BBI Associate

CLEVELAND – Speaking to what he termed "the promise of the biomedical century," Centers for Medicare & Medicaid Services (CMS; Baltimore) Administrator and former FDA commissioner Mark McClellan said that innovation is as much a priority for CMS as it is for those in the audience he was addressing at the mid-October Medical Innovation Summit sponsored by the Cleveland Clinic. However, he told those attending the gathering that government can't be the only driver in bringing the promise to fruition. "We can't do this alone ... these are urgent issues because of the unique time in which we're working," he said. "I believe we're at an absolutely critical time in health policy in our country."

The promise is there, McClellan said, but paying for that promise is, as always, the biggest issue. The good news, he said, is that there are new ideas and new laws including the Medicare Modernization Act "that give us the best opportunity yet to address these problems." While McClellan said there are more new drugs, biologics and innovative devices in development than ever before – particularly in new scientific fields such as genomics, proteomics, nanotechnology, tissue engineering and healthcare information technology – they have so far not had a fundamental impact on the care that patients receive.

He held out promise that historians will look back at this time in the early 21st century as the dawning of the "biomedical century," but said that is not an absolute given. "A future of better health through better healthcare is by no means a sure thing," he said. "If we keep going at the pace that we've seen in the last few decades, it may take many years at a cost that may be difficult to afford to get these improvements into patient care." He said the failure to translate recently acquired knowledge into high-quality patient care "causes needless suffering and avoidable deaths and billions of dollars of extra healthcare costs every year all across the country as too many patients receive the wrong treatments."

McClellan said that the high cost of developing new treatments, coupled with the difficulties of quickly integrating high-quality treatment into patient care, are a "bad combination." He said that with the rising costs of medicine, fewer new products to show for it, and the billions of dollars of extra costs for delivering treatments that are too often mismanaged, "it's no wonder that healthcare costs are rising [and it's] no wonder that our medical future and our ability to deliver on the promise of the biomedical century remain uncertain."

McClellan said that, unfortunately, one alternative to rising costs and an inability to find value-added solutions in Medicare is to cut payment rates for hospital care, for medicine and for doctors – all the components to the system. When government has to come in and make decisions about healthcare based on political motivation, he said, "our healthcare policy is failing us."

There is a better way to do things, McClellan said, and that is to make policy decisions based on good evidence, benefits and cost for particular patients, "with doctors and patients at the center of our decision-making and healthcare more personalized." He said that he recognizes that "arbitrary one size-fits-all government limits are a worse and worse fit in modern medicine," and that is where a pluralistic public/private healthcare system comes into play. For its part, McClellan said that CMS is implementing an agency-wide quality improvement strategy that will work in tandem with both the public and private sectors.

As for the future of medicine, he said there is every reason to believe that patients will benefit from individualized support that takes into account the particular and unique needs of the individual as opposed to "pigeonholing" that person into a larger patient population that does not take into account nuances that could enhance life and save money. "In many ways," McClellan said, "this is a bit different than the evidence-based practice guidelines that are used today, which often focus on raw classes of patients."

As an example of this new way of thinking, he cited the example of implantable cardioverter defibrillators (ICDs) and the recently expanded evidence-based guidelines (largely through the SCD-HeFT trial) that will put these expensive devices in a broader patient population. McClellan said the risk of life-threatening arrhythmias is somewhat low in most of these patients. "If we could better identify more precise characteristics to better predict which patients would likely benefit and which won't," he said, "patients and doctors could make more informed decisions and we might be able to extend indications for use of this product even further and get more health benefits for it while avoiding unnecessary procedures and costs in patients."

McClellan said one of his main goals at CMS is to take steps to address policy problems by making healthcare more supportive and responsive to the needs of the individual. Noting that he believes recently passed legislation will greatly aid in this endeavor by attempting to address individual patients' health concerns by attempting to keep Medicare beneficiaries healthy rather than trying to treat them after a major and expensive health problem has occurred, he called this a "reorienting of Medicare." He said he believes that CMS, in tandem with industry, is positioned "in the right place at the right time to make a real difference in the lives of patients in this country."

