With the news of President George Bush's intention to nominate current FDA Commissioner Mark McClellan, MD, to head the Centers for Medicare & Medicaid Services (CMS; Baltimore, Maryland), the major Washington-based medical device associations said they were mostly upbeat about the potential change. While they indicated they see the planned move as a positive for business, they expressed hope that the FDA also will attain needed long-term stability with the next permanent appointment to the FDA commissioner post.
If approved, McClellan would succeed Tom Scully, who resigned as head of the reimbursement-centered agency in December after three years on the job to join the Washington law firm of Alston & Bird.
McClellan, an internist and economist, has made quite an impression during his year-plus stay at the FDA, winning kudos for implementing innovative, industry-friendly polices designed to improve efficiency and speed the product review process. As CMS administrator, McClellan would lead the agency through implementation of the new Medicare law, according to Tommy Thompson, Secretary of Health and Human Services. For the time being, McClellan will be replaced by Lester Crawford, the deputy commissioner and veterinarian who temporarily headed the FDA before McClellan took the job in late 2002.
McClellan must be confirmed by the Senate. If his last confirmation hearing and vote provides any window into the future, McClellan shouldn't have a problem. The Senate unanimously approved his nomination in October 2002 after a perfunctory hearing before the Health, Education, Labor and Pensions Committee during which only three members showed up to grill the nominee.
The Advanced Medical Technology Association (AdvaMed; Washington) praised the Bush administration for its plans to nominate McClellan for the CMS post. "Dr. McClellan is enormously qualified to lead the agency that will implement the newly enacted Medicare reform legislation during this critical period," said AdvaMed President Pamela Bailey in a statement. "He understands the challenges ahead and the importance of ensuring that the regulation meets the goals of the legislation. Moreover, he understands the value advanced medical technology provides to the nation's 40 million Medicare patients and the overall healthcare system value that will be better realized through the implementation of the recently enacted reforms."
Bailey said that McClellan's private-sector management style has enabled him to transform the FDA into a more modern, less-bureaucratic government agency. She said his initiatives to make FDA reviews more efficient are not only helping to get lifesaving and life-improving technologies to patients faster, but also to reduce the costs associated with getting an innovation to market. She said she hopes that he will attack the long delays in CMS coverage, coding and payment processes in a similar fashion.
"Progress in helping CMS keep pace with 21st century medical technology will hinge on good leadership," said Bailey. "Commissioner McClellan is well suited for this new role because he recognizes the need to ensure patients have access to high-quality, affordable healthcare, which includes timely access to new innovations."
Jeff Ezell, director of media relations for the organization, said that AdvaMed was happy with Crawford in charge. "We're very comfortable with him; we have a good relationship with him," he told The BBI Newsletter. Regardless of whoever permanently takes McClellan's place, Ezell said he or she would need a thick skin. "It's a tough [position] to fill; it's always controversial."
As for McClellan, Ezell said that with the new prescription drug benefit and all the new medical technology reform provisions taking place at CMS, "we need someone at the helm who has experience. He has a pretty good understanding of the value of innovation . . . and he's done a lot of work in the area of quantifying the value of investment in healthcare."
The Medical Device Manufacturers Association (MDMA; Washington) closely mirrored AdvaMed's position on the Bush nomination. "I think clearly the administration made a great decision to nominate Dr. McClellan," Mark Leahy, MDMA's executive director, told BBI. "He has shown tremendous leadership heading the FDA and I think that leadership is going to really allow CMS to excel as they face the challenges of implementation." Leahy said he thinks the CMS job fits McClellan very nicely. "He understands the importance of medical innovation and the overall importance of technology and trying to balance the improvements of technology with the budget constraints."
