CDRH Strives to Strike a Balance Between Risk, Device Innovation Seeking a balance between risk and innovation, CDRH is in- vestigating devicemakers’ complaints that it has become too op- posed to risk while developing an initiative to encourage device in- novation. Industry allegations that CDRH is too risk-averse is a new phenomenon, Jonathan Sackner-Bernstein, associate director of postmarket operations at CDRH, told D&DL Thursday. To get to the truth behind the allegations, the center is conducting an inter- nal inquiry. “We’re trying to figure out whether there is a pattern that has emerged recently where we are rejecting things all the time, or whether it’s being said because of the administrative change or if it’s people who are upset because they got rejected and are talking about it,” Sackner-Bernstein said. Cyberattacks on medical devices are a critical con- cern for the VA ........Page 3 FDA is working on a rule to extend investigator disqual- ifications ..................Page 3 CDRH leadership could learn from new policies at patent office .............Page 5 US regulatory system push- es devicemakers into inter- national markets .......Page 6 Trade groups can be con- duit for information on sup- plier issues ...............Page 7 FDA sends closeout letters to HeartSine Technologies and KHL ..................Page 7 FDA: DexCom should do more to prevent off-label uses ..........................Page 9 Covidien to pay $2.6 billion for Ev3 .....................Page 9 Expert: Supplier agree- ments should address han- dling of CAPAs ......Page 10 (See Balance, Page 4) Vol. 37, No. 23 June 7, 2010 Medtronic Unveils Physician Database, Revised Procedures on Disclosures Medtronic paid $15.7 million in royalties and consulting fees to more than 200 physicians in the U.S. in the first quarter of 2010, ac- cording to its new physician registry. The database, available on Medtronic’s website, provides the company’s first quarterly disclosure of payments it made to physi- cians. The public registry delivers on a promise the devicemaker made last year to disclose the names of physicians to whom it made payments of more than $5,000. “Collaboration between physicians and industry remains cru- cial to innovation in the medical technology industry . ... Because such collaboration is so critical to our mission, it must be based on solid principles, in order to avoid the potential for real or perceived (See Disclosure, Page 2) INSIDE THIS ISSUE
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CDRH Strives to Strike a BalanceBetween Risk, Device Innovation
Seeking a balance between risk and innovation, CDRH is in-
vestigating devicemakers’ complaints that it has become too op-
posed to risk while developing an initiative to encourage device in-
novation.
Industry allegations that CDRH is too risk-averse is a new
phenomenon, Jonathan Sackner-Bernstein, associate director of
postmarket operations at CDRH, told D&DL Thursday. To get to
the truth behind the allegations, the center is conducting an inter-
nal inquiry.
“We’re trying to figure out whether there is a pattern that has
emerged recently where we are rejecting things all the time, or
whether it’s being said because of the administrative change or if it’s
people who are upset because they got rejected and are talking about
it,” Sackner-Bernstein said.
Cyberattacks on medical
devices are a critical con-
cern for the VA ........Page 3
FDA is working on a rule to
extend investigator disqual-
ifications ..................Page 3
CDRH leadership could
learn from new policies at
patent office .............Page 5
US regulatory system push-
es devicemakers into inter-
national markets.......Page 6
Trade groups can be con-
duit for information on sup-
plier issues ...............Page 7
FDA sends closeout letters
to HeartSine Technologies
and KHL ..................Page 7
FDA: DexCom should do
more to prevent off-label
uses ..........................Page 9
Covidien to pay $2.6 billion
for Ev3 .....................Page 9
Expert: Supplier agree-
ments should address han-
dling of CAPAs ......Page 10(See Balance, Page 4)
Vol. 37, No. 23June 7, 2010
Medtronic Unveils Physician Database,Revised Procedures on Disclosures
Medtronic paid $15.7 million in royalties and consulting fees to
more than 200 physicians in the U.S. in the first quarter of 2010, ac-
cording to its new physician registry.
