Date post: | 11-May-2015 |
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Thomas C. NovelliVice President, Government Affairs
Medical Device Manufacturers Association
National trade association focused on regulatory, legislative and legal issues for medical device companies
Based in Washington, DC
Over 300 member companies
Health Care Reform◦ Medical Device Excise Tax◦ Physician Payment Sunshine◦ Other issues◦ Other issues
Supreme Court Decision on Health Reform◦ Scenario Analysis
FDA Reform in 2012FDA Reform in 2012
How did we get here?
Goals of health care reformd d h l h◦ Increase and extend health insurance coverage
◦ Improve efficiencies throughout health care systemImprove efficiencies throughout health care system
◦ Reduce costs
Industry Top 5 Concerns (Initial)1. Transparency/sunshine requirements2. Comparative effectiveness research3. Medicare commission/cost-control4. Payment Reforms
D d i i5. Downward pricing pressure
Industry Top 5 Concerns (Current)1. Device tax2. Device tax3. Device tax4. Device tax
D i t5. Device tax
Takes effect January 1, 2013Based on total revenue, not profitabilityNo accommodations for small businesses Certain exemptions from tax exist (eyeglasses, contact lenses, hearings and products sold at retail*products sold at retailIRS began rulemaking process◦ Began in February, final regulations expected in FallBegan in February, final regulations expected in Fall◦ Having difficulty determining how tax will be
assessed
Efforts to repeal have gained significant momentumHouse of Representatives overwhelmingly voted for repealvoted for repeal◦ Bipartisan support for repeal (all Republicans and
37 Democrats voted for repealpSenate outlook not as positivePresident indicated veto threatFuture could rest of Supreme Court outcome
Requires disclosure of manufacturer payments d h i i hi h i lmade to physicians, teaching hospitals
(consulting fees, training, etc)CMS indicated difficulty in structuringCMS indicated difficulty in structuring regulations, essentially delayed implementation until 2013 Payment threshold: $10 per payment or $100 aggregate in a calendar yearDelayed disclosure until FDA clearance/approvalDelayed disclosure until FDA clearance/approval or 4 years after payment madeFuture could rest of Supreme Court outcome
Independent Payment Advisory Board
Comparative Effectiveness Research
Accountable Care Organizations
Payment Reform/Payment Bundling
f ll h ldFuture of all these could rest on Supreme Court Outcome
Court examining a few central issues ◦ Constitutionality of the individual mandate
Can Congress mandate individuals to purchase a product (in this case health insurance)?
If mandate question is not constitutional, can the rest of the health reform law be “severed” from the individual mandate? O d h i l d b h ?Or does the entire law need to be thrown out?
Court heard arguments in March, 2012
Decision will be announced TOMORROW
•Nothing changesLaw is upheldLaw is upheld
•Device related provisions remain•Non-insured individuals will not be compelled to
Mandate is repealed but rest
Mandate is repealed but rest
purchase insuranceof law remainsof law remains
•Device related provisions no longer in effect*•Likely action by Congress to pass popular provisions in
the law (pre-existing conditions, young adults insurance)
Entire law is repealed
Entire law is repealed
Industry has experienced considerable delays in product approvals in the past 3 5 yearsproduct approvals in the past 3-5 years
Uncertainty, unpredictability and lack of y, p yreasonableness has pervaded
More US based companies have launchedMore US based companies have launched overseas before US (if at all)
Venture capitalists have pulled away dramatically from investment in medical technology◦ Cite FDA as primary reasonp y
Extensive Survey by Stanford University
FDA Negatively impacted >75% of companies0% h d ff b h h f h◦ 50% had review staff/branch chief changes
◦ >30% stated appropriate FDA staff not present at meetingsg◦ >90% stated FDA has become more risk-adverse◦ >80% stated FDA has difficulty dealing with novel
technologies and/or indicationstechnologies and/or indications
General BackgroundCongress first gave FDA authority to collect userCongress first gave FDA authority to collect user fees for medical devices in 2002◦ Intent was to provide resources to supplement
congressional appropriationscongressional appropriationsCurrent authority expires September 30, 2012Under MDUFA II, FDA has failed to meet a number of goalsnumber of goalsSince MDUFA II, FDA’s budget for device review has increased from $120M to $292MRecent decline in FDA performance (FDA data)Recent decline in FDA performance (FDA data)◦ Average 510(K) application clearance time increased 51%◦ Average total time to approve a PMA application has
doubled (234 days in 2000 to 464 days in 2008)( y y )
Resources$595 million over 5 years◦ MDUFA I - $142 over 5 years
MDUFA II $287 million over 5 years◦ MDUFA II - $287 million over 5 yearsBulk of increase generated from lifting fee exemptions on annual registrationsexemptions on annual registrations Adjusted annually for actual inflation with 4% cap in any year Addition of 240 full-time employees for FDA
Process ImprovementsScientific and regulatory review capacity should increaseE h d i i f FDA iEnhanced training for FDA reviewers Pre-submissions: More structure and clarity will be provided to the process (includingwill be provided to the process (including establishment of meeting minutes)Submission acceptance criteria: FDA willSubmission acceptance criteria: FDA will update list of objective requirements for applicant companies
Process Improvements (con’t)G id d d l iGuidance document development: improvement of developing, tracking, updating, reviewing guidancePatient safety and risk-tolerance: requires FDA to meet with patient groups to understand tolerance for riskfor riskMandatory substantive interactions for all submissionsNo submission left behind: plan for reachingNo submission left behind: plan for reaching decisions on submissions that do not meet goals FDA will also look at “total time”
FDA Accountability MeasuresCl i f l iClear, meaningful metricsQuarterly and annual reporting◦ Updated on progress towards performance goalsp p g p g◦ Additional information
Average number of review cycles Non-substantially equivalent ratesWithdrawal rates Non-approvable rates
Annual performance report to Congressp p gIndependent evaluation of FDA’s management of the review process
Reauthorizes user-feesIncludes important FDA reforms◦ Requires enhanced scientific rationale for major
decisionsdecisions◦ Eliminates profit prohibition for Humanitarian
Device Exemption products ◦ De Novo reform: companies can seek direct review
by determining non-substantial equivalence◦ Provides specific dates to begin Unique DeviceProvides specific dates to begin Unique Device
Identification ◦ Directs FDA to improve recall system
Next legislative battles will likely focus on the t f di l dl f h lthcost of medical care, regardless of health care
reform’s future◦ Why does a hip replacement procedure cost 4-5 y p p p
more than in other countries?More pressure to prove why your product is better than existing standard of carebetter than existing standard of care◦ The era of the “me-too” product is over◦ Companies/products without significant and
compelling evidence will likely not receivecompelling evidence will likely not receive reimbursement
Evidence, evidence, evidence
Thomas C. NovelliVice President, Government Affairs Medical Device Manufacturers Associationt lli@ di ld [email protected]