FDA and the Veterans Health Administration announced a formal agreement to share information and expertise related to the review and use of medical devices and other FDA-regulated products. The goal of the Memorandum of Understanding is to enhance postmarket safety data collection. By working together, the agencies hope to identify, validate, and analyze product risks more effectively. Within 30 days, there will be a meeting to establish procedures and safeguards. The VHA has been at the cutting edge both of adopting medical technology and of implementing patient safety measures. FDA could learn a lot from its experiences.
Today’s Washington Post has a Bloomberg News column that assesses the impact of a Jan. 18 executive order issued by President Bush that curbs the powers of federal agencies to regulate industry through guidance. This is hugely significant for the device industry as FDA relies heavily on guidance documents to regulate manufacturing and quality issues. The concern, not only expressed by FDA-regulated industries but by many industries regulated by the federal government, is that issuance of guidance had come to serve as back-door rule writing, without being subject to the same scrutiny that proposed new rules are. Under the order, federal agencies must submit to the Office of Management and Budget for review any guidance with an impact of $100 million or more, and must make such guidances available for public comment. An agency must also state the “specific market failure” that the guidance would help cure. If implemented properly, the order could make FDA more accountable, which is sometimes necessary.
Despite what you may have gleaned about Iran from news reports, the country is one of the more modernized in the Middle East and has some very sophisticated hospitals. What it does not have is a domestic company that can manufacture stents in-country. Currently, hospitals must import stents, which can be very expensive. The engineers, surgeons, and cardiologists who have formed a new firm, Shafa Teb e Arya Medical Device (STAMD), are looking to change that. They want to manufacture coronary and peripheral bare-metal and drug-eluting stents and offer them to Iranian hospitals at a more affordable price. The firm is looking to buy stent technology and the equipment to manufacture it. Anyone interested in doing business with STAMD should contact its executive director, Alireza Khajeh, at khajeh.alireza@gmail.com. US firms should be aware that there may still be in place trade sanctions that prevent them from doing business with Iranian companies.
With plans to refocus on its supply chain and clinical products, Cardinal Health (Dublin, OH) has sold its drug manufacturing unit to Blackstone Group for $3.3 billion. Cardinal still plans on keeping two of its businesses that support generic drugs, however. The announcement sent the company’s shares up nearly 3.4 percent. The sale is part of Cardinal Health’s committment to making healthcare “safer and more productive,” according to Cardinal President and CEO R. Kerry Clark. Cardinal Health’s medical device business, which generates $1.6 billion in revenue, includes surgical instruments, gloves, interventional radiology products, and respiratory care products.
Today’s Boston Globe features a story on a large device company that is new, yet old. Tyco International Ltd. has formalized plans to spin off its medical products division. The new company will be called Covidien and will be based in Mansfield, MA, giving the state a second device-industry titan to accompany Boston Scientific. The 43,000-employee company with more than 10,000 products will focus exclusively on the medical market and hopefully avoid the financial shenanigans that brought down its soon-to-be-former parent company. If Tyco shareholders and the SEC approve, the spinoff would happen in April.
It’s earnings reporting time again. Johnson & Johnson posted record revenues of $53.3 billion last year, and Abbott reported a loss of $476.2 million for the fourth quarter, thanks mostly to costs associated with a pharmaceutical purchase. But the real interest lies further down in those stories. In its conference call to analysts, J&J said that stent sales fell 15% in the fourth quarter, and that it has abandoned plans for development of an internally designed next-generation stent. That likely means it will have to rely on the technology it acquires from Conor Medsystems to remain at the forefront of the stent market. Abbott, meanwhile, reported a gain of $389 million in global sales of vascular devices, and development continues on the next-generation stent technology it acquired from Guidant via Boston Scientific.
Cyberonics, a maker of neurostimulation technology, has been reeling lately, following the resignation of two top executives after a stock-options scandal and a report from its auditor indicating serious financial trouble. Now Carl Icahn, who has made his mark as – depending on your perspective – a corporate raider or a turnaround artist, is getting involved. Icahn has accumulated a 9.77% stake in Cyberonics and is backing an effort to have three directors replaced, Reuters reports. With the shakeup in management, rumors have started that the firm will be sold, and potential buyers may think they can get a bargain compared to what competitors Advanced Neuromodulation Systems and Advanced Bionics went for. But you can be sure Icahn will do whatever he can to increase the company’s value before a sale.
Cyberonics was named one of MD&DI’s 50 Companies to Watch last June. We were right — but for a different reason.
Generic Medical Devices (Gig Harbor, WA) has received FDA clearance for what it claims is the nation’s first generic medical device, a circumcision clamp. The firm says it is the first to market surgical products at generic prices, and this is its first approved product in the United States. If this is indeed an economic model equivalent to generics for drugs, the approval could be a significant milestone in industry history. But because of the 510(k) approval standard of “substantial equivalence,” the industry has a long history of “me too” products. Is GMD’s model significantly different from that? The staff of MD&DI will find out when we meet with the company at the MD&M West show next month. Stay tuned.
FDA Commissioner Andrew von Eschenbach has named two people, one of whom should be very familiar to FDA observers, to top positions in the agency. Janet Woodcock, MDÂ will assume a newly created position, Chief Medical Officer, which will oversee scientific and planning operations. Woodcock has previously been Deputy Commissioner for Operations and director of the agency’s drugs and biologics centers. John Dyer, MPH, has been named Deputy Commissioner for Operations and Chief Operating Officer. He will focus on issues concerning management, business processes, and information technology. He was previously COO at CMS, where he helped implement the vast reforms at that agency. In other words, Woodcock’s charge will be to ensure the agency fulfills its scientific mission. Dyer’s will be to ensure it fulfills it with as few bumps in the road as possible. Success in both is badly needed in this era of tribulation for the agency.
Yes, it’s possible. The rise of genetic testing and FDA’s approval of a cervical cancer vaccine are contributing to this speculation. Some experts argue that the Pap test doesn’t have a high enough percentage of accuracy (only 50 to 80%) and that genetic testing can detect more than 90% of precancerous lesions. However, it can’t be expected that the Pap test, which has cut cervical cancer rates by more than 75%, is going to disappear overnight. More than half of the 10,000 U.S. cervical cancer cases are in women who don’t even undergo screening, according to the New York Times article. While part of the solution is to engage in stronger efforts to have more women screened, this newer technology–HPV genetic testing–will also have to prove itself more effective (and more cost efficient) than the Pap test.
