A revamped bill for medical device user fees passed the U.S. House of Representatives late last month following lengthy negotiations, and the proposal received swift Senate approval before legislators hit the campaign trail. It was then quickly signed into law by President George Bush. H.R. 3580 — hailed as a "landmark" piece of legislation — originally passed the House on Oct. 9. The bill then was replaced with a new bill (H.R. 5651) after Sen. Edward Kennedy (D-Massachusetts) addressed what he called "legitimate concerns," according to staffers in Kennedy's office.
An additional amendment to the bill — welcomed by smaller device manufacturers and start-ups — sets $30 million in annual revenues as the starting point for paying user fees, rather than $10 million as previously set. The new figure is more in line with the definition of a small company proposed by the Medical Device Manufacturers Association (Washington).
For Kennedy, the primary issues of concern were with third-party review provisions and the re-use of single-use devices. "The compromise language gives the FDA sufficient authority to deal with third-party inspections and includes tighter language on the reprocessing of single-use devices to better protect the American consumer," Jim Manley, press secretary for Kennedy, told The BBI Newsletter. Companies still will be allowed to use third-party inspections from accredited companies, but further safeguards were added for FDA control. "Companies will be allowed to have two third-party inspections under the compromise legislation," Randy Burkholder, director of public affairs for AdvaMed, told BBI. A third inspection would need to be from the FDA itself, Burkholder said. "The company can petition the FDA for the outside inspection if there is a delay in the agency's response to the request for the inspection."
President Bush reported on signing the bill in a weekly Saturday radio address, crediting the industry with producing new technologies. He acknowledged the main issue that the user fee legislation addresses: "Medical devices," he said, "are often very complex and require careful testing before they're approved by the Food and Drug Administration. But the FDA is overwhelmed by the volume of new technologies, making delays more frequent, and undermining the quality of device reviews."
The fees are projected to give the agency an additional $225 million over five years, beginning in 2003. But those funds won't all be required of medical device firms: $75 million will come from congressional appropriations. Year one fees were set to establish an initial funding level, but the fees will be calculated in subsequent years to reach the projected financial goals. For October 2002 to October 2003, a little over $25 million will come from combined congressional appropriations and user fees.
The specific fees will be $154,000 for an original premarket approval (PMA) application and $2,187 for a 510(k) filing. Funding levels for the following years are as follows: FY2004: $27.25 million; FY2005: $29.78 million; FY2006: $32.61 million; FY2007: $35 million.
The law doesn't just ask something from industry — it also requires something from the agency. It establishes performance goals the FDA must meet to correct delays in the approval process. Review times for all types of premarket submissions must improve an average of 25%, according to the law's language.
Still left is some actual machinery for putting the fee system into place, according to a spokesperson in the FDA's Centers for Device and Radiological Health. "Although the law has a retroactive start date [Oct. 1], we've not had anybody send checks yet," she told BBI. "We're still trying to figure out a mechanism to get the billing in place, but I'm sure we'll get it sorted out soon."
Compelling results halt brain aneurysm trial
Data released late last month from the International Subarachnoid Aneurysm Trial (ISAT), a multi-center, prospective, randomized trial, demonstrated that less-invasive endovascular treatment with detachable platinum coils produced better outcomes for patients suffering from ruptured brain aneurysms than neurosurgical clipping. The data came from a trial that was halted early because of the weight of early results — that coiling reduced the relative risk of disability or death by almost a quarter and the absolute risk by 7%. The trial halt came with the analysis of interim results in early May and after enrolling 2,143 of the planned 2,500 patients. The difference in outcomes between the two procedures was so great that it was no longer deemed ethical to randomize patients to neurosurgical clipping.
Published in the British medical journal The Lancet, the study showed that the risk of death or significant disability at one year for patients treated endovascularly with coils was an impressive 22.6% lower than for those treated neurosurgically with clipping. Initiated in 1994 and funded by the Medical Research Council of Great Britain, the study involved 43 neurosurgical centers in Europe, North America and Australia. Its primary objective was to determine whether endovascular coiling reduces the number of poor patient outcomes as compared to neurosurgical clipping. It is estimated that as many as 18 million Americans will develop a brain aneurysm during their lifetime. Every year it is estimated that more than 30,000 people suffer from ruptured brain aneurysms and about 10% to 15% of these patients will die before reaching the hospital. More than 50% will die within the first 30 days after rupture. Of survivors, about half suffer some permanent neurological deficit.
