FDA Shakes Down Medical Device Companies

Food and Drug Administration (FDA) to Company XYZ – “That sure is a nice little medical device you have there.  It’d be a shame if we never got around to approving it.”

I have no evidence that the above conversation actually took place but after reading a story on Medcity News, it’s hard not to see the latest news from the FDA as anything but a shakedown for protection money from medical device companies.

It has been known for years that medical device companies (and drug companies) are finding it increasingly more difficult to get products approved by the FDA.  From the Progressive Policy Institute paper written in June 2011:

“For the purpose of this paper, however, we will focus on the FDA, which has been criticized for imposing excessive requirements on the approvals of new drugs and medical devices.  Three facts are clear.  First, the FDA’s regulatory reach and intensity has increased over the past 10 years.  FDA employment grew by 33 percent between 2000 and 2011, even as employment in the regulated industries – pharmaceuticals, medical devices and biotech – only rose by 3 percent.”

Before I get to the Medcity News article, let’s first clarify some FDA jargon.  Prior to selling a device for human use, the medical device company is required to submit either a Premarket Approval (PMA) for devices that support or sustain human life or a Premarket Notification (510(k)) for all other devices that don’t meet the stricter requirements of a PMA. 

A few weeks ago the FDA appeared to offer a deal to get things moving and cut through the red tape.  From the Medcity story:

“Now, a tentative deal has been reached. The FDA announced Wednesday that in exchange for agreeing to shorter review periods for 510(k) applications and other performance improvements, the FDA is getting $595 million over five years from the medical device industry. The three industry groups with whom the FDA reached a deal were AdvaMed (Advanced Medical Technology Association), the Medical Device Manufacturers Association and the Medical Imaging and Technology Alliance.”

So in exchange for $595 million, the medical device companies in these three groups will get faster service/approvals of their 510(k) applications.  Why does the FDA need this payment from the medical device companies to speed up applications?  From the FDA announcement:

“The agreement provides FDA $595 million in funds over five years, which will give FDA the ability to hire additional reviewers, lower the ratio of managers to reviewers and enhance training for reviewers.”

Wait, why does the FDA need to hire new reviewers since they have already outpaced the private companies that they regulate?  The FDA workforce grew 10 times faster than the private companies did over the past 11 years and that should provide them ample headcount to take care of their duties.

It should be pointed out that this negotiated amount of $595 million is really something that medical device companies have paid since 2002 under the Medical Device User Fee and Modernization Act of 2002.  From the Medcity News article:

“Congress first established the user fee program a decade ago with the Medical Device User Fee and Modernization Act of 2002 (MDUFA I) because the medical device review program had expanded greatly and prompted concerns about its capacity and performance. The five-year program was reauthorized in 2007 (MDUFA II) and will expire on Sept. 30.”

“The $595 million will help FDA hire 200 new scientists. At one time, a number as high as $805 million in user fees was also mentioned. But the new amount essentially more than doubles what the industry paid the last time user fees were reauthorized back in 2007 — $287 million.”

So we are really talking about an increase of $308 million when compared to 2007 numbers.  But if this additional $308 million (spread over 5 years) is going to fund 200 more scientists, that puts the average annual salary of these new scientists at $308,000/year.  Can I get one of those jobs?

There is no need to hire new scientists and there is no way each of these new scientists will be making over $300,000 per year.   This is a bribe, pure and simple, and I can’t believe this sort of thing is happening in America now. 

This entry was posted in healthcare, Over Regulation, politics. Bookmark the permalink.

2 Responses to FDA Shakes Down Medical Device Companies

  1. Pingback: Let Them Come | cosmoscon

  2. Pingback: NPR Wakes Up | cosmoscon

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