Showing all posts written by Dan Fischer

Dan Fischer
Dan Fischer
Dan Fischer is an associate at our New York office. In his practice, Mr. Fischer assists clients large and small in various technological fields including metals/alloys, polymers, composites, medical devices, semiconductors, oil pipes, catalytic converters, and building construction.

Mr. Fischer received his J.D. from the University of Southern California. During law school, he worked in the USC IP and Tech clinic.

Before attending law school, Mr. Fischer attended the University of Illinois and received a B.S. in Materials Science Engineering with concentrations in biomaterials and polymers. Mr. Fischer also worked in the Materials Lab at FermiLab.

Mr. Fischer worked as a summer associate at the firm in 2010 and joined the firm as an associate in 2011.
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The Medical Device Tax Lives On

For opponents of the 2.3 percent medical device tax, it looked like the repeal/replacement of the Affordable Care Act would alleviate their concerns.  However, following the failure of repeal legislation that would have killed off, or delayed, the tax, the tax is on pace to be reinstated on January 1st, 2018 after a two-year gap.

Regardless of the status of the Affordable Care Act, news articles have indicated that companies and lawmakers opposed to the tax are considering pursuing a number of different options, such as adding tax delay language into other bills.  Accordingly, a group of conservative action groups are pushing Congressional leaders to pursue a repeal of the tax, including preparing a letter to House speaker Paul Ryan and Senate majority leader Mitch McConnell.  Further, the Advanced Medical Technology Association will be running digital and social media ads throughout this month in a number of states, hoping for tax repeal once lawmakers are back in session in September.

While it can be difficult to truly define a correlation between job performance and the medical device tax, a member survey performed by the Medical Device Manufacturers Association found that 70% of companies added jobs in 2016-2017 and R&D increased by 19% on average.  On the other hand, in 2015 the Congressional Research Service found that there were no significant losses due to the tax.

According to news sources, the tax applies to hospital and physician medical equipment, but excludes many consumer medical items (eyeglasses, hearing aids, etc.).

 

Medtronic’s Recent Interactions with the FDA

It has been a busy couple of months between Medtronic and the Food and Drug Administration (FDA), with Medtronic experiencing both recalls and approvals from the government agency.  Below is a brief summary of some recent of Medtronic’s recent interactions with the  FDA.

First, in early April, the FDA announced that Medtronic was notifying customers of a voluntary field corrective action for its Newport HT70 and HT70 Plus ventilators over the potential for unexpected shutdowns, which it believes are due to software issues in the devices.  MassDevice reports that is recalling well over 7,000 of the affected devices.

Next, the FDA cautioned healthcare providers against using Medtronic’s NavLock Tracker with instruments not cleared to be used with the device.  The NavLock Tracker is an accessory to Medtronic’s StealthStation navigation system for use during spinal fusions.  As a result, Medtronic is updating its labels on the devices to indicate that only Medtronic instruments should be used.

In early May, Medtronic received official FDA approval for a new drug-eluting stent (DES) known as Resolute Onyx.  According to FierceBiotech, the stent is formed from a single strand of a cobalt alloy wire with a platinum-iridium core and can provide physicians with stent sizes up to 4.5-mm and 5.0-mm.  This newly approved stent is available for use in the United States, Europe, and countries that recognize the Conformité Européene (CE) mark.

In addition, Pat Shrader, Medtronic’s Vice President of Global Regulatory Affairs, appeared on Capital Hill to request changes in device manufacturing facility inspections by government officials due to the short notice that the manufacturing facilities receive prior to inspection.  Shrader was speaking on behalf of the Advanced Medical Technology Association, which includes other companies such as 3M, St. Jude Medical, and Boston Scientific.  Ms. Shrader called for standardization of inspections by the FDA.

Potential Repeal of Medical Device Tax

With the upcoming Republican-dominated Presidency and Congress in 2017, the Affordable Care Act, or at least parts of it, look to be on the chopping block.  One of the changes that may be forthcoming is a repeal of the 2.3% medical device excise tax.  While currently being suspended through 2017, under the present law the medical device tax would be reinstated in 2018.

Some producers of medical devices hope that the tax is never reinstated. Mark Throdahl, president and CEO of OrthoPediatrics Corp., a northern Indiana based orthopedic company, has said that the suspension of the tax allowed the company to hire new workers and hopes for a full repeal after the Republican transition.  According to Throdahl, the tax led to a hiring freeze, and suspension of the tax allowed  for them to resume “an aggressive pace of hiring and investment.”  Complaints from companies like OrthoPediatrics, as well as medical device associations like AvaMed, were what led to the initial temporary suspension of the tax.

Immediately after Donald Trump‘s election victory, AvaMed President Scott Whitaker wrote in a letter to Vice President-elect Mike Pence:

The medical device tax has been a significant drag on medical innovation, and resulted in the loss or deferred creation of jobs, reduced research, spending and slowed capital expansion.

