Q Review Volume 3, Issue 3 - July 2007

 

Hill Moves Closer to Passage of MDUFMA Reauthorization
In May, the Senate passed the FDA Revitalization Act of 2007, by a vote of 93-1. This legislation will reauthorize MDUFMA through 2012. MDMA is supportive of the legislation as it improves and simplifies the MDUFMA performance goals, increases collaboration between FDA and the industry, and creates a fee structure that is more stable and provides greater fee relief for small companies, especially those under $100MM in annual sales.
To learn more about the Senate bill, please click here

In the House of Representatives, the Energy & Commerce Health Subcommittee held a hearing on the reauthorization of MDUFMA, in which MDMA Board member, Kelvyn Cullimore, testified on behalf of MDMA. Mr. Cullimore expressed support of the agreement reached by FDA, MDMA, and other stakeholders and emphasized the need for increased congressional appropriations in the future to ensure the user fees do not become the primary source of funding for FDA.
To read MDMA’s testimony, please click here

In June, the House Energy and Commerce Committee approved H.R. 2900, The FDA Amendments of 2007, which like the Senate bill included the reauthorization of the medical device user fee act, improvements to the third-party inspection program and the establishment of a clinical trial registry and results database. The full House passed the bill in early July and final passage is expected before MDUFMA expires on September 30, 2007.
To read more about H.R. 2900, please click here


Supreme Court to Hear Preemption Case
In June, the Supreme Court agreed to hear Riegel v. Medtronic during the fall term, beginning in October. This is the first time that the Supreme Court has decided to hear a case where a patient is seeking state court remedies against a medical device manufacturer where the device was approved through FDA’s premarket approval (PMA) process.
To learn more about the case, please click here


CMS Issues Series of Final and Proposed Rules
DME Final Rule
In April, the Centers for Medicare & Medicaid Services (CMS) issued the long awaited final rule to implement a competitive bidding program in Medicare for certain, durable medical equipment prosthetics, orthotics and supplies (DMEPOS). Due to the restrictive definition of "small" suppliers (gross revenue of $3.5 million or less in annual receipts), MDMA remains concerned about the impact this program will have on beneficiary access and the ability for small medical device companies to participate in the program. MDMA will continue to engage CMS and advocate for a more reasonable approach to address the concerns of beneficiaries and medical technology companies.
To read the entire rule, please click here


Clinical Research Policy
In April, CMS released their proposed policy for clinical trials. MDMA is supportive of CMS covering routine patient care costs for Medicare beneficiaries who are enrolled in clinical trials and we continue to hope that CMS will continue to encourage Medicare beneficiaries to participate. However, it did come to MDMA’s attention in late May that CMS is potentially negatively interpreting their forthcoming National Coverage Determination (NCD) on Clinical Trials to preclude Medicare coverage for most industry-sponsored post-approval clinical trials of drugs and devices. Worse, CMS apparently intended this interpretation to be retroactive to the date of the first Clinical Trial NCD in 2000. Such a policy decision would have a profound chilling effect on Medicare beneficiary enrollment in clinical trials, and would also put in question literally thousands of Medicare claims paid in the last seven years.
To read MDMA’s letter to CMS, please click here

As a result of MDMA’s efforts, CMS issued a final rule that continued its current policy. However, CMS is seeking comments on this issue again and MDMA continues to be concerned about changes to the policy.

Inpatient Proposed Rule
Also in April, CMS released the inpatient prospective payment system (IPPS) proposed rule for fiscal year 2008. The proposal continues the steps that CMS started last year to adjust payments to hospitals based on a patient’s severity of illness by expanding the number of diagnosis-related groups (DRGs) from 538 to 745. The proposal also continues the phase-in of moving from charge based weights to cost based weights. Under the proposal, two-thirds of a DRG payment will be based on costs and one-third based on charges. On average, hospitals are going to receive a 3.3 percent payment increase with urban hospitals faring better than rural hospitals.
To read the proposed rule, please click here

