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.

Philips Acquires EGI

Philips recently announced that it will purchase Electrical Geodesics, Inc. (EGI).  The total value of the deal is estimated to be GBP 29.0 million (approximately $36.9 million).  According to its website, EGI designs, develops, and commercializes various non-invasive neurodiagnostic products that monitor and interpret brain activity, such as its dense array electroencephalography (EEG) platform.

This agreement comes on the heels of other recent acquisitions for Philips.  Most recently, Philips acquired RespirTech in May 2017.  Over the last few years, Philips also added Wellcentive, PathXL, and Volcano.

EGI is based in Eugene, Oregon, and reportedly generated $14.3 million in sales during 2016. According to EGI, the dense array EEG technology collects data on brain activity from more electrodes than traditional EEG products.  Philips believes that this technology will complement its existing portfolio of imaging technologies such as MRI and PET-CT, and advanced informatics, such as IntelliSpace Portal.

Speaking about the acquisition, Joe Burnett, Philips Neuro Diagnostics Business Leader, stated:

By fusing these different tools together, we will create a more comprehensive map of the brain, and unlock new computational algorithms which will help to shorten the path to a definitive diagnosis and guide some of the most complex therapeutic strategies.

Dr. Don Tucker, CEO and Founder of EGI, also remained optimistic, stating:

We will now complete the important work that we started 25 years ago, as part of a health technology leader that is known for its commitment to research and innovation. Our goal has always been to put the patient first and we feel this combination to be a perfect match.

MRI-Compatible Robot Aims to Improve Breast Cancer Biopsies

The University of Twente in Enschede, Netherlands recently introduced “the world’s smallest and most accurate 3D-printed biopsy robot,” called the Stormram 4.  The device is designed to carry out biopsies during breast cancer scans and was developed by a team at the university’s Robotics and Mechanics lab in collaboration with Ziekenhuis Groep Twente.

The Stormram 4 can be used inside an MRI scanner because it is constructed entirely of plastic and is small enough to fit inside the MRI scanner’s narrow tunnel.  The device is powered by rectilinear and curved air-pressure motors, which are controlled by an operator outside of the MRI scanner.  New Atlas reports that the device allows the biopsy procedure to be carried out with sub-millimeter precision, which is impossible to achieve manually.

Vincent Groenhuis MSc, one of the Stormram 4 developers, spoke with Digital Trends about the new device.  He stated:

The robotic system can manipulate the needle more precisely toward target coordinates of the lesion inside the body, on the first attempt . . . . This will improve the accuracy of the biopsy procedure compared to the current manual practice. Secondly, the needle insertion can be performed inside the MRI scanner itself, so that the needle can be followed under nearly real-time imaging guidance. The required time to perform the biopsy is also shorter, allowing more effective use of the MRI scanner facilities.

According to Digital Trends, the Stormram 4 is in its final stages of design, after which Groenhuis and his team plan for the device to undergo clinical testing in order to obtain regulatory approval.

The Stormram 4 is one of several MRI-compatible robots under development in the field of cancer diagnosis and treatment.  Earlier this year, researchers at Johns Hopkins reported on a successful prostate biopsy trial of an MRI-compatible biopsy robot called MrBot.  According to the Urology Robotics Lab at Johns Hopkins, MrBot is the “first fully actuated MRI robot.”

Philips Acquires Spectranetics for $2.16 Billion

Spectranetics Logo

According to a June 28, 2017 press release, Dutch healthcare company Philips has agreed to buy Colorado Springs-based Spectranetics Corporation, a cardiac device manufacturer, for approximately 1.9 billion euros ($2.16 billion), inclusive of Spectranetics’ cash and debt.  Philips states in the press release that the acquisition of Spectranetics will expand and strengthen Philips’ Image-Guided Therapy Business Group.  According to the press release, Spectranetics is growing at a double-digit percentage rate and expects sales this year of around $300 million.

According to Spectranetics‘ website, its products include laser atherectomy catheters for treatment of arterial blockages with laser energy.  In addition, Spectranetics produces drug-covered balloons to treat blockages.  Philips stated that the drug-covered balloons are a key growth driver in Spectranetics’ portfolio.  According to Philips, Stellarex drug-coated balloon is CE-marked and under review by the U.S. Food and Drug Administration (FDA) for premarket approval.

According to the press release, Philips is offering Spectranetics shareholders $38.50 in cash per share, which is a 27 percent premium to the closing price of the Spectranetics shares on June 27.  According to Bloomberg, Philips also will buy back as much as 1.5 billion euros ($1.7 billion) of its own stock starting in the third quarter, and the share buyback program will run for two years.

