q reveiw volume 3, Issue 4 - October 2007

Top Stories


Congress Renews Device User Fee Legislation, Adds Clinical Trial Component

President Signs the Food and Drug Administration Amendments into Law
In late September, the President signed the Food and Drug Administration Amendments of 2007 into law. Congress overwhelmingly passed the measure which will reauthorize the user-fee program for pharmaceutical and device manufacturers as well as provide new regulatory authority to the FDA. With passage of the legislation, the FDA will collect approximately $287 million from device manufacturers over a five-year period to finance both pre- and post-safety market reviews. In addition, the law creates a public, searchable database of clinical trials for drugs and medical devices. The database will include information on safety risks and will be administered by the National Institutes of Health

FDA Issues FY 2008 Medical Device User Fee Small Business Qualification and Certification
In October, FDA issued its guidance for small device businesses entitled FY 2008 Medical Device User Fee Small Business Qualification and Certification. Companies with under $100MM in annual revenues will see additional reductions in application fees under MDUFMA II. For example, small companies will pay 50% of the full fee 510(k) and 25% of full fee PMA and PMA Supplements. However, companies must receive the small business certification prior to a submission to qualify. FDA officials have committed to reviewing all applications within 7 days time.


Click here to read more about MDMA's work on FDA/MDUFMA Issues


CMS Issues Series of Final Rules Impacting Device Industry

Outpatient Prospective Payment System Final Rule
The Centers for Medicare and Medicaid Services (CMS) issued the outpatient prospective payment system (OPPS) final rule. The OPPS payment reforms will require that hospitals report seven consensus quality measures. Those hospitals that are paid under the Inpatient Prospective Payment System are also now required to report their applicable quality measure to receive the full market basket update in CY 2009. Failure to report these measures will result in a 2 percent reduction in the update.

In addition, CMS is also moving forward with extending packaging various services under OPPS. Services to be packaged include: guidance services, image processing services, intraoperative services, imaging supervision and interpretation services, diagnostic radiopharmaceuticals, contrast agents, and observation services. In addition, CMS is moving forward with adoption of composite APCs to provide bundled payment for several major services.

CMS will also reduce Medicare payment and beneficiary liability for certain device-dependent APC groups when a manufacturer provides a substantial partial credit to a hospital for a replacement device implanted in a procedure.

Finally, CMS will provide reimbursement for extended outpatient visits with observation care through two composite APCs and will also utilize composite APCs to pay for low dose rate prostate brachytherapy and cardiac electrophysiologic evaluation and ablation services.

CMS Announces Final Decision on Clinical Trial NCD
CMS announced its final determination regarding the Clinical Trial National Coverage Decision. CMS decided that no change to the July 9, 2007 policy is necessary appropriate. Therefore, no additional conditions of coverage will be imposed. The decision comes in light of the recently passed Food and Drug Amendments of 2007 which establishes significant requirements for clinical trials. CMS stated that it will continue to review the legislation to avoid imposing duplicative or inconsistent obligations.

Inpatient Prospective Payment System Final Rule
In August, CMS issued the inpatient prospective payment system (IPPS) final rule. The IPPS payment reforms would restructure the inpatient diagnosis-related groups (DRGs) to account more fully for the severity of each patient’s condition. In addition, the rule includes provisions to ensure that Medicare no longer pays for the additional costs of certain preventable conditions (including certain infections) acquired in the hospital. The rule also expands the list of publicly reported quality measures and reduces Medicare’s payment when a hospital replaces a device that is supplied to the hospital at no or reduced cost.

Click here to read more about MDMA's work on Reimbursement Issues


As the House Moves Forward on Patent Reform, Uncertainty Persists in the Senate

Patent Bill Passes House, Awaits a Senate Vote
The House of Representatives narrowly passed HR 1908, The Patent Reform Act of 2007. The bill significantly weakens the intellectual property rights of patent holders and eliminates many deterrents that currently exist against infringers. However, proponents of the bill were only able to muster 2 votes more that a simple majority of House Members and 175 Members from both parties opposed the legislation.

In addition to our lobbying efforts, several members of the Medical Device Manufactures Association board came to Washington, DC share their views at a press conference on/of the Patent Reform Act of 2007. The event was a joint effort by MDMA, Bio, NVCA and the Innovation Alliance to present to the public some of the potentially devastating consequences the proposed measure could bring about if implemented in its current format. Joe Kiani, Chairman of the MDMA Board of Directors, and Mark Wan, also on the Board, spoke on behalf of the organization. Both Kiani and Wan emphasized that the proposed changes to the patent system would create uncertainty about the validity of patents and drive venture capital away from innovative device companies.