According to some lawmakers, lobbyists, and industry executives, Trump and U.S. lawmakers will likely repeal the tax which could help some of the larger medical device manufacturers such as Medtronic, Boston Scientific, St. Jude Medical, and Johnson & Johnson.  Senate Republican Leader Mitch McConnell has stated that repealing the Affordable Care Act will be one of the first order of business starting in January.   Senator John Barrasso (R-Wyoming) has also stated that the medical device tax would likely be repealed.

There are still a number of decisions on how to approach the repeal of the medical device tax, whether in one single bill to repeal the Affordable Care Act or a number of smaller bills removing different parts of the Act.  We should be receiving more clarity once President-elect Donald Trump officially takes office.

Repeal of the tax may remove approximately $2.5 billion of annual federal funding.

Isto Holdings Acquires Arteriocyte To Form Isto Biologics

Isto Holdings, the parent company of Isto Technologies, has acquired Massachusetts based Arteriocyte Medical Systems Inc. and the two companies will be combined under the name Isto Biologics under the current CEO of Isto Technologies, George Dunbar.

According to its website, Isto Technologies is a medical device company involved with bone and cartilage repair and regeneration. Public records indicate that there are several pending patent applications listing Isto as the applicant.  According to its website, Arteriocyte focuses on improving surgical outcomes and there are several patents and applications listing Isto as the applicant covering a number of technologies, such as centrifuge systems and autologous fibrin sealants, to name a few.

Accordingly, Isto Biologics’s expanded product portfolio will now include Arteriocyte’s MAGELLLAN autologous platelet separator with Isto’s bone-growth and cell therapy products including InQu bone graft extender and substitute, Influx natural bone-grant material, and CellPoint concentrated bone marrow aspirate system.

Thompson Street Capital Partners, which acquired the commercial operations of Isto in June of this year, provided capital for the transaction.  According to Anthony Chambers, Director at Thompson:

We’re excited to bring together two great organizations under the Isto umbrella and build upon their leading biologics platforms.

At this time, the terms of the acquisition deal have not been disclosed. While the combined company will be headquartered in St. Louis under CEO George Dunbar, Isto’s base of operations, they will maintain operations in Massachusetts.

FDA Releases Draft Guidance for Unique Device Identifiers

The FDA has just released draft guidance for unique device identifiers (UDIs) tracking medical devices from their manufacturers to the end users.  Specifically, the FDA is providing guidance to device the content and form of UDIs that was lacking (or at least unclear) in the original FDA UDI rule which was published on September 24, 2013.

UDI laws are currently listed under 21 CFR 801.20, and every medical device in commercial distribution is required to have a UDI, unless an exception or alternative applies (for example if the UDI is not technologically feasible).  They must be given by an official UDI Issuing Agency that is in line with international standards for medical devices.

The UDI rule began applying to Class III devices in 2014 and implantable, life-supporting and life-sustaining devices in 2015.  Class II devices will be in compliance this year, and Class I and non-classified devices will need to have them in 2018.

In this updated draft guidance, the FDA has clarified what forms that the UDI are required to be on medical device packaging.  Specifically, the guidelines clarify that the UDIs must be present in two forms on the label and device packing: 1) “easily readable plain-text” and 2) automatic identification and data capture (AIDC) technology.  The UDI then must be submitted to the Global UDI Database.

The guidelines provided further information on a number of other topics as well.  For example, the guidelines clarified the AIDC technology should be read by a barcode scanner or similar technology, and the UDI may be split into multiple segments on medical device packaging.  Moreover, multiple types of AIDC technology can be used on a device label, both representing the same UDI.  However, if the UDI is not visible to the human eye, the packaging must disclose that there is the presence of AIDC technology.

The guidance further discussed the specific content of the UDIs, including device and product identifiers as well as data delimiters, and the particular ordering of such information on the packaging.

The FDA providing guidance to the UDI Rule is not uncommon, as a number of other guidances have been issued, such as the guidance issued on June 27, 2014 regarding the Global Unique Device Identification Database and the general guidance issued on August 20, 2014.  As this is a complex and important issue, the FDA contains FAQ pages for any questions medical device manufactures may have.

The draft comments will be open for comment for 60 days, and both written and electronic comments are accepted.

Abbott to Acquire St. Jude Medical for $25 Billion

A burst of potential acquisitions and consolidations occurred on April 28th in the medical device world, the largest being Abbott Laboratories‘ deal to acquire St. Jude Medical Inc.  The deal is for $25 billion dollars and would bring together two of the leaders in cardiac-related medical devices.  It allows Abbott to boost its medical-device sector to compete with competitors Medtronic PLC and Boston Scientific Corp.

