Recently, I had the opportunity to interview Pete O'Heeron, CEO of a private company called SpinalCyte, a company developing an application to treat degenerative disc disease using cells derived from human skin for the Nov. 9th edition of Medical Device Daily .
O'Heeron was especially enthusiastic about the application, which would promote autologous regrowth of the spinal disc nucleus using human dermal fibroblasts (HDF).
If such a technology could garner approval, it could potentially replace implants in patients. Although, this has only been test in animal models - the technology holds great promise.
I think this story was right on time for me, because I had just returned from the 2012 Cleveland Clinic Medical Innovation Summit, and biological solutions vs. implants was a topic of discussion during a few panel sessions.
It was pretty neat to see a company actually making strides toward fulfilling predictions that were made by an expert panel at the Cleveland Clinic meeting.
Time will tell if SpinalCyte is successful. As to when the therapy could be used in human patients in a trial – that could be about two years out, O'Heeron told MDD. But ultimately biologic solutions are only going to gain more traction in the future.
[caption id="attachment_2031" align="alignleft" width="300"] Who needs caffeine at a time like this?[/caption]
New York may be the town that never sleeps, but Washington is the town that never fails to amaze. We currently have a sex scandal seeming to rival the Bill Clinton-Monica Lewinsky detonation, but the current scandal has more in common with the Profumo affair because a secretary of defense was involved.
Obviously the President has a number of distractions. One of those is Benghazi, a story seeming to grow more convoluted every day. Somewhat linked to all that – more or less immediately – are Gen. David Petraeus, Gen. John Allen, Jill Kelley, and Paula Broadwell (apparently it doesn’t end there, but I just don’t have the stomach for any more).
Then we hear the FBI was investigating the CIA chief purportedly without telling the White House until 5 pm on election day. If that doesn’t stretch your brain, nothing will.
So what does all this have to do with the device tax and the fiscal cliff?
Well, let’s face it: The Benghazi-Petraeus thingamabob and the FBI-watching-the-CIA chief mindblower together constitute a mess that can’t help but distract everyone working within 10,000 feet of the Oval Office (read: Capitol Hill). They’re an enormous pair of problems for anyone who shows up at the White House for work every day, and they will not go away in a week or two.
That leaves the House and Senate for leadership on the Gordian knot known as the fiscal cliff. The GOP still holds the House, but as we discussed previously, Democrats picked up three seats in the Senate, thus giving Senate majority leader Harry Reid more reason to play hardball. And let’s face it. Senator Reid knows from hardball.
If you don’t believe me, remember that Reid alleged earlier this year that Mitt Romney had not paid a dime in federal income taxes for a decade or so, an assertion that proved amazingly dead wrong. Reid never came clean on that utterly unfounded little slur, so why would he suddenly get bashful now?
“We could avoid the fiscal cliff for 98% of Americans today,” Reid is credited with having said recently. Clearly the line has been drawn. Add to that the fact that President Obama has said enough to indicate he believes the election gave him a mandate, and there’s no expectation Democrats will bend much at all, if any, on any hot-button tax matters. One exception would be the R&D tax credit, except that it’s not even remotely controversial.
There are a couple of conclusions to be drawn from all this. One is that the Bush-era tax cuts will lapse for those making more than a quarter of a million bucks a year, and the second is that all the fiscal cliff issues will go down to the wire. Both parties are pretty dug in, and although one cannot rule out the possibility that one side will cave and thus expedite a resolution, it’s rather unlikely. These issues are almost sure to devour enormous amounts of time and energy on the Hill. Hence, it’s tough to see how a device tax repeal is likely to draw much interest in the Senate (let alone draw 60 votes), at least not without offsets.
“Offsets? In this fiscal environment? Are you kidding me? Offsets?” I can almost hear myself saying that in the same tone of voice Jim Mora used in addressing a question about his team making the playoffs a few years back.
I would gently remind the reader that the Medicare physician fee doc fix (a.k.a. SGR) is a $27 billion a year mess Congress has yet to address. Granted the device tax comes to far less than that, but many in Congress might argue they have no business repealing the device tax with SGR hanging over the king’s head.
In other words, good luck with that device tax repeal.
There’s a saying that elections have consequences, an observation that has special meaning for the highly regulated medical device industry. Here are a few things for device makers to bear in mind as 2012 gives way to 2013.
Supreme Court vacancies: Is PMA pre-emption back in play?
The last time the U.S. Supreme Court reviewed FDA’s pre-emption of state regulatory mechanisms for PMA devices was Riegel v. Medtronic in 2008, and the decision came out in favor of the defendant. We previously discussed how the election might converge with retirements on the Supreme Court, but industry cannot assume pre-emption is a dead issue. The folks at Public Citizen were highly agitated at the outcome and surely will look for another crack at this.
Reading the outcome in Reigel as an 8-1 decision is a bit simplistic if only because Justice Stevens sided with the majority somewhat grudgingly. In any case, Justice Souter, who voted with the majority, is gone, as is Stevens, replaced by Justices Sotomayor and Kagan, who can reasonably be presumed to tilt toward eliminating pre-emption.
Justice Ginsburg, the lone dissenter in Riegel, is expected to retire sometime soon as might Justice Breyer. If President Obama has to replace anyone besides Justice Ginsburg, it’s likely to be either Justices Scalia and/or Kennedy.