Healthcare analysts estimate that currently, as many as 75% of patients with brain aneurysms in the U.S. are currently treated by neurosurgical clipping, which involves performing a craniotomy (removing a section of the skull) and placing a surgical clip at the neck of the aneurysm. Endovascular treatment, which was introduced in the early 1990s, involves insertion of a catheter into the femoral artery in the patient's leg and navigating it through the vascular system under X-ray guidance, into the head and into the aneurysm. Tiny platinum coils are then threaded through the catheter and deployed into the aneurysm, obstructing blood flow into the aneurysm and preventing further damage.
"This study was designed to provide results that will help guide physician practice," said Richard Kerr, MD, neurosurgical principal investigator of ISAT and a consultant neurosurgeon with the department of neurosurgery at the Radcliffe Infirmary (Oxford, UK). "For patients with ruptured brain aneurysms suitable for both treatments, endovascular coiling is significantly more likely to leave patients alive and free of disability." He cautioned that, as in any study, "long-term follow-up will be essential to evaluate the substantial early advantage of endovascular coil treatment."
Several companies with endovascular technology stand to benefit from the results of this study. Among them is the clear leader, Boston Scientific (Natick, Massachusetts), whose Target division manufactures the Guglielmi Detachable Coil (GDC), which was used in a substantial portion of the endovascular patients in the ISTAT study. Other companies in the hunt include Micro Therapeutics (San Clemente, California), Micrus (Mountain View, California) and MicroVention (Aliso Viejo, California).
Initially, endovascular coils were only approved in high-risk cases in this country, but Dan Tuden, director of reimbursement and outcomes planning of Boston Scientific's Target division, hopes that this study will change that. "Patients suitable for both treatments will do far better and will be far less likely to be dead or disabled at the end of one year if they receive endovascular," Tuden told BBI's sister publication, Medical Device Daily. He said these results should mandate "that all patients should get an endovascular consult[ation], and that's not the standard of care right now."
Larry Haimovitch, president of Haimovitch Medical Technology Consultants (Mill Valley, California), who follows the cardiology sector for BBI, noted that from 15% to 20% of all infra-cranial aneurysms are treated endovascularly and the other 80% to 85% are currently treated with surgery. He said he has talked to doctors who have told him "that over time, they think it's going to cause a significant shift from surgery to endovascular." While noting a potential turf war between neurosurgeons and neuroradiologists over the proper course of treatment, Haimovitch noted that the data offers a very compelling argument for the use of an endovascular approach. "I think [the study] is going to drive the market towards endovascular; it's only a question of how long it takes and how big the market shift is."
Tardy reimbursement impacts blood safety
The nation's blood supply is safe, but the current methodology in place for Medicare reimbursement fails to account for the rising costs of blood safety technologies, according to a report released last month by the Advanced Medical Technology Association (AdvaMed; Washington). Commissioned by AdvaMed, the report, "Ensuring Blood Safety and Availability in the U.S.," was produced by The Lewin Group (Falls Church, Virginia). The problems with inadequate payments, AdvaMed charges, lie primarily within Medicare's prospective payment system (PPS) for hospital inpatient care, where blood transfusions are most likely to occur.
David Perez, president of Gambro BCT (Lakewood, Colorado), noted during an association briefing that the current system "isn't optimized as it is. When new safety issues and technology are introduced, there's no DRG [diagnosis-related group] for it." He said America's blood collection and supply centers readily embrace new technology as it becomes available, but that could change in the near future unless reforms aren't forthcoming.
Pathogen reduction is just one of several new technologies before the FDA. Currently, 11 companies are involved in some phase of research for blood-related technologies, with several in the final stages of clinical trials before submitting the PMA to the FDA, Perez said. "The situation right now is that if there was a solution to prevent West Nile that gets FDA approval, how would the current reimbursement system address the costs?"
As has occurred so often of late, tardy Centers for Medicare & Medicaid Services (CMS) processes were identified as a major culprit. Clifford Goodman, senior scientist at The Lewin Group and primary researcher for the 81-page report, said, "CMS can wait up to two years before adjusting its payment rates to reflect what it considers new technology."