Challenges of Trade with Medical Devices:

By

Christa Altenstetter, Ph.D.

Professor of Political Science

The Graduate Center and Queens College, CUNY

Lecture delivered on Tuesday, March 25, 2008, 5:30 -7:30 p.m.

EUSC Lecture Series co-sponsored by the Otto and Fran Walter Foundation

Background

Attention to the international trade with medical devices is prompted by a simple fact. Medical devices are used in daily medical and clinical practice in doctors’ offices, hospitals, and increasingly in the home environment. They are used in diagnosis, treatment, prevention and rehabilitation. These wide and multiple uses in all areas of the delivery of health care make medical devices an important topic for social science research. Yet most people take for granted that self-care or patient-assisting devices they use at home, or surgical instruments, devices, implants or combination products (i.e. drug and device) [1] doctors use are safe, properly certified and approved and have undergone all necessary tests to secure their quality, safety, and efficacy.  However, the way the regulatory process works – in the United States, Japan or the European Union, and increasingly on the global level - does not always produce regulatory decisions that are patient-friendly. Shoulder, knee, hip and heart implants, to mention only a few samples of devices, are not always of high quality or efficacious. Nor do they always perform and last as long as expected.

            This lecture will draw out a few challenges that are significant from a patient perspective. Although the challenges are also significant for manufacturers, regulators and doctors, this lecture will only address their roles indirectly. Nor can the many legal, ethical, social and economic issues that regulation raises be addressed, except to say that within this extraordinarily complex field of regulation, there can be no simplistic distinctions made between black or white, right or wrong, legal or illegal, ethical or unethical, professional or unprofessional. Balancing acts between the rights of patients and the rights of other stakeholders have always been necessary, but attention to the patients’ perspective is now more urgent than ever.

            The diagnosis of the issue certainly depends on which point of view you approach the issue from: the medtech industry’s, the regulators’, doctors’ and surgeons’ or the patients’.  A reader of the Wall Street Journal may be convinced that Bill Hawkins, the CEO of Medtronic - the leading device maker of heart implants - diagnoses problems within the medical device industry correctly. Hawkins claims that, “Society’s tolerance for any risks associated with medical technology is nearing zero.”  Zero tolerance is said to translate into little innovation. End of story.  By contrast, for a reader of the New York Times, the New England Journal of Medicine (NEJM), Clinica, or any other halfway credible newspaper, the story does not end here but unfolds in subsequent chapters. Dr. William Maisel from Harvard Medical School, a leading expert in device technology safety, [2] responds to Hawkins in his March 6, 2008 NEJM editorial by arguing, “[S]ociety is not intolerant of all risk – just unnecessary, undisclosed and preventable risk.”

            Maisel continues, “The large number of affected patients, the billions of dollars at stake in the ICD (Implantable Cardioverter-Defibrillator) market, and the controversy surrounding the timing of communication with physicians and patients about the lead’s[3] performance highlights the shortcomings of the regulatory system for medical devices and underscores the urgent need for legislation that will ensure adequate protection for patients receiving them.”[4]

            Readers of the New York Times might also be familiar with the recent Supreme Court ruling, Riegel v. Medtronic, which shows how little protection patients have when devices become defective.  A recent Clinica article summarizes the situation, arguing, “The court’s ruling found that medical device companies cannot be liable for damages caused by their products if the products have FDA pre-market approval (PMA) and meet the agency’s specifications. That ruling also led to calls for Congressional action – from Senator Kennedy and Representative Henry Waxman – to ‘correct the court’s decision.’”[5]

            At issue in the case was whether the Federal Food, Drug, and Cosmetic Act (FDCA) preempts state law damage suits involving devices that have received premarket approval from the FDA. In making its case that state law does not preempt federal law, Medtronic had two allies: the federal government and the medical device industry association (AdvaMed).  The essence of this case boils down to whether patients have rights under state law. The enormous ramifications that this case may have will not be known until the Supreme Court issues an opinion in June 2008. However, to fully understand the challenges of trade with medical devices, we also need to look at other developments during the last decade.

