Although the final bill approved by the House and Senate and sent to President George Bush for his signature omitted such fees, the Advanced Medical Technology Association (AdvaMed; Washington) last month reversed its longstanding opposition to user fees paid to the FDA. In discussing its about-face, the association said such fees would support improved performance by the agency and ultimately help the industry.

In a unanimous vote, AdvaMed's board in mid-May approved a plan supporting fees paid to the agency by companies seeking regulatory clearance of a new product. The vote came, the organization said, after an agreement hammered out with FDA officials. The proposed yearly fees paid to the agency by device manufacturers would bring in an estimated $25 million in the first year. Specific first-year fees would be as follows: $125,000 for a premarket approval (PMA) filing; $25,000 for a PMA supplement; and $2,500 for a 510(k).

AdvaMed — as well as the Medical Device Manufacturers Association (MDMA; also Washington) — has traditionally launched aggressive lobbying efforts against user fees, arguing that the additional monies required from companies would be a disincentive to development of new products, especially by smaller firms. But in announcing the new position, Pamela Bailey, AdvaMed president, said the user fees should not create an undue burden on small companies and would speed up product clearances.

"We worked with a group of our small member companies to ensure the proposal provided a strong protection for small firms that do not have the up-front resources to pay a premarket application fee," Bailey said. More than 80% of AdvaMed's member companies have fewer than 50 employees, she noted.

Taking the political high road, Bailey stated the association's new position in terms of the value to patients rather than as a burden on manufacturers: "It's an exciting new day for patients, because this will give them more timely access to technologies and establishes strong review performance goals for the FDA." She particularly pointed to cutting-edge technology areas such as tissue engineering, diagnostic imaging and microelectronics as having great promise for patients. But approval of these new technologies requires added resources because of the challenges they pose to the FDA's premarket review program, she said.

Stephen Ubl, AdvaMed's executive vice president for federal government relations, said that the fees would increase over a five year period, and produce a total of about $225 million. "There is a ramp-up schedule, and the FDA will establish the fees for subsequent years based on several factors, including inflation and workload, but tentatively it looks like it will increase from $25 million to $29 million, then to $32 million and finally to $35 million, with additional appropriations from Congress," he said. Ubl noted there are two types of goals included in the agreement: first, cycle goals, where the FDA agrees to perform PMA and 510(k) reviews in a quicker time period; and secondly, the agency will establish its own decision goals on how to meet industry demand.

"Initially, current performance will be maintained, but the two types of goals would work together and be firmly in place in five years," Ubl said.

"There is a deferral for small companies, which is defined as a company with revenues of $5 million or less from the last federal tax filing, and the company would have one year following the FDA decision to pay the fee," explained Ubl. There are some additional provisions for financial hardships that the agreement would provide, he noted.

The agreement is based on the FDA receiving 78 PMAs in the coming year. Within five years, AdvaMed hopes to see a 25% performance increase from the FDA, based on the additional funds. There are some exceptions to the mandatory fees, Ubl noted. "If a company chose to get a third-party review, they would not have to pay the fee for a 510(k) as well."

AdvaMed doesn't necessarily see the fees as resulting in additional FDA staff, but rather the flexibility to contract with experts in specific areas of science to help improve the agency's market approval process, explained Jim Benson, executive vice president, technology and regulatory affairs. "There may very well be additional employees [hired], but we see it as a way of gaining consultations from experts in new technologies and gaining additional infrastructure improvements, such as new computers and networks," he added.

The staffing levels at the Center for Devices and Radiological Health have fallen 10% since 1995, and in 2001 the average review time for PMAs rose to 411 days — twice the statutory review time of 180 days, according to data from AdvaMed.

The MDMA, by contrast, has not endorsed user fees but instead has proposed that additional FDA funding be developed through the mechanism of a joint task force supporting agency efforts. MDMA was not approached about the user fee agreement, Bailey said, but she expressed hope that it would offer its support. "We are hopeful they will have an open mind about this because it serves the interest of small companies," she said.

AdvaMed also lobbied Congress to pass a bipartisan bill introduced by Reps. Jim Greenwood (R-Pennsylvania) and Anna Eshoo (D-California) titled the "Preparing FDA for 21st Century Medical Technology Act" and designed to ensure the safety of reused single-use devices. The bill is an amendment to pending bioterrorism legislation.

