Showing all posts written by Neil Anderson

Neil Anderson

Trump’s Chinese Tariffs Could Cost Medical Device Makers $138 Million Per Year, MITA Says

President Donald Trump’s 25 percent tariffs on Chinese imports went into effect on July 6, a move that, according to industry experts, could have wide-ranging effects on American medical device manufacturers.  In early April, RBC Capital Markets estimated the proposed tariffs could cost the entire medical device industry up to $1.5 billion each year.  A more recent survey conducted by the Medical Imaging and Technology Alliance (MITA), an organization that represents medical imaging and radiopharmaceutical  manufacturers, projected that the tariffs will cost American medical manufacturers more than $138 million this year.  According to MITA, CT scanners and other radiographic imaging devices could be impacted the most by the new tariffs. 

The Trump Administration’s original tariff list included more than 1,300 items, of which 30 were finished medical device products, including pacemakers, ultrasounds, CT scanners, needles, catheters, radiation therapies.

Patrick Hope, Executive Director of MITA stated:

“These tariffs on imaging products or their components will harm the American medical technology sector’s ability to stay competitive and will adversely affect the U.S. economy in ways that could compromise patient access to care.  Though the Administration has stated that it will implement an exemption process, we have not yet seen any information about how or when it will do so. Policymakers should act quickly to ensure that patient access to innovative life-saving technology is not compromised.”

MITA has commented to U.S. Trade Representatives that many medical imaging products undergo “inter-company transfers,” meaning the products are imported from a manufacturer in China to a facility in the U.S., where they are transformed and re-exported, sometimes to China.  In these cases, the tariffs present a major disincentive to manufacturing the products in the United States.

MITA hopes it can convince U.S. Trade officials to develop a “robust exemption process” for medical imaging products and components.  Patrick Hope stated:

“[W]hile we are encouraged that the Administration has shown openness to making adjustments to the list, we first need a clear explanation of the process we should use to make our case to the government to ensure that American innovation can continue to thrive.”

Although AdvaMed, an international trade association for medical technology, claims to have successfully lobbied to remove some types of medical devices from the tariff list, an AdvaMed representative declined to reveal which devices had been removed.

FDA Provides Guidance on 3D-Printed Medical Device Products

The U.S. Food and Drug Administration released finalized guidance regarding 3D printing in medical devices.  The guidance document, which issued on December 5, 2017, is based on the FDA’s review of more than 100 devices currently on the market that are manufactured using 3D printers.  Importantly, many of these devices can be tailored to fit a specific patient’s anatomy.  For example, the FDA has reviewed 3D-printed knee replacements and implants for facial reconstruction.

The new guidance gives the FDA’s recommendations regarding the content of FDA submissions, device testing, and manufacturing considerations for 3D printed devices.

In a press release announcing the new guidance, FDA Commissioner Scott Gottlieb stated:

[This guidance] will help manufacturers bring their innovations to market more efficiently by providing a transparent process for future submissions and making sure our regulatory approach is properly tailored to the unique opportunities and challenges posed by this promising new technology.

The new guidance comes on the heels of recent FDA approvals for several 3D-printed devices, including Medicrea’s 3D-printed titanium interbody device for spinal surgery.  The FDA also recently approved a 3D-printed drug tablet, the epilepsy drug Spritam, marketed by Aprecia Pharmaceuticals.

Commissioner Gottlieb further opined that “3D printing is certain to alter the daily practice of medicine where patients will be treated with medical products manufactured specifically for them.”  He noted that 3D printing could one day be used to treat burn patients by printing their own skin cells onto their wounds or used to grow replacement organs.

Commissioner Gottlieb noted, however, that the FDA’s new guidance is intended only “to provide the FDA’s initial thoughts on an emerging technology” and that the FDA’s recommendations likely will change as 3D-printing technology develops.

FDA Approves First-Ever Mobile App for Addiction Treatment

FDA Approves First-Ever Mobile App for Addiction Treatment

The FDA recently approved the marketing of the first-ever prescription digital therapeutic to be used in the treatment of substance use disorder (SUD).

The reSET® mobile app, developed by Pear Therapeutics, is approved to assist individuals undergoing outpatient therapy for alcohol, cocaine, marijuana, and stimulant addictions.  The application is not intended for use in treating opioid dependence, however.

