04272017Headline:

Charlottesville, Virginia

HomeVirginiaCharlottesville

Email Greg Webb Greg Webb on LinkedIn Greg Webb on Facebook
Greg Webb
Greg Webb
Attorney • (800) 451-1288

Medical Cost Increases Driven by Medical Devices…

Comments Off

Once again, one might say that rising medical costs are being pushed even higher, but this time, it’s not the doctors, hospitals, and insurance companies doing the pushing. In theory, it’s the cost of developing, producing, going through the approval process, intensive marketing, and distributing medical devices that are in high demand, not just in the U.S. but worldwide. ( “Soaring Medical Costs Pinned on Medical Devices”, June 7, 2011, The Fiscal Times.)

Some of these devices, the production and marketing of which are driving health costs up, aren’t new, but are merely so-called improvements, upgrades, if you will, on previous similar devices. The smaller and even smaller heart pacemakers, the hip replacement devices of various construction are both typical examples of so-called improvements on previous similar devices. These improved devices are usually significantly higher in cost than their predecessors—and the marketing of the devices has become a driving force in rising health care costs. If patients need a hip replacement, they usually want the latest and greatest, most improved version; and they do not want the one that leached metal fragments into their Aunt Viola’s circulatory system.

Voices in the medical world are being raised over the need for more strict rules to make sure the “new and improved” devices do what they are meant to do, safely. While “new devices are often more complex and expensive,” says Steve Nissen, chairman of cardiovascular medicine at the Cleveland Clinic, they “may not offer any improvements in health outcomes.” Also, some of the newer devices make it to the marketplace with little or no clinical data (the results of clinical trials in humans) to support their claims of efficacy. And, according to Rita Redberg, editor of the Archives of Internal Medicine (University of California, San Francisco), requiring evidence of actual effectiveness of devices for patients before device approval would prevent “billions of dollars from being spent on technologies that are not helpful for patients and are even harmful.”

That’s scary—and it’s only the tip of the iceberg: Allowing medical devices to scoot through the 510(k) (fast-track) approval process under less radar may be more costly, as faulty, ineffective or unsafe devices are recalled expensively en masse, which also means more redevelopment (cost to the industry), less goods to the marketplace in a timely manner—and somebody eating the device industry’s lunch possibly in Europe or China. But there are also safety issues when there are no clinical trials for follow-on devices.

The line in the sand between the device industry and the FDA has been drawn—and, as if the conflict described above were not enough to fuel the fire, there are looming tax issues as well, to the tune of possibly $2 billion across the industry—“there are over 8,000 medical device companies in the U.S. which generated approximately $136 billion in sales and employed over 422,000 last year, according to industry officials.” The taxes are purportedly to generate funds to help pay for covering the uninsured, as part of health care reform. The Institute of Medicine (IOM) is still preparing its report on this, and all the players are awaiting this report’s publication, but meanwhile some companies are ditching the U.S. and going to Europe… less radar, less regulation, less red tape and more hospitable environment for the device industry to get those devices on the market sooner. One might ask, what does this mean for American jobs, especially in the Midwest where the preponderance of medical device companies reside? You have to ask who the villain here is, or is there a villain? Is the underlying battle the global marketplace vs. U.S. industry once again? Or is it simply that the FDA’s effort at tightening up medical device regulations may be just too little too late? The industry may say that the system is not broken, but that seems to run contrary to what the evidence shows – e.g., DePuy Orthopedics ASR hip replacement recall this past year. Striking a proper balance is a challenge, but the FDA may choose to err on the side of consumer safety.