In June, MDMA submitted comments to CMS on the IPPS proposed rule and MDMA made 13 recommendations to CMS to improve the rule. Specifically, MDMA recommended that CMS should phase in implementation of the MS-DRGs over three years to allow hospitals the time to adjust to the changes. In addition, MDMA recommended that CMS should address the effects of charge compression on payments for procedures involving advanced devices by adjusting DRG weights as recommended by the RTI report released earlier this spring. Further, CMS should implement changes to cost reports in fiscal year 2008 to allow the agency to gather more accurate cost data regarding advanced medical devices for use in future rate-setting.
To read MDMA’s comment letter, please click here


New Leadership at the Head of CMS
In May, President Bush nominated Kerry Weems, HHS Deputy Chief of Staff, to head the Centers for Medicare and Medicaid Services (CMS). Before serving as Secretary Leavitt’s Deputy Chief of Staff, Weems was the Department’s Acting Assistant Secretary for Budget, Technology and Finance. Separately, Leslie Norwalk, CMS’s acting administrator has announced she will be leaving CMS. MDMA supports the nomination of Weems and looks forward to working with him to ensure that innovative technologies are adequately covered and reimbursed for the Medicare population.

Congress Continues to Push for Patent Reform that Will Stifle Investment and Innovation
The issue of patent reform continues to heat up in Washington, as Congress is currently in the process of considering changes to the patent system that would negatively impact medical technology companies. MDMA has joined the Cross-Coalition which includes BIO, CHI, The Innovation Alliance, Qualcomm, Texas Instruments, Corning, Monsanto, Motorola, NVCA, and many others to lobby against the current bills (S.1145 and HR 1908) under consideration in both the House and Senate. Members of the Cross Coalition are specifically concerned with provisions in the current bill dealing with post-grant review, apportionment and expanding PTO’s rulemaking authority.
To view MDMA’s position paper, please click here
In addition, MDMA joined over 200 other organizations to express concerns with The Patent Reform Act of 2007 by sending a letter to key members of the House and Senate Judiciary Committees.
To read the letter, please click here

Issues Impacting Small Business
SEC…
In April, the Securities and Exchange Commission (SEC) met to consider easing the most contentious provision within Sarbanes-Oxley Act - Sec. 404. Since enactment, small and mid-size businesses have argued that the law is too complex and burdensome. However, striking an appropriate balance between reducing the costs of the regulations and preserving the investor safeguards has proven to be a challenge.
To read a Washington Post article on this issue, please click here

SBIR
In late April, the House Science and Technology Subcommittee on Technology and Innovation held a hearing on “Small Business Innovation Research Reauthorization on the 25th Program Anniversary.” President and Chief Executive Officer of Synapse Biomedical (MDMA member company), Anthony Ignagni, testified before the Committee about the ways in which the SBIR program could be more effective in achieving its goals. Specifically, he made three concrete recommendations to improve the program:

  • First, Congress should increase the dollar amount of Phase I and II awards so that they account for an inflationary adjustment as the amount of the awards hasn’t increased since 1992.
  • Further, he articulated the need to provide agencies with more flexibility in administering the SBIR program so that companies could apply for Phase II grants without having to first apply for a Phase I grant.
  • Finally, he strongly encouraged Congress to return to the previous policy (prior to the 2003 rule change) so that majority venture backed companies could re-participate in the program.

Based on these three suggestions, Mr. Ignagni suggested that small business participation in the SBIR program would increase. The Committee seemed very receptive to his testimony and MDMA looks forward to continuing to work with Congress to legislatively fix the problem that majority venture capitol backed companies are experiencing.
To learn more please click here


MDMA Celebrates 15 Years of Achievement During Annual Meeting
In May, MDMA held an extra special Annual Meeting as we celebrated 15 Years of Achievement on May 17th and 18th at the Grand Hyatt hotel in Washington, D.C. With more than 130 attendees and a host of distinguished speakers, it was an extremely informative and successful meeting. Former MDMA Chairmen and senior staff discussed early years of the organization and stressed the critical importance of entrepreneurial companies having a voice in Washington. Senior officials from HHS, FDA, CMS, Capitol Hill and the industry all engaged in lively discussions on policy and the future of the medical technology industry.
For more information please click here