Two things happened in January that really got the attention of a lot of people in this country - the payroll tax expired and in some cases insurance premiums went up. This cataclysmic effect sent many to Twitter and Facebook, ranting about how much money was being taken out of their monthly pay.
While I could go on about the first blow, it might be more appropriate to talk about the second, being that this is a blog on the med-tech and healthcare industry.
According to a report titled, "Cost of Comprehensive Health Benefits” from eHealth, the average monthly premiums for individual and family health insurance plans are 47% higher than average when said plans cover a comprehensive list of eight health benefits as compared to 2012. The report also found that deductibles for these plans covering these eight health benefits are 27% lower.
To many of us who have covered the med-tech space for years this comes as no surprise. For a while now, we've heard the term sick care, and have seen reports curtailing the rising costs and how something needs to be done. The only difference is, now this is having a definite impact on the cost to the consumer and it's not the elephant in the room any more, it's the gaping hole in the consumer's wallet.
While it is hard to gauge the impact of President Obama's healthcare plan, one thing is certain, and that's the vitality of the U.S. healthcare system depends on the plan's success.
There’s no shortage of important developments in the world of medical devices, but today, let’s discuss this matter of dogmatic adherence to biostatistics. We’ve all heard about the FDA advisory committee that recently recommended the agency approve a neurostimulation device for refractory epilepsy, and the concomitant thundering from on biostatistical high about what a corruption of the process it is to put the needs of the few gravely endangered patients ahead of numbers.
What a global tragedy it is when people who are suicidal are given one last option to deal with their disease. What a moral stain on humanity when another advisory committee recommends FDA approve a device to deal with mitral valve regurgitation despite iffy clinical trial outcomes. How dare anyone suggest that people be allowed to get a device (the NeuroPace for epilepsy or the MitraClip for mitral valve regurgitation) when their only alternative is to drop dead or take their own life?
So please, excuse me if I weigh in on behalf of the damned. Pardon me if I meekly beg for some consideration of those whose epilepsy is driving them to suicide, and those whose mitral valve regurgitation leaves them with nothing to look forward to but a slow, tormented path to the grave as their loved ones are forced to watch a death unfold before their eyes. But I feel I must find some way to appease the Authoritarians of Numbers, though they may rain blows of disapproval down upon my slender neck.
Appease, baloney. The fact is that the dominance of the medical discussion by the biostatistician is dead. It’s over, done with, kaput. Deal with it, already.
Clinicians on advisory committee hearings are arguing – and rightly so in my view – for the individual patient and telling biostatisticians that their numerical analyses are all good and well, but when does a biostatistician ever have to decide how to attempt to save a human life? I dare someone with a doctorate in statistics to look a patient in the eye and say, “numbers don’t lie, and that’s too bad for you, even if you are the exception.”
Precisely never. They deal with abstractions, not lives. And although they are perfectly decent human beings with the best intentions, they will never be charged with telling a patient, “well, the device failed the trial, so I’m sorry to tell you, you’re just flat out of luck. Tell God I said hi when you see him!”
So please, enough of the overbearing, obnoxious, totalitarian fulmination regarding biostatistics. Had I wanted to live in a nation-state run by a medical dictator with absolute power, I’d have moved there.
There was a time when we lived in a world in which those with no direct responsibility to the individual patient held sway at advisory hearings. The problem is that we are living in the age of individualized medicine. How soon we forget. In-di-vi-du-al-ized. Capisce? That means if there are patients in there who need a device and will benefit, they should get it.
Some people apparently didn’t get the flyer and would return us to a world dominated by the icy, uncaring gods of biostatistical numerology, and see any deviation from the party line as apostasy. Do I care to live in such a world?
As Fred Flintstone might say, thanks but no thanks.
[caption id="attachment_2339" align="alignleft" width="150"] Charles Dickens at his desk in 1858. Dickens' famous opening line from "A Tale of Two Cities" could easily be applied to the current state of the medical device industry, "It was the best of times, it was the worst of times."[/caption]
Here at Medical Device Daily we've become accustomed to the doom-and-gloom stories about our industry. The medical device tax provision in the Affordable Care Act and other emerging realities of healthcare reform along with worldwide economic sluggishness, regulatory and reimbursement challenges, consolidation among hospitals and an increase in hospital-employed physicians has created the perfect storm for the medical device industry.
So it was incredibly refreshing to speak with Paul Teitelbaum recently about why he sees medical devices as healthcare’s hottest commodity. Teitelbaum, a managing director with Mesirow Financial’s Investment Banking Practice, pointed out that there is a shift in M&A interest toward medical devices and away from traditional pharmaceuticals and generic drugs.
It’s a trend that began, to some degree, in 2011 and is expected to continue, according to Teitelbaum. Ironically, some of the same industry pressures that have created the doom-and-gloom attitude in med-tech are also responsible for the M&A surge.
