The cardiovascular device arena tends to blaze the technology trail in the med-tech sector. And now, events in this sector may also foreshadow a much closer scrutiny of medical devices, especially in post-approval evaluation a type of scrutiny that over the past year has tended to cast a dark shadow over the pharmaceutical industry, with its various recalls and label changes.
In mid-July Charles Grassley (R-Iowa), chairman of the Senate Committee on Finance, sent a letter to Lester Crawford then still "acting" FDA commissioner requesting that the agency provide the committee "with copies of the past five annual post-approval reports . . . for all pacemakers and defibrillators," clearly relating to recent recalls of implantable cardioverter defibrillators (ICDs) by Guidant (Indianapolis), followed by a pacemaker advisory from the company.
Specifically referring to these actions by Guidant, Grassley wrote that it was his "understanding" that the FDA does not "make all device manufacturers' annual post-approval reports publicly available, despite the fact that the reports contain important performance data" information including reports of patient deaths, analyses of failure mechanisms and other safety and effectiveness issues related to pacemakers and defibrillators.
The letter cited the "importance of such information," with Grassley asking Crawford to "state why the FDA should not proactively post such information in the FDA's electronic reading room. In addition, describe in detail the FDA's disclosure policy with respect to post-approval-related documents for devices, including but not limited to pacemakers and defibrillators."
The letter would seem to point to two outcomes: a much closer examination of post-approval adverse events produced by medical devices and technology and, for Guidant, dimming chances of its smooth and easy merger into Johnson & Johnson (New Brunswick, New Jersey). Problems with Guidant's implantable products are likely to blur the focus of the companies as they seek to consummate their proposed $24.5 billion merger, disclosed late last year. That focus already is under heavy attack via a series of individual and class action lawsuits filed against Guidant, its executives and subsidiaries, related to the ICD recalls and the advisory concerning potential leaks in the seals of about 28,000 pacemakers made by the company.
Despite Guidant's rising tide of difficulties, J&J put a brave face on the proposed acquisition, saying in its July conference call to the industry that it is moving forward with the deal. Robert Darretta, CFO of J&J, said that "the impact of product notifications and recalls is something we're evaluating in conjunction with Guidant management."
But despite his reassurance of J&J's commitment to the link-up, Darretta suggested for the first time that the deal could be delayed beyond what was set for a third-quarter closing this year. Responding to question from analysts, he said he couldn't comment on whether the two companies can resolve recall and safety issues in that timeline. Guidant management, Darretta said, "is being very cooperative and very helpful, but as you know, it's an evolving situation."
Cyberonics finally wins TRD approval for VNS
After a regulatory odyssey extending roughly seven years, Cyberonics (Houston) last month won FDA approval for its Vagus Nerve Stimulation (VNS) therapy system for the adjunctive treatment of chronic, or recurrent, treatment-resistant depression (TRD). The approval comes after the company negotiated a variety of twists and turns. A 2004 FDA panel recommendation to approve the technology for TRD was followed by agency turndown, with the agency then reversing itself and issuing an approvable letter early this year.
The VNS system is the first implantable device-based treatment for depression and the first treatment studied and labeled specifically for patients with TRD, according to Cyberonics. It costs about $20,000, including surgical and hospital expenses. The device is the only product Cyberonics sells, and some analysts estimate the device's market for TRD treatment about 4.4 million people in the U.S. could be as much as 10 times larger than the epilepsy market for which the therapy won its first application.
Skip Cummins, chairman and CEO of Cyberonics, said that though the company achieved a major milestone with the TRD approval, there is still much work to do. "Any time you're the first and only in anything, it's neither quick nor easy getting to the end of the road," he told The BBI Newsletter's sister publication, Medial Device Daily, "and the end of the road is never the end it's just the beginning."
He frequently refers to the current standard treatment modality for depression primarily pharmaceuticals "the status quo," and a strategy that "has failed people with treatment-resistant illnesses." And when you change the status quo, "you scare a lot of people who are personally, professionally and financially benefiting . . . and they will go to great lengths to try to keep you from changing things," he said, suggesting a reason for the long delay in approval. Now, "for the first time, Americans with treatment-resistant depression have an FDA-approved, informatively-labeled, long-term treatment option for their lifelong and life-threatening illness," Cummins said during a press conference. "The safety and effectiveness of VNS therapy was demonstrated in up to two-year studies of patients with the most chronic and resistant depressions ever studied." That, however, is a contention challenged by critics who say the treatment is often shown to be no better than placebo.
