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LEAD STORIES
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AdvaMed, AACC Call for Repeal of Competitive Bidding Demonstration
Weems |
Industry association AdvaMed (Washington, DC), the American Association for Clinical Chemistry (AACC; Washington, DC), and other laboratory groups are raising concerns regarding plans by the Centers for Medicare and Medicaid Services (CMS) to launch a clinical laboratory competitive bidding demonstration program. AACC contends that many laboratories could be forced out of business in regions where the demonstrations are conducted. And, if CMS deems the demonstration a success and effectively makes its case to Congress, a clinical laboratory competitive bidding program could be implemented nationwide.
“CMS is seeking to enhance its role as a prudent purchaser of clinical laboratory services, while maintaining a strong focus on beneficiary access and quality of care,” said acting CMS administrator Kerry Weems. “This demonstration uses market-based competition to increase efficiency in Medicare. In this demonstration, Congress is building on the experience of CMS demonstrations for durable medical equipment, which found that competitive bidding can reduce spending, while assuring access and quality.” [More]
Ten Questions for Mark McClellan
McClellan |
In the healthcare sector, few luminaries are as well recognized as Mark B. McClellan, MD, PhD, who is both a former administrator of the Centers for Medicare and Medicaid Services (2004–2006) and a former FDA commissioner (2002–2004). Last July, McClellan began a new chapter in his distinguished career in public service and academic research, when he was named senior fellow and director of the Engelberg Center for Health Care Reform and holder of the Leonard D. Schaeffer Chair in Health Policy Studies at the Brookings Institution (Washington, DC).
Earlier this month, McClellan delivered a keynote address at BIOMEDevice Forum, an innovative new executive conference focusing on the convergence and cross-sector collaborations among companies in the biotechnology, medical device, and pharmaceutical industries. In the following interview with MX editor in chief Steve Halasey, McClellan describes the work of the new Engelberg center, which will support studies of ways to provide practical solutions for the access, quality, and financing challenges facing the U.S. healthcare system. He also discusses some of the key areas where public healthcare policy is undergoing significant changes, as well as the expected impact of recently passed—and recently vetoed—legislation on medtech companies and the broader healthcare community. [More]
Orthopedic Firms Reach Settlement with Department of Justice
Christie |
In late September, five leading orthopedic manufacturers reached a settlement with the U.S. Department of Justice (DOJ) regarding the government’s probe into the companies’ alleged violations of the Federal Healthcare Antikickback Act and the False Claims Act. U.S. attorney Christopher Christie, lead prosecutor on the case, said, “This industry routinely violated the antikickback statute by paying physicians for the purpose of exclusively using their products. Prior to our investigation, many orthopedic surgeons in this country made decisions predicated on how much money they could make—choosing which device to implant by going to the highest bidder. With these agreements in place, we expect doctors to make decisions based on what is in the best interests of their patients—not the best interests of their bank accounts.” [More]
Medtronic’s Endeavor Poised to Enter Struggling Stent Market
Wald |
Earlier this month, FDA’s circulatory systems devices panel unanimously recommended full agency approval of the Endeavor drug-eluting coronary stent, manufactured by Medtronic Inc. (Minneapolis). If Endeavor receives FDA approval, it will face a much more daunting market than did its predecessors. In light of recent safety concerns that have been raised regarding drug-eluting stents, the devices have dropped from their previous lofty utilization rates of 85–90% to account for around 65% of stent implantations in the United States.
Most analysts anticipate a slow recovery for the market, particularly as next-generation devices are introduced. “We will likely never get back to those usage rates—or if we do, it will take a long, long time,” says Jan Wald, managing director and medical technology analyst with the Stanford Group Co. (Houston). “New patterns of physician and patient behavior and belief systems are already taking hold, resulting in an extremely cautious approach to drug-eluting stents. Overall, at this juncture, an eventual penetration rate of 75% may be the most optimistic forecast.” [More]
FDA Amendments Act Expands Agency’s Authority over Medical Devices
Rathvon |
Late last month, just days before the Medical Device User Fee and Modernization Act of 2002 (MDUFMA) was set to expire, Congress overwhelmingly passed the FDA Amendments Act of 2007 (FDAAA), which reauthorized and expanded the agency’s role in reviewing, approving, and monitoring medical devices. The legislation not only ensures the continuation of the medical device user fee program through 2012, but it also includes several new components and initiatives.