Activity Trackers Eye Inactivity Tracking

Fitbit recently announced plans to build sleep apnea diagnostics into its wrist-worn activity tracking devices, stating that it expects do so within a year.  If successful, Fitbit may be able to address a market that is expected to have $6.7 billion in revenue by 2021.

Sleep apnea is characterized by pauses in breathing and shallow breath and comes with an increased risk of heart failure, obesity, and strokes.  While it affects about 18 million American adults today, one of the biggest concerns is that many affected people do not realize they are affected.  Traditionally, sleep apnea diagnosis involved capturing electroencephalograms (EEG) using electrodes that track brain electrical activity.  Such EEGs generally require cumbersome overnight visits to a sleep lab.  Alternatively, although potentially not as definitive as EEGs, non-EEG based methods that combine cardiac, respiratory, and movement data may be used.  However, alternative methods have not achieved broad use by the consuming public.  According to its announcement, Fitbit aims to fill that gap in the market.

The fashion appeal of activity trackers and ease of use (i.e., simply wearing it) have fostered widespread adoption of activity tracking devices.  Also, these devices have increased their functionalities over the years from merely counting steps to reporting heart rates and calories burnt, among others.  It’s likely that these devices are here to stay and will get “smarter” and more capable.  It may seem strange that “activity” trackers are seeking to carefully monitor inactivity, but they may prove up to the task — in fact, there is some evidence suggesting that the devices are better at measuring rest than activity.

In March, 2017, Fitbit released Sleep Stages, a feature that tracks whether the wearer is in a light, deep, or REM sleep.  By combining heart rate analysis with more traditional movement tracking, a study found that it could determine sleep stages with a reasonable degree of accuracy.  Fitbit has logged over 4 billion nights of sleep data, a data pool of over 23 million hours, from its users since 2010.  However, reliable detection of sleep apnea may require a more advanced analysis than reliably categorizing sleep stages.

CNBC reports that Dr. Conor Heneghan, author of the study and Fitbit’s lead sleep research scientist, is researching additional data sources that Fitbit’s trackers may be able to exploit as potential indicators of sleep apnea. He explains:

We’re leveraging the fact that Fitbit has experience in optical electronics, and making them small and power efficient.

Fitbit’s activity/inactivity trackers will not cure or treat sleep apnea.  Rather, CNBC reports that Fitbit seeks to provide reliable sleep apnea detection.  Even if its forthcoming technically is sound, challenges may wait for Fitbit.  The report notes that Fitbit isn’t yet certain how much it will need to work with the FDA and regulators in other countries. The device will most likely nudge a user to see a doctor rather than making a diagnosis.  And, Roy Raymann, vice president of sleep science at SleepScore Labs, and the former sleep expert on Apple’s health team, opined that:

Doctors are often ultraconservative, so it remains to be seen whether they’ll accept data from a consumer wearable.

FDA to Create New Digital Health Unit

The FDA has announced that it will create a new unit responsible for overseeing digital health products.  According to Bakul Patel, the Associate Center Director for Digital Health at FDA, the agency is working to define “what clinical validation looks like for software,” and will consider creating new premarket approval or clearance procedures for digital health products.

As Patel stated in an interview with Wired, the new unit will aim to keep up with emerging technology that uses artificial intelligence and machine learning to diagnose and treat patients.  Patel noted that this kind of technology creates new and difficult challenges for regulators, who must figure out how to ensure that patients remain safe while keeping up with the increasing complexity and tighter release schedules that these new kinds of software bring.

“We’ve been trying to translate the current regulation paradigm for digital . . . [b]ut what we have today and what we’re going to have tomorrow are not really translatable. We need to take the blinders off, start with a clean sheet of paper.” –Bakul Patel, Associate Center Director for Digital Health, FDA

Wired reports that Patel is working to develop new models for testing and approving digital health products.  Patel told Wired that “the idea is to get safe products to market faster, by having people compete on excellence rather than compliance.”  One way the FDA might do this is by providing faster review with lower scrutiny for manufacturers with a long track record of safety and compliance.

According to FierceHealthcare that the new digital health unit will be part of the FDA’s Center for Devices and Radiological Health.  While the new unit won’t be officially open until October, hiring of key staff is underway.  Wired notes that the unit will be funded by the Medical Device User Fee program.

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.

FDA Approves Bayer’s myBETAapp™

On May 30, 2017, Bayer announced FDA approval of a supplemental Biologics License Application for Bayer’s myBETAapp™ and BETACONNECT Navigator™.  The myBETAapp joins the growing field of medical mobile applications, which the FDA predicts will reach 1.7 billion smartphone or tablet users by 2018.

