[caption id="attachment_3753" align="alignleft" width="240"]Guy Fawkes night; a different kind of giving of thanks[/caption]
November is not always a spicy month where federal agencies are concerned, but FDA and CMS have come through to give us something to talk about. Below are a couple of items to mull over as you enjoy a leisurely, stress-free drive or comfy, un-cramped flight to celebrate Thanksgiving with loved ones.
CMS makes a virtue of necessity
The final guidance for the Medicare coverage with evidence development (CED) program is a relatively brief document considering the impact it will have, but also considering the length of the draft that birthed it.
One thing CMS did make clear in the final is that Medicare administrative contractors (MACs) will not be issuing CEDs despite that the agency had floated such a notion in the draft. However, CMS was very un-specific about how to closeout a CED study in the final, stating little more than that it has its eye on the coverage transition between the termination of a study and the agency's decision about non-trial coverage.
One can understand how CMS might want to maintain flexibility, but the draft version raised more questions than it answered. Other than the MAC/CED thing, just what do we know now that we didn't know before? I guess brevity is the key virtue with this document.
FDA clamps down on morcellation
FDA announced November 24 that it will require that manufacturers apply a black box warning to power morcellators as well as contraindications, a move designed to eliminate the spread of uterine sarcomas and other cancers as a consequence of morcellation.
One cannot complain about FDA's concern over the potential for debilitating and lethal cases of cancer, but there are those who believe the agency has overreacted in requiring that labels convey a contraindication for peri-menopausal women. Understandably risk averse device makers have already pulled their offerings from the market, but at least one private-sector insurer has abandoned coverage of the procedure, and a number of hospitals have forbade use of these devices in their facilities as well.
When it comes to things like this, I always wonder why more people never get upset about device lag (cought*TAVR*cough), which has undoubtedly cost far more than the dozen lives FDA has attributed to morcellation. We should not want to actively do things that promote morbidity and mortality, but is benign neglect that leads to death and debilitation really any better?
As an aside, FDA used the immediately-in-effect (IIE) guidance mechanism to communicate its concerns about power morcellators without offering the 60-day comment period it had required of itself in the final standard operating procedure for these guidances. Unless I'm mistaken, the IIE is a tool for addressing urgent medical situations based on recent scientific or evidentiary developments. If FDA feels it can make this declaration without offering stakeholders 60 days to comment, why would it bother to ask for public comment any other time it wants to use the IIE mechanism?
Since it is quite apparent that the use of morcellation is already in sharp decline, we can reasonably conclude that FDA is of the do-as-I-say-not-as-I-do school of thought when it comes to its own regulations. And some people wonder why other people are skeptical of government.
[caption id="attachment_3725" align="alignleft" width="257"]"You totally fell for that keep-your-doctor thing, didn't you?"[/caption]
There’s rarely a lack of activity on the policy and regulatory fronts in the world of med tech, and the past couple of weeks are no exception. Let’s talk about a few of those developments.
Consequences or tea leaves?
President Obama said in 2009 that elections have consequences, and that’s certainly true. But that’s a very different proposition than declining to “read the tea leaves on election results,” isn’t it Mr. President?
(And then there’s MIT’s Jonathan Gruber extolling the virtues of a lack of transparency, not to mention that he was taking in $400,000 of taxpayer money he decided not to disclose while publishing on healthcare reform. Ah, what a great time to be a stupid American!)
The trick for device makers is figuring out just what those electoral consequences will be in 2015. The medical device tax and corporate tax reform are high on the wish list, and some in industry feel the two are twin sides of the same coin.
Joined at the hip? Says who?
The problem with that definition of the device tax repeal problem is that while several members of the GOP have spoken hopefully of repeal in recent days, it’s not clear that a pairing of repeal with corporate tax reform is seen as a natural act by all involved.
Ask yourself how IBM or General Motors feels about exposing corporate tax reform to a potential veto over the device tax. Nothing against Medtronic’s market cap of more than $60 billion, but it’s a punk compared to Apple, which has a market cap of more than $600 billion. Even the Johnson & Johnson colossus is less than half that.
But whose ox will be gored in the corporate tax reform debate? As Paul Van de Water of the Center on Budget and Policy Priorities reminded me, the closed tax loopholes will affect different industries differently, while the reduced tax rates will affect everyone more uniformly.
That’s the debate that will make the corporate tax reform scrum really interesting in 2015 (remember that it took Congress five years to forge a consensus on patent reform). A device tax repeal may fly as a solo legislative venture next year, but I’ll ask only one question about corporate tax reform: Holding your breath yet?
Combo Dx devices
Steering away from elections, it was interesting to see the draft and final guidances on diagnostic systems used for both medical and research purposes. The draft emerged in April 2013, and FDA indicated in the draft that the provisions would not apply to systems used to screen blood and other tissue donors for communicable diseases.
AdvaMed made a different argument in its remarks for the draft, claiming that “consistency and optimal utility” would be enhanced by making the draft’s provisions applicable to those tissue-screening systems as well.
You have to wonder, though; optimal for whom? The manufacturers? Well, sure, but operators of blood and other tissue donor operations might think they’re paying for features they’ll never use. I find myself in the unusual position of applauding FDA for ignoring industry’s pleas.
So what were the major talking points coming out of Cleveland Clinic's Medical Innovation Summit? It certainly wasn't a discussion on the lack of venture capital dollars available for med-tech start-ups - a topic that used to dominate conversations a few years back. Nor was it about the Affordable Care Act.
No, the major talk at this year's Medical Innovation Summit, which was held last week, revolved around companion diagnostics. Look for new and exciting pharmaceuticals to be married to diagnostic tests for the foreseeable future. It seems in nearly every other panel something about combination diagnostics was mentioned. One pharma company executive went so far as to say that his company doesn't even start development of a new pharma product without thinking of how a diagnostic could work along with it.
And let's face it, with healthcare in full migration to a results-based only model, this is going to become the new norm. In a discussion with Myriad Genetics' President Mark Capone, he noted that "five years ago, you would have generally seen pharmaceutical companies try their best to develop a drug without a diagnostic. I think we've transitioned to the point where the recognition is that without a diagnostic, companies might have difficulty getting approval."
While this could be a tremendous boon for many diagnostic companies - or create a headache when discussing royalties - I wonder if pharmaceutical companies will go on a sizeable acquisition spree for diagnostics firms in the future.