Medical Device Daily Washington Editor

Health Canada (HC) is working to refine its regulation and surveillance of medical devices, and the department recently published a strategic plan titled “Building for the Future,” which is geared to helping the government “get ahead of the issues before they impact us.”

However, perhaps the most interesting passage in the report indicates that this agency is set to roll out a user fee program for makers of medical devices and other regulated healthcare products.

The cover letter for the report also says that responsibility for medical device regulation is divided between three agencies at HC, and that the government “will review alternative governance and organizational structures that could be implemented over the longer term.”

The passage in the report addressing user fees describes the program as a cost-recovery initiative, and “an up-to-date external charging framework that covers the regulation, licensing and post-market surveillance of health products, including medical devices.” The system will “ensure charging covers all allowable aspects of the program.”

Canada’s National Assembly passed the law allowing user fees in 2004.

The HC web site includes a page that lists some details on the proposed fees, including: fees for evaluations of submissions and applications; licensing fees (to offset the cost of inspections); certification fees for drug and device master files; and fees connected with authorization to sell devices, drugs and biologics.

The fee schedule describes the percentage of the cost of these functions that industry will pay. According to the HC web site, industry will pay 75% of the total cost of the government’s review of new drug and device submission, and half of the cost of authority-to-sell functions.

Industry will bear the entire cost of the other two functions: establishment licensing and master file certification. HC also says that user fees are becoming commonplace in the developed world, with FDA purportedly recovering 60% of cost (although the site does not explain precisely which costs this estimate is based on), and Australia’s Therapeutic Goods Administration recovering all such costs.

The report from HC says that the action is at least partly motivated by the need to respond to a report by the Canadian government’s Auditor General, which serves a function analogous to that of the U.S. Government Accountability Office.

The cover letter, penned by the directors general of Health Canada, says that the bureau eliminated a backlog of pre-market applications “and achiev[ed] 81% of decisions within target for Class II, III and IV applications in 2006.” The remaining class, Class I, is the category into which products such as toothbrushes fall.

Still, HC may have set itself up for the kind of criticism FDA receives for performance standards (Medical Device Daily, June 16, 2006).

The HC web site states that HC’s performance in reviewing new drug and device applications can trigger a reduction in fees when “the actual performance in a given fiscal year is more than 121% of the target for that fee category.” The calculation of 121% is based on a scenario in which HC runs 10% or more over the target turn-around times, plus “a 10% leeway on this performance standard,” a metric that is almost sure to draw criticism by at least some applicants.

As for the organization of the agencies at HC, the announcement says that the Therapeutic Products Directorate encompasses three sub-agencies, each of which has some jurisdiction over devices. The Medical Devices Bureau reviews Class III and IV medical devices for safety/efficacy, whereas the Marketed Health Products Directorate handles surveillance of device safety data.

The agency responsible for “collection, review and follow-up on medical device problem reports” is the Health Products and Food Branch Inspectorate, which also handles establishment licensing. The report did not indicate what sort of circumstances would have to prevail in order for HC to consider a restructuring of these agencies.

CMS: Nay to lumbar disc NCD

The Centers for Medicare & Medicaid Services reported this week that it has concluded its review of the reasonableness and necessity of lumbar artificial disc replacement (LADR), but the announcement left many makers of artificial lumbar discs wondering if their glasses were half empty or half full.

The agency said that its decision constitutes a change “from non-coverage for LADR with a specific implant to non-coverage for the LADR procedure for the Medicare population over 60 years of age.” However, the announcement notes that the door is still open to local coverage determinations.

The announcement acknowledges that millions of Americans “suffer from pain-related problems” from lower back pain and that such a condition is common, affecting 60%-80% of Medicare beneficiaries. However, CMS says that the literature suggests “we do not know the origin of low back pain in the majority of cases.”

CMS also cites sources in the literature that indicate that “[w]hile from a simple mechanical aspect it could be hypothesized that DDD [degenerative disc disease] is a cause for pain, disc degeneration is also observed in individuals without pain.”

CMS wrote an NCD for the Charité lumbar disc replacement, made by Depuy Spine (Raynham, Massachusetts) in May 2006, naming the Charité in that decision “because it was the only lumbar artificial disc with FDA approval at that time. The current CMS announcement says that in March, the Medical Advisory Panel for the Blue Cross/Blue Shield Technology Evaluation Center reaffirmed an earlier decision that “the artificial lumbar disc for DDD does not meet TEC criteria because evidence from trials for the Charité and the ProDisc, manufactured by Synthes Spine (West Chester, Pennsylvania) were inconclusive.

According to CMS, “the Charité trial showed little evidence of superiority, and the ProDisc analysis is problematic because of missing values and uncertain outcomes for all patients.” CMS also said that the population in the ProDisc trial did not offer “evidence of benefit for those Medicare beneficiaries over the age of 60,” leaving the agency little choice but to leave the decision to local carriers.

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