News: November 06, 2007
Industry Offers Scaled-Back Version of the Remote Monitoring Access Act of 2007. The device trade group, AdvaMed, has been lobbying lawmakers to require the Centers for Medicare and Medicaid Service (“CMS”) to reimburse doctors for the time they spend analyzing data from remote devices that monitor sleep apnea, epilepsy, diabetes, cardiac arrhythmia, and heart failure. The Remote Monitoring Access Act of 2007, which was introduced to the Senate in February 2007, addresses the lack of reimbursement for remote monitoring in order to promote the adoption of this technology. One major obstacle to meeting this goal is cost; experts project the cost of the original bill at $330 million over five years. Recognizing that this figure was cost prohibitive, AdvaMed worked with its member companies to scale back the proposal to increase its chances of success. The new version of the legislation would cost about $100 million over five years and would require national Medicare coverage of remote-monitoring services for heart failure and cardiac arrhythmia. The use of remote monitoring technologies is expected to reduce the overall healthcare costs for patients with diabetes, heart failure, and chronic obstructive pulmonary disease. Additional information available at www.thegraysheet.com (paid subscription service).
New FDA Guidance Issued Regarding Advisory Panel Conflict Disclosures. On October 31, 2007, FDA released a draft guidance document clarifying its process for publicizing the potential conflicts-of-interest of FDA advisory panel members. The FDA Amendments Act (“the Act”) requires FDA to disclose the nature, type, and magnitude of any disqualifying financial interests of prospective advisory panel members who receive a conflict-of-interest waiver from the agency. According to FDA, it will generally post this information on its web site 15 days prior to the meeting. The draft guidance also includes a sample disclosure form alluding to a $50,000 threshold for advisory panel conflicts of interest—advisory panel members with conflicts of more than $50,000 typically being excluded; members with conflicts of $50,000 or less typically being allowed to participate, but not to vote. Despite this, the FDA Commissioner may make exceptions when the value of the conflicted member’s expertise outweighs concerns about the conflict. In fact, several key panelists recently received waivers despite working for institutions with financial interests exceeding the $50,000 threshold. Additional information available at www.thegraysheet.com (paid subscription service).
Controversy Over Regan-Udall Foundation. Representative Rosa DeLauro, D-Conn., is urging FDA to cease efforts to establish the Regan-Udall Foundation, the non-profit foundation created by the recently enacted FDA Amendment Act (“the Act”). In a November 1, 2007, letter to FDA Commissioner Andrew von Eschenbach, DeLauro stressed the potential for FDA staff to be pressured to accept Regan-Udall Foundation-endorsed research without independent verification. She finds this pressure particularly concerning since the foundation, which will work with FDA on its Critical Path Initiative and other efforts to speed product development, will be funded by private donations and patent revenue, as well as by the agency’s budget. The Act requires that four members of the foundation’s 14-member board be from the device, drug, biotech, cosmetic, and food industries. Additional information available at www.thegraysheet.com (paid subscription service) and http://www.house.gov/delauro/press/2007/November/FDA_Cease_11_1_07.html.
CMS Publishes Two Final Payment Rules for 2008. On November, 1, 2007, CMS published final rules for payment of hospital outpatient and physician services, effective January 1, 2008. The outpatient rule goes ahead with the controversial “packaging” policy for seven new service categories including intra-operative services, image guidance, and diagnostic radiopharmaceuticals. The new policy is intended to fight rising outpatient costs and to encourage hospitals to be frugal and negotiate effectively with device manufacturers. The physician fee schedule includes no major new policies for reducing imaging payments, despite increasing pressure from policy makers who view such payments as a significant contributor to accelerating Medicare spending growth. Additional information available at www.thegraysheet.com (paid subscription service).
