A Perfect Storm: Regulation, Reimbursement, and Intellectual Property
The medical device industry today bears little resemblance to its beginnings 30 years ago. The first development to come, of course, was regulation, followed by the complexities of reimbursement. Along the way came the need to protect intellectual property (IP), and that brings us to today. I spoke with industry veteran Gerald Loeb, MD, (read the full interview here) about how these three factors have changed the industry—and whether we might be on the road to stifling innovation.
“We've gone from complete laissez-faire to a system that treats research and product development almost equally,” says Loeb, professor of biomedical engineering and director of the medical device development facility at the University of Southern California.
Loeb says that some regulation is useful. But, he says, “I think the pendulum has swung too far to the other side and that the present regulatory environment is going to be a serious constraint on the development of truly novel medical treatments.” Rather, he says, the device industry is geared toward producing derivative products.
A big change that he says has affected the industry—mostly negatively—has been the substantial increase in litigiousness among medical device manufacturers. “It's always been true in the drug business, but in the last 10-20 years, medical device manufacturers have become progressively more protective of their IP portfolios.”
Another negative Loeb cites is the lack of incentive for companies to reduce costs by simplifying products that have been on the market for a while. Once a particular class of products has reimbursement at a particular rate, their cost competition disappears, he says.
A wholesale rethinking of the healthcare delivery system is probably the answer to these problems but its not likely to happen. “If you just try to change insurance without thinking about how that's related to regulations and intellectual property or medical practice and product liability, you're not going to solve the problem,” Loeb says. Industry, of course, can and should step in to do its part.