Reasons a focus on the challenges of trade with medical devices is long overdue

Trade of medical devices worldwide is a $180 billion business annually (about 8,000 different types of medical devices are marketed) and is growing at a steady pace. The US device market is set to reach $89 billion in 2008.[6]  Seventeen top global US companies (out of a total of 20 global traders) supply most of the sophisticated advanced medical technology to the United States, the European Union, Japan and other parts of the world. Only three European companies - Siemens Medical Solutions, Philips Medical Systems and Becton Dickinson & Co. - make the top 20. The only Japanese company in this league is Terumo, which ranks 25^th on the world list.[7]  This list, however, does not include information on in vitro device companies.

            The data of the world market can be broken down into national markets; accordingly, the United States is the largest market (50 percent), followed by the European Union (30 percent), Japan (10 percent) and others (10 percent). If the world market is broken down by traders, the EU leads (30 percent), followed by the US (29 percent), Japan (9 percent), China (4 percent) and Switzerland (4 percent).[8]

            The industry claims that trade with medical devices is seriously hampered by i) inadequate reimbursements of devices by Medicare and commercial insurers in the United States and by publicly sponsored and regulated health care systems in Europe and Japan, ii) the price controls payers impose, iii) the sole funding of research and development (R&D) by the medtech industry, hence the “free riding” of patients around the globe, and, finally, iv) the cumbersome regulatory processes lacking in transparency abroad. It comes as no surprise then that the medtech lobby and individual companies are present whenever and wherever opportunities to promote their cause and economic interests exist.  Before we buy the industry claim, however, we need historical and empirical evidence that can put their arguments in some perspective.

            Until legislative reforms in 2000 in the United States, review times for market approval were comparable to those in other countries at the time and current rates in Japan.  The FDA-based process then and now is still as complex and bureaucratic and lacking in transparency for foreign device makers that apply in the United States, as it is for US firms applying abroad. Bureaucracy is a feature that describes the essence of all regulatory processes regardless of a particular country.

            The industry complains vociferously about its supposed financing of R&D for the rest of the world.  Industry spokespeople argue that, “When delays or denials result in forgone or lost sales, companies are also deprived of an important source of funding for reinvestment in R&D to develop even better products.” [9]  How credible is this claim? The industry is not sharing the true picture of R&D funding. Device makers, notably in the cardiac sector, have benefited from funded research through the National Institutes of Health (NIH), a primary source for funding medical and biomedical research in the US, and the National Aeronautics and Space Administration (NASA), the leading US funding agency for space exploration.  A rigorous analysis of R&D funding of advanced medical technology has not yet been completed. But a March 2007 report of the US International Trade Commission mentions cardiac defibrillators, magnetic resonance equipment, and nuclear imaging devices as having benefited from NIH funding. Another relatively new source of funding for basic research is the National Institute of Imaging and Bioengineering (NIBIB), the newest NIH component created by Congress in 2000.[10]  Basic and applied research has also been funded by NASA, which provided $1.3 billion in NIH bioengineering grants for medical technology research in 2005, an increase of 30 percent from 2003. Beneficiaries included US firms such as Spacelabs, Hewlett-Packard, and Marquette Electronics.

            Recently, AdvaMed has appealed to Congress to pass legislation that would renew old credits and legislate a flat tax rate of 20 percent for all companies on a permanent basis (rather than a biannual basis, the practice since 1981) so as to allow for more long-term planning. This would give the industry “much-needed assistance,” as the costs for R&D have allegedly increased 20 percent cumulatively each year since 1990.[11]

            The reason that concern about trade with medical devices is urgent is illustrated by recent developments. Quantitatively on the supply side, globalization has opened up new markets in Asia, Latin America and Central and Eastern Europe, although fewer in Africa. The number of device makers and suppliers of medical devices has increased enormously. These include not only the top 20 to 30 global companies running international operations, but also small and medium sized start-up companies.   All medtech companies are looking for new markets abroad in which to sell their products, outsource their manufacturing and conduct clinical trials as part of multi-site clinical trials.

             On the demand side, the demand for life-extending and life-supporting devices is increasing due to aging populations everywhere,[12] hence securing a lucrative and growing business. The US medtech industry registers an average growth rate of seven or eight percent a year, but can reach 15 percent or 20 percent per year depending on the market and the product type.