Thus the votes you have for ending pre-emption are: Kagan, Sotomayor, and the replacements for a list that may include Ginsburg, Breyer, Kennedy and Scalia. If the White House replaces both Ginsburg and only one conservative jurist, all you have to do is flip Breyer – or replace him with someone who goes along should he retire – and you’re there.
FDA managementstanding pat
I’d argued previously that Jeff Shuren might be on the hot seat in his post as the chief of FDA’s device branch should Romney win, but that appears to be a non-issue. Yes, some in the House and Senate will continue to grill Shuren like cheap ground beef, but if the e-mail surveillance and the miscue by Bill Maisel, MD, can be overlooked, who’s to gripe about a rescinded 510(k) application?
FDA commissioner Margaret Hamburg is also safe, although it remains to be seen whether she’ll want to stick around. It’s a grueling job, as is the CDRH directorship, so who could blame her for finding the door? I might point out that Shuren has been in the HHS bureaucracy for some time, but this was new to Hamburg in 2009. She might voluntarily say adios. He won’t, not yet anyway.
By the way, anyone who thinks HHS Secretary Kathleen Sebelius will retire has to give me a good reason for thinking so. Secretaries often hang it up after one term – especially the one working at Foggy Bottom, a job that rarely lasts more than four years – but Sebelius has been an unusually enthusiastic cheerleader for the Affordable Care Act. She might leave, but I doubt it.
Congress: GOP loses three Senate seats
The Republican Party did well in the House but managed to lose three seats in the Senate. Scott Brown lost his Bay State seat to Elizabeth Warren, who is no fan of the device tax and hence might be counted on in other votes important to industry, but now there’s the chatter that the other Massachusetts senator, John Kerry, may take Secretary of State Hillary Clinton’s job. Should that prove out, there’s a new wild card in the Senate, and there’s no guarantee it’d be Scott Brown.
The Indiana seat once held by Richard Luger has gone to the Democrats, and there’s no way of telling how Joe Donnelly will vote. Donnelly generally does not seem to favor high taxation, but can both he and Warren, two freshman senators, afford to buck the system on sensitive votes? If you know anything about Senate majority leader Harry Reid, you might not be very optimistic.
Angus King is a purported independent who took the seat vacated by Olympia Snowe in Maine, but King is on record as supporting the Affordable Care Act. He is also expected to caucus with the Democratic Party. Score one for those who think device makers are the problem.
Bottom line: The device industry cannot assume its fortunes were enhanced by the 2012 elections.
If I had to sum up the key take away from Cleveland Clinic's Medical Innovation Summit last week, I would probably say something like this : Innovation is alive and well, but are hospitals and physicians willing to pay for it when capital is so strained?
Nearly every panel that I attended seemed to have that as an underlying theme. Everyone from Cleveland Clinic's own Dr. Joseph Iannotti to Medtronic's CEO Omar Ishrak made statements about innovation in healthcare and the importance of having it present in an environment where capital is limited and dollars are few.
Iannotti made the most recent comment about innovation on the closing day of the summit when he said, "High Cost technology is needed - we need to be more efficient in how we use it."
The Medical Innovation Summit was perhaps in a state of flux this year and not because of Hurricane Sandy and its impact into the proceedings (Kudos for Chris Coburn, the executive director of CCF Innovations – the technology arm of the Cleveland Clinic, his team for shuffling around the speakers and keeping the panel going despite the storm impeding traveling plans for many of the panelists).
But rather, the flux came from the lateral shift to med-tech firms and clinicians proving outcomes in therapy coming into fruition. The result is a shift in the way med-tech firms and clinicians are thinking about innovation.
One thing that was made apparent, was that the additional bells and whistles method that was perhaps touted in years past is fading out. Clinicians want simple tools that can get a job done better than some of the complex offerings out on the market.
Perhaps the greatest sign of this was in the Top 10 Innovations of 2013. From insurance plans to bariatric procedures, innovation is slated to occur much differently than in the past.
Below is the Number 1 Innovation of 2013.
Last month, I had the opportunity to witness something extraordinary. No, not the first presidential debate between President Obama and Governor Romney ... that's a discussion for another time blog.
What I saw that was so intriguing occurred at the Georgia Life Sciences Summit held here in Atlanta. I got the chance to see three college students present a technology that could significantly change the quality of life for paralyzed patients.
What I'm speaking about is Lingcast's (a start-up firm based out of Atlanta) Tongue Driven System (TDS). The device utilizes an tongue-computer interface that uses magnetic sensors to wirelessly track the motion of the user’s tongue within the oral cavity and translate its motions into set of commands that can be used to perform a multitude of tasks, including driving a wheelchair, controlling a cursor on a computer, smart phone or tablet (an article discussing the device at length appeared in October 5, edition of Medical Device Daily).
But what was more impressive than this innovative technique, are the students who were working on this project. Led by, Jacob Greenberg, a student at the Emory University Law School , Georgia; Nikhil Kurien, MBA Candidate, Georgia Tech Scheller College of Business, Georgia, and Hangue Park, PhD, Candidate in Electrical and Computer Engineering, from Georgia Institute of Technology; gave a key presentation that clearly matched the level of innovation of the TDS.
If these students are able bring the energy of this presentation into Lingcast's discussions with FDA, then TDS will be available on the market in no time.
Here's a brief demonstration on how TDS works.