FDA Requests New Trial Designs for Peripheral Vascular Devices. According to FDA officials, the agency’s perspective on the regulation of peripheral vascular devices is in transition. The agency is asking device manufacturers to consider new clinical trial designs for vascular interventions in the superficial femoral artery and other indications that are routinely treated off-label by physicians. The agency is looking for innovative ways to make the regulatory process more meaningful to current clinical practices. According to FDA officials, the agency recognizes that the control groups and endpoints used in past peripheral stent trials have not always been helpful for informing clinical decisions. The agency is particularly interested in studies that combine indications for multiple vascular beds into a single trial, with each artery tested being assigned to a different arm of the study. In addition, single-arm trials with objective performance criteria or historical controls could serve as an alternative to randomized trials. Additional information is available at www.thegraysheet.com (paid subscription service).
FDA Officials Concerned Over Lack of Design Control Expertise at Device Firms. Officials from the U.S. Food and Drug Administration (“FDA”) are concerned that the lack of experienced engineers capable of helping device firms ensure compliance with FDA’s regulatory requirements is leading to increased violations of the Quality System Regulations (“QSR”). In 2006, 60% of the quality system warning letters issued by FDA included at least one design control issue. This represents an increase from calendar year 2005 in which 51% of such letters cited design control violations. FDA believes that manufacturers who struggle with design control are not investing enough in their engineering departments and would benefit from hiring more experienced engineers. Under the management responsibilities outlined in the QSR, managers are required to provide adequate resources to ensure appropriate design controls, which includes hiring qualified engineers to develop the products. Additional information available at www.thegraysheet.com (paid subscription service).
Synthes ProDisc-C “approvable.” FDA recently issued an “approvable” letter for Synthes’s ProDisc-C total cervical disc replacement. The Swiss company expects to receive final PMA approval following a review of the company’s manufacturing processes. Currently, Medtronic’s Prestige—approved in July 2007—is the only artificial cervical disc approved for sale in the U.S. market. However, Medtronic’s Bryan cervical disc was also recommended for approval by an FDA advisory panel in July 2007. Additional information is available at www.thegraysheet.com (paid subscription service).
Despite Strong Leg Artery Data, FDA Wants More Information on LifeStent Before Approval. On October, 23, 2007, Edwards Lifesciences reported positive clinical results from its one-year RESILIENT trial for LifeStent femoral/popliteal stent. The study compared traditional balloon angioplasty alone with a LifeStent and angioplasty combined in patients presenting with narrowing of the superficial femoral or popliteal artery. The study’s primary endpoint was revascularization of the target lesion or target vessel. The results indicate that over four times as many patients treated with angioplasty alone required a follow-up procedure, while twice as many arteries of patients in the LifeStent group displayed unobstructed blood flow. LifeStent is currently cleared for opening bile ducts, but is widely used by physicians for treating the superficial femoral artery; Edwards is using the RESILIENT study data to support a PMA for a femoral artery indication for LifeStent. While Edwards expected to receive PMA approval for the LifeStent by the end of this year, FDA is calling for more information on the preclinical bench testing of the product. Edwards now expects approval in early 2008. Additional information is available at www.thegraysheet.com (paid subscription service).
Mitroflow gains FDA approval. On October 26, 2007, the Sorin Group announced that FDA has approved its Mitroflow aortic pericardial heart valve for sale on the U.S. market. The device, which has been available in Europe for 25 years, will be available in the United States in December 2007. Additional information is available at www.thegraysheet.com (paid subscription service).
New Senate Bill Would Require Device Firms to Report Prices to CMS. Senators Chuck Grassley (R-Iowa) and Arlene Specter (R-PA), introduced a new bill in the Senate that would require device manufacturers to report to the Centers for Medicare & Medicaid Services (“CMS”) the prices negotiated with hospitals for all implantable medical devices when seeking Medicare reimbursement. The Transparency in Medical Device Pricing Act, S. 2221, which was referred to the Senate Finance Committee, is intended to ensure that hospitals can provide adequate care to patients and to prevent taxpayers from being overcharged for implantable medical devices. Under the bill, manufacturers would be required to report their average and median sales prices for all implantable devices to CMS on a quarterly basis. The bill also requires CMS to publicize these pricing data on its web site. The trade group AdvaMed is reviewing the bill and has expressed no formal position on it at this time. Additional information is available at www.thegraysheet.com (paid subscription service).