            The medtech industry is also emerging as a big lobbyist. According to the Washington D.C.-based Center for Responsive Politics, “As a group, medical supply companies spent more than $28 million on lobbying in the US alone during 2007...and the three top global operators known for cardiac implants – Medtronic, Boston Scientific and St. Jude Medical – are among the most generous and demanding for their interests. Medtronic spent $ 1.7 million lobbying the federal government. Its rival Boston Scientific spent $ 1.96 million on lobbying last year, and St. Jude Medical spent $ 460,000.”[13]  This level of activity and donation is closely related to two policy issues:  reimbursement by Medicare and user fees for the FDA. Moreover, the medtech industry is listed among the contributors to the 2007-2008-election cycle. According to Clinica, Democrats and Republicans benefited equally from the total of $10 million, with $ 5 million each.[14]

            Qualitatively, the regulation of medical devices, while always requiring a balancing act between competing objectives, has become more complicated in the last five years, as new sophisticated and complicated devices are introduced on the market at an ever-increasing speed and become key elements in patient care.[15]  The biggest challenge for the regulator is that revolutionary advances often outpace their capacity to act objectively and make decisions on the basis of regulatory science rather than on the basis of politics and political pressures from different stakeholders.

            This admittedly preliminary account which emerges from my ongoing research on the regulation of medical devices in the United States and Japan, and my previous research on the European Union, makes it clear that global trade of medical devices has brought about closer relations between the industry and the regulators and between device makers and surgeons and doctors. All of these groups are well positioned in the regulatory processes, whether the process takes place domestically or internationally. Overall, device makers, traders, clinicians, and even regulators have considerably more influence in the regulatory process than do patients or their advocates.[16]

            International connections between the industry and regulators have intensified. One pathway has been through e-trade and e-regulation and, at the highest governmental level, through the creation of a new institutional architecture: the Global Harmonization Task Force (GHTF) created in 1993.  The GHTF is dominated by the national regulators of developed countries and the advanced medical technology industry but above all, by individual companies. Created some fifteen years ago, the GHTF is a voluntary international body that seeks to promote harmonization of regulatory practices around the globe – that is, bringing closer the regulatory approaches of the founding members. Others reject the notion of harmonization and instead promote the convergence of regulatory practices under the leadership of the FDA and, by extension, AdvaMed.

            Mr. Stephen Ubl, president of AdvaMed, asked Congress to assist the administration “to actively oppose excessive regulation, government price controls, foreign reference pricing schemes, and arbitrary across-the board reimbursement cuts imposed on foreign medical devices and diagnostics.”[17] The implications of this political move are clear and the battle cry loud enough to be heard. At the same time, it should be noted that regulation, price controls, reference pricing, and balanced reimbursement are the very elements that provide the clue for affordable, equitable and solidarity-based universal health care in most advanced societies. [18]

            There is a push for “the early market availability of new treatments and devices to benefit patients around the globe,” which is allegedly supported by the industry, doctors, patients and other providers.[19]  The FDA, for example, has launched a pilot project with Japan – called the “Japan-US Harmonization by Doing” (HBD)- intended to “allow availability of novel treatments and innovative, safe and effective medical devices to patients more quickly.”[20]  This initiative covers pre-market activities and post-marketing clinical studies (the collection of post-market data and patient registries). Despite the appeal of the project’s flowery language, however, early and expedited approval processes without the necessary clinical tests, real time data, and experience with the safety and effectiveness of new devices make me personally uncomfortable.

            Who benefits from the increasingly closer relations between regulators and the leading trade associations around the globe? Obviously, they are good for profits and building professional reputations. Are they also good for patients? Patients, notably American and European patients, have greatly benefited from technological advances in the last decade. American and European patients are treated with medical devices that are up to five generations ahead of those with which Japanese patients are treated. Explanations for this gap between otherwise comparable advanced industrial societies are the subject of further research.  However, we know for sure that patient rights and patient protection under the prevailing regulatory regimes are not secured.

