Medical Device Link.

Originally Published MX September/October 2003

COVER STORY

In a variety of his public speeches, Commissioner McClellan has manifested an economist's understanding of the many factors that can stimulate—or kill—investment into the development of new medical technologies.

Discussing the need for medical countermeasures against terrorist attacks, for instance, McClellan told the annual FDLI meeting that "research and development into new countermeasures has been slow, largely because there is no financial incentive. Many companies I have talked to know that the development of medical products is an uncertain process, and they are used to taking risks knowing they might fail. But they want to know that if they succeed, there's the certainty of a reasonable financial reward. When it comes to countermeasures, there are plenty of risks, and few clear rewards."

McClellan drew out a similar point for medical products in general. "This situation is what I want to avoid for naturally occurring diseases," he told FDLI. "Without significant financial rewards for effective, high-value new treatments; with no surety of payments because reimbursement from the only major purchaser (the government) is based on the pressures of the appropriations process and not the value of the innovation; we end up in a situation where the incentives for developing better treatments are inadequate, and where the potential value of modern medical technology is not fully realized."

The commissioner nevertheless expresses high hope that the changes he has initiated at FDA will help to support investment in medical technologies. "If we can fulfill our mission of determining whether products are safe and effective in a lower-cost and least-burdensome manner—to the agency, but especially to society—then this translates into lower costs for innovating, and greater use of new products by more patients," he told San Francisco's Commonwealth Club in June.

"If the cost of development were lower, then the same amounts of investment in research and development could be used to make bets on more innovative ideas, hopefully resulting in more products for more health problems being developed. And entrepreneurs might also be more inclined to go after more small therapeutic markets—for example, more individualized treatments based on insights from genomics—where the lesser returns might not otherwise justify the risks if the costs of development were too high."

Copyright ©2003 MX