In particular, according to press releases, St. Jude has a strong portfolio in heart failure devices, atrial fibrillation, and cardiac rhythm management which will complement Abbott’s portfolio of cardiac intervention devices and transcatheter mitral repair.  Certain medical devices produced by both companies can be used to alleviate the burden of cardiovascular disease, where more than 40% of adults are expected to experience some sort of cardiovascular disease by 2030.

According to Abbott’s Chairman and CEO, Miles D. White,

“The combined business will have a powerful pipeline ready to deliver next-generation medical technologies and offer improved efficiencies for health care systems around the world.”

However, investors do not appears nearly as confident as Abbott’s stock fell by nearly 6 percent after the acquisition.

Abbott further has a pending deal to acquire the diagnostics company Alere Inc. for $5.8 billion.  Other deals included Sanofi SA’s offer to purchase Medivation Inc. and AbbVie Inc.‘s offer to purchase Stemcentrx Inc.  These consolidations appear to be attempts to improve negotiating power of the companies with hospitals.

Class Action Lawsuit Filed Against Fitbit

Fitbit, Inc., a manufacturer of wearable health technology, is involved in a national class action lawsuit filed on January 5, 2016 in the Northern District of California over two of its wristbands, the Charge HR and the Surge, based on their “PurePulse” LED-based technology used for tracking heart rates.  Generally, the lawsuit alleges that the heart-rate monitor used in those wristbands, advertised under the now amusing tag line “every beat counts,” does not monitor heart beats correctly.  This allegedly especially occurs during times of intensive exercise.

In a statement to ArsTechnica responding to the lawsuit, a Fitbit spokesperson wrote, “We do not believe this case has merit.  Fitbit stands behind our heart rate technology… [b]ut it’s also important to note that Fitbit trackers are designed to provide meaningful data to our users to help them reach their health and fitness goals, and are not intended to be scientific or medical devices.”  Further, Fitbit released another statement after the lawsuit saying that “PurePulse provides better overall heart rate tracking than cardio machines at the gym.”

Fitbit is also involved in another class action lawsuit filed in May 2015 regarding its sleep tracking data, and is also involved in several suits against rival wearable-device maker Jawbone.

Edwards Completes Acquisition of CardiAQ

According to PRNewswire, Edwards Lifesciences Corporation recently completed its acquisition of CardiAQ Valve Technologies, Inc, a developer of transcatheter mitral valve replacement systems, which follows from Edwards’ acquisition agreement announced last month.  The article reports that Edwards paid $350 million cash for CardiAQ at closing, with an additional $50 million to be paid upon reaching a European regulatory milestone.

Michael Mussallem, Edwards’ Chairman and CEO, stated:

We look forward to the CardiAQ team joining Edwards.  We believe the combined knowledge and efforts of the talented CardiAQ and [Edwards’ own] FORTIS transcatheter mitral valve system teams will help us advance a therapy that offers a meaningful solution for patients.

Marketwatch reports that none of CardiAQ’s valve systems are presently approved for sale in any country.  However, according to PRNewswire CardiAQ has received U.S. FDA Investigation Device Exemption approval to conduct an early feasibility study of up to 20 patients, and also plans to initiate a CE Mark study in Europe.

UW Donation to Morgridge “Fab Lab” For Medical Device Innovations

University of Wisconsin-Madison alums, Dr. James Berbee and Karen Walsh, have agreed to a five-year, $300,000 gift to the Morgridge Institute for Research through their Berbee Walsh Foundation.  According to the press release, their intention is to “create a prototype pathway for clinical devices between University of Wisconsin-Madison clinicians, students and the Morgridge Advanced Fabrication Laboratory, or ‘Fab Lab.'”

According to its website, Morgridge provides research assistance in a number of medical device areas, including regenerative biology, medical engineering, and core computation.  The website states that some projects currently in the works are more effective ways to maintain health of organs prior to transplant, feedback sensors to warn of the possibility of injury when installing breathing tubes, and a multi-source x-ray tube. Berbee and Walsh’s donation provides the ability for students to be full members of the Fab Lab team, instead of one-time participants, thus allowing them to work closely with clinicians throughout the process.

According to Morgridge CEO Brad Schwartz:

“What’s really exciting about this project is its potential to improve patient care by unlocking great ideas from people at the front lines of medical care”

Further, according to Kevin Eliceiri, the interim director of Morgridge Medical Engineering and the Fab Lab: “I expect this program to have a great impact and generate a fair amount of intellectual property.”  For example, participants can tap into the well-established connections with the Wisconsin Alumni Research Foundation for timely IP support.

The press release notes that Dr. Berbee was an engineering graduate who founded the Berbee Information Networks in Madison in 1993, now owned by CDW, and got involved with Morgridge as he received help from the Fab Lab for early prototypes of his new otoscope. Walsh was an assistant dean at the UW-Madison College of Engineering and helped launch the schools first-ever campus innovation prize, the School’s Prize for Creativity.

