Medtech Year in Review: Implant Scandals, New EU Device Regulations and US Device Tax Uproar

December 17, 2012 – 12:17 pm

The Irish Medical Technology Industry Excellence Awards, which were held in Galway, Ireland, on 13 December 2012, provided an object lesson on everything that is right with the medtech industry. Performing well in an otherwise dodgy economy, with exports up year on year, Ireland’s medtech sector celebrated its achievements at this annual event. The global medtech industry also has reason to celebrate. It continues to invent life-saving technologies that would have been unimaginable even a few years ago. Countless improvements to quality of life are developed and marketed at a record pace. Patient empowerment via mobile health technologies continues to grow by leaps and bounds. But 2012 started under a dark cloud, as the Pip breast implant scandal dominated medtech news.

French company Poly Implant Prothèse (Pip) fraudulently manufactured breast implants using industrial silicone for almost 10 years until French authorities finally shut down the business. The impact of the scandal continues to reverberate. It is largely why the new medical device regulations include a “scrutiny procedure,” which has been roundly condemned by industry.

“Article 44 Mechanism for scrutiny of certain conformity assessments” would enable a Medical Device Coordination Group to review submissions for high-risk devices and request clarifications. The procedure has the potential to significantly lengthen the time it takes to bring certain products to market in Europe. In an interview with medtechinsider, Eucomed CEO Serge Bernasconi said, “We don’t see the need for this extra layer of control, especially in light of all of the other recommendations that are in the proposal. It places an extra burden on industry but does not improve patient safety. And it has the potential to really hurt small and medium size enterprises.”

More bad news dropped in February, when the UK Medicines and Healthcare products Regulatory Agency (MHRA) advised that patients who had undergone large-head metal-on-metal hip replacements should be monitored annually for life. A BBC report revealed that some orthopaedics companies had altered hip implants without conducting appropriate trials or postmarket studies, or informing the MHRA of their actions. The design change may be responsible for the release of high levels of toxic metals into the body, according to some experts.

Adding insult to potential injury, UK journalists submitted a formal application to Notified Bodies in Slovakia and the Czech Republic for a hip implant modelled after a metal-on-metal device banned in the United Kingdom. The Slovakian organisation was prepared to offer provisional approval for the design, while the body in the Czech Republic said it would consider licensing the product, reported the Telegraph in October. The hip implant was designed by medical experts for the purposes of the investigation with specifications similar to the Depuy ASR XL Acetabular System, which was recalled in 2010. The unscrupulous actions of two Notified Bodies could not have come at a worse time for industry, as it battled perceptions in the corridors of Brussels and public opinion that more regulatory oversight was needed to protect public health.

Meanwhile, the device industry in the United States was in a lather for much of 2012 about the “device tax.” The 2.3% levy applies to gross sales, not profits, and would be especially detrimental to small to midsize companies and startups, where innovation happens. Cook Medical was among the most vocal opponents of the tax, claiming that the tax would force it to scrap expansion plans (and threaten US jobs). The tax is scheduled to go into effect on 1 January 2013. At the time of writing, there was a slim ray of hope that implementation of the device tax might be delayed.

Quantified self became a buzz phrase in 2012. The concept encompasses patient empowerment, the consumerisation of medical devices and the explosion of mobile technology and healthcare apps. “A growing number of patients want to be engaged in their own care and, at the same time, they are growing weary of the paternalism often found in medicine,” wrote MD&DI Editor-at-Large Brian Buntz in “Why Consumerization Is Coming to Cardiac Monitoring.” Buntz quoted iPhone ECG inventor David Albert, MD: “We often treat patients like they aren’t responsible—like they are children. Do this, don’t do that; don’t call me, I’ll call you. Medicine from that perspective is going to change,” said Albert. The device recently received FDA approval and has been granted a CE mark.

The iPhone ECG monitor is one example of how the medtech landscape is being altered in fundamental ways. A rapidly shifting business model was one of the major themes at the 2012 MedTech Forum organised by Eucomed and EDMA. At the event, Chris Llewellyn, Partner, McKinsey & Co, and former orthopaedic surgeon, presented a graph showing the percentage of healthcare spend growing unsustainably. To survive, the healthcare business model must change, he and other speakers stressed over the course of the conference. Value-based innovation was posited as the surest route to self preservation.

That is my idiosyncratic and admittedly incomplete view of the year that was. What did I miss? Plenty, I know. I’m counting on your comments to complete this fragmented review of the medtech industry in 2012.

Norbert Sparrow

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