presupposes there is "something hidden." Of great importance to him was to get the word out once again and that any FDA guidance that is issued, should be followed as best possible, and that the agency prefers that "companies come in to meet with us" if issues or questions arise. Although formulating guidances takes time, in the end it helps industry and FDA alike to have things clarified: "At the end of the day, it is time and effort well spent," as is the assembly of advisory committees. He stated once again, "We recognize that in general, the progress that has been made has been positive."

The beleaguered and underfunded agency did get some reprieve: In June 2008 it was given an increase in its budget, so now about $2.1 billion is slated for 2009. After years of diminishing resources, this should help a little. House Agriculture Subcommittee Chairwoman Rosa DiLauro (D-Conn.) said the increase in aid was due to the fact that "the nation's food and drug safety system is broken." In his MDD Perspectives article in November 2008, Washington Editor Mark McCarty predicted that because of the economic climate, the FDA budget may only get small increases from Congress from here on out. As a consequence, when negotiations on device user fees reappear, the fees will most likely end up getting larger.

Investigating Corrupt Practices Abroad

According to Medical Device Daily, the U.S. Securities and Exchange Commission (SEC) initiated an investigation into potential violations of the Foreign Corrupt Practices Act (FCPA) by sending letters to Warsaw, Ind.-based Zimmer Inc., Kalamazoo, Mich.-based Stryker Corp. and London-based Smith & Nephew plc in October 2007. The sale of devices in several foreign countries would be reviewed. In June 2008, Arlington, Tenn.-based Wright Medical Technology Inc. was sent a letter stating that it was being investigated as well. Basically, the investigation centers on possible payoffs to government officials or others in order to gain better market position, which is illegal as outlined in the FCPA. Apparently, both the SEC and the Department of Justice have increased their enforcement actions fourfold, as in 2008 they had 38 FCPA enforcement actions.

Consultant Gives Companies Greater Ease in Dealing with Asian Regulatory Agencies

In mid-2008, Emergo Group Inc., of Austin, Texas, announced that it was expanding its device consulting services to Beijing, China, and Tokyo, Japan. Asia is considered the third largest device market after the U.S. and Europe. The company offers clients assistance in dealing with approval by the China State Food and Drug Administration (SFDA) and its Japanese counterpart, with issues related to quality, law, reimbursement and distributor searches as well. Its other offices cover the U.S., Europe, Canada and Australia. Currently, the Emergo medical device client base is more than 500 strong.

When a Device Is Not a Device

Quackery in the area of arthritis probably has been going on for centuries. Some people establish legitimate-seeming businesses selling solutions to desperate arthritis patients. A device not registered with the FDA, the Q-Ray Ionized Bracelet, was marketed by Que Te Park/Andrew Q. Park through several companies. His infomercials claimed the bracelet worked through ionization, by "enhancing the flow of bio-energy." After the Federal Trade Commission filed suit in 2003 and two courts reviewed the case, a final decision was rendered in January 2008, stating that the claims were indeed "blather" and that the advertisements made false and misleading advertising claims. Amusingly, the company's argument that the bracelet did confer benefit by way of the placebo effect was deemed not acceptable, although the court did admit that the FTC Act "lacks an exception for 'beneficial deceit.'" As the company was ordered to give up $16 million in net profits and pay out $87 million in refunds to consumers, the Q-Ray company entered Chapter 11 bankruptcy court. How many other similar businesses are out there? How will the government ever find the time to make cases and pursue them?

When a Device Is Not a Material Object, but Live Human Tissue

In January 2008, CryoLife Inc., of Kennesaw, Ga., was told the Keenan Law Firm was planning to file a lawsuit on behalf of an Illinois man with a severely compromised knee who received a new knee meniscus from another human as an implant. The firm alleged that Michael Hohneberry became severely infected due to CryoLife negligence, needing antibiotics and pain medication for the rest of his life. CryoLife released a statement of regret for the state of the patient, along with the comment that the FDA had been notified of the incident. In addition, CryoLife was concerned that these lawyers were trying to force it into a monetary settlement. CryoLife denied that its aseptic technique was compromised while the knee was prepared. As is well known, one can indeed get an infection from transplanted human tissue, due to the fact that there is no way to sterilize human tissue in a knee. Real human tissue implants do have this type of risk associated. CryoLife was previously shut down by the FDA in 2002 and another similar incident occurred in 2003. The Keenan Law Firm itself stated that more than 1 million transplant/implant operations a year use cadaveric tissue. These occasional but serious adverse events that result from contaminated donor tissue do make one wonder if CryoLife will continue to market this particular type of cadaveric product.

State Liability Laws for Devices with Pre-Market Approvals

As Washington Editor Mark McCarty pointed out in MDD Perspectives in November 2008, the change in political climate in Washington may bring about changes in state liability laws for medical devices with premarket approval. That is because the Supreme Court decision in Riegel v. Medtronic had Democrats crying foul and as a consequence, they produced the Medical Device Safety Act of 2008. "This bill will reverse an unfortunate Supreme Court decision that denied victims any legal recourse and gave medical device makers blanket immunity for the life of a product," said Rep. Frank Pallone (D-N.J.), to explain its essence. Although the bill died in committee under former President George W. Bush, it is expected to pass in 2009 and get the Oval Office signature of approval.

Mark Leahy, executive director of the Medical Device Manufacturer's Association, commented that if the bill passed, it would change the regulatory landscape dramatically. He implied that it would likely be hugely detrimental for small companies that are trying to abide by all the rules and think they are covered if they do so. Medical Device Daily's McCarty stated that in cases such as Riegel v. Medtronic and Wyeth v. Levine, industry is blamed for decisions made by physicians, who are "notoriously contemptuous" and apt to do what they please. In an odd effort to make industry forbid doctors to use devices in hazardous ways, he says passing of the act and thus gutting of pre-emption would make device makers have to write labels that would first indemnify and secondly, inform.

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