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Reports: Medtech Venture Investment Soars in 2006
Shah |
In 2006, U.S. venture capital investment in the medical device and equipment industry rose substantially over 2005, according to a report released by
Ernst & Young LLP (New York City) and Dow Jones VentureOne (San Francisco). During 2006, the industry recorded 239 deals—20 more than in 2005.
Overall, 2006 investment in the industry totaled $2.63 billion, representing
the largest annual capital invested in industry on record.
On a regional basis, the trend was echoed by a new report from BioEnterprise
(Cleveland), which reported that 2006 investment in Midwestern medical device
companies totaled $356 million—an increase of more than 70% over the
$205 million reported for 2005. "The region has always been rich in
research and industry assets," says Baiju Shah, president of BioEnterprise. "That
rich base is now translating into a growing stream of high-quality healthcare
start-ups due to progressive policies and programs such as state investments
in research institutions, creation of new capital sources, and professional
technology development groups." [ More ]
Diverse Stakeholders to Converge at Postmarket Monitoring Colloquium
David |
On March 8, a diverse group of stakeholders—including medtech manufacturers,
hospital personnel, and industry regulators—will meet in Houston to develop
an integrated action plan for improving patient safety through an effective—and
fair—system for reporting device-related failures. The one-day event is
being sponsored by the American College of Clinical Engineering (ACCE) Healthcare
Technology Foundation, Texas Children's Hospital, Texas A&M University,
and the FDA Medical Device Industry Coalition.
"This colloquium will offer a unique opportunity for
participants to hear from key people working in this area and to present
their own perspective on what is needed to build a better medical device
reporting system that can improve patient safety," says Yadin B. David,
president of the ACCE Healthcare Technology Foundation and director of the
biomedical engineering department at Texas Children's Hospital (Houston). "By
bringing together representatives of medical device manufacturing firms,
hospital administrators, clinicians, legal professionals and risk managers,
reporting system vendors, and regulators, a complete understanding of the
objectives and barriers to implementation of a blame-free system can be achieved." [ More ]
Survey: Orthopedic Surgeons Fault FDA's
Approval Process
Kazman |
A recent national survey of orthopedic surgeons found that respondents
generally view FDA as being too slow in its review and approval of
new drugs and devices. A majority of the respondents indicated that
they feel delays in FDA approval harm patients and hinder their practice
of medicine. The survey was developed by the Competitive Enterprise
Institute (CEI; Washington, DC), a nonprofit, public-policy organization.
Since 1995, CEI has conducted six physician specialty surveys, all
of which have uncovered strong anti-FDA sentiments. However, CEI reports
that responses to the orthopedic survey were the most pronounced in
their condemnation of the agency.
"In recent years, FDA has been repeatedly attacked
for approving allegedly defective therapies," said Sam Kazman,
CEI's general counsel. "But as this physician survey shows,
the real threat to public health is that FDA's approval process
is already too long. Any attempt to make it more stringent will only
worsen this problem."
According to the report, younger orthopedic surgeons expressed a greater
degree of dissatisfaction with FDA than their older colleagues. CEI
cites this as a significant finding, as the demand for orthopedic surgeons
is expected to grow in order to keep pace with the aging of 77 million
baby boomers. [ More ]
CMS to Consider Expanded Coverage of
Carotid Stenting
Capek |
In a decision that reflects the latest evidence on the effective use of carotid
stenting in reducing the occurrence of stroke, the Centers for Medicare and
Medicaid Services (CMS; Baltimore) recently said that it would consider expanding
its coverage of the procedure. Under the proposed change, CMS would cover carotid
artery stenting for symptomatic patients with 50% or greater carotid artery
stenosis, or blockage, as well as asymptomatic patients with 80% stenosis.
In addition, coverage would no longer require that a patient be designated
as a poor candidate for carotid endarterectomy, a more-traditional procedure
for removing blockages.
"This
proposal reflects the growing consensus in the medical community that
carotid artery stenting is an important treatment option for these patients," said
John M. Capek, PhD, president of the vascular division at Abbott (Abbott
Park, IL). "Abbott is committed to working with the medical community,
FDA, and CMS to gather additional evidence to support broader patient
access to carotid stenting." [ More ]
Analysts Expect a Rebound in Drug-Eluting
Stent Sales
Gunderson |
Although many medtech market observers once viewed drug-eluting coronary
stents as being on a trajectory for continued growth, sales of the products
declined significantly in the final quarter of 2006. Prior to recent studies
that indicated a significantly higher incidence of late-term thrombosis
with drug-eluting stents than with their bare-metal counterparts, the devices
accounted for 85–90% of all coronary stents implanted in the United
States. Most analysts estimate a current usage rate of 70–75%.
However, most analysts see little—if any—permanent damage to
the category. Many expect that, with time, next-generation products already
in the pipeline will stimulate growth over the long term.
"The probability of a recovery is high, but it may take
a year or more to get back to an 80–85% usage rate," says Thomas
Gunderson, a managing director and senior medtech analyst at Piper Jaffray & Co.
(Minneapolis).
[ More ]
Tyco Healthcare to Become Covidien
Meelia |
As a part of a larger corporate restructuring that was initially announced
in January 2006, Tyco International Ltd. (Pembroke, Bermuda) announced late
last month that it would spin off Tyco Healthcare. With annual sales of nearly
$10 billion, Tyco Healthcare is one of the top five players in the worldwide
medtech market. Under the name Covidien, the new company will operate independently
from the parent firm.
Richard Meelia, president and CEO of Tyco Healthcare, said the new
name "reflects
our corporate goal to build and strengthen our role as an integral healthcare
partner, supporting the lifesaving work of medical professionals." Meelia
will carry his position into the new organization. [ More ]
CMS Denies Expanded Coverage for Cyberonics Neurodevice
Earlier this month, the Centers for Medicare and Medicaid Services
(CMS; Baltimore) declined a request by Cyberonics Inc. to expand reimbursement
for the company's implantable neurodevice to include therapy
for patients with treatment-resistant depression (TRD). CMS is accepting
comments on its proposed decision through March 7 and plans to finalize
its ruling this spring.
The latest ruling throws yet another
hurdle in front of the company, which has already traveled a long—and
sometimes contentious—road
to expand the market for its Vagus Nerve Stimulation (VNS) device,
which costs about $10,000. "Published peer-reviewed data demonstrate
that VNS therapy provides unparalleled long-term benefits for many
patients who have been unable to experience relief from depressive
symptoms with other available treatment options," said George E.
Parker, Cyberonics' interim chief operating officer. "A recent study
has shown that annual medical costs associated with the subset of
patients with TRD identified in the submission to CMS average approximately
$47,000."
Shares of Cyberonics plummeted nearly 10% after news of the CMS
noncoverage decision was released. Some industry analysts don't
expect the agency’s final decision to deviate from its initial
conclusion, resulting in Cyberonics grasping after a smaller
share of what is already considered to be a modest market. [ More ]
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