Survey blames FDA for eroding med-tech

  • Article by: JAMES WALSH
  • Star Tribune
  • June 18, 2012 - 9:04 PM

Minnesota is home to more than 350 medical technology companies, directly employing more than 35,000 people -- making the state a muscular world giant of the industry.

But the people leading those companies are pessimistic that the state will retain its lofty status. In fact, many med-tech CEOs said in a recent survey that they would shun investing in their own industry, thanks to increasing delays and uncertainty surrounding government approval for new, lifesaving devices.

"Gee, it's like the government is saying to the medical device business: 'Go Away,'" said Jim Hickey, who in the past 20 years has been CEO of four med-tech companies.

A study commissioned by the Medtech Resource Alliance is the latest salvo fired at the U.S. Food and Drug Administration by the industry it regulates. But advocates for patients and those injured by unsafe medical devices also criticize government regulators -- for not being tough enough.

"It is important for us to find a balance between innovation and patient safety -- and making sure it is not an unchecked carte blanche to try products out on American patients," said Genevieve Zimmerman, a local attorney who has represented hundreds of people injured by medical devices they had been told were safe.

In an e-mailed response, a spokeswoman for the FDA said, "This survey sheds no new light and is less informative than many prior surveys" of med-tech industry leaders.

Zimmerman said she does not believe the current system puts U.S. devicemakers at a competitive disadvantage. That is not the opinion expressed by CEOs, however. For example:

•Sixty-four percent of Minnesota med-tech CEOs have an unfavorable impression of their own industry, in large part "because of regulatory difficulty FDA poses," according to survey results. "Respondents said the unpredictable and unresponsive FDA stifles their ability to innovate and be competitive because of its risk-aversion and uncommonly long approval process -- 28 to 76 months on average to clear products for market."

•Thirty-six percent of respondents said they would not invest in the medical device industry today. In fact, "more than half of those surveyed said their growth strategy is to focus on market releases outside of the United States -- with 40 percent focused on Europe and 12 percent on developing countries."

•Eighty-five percent said the U.S. regulatory environment negatively affected their ability to create jobs.

Bob Freytag, president of Introworks, which conducted the survey, said the results show a loss of trust in the regulatory process: "Perception is reality. What people believe becomes reality in the marketplace," he said. "One person's opinion is one thing. But this is really a collective voice."

Leaders of 59 medical device companies in Minnesota responded to the survey. Thirty-five percent were CEOs from pre-revenue med device companies; 37 percent led companies with annual revenues of $1 million to $10 million; 12 percent had revenues of $11 million to $25 million. None was from a company with more than $500 million in annual revenues, according to Introworks.

Frustrations with the FDA go beyond med-tech board rooms. Dr. Robert Schwartz, a cardiologist at the Minneapolis Heart Institute at Abbott Northwestern Hospital, said delays in getting FDA approval for new devices mean that new technology is available outside the U.S. years before it can be used here.

A new replacement heart valve that can be implanted without open heart surgery was recently approved for the U.S. market, Schwartz said. It was made in the United States, but "we were No. 43 in the world to get that valve," he said. "No. 42 was Algeria. No. 41 was Brazil."

Schwartz said people at the FDA are well-meaning. They're also caught between the rock of consumer groups who say the FDA isn't stringent enough and the hard place of industry pressure to speed device approval.

But the result is that patients here are getting "the Model T" of devices because the process is so slow.

Hickey said that the FDA is overwhelmed, "crucified by the public when something goes wrong." But, he said, the process must improve if the industry here is to thrive again.

"We absolutely want to work with [the FDA]," he said. "I wish they would believe in us."

James Walsh • 612-673-7428

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