“It’s like a raccoon in a garbage can, looking to find anything digestible.”
The atmosphere was dark and stormy inside the John F. Kennedy Presidential Library & Museum yesterday — to say nothing about the downpour outside — as 320 members of the Massachusetts Medical Device Industry Council (MassMEDIC) were treated to a morning of sobering news.
Not that it’s likely any of them needed the reminder.
If you want a good snapshot of what’s going on in the medical device industry, just look at Bedford’s Hologic Inc., which took an enormous, $2.34 billion hit to its bottom line Monday after being forced to push back the release of its new 3-D mammography system.
The company, which makes diagnostic tests and imaging equipment for women’s health, says its new Tomosynthesis imaging system can detect breast cancer much earlier than other tests on the market. But the firm has been mired in what it calls the “ever-changing landscape of federal Food and Drug Administration personnel and regulatory requirements” for more than a year as it seeks pre-market approval for the device.
The federal watchdog agency “created considerable complexity in the approval process,” Hologic said, forcing the company to postpone a panel date with the FDA for the near future. Instead it will use the time to conduct more clinical trials, as it waits for President Barack Obama’s administration to “stabilize internal issues, resources and requirements” at the agency.
It’s no help that the market for capital equipment is running on fumes, as hospitals slash budgets and lay off staff to cope with lower admissions, fewer elective procedures and less institutional investment income. Or, as Ernst & Young analyst Richard Ramko told attendees, “It’s the perfect storm within the hospital sector.”
That means companies like Hologic, looking to market high-end imaging systems in the U.S. hospital market, are in for a lot more stormy weather.
I told you those guys ain’t us
If you’re a pharma rep, your ears must have been burning yesterday. On several occasions, speakers expressed frustration at having medical device companies lumped in with their pharmaceutical brethren as state, federal and international governments look to rein in industry’s influence over physicians.
“We have to do a better job of explaining the differences between the pharmaceutical industry and the medical device industry,” Eucomed chief executive John Wilkinson told the crowd. “The people regulating us have to understand that we have a relationship with clinicians that is very different (than the pharmaceutical industry). If we can’t have this relationship with the clinicians, then innovation isn’t going to happen.”
Ubl called attention to the issue as well: “It’s a constant challenge to distinguish the difference between pharma and medical device.”
A little wonk with your croissants
While the conference was short on food (the mini-croissant leaves much to be desired), it was long on policy issues. Ubl outlined a series of healthcare reform initiatives under way in Washington, from preemption, to MedPac, to policy shifts at CMS. The gist of his presentation was that healthcare reform is coming, it’s coming fast and it’ll likely be here by the end of the summer or the fall.
“We’re fairly bullish about this actually happening,” said Ubl, who told the crowd that Democrats holding the reins of power brings a host of issues for the industry. Not least of which, he said, is the general perception that the Dems are “traditionally more suspicious of business in general and healthcare specifically.”
If that’s not enough of a warning, Ubl added, “There’s some members of Congress who don’t believe people should make a profit in health care.”
For the record, Ubl was quick to point out that both he and AdvaMed are agnostic when it comes to party affiliation.
Stay tuned, as it looks like its going to be a long, hot summer on Capitol Hill.