The reSET® application is designed to provide a form of treatment called cognitive behavioral therapy.  It teaches SUD patients practical skills that help them abstain from using drugs and stick with their rehab programs, and provides a series of reward-based incentives.  reSET® is not approved as a standalone treatment.  Instead, it is designed to be used in conjunction with outpatient addiction therapy.

“This is an example of how innovative digital technologies can help provide patients access to additional tools during their treatment,” said Carlos Peña, Ph.D., M.S., director of the Division of Neurological and Physical Medicine Devices in FDA’s Center for Devices and Radiological Health.  “More therapy tools means a greater potential to improve outcomes, including abstinence, for patients with substance use disorder.”

reSET® was reviewed through the FDA’s de novo premarket review pathway, a regulatory scheme for low- to moderate-risk devices for which there is no legally marketed predicate to which the device can claim substantial equivalence.  The FDA reviewed data from a multi-site, unblinded 12-week clinical trial of 399 patients.  In this trial, patients with alcohol, cocaine, marijuana, and stimulant SUD who used reSET® demonstrated statistically significant greater adherence to abstinence (40.3 percent) compared to patients not using reSET® (17.6 percent).

Corey McCann, President and CEO of Pear Therapeutics stated in a company press release:

We believe that prescription digital therapeutics hold promise in improving patient outcomes across a wide range of central nervous system disorders including psychiatry, neurology and pain, and will become a vital part of tomorrow’s treatment paradigm across all disease areas.

Regulatory approval of reSET® may represent an important step forward in the use of mobile applications to treat people with psychological, neurological and substance abuse disorders.

Trump Administration Policy Statement Calls for FDA Premarketing Activities to be Funded Entirely by Industry Fees

The Trump White House released a Statement of Administration Policy on Wednesday in response to the House of Representatives’ passage of H.R. 2430, a bill that would reauthorize the use of four FDA user fee programs: the Prescription Drug User Fee Act, the Medical Device User Fee Amendments, the Generic Drug User Fee Amendments, and the Biosimilar User Fee Act.

 

The Trump Administration’s Statement includes the following recommendation:

 

“The Administration urges the Congress to provide for 100 percent user fee funding within the reauthorized programs.  In an era of renewed fiscal restraint, industries that benefit directly from FDA’s work should pay for it.”

 

This call for the FDA to be fully funded by user fees paid by medical-device and pharmaceutical companies echoes previous statements from the Trump White House.  In May, the Trump Administration released its budget proposal for Fiscal Year 2018, which called for the elimination of federal funding of premarketing review programs at FDA.  Trump’s budget proposed that FDA user fees should be recalibrated from approximately $1.2 billion in 2017 to over $2.4 billion in 2018.  The FDA currently receives about 60% of its funding for premarketing review from user fees.

 

Scott Gottlieb, the newly confirmed FDA commissioner, has expressed his support for increasing user fees as a way for funding FDA activities.  FDA’s budget request for 2018 seeks $3.2 billion in user fees—a reported increase of 68 percent from 2017 levels.

 

Some industry experts have expressed concern that a large increase in FDA user fees could discourage innovation and keep smaller companies such as digital startups from entering the market. Increasing FDA user fees would also complicate existing user fee agreements that FDA negotiated with the medical device industry last summer.

 

While the future of user fees remains uncertain, the Trump Administration and FDA’s persistence in calling for higher user fees suggests that fee hikes could be looming—a development that could have major effects on the medical device industry.

Obamacare Replacement Would Repeal Medical Device Tax

Republican lawmakers recently proposed a replacement of Obamacare known as the American Health Care Act (AHCA).  One provision of the proposed legislation would permanently repeal Obamacare’s 2.3% medical device excise taxBeginning in 2013, manufacturers and importers of certain medical devices were required to pay a 2.3% tax on sales of these devices.  Although the medical device tax was suspended for 2016 and 2017, it was set for reinstatement in 2018.

Introduction of the AHCA is not the first time that lawmakers and industry lobbyists have attempted to permanently repeal the medical device tax.  For example, in January 2017, a group of more than 220 Representatives introduced a bill in the House of Representatives that sought to repeal the tax.  In introducing that bill, Rep. Erik Paulsen (R-MN) released a statement citing improvements in the industry after temporarily suspending the tax:

We are already seeing new American jobs and increased investment in research and development as a result of the temporary suspension of this tax. With over 200 cosponsors at the start of this new session, and with overwhelming bipartisan support, permanent repeal should be a top priority for Congress.