Industry asked to help redefine FDA role

What is the FDA doing to stimulate medical innovation? The agency's acting commissioner, Lester Crawford, PhD, addressed this important issue during a luncheon presentation the final day of the Medical Innovation Summit. As in any big organization – and the FDA qualifies with more than 10,500 employees organized loosely in five distinct product centers that regulate 25% of the gross domestic product of the U.S. – Crawford said it is difficult to make radical changes to the culture, and they will not happen without the creative thinking of the industry that his agency serves.

"[The FDA] has been described as an organization that has difficulty reforming itself from within," he said. Nevertheless, that is exactly what Crawford attempted to do after his appointment to the acting commissioner post. He said that the response from many people at the agency was, "Well, do we really have to do this? It's not what we're supposed to do to change all these things to make life easier for the regulated industry so that they have a reasonable chance of both having a dialogue with FDA and also surviving in the market and of getting products approved in a reasonable amount of time if, in fact, they can be approved."

It was during one of the worst of those conversations that Crawford recalled the words of the late Jerry Garcia, the lead guitarist of the Grateful Dead, when he decided to take on some social activism: "You know, somebody's got to do something, and it's just incredibly sad that it has to be us."

In the spirit of those immortal words, Crawford said that he, along with Health and Human Services (HHS) Secretary Tommy Thompson, put together a medical innovation task force at the agency. That new task force, which Crawford said would debut at the beginning of December, will propose some new rules, regulations and procedures at the FDA. The task force consists of what he called the "medical product operating division heads," which include Centers for Medicare & Medicaid Services (CMS; Baltimore) Administrator Mark McClellan, MD, PhD, and National Institutes of Health (NIH; Bethesda, Maryland) Director Elias Zerhouni, MD, with Crawford chairing the task force because his organization would have the largest stake in its success.

An example of how the FDA is working to make the healthcare system more efficient, Crawford said, is the recently implemented bar-code initiative as a way to eliminate medical errors. The organization said such coding will help with pharmaceutical identification, one area that has been blamed for the nearly 100,000 preventable patient deaths in U.S. hospitals reported on in the oft-cited Institute of Medicine (Washington) report, To Err is Human: Building a Safer Health System.

As an example of identification technology that could help shape the future of medicine, Crawford pointed to the recent approval of Applied Digital Solutions' (Delray, Florida) implantable VeriChip for medical applications. That device can rapidly identify patients and provide medical personnel with critical information about a patient's specific needs. While he said that some people are afraid of the Orwellian overtones of such a technology and its potential "Big Brother" implications, he said that "the product is safe and also is effective for its intended use and is going to help us, I think, in the long run." He added that his agency is "very open" to those types of technologies, as long as they are not patently unethical and that a device will do what its labeling says it is supposed to do.

Crawford also discussed the plans for an improved medical device reporting system that has been in the works for several years. The Medical Device Surveillance Network (MeDSuN) is designed to meet the requirements of the FDA Modernization Act, which stipulates that the current universal user reporting system be replaced by one based on only a representative sample of user facilities. The FDA already has completed a year-long pilot program (known as DeviceNet) and is working on a large-scale Phase II study. Afterward, MeDSuN will be implemented by regulation. Crawford said that MeDSuN will help to report adverse events in the device industry in much the same way that the ongoing bar coding project is slated to do in the pharmaceutical industry.

The agency, he said, also is re-examining the idea of fast-tracking drugs and devices, things that industry and advocacy groups have said could make a great difference both financially and in the realm of public health. Crawford said that the agency is "exhaustively" analyzing the fast-track system now that it has two to three years of really good data. He said this examination has led to two major observations. One is whether the system would profit a great deal if, in fact, "companies could put in some of the data rather than having to wait and put in all of the data for the approval at one time." The second item is "whether early or continuous consultation with FDA is something we would be providing as a technical service in the approval process. Whether or not that will impede the process or improve it."

