Editors' Picks - Notable Gray Sheet Stories From 2009

Article preview reprinted from "The Gray Sheet" - January 4, 2010 "It almost feels like the medical device industry is under attack from the government," a venture capital executive remarked to us recently. That is likely overstating it from a motive standpoint, but there is no doubt that more policy proposals are bubbling up that would make manufacturers' ability to do business in the U.S. more challenging. The discussion of FDA review standards has evolved to a point where formal changes to the process by which most devices reach the market are foreseeable in the near-term. And with the device industry tax, health care reform will hit very close to home. These are among the biggest stories we covered in 2009. Read more...

¹ Schultz Exits: Pressures From Inside And Out Catch Up With CDRH Director (Aug. 17, 2009): Dan Schultz was widely respected by industry, but that did not help his job security at CDRH after being singled out by whistleblowers and investigating lawmakers for running a center where scientific processes were corrupted by intimidation and political pressure. When the new administration took over at FDA, the writing for the 15-year CDRH veteran was on the wall.

² Do-Over? FDA Orders Look-Back At Knee Device 510(k) Review Process (May 18, 2009): The new FDA leadership has significantly advanced the prospects for reforms to the 510(k) program in large part due to the unprecedented decision to re-assess a controversial 510(k) review and release a detailed, self-critical report based on the assessment. The Menaflex device narrative will no doubt be considered a major catalyst for upcoming changes.

³ Industry Balks At Proposal For $4 Billion Annual Device Sector Charge (Sept. 14, 2009): Industry's role in the health care reform process shifted from engaged supporter to enraged interest group when word came in mid-September that the Senate was proposing to tax device companies to help pay for the bill. The lobbying infrastructure went into overdrive, rallying device-state lawmakers against the fee. The planned industry contribution has been halved from the original proposal, but there is little-to-no chance the charge will be removed from a final reform bill.

⁴ St. Jude's Departure From AdvaMed Highlights Inherent Industry Tensions (Nov. 16, 2009): The health reform device tax likely will not take effect until 2011 at the earliest, but one of the most dramatic impacts of the proposal so far is St. Jude Medical's abrupt decision to quit AdvaMed over the association's plan to advocate for a policy that would have St. Jude and other Class III-device-focused firms contributing a bigger chunk of the payment.

⁵ Comparative Effectiveness Research Gets $1.1 Bil.; How Will Data Be Used? (Feb. 16, 2009): Before the device tax, there were other legislative issues that got industry's blood boiling. Comparative effectiveness research and the serious funding for the practice included in the American Recovery and Reinvestment Act was near the top of this list. HHS agencies have already made progress in spending the funds, laying a foundation for what will be a significantly expanded long-term enterprise once a health reform bill passes.

⁶ J&J Cites Economy, Increased Regulatory Costs For Large-Scale Layoffs (Nov. 9, 2009): Although improvements are evident, the private sector, including the device industry, is still reeling from the financial crisis, as J&J's large-scale layoffs in November made clear.

⁷ Stryker Unit Charged With Fraud, Misbranding For Illegal Marketing Scheme (Nov. 2, 2009): Stryker executives face prison time and millions in fines for an alleged scheme to promote the unapproved use of bone growth products in a case brought by the Department of Justice. Observers say the case is just one example of an increasingly aggressive stance by federal prosecutors against medical device companies.

⁸ FDA's New Enforcement Approach Will Put More Warning Letters In The Mail (Aug. 10, 2009): Incoming FDA Commissioner Margaret Hamburg outlined new steps for protecting the public against product risks. On the list: getting warning letters to firms faster. On a more conciliatory note, the agency will also formally let firms know when they've successfully corrected problems and are out of trouble.

⁹ Hamburg, Sharfstein Take The Floor; FDA Stakeholders Watch And Wait (March 23, 2009): At base, many of the important stories of 2009 stem from one source: a change in leadership in Washington, D.C. For the device industry, the ascension of Margaret Hamburg and Joshua Sharfstein to the top two posts at FDA was of most significance.

- The Gray Sheet

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