Q Review Issue 4, Volume 2 - April 2008

Top Stories


MDMA Increases Awareness About Concerns with Patent Reform Act
The Patent Reform Act continued to face increasing opposition by various stakeholders over provisions dealing with damages, post grant review and inequitable conduct. Growing opposition from various labor groups, universities and healthcare industries have caused several key Senators to reconsider their position on the legislation. While some mega tech companies sought to rush the bill through the Senate, it now appears that Members of Congress are taking a more deliberate approach to make sure they address the key issues properly.

MDMA continued its advocacy efforts before the Senate, meeting with key Senate staff to inform them of the serious consequences the legislation would have on innovation in the medical technology sector. In addition, MDMA Chairman Joe Kiani, President and CEO of Masimo Corporation, presented before a congressional stakeholder’s meeting held by the Senate Committee on Small Business regarding the Patent Reform Act (PRA). The purpose of the briefing was to inform Senate staff of the impact the PRA can have on small and emerging companies. Kiani cited his own experience on how the current system affords significant protection to small, developing companies and is sometimes the only leverage that a breakthrough technology will have against larger, more established companies. Specifically, Kiani and other panelists opposed to the current version of the PRA argues that changes to the way damages are calculated, and other positions, will greatly affect the levels of investment in developing technologies.

Another key development in the patent debate occurred when Senator Arlen Specter, Ranking Member of the Senate Judiciary Committee, announced he would not be able to support the bill due to several points of contention, including how to assess damages in patent infringement cases. Specter’s defection was critical because of his seniority on the Committee as Ranking Member and also because he was viewed as a key Republican supporter of the legislation.(Read more)

It now appears uncertain whether or not an agreement on the PRA can be reached in the 110th Congress.


MDMA Testifies on SBIR Reauthorization
MDMA Executive Director Mark Leahey testified before the House of Representatives Committee on Small Business regarding reauthorization of the Small Business Innovation Research (SBIR) program. MDMA’s testimony focused on the importance the program has had in the development of medical technologies. MDMA also recommended that the reauthorization legislation include changes to current law and regulations including an increase in Phase I and Phase II grant levels and refining the small business ownership definition to include businesses with a majority ownership by venture capital investors.
To view MDMA’s testimony click here

A vote on reauthorization of the SBIR program is scheduled for late April.


Supreme Court Limits Lawsuits Against Medical Device Manufacturers
In a landmark decision, the Supreme Court upheld initial lower court rulings that medical device manufacturers cannot be held liable in state tort cases if the device has been approved by the Food and Drug Administration. The case, Reigel v. Medtronic, is significant because it reaffirms that existing Federal device approval laws preempt individual state regulations. Specifically, the ruling applies to devices approved by the FDA under a premarket approval (PMA) application. (Read more)

While the victory is significant, the ruling is likely to motivate some Congressional members to offer legislation. The New York Times reports that Senator Edward Kennedy, Chairman of the Health, Education, Labor, and Pensions (HELP) and Representative Henry Waxman, Chairman of the House Committee on Oversight and Government Reform, will likely proposed legislation to nullify the Court’s decision.  (Read more)

MDMA submitted an amicus curiae brief before the Court argued the case.

 


Other News


CMS Releases Proposed IPPS Rule
The Centers for Medicare and Medicaid Services (CMS) released the proposed hospital Inpatient Prospective Payment System (“IPPS”) rule. As expected, CMS addressed several areas of concern to the medical device industry including, but not limited to, charge compression, new technology add-on payments, physician owned medical device companies and gainsharing.

CMS also address several other areas of general concern. CMS estimates that payments to acute hospitals will increase by $4 billion in the next fiscal year. In addition, CMS projects that hospitals that report all of the required quality measures will receive a full market basket update of 3% while non-reporting hospitals will receive an update of only 1%. CMS will also complete the three-year phase-in of cost-based weights and the two-year phase-in of Medicare Severity Diagnosis Related Groups (MS-DRGs).
More information on the rule


FDA Proposed Rules Would Allow for Dissemination of Off-label Use of Medical Devices
The FDA issued draft guidance for use in the distribution of medical or scientific journal articles and reference publications that involve off-label use of medical devices. Previously, Section 401 of the Food and Drug Administration Modernization Act set out guidelines that allowed the dissemination of information on unapproved uses of FDA-approved products. As long as the guidelines were met by the manufacturers, the dissemination of this type of information was not viewed by the FDA as evidence of an intent to promote the product for an unapproved or off-label use. However, Section 401 expired on Sept. 30, 2006.

MDMA submitted comments on the draft guidance to provide for the proper dissemination of scientific articles to educate physicians and patients about important medical therapies. To view MDMA’s comments click here



Administration Releases FDA Budget for 2009
The Administration released its FY 2009 Federal budget calling for increased funds for the Food and Drug Administration (FDA). Specifically, the President requested $2.4 billion for the agency. The request represents a 5.7 percent over the current fiscal year’s budget. The $2.4 billion request includes $1.7 billion from Congress and $628 million in user fees collected from drug and medical-device companies. The Centers for Devices and Radiological Health (CDRH) proposed budget increased slightly to $241,880,000 for FY 2009.

While the budget request is an increase from the previous year, many stakeholders contend that even more is needed to deal with the current level of demands on the agency. MDMA also remains opposed to any efforts to raise additional funds through user fees. MDMA strongly believes that the additional resources must come from congressional appropriations and not the industry.

Food and Drug Administration (FDA) Commissioner Andrew von Eschenbach warned that the FDA "may fail in its mission to protect and promote the health of every American.” Commissioner von Eschenbach cited that a lack of resources, as identified by the agency-commissioned Science Board, is causing the agency to not keep up with current scientific advances. The Science Board stated that the agency's budget will need to increase to $3.7 billion by 2013 in order to perform its stated mission.


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