He also said that the proposed good manufacturing practices regulations of the FDA are critical. He said that the FDA essentially does three things. "We make sure that products are safe, we make sure they are effective, and the most difficult, making sure that they can be mass-produced and manufactured in such a way that they are consistent" and don't jeopardize human health.

One of the most important things that Crawford's FDA is currently involved with is the process called the "Critical Path." He said that the budgets of all the HHS entities continue to go up and yet the results that his agency had hoped for continue to vanish. "We need to figure out the critical path for getting the product from the laboratory all the way to the bedside and what we can do at FDA to expose the weaknesses and make recommendations and also to change our processes in order to commit to that which is coming." Unfortunately, he said, "That which is coming is not that much at this point."

Crawford said the agency needs the help of industry in understanding what is coming along in terms of groundbreaking technology far up the product pipeline. "We need help and we need the industry and the research establishment around the world." He added that the critical pathway that he mentioned should allow the FDA to structure "self-improvement within FDA and within the regulated industries." He said he hopes that this will help define the new FDA and that continuous dialogue with industry will allow the agency to maintain this redefinition of itself over time instead of merely changing every time a new commissioner comes in.

Cardio innovation in the clinical setting

Eric Topol, MD, chief academic officer of the Cleveland Clinic, said during the Medical Innovation Summit that those involved with or interested in innovation need to get away from the idea that every drug and device needs to be a "blockbuster" product. "We've got to turn that upside down," he said. "There are things that can happen that can revolutionize the industry, but it's going to take some revolutionary thinking and leadership." Topol, who also is provost of the Cleveland Clinic Lerner College of Medicine of Case Western Reserve University, moderated a panel exploring how cardiovascular innovation has been put into action in the practice of medicine.

Looking to the future, he outlined his views on ways we can transition to an era of "smart medicine." Topol seized upon an article in the most recent issue of the Harvard Business Review that outlined a "blue ocean" strategy for developing new technology. The article, he said, talks about forgetting the "red ocean," the "me too" approach to product development – going instead into the uncontested blue space, "where there is no relevant competition and creating, of course, a new demand. That's really what we talk about with innovation."

As an example of how medicine could be better managed, Topol cited the case of former president Bill Clinton, who recently had a coronary artery bypass performed since his coronary disease had reached an advanced stage. "Should he have had a multi-slice CAT scan of his coronary arteries? Might his coronary disease [have] been diagnosed properly?" Topol asked. He said Clinton had been walking around with this advanced disease despite the fact that he had had a normal stress test. Instead of using calcium score, Topol suggested that if you could actually image the coronary artery directly with multi-slice computed tomography or magnetic resonance imaging (MRI), "this would be an example of smart medicine."

On another topic, he wondered whether industry could come up with a less expensive version of the implantable cardioverter defibrillator (ICD) and if the insight from genetic information could be used to help diagnose the need for ICDs or other therapies. "Today, we recommend [ICDs] for low ejection fraction," Topol said. "In the future, we may be recommending defibrillators for people with channel-opathies as defined by genetic tests."

Medicine needs to undergo an extreme makeover, he said, adding hopefully: "Over the time ahead, we'll be able to focus much more on getting away from just to treatment towards defining what we've been after for such a long time, that is prevention."

Speaking on the promise of stem cell research in cardiology was Marc Penn, MD, PhD, director of the cardiac intensive care unit at the clinic. Penn said that stem cells hold promise in both the prevention and treatment of heart disease. Noting that while mortality from heart disease has gone down substantially, he said these patients go on to live with reduced heart function via congestive heart failure, and there is an greatly increasing percentage of such patients every year. Penn said he believes that the heart failure epidemic will ultimately be treated through biological therapies rather than mechanical ones.