James P. Rathvon, a partner with law firm DLA Piper (Washington, DC), says that the final FDAAA provisions were generally consistent with the expectations of the medtech industry. Noting the law’s increased focus on provisions and initiatives regarding device safety, Rathvon said, “It will be some time before we know the full outcome of the law’s provision that calls for a thorough review of FDA’s 510(k) process. However, given the increasing calls for greater oversight and device scrutiny prior to market approval, FDA may indeed tighten the 510(k) approval process.” [More]
IP Watch: DePuy Awarded $226M in Patent Suit
Wehrly |
Late last month, a federal jury in Boston ordered Medtronic Inc. (Minneapolis) to pay $226.3 million in damages to DePuy Spine (Raynham, MA), a division of Johnson & Johnson Inc. The jury found that Medtronic’s Vertex line of multiaxial pedicle screws infringe, under the doctrine of equivalents, a patent licensed to DePuy.
“We are disappointed in the jury’s verdict,” said Pete Wehrly, senior vice president and president of the spine and biologics business unit at Medtronic. “We appreciate the time and effort that the jury put into this case, but we respectfully disagree and we will appeal."
Read more about this deal and other industry patent news in this month’s edition of “IP Watch.” [More]
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| IN THIS ISSUE |
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AdvaMed, AACC Call for Repeal of Competitive Bidding Demonstration
Ten Questions for Mark McClellan
Orthopedic Firms Reach Settlement with Department of Justice
Medtronic’s Endeavor Poised to Enter Struggling Stent Market
FDA Amendments Act Expands Agency’s Authority over Medical Devices
IP Watch: DePuy Awarded $226M in Patent Suit
INDUSTRY IN BRIEF
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INDUSTRY IN BRIEF
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Hologic Inc. (Bedford, MA) has completed its planned $6.2 billion merger with Cytyc Corp. (Marlborough, MA). The new company will operate under the Hologic name, with Cytyc becoming a wholly owned subsidiary. In related news, Standard & Poor’s said that Hologic will replace Cytyc in the S&P MidCap 400.
Two days before Boston Scientific Corp. (Natick, MA) reported a third-quarter net loss of $272 million, the company announced its intention to eliminate approximately 2300 positions worldwide and to restructure or sell multiple business units. The company is seeking buyers for its combined fluid management and oncology venous access business, as well as its cardiac surgery and vascular surgery businesses. The company previously announced that it had entered into an agreement with Advanced Bionics Corp. (Sylmar, CA) to sell its auditory business. Collectively, these businesses represent a reported $550 million in 2007 sales for Boston Scientific.
Medtronic Inc. (Minneapolis) has voluntarily suspended worldwide distribution of the Sprint Fidelis family of defibrillation leads due to the potential for lead fractures. The announcement prompted an FDA official to report that the agency plans examine whether the mechanical stress tests it requires were sufficient to catch problems with the leads.
Earlier this month, Johnson & Johnson Inc. (J&J; New Brunswick, NJ) filed suit against medical imaging equipment maker Hologic Inc. ( Bedford, MA). In the suit, J&J’s Ethicon Endo-Surgery unit claims Hologic violated four of its patents related to a tumor-detection system. Hologic has said it believes the lawsuit is without merit and intends to defend its position.
For the Record: An article in the supplement to the July/August issue of MX magazine (“Panel Discussion: Venture Capital and Angel Investors,” page 28) suggested that ev3 Inc. (Plymouth, MN) and Hologic had entered into a merger agreement. In fact, ev3 recently acquired FoxHollow Technologies (Redwood City, CA), and Hologic recently finalized its acquisition of Cytyc.
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CALENDAR
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November 1: MedTech Investors Conference, Waltham, MA.
November 6–7: Intellectual Property for Technology and Business Development, Pasadena, CA.
November 7: Trends in Health Care Policy: How They Will Affect the Medical Device Industry, Waltham, MA.
November 8: Mass Opportunities Investment Conference, Boston.
November 12–13: Principles & Practices of EU and U.S. Medical Devices, Brussels, Belgium.
November 14–16: Medical Device Regulatory Compliance, New Brunswick, NJ.
November 19: The Operating Room of the Future: Improving Efficiency and Outcomes, Waltham, MA.
November 27–29: Piper Jaffray Annual Health Care Conference, New York City.
November 29: FDA Update, Waltham, MA.
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