Even big pharma companies that have historically had more cash at their disposal than med-tech companies are taking notice of the small-to mid-size companies that have innovative technology just waiting to be acquired by an organization with deeper pockets.
But what are the big-picture implications of this emerging trend? If more big pharma companies start playing ball on the med-tech field, will it end up being a plus or a minus for the industry as a whole? It was a question that Teitelbaum wasn’t able to answer for certain.
One potential implication, he said, is that the current big players on the med-tech side—Medtronic, Boston Scientific, Johnson and Johnson, St. Jude Medical, Covidien—are going to be batting against tougher competitors. On the other hand, Teitelbaum noted, the medical device manufacturing and regulatory process is so different from what the traditional pure-play pharmaceutical companies are used to, it’ll be interesting to see how successful these integrations are over the long term.
My conversation with Teitelbaum reminded me of Charles Dickens’ opening from “A Tale of Two Cities” and how it might be applied to the current state of the med-tech industry. So, borrowing Dickens’ longwinded sentence structure, this is what I came up with:
It was the best of times, it was the worst of times, it was the age of ObamaCare, it was the age of foolish medical device taxes and FDA user fees, it was the epoch of heart lead recalls, it was the epoch of PIP scandals and regulatory overhauls, it was the season of meaningful use, it was the season of comparative effectiveness, it was the spring of innovation, it was the winter of accountable care organizations, we had everything before us, we had nothing before us, we were all going direct to FDA, we were all going direct to M&A- in short, the period was so far like the present period, that some of healthcare’s noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of improved quality and cost effectiveness.
It isn’t often that a bit of news is a perfect fit to that one-word description, but the recent decision by a Los Angeles jury in the first case to be decided pitting Johnson & Johnson (J&J; New Brunswick, New Jersey) against what is a cast of thousands of litigants is nothing short of that.
Oh sure, there’s the usual post-decision posturing by the company per appealing the $8.3 million-plus jury award, but c’mon folks, the implications of this case for the medical-products giant – and truly for all other companies trying to do business in the med-tech space – are simply enormous.
Yes, the eventual financial onus will fall largely on the insurers who’ll be left holding the bag. It’s doubtful that many common folk will be weeping over that outcome – picture the folks in line at the phone company in the film Fun With Dick and Jane, bursting into cheers when D&J come in to rob the coffers – but the fact is that the outcome will make doing business as a device company even more difficult.
First of all, consider the scope of the entire J&J/DePuy Orthopedics hip implant legalities. This was the first of thousands of cases, with something in excess of 10,000 lawsuits pending over the Articular Surface Replacement, or A.S.R. The fiscal gymnastics of taking $8.3 million and multiplying it by that number of cases would fry even a Cray supercomputer. With thousands of the individual cases already having been consolidated into a single proceeding in a federal district court in Ohio, we wouldn’t expect to see every victorious litigant capture $8 million for pain and suffering as did the first California winner, but the number of digits following the dollar sign is still likely to be breathtaking.
Secondly, there’s the trust thing – from both the public (consumer) and user (surgeon) perspectives. The A.S.R. was sold in the U.S. and elsewhere in the world for years even though J&J’s own internal documents, as shown during the Los Angeles trial, clearly indicated DePuy knew there were problems with the metal-on-metal design.
Surgeons apparently told the company with great regularity that problems with metallic debris made it clear sales of the device should be slowed or stopped, but that didn’t happen until 2010, with sales of the A.S.R. continuing throughout much of the prior decade.
Even in a country where litigation of all sorts occurs pretty much at the drop of a hat, and where makers (and users) of medical products are among the most favored of targets, the scope of the J&J/DePuy cases is just plain startling.
Despite the regulatory approval of new antiepileptic drugs (AED) over the past decade and the expansion of indications deemed suitable for epilepsy surgery, individuals with intractable seizures – roughly one in three epilepsy patients – still face a dearth of treatment options. That void is all the more frustrating because epilepsy remains a debilitating condition for reasons beyond the clinical manifestations, often resulting in chronic unemployment or underemployment, social isolation and poor socioeconomic status.
It's no surprise, then, that the prospect of a new treatment for people with medically refractory epilepsy would be greeted with great enthusiasm. As an adjunct to AEDs, the responsive neurostimulator system, or RNS, under development by NeuroPace (Mountain View, Calif0rnia), is designed to detect abnormal electrical brain activity and deliver electrical stimulation to regulate brain activity before a seizure develops. The RNS could become the first electrical stimulation device approved by the FDA in epilepsy since vagus nerve stimulation was green-lighted in 1997.