Patrick Whitlow, director of interventional cardiology at the clinic, gave a brief overview of the field, outlining some of the major changes that have occurred in that sector. The cath lab has gone from "a primarily coronary-based laboratory to peripheral vascular disease and now, really to all of cardiovascular disease," Whitlow said. He said that he and other doctors are working with industry to develop new techniques that can be employed in the cath lab. "We're very much partnered with industry to try to improve the outcomes of our patients and try to develop minimally invasive procedures in the future that take the place or at least substitute for surgery in high-risk patients."

Evalve (Redwood City, California) CEO Ferolyn Powell described one new minimally invasive technique that her company is working on – the repair of the mitral valve. The technique involves threading a dime-sized clip into the heart via a catheter. The catheter is guided by a small echocardiography probe in the patient's throat, as well as an ordinary echocardiography transducer placed on the chest.

Powell termed the opportunity in that sector a large one, "because there are many people who suffer from valvular heart disease." She said it could potentially be worth upwards of $3 billion. She noted that developing this "first-in-class device" has involved a large amount of resources and time – taking more than four years just to come up with a system that was functional and safe in humans.

Powell said the goals of percutaneous valve therapy are to improve the risk/benefit profile associated with treating patients with valvular heart disease, thereby expanding the population that receives treatment for this condition that usually progresses into heart failure if left untreated. She said that Evalve has seen many surgeons leading the development of percutaneous valve therapies. "The surgeons see that they've got an excellent solution for a good group of patients and [now can] offer a treatment for a group of patients that they ultimately [would] never see." For their part, Powell said interventionalists also must recognize that surgeons have been doing this for quite a long time and that there must be "a strong collaboration between the surgeons and the interventional cardiologists to develop this technology."

Bruce Wilkoff, MD, who heads the electrical device section of the Cleveland Clinic's electrophysiology and pacing department, discussed future innovations in that space. He said that one of the major trends that will be seen over the next five years in the cardiac rhythm management space is the increasing integration of imaging and device therapies.

Wilkoff said that the management of co-morbidities with the new generation of implantable CRM devices is crucial. "We're putting sensors inside of these implantable devices that can provide diagnostic and therapeutic functions that enhance the management of diseases that occur." He said that with such sensors "we can find out about blood pressure and glucose and potassium; we can find out about their rhythms both fast and slow heart rhythms." He noted that these new features will be a boon to healthcare practitioners. "Having the opportunity in an implantable device with telemetry and with telemedicine provides the opportunity for monitoring these patients," Wilkoff said. "By including a combination of internal monitors and implantable, we have access to all of these disease properties."

Dollens: Health policy has global implications

How do today's health policies both encourage and discourage medical innovation? That was the issue posed by Ronald Dollens, outgoing president and CEO of Guidant (Indianapolis), in a luncheon presentation at the Medical Innovation Summit. Dollens, who will retire at year-end, termed himself a "short timer" and said his speech would cover immediate issues concerning Guidant and the healthcare industry in general, but added, "I'm going to do it as it relates to things that I think have very broad and long-term implications." And, he said, nothing has more profound implications for both the healthcare industry and patients than the climate for medical innovation, which he termed the No. 1 issue for health policy.

While targeting U.S. health policy in particular, Dollens noted that policy's broader influence worldwide. "I guess what I would recognize is that policy in the U.S. has incredible global implications, both economically as well as in the therapies available to individuals." In essence, he said, "The U.S. is financing the innovation process for the world."

Saying he was not making such a statement as just another "ugly American," Dollens backed his assertion with data. He said that Guidant had 2003 revenues of about $4 billion and made roughly $780 million of net income. "If I would have sold my products around the world at European selling prices," he said, "instead of making $780 million, I would have lost money."

Dollens emphasized that this did not mean that the European market makes no contribution to his company's "turnover," but that the lion's share of the healthcare development burden still falls on the shoulders of the U.S. He said that the question that should be asked in the U.S. is: "What have we attained through this invention/innovation process around health?"

