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VOL. 125 | NO. 37 | Wednesday, February 24, 2010

New FDA Rules Could Tighten Medical Device Pipeline

By Tom Wilemon

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Memphis makers of medical devices are keeping a close watch on the U.S. Food and Drug Administration as it considers tightening the rules that allow a faster approval track for some products.

For almost 35 years, “substantial equivalency” has been the test for what is known as 510k approval. If a product is similar enough to one already on the market and proven to be safe, it can gain approval without clinical trials.

This can cut the approval process from as long as five years to as short as three months. In the past six months, the biggest players in the Memphis orthopedics industry – Smith & Nephew Inc., Wright Medical Group Inc. and Medtronic Inc. – have all received 510k approvals for new products.

So have smaller companies, such as Grace Medical, which specializes in ENT surgical devices and ear prostheses.

Christine Scifert, an owner of Memphis Regulatory Consulting LLC, helps guide companies through the FDA approval process.

Scifert

“The FDA could go anywhere from not changing anything to completely changing a lot of different pieces of that process,” Scifert said. “If the time frame increases or if the amount of documentation needed to submit increases, small companies don’t have as many resources and they usually need to get a product on the market fairly quickly to be able to start getting cash flow.”

However, bigger companies might also have to squeeze their pipeline of new products.

Medtronic sent Susan Alpert, its senior vice president of regulatory affairs, to a public hearing the FDA held on the 510k rules last week.

The federal agency has not yet proposed what changes it is considering, but critics of the medical device industry, such as Sen. Charles Grassley, R-Iowa, have been pushing for tighter rules.

Alpert said some changes might require new rules and the goal is “balanced change with an appropriate cadence and change that protects innovation as well as allows products to evolve that will benefit patients.”

Tarr

Richard “Dick” Tarr, president of the InMotion Orthopaedic Research Center, worries about what may be in store.

“My understanding is that they are going to start looking at some clinical data even for the 510k process – not maybe as rigid of a process as they have for the Class III devices (completely new products for which clinical data must be submitted to prove safety and efficacy) but at least to have some clinical data involved,” he said.

This burden adds cost and time to the launch of a new product.

In many cases, the devices that go through the 510k process are not actually new products, but adjustments and improvements of existing ones, Tarr said.

About 3,500 devices are cleared each year through the 510k process.

Last month, 192 devices were cleared, including two for Smith & Nephew. In December, 258 devices were cleared, including two for Medtronic’s Memphis-based Spinal and Biologics division, and two for Smith & Nephew.

The FDA has an internal panel looking at the process. The agency also has asked the national nonprofit Institute of Medicine for a report before making any changes.

The decisions made by the agency could have wide repercussions here.

“In orthopedics, the medical devices are somewhere between 20 and 25 percent of the worldwide market that come from here in Memphis – just Memphis alone,” Tarr said. “That’s a big pool.”

The manufacturers include several smaller companies.

“It’s going to be those companies that are most impacted by this,” Tarr said. “They can’t afford to wait very long.

They are working off either venture capital dollars or dollars that aren’t their own.

“They’ve got to start rolling a profit as quickly as possible.”

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