Beyond repealing the medical device tax, the Washington Post reports that the AHCA seeks to repeal a wide array of taxes that were expected to cost insurance, medical device, and other healthcare companies billions of dollars over the next decade.  Indeed, according to the Joint Committee on Taxation the 2.3% medical device tax, alone, was expected to cost these companies $20 billion over the next ten years.

Medical device industry representatives are encouraged by the prospect of a full repeal of the medical device tax.  Scott Whitaker, CEO of the trade association AdvaMed stated:

Repealing the tax will provide medical technology innovators with the long-term certainty necessary to support future job growth and sustainable, cutting-edge R&D that will ultimately lead to the next generations of breakthroughs in patient care and treatment. We urge the House and Senate to act expeditiously to pass this important legislation.

First FDA Approval of Closed-Loop Insulin Pump

First FDA Approval of Closed-Loop Insulin Pump

Medtronic’s MiniMed 670G system was recently approved by the FDA – this marks the first-ever FDA approval of a hybrid closed-loop insulin delivery system.  Medtronic explains that the system uses a computer algorithm in combination with a wearable glucose monitor that automatically measures glucose levels every five minutes after which it automatically administers any insulin needed by the patient.  While the system does not completely automate insulin management—users still have to enter mealtime carbohydrates and must periodically calibrate the sensor, among other tasks—nevertheless, Lori Laffel, an endocrinologist at Harvard University’s Joslin Diabetes Center, says that the approval was a “big step forward.”

According to Medtronic, the MiniMed 670G system features Medtronic’s SmartGuard HCL algorithm and new Guardian Sensor 3, which can be worn continuously for up to seven days.  The system is approved for the treatment of type 1 diabetes in individuals fourteen years of age or older and provides continuous delivery of basal insulin (at rates selectable by the user) and administers insulin boluses (in amounts that can also be adjusted by the user).  According to the U.S. Centers for Disease Control and Prevention, approximately 5% of people with diabetes have type 1 diabetes, which is also commonly referred to as “juvenile diabetes.”

Richard M. Bergenstal, M.D., the principal investigator of the pivotal study and executive director of the Park Nicollet International Diabetes Center in Minneapolis, states:

With SmartGuard HCL, the ability to automate basal insulin dosing 24 hours a day is a much-anticipated advancement in the diabetes community for the profound impact it may have on managing diabetes—particularly for minimizing glucose variability and maximizing time in the target range.

Following Medtronic’s recent approval, experts and analysts have also opined on what future insulin delivery systems could provide.  For example, Aaron Kowalski, PChief Mission Officer and Vice President of Research at JDRF, an organization dedicated to type 1 diabetes research, states:

This is a fantastic step forward, but we are not done, JDRF will continue supporting other artificial pancreas advancements and advocating for broad access to this life-changing technology.  Next generation systems are in the pipeline that could provide even better outcomes with less burden.

 

First-Ever FDA Approval of Liquid Biopsy for Detecting Lung Cancer

The New York Times reports that Roche, a Swiss biotech company, recently received the first-ever FDA approval for a “liquid biopsy” test for diagnosing non-small cell lung cancer (NSCLC).  The Times reports that while the test may not be perfect, it was able to produce results that generally agree with those of an invasive tumor biopsy.  NSCLC is recognized as the most common form of lung cancer, accounting for approximately 85% of all detected lung cancers.  Therefore, the market for Roche’s test is likely robust.

According to Roche, the approved cobas® EGFR Mutation Test v2 detects mutations of epidermal growth factor receptor (EGFR) genes in a patient’s blood sample.  While oncologists have traditionally relied on medical imaging or invasive surgical biopsies to detect cancer, in an effort to avoid unnecessary biopsies and find cancer earlier, researchers are now seeking to develop tests to detect cell-free DNA biomarkers that are indicative of cancer.  Although some liquid biopsies have been commercially available for years, these DNA-based tests have long been considered a “regulatory blind spot” of the FDA.
In an FDA press release regarding the approval, Alberto Gutierrez, Director, Office of In Vitro Diagnostics and Radiological Health, Center for Devices and Radiological Health at the FDA states:

Approvals of liquid biopsy tests make it possible to deliver highly individualized health care for patients.  Liquid biopsies also have the potential to allow physicians to identify patients whose tumors have specific mutations in the least invasive way possible.