The database, available on Medtronic’s website, provides the
company’s first quarterly disclosure of payments it made to physi-
cians. The public registry delivers on a promise the devicemaker
made last year to disclose the names of physicians to whom it made
payments of more than $5,000.
“Collaboration between physicians and industry remains cru-
cial to innovation in the medical technology industry. ... Because
such collaboration is so critical to our mission, it must be based on
solid principles, in order to avoid the potential for real or perceived
(See Disclosure, Page 2)
IINNSSIIDDEE TTHHIISS IISSSSUUEE
conflicts of interest,” Medtronic CEO Bill Hawkins
said in announcing the registry last week.
The database lists physicians alphabetically
and indicates the services they provided in broad
categories: royalties, advisory services, R&D, and
training and education. The database provides ex-
act figures for royalties but only ranges for the
other services. For instance, Kevin Foley of Ger-
mantown, Tenn., was paid nearly $3.97 million in
royalties for his intellectual property contributions
to 10 Medtronic products, including a rod inser-
tion system, a spinal corpectomy device and an
anterior cervical spinal plating system.
However, the database shows David Car-
away of Huntington, W.Va., and Stephen James
of Cumming, Ga., were each paid between
$50,000 to $99,999 for training and education
services.
Policies Revised
Along with the registry, Medtronic unveiled
its updated policies and procedures for working
with physicians, including:
● A standardized needs-assessment process
that verifies and documents the precise busi-
ness need for specific physician services;
● Limitations on the involvement of royalty-
earning physicians in clinical studies and on
the total annual payments that can be made
to individual physicians for providing serv-
ices to the company;
● A standardized services agreement that doc-
uments in advance the services to be provid-
ed by physicians and the fair market value
payment to be made for the services; and
● Systems linking each of these steps with
documentation indicating the physician has
satisfactorily completed the service and in-
voiced for the service prior to payment.
The policy revisions follow months of ex-
amining industry and internal practices, the com-
pany said. As part of its transparency effort,
Medtronic announced last year it was conducting
a broad, comprehensive review of its relation-
ships with physicians and any potential conflicts
of interest.
The announcement came on the heels of a
Senate inquiry into the company’s relationship
with former Army doctor David Polly, who was
accused of failure to disclose that Medtronic had
paid for his trip to testify before a Senate sub-
committee in 2006.
As a researcher at the University of Min-
nesota, Polly allegedly told a university review
committee a Medtronic bone product was the on-
ly commercially available off-the-shelf growth
factor when another product was available, and
he informed Medtronic about study findings be-
fore the information was made public, contrary
to university policy. Medtronic paid Polly more
than $800,000 over a four-year period (D&DL,
Sept. 7, 2009).
However, none of the updated policies was
created in response to a particular physician rela-
tionship, Medtronic spokesman Steven Cragle
told D&DL.
Federal Mandate
The new registry puts Medtronic ahead of a
federal mandate that devicemakers must disclose
any payment or other transfer of value made to a
physician after Dec. 31, 2011. The requirement is
part of the Patient Protection and Affordable Care
Act passed this year (D&DL, April 5).
Once the disclosure requirement kicks in,
Medtronic will have to lower its reporting thresh-
old from $5,000 to $100 to comply with the law.
The necessary adjustments will be made by the
deadline, Cragle said. Medtronic will likely have
to expand its infrastructure to track the additional
Decisionmaking that was submitted to center Direc-
tor Jeffrey Shuren last month. The report is expect-
ed to be released to the public this summer (D&DL,
Feb. 15). Further findings from the internal inquiry
will be issued later, Sackner-Bernstein said.
The zero-risk allegations are likely a percep-
tion rather than truth, Sackner-Bernstein said, but
that perception could be a problem for the agency.
“If people view the FDA as opposed to risk,
investors are going to think the agency is just going
to take the easy way out” and reject new devices, he
said. As a result, investors would question the via-
bility of investing in device development in the U.S.
“I’m a U.S. regulator,” Sackner-Bernstein
said. “I want to make sure we have the best tools
and products available in the U.S.”