Guidant is involved in about 10 different therapeutic areas, including implantable defibrillators, coronary stenting, drug-eluting stents, off-pump coronary bypass systems, endoscopic vessel harvesting, peripheral vascular disease and pacemakers. Of these technologies, Dollens said that only pacemakers existed when he began his career in the medical device industry just over three decades ago. During that same period, he said, great advances also have been made in other healthcare sectors such as orthopedics, in vitro diagnostics, imaging and neurology.

He presented numbers describing patient outcomes that have improved in direct correlation with innovation: "If you look between 1980 and 2000, what one sees is the level of mortality rate is down 16%. We [also] see the disability rates are down 25% ... life expectancy is up 3.2 years, hospital days are down 56%, mortality rates on infarcts are almost cut in half, mortality rates from stroke are down almost a third and the overall cancer survival rate is up three times in the last 30 years." While these advances might be considered attributable to the passage of time, Dollens said such an explanation is too simplistic. "It is about attracting the investment of financial capital which then attracts intellectual [human] capital, which is the only source of creativity and ingenuity, and to have that directed towards healthcare we think is a good thing."

Addressing the source of the capital necessary to spur healthcare innovation, he said that the average cost for cardiovascular device R&D is around 12%, fed in part by venture capital to the tune of nearly $2 billion a year. "Almost 20% of product development comes from the risk capital community, and you have a lot of private small companies that also are making that investment," Dollens said. He noted that nearly 90% of the companies in the sector employ fewer than 100 people but contribute almost 30% of the med-tech R&D.

Current healthcare challenges outlined by Dollens ranged from medical liability and patient safety to the growing ranks of the uninsured. He called the latter a "diverse group" of roughly 43 million Americans, ranging from college students to those who are employed but unable to afford health insurance.

He said there are solutions for a majority of this group, in which 80% of the uninsured are in working households. According to Dollens, most health insurance is employer-based, meaning that employers cover a majority of the costs of healthcare for their employees. "Why don't we leverage that?" he asked. "Wouldn't the small employer like to offer health insurance to the employee? I don't have any data on that, but I would have to answer intuitively, absolutely. [A major] reason people change jobs is to go to a job that has health insurance." The other 20% of these uninsured, he said, are falling through the cracks of the healthcare system. "We've got to do a better outreach program to make sure that insurance is available to them."

Dollens offered up sobering news concerning the need to control the federal deficit. But he noted that this might not bode well for healthcare, citing the Balanced Budget Act of 1997 in which the government carved out $100 billon from that sector, "mostly on the backs of hospitals." In that instance, he said, government overshot the mark and ended up taking out $250 billion over a five-year period and causing nearly a third of the nation's hospitals to operate in the red. As to why this is a med-tech concern, Dollens provided this thought: "I'm just telling you, don't try to make a living selling products to someone [who's] broke – that is not a good place to be."

He said that consumers don't understand that the incentives allowing invention and innovation to happen in their lives around healthcare are the same drivers that produce improvements in our standard of living. "They think that's a disconnect."

And Dollens predicted that investors won't continue to play in the healthcare field if they lose their financial incentives. "No money is tied to investing in health because they feel it's where they ought to be from a philanthropic basis." He added: "Health policy will determine whether this is an interesting business going forward, health policy will determine whether patients have access to novel innovative therapies going forward, and I don't know that there's a much greater mission for us going forward."

Luck, skill all part of Taxus development

If one is to believe Jim Tobin, chairman and CEO of Boston Scientific (Natick, Massachusetts), his company lucked into becoming the second company in the U.S. to have a drug-eluting stent (DES) on the market, and by his account, "king of [drug-eluting] stents," with more than 70% of the market share in the DES space.

Tobin told an attentive audience at the Medical Innovation Summit that while many of the choices the company made in its DES program were based on educated guesses, luck did in fact play a large part in allowing the company to succeed where countless others had failed. "There are, worldwide, roughly 80 companies that make stents," Tobin told the standing-room-only crowd. "There were roughly nine of those who decided to do a drug-coated stent." And of those in the U.S., he said, "there are exactly two that got approved."