While he said that Crawford did a great job filling in as acting commissioner in the interim period after Jane Henney, a nominee of President Bill Clinton, resigned following the Bush inauguration, and he believes that will be the case again, Leahy said he hopes a permanent replacement including potentially Crawford can be quickly brought in. "Obviously we look forward to hopefully a quick nominee to fill that post in a permanent way because we think that it is clearly important to have someone at the top in a permanent capacity," Leahy said.
While McClellan's appointment may be looked upon largely as a lateral move, rumors around Washington have it that Bush is grooming him for a possible role as head of HHS, since Thompson has indicated that he will not remain in that position for a second term if Bush is re-elected.
Device bar codes 'at some point'
Manufacturers of drugs and certain over-the-counter medications used in hospitals have two years to include linear bar codes on product labels. While the rule covers all drugs used in the hospital setting and all blood and blood products, it does not include medical devices. The FDA's McClellan said: "We are interested in extending this to devices, but there is no equivalent to the National Drug Code in devices. But you can expect to see this in devices at some point."
The pharmaceutical bar coding requirement is designed to protect patients from preventable medication errors and to reduce the overall cost of healthcare, HHS' Thompson said when the rule was rolled out last month. Indeed, he said 50% of hospital errors occur because the wrong patient is given the wrong drug at the wrong dose or the wrong time. The final rule applies to most drug manufacturers, repackers, relabelers, private-label distributors and blood establishments. New medications covered by the rule will have to include bar codes within 60 days of their approval; most previously approved medicines and all blood and blood products will have to comply within two years. Thompson said he was moved to reduce medical errors after learning of the 1999 Institute of Medicine report, To Err is Human: Building a Safer Health System, that said upward of 100,000 people die every year in U.S. hospitals due to preventable medical errors, often related to drugs.
Last spring the FDA sought public comment on the proposal, and Thompson said the drug and hospital industries support the requirement. The FDA does not regulate the hospital industry; therefore it cannot force hospitals to implement the system. However, Nancy Foster, senior associate director of the American Hospital Association (Washington), told BBI that the association supports the rule, especially since it should help improve patient safety. "We think bar coding can be an effective technology that hospitals would like to consider as part of the opportunities they have to improve patient safety," she said.
While most of the current attention for bar coding is focusing on pharmaceuticals, Foster said she believes it should also be used in medical devices as well "to help make sure we're getting the right-sized equipment to the patient." Additionally, she said bar coding "could facilitate" inventory and maintenance of medical devices, but the primary use that hospitals currently envision the technology for is making sure that singe-use devices that a doctor orders for a particular patient, go to the right patient.
For its part, Abbott Laboratories (Abbott Park, Illinois) said it welcomes the new bar code rules. In March 2003, the company said it completed what it referred to as "an industry-leading effort" to affix unit-of-use bar codes to 100% of its hospital injectable pharmaceuticals and intravenous (I.V.) solutions. The initiative encompassed more than 1,000 products and has the ability to impact patient safety where it is most critical, at the patient bedside. Additionally, virtually all of Abbott's oral pharmaceuticals distributed in bottles to hospitals in the U.S. already include bar codes. Abbott also has made progress in its efforts to use bar code technology across hospital unit-dose packaging of these oral medications.
In addition to its bar coding initiative, Abbott's hospital products business recently launched Abbott MedNet, a drug library software that provides clinical decision rules for up to 1,200 medications and is designed to improve medication management at the hospital patient's bedside, offering protection against I.V. medication errors. Also in the product portfolio is LifeCare PCA3 Infusion System, a patient-controlled analgesia (PCA) device the first of its kind to incorporate a built-in bar code reader to identify and verify drug and dose concentrations automatically.
As for the cost of implementing a scanning system in the hospital, neither McClellan nor Thompson provided a figure. Foster didn't offer an estimate either, but did say, "Relative to other technology costs, this would be relatively small." Once fully in place, McClellan said bar codes are expected to help prevent 500,000 adverse events and transfusion errors during the following 20 years. The economic benefit of reducing healthcare costs is estimated at $93 billion over the same period, he said.