VNS therapy is delivered from a small pacemaker-like generator implanted in the chest that sends mild electrical pulses intermittently through the vagus nerve in the neck to the brain. The system, already used in more than 30,000 patients worldwide, was approved as a treatment for medically refractory epilepsy in Europe in 1994 and in the U.S. and Canada in 1997 and as a treatment for TRD in Europe and Canada in 2001.
The agency's stated reasons for initially rejecting the approval included worsening depression, potential biases stemming from a non-randomized control and an inability to distinguish one-year VNS effects from placebo and concomitant treatment effects. And some patient advocate groups have expressed concern about the FDA approval of a device previously rejected. Peter Lurie, MD, deputy director of the non-profit Public Citizen's Health Research Group (Washington), in a press statement, called the FDA decision to approve the VNS system for TRD "one of its most questionable regulatory decisions made by the agency in recent memory." As a result of the agency's "data-free decision-making," he said, "hundreds of thousands of patients with severe depression are likely to undergo surgery to implant a device that has not been proved to work."
In answer to Lurie's arguments, Cummins noted that while device regulations and approval processes are indeed different from drugs, they are by no means less stringent. "I've heard the statement, Gee, if VNS was an antidepressant drug, it wouldn't be approved,'" he said, and that if the same rigorous standards that VNS had to go through to gain TRD approval were applied to antidepressants "they wouldn't have been approved either."
The FDA is requiring Cyberonics to conduct a 450-patient, post-market dosing study and a 1,000-patient, five-year outcome registry, standards that antidepressant drugs are not held to, Cummins noted. And he emphasized the protocol required to receive the VNS therapy for TRD: "You must have an informed psychiatrist who specializes in TRD, a patient who has to undergo a surgery, a surgeon who has liability, a hospital who has to pay $16,000 for the device and, lastly, a payor, who has to shell out $20,000 for the device and implant procedure; they have to all agree in each and every case" before implant takes place.
Cyberonics said it is much better prepared to accomplish its mission today, than it was at the time of the epilepsy approval. When the company launched VNS for epilepsy in 1997, it had just 20 untrained salespeople. "We now have 330 highly trained, very well-equipped support personnel to address every one of the customers' needs," Cummins said. The company, he said, now will turn attention to approvals for VNS as a treatment for anxiety disorders, Alzheimer's disease, chronic headache/migraine and eating disorders.
Structural, executive changes for Hill-Rom
Hillenbrand Industries (Batesville, Indiana), serving the healthcare and funeral sectors, last month said it will "simplify" its structure to integrate its hospital equipment manufacturing unit, Hill-Rom (also Batesville), and it reported new executive appointments.
It said it would establish two commercial divisions: one focused on North America, one focused internationally, each consisting of capital sales, clinical and services businesses with supporting sales, marketing and field service organizations. Home Care and Surgical products will be run as a separate, fully integrated division and profit center. Hill-Rom also will combine sourcing, manufacturing and product development under one new function in order, Hillenbrand said, to more rapidly take products to the market. Additionally, all Hillenbrand corporate functions, including human resources, finance, strategy, legal and information technology will be consolidated with those in Hill-Rom.
Rolf Classon will be president and CEO of the newly combined Hill-Rom/Hillenbrand organization on an interim basis as it reorganizes to reduce costs and focus on core businesses. Classon is a veteran of the medical products industry, formerly serving as president of Bayer Diagnostic, a division of Bayer Healthcare. He has been vice chairman of the Hillenbrand board as an independent, non-executive director.
Gregory Miller was promoted to vice president and chief financial officer of the combined organization and will continue as Hillenbrand's controller and chief accounting officer until a successor is named. Two executives, Scott Sorensen, former vice president and chief financial officer, Hillenbrand Industries, and Ernest Waaser, former CEO, Hill-Rom, are leaving the company to pursue other interests, Hillenbrand said.
Previously, in 2003, Hillenbrand initiated a re-structuring of Hill-Rom, which involved the phased-in elimination of 250 jobs, but addition of about 100 positions that would have, it said, "the skills and experience necessary to establish and support new revenue initiatives."