Medical Device Tax Repeal Heating Up

Following up on the hearing from B. Braun Medical Inc. advocating for the repeal of the medical device tax, according to news sources, more than a dozen House Democrats are pressuring leadership to advance a bill repealing ObamaCare’s medical device tax before Memorial Day (May 25).  Leading the charge is Representative Scott Peters (Calif.), who, in a letter dated May 1, urged a “timely passage” of H.R. 160, the Protect Medical Innovation Act, to Speaker John Boehner and Minority Leader Nancy Pelosi.  According to Peters:

As companies look to make cuts to offset the tax, one of the first items to go is research and development.  This undermines the future of the industry, and puts the discovery of new breakthrough medical technologies at risk.

While the repeal of the tax is receiving bipartisan support , the Obama administration is likely to oppose the repeal unless lawmakers can find a way to make up the cost, an estimated $26 billion over the 2015-2024 period according to a report by the Center on Budget and Policy Priorities.  Further, it seems unclear whether there is enough debate time in order to meet Representative Peter’s Memorial Day deadline.  However, it seems clear that at least one major push to repeal the tax will be coming soon.

Shift Labs Continues Trend Toward Consumer Wireless Healthcare Devices

The medical device market is expanding into more private healthcare products in hopes of bringing healthcare directly to the user.  For example, the increase in popularity of wearable diagnostic devices, such as FitBit, and Apple’s recently released ResearchKit, turning iPhones into medical devices, illustrate that users are ready to look after their own health.

Following this trend, Medical device startup Shift Labs is launching this Spring with a lofty goal: to be “the Nest of medical devices.”  Founded by Human Centered Design & Engineering Professor Beth Kolko along with Koji Intlekofer, Shift Labs is looking to provide products to the rapidly expanding market of home healthcare programs, outpatient clinics, and emerging international locales.

According to founder Koji Intlekofer:

The places where healthcare is growing fastest is outside of traditional hospital settings.

Shift Labs aims to pioneer a new “middle class” of medical device offerings, and provide products outside the hospital setting.  According to founder Beth Kolko,

There is no reason why we can’t make products for nurses and medical practitioners that they enjoy using.  But no one is building products for the people who are going to be providing the care.

 

According to its website, Shift Labs’s first product is the DripAssist, a simple, low-cost take on an infusion pump for monitoring IV drips, which runs on a single AA battery.  By contrast to typical infusion pumps, which can cost anywhere from $5,000 to $15,000, this patent-pending pump has a suggested retail price of only $225.  The DripAssist does not pump fluid in the conventional sense.  Instead, it monitors the rate of an IV drip and sounds an alarm if the pace is outside particular threshold values.

The DripAssist is currently being sold in select international markets and for veterinary usage.  Shift Labs is still in the process of securing FDA clearance to sell the DripAssist in the United States.  USA Today reports that Shift Labs’s next projects in the pipeline are an oxygen monitor, a cooling system for vaccines, and a device to pasteurize breast milk.

Shift Labs states that it received initial startup capital from Y Combinator, which provides seed funding and mentorship for early-stage startups.  Other notable companies seeded by Y Combinator include Reddit, Airbnb, Hipmunk, and Dropbox.

First Flexible Tip Ablation Catheter To Receive FDA Approval

St. Jude Medical, Inc. recently announced that the U.S. Food and Drug Administration (FDA) has approved its FlexAbility Ablation Catheter for use by electrophysiologists to treat cardiac arrhythmia.

The new catheter provides a unique bendable irrigated catheter tip that allows the catheter to better conform to the cardiac anatomy and more effectively form lesions during operation.  According to St. Jude Medical, the FlexAbility catheter also has an improved handle and shaft that enhance maneuverability, allowing electrophysiologists to reach challenging anatomical locations with less hand fatigue.

St. Jude’s new catheter could provide benefits to an estimated 10.4 million people in the United States who suffer from some type of cardiac arrhythmia.  According to Dr. Andrea Natale, executive medical director at the Texas Cardiac Arrhythmia Institute:

“The FlexAbility catheter is the only ablation catheter with a flexible tip available to electrophysiologists in the United States today.  For the past several years we’ve been looking for a catheter that provided a gentler, more optimal approach to ablation.  The FlexAbility catheter addresses this need and provides me with another safe treatment option for my patients”

MarketWatch reports that the FDA approval of the FlexAbility catheter, which received its CE Mark in Europe last year, bolsters St. Jude Medical’s expanding ablation portfolio, which includes various patents such as U.S. Pat. No. 8,790,341, and expands the ability of physicians to treat patients battling abnormal heart rhythms.