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• Part 1: The U.S. Healthcare System• Part 2: FDA: The Regulatory Environment and
How it Affects You
Where do you want to go?• “Would you tell me, please,
which way I ought to go from here? “
• “ That depends a good deal on where you want to get to,” said the Cat.
• “I don’t much care where—” said Alice.
• “Then it doesn’t matter which way you go,” said the Cat.
– Lewis Carroll -- Alice's Adventures in Wonderland, Chapter 6
OVERVIEWThe U.S. Healthcare System
Health care in the U.S.? It’s simple…
Nearly ¼ of U.S. budget is
spent on health care!
Return on Investment
Life Expectancy at Birth in the United States, 1900-2009 Source: Elizabeth Arias, "United States Life Tables, 2006," National Vital Statistics Reports 58, no. 21 (Hyattsville, MD: National Center for Health Statistics, 2010): table 11.
Life expectancy is increasing.
Centers for Medicare & Medicaid Services (CMS)
• Who is CMS?– Administer public health care
in the U.S. – Medicare is for those 65+– Medicaid is for the indigent– CHIPS is for children– Account for 60-65% of
healthcare• Private insurance companies
– Account for 35-40%– Employer plans, etc.
Affordable Health Care Act
• New law – Controversial– Also called “Obamacare”– TREMENDOUS impact on the U.S. Heath Care System
• Covers uninsured– Guarantees access to health care – Covers those not covered under Medicare, Medicaid,
etc.– U.S. Census: 49.9 million residents, 16.3% of the
population, were uninsured in 2010
“…we have to pass the bill so you can find out what is in it, away from the fog of the controversy.”
--Nancy Pelosi, Member of the U.S. House of Representativesfrom California's 8th district, and Minority Leader of the U.S. House of Representatives
Changes are Coming Due To Obamacare
• Obamacare created many new regulations; many of which are not in effect yet
• Sampling:– New 2.3% excise tax on devices– Physician Payment Sunshine Act– Health Care Exchanges
• Not fully appreciated/realized/understood in the United States yet
• Largely goes into effect this year• Huge expense to U.S. economy
AN UPDATE + IMPORTANT CONSIDERATIONS.
FDA
Food and Drug Administration (FDA)
• Who is the FDA?– “The FDA is a scientific
regulatory agency whose mission is to promote and protect the public health and safety of Americans. FDA’s work is a blending of science and law.” – U.S. Congress
– FDA is a giant consumer protection agency
What products does FDA regulate?
Biologics (vaccines,
cell therapies)
Dietary Supplements
Blood, Human Cell & Tissue Products
(transplants)
Drugs (human & animal)
Medical Devices
Foods (and food additives)
CosmeticsTobacco
Radiation-Emitting Products
Since 1975, FDA has banned the sale of small turtles (less than 4” long) due to salmonella concerns.
And let’s not forget pet turtles…
FDA also regulates…Product supply chain
Product approvals
Manufacturing
Promotion
Certain Imports/Exports
Ingredients used
Labeling Requirements …AND MUCH MORE!
Modern FDA structure
The Regulatory Environment
• Heightened• Political fights• Improving…perhaps
• “. . . Responsible for protecting the public health. . .”
It’s a balance for FDA…
“. . . advancing the public health by helping speed innovati ons . . .”
• If it ain’t broke, don’t fix it (the system is working)– New diagnostic and treatment paradigms helped drive an increase in
U.S. life expectancy of more than 3 years, a 16% decrease in annual mortality rates, and a 25% decline in disability rates for the elderly (Makower Report)
– Mortality from heart attacks was nearly cut in half (Makower Report)– Mortality also declined by more than 30% for stroke patients and by
over 20% for those with breast cancer (Makower Report)
• Not only are we doing good for mankind, the U.S. medtech industry ships $123 billion in products, pays $21.5 billion in salaries and directly employs more than 357,000 individuals
My Soap Box
Let’s talk about you.What is your strategic goal?
• Build a company for the long-run?• Build a company to sell?• This will impact the answers to some of the
questions coming up
Step 1: Figure out your product. What is it?
• Drug (metabolized, systemic effect)• Device (mechanical, local effect)• Biologic (derived from living organism)• HCT/P (human cell and tissue products)• Dietary supplement (not a drug or a food)• Food • Cosmetic • None of the above? If you can’t define it, you
can’t regulate it.
Step 2: Determine your intended use.
• This will help you answer the question on the previous slide.
• What is the product’s job? • How will you sell it?• How will physicians (or consumers) use the
product?• How does this impact reimbursement?• Will you have a disposable (if you are a device)?
Step 3: Determine the risk of your product.
• Device– Class I (low risk)– Class II (medium risk)– Class III (high risk)
• Drug– Prescription (Rx)– Over-the-counter (OTC)
• Other products?– Biologics/biosimilars– HTC/Ps– Dietary supplements,
etc.
Step 4: Determine your path through FDA.
• Device– Waived/exempt– 510(k)
• Rx or OTC
– PMA– De Novo
• Drug– NDA– Generic (ANDA, 505(b)
(2))
• Other products?– Biologics/biosimilars– HTC/Ps– Dietary supplements,
etc.
Step 5: Consider the Need for Clinical Data
• You may or may not need it depending on the path you take through FDA
• What have your competitors had to do?• Will you have to submit an application for an
investigational device exemption (“IDE”) for your device?
• Will you have to submit an application for an investigational new drug (“IND”) for your drug or biologic?
Step 6: Consider Post-Launch Responsibilities
• What can you do before launch?• Launch!• What does the Food, Drug and Cosmetic Act require you
to do? – General controls– Special controls– Post market studies and surveillance
• What other laws impact you?– Food, Drug and Cosmetic Act, Physician Payment Sunshine
Act, Anti-Kickback Statute, False Claims Act, HIPAA, state laws, etc.
Elements of a Substantial Equivalence (SE) Determination
A device is substantially equivalent if, in comparison to a predicate, if it: – has the same intended use as the predicate; and – has the same technological characteristics as the predicate;
OR – has the same intended use as the predicate; and – has different technological characteristics and the information
submitted to FDA; • does not raise new questions of safety and effectiveness; and • demonstrates that the device is at least as safe and effective as