But the results of the Feb. 22 FDA adcom meeting evaluating the NeuroPace RNS raise troubling questions about regulatory decisions in epilepsy care. As reported in Medical Device Daily, the FDA briefing documents submitted for the Neurological Devices Panel of the Medical Devices Advisory Committee meeting indicated that a pre-specified statistical analysis plan of NeuroPace's prospective, randomized, double-blind, sham-stimulation-controlled pivotal study called for the use of a generalized estimating equation (GEE) model and required that superiority be demonstrated based on a reduction in the frequency of total disabling seizures during the blinded evaluation periods (BEP).
However, neither the study protocol nor the statistical analysis plan “explicitly stated” which of two methods would be used to estimate standard error, producing what the FDA called “distinctly different p-values” for the primary efficacy endpoint. The agency and sponsor concurred that an alternative model was needed, agreeing to use the Poisson regression model. Although the FDA recommended that monthly seizure counts be used, NeuroPace chose the daily model, with the expectation that many seizure-free days would occur in the treatment group and there would not be a clinically meaningful way to group data.
That premise seemed reasonable, since seizure activity can vary from day to day. However, the observed variability in the study exceeded the expected variability in daily seizure counts following a Poisson distribution. NeuroPace then made ad hoc modifications, reverting to monthly seizure counts along with the use of a negative binomial distribution to analyze the returns. According to the FDA, NeuroPace had to add an adjustment for clinical co-variates along with the other modifications to achieve statistical significance for the primary efficacy endpoint.
With these modifications, the pivotal study showed a statistically significant 37.9 percent reduction in seizure frequency in the treatment group compared to a 17.3 percent reduction in the control group during the three-month BEP. Long-term results showed median seizure frequency reductions of 44 percent and 53 percent, respectively, at one and two years post-implant.
In its briefing docs, the FDA argued that some alternative post-hoc GEE models did not achieve statistical significance, none of the pre-specified secondary endpoints achieved statistical significance and no observed data analyses achieved statistical significance. Moreover, response to the device varied by the number of seizures seen at baseline, and findings from the treatment arm may have benefited from two patients on the sham arm with a different response pattern than others in the trial.
Despite these statistical qualms, 12 of 13 adcom members agreed there was “reasonable assurance” that the NeuroPace RNS system is effective for patients meeting the criteria for the proposed indication: adults with partial onset seizures from no more than two foci who are refractory to two or more AEDs. One panelist – a statistician – abstained. The panel voted unanimously that the system is safe, and 11 members concurred that the RNS benefits outweighed the risks, with two abstentions.
I understand the genuine desire to offer hope to epilepsy patients with uncontrolled seizures. My husband developed epilepsy at age 15 a year after a serious head injury, and he is not seizure-free after 40 years on various combinations of AEDs and a left temporal lobectomy.
But should the FDA permit statistical manipulation in epilepsy that would likely raise eyebrows in other indications? At BioWorld Today, I write about the development of drug therapies designed to treat individuals with cancer, hemophilia, multiple sclerosis, Alzheimer’s disease and many other poorly treated diseases. I understand the desire to bring new treatment options to patients with agonizing conditions. I really do.
I also see countless drugs rejected by the FDA when efficacy is not assured, even when safety is unquestioned. And, compared to medical management, the implantation of a deep brain stimulator is not inherently safe. Up to one in five patients could be expected to have a serious adverse event related to implantation and related medical procedures, according to the FDA’s own risk/benefit analysis of the RNS. Shouldn’t the burden of proof for such a device be even higher than that of a drug?
With respect to epilepsy, quality of life implications often are cited as a compelling reason for drug or device approval, with patients seemingly willing to accept a higher risk threshold in return for the prospect of improved seizure control. In my view, that premise should be predicated on demonstrated efficacy. In the real world, physicians are quick to suggest new treatments, and patients often are desperate. Few have the benefit of advocates with neurological expertise who can provide an unvarnished appraisal of a newly approved therapy. I wake up every morning with someone who has run the epilepsy treadmill, trying therapies touted for their efficacy that proved futile, and worse.
The NeuroPace RNS may, indeed, help some epilepsy patients, which would be a terrific outcome for the developer and the epilepsy community, alike. However, that claim seems far from proven, which should give the FDA pause in approving its usage without additional study. Individuals with epilepsy deserve treatments that offer true hope, not outcomes derived on the basis of statistical tinkering.
Are you ready? That's probably the most appropriate way to start off a blog entry concerning the soon to be implemented Physician Payment Sunshine Act. And the question isn't just for med-tech companies alone, it's for the physicians as well.
A recent survey conducted by MMIS, a company that develops secure communication solutions for firms, shows that physicians still aren't completely aware of the provision- which is set to go into effect in August (a little more than 4 months away. Yikes!). In a conversation with Medical Device Daily, Michaeline Daboul president/CEO MMIS said that survey results of the more than 1,000 physicians questioned show that more than half admitted they didn't know that the law required medical device companies and pharmaceutical companies to report on expenditures annually, without physician review of the data to correct any inconsistencies or errors prior to submission to the government.