According to Bayer, the myBETAapp connects their BETACONNECT autoinjector (for delivering BETASERON®, a therapeutic agent for multiple sclerosis) to a patient’s mobile device or computer, and the BETACONNECT Navigator functions as a tool to view data uploaded by the myBETAapp.

According to the myBETAapp user instructions, the application will:

  • Display scheduled injections according to an injection routine
  • Allow the user to determine when an injection is scheduled
  • Display suggested injection sites based on the injection sites shown in the prescribing information for BETASERON®
  • Display a monthly calendar of recorded, missed, and scheduled injections
  • Transfer and sync data recorded by the autoinjector to the corresponding injection in the calendar
  • Send a notice to record injection data to the patient via email

In the press release, Bayer describes the myBETAapp and BETACONNECT Navigator as allowing further connection between the patient and the healthcare team by, with the patient’s permission, providing access to the patient’s injection history. The application is also advertised as providing further connectivity to a BETA Nurse for patients enrolled in BETAPLUS®, Bayer’s patient support program.

According to Dr. Kantor, President Emeritus, Florida Society of Neurology:

The myBETAapp and BETACONNECT Navigator work cohesively together to support communication and connection between people living with relapsing remitting multiple sclerosis and their BETA Nurse and health care team.

Bayer reports that the myBETAapp will be available for free download from the Apple app store, Google Play Store, or Betaseron.com by mid-July 2017.

 

ECRI Institute Releases Guidance on How to Protect Your Medical Device Systems

The ECRI Institute released new guidance in its article: “Ransomware Attacks: How to Protect Your Medical Device Systems” on May 18, 2017.  The report recommends various protective actions for hospitals to take and points to critical differences in the protection of medical device systems as opposed to general hospital systems.

According to the report, ransomware makes data, software, and IT assets unavailable to users.  The report describes ransomware as using the encryption of data to hold systems hostage, where the hacker promises to give the victims access to their data if a ransom is paid.  One previous ransomware example reported on the Knobbe Medical Device Blog was the WannaCry virus, a ransomware that caused disruptions for several hospitals in the United Kingdom.  The International Business Times reported that security researchers had found that the WannaCry ransomware was not limited to computers but also capable of exploiting medical devices.

The ECRI Institute report explains that an IT department can use new security patches for some medical device systems; however, some systems will remain susceptible because they are based on an older version of an operating system and can’t be upgraded or they have not been validated for clinical use with the latest security patches. 

The report includes a list of dos and don’ts for quickly responding to emerging threats.  The “Dos” mentioned in the report include:

  • Identify medical devices, servers or workstations that may be affected.
  • Contact the device vendor. 
  • Request written copies of the manufacturer’s recommended actions for dealing with a current ransomware threat. 

The “Don’ts” mentioned in the report include:

  • Don’t overreact.
  • Don’t install unvalidated patches.  Unvalidated patches can make medical devices faulty or inoperable.  Ask the manufacturer for documentation of the validation.

The ECRI Institute is a nonprofit organization that has its U.S. headquarters in Plymouth Meeting, Pennsylvania.

Boston Scientific closes acquisition of TAVI device company, Symetis

On March 30, 2017, Boston Scientific announced an agreement to acquire Symetis SA, a privately-held Swiss company focused on minimally-invasive transcatheter aortic valve implantation (TAVI) devices, for $435 million in cash.

The acquisition expands Boston Scientific’s structural heart portfolio and Symetis will join the Boston Scientific Interventional Cardiology division. According to the press release, Boston Scientific will begin selling the ACURATE TA™ and ACURATE neo™/TF™ valve systems in Europe and in other geographies outside of the United States.

ACURATE valves are marketed as replacement valves delivered via a transcatheter percutaneous delivery system.  As noted in the press release, the ACURATE valves along with Boston Scientific’s LOTUS Valve System platform “are designed to treat patients suffering from severe and symptomatic aortic valve stenosis, who are considered at high risk for surgical valve replacement.” As stated on the Symetis website with reference to the ACURATE TA™ valve system

“[t]he most distinctive aspects of the bioprosthesis design are the self-seating and self-sealing features that allow for optimal positioning of the valve, promote sealing, and reduce paravalvular leak. Combined with the two-step deployment technique of the delivery system, these properties provide outstanding ease-of-use throughout the procedure.”

The ACURATE neo™/TF™ valve system is described as including the same self-seating and self-sealing features and stepped deployment technique.

The executive vice president and global chief medical officer of Boston Scientific, Ian Meredith, M.D., stated:

“Adding the ACURATE family of valve products to our structural heart portfolio presents us with the opportunity to provide two distinctly different but complementary TAVI platforms enabling implanting physicians and hospitals to treat the broadest range of patients and aortic valve anatomies.”

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