The FDA specifically identified that Roche’s liquid biopsy can now be used as a blood-based companion diagnostic for Genetech’s cancer drug Tarceva (erlotinib), which was approved in 2013 as a first-line treatment for patients with metastatic NSCLC whose tumors have EGFR exon 19 deletions or L858R substitution mutations, the same genetic mutations identified by Roche’s new test.

Medical professionals appear accepting of the new technology and excited regarding the role it could fill in patient treatment – Dr. Benjamin Levy, MD, Director of Thoracic Medical Oncology at Mount Sinai Health Systems and Hospital said:

The advent of liquid diagnostic platforms in non-small cell lung cancer is truly a game changer in the diagnostic workup of advanced stage patients. The ability to both isolate and genetically interrogate tumor DNA from a simple minimally invasive test that can subsequently inform treatment decisions is a win for both physician and patient.

Stryker’s Next Acquisition – Physio-Control

Medical device maker Stryker Corp. recently announced that it will buy Physio-Control, a manufacturer of emergency defibrillators and other emergency medical response products based in Redmond, Washington. According to Stryker’s press release, the deal is a $1.28 billion all-cash acquisition and is expected to close at the beginning of Q2 2016.

Physio-Control opened its doors in 1955.  Since then, Physio-Control reports that it has become one of the Seattle area’s largest medical device manufacturers — it currently employs more than 1,400 people globally and posted $503 million in revenue in 2015.  Stryker explains that the acquisition permits Stryker to expand its emergency medical services (EMS) business both domestically and abroad (specifically in Europe).  Regarding the deal, Stryker Chairman and Chief Executive Officer Kevin Lobo states:

Physio-Control’s focused strategy and their culture will fit well within the EMS business of our medical division, further leveraging our existing call pattern. We look forward to welcoming the Physio-Control team to Stryker.

Stryker’s acquisition of Physio-Control follows on the heels of its recent agreement to purchase Sage Products LLC for $2.78 billion in cash and its recent agreement to purchase Synergetics USA, Inc.’s neuro portfolio in another all-cash transaction.  Moreover, as reported by the Venture Capital Post, Stryker has said that more deals will be done by the company soon.  Mr. Lobo has been quoted as saying that:

One of the reasons to postpone the share repurchase program was to make sure we still have the capacity, so this will not be the last deal that we do.

 

NuVasive Receives First-Ever 510(k) Clearance for a Cervical Corpectomy Cage

NuVasive Receives First-Ever 510(k) Clearance for a Cervical Corpectomy Cage

Spinal device specialist NuVasive recently received section 501(k) FDA clearance for its X-Core Mini Cervical Expandable VBR System, a titanium vertebral-body replacement device used in the cervical spine to replace vertebral bodies damaged by tumors, fractures, or osteomyelitis.

According to NuVasive’s FDA filing, the X-Core Mini system can also be used for reconstruction following a corpectomy or to restore the integrity of the spinal column without resorting to spinal fusion in patients that have short life expectancies due to advanced-stage tumors involving the cervical spine. The X-Core Mini system is available in a variety of sizes and shapes to accommodate differences in individual patients’ physical characteristics and pathology.

NuVasive states that the X-Core Mini must be used with supplemental fixation that has previously been cleared by the FDA for use in the cervical spine, which includes NuVasive’s new Archon Reconstruction Corpectomy plate. This plate is designed to increase rigidity and to resist screw pullout.

In a company news release NuVasive’s President and Chief Operating Officer, Pat Miles, stated:

The assembly of best-in-class cervical products into a cohesive procedural offering further reinforces NuVasive’s commitment to providing single-source, integrated procedural solutions to our customers. Combining X-Core Mini VBR and Archon Reconstruction plate provides another excellent example of defining the components necessary to properly address an unmet market need as NuVasive remains focused on becoming number one in spine.

According to Fierce Medical Devices, NuVasive became the third-largest competitor in the spinal device market last year. NuVasive maintains an active patent portfolio to help protect its market share: the USPTO Assignment Database lists NuVasive as the Assignee of 325 patents and patent applications dating from 1999 to the present.