            On March 22, 2008, the New York Times ran another article entitled “New Focus of Inquiry into Bribes: Doctors” in a long series of articles on the front-page or in its business section in 2006 and 2007. These articles focus on the orthopedic device industry and the alleged kickback payments to surgeons in the previous years.  What transpires from these articles and from reading the New England Journal of Medicine, the Lancet, Clinica, and other serious media outlets reinforce my cautionary reactions to the declarations, promises and advertisements coming from individual companies and the cheerleader of the medtech industry, the Advanced Medical Technology Association (AdvaMed).  Do they really bring the latest innovations to the market for the sole benefit of patients?

            Given the extensive reporting in the last two years, there is documented evidence that insiders and close observers of the industry withheld information. Like their colleagues in the pharmaceutical industry, device makers engage in three types of activities that are suspect from a patient perspective.

            First, device companies are now known to have withheld crucial information on the results of clinical trials (positive or negative).  They have not shared relevant information with doctors - let alone with the public and patients - and sometimes not even with the FDA, all while continuing to sell them and convince surgeons to use their devices, although an investigation may be under way or a threat of court proceeding may be forthcoming. Pertinent information is released only when mandated by the Department of Justice (DoJ) or the Security and Exchange Commission (SEC), which investigated whether violations of the Foreign Corrupt Practices Act (FCPA) through bribes and kickbacks had been committed. According to the FDA New Device Daily Bulletin, “for large device companies with global operations, I think we’re going to see more cases where FCPA investigations are added as a cause of action to other investigations.”[21]

            In 2007, the DoJ started an investigation into sales practices and consultant arrangements with surgeons from the five top global hip and knee makers (which provide 95 percent of the world surgical knee and hip implants).[22] In the process of the DoJ investigation, it was found that the companies had paid some $800 million to doctors through consulting over a four-year period form 2002 to 2006. The Washington Post reports that, “Four of the world’s top companies last year agreed to pay a combined $311 million to settle a federal probe into whether the manufacturers paid kickbacks to doctors to get them to recommend their products. The companies were Zimmer Holdings Inc., Depuy Orthopedics Inc., Biomet Inc., and Smith & Nephew Inc. A fifth company, Stryker Orthopedics Inc. cooperated early in the investigation and paid no fines, but agreed to disclose its consulting arrangements.” [23] No company admitted any wrongdoing or pleaded guilty to any criminal charges.

            Despite its earlier cooperation, however, Stryker eventually received a subpoena from the criminal division of the Justice Department concerning possible violations of the Foreign Corrupt Practices Act, which prohibits paying bribes to foreign officials.  A similar inquiry is underway against Zimmer by the Securities and Exchange Commission.  This topic was of great concern to all surgeons who attended the American Academy of Orthopedic Surgeons (AAOS) meeting in San Francisco in early March 2008.  [24]  On March 20, 2008, the Australian government reacted very swiftly in response to the revelations that Stryker may have paid over $ 250,000 consultancy fees to the head orthopedic surgeon of a renowned hospital in Melbourne by submitting a draft legislation which would impose stricter conflicts of interest rules.

Another practice giving reason for concern occurs when device makers occasionally encourage the off-label use of medical devices (like the off-label use of medicines). This is a serious problem under liability laws but it is also a problem for patients when they are recruited as volunteers in clinical studies.

            Third, some device makers tend to push for direct-to-consumer advertisements such as automated external home defibrillators, [25] other equipment and even implants, a practice prohibited in practically all other advanced countries except the United States.  The prohibitions are decried by the industry as yet another instance of a non-tariff trade barrier that hampers business. The leading regulatory journal for regulatory professionals, Regulatory Affairs Journal for Devices, states in its February 2008 issue, “A review of recent direct-to-consumer advertisements for implantable devices found they lacked basic information about side effects” (italics in original).

