Medical Device Link The Online Information Source for the Medical Device Industry.

It’s a common complaint from married couples: the passion just isn’t there anymore. The dating process is marked by romance and excitement, but after a few years of domesticity, it’s all too easy to take your partner for granted. The same attitude of complacency seems to be plaguing the partnership between the device industry and the state of Minnesota, according to an article in the Minneapolis Star Tribune.

A report Destination 2025, written by the BioBusiness Alliance of Minnesota and Deloitte Consulting, says that Minnesota is falling behind other states when it comes to creating economic opportunities for medical device companies. The report places much of the blame upon the University of Minnesota, saying that the school needs to “reestablish its premier status among universities by supporting research relevant to the medical device industry,” according to the Tribune.

Unlike many health ailments solved by a medical device, or marital spats settled with a bouquet of flowers, there may be not be a simple cure for the problem. But Destination 2025 does have a few recommendations, such as urging the state to expand into growing technologies like drug-device combinations and neurology. The basic message: stop taking the device industry for granted, Minnesota.

Nine scientists who have accused FDA’s managers of meddling in medical device approvals and bullying the scientists into approving high-risk devices are now under criminal investigation, the scientists said in a letter to President Obama earlier this week.

“It has been brought to our attention that F.D.A. management may have just recently ordered the F.D.A. Office of Criminal Investigations (O.C.I.) to investigate us rather than the managers who have engaged in wrongdoing!” the letter says.

An FDA spokesperson said that an investigation could not be confirmed or denied. There’s sure to be more to this story in the coming weeks, so stay tuned.

Moog Inc. has purchased contract manufacturer Ethox International for a little more than $15 million in cash. Since 2006, Moog has made numerous acquisitions to better its position in the medical device industry. The company started by acquiring Curlin Medical, which manufactured infusion pumps. Following that came the acquisition of McKinley Medical’s line of disposable pumps, and then Zevex’s enteral feeding pumps. Earlier this year, Moog acquired Viltechmeda’s Aitecs syringe pumps. Read more about Moog’s acquisition of Ethox in MD&DI’s March issue.

Much as dietary supplements, food safety, and pharmaceuticals had their time under the hot light, media has now turned its attention to medical devices.

We knew it was coming. There are flaws in the system and they cannot be ignored. And don’t worry, the New York Times won’t ignore them.

Of course, there are the old arguments: that devices are approved too quickly and not vetted well enough. Such criticism, although not without merit, is easily explained as a necessary tradeoff. An approval system that is relatively fast means that life-saving devices get to patients more quickly.

More troubling are reports of letters written by FDA scientists to various law makers, most recently to the Obama administration. In those letters, the scientists accuse FDA managers of bullying, coercion, and worse, in order to push through approval of certain devices. They imply that the managers are in league with device manufacturers, or that those managers are themselves bullied by lawmakers into forcing a quick decision.

Another seeming indicator of FDA’s lax stance on devices is the abandoned plan to write rules and firm deadlines for the testing of all Class III devices. This delay allows many Class III devices to be passed with minimal testing. The GAO released a report recommending that FDA to fix its process for approving complex medical devices.

An op-ed piece from the Times today reviews these arguments, concluding that, “Given its sorry performance in so many areas important to public health and safety, [FDA] is ready for a major overhaul.”

So what can device makers do to avoid criticism, or to defend itself should the spotlight turn away from FDA and onto OEMs? Be dull. Media attention is best stemmed by being too boring to cover. Or you could take a lesson from President Obama and be so charming, so logical, and so level-headed that the New York Times can’t help but love you.

Heather Thompson

In an announcement to its employees, Xtent stated it would be laying off 112 of its 121 employees effective March 23, 2009. The company already made cuts last summer. In the meantime, the manufacturer of drug-eluting stents is seeking the help of an investment bank in order to pursue some kind of strategic deal to “maximize the value of our assets.” Xtent’s market value is estimated at less than $5 million and this low price could potentially pique the interest of larger players like Boston Scientific or J&J.

