An internal Food & Drug Administration memo leaked by the Wall Street Journal indicating that the Food & Drug Administration plans to tighten up its 510(k) approval process for medical devices has industry leaders expressing concern.
According to the memo, written by FDA device evaluation office head Donna-Bea Tillman, the agency is already clamping down on the 510(k) process, by which the majority of medical devices are approved.
“It’s Autumn, and change is in the air. This is particularly true for our 510k program,” Tillman wrote, according to the Journal, adding that in order to “get a better lay of the land” branch chiefs are now required to pass along applications for devices with a new “indication” or use “that you have never cleared for that device type.”
That’s a deviation from former FDA protocol, two FDA scientists told the newspaper. But new protocol is “just the first of what I am sure will be many things that we will be doing to strengthen the 510k and all of our other programs in the months ahead,” Tillman wrote.
Thomas Sommer, president of MassMEDIC, the Massachusetts medical device industry council, told MassDevice that the 510(k) procedure, which is used for devices that are “substantially equivalent” to products already on the market, is one of the world’s most stringent approval processes.
“Our concern as an industry is that this change in protocol will bring us back to the days in the mid-1990s when 510(k)s took well over a year for FDA to clear,” Sommer told us. “This industry is one of the most heavily regulated industries. It complies with FDA guidelines and regulations on everything from developing products to manufacturing to marketing and sales. Companies do a very good job of complying with a vast web of regulations.
“Our companies already comply with the toughest product review protocol in the world. It’s viewed as the gold standard and most companies are delighted to go though the process, because it means they have achieved the highest certification of safety and effectiveness in the world.”
A Johnson & Johnson spokeswoman sounded a similar note in speaking with the Journal, saying that adding evidentiary requirements to the 510(k) process “would raise development costs substantially while also creating barriers to market entry that would reduce competition.”
The FDA, in addition to its own internal review of the process, commissioned the Institute of Medicine for a $1.3 million study examining whether the 510(k) process protects patients and promotes innovation and what changes, if any, are needed.
Another closely watched issue is a proposed 10-year, $40 billion tax on medical device makers included as part of the healthcare reform push in Washington. The national medical device industry council, AdvaMed, issued a study today claiming that the proposal would double the industry’s existing tax burden.
The study, by Robert Carroll, former U.S. Treasury Dept. tax analyst and Tax Foundation senior fellow, found that the proposed tax would increase the medical device industry’s tax rate from 23 percent to nearly 50 percent.
That, in turn, is likely to shift innovation overseas, according to the report, and could also drive up healthcare costs as the tax increase is passed on to medical device firms’ customers.
Its most onerous impact would be on fledgling device firms that aren’t yet showing a profit, AdvaMed president and CEO Stephen Ubl said in a statement. That’s because nearly 3,000 device makers with no profits would be due to pay a total of $600 million in annual taxes under the proposal, according to the study.