            In response to earlier revelations, Congress gave the FDA stronger authority with the FDA Amendments Act of 2007, although the FDA did not immediately use these new powers. By early 2008, pressures on the FDA and AdvaMed to address increased regulation were rising. Legislation is being drafted in Congress that would require device makers to reveal all payments to orthopedic surgeons. Additionally, FDA commissioner Andrew von Eschenbach had sought increased resources for the FDA’s devices program.  The increased resources, he said, would improve device safety by improving the FDA’s ability to identify, analyze and act on postmarket safety information, hire additional staff to handle product recalls and deploy analytical tools to detect adverse events in medical devices on the market. In a summary of its FY 2008 budget request, the FDA outlined four goals that it would achieve with increasing funding:

• Strengthening medical device safety by improving the FDA’s ability to identify, analyze, and act on medical device safety information;
• Using medical device safety information to improve the quality of new devices introduced to the market;
• Providing timely information on device safety to consumers; and
• Meeting so-called “statutory triggers,” whereby the FDA cannot continue

      to collect medical device user fees in FY 2008 if it does not meet those triggers.[26]

      The Center for Devices and Radiological Health is earmarked to receive $267 million, while medical device industry user fees are expected to generate an additional $48.4 million.

            The latest communication from AdvaMed Smartbrief dated March 28, 2008 advertised an April 2008 workshop under the heading “Fraud and Abuse: Walking the Compliance Line. The Do’s and Don’ts of Device Marketing.” This workshop is designed for compliance officers, in-house counsel, sales and marketing executives and senior management. The ad reads as follows:

            “As government regulation and scrutiny of medical technology companies increases, so too does the risk of non-compliance and exposure to severe civil and criminal penalties.

            Now more than ever, companies must be certain that sales and marketing practices do not violate what is permitted by law. So how do you navigate the fine line between practices that  

            create star performers in other industries and felons in this one? A challenge? Yes. But, the risks of remaining uninformed are too great compared to the cost of learning how to avoid

            them. ...This program uses didactic sessions and role-playing examples to convey with alarming clarity the risks and consequences medical technology companies may face and

            the protocols necessary to prevent them.”

This flyer more than anything reflects the recognition by the industry that something has to be done and that conflicts of interest need to be appropriately addressed and a new balance between a push for sales and marketing and the protection of patients need to be established.

Conflicts of Interest Abound

Conflicts of interest are central to this discussion.  However, when discussing the close relationship between surgeons and the medtech industry, a few fundamentals need to be understood. Medical advances are initiated by the industry and perfected by practicing surgeons; sometimes surgeons come up with an idea for a new design and approach a manufacturer to produce it. In essence, innovations are not possible without the synergy of the two parties. Clinical investigators and surgeons perform several duties at the same time: i) they have important advisory roles in various market approval and monitoring processes, ii) they are users of advanced technology when they diagnose and treat patients, and iii) they are the ultimate assessors of postmarket clinical studies.

            In the medical device field conflict of interest issues are also more complex and intangible than in the drug sector. This has to do with a structural difference in the role and political and professional dynamics of professional-industry relationships in each sector. There are two different kinds of processes in which conflicts of interest may occur: pre-market approval processes and post-market processes and their related clinical studies.

            Why the different professional and corporate dynamics? Physicians prescribe drugs, and patients are to–or should–comply with a prescription and take the medication as prescribed. Whether a patient is compliant or not does not depend on the doctor as the intermediary. By contrast, for most devices a doctor or surgeon is essential for the performance of the device before, during, and after surgery. So conflicts of interest may come into play in several phases: first, when they recommend a particular surgical procedure and choosing one device over another; second, when they implant the device; and, finally, they remain involved in post-surgery recovery and their advice and professional assessment remain crucial for years after surgery. Surgeons play this role independent of whether or not they have a special interest in doing clinical studies.

Broader Implications

Conflicts of interest affecting patients tend to be complicated but can be explained by four additional clarifications. Are complaints about medical devices on the rise? Probably not, but certainly the awareness level may be. First, turning to the regulatory process and repeating what was already said, clinical investigators play a critical part in the approval process of medical devices and an even more important role in post-market surveillance and clinical studies in the United States, the European Union and Japan. “These physicians are expected to act objectively in testing the safety and effectiveness of the drug or medical device under consideration. But when they stand to profit from FDA approval of the product they are testing, the investigator’s objectivity is called into question,” as Senator Chuck Grassley, a Republican from Iowa and member of the Senate Finance Committee, wrote in a letter to the FDA and Synthes (a Swiss company) concerning an artificial spinal disk – the Prodisc – that was eventually approved by the FDA.[27] In his letter Sen. Grassley also asked for the disclosure of the documents the company had given to the FDA and an outline of the “companies’ internal policies, guidelines and/or standards regarding clinical investigators and their potential conflict of interest.”