Judge Orders Injunction Blocking PTO Rules
In late October, The US District Court of Eastern Virginia granted GlaxoSmithKline's preliminary injunction blocking the United States Patent and Trademark Office (PTO) from implementing its controversial rules on continuations and claims. The PTO rules would have limited the number of claims and continuations filed by a patent holder the court schedule has not been announced, some expect further proceedings to resume in January.

MDMA is very pleased that the court issued a temporary injunction in the GSK case. Consistent with the comments MDMA and hundreds of others filed with PTO, the rule changes are beyond PTO's authority and would severely undermine the ability of life science companies to innovate.

Click here to read more about MDMA's work on Patent Issues


GPO and Others Accused of Defrauding the Government
A former Novation employee filed a qui tam action against her former employer in what appears to be one of the most significant actions taken against the illegality of GPOs. Alleging that Novation was illegally receiving additional payments and kickbacks from vendors to contract with the GPO, the former employee contends that she was terminated after raising concerns to her superiors. Specifically, she claimed that inordinate fees we assessed to vendors and, in turn, these costs were passed on to hospitals and ultimately the Medicare and Medicaid Federal health programs. Under the Federal False Claims Act, an employee with knowledge of wrongdoing can bring an action for themselves and the government and share in any financial recovery.
Click here to read the article.

 

Other News


New Legislation Raises Many Questions for Device Manufacturers

Grassley-Kohl Introduce “Sunshine Act” Legislation
A proposal in the Senate will attempt to address the relationship between drug and medical device manufacturers and physicians. Offered by Senators Charles Grassley and Herb Kohl, the legislation would compel manufacturers to disclose nearly all gifts used for marketing purposes. The measure, if passed, would require quarterly and annual disclosure reports of gifts and would be available to the public through an internet-based website maintained by the Department of Health and Human Services. The measure would be applicable to drug and device manufacturers whose annual gross revenues exceed $100 million.

Transparency in Medical Device Pricing Act of 2007
In late October, Senator Charles Grassley, Ranking Member of the US Senate Committee on Finance, and Senator Arlen Specter, Ranking Member of the US Senate Judiciary Committee, introduced legislation requiring public disclosure of medical device prices. The measure would require medical device manufactures to file quarterly reports on the average prices of all implantable medical devices sold for inpatient and outpatient procedures. The reporting condition would be a requirement to participate in Federal health insurance programs including Medicare, Medicaid and CHIP. In addition, failure to disclose prices as well as misrepresenting prices would result in civil monetary penalties ranging from $10,000 to $100,000. The Centers for Medicare and Medicaid Services would be responsible for posting pricing information to the public on the agency's website and update that information on a quarterly basis.



Most Successful Premarket Approval (PMA) and 510(k) Premarket Notification Workshop to Date

MDMA, in cooperation with BayBio, held a one-day PMA and 510k workshop in Palo Alto, CA on September 28th. The program was MDMA’s most successful to date with 60 attendees, informative speakers, and thorough presentations.

Attendees learned the regulations governing 510(k) and PMA premarket submissions from leading FDA attorneys, industry representatives, and FDA officials. This program is designed to help companies understand the technical requirements of submissions, provide practical advice on how to prepare them, help manage and maximize communications with FDA, avoid fraud and abuse in clinical trials, and devise a product reimbursement strategy. The program provided valuable insight from a variety of perspectives and gave companies considering submitting a 510(k) or PMA in the future the tools they need to prepare successful submissions.

You can’t afford to miss this program in 2008, date coming soon.
Click here to view the 2007 agenda.

 

upcoming events


This fall, MDMA will host its 10th Annual Coverage, Reimbursement and Health Policy Conference in Washington, DC on November 12-13, 2007 at the Hotel Monaco. This conference offers attendees the opportunity to hear from leaders in Medicare policy, including senior CMS officials, Congressional staffers, and reimbursement consultants. Through presentations and interactive sessions, attendees will learn about recent changes and future trends of Medicare and private payer coverage, new legislation affecting reimbursement, and strategies for obtaining speedy, adequate reimbursement here and abroad.

VIEW AGENDA AND REGISTER