Red tape still stalls medical devices

President Obama made a high-profile pledge earlier this year to cut through business-stifling regulatory red tape.

A disturbing Northwestern University survey released this week -- one focusing on the medical device industry -- was a reminder of the difficult work still ahead if the Obama administration intends to deliver on this important promise.

Minnesota's economic health may well depend on presidential follow-through. Medical device manufacturing is part of the state's economic backbone, employing about 27,000 Minnesotans.

This clean, well-paying industry needs to stay here and grow here. The main challenge is not the state's winter weather nor its taxes.

Instead, it's the device industry's justified frustrations with the uncertain, unpredictable and nontransparent oversight by its federal regulator -- the U.S. Food and Drug Administration (FDA).

Those concerns, which the industry claims are scaring off investors and driving jobs out of the United States, were freshly detailed in findings released Tuesday by Northwestern and the Institute for Health Technology Studies (InHealth), a nonprofit with industry ties.

While there's always going to be tension between industry and regulators, the Northwestern findings add to the growing number of reports suggesting that the relationship is truly dysfunctional.

As a result, two-thirds of the small companies (the industry's innovation engines) surveyed are seeking initial clearance for new products in Europe because the process there is widely considered more predictable.

That's a problem for American patients, because they won't get first crack at potentially life-saving new devices. And it's an economic problem, because key jobs will naturally follow where the products go on the market first.

A PricewaterhouseCoopers report this year concluded that the "innovation ecosystem" of research and development jobs is already moving offshore.

The Northwestern survey is considered one of the most comprehensive assessments to date of the 510(k) regulatory process. That process is designed for medical devices similar to products already in use.

Right now, the FDA is weighing historic 510(k) changes, in part because of a small but highly publicized number of medical device recalls. A landmark report this summer from the independent Institute of Medicine will play an influential role in the changes.

The FDA must also avoid stifling innovation.

The agency announced a major initiative earlier this year addressing the concerns highlighted by the survey.

Last week, Dr. Jeffrey Shuren, director of its Center for Devices and Radiological Health, was clearly frustrated that the agency was again criticized for problems it has acknowledged. Shuren also made a valid point that devices are becoming more complex, and that this is complicating the clearance process.

The FDA, however, has yet to detail many of the improvements it will make. This survey adds urgency to industry concerns and suggests, according to well-known Stanford University professor and device entrepreneur Dr. Josh Makower, that "nothing yet has really improved and the situation remains dire."