            Second, regulators everywhere are using outside experts to serve on an increasing number of advisory committees. The experts’ recommendations matter in two ways: in the review process of approving medical devices and in the assessment of their effectiveness in post-market clinical studies. This issue is seemingly well researched and documented in the drug sector but is under-researched in the medical device field.

            A third kind of challenge to patients arises in circumstances that are not fully examined; the empirical facts are established but their meanings and ramifications are not. I can only present them in form of an agenda for future research. The list, while incomplete, is sufficient in order to bring home how important social science research on the topic of “challenges of trade with medical devices” is.  I will highlight a few areas I believe deserve special attention.

            1) One area that requires analysis is the counterfeiting of medical devices through nebulous and often unregulated distribution channels offering high-volume, low-cost items such as dental materials, condoms, pregnancy tests and tests for diabetes and Hepatitis C.  Parallel trade is legal in the EU. Counterfeited surgical instruments were found at a large trade fair in Europe in 2007, but it is unclear whether this was evidence of parallel trade or of a systemic problem that arises when companies do not directly supply their medical devices to the end users via hospital management and when the supply channels run through several countries.

2) The inspections of establishments (manufacturing sites, clinical study sites, etc.) are a “core post-market tool for risk identification” [28] in providing information on the current state of the medical device industry.  Inspections are resources-intensive. By its own admission, the Center for Devices and Radiological Health (CDRH, a unit within the FDA) “is not able to meet its current statutory obligation to inspect the total industry every two years.” The risk-based approach focuses device inspection resources upon the part of the industry that is thought to present the greatest public health risks.[29]  Inspection of foreign firms is even less likely than in the US.

            In the past, Congress has supported the idea of utilizing user-fees to pay for foreign inspections and funding the review process prior to market approval. The review process is the only process that seems to work well.[30] This comes as no surprise. Overall, the medtech industry supports the use of user-fees in the US, the EU and Japan. In September 2007, the Medical Device User Fee and Modernization Act (MDUFMA) was  reauthorized.

3) Outsourcing is becoming an attractive option in the medical device industry, but with the inability to carry out inspections of good clinical practice in the United States and abroad, it is also a cause of concern. Will regulators follow up and inspect the sites? [31] The Wharton School of the University of Pennsylvania and HCL Technologies completed a survey on outsourcing covering 264 responses. The outsourcing of manufacturing was most frequent (132), followed by IT organization (120), R&D (75), regulatory compliance (46), and sales & marketing (46). The survey also asked what areas within R&D process outsourcing helps. The responses were listed in order of importance: software solution (133), product verification and validation (101), clinical trials (99), and hardware engineering (mechanical & electrical, together 94).

            4) Close device maker- surgeon relations should also be examined in every country. The information that became public in the aftermath of the recent revelations about these relations speaks of an alleged cooptation of surgeons and hospital managers by individual companies and procurement decisions.[32]  The financial relationships between companies and surgeons are close and sustained by special consultancy arrangements between companies and surgeons, in a few cases reaching $1 million.

            5) There are limitations inherent in medical devices, which should guard against any premature conclusions concerning professional fault and mishaps and company liability. The limited number of patient volunteers in the initial stages of clinical testing before devices are marketed is a fact of life. Deficiencies in devices may be detected only after they are marketed. Experience can only be acquired when a device is used in a larger patient population groups. For example, implants occasionally decline in performance prematurely, even though they went through all the necessary tests prior to market approval.[33]

            6) Clinical trials are essential in medical device regulation, constituting the most important building block for securing patient safety.  But research concludes that often there is limited training in how to conduct clinical trials in the US and Europe and even less in Japan. [34] This lack of training extends to even world-renowned specialist surgeons. Documented evidence suggests that the FDA is unable to comply with its own procedures and rules to enforce good clinical practice.[35]

            7) The nefarious impact of money on clinical research is – or should be – of

concern to the medical device sector as much as it has been to the drug sector. Contracting out of research functions to for-profit research organizations or clinical research organizations (CROs) raises numerous questions that need to be examined. Overall, industry money may have a profound impact on the scientific and medical research process and what gets published and what not.[36] What this might mean for multi-site clinical trials spread over several countries is an empirical question.

