Minnesotan Nadim Yared was supposed to have one of his biggest jobs well underway just a few days into his new role as incoming chairman of the national medical-technology trade group AdvaMed.
Congress, however, had other plans.
Yared, the CEO of Twin Cities med-tech company CVRx, became the new chairman of AdvaMed on March 21. That was supposed to be just a few days after the U.S. House of Representatives voted to repeal the Affordable Care Act, which contains the industry-despised 2.3 percent excise tax on med-tech revenue.
Instead, the House canceled its March 17 repeal vote and moved on to other priorities, leaving opponents of the med-tech tax wondering how they could achieve a goal that they say is supported by strong bipartisan majorities in both chambers of Congress.
“We’re not going to rest until the device tax is repealed,” Yared said in a March 31 interview. “We’ve got really smart people here in Congress that can help us navigate this, and find out what is the right pathway. Two weeks ago, the right pathway would have been to attach it to the health care bill. Now it’s open again. Is [the repeal] in the next version of the health care bill? Or in tax reform? Or stand-alone? We don’t know.”
Time will tell what accomplishments Yared’s two-year term as chairman of AdvaMed will hold, but the background he brings to the job is unique.
Yared is the first person to chair AdvaMed who doesn’t hail from a large medical device company. In fact CVRx, the company in Maple Grove where Yared is chief executive, doesn’t yet have approval to sell any noninvestigational device in the United States.
Rather, CVRx has a “humanitarian device exemption” from the Food and Drug Administration to sell limited numbers of its novel electric stimulation system for heart failure called the Barostim. The company is actively working on a large-scale clinical trial of the Barostim and has also been accepted into the FDA’s new “expedited access pathway” program intended to speed up final approvals for safe, novel medical devices.
Such experience is as relevant as ever for someone at the top of the industry trade group.
As the president and CEO of a privately funded clinical-research-stage med-tech company, Yared said he’s intimately familiar with challenges facing the industry, like vanishing venture capital and seed-funding sources and the growing period of time between first concept to final approval of a device.
Those challenges drive up expenses — today it costs about $74 million to bring a med-tech company to fruition from inception, compared to $32 million a decade ago, he said. Yet even after the FDA approves a device as safe and effective, makers often spend years persuading Medicare and private insurers to pay for it.
“We are seeing the timeline getting longer for small companies, and the money required to get a company from inception to exit is higher, and there is less money available and lower initial investment from investors in the sector,” Yared said. “We are trying to break this logjam by working on each one of those obstacles.”
And then there’s the device tax, which he said saps big companies’ ability to invest in smaller companies and bring their innovations to the wider world. The tax went into effect in 2013 but was put on hold in 2015 under a two-year moratorium that is set to expire at the end of this year.
The tax is unpopular with many, including lawmakers on both sides of the aisle. But translating that sentiment into action is no easy job. Yared demurred when asked whether he had 100 percent confidence that the device tax will be repealed this year.
“Knowing the political landscape, I would not say it’s 90 percent,” he said. “I would say it’s a high level of confidence that it will happen this year.”