Medical Device Daily Washington Editor

The bad recent news about Advanced Bionics (AB; Sylmar, California) would seem less conspicuous but for the cash paid to the firm and its executives for the termination of its merger agreement with Boston Scientific (Natick, Massachusetts) last year (Medical Device Daily, Aug. 13, 2007), a sum that came to $1 billion. Given the headaches Boston Scientific inherited with its purchase of Guidant, however, the recent news about AB, a maker of cochlear implants, might make the billion-dollar payout seem like a fair price to avoid more FDA scrutiny.

On the other hand, FDA and AB see the current controversy differently, and the CEO of AB is of the position that not only has the moisture problem dried out, but also that FDA is pursuing an issue that has been dead since 2003.

As was reported late last week, FDA is seeking $2.2 million in civil money penalties from AB due to quality control problems and a failure to notify the agency of a change of outside vendors. According to the March 28 FDA announcement, the agency's concerns were that the hearing aids "pose a public health risk due to excessive moisture, exposing patients to the risk of device failure, possible surgery, and the potential for additional hearing loss," but also because Advanced changed vendors for an unspecified component of the devices.

FDA dealt AB an 11-page warning letter dated Feb. 1, 2005, which cited the firm for lack of management reviews in connection with a "significant manufacturing deficiency" that led to "moisture being hermetically sealed in the Hi Res 90K cochlear implant." FDA stated further in that letter that moisture was detected in product reviews "dating back to 2002."

The rest of the 2005 warning letter ran to 17 additional citations and included a citation that AB failed to validate "two of the three vacuum bake ovens," which are responsible for removing the moisture from ceramic articles (the company's previous warning letter, from September 2001, cited AB for marketing its Clarion II bionic ear prior to issuance of a 510(k)). The company obtained a PMA for the Hi Res 90k, an implantable cochlear stimulator, in July 2003.

Jeff Greiner, the firm's CEO, told Medical Device Daily "the issues pertain to things that happened in 2003, so it's old news."

Greiner said the 2005 warning was from an audit in early 2004 and that "we fixed those problems and cleared that warning letter." The most recent inspection was this past February, he said, adding that "they did issue a 483, but there were no major deficiencies" with any significance "in terms of patient health." The 483 from this year cited the company for a laser welding validation that "could have been done better," Greiner said, and another citation involved "a decision we made more than two years ago not to report a meningitis incident that the doctor said was unrelated" to the device. FDA's view was that AB should have reported it.

"The thing that's most surprising about the announcement is that they talk about it in the present tense, and that's misleading," Greiner said.

However, these events should not affect funding for the privately financed company. According to Greiner, "we don't have any problems with financing and won't have any problems with financing" in the future. As for the agency's pursuit of civil money penalties, Greiner said "we're working with the agency to resolve it."

FDA spokesperson Peper Long confirmed that "the moisture problems occurred ... in March 2006 and the company stopped using that vendor at that time." However, she could not say whether the agency typically pursued such cases after resolution of the underlying problems.

CMS launches consumer hospital guide

It's all about quality when it comes to hospitals, and many are of the opinion that when consumers can see how hospitals score on quality points, they'll flock to the best and ditch the rest.

Hence the Centers for Medicare & Medicaid Services reported last week the posting of a substantial base of survey information at its web site that gives consumers a look at the quality scores of hospitals across the U.S.

Thanks to the information at the site, located at www.hospitalcompare.hhs.gov, Medicare beneficiaries will have access to data on "a number of certain elective hospital procedures provided to those patients and what Medicare pays for those services." CMS said that the site provides "quality information, patient satisfaction survey information, and pricing information for specific procedures" that are essential to making "effective decisions about the quality and value of the healthcare available to them through local hospitals."

Mike Leavitt, the Secretary of the Department of Health and Human Services, said the site will give beneficiaries "more choice about the quality of their healthcare and how they may be able to lower their healthcare costs."

Leavitt also said: "To achieve goals around providing consumers with the information necessary, and the incentive, to choose hospitals based on quality and value, HHS is continuing to work with partners such as the Hospital Quality Alliance to drive quality up and the cost down."

The Hospital Compare site "currently provides information on 26 quality measures, which include process of care and outcome measures," according to the March 28 announcement, with the latest 10 measures giving consumers "a better picture of the quality of care delivered at their local hospitals."

Acting CMS administrator Kerry Weems said in the statement that beneficiaries "tell us ... they want to know what their neighbors are saying about the care they received while in the hospital; they want to know how much it costs; and they want to know about the quality of that care." Weems said that the Hospital Compare site is among the tools the agency is deploying that will help consumers "to do just that."

Upcoming additions to the site include mortality measure for pneumonia and two pediatric asthma measures collected by the Joint Commission on the Accreditation of Healthcare Organizations.