            8) User fees are the primary source of funding of approval processes in the EU, the US and Japan. Regulators in the US and Japan are authorized by legislation to raise user fees to supplement the agency budget to improve the efficiency of their product approval operations.[37]

            User fees do not only pay for foreign inspections. Instead user fees pay for a variety of costs incurred by the launch of new products on the market.  According to USITC 2007, user fees in the US and Japan consist of four elements: i) user fees paid by applicants to help fund regulatory agencies’ product approval activities; ii) opportunity costs if product approval in a particular market takes significantly longer than in other global markets; iii) costs of conducting clinical trials, and iv) capital restructuring costs that firms may incur to meet new regulatory requirements.[38] In Japan, the approval costs are extremely high because of i) much longer approval times; ii) requirements for conducting additional clinical trails to acquire safety data equivalent to that obtained in previous trials and accepted by regulators in other markets; and iii) new requirements for firms to separate marketing and safety operations from product functions, thereby requiring expensive organizational changes and associated ongoing maintenance costs not required in other countries.”[39]  Could it be that the Japanese approach insisting on this information ex ante is not completely wrong? To use an example from the drug sector, “[I]n 2002, only 10 months after Lilly began selling Zyprex in Japan, medical regulators in that country required Lilly to warn doctors against using Zyprex in  diabetic patients.”  Zyprex continued to be sold in the United States. Sales representatives were instructed not to discuss diabetes with doctors unless the doctors brought it up first. This was only learned through the release of documents at the trial.

Challenges to patients from regulators

Challenges to patients also arise when the regulator does not enforce all statutory obligations and responsibilities and does not use its authority and soft power. There are multiple reasons that regulations are not enforced: partisan politics, an elite consensus on the virtues of unregulated markets, manpower shortages, lack of scientific expertise, and many other reasons.

            In the last decade, many countries have engaged in public sector reforms creating this dilemma of conflicts of interests faced by most regulators. The trend has been that regulators (the FDA in the United States, PMDA in Japan, AFFSAPS in France, MHRA in the United Kingdom, BfArM in Germany and others) started to fund their regulatory activities from user fees rather than from tax funds. This issue is on the table again in the United States, Japan and in the European Union. Developments such as these fundamentally challenge trust in the political independence and objectivity of regulators and the integrity of regulation based on regulatory science rather than political pressures. When the regulators are dependent on the very resources they are to regulate, how can regulatory decisions not be biased? Free-marketers may not see a problem, but I do and I am not alone.

            On March 17, 2008, the New York Times[40] reported that the Institute of Medicine, the Government Accountability Office and the FDA’s own Science Board have all issued reports saying “poor management” and “scientific inadequacies” make the agency incapable of protecting the country against unsafe drugs, medical devices and food.” [41]

            The observations of the lead author, Dr. Gail Cassell, chair of the Science Board’s Science and Technology Subcommittee (and simultaneously vice president of scientific affairs at drugs company Lilly) are troubling: i) “The FDA’s evaluation methods have not kept pace with major advances in medical devices and use of products in combination;” ii) “The pace of scientific discovery and complexity of new products have left the agency struggling with an increased workload and a chronic shortage of funds;” iii) “the FDA has no systems to store data from clinical trials or adverse event reporting.” iv) “The FDA has been forced into a position of fire-fighting instead of pursuing a proactive culture of regulatory science.”[42]

            Adverse event reporting (AER) is a vital and the only tool established by law in the United States, European Union and Japan to get feedback on the actual or potential adverse events in clinical practice in a doctor’s office, the hospital or at home through post-market surveillance. Recent revelations about drug-eluting stents, implantable cardiac defibrillators and other devices provoke criticism of the FDA, which had information on deficient devices implicated in medical accidents and even deaths through the adverse event reporting.  However, the FDA did not react at first and took no action against companies implicated.

