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LEAD STORIES
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Supreme Court to Consider Preemption for PMA Devices
Silverman |
In a move that will likely provide a definitive resolution to the issue of federal preemption for medical devices cleared to market via the premarket approval (PMA) path, the Supreme Court announced in June that it would review the case of Riegel v. Medtronic. In this article, Caryn M. Silverman, a partner in the law firm of Sedgwick, Detert, Moran & Arnold LLP, provides background on the series of events leading up to this decision—and what it could mean for medical device manufacturers.
Federal preemption is a legal concept that provides that federal laws and regulations take precedence over state laws and regulations in the same area. Most federal courts of appeals have decided that a preemption defense is available to manufacturers of PMA devices for most tort claims. Only one, the 11th Circuit, has declined to extend preemption. But until now, the Supreme Court had not agreed to decide whether state claims involving devices approved through the PMA process are preempted. [More]
Diagnostics Deals: Sold, Fold, and On Hold
Reinhardt |
The in vitro diagnostics sector continues to generate significant industry interest as evidenced by three deals that have dominated medtech headlines over the past several weeks. While Siemens’ acquisition of Dade Behring appears to be a done deal, GE’s previously announced agreement to buy two of Abbott’s diagnostic units has fallen through. Meanwhile, the final outcome of a hostile takeover attempt by Roche to acquire Ventana Medical Systems remains uncertain, as the targeted company vows to beat back the unsolicited bid.
In the deal that is expected to proceed without incident, Siemens Medical Solutions USA Inc. (Malvern, PA), a division of Siemens AG (Munich, Germany), announced that it will purchase Dade Behring Holdings Inc. (Deerfield, IL) in an all-cash transaction valued at around $7 billion. Erich R. Reinhardt, president of Siemens Medical Solutions, said the acquisition “complements our current capabilities and offers us the unique opportunity to create an unparalleled portfolio of products and services, and become the world market leader in comprehensive clinical laboratory diagnostics.” [More]
Kaiser Permanente Contract Drives Connectivity and Interoperability
Gee |
In the past, medical device manufacturers may not have paid much attention to the surging importance of healthcare information technologies (IT) or to the growing trend toward greater connectivity and interoperability among medical technology products. But language now being included in vendor contracts by Kaiser Permanente (Oakland, CA) may make it a lot more difficult for medtech companies to ignore those trends. The language is designed to ensure device interoperability with the organization’s electronic medical record (EMR) system.
Tim Gee, principal of Medical Connectivity Consulting (Beaverton, OR), describes the potential impact of Kaiser’s move as “huge.” Gee expects other hospitals to follow suit and says that a large, prestigious medical center in the northeastern United States is expected to announce a similar program shortly. “This is radical stuff that places the systems integration role firmly on the shoulders of the medical device vendor,” says Gee. [More]
Report: Collaboration Key to Driving Growth in OTC Diagnostics
Arlett |
Medtech manufacturers looking to capitalize on growth opportunities in the over-the-counter (OTC) diagnostics market will need to seek out partners among consumer and pharmaceutical companies, concludes a new report by Cambridge Consultants (Cambridge, MA). The report follows a workshop hosted by Cambridge Consultants in late June, at which industry representatives from across Europe discussed the future of diagnostics as a consumer-driven market. Workshop attendees said that the OTC tests market is poised for substantial growth in Europe, especially in nations with centralized healthcare providers such as those in the United Kingdom and Italy.
“The U.S. healthcare system has a very different structure and, consequently, a different set of drivers for the uptake of OTC diagnostics,” says Ben Arlett, manager of diagnostics for Cambridge Consultants. “In particular, the mechanism of reimbursement, the regulatory environment, and consumer awareness are very different in the United States.”
To gain more insights into the U.S. industry perspective on OTC diagnostics, this fall Cambridge Consultants plans to repeat the workshop and report with a wholly North American audience of diagnostics industry representatives. [More]
IP Watch: Innovation Industries Slam Patent Reform Measures
Leahey |
In spite of a groundswell of industry opposition—with medical device organizations prominently in the forefront—the patent reform juggernaut is continuing to progress through Congress. Earlier this month, the House and Senate judiciary committees voted to advance their respective versions of the Patent Reform Act of 2007 (HR 1908 and S 1145), each of which includes provisions considered harmful to medical technology companies.