Devicemakers are starting to see venture
capital go offshore. From 2000 to 2009, venture
capital investment in medical technology grew al-
most 60 percent in Europe and Israel but less
than 40 percent in the U.S., AdvaMed said in tes-
timony presented at a recent meeting of the Presi-
dent’s Council of Advisors on Science and Tech-
nology (D&DL, May 31).
To counter such trends, CDRH is looking for
ways to promote device innovation. One plan is to
launch an innovation initiative similar to the center’s
signal escalation program (D&DL, May 3). But
whereas that program focuses on a risk profile by al-
lowing CDRH staffers in various divisions to moni-
tor information about a single device, the new initia-
tive would use some of the same sources of informa-
tion to monitor innovation, Sackner-Bernstein said
during the keynote address at the Seventh Annual
Medical Device Quality Congress Thursday.
A study released last month showed device-
makers were falling behind other FDA-regulated
industries in terms of innovation. The study attrib-
uted the decline to a widely used business model
focusing on first-of-its-kind devices and longer
approval times at CDRH (D&DL, May 24).
— Virgil Dickson
Page 4 DEVICES & DIAGNOSTICS LETTER June 7, 2010
Balance, from Page 1
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US Regulatory System PushesIndustry Into Other Markets
Citing slow review times and an increasingly
burdensome regulatory system in the U.S., many
American devicemakers are taking their products
— and their business — to other countries.
Masimo is one device company that began
to expand internationally in answer to slower
510(k) review periods at the FDA. As a result,
every new patient-monitoring device the compa-
ny has made in the past two years has debuted
in Europe, Masimo CEO Joe Kiani said at a re-
cent Medical Device Manufacturers Association
conference.
More companies, especially smaller ones, may
begin to take that route as well, Christopher Row-
land, CEO of NeoTract, a device company focused
on urological and gynecological disorders, predicted.
“Hundreds of companies are struggling try-
ing to do business in the U.S.,” he said at the
conference. “In the meantime, we will find a way
to be competitive outside the U.S.”
For startup companies like his, Rowland
suggested trying to break in to the international
market in Italy, Saudi Arabia, Spain or Turkey
as they have favorable reimbursement policies
and are easier in which to gain traction. The
key to success is finding a good distributor,
he added.
Heading overseas is not without risk, Kiani
cautioned. For instance, the potential for device
plagiarism is high outside the U.S., and interna-
tional patents are a waste of money as they can
be difficult to enforce from country to country,
he added.
When an audience member noted that more
devicemakers are moving their R&D to Asia to
cut costs, Kiani warned, “The Chinese think
copying is an art. Manufacturing there is like a
Trojan horse; it’s really dangerous to do that.”
Expanding internationally is not always an
alternative to FDA approval since some countries
expect a device to be cleared or approved in the
U.S. before they grant marketing authorization,
Kiani said. — Virgil Dickson
Page 6 DEVICES & DIAGNOSTICS LETTER June 7, 2010
Today, your challenge is to use gifts to build relationships without violating the Federal Physician Payment Sunshine provision.
You’ll need expert guidance — because there’s not always a black-and-white answer as to what’s okay and what isn’t.
Meanwhile, since the new federal laws do not preempt stiffer state gift rules, you must clarify what both sets of requirements mean foryour marketing and your compliance efforts.
Let regulatory expert John Patrick Oroho clear up the confusion. Mr. Oroho will clarify what the federal law now requires and how to meshthese requirements with existing state requirements. He will leave no stone unturned in showing you how to protect yourself, including:
• Exactly how the new law applies to gifts of payments to physicians (the reality may be different than what you’ve heard)• 5 tips for avoiding problems as you disclose sampling and payment information• How to plan now for when gift and payment information becomes publicly available• Reporting and disclosure deadlines you don’t want to miss• How to make sure you report no less — and no more — than what’s required• And more
Federal Pharma and Device Physician Gift Law:Confusion Reigns Over New Requirements — State Laws Still Apply
An WebinarThursday, June 17, 2010 • 1:30 p.m. – 3:00 p.m. EDT
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