            Despite this criticism, most advanced countries have monitoring and enforcement systems in place to ensure that medical devices are safe when used in clinical care.  However, they do not perform as well as they should. And there is a disconnect between what goes on in healthcare delivery and regulation. Research is needed to shed light on the effectiveness of these crucial enforcement tools but may be hampered by a lack of relevant data. Preliminary research points to adverse event reporting as an under-researched area in health services research and almost non-existent as a serious effort to secure patient safety in the United States, European countries and Japan.

            In assessing how safe medical devices are, and how often they are the cause of an adverse event in patient care, the FDA and European and Japanese regulators distinguish between adverse events related to the use of a medical device by a clinicians as distinct from those related to medical devices as a product.  For its part, the FDA’s Center for Devices and Radiological Health (CDHR) focuses on “new, high risk, and complex devices.”[43]  It also operates a complex system of monitoring and responding to adverse events and risks associated with the use of medical devices that are available on the market.  By the FDA’s own admission, in the United States, “As few as one in 100 medical device adverse events are actually reported.”[44] This suggests that our knowledge about the causes of adverse events is very limited at best. Any cross-national comparison may suffer from lack of comparable data.

            In addition, the FDA’s system of advisory committees has also come under attack for granting waivers to experts when they have financial interests in a device company and benefit from FDA’s decisions. Eastern Research Group carried out an investigation into the advisory system and found that the committee members whose research was most often cited in the scientific literature were also the most common recipients of waivers.  Perhaps the notion of having conflict-free advisory panels is an illusion.[45]

            What is the objective of regulation: the safety of patients or the interests of shareholders? The executives of Boston Scientific, which is present on all world markets, are accused of hiding knowledge of defects in their pacemakers and defibrillators so the value of their company would not slump at a time when the device maker was about to be acquired by Boston Scientific. Vital information that is significant for doctors and patients when deciding to go ahead with surgery is not shared. The interests of shareholders come first.

            Additionally, the Consumer Union recently requested that manufacturers of implantable medical devices advertising their products directly to consumers should provide more information about possible infection risks, side effects and limited life span of medical devices. For example, the Agency for Healthcare and Quality Research found that “complication of device, implant or graft” was the third most common principal diagnosis for hospital stays with MRSA (Methicillin-resistant Staphylococcus Aureus) infection in 2004. The Consumer Union insists that manufacturers should include explicit warnings about related risks on all medical device advertisements. Given these challenges of trade with medical devices, and given the importance of public health, it is surprising that these issues receive so little attention in social science scholarship.

Concluding comments

By way of summary, the demand for all kinds of medical devices, advanced technologies, and home and self care devices is rising everywhere due to aging populations and so is the supply. Device makers are vying for market shares in these emerging markets. The medtech lobbyists are present in many parts of the world, have a profound impact on regulatory processes, and are active participants on relevant international standard and norm-setting bodies.

            Despite the negative features this lecture was referring to, there is also an upside. Technology has transformed medicine in ways unthinkable sixty years ago. More and improved medical technologies are bound to come if inferring from past developments is permissible. Starting from the implantable pacemakers (1962), CT scans (1972), magnetic resonance imaging (1977), positron emission tomography (PET) and coronary artery stents (1994) to improved laboratory testing, the use of polymer in implants, fiber optics and improvements in diagnostic in recent years, hope is justifiable in three areas. 

            First, I hope that the rapid and revolutionary advances of science, knowledge and new applications in medicine of the past will continue into the future. Second, I hope that the role of medical device regulation will be revisited and be followed by a strategy of measures designed to protect patients without bringing medical advances to a halt or stop global trade with medical devices.  Borderless trade with medical devices and early commercialization and early release on the market are fine as long as they are accompanied by proper regulation designed to protect patient as a first priority and not as an afterthought. Finally, the recent revelations hopefully will bring forward heightened awareness that patients should be crucial partners in medical device regulation, risk communication, and clinical trials.