The provisions of the proposed reform legislation had already caught the attention of industry associations and companies whose business relies heavily on patent-protected intellectual properties. In June, a group of more than 200 companies and industry organizations sent a letter to key members of the House and Senate judiciary committees to express their concern with the proposed legislation. Signatories on the letter included the Medical Device Manufacturers Association (MDMA), MassMedic, and the Biotechnology Industry Organization, as well as many other regional associations and life sciences companies. Commenting on the industry letter, MDMA executive director Mark Leahey said, “The diverse nature of signatories demonstrates the far-reaching implications this legislation will have on the patent system, and we urge Congress to make the recommended changes to ensure America’s innovation economy continues to flourish.”
Read more about the current state of patent reform and other industry intellectual property news in this month’s edition of “IP Watch.” [More]
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| IN THIS ISSUE |
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Supreme Court to Consider Preemption for PMA Devices
Diagnostics Deals: Sold, Fold, and On Hold
Kaiser Permanente Contract Drives Connectivity and Interoperability
Report: Collaboration Key to Driving Growth in OTC Diagnostics
IP Watch: Innovation Industries Slam Patent Reform Measures
INDUSTRY IN BRIEF
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INDUSTRY IN BRIEF
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Medtronic Inc. (Minneapolis) and Kyphon Inc. (Sunnyvale, CA) have signed a definitive merger agreement under which Medtronic will acquire all of the outstanding shares of Kyphon for about $3.9 billion. When the deal was first announced, the acquisition price represented a 35% premium over Kyphon’s 30-day average trading price.
Late this month, ev3 Inc. (Plymouth, MN) and FoxHollow Technologies Inc. (Redwood City, CA) announced that they have agreed to merge in a $780 million cash and stock deal. The proposed merger would create a new company with a market capitalization of about $1.7 billion, creating a global leader in endovascular devices with net sales in 2008 projected to be in the range of $585 to $615 million.
Midwest healthcare start-ups reported $726 million in total investments across 59 companies in the first half of 2007, according to the BioEnterprise Midwest Health Care Venture Investment Report. Medical device companies accounted for $148 million of the investment dollars.
In mid-July, an unsolicited $3 billion takeover bid by Roche Holding (Basel, Switzerland) was rejected by the board of Ventana Medical Systems (Tucson, AZ), which said the bid undervalues the company’s current standing and market potential. Following Ventana’s rebuff, Roche reported that it intends to pursue the transaction, whether through negotiations or unilaterally.
Abbott (Abbott Park, IL) and General Electric Co. (Fairfield, CT) announced in July that the companies have agreed to terminate their contract for the sale of Abbott’s core laboratory and point-of-care diagnostics businesses to GE. The two companies report that they were unable to agree on final terms and conditions of the proposed $8.1 billion sale.
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CALENDAR
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August 13–14: Preparing for and Surviving an FDA Inspection, New Brunswick, NJ.
August 13–17: Quality System Requirements and Industry Practice, Skaneateles Falls, NY.
August 16–17: Patent Law for Managers, Engineers, and Scientists, New Brunswick, NJ.
August 19–24: Management Development Program, Hanover, NH.
August 21–22: Project Management for Clinical Trials, Web seminar.
August 28–30: MEDTEC China, Shanghai, China.
September 17–18: Fundamentals of Finance for the Technical Executive, Cambridge, MA.
September 17–18: MedTech 07: Quality Product Development in a Regulated Environment, Skaneateles Falls, NY.
September 19–20: MEDTEC Ireland, Galway, Ireland.
September 21: Understanding the Japanese Medical Device Market and Pharmaceutical Affairs Law, Philadelphia.
September 23–26: Regulatory Affairs Professionals Society Annual Conference & Exhibition, Boston.
September 24–27: National Manufacturing Week, Rosemont, IL.
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