In the end, neither effort proved successful, as the final bill passed by the two houses in late May failed to include either device user fees or reference to re-use of single-use devices.

Women's health expansion for Boston Sci

Boston Scientific (BSX; Natick, Massachusetts) pulled the trigger on its third and largest deal of 2002 with the signing of a definitive agreement for the purchase of BEI Medical Systems (Teterboro, New Jersey), developer of the Hydro ThermAblator (HTA) system for the treatment of menorrhagia (excessive uterine bleeding). When completed, the deal will mark a continuation of Boston Scientific's strategic efforts to broaden its product portfolio in the women's health sector.

Boston Sci will acquire BEI in an all-cash transaction valued at approximately $95 million or $6.84 per share. The transaction, which will be accomplished by a cash tender offer and follow-on merger, is expected to close some time this quarter. BSX, which made seven acquisitions last year, took a breather in the first quarter before resuming its acquisitive ways in 2Q02. Prior to this deal, the company made two other deals in May. Earlier in the month, Boston Scientific made an equity investment in Therus (Seattle, Washington), a developer of ultrasonic vascular sealing technology, with an option to buy the company at a future date. Additionally, the company acquired a portfolio of technology related to cardiac delivery from privately held Microheart (Mountain View, California). Terms of the two prior deals were not disclosed.

BEI, which will become part of Boston Scientific's Endosurgery group, had previously reported entering a marketing and services agreement with HealthSouth (Birmingham, Alabama) in which HealthSouth would use the Hydro ThermAblator system to treat excessive menstrual bleeding under a clinical pilot program in a select group of geographically dispersed HealthSouth facilities. BEI and HealthSouth said they would work together to provide gynecologists and their patients with access to endometrial ablation treatment with HTA at additional HealthSouth facilities.

Both BEI and HealthSouth will promote the implementation and utilization of the HTA for treating menorrhagia due to benign causes. BEI will provide workshop training, in-service training and ongoing customer and technical support to physicians and staff, while HealthSouth will provide HTA marketing support and will help introduce the HTA to physicians, patients and third-party payors in its network.

HealthSouth provides outpatient surgery, diagnostic imaging and rehabilitative health care services at more than 1,900 locations.

In another women's health deal, Mentor (Santa Barbara, California) reported acquiring the urology business of Portex Ltd., a subsidiary of Smiths Group (London), for about $10.5 million in cash. The acquired business, named Mentor Medical Ltd. (Lancing, UK), develops incontinence and ostomy products primarily for the home health care market. The products are sold mainly in the UK, Germany and the Netherlands. Sales last year were about $16 million. Smiths Group companies produce aerospace systems, medical devices, mechanical and polymer seals, and interconnect products. Mentor develops specialized medical products.

Plasma Separation Process in place

Theragenics (Atlanta, Georgia) reported successful operation of its Plasma Separation Process (PSP) at its Oak Ridge, Tennessee, facility, saying that, "based on the capabilities of the PSP," it has opportunities in the fields of medical therapeutics, medical diagnostics, neutron detection for research applications, sterilization applications, nuclear power applications, and national defense applications.

Developed in the early 1980s under the direction of the U.S. Department of Energy, PSP was originally intended to support the production of materials for nuclear power generation. In 1987, Theragenics was able to contract for the process to enrich Pd-102 (raw material for cancer products), and the company then entered into a 30-year lease for its exclusive use. The company said its next steps would be to sift through proposals from commercial, governmental, and research organizations to purchase specific isotopes.

In a separate development, Theragenics is continuing its investigation into the use of Pd-103 for the treatment of peripheral vascular disease as well as macular degeneration. A human feasibility study treating vascular disease in the superficial femoral artery is expected to be under way by the third quarter. Additional studies to treat vascular disease below the knee are currently under evaluation. Animal feasibility studies for treating macular degeneration are expected to be completed in 3Q02.

Clinical data capture made easier

3F Therapeutics (Lake Forest, California) and Acu- men Healthcare Solutions (Minneapolis, Minnesota) said all of 3F's European heart valve study centers have been trained to use an electronic clinical data-capture system designed and supported by Acumen. The collaboration is meant to improve the analysis and reporting of information recorded under the 3F study protocol to regulatory agencies in Europe and the U.S.