Intel Develops Remotely Monitored Medical Devices. Intel plans to bring new remotely monitored medical devices to patients’ homes as early as 2008. The company’s first health care product, a telehealth solution for management of chronic disease, will be revealed early next year. This device and other upcoming Intel technologies including scales, glucose meters, and respiratory monitors will be designed to remotely transmit data to physicians, decreasing the need for frequent physician visits. The company reportedly has half a dozen prototypes at present including: a system that allows Parkinson’s patients to administer six weekly tests at home to track their disease, rather than reporting to the doctor’s office for tests every three to six weeks, and an advanced form of caller ID for Alzheimer’s patients’ phones that provides patients with reminders and notes about past conversations. Other prototypes include a medication prompting system, diagnostic systems for degenerative diseases that result in falls, and in-home sensors that monitor behavior and physical activity. Additional information is available at www.thegraysheet.com (paid subscription service).
New FDA Guidance Document: FY 2008 Medical Device User Fee Small Business Qualification and Certification. FDA released an updated guidance document on October 17, 2007, to assist companies attempting to qualify as small businesses under the Medical Device User Fee and Modernization Act (“MDUFMA”). The updated guidance outlines the fiscal year 2008 fee rates under MDUMFA, which took effect on October 1, 2007, pursuant to the recently enacted FDA Amendments Act. The new rates include up to a 50% discount for many premarket submissions for small businesses. Topics covered by the new guidance include: the benefits of qualifying as a small business; guidance for U.S. and foreign businesses, guidance for foreign governments; frequently asked questions; and forms and instructions. Additional information available at www.fda.gov/cdrh/mdufma/guidance/2008.pdf.
JAMA Article Reports High Rates of Financial Relationships between Academia and Industry. According to a recent study of 125 medical schools and 15 large independent teaching hospitals published in the October 17, 2007, Journal of the American Medical Association, 60% of department chairs and 67% of departments have a some financial relationship with industry. More research is necessary to fully understand the impact of these relationships. Additional information is available at www.thegraysheet.com (paid subscription service).
Device Companies Targeted in Foreign Corrupt Practices Act Investigations. Recent events indicate that the medical device industry is a new focal point for Department of Justice (“DOJ”) and Securities and Exchange Commission (“SEC”) prosecutors who investigate violations of the Foreign Corrupt Practice Act (“FCPA” or “the Act”). Common marketing activities, such as giving an inappropriate payment or gift to a physician overseas, violate FCPA and may subject the device firm to liability under the Act—this includes physicians working in foreign government hospitals. Under the Act, it is illegal for U.S. companies operating overseas to offer bribes to foreign public officials. Companies are also required to maintain accurate records of their business transactions in foreign countries. Bribery is broadly construed to include any action in exchange for pay and any person who fills a non-clerical, non-laborer position and has some authority with a foreign government entity may be considered a government official. Companies caught violating FCPA are subject to fines and penalties in the tens of millions of dollars and individuals may face up to one year in prison. In addition, violators are required to enlist a compliance monitor who continually audits the company. Additional information available at www.thegraysheet.com (paid subscription service).
CMS Abandons Proposed Reforms of Clinical Trial Coverage. The Centers for Medicare and Medicaid Services (“CMS” or “the Agency”) has decided to maintain the status quo for coverage of routine costs of clinical trials. This decision follows numerous questions from industry concerning CMS’s authority to establish standards and provide limitations for coverage of clinical studies, threats of lawsuits, and pressure from some members of Congress to abandon proposed reforms. Accordingly, the Agency has decided to maintain the automatic coverage outlined in the 2000 policy for routine costs in federally funded trials, as well as items and services in some trials that did not meet the standards of the policy, but have been paid by some contractors. Coverage for investigational device exemption ("IDE") trials will continue to be covered under other policies. CMS also plans to work with other Department of Health and Human Services (“HHS” or “the Department”) entities to prevent the imposition of duplicative or inconsistent obligations under the new FDA Amendments Act, enacted on September 27, 2007. Additional information is available at www.thegraysheet.com (paid subscription service).