Tobin traced the company's DES program back to 1992, when Boston Sci decided that it was going to work on polymer coatings for stents. At that time, the company didn't even have any stents. "That's a little bit of a problem if you think that's what you're going to do," he said. While he acknowledged that the company took a long time to develop the stent, he noted that Boston Scientific approached the design of a DES stent more as a drug delivery problem as opposed to a drug molecule problem. "That's crucial."

In 1997, the company did its licensing deal with Angiotech Pharmaceuticals (Vancouver, British Columbia) for the paclitaxel coating, giving it one chance for its compound to work. "Anybody in the drug business knows that you've got to have a whole bunch of shots on goal ... but nobody goes naked with one shot on goal," Tobin said. "We didn't know that, so we did." Fortunately, he said, the properties of paclitaxel were well known and the FDA had extensive knowledge of the compounds properties, a fact that was also fortunate for his firm. "We had that advantage going for us because we didn't have to break new ground there," Tobin said. "We weren't equipped to break new ground there. Despite the fact that the compound was known to be fairly stable, he said that it was still "pretty much luck" that it worked in the interventional setting.

While the drug choice turned out to be fortuitous, an even more difficult piece of the puzzle was in finding a polymer that works in this application, he said. "If you think about what happened to the other guys, a lot of it has to do maybe not with the drug so much as the polymer delivery system that was being used," Tobin said. Overall, Boston Scientific looked at between 20 and 30 different polymers in the development process before stumbling upon what he said was yet another good piece of fortune. "It turned out that the [polymer] that worked best was sitting on our own shelf. We had acquired it by accident, basically, along with Schneider (Minneapolis), which we acquired for completely different reasons."

The next part of the equation was establishing the optimal dose of the paclitaxel to load onto the stent. In that effort, Tobin said that the company did some quality work that was far from being a matter of luck. The company approached the development of its DES program from the classic drug development model, a different perspective for an outfit normally totally focused on devices. "We started out in pigs, and I think it's fair to say that no pig near Natick was safe," he joked. "We did a lot of pigs and learned a lot in the process."

Tobin reviewed the various TAXUS trials that helped the company determine that the slow-release dose of the paclitaxel was optimal. And the company had to develop a pharma-style clinical effort in a device company – no mean feat – and the program reached a point where, Tobin said, "we virtually have a drug-development capability inside the four walls of Boston Scientific."

There was no stopping after product approval, he said, citing the TAXUS V and VI trials as proof, and that data, he added, is both consistent and comprised of some difficult-to-treat sub-groups. "We've got apples to apples, and we can actually understand how our product performs in real-world situations as opposed to the stylized, carefully designed pivotal trials that all of us do." He added that the company currently has more than 7,000 people in its DES registries and is about to add even more, another effort he noted as analogus to drug companies.

A final key in that area where Tobin said he believes his company has excelled is the realm of capacity. From the get-go, the company decided to build enough capacity to garner 75% of the market share in the U.S., at a time when the company was in roughly fourth place among companies in the DES race. He said that many considered him to be a "lunatic" for that particular idea.

That capacity drive led Boston Scientific to develop its manufacturing facilities so that virtually every component in the DES program could be produced under two roofs, one in the U.S., one in Ireland, "so that if something goes wrong, we've got what I call recovery capacity." Those two plants together have more capacity than the entire DES market uses today, he noted.

The move may have seemed somewhat crazy, but that drive for recovery capacity came in handy in July when the company was compelled to recall a huge portion of its existing product – some 88,000 stents and stent systems. "It turns out we did have a problem, but this excess capacity that we had allowed us to recover very, very quickly," Tobin said. "Who else can replace a market full of product in 48 hours, which is what we did. You probably didn't read that, but that's what happened."

While Boston Scientific did have considerable luck, it created most of it on its own, particularly in its philosophy concerning device production. "Taxus really is a combination product. You have to develop the product as if it were a drug, and you have to sell it like it was a device. If you approach something like this as a device, you will fail."

As an addendum, he said that it takes maniacal focus to see devices like this through to completion – "and I was the chief maniac."

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