Now there are probably tons of reasons why these physicians were unprepared for certain aspects of this law. Perhaps firms were hedging their bets that the Presidential election would go another way and that many provisions of the Affordable Care Act would be thrown out. Well that didn't happen and now med-tech companies and physicians have to deal with the law - or face hefty fines and damaged relationships if they aren't in compliance.
But that's where companies like MMIS come in. The company has designed a network that will allow physicians to become more familiar with the process and also view and possibly dispute payment entries prior to these said entries being made public.
It's an interesting network and MMIS has been talking to MDD about this for the last two years.
Obviously this company is ready, the question is are the med-tech firms and physicians out there ready?
Those who are following the medical device tax repeal story might also be buried in the weeds of the budget sequester, the continuing resolution and so on, and not without reason. After all, the resolution of these issues has a lot to do with how Medicare spending unfolds over the next seven months and beyond.
Much of the current hope for a repeal of the device tax seems to revolve around tax reform, so the question at this point is what will the tax reform discussion look like and whether it is viable as a vehicle for the device tax repeal. At the risk of seeming habitually pessimistic about the device tax repeal, the problem with the tax code overhaul as a vehicle for the repeal is that the two sides in this debate are approaching tax reform from what appears to be diametrically opposing points of view.
The Obama administration has made it clear since before the election of 2012 that an increase in tax revenues is its preferred means for dealing with the deficit. Reduced spending has not been the approach taken by President Obama, who has indicated that he will not settle for just an increase in rates, that he also wants to close out some tax loopholes as well.
Tax reform as House Republicans will propose it will likely consist of some closure of loopholes along with some lowering of rates, a sharp contrast to the President’s approach, which will be to attempt to bolster government revenues by leaving rates where they are – after all, he got what he wanted in terms of rates in the tax fight ending in January – and by closing loopholes.
Those who see room for compromise might cite Sen. Kelly Ayotte (R-New Hampshire), who indicated in a March 3 interview on This Week that she and Senate Republicans might be on board with tax reform that boosts revenues for Uncle Sam, but that’s not where House Speaker John Boehner is.
Boehner is in the driver’s seat where a Republican tax reform proposal is concerned, and it’s not that it doesn’t matter what Ayotte thinks. It’s just that it matters much more what Boehner thinks. Boehner said on Meet the Press, “the President got his tax hikes,” adding “the issue here is spending.”
There is little reason to think tax reform will be taken up in a serious fashion before the congressional recess in August simply because as soon as Congress gets past the continuing resolution/budget sequester issue, the matter of fiscal 2014 spending will surface. There are a scant seven months to come to terms with FY 2014, which means most if not all other issues of a fiscal nature will receive very little attention in the meantime.
[caption id="attachment_2265" align="alignleft" width="150"] The Mayo Clinic Jacksonville campus offers a landscaped plaza with garden ponds, walking paths and fountains for patients to enjoy between appointments.[/caption]
There has never been a shortage of negative news regarding the U.S. healthcare system, and for good reason. I could write a whole book on the subject, just based on my own bad healthcare experiences. But this is a mere 400-word blog, not a book, and I would rather spend it on a positive note.
After suffering from painful digestive problems for far too long, and getting absolutely nowhere with local doctors, I finally took control of my situation and went to the Mayo Clinic in Jacksonville, Florida. It was, hands down, the best healthcare decision I have ever made for myself.
Jacksonville is a six-hour drive each way from where I live and I have had to make several trips back and forth just since Christmas. But the high quality care and attentiveness I have received from the doctors and nurses at Mayo have more than made up for the cost and inconvenience of travel.
From my very first visit on Dec. 26 with my new gastroenterologist to my follow up visit with the colorectal surgeon this past Monday, I noticed a significant difference in the way patients are treated at Mayo compared to any other healthcare facility I have ever been to, which includes both civilian and military hospitals.
I was impressed by my GI doctor’s knowledge about inflammatory bowel disease and its effects on not just the digestive tract but the entire body. He was incredibly thorough in his evaluation and in his explanation of the diagnosis and treatment plan. When it became necessary to send me to one of the clinic’s colorectal surgeons for further treatment, he worked closely with the surgeon to coordinate my care.
Throughout my experience at Mayo I felt confident in the clinic’s team approach to patient care and I was treated like a human being rather than a number. It’s obvious that even the campus itself was designed with patient comfort in mind. In between appointments I took advantage of the outdoor plaza full of garden ponds, walking paths and fountains. And best of all, the entire campus is smoke free so nonsmoking visitors like myself can actually enjoy the fresh Florida air.
I am still frustrated that none of the doctors I saw locally took my medical condition seriously. But I am very glad I took matters into my own hands and went to Mayo. Finally I can eat food again without suffering painful consequences.