In an opinion letter, Stephen Ubl, clarified a few things the New York Times has gotten wrong about devices in its recent coverage. Ubl, who is the president and CEO of AdvaMed, said that the Jan. 15 article “Report Criticizes F.D.A. on Device Testing” incorrectly characterized the device review process as “lax.”

In the published letter, Ubl says:

FDA’s premarket review process involves extensive review of specifications and performance-testing information, and in many cases clinical data, before being made available to patients. For the higher risk devices, FDA requires comprehensive clinical data for approval.
The Government Accountability Office’s report on FDA’s review process, the focus of the article, limited its comments primarily to a small subset of 20 devices that the FDA has yet to classify, not the review process as a whole.
In fact, the GAO report demonstrates that FDA’s process is working as intended so that all devices are subject to the appropriate level of regulation to ensure their safety and effectiveness.

A new economic impact study shows that biotechnology, life sciences, and medical research contributed billions of dollars in direct revenue to Oregon’s economy. According to the Oregon Bioscience Association, despite Oregon’s recessionary slump, the brightest news is the previously underestimated economic effect of Oregon’s bioscience industry, including medical device manufacturing. The study shows that the sector contributed nearly $3.5 billion in direct revenue, more than 13,630 jobs and $800 million in biotech workers’ personal income to the state economy in 2007. The comprehensive analysis, conducted by ECONorthwest, shows that those employed in the bioscience sector fared substantially better in take-home pay than other workers in Oregon.

“With its continued and anticipated growth curve in Oregon, the data show that biotech is likely to beat the current recessionary trends,” says Nathan Gibson, vice president of business development for Skanska and chair of the board for the Oregon Bioscience Association. “The significant multiplier effect illustrates the true impact of the growing cluster in this state, and now we know its impacts are profoundly more extensive than many knew.”

India’s medical device industry may have to wait months to get a decision on the change it has been pushing for. According to The Hindu, both the incoming of a new assistant drug controller and government elections will delay for at least 8–9 months the review of a proposal to create separate regulations for drugs and devices. Under the current law, drug regulations apply to devices, making it difficult for some companies to get their devices approved. A representative of AIMED, a group of Indian medical manufacturers, says that the lack of specific rules makes it hard for companies to get a license to export from the Indian government. The representative also tells The Economic Times that “less than 2% of the entire industry” has been given registration in the last 20 years.

Large corporations are often thought of as money-grubbing behemoths that are always looking to increase profit margins. That may be true in some cases. But sometimes, it’s the corporation that doles out gratuitous dollars—sometimes wittingly and other times, well, unwittingly.

Medtronic has had to deal with significant fallout from its relationships with consultants and physicians. One spine surgeon from the University of Wisconsin received $19 million (!!!) over five years from Medtronic. The school’s reporting rules only required the surgeon to disclose that he had received $20,000 or more annually (i.e., not an exact amount) from the company. Those rules will likely be changed.

On the flip side, a former payroll manager for Advanced Medical Optics embezzled $487,000 from the firm. He used the payroll system to funnel money from AMO into an account for a business that he owned. Prosecutors say he set it up so that AMO employees were taxed for money they never received. In addition to restitution ($487,000), he has been sentenced to five years in prison.

Johnson & Johnson has reported lower sales of medical devices in its fourth quarter and forecast lower 2009 profit. The report follows a Jan. 9 forecast by competitor Stryker Corp. in which the firm predicted its 2009 profit would increase by 10–14%. J&J said it earned $4.57 a share for 2008 and predicted 2009 earnings of $4.45 to $4.57. Its fourth quarter sales of medical devices fell by 2%, to $5.6 billion. But J&J’s full year sales of medical devices increased 6.4% to $23 billion.

Stryker, which has grown its annual per-share profit by at least 20% every year since 2000, had previously lowered its 2008 profit forecast. Stryker said its 2008 profit would be in the range of $2.77 to $2.79 a share. And it forecast 2009 profit of $3.12 to $3.22 a share. Stryker reports its fourth quarter and full year earnings on Jan. 27.