Obama Orders FDA To Streamline Medical Tech RegulationsObama Orders FDA To Streamline Medical Tech Regulations

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On the same day that President Barack Obama chided regulatory agencies like the Food and Drug Administration for developing regulations that interfere "with the pursuit of progress and the growth of our economy," PriceWaterhouseCoopers (PwC) published a report that found emerging markets led by China, India, and Brazil are chipping away at America's lead in medical technology innovation, in part, because the FDA's 510 (k) medical device approval program is cumbersome and costly.

In an article he penned for Tuesday's Wall Street Journal, President Obama said the FDA will outline new efforts to improve the process for approving medical devices. The president also signed an executive order on Tuesday requiring federal agencies to ensure that regulations protect safety, health, and the environment while advancing economic growth.

Anand Iyer, president and chief operating officer of WellDoc, a telehealth company that recently received FDA 510 (k) clearance for its WellDoc DiabetesManager system, said the time has come for the FDA to develop a medical device approval program that demonstrates the balance of innovation and safety that the president seeks.

"WellDoc applauds President Obama's executive order, which will help the FDA ensure safety and efficacy, while fulfilling their complete mission of advancing public health. The safe and accelerated approval of new genres of medical devices -- especially those which enable more effective and cost-efficient healthcare -- drives our nation's innovation potential and global competitive advantage," Iyer told information.

The FDA's 510 (k) clearance program, which approves medical devices for sale in the United States, is a key component that PwC examined to determine U.S. competitiveness in medical technology innovation.

According to PwC's report, "Medical Technology Innovation Scorecard: The Race for Global Leadership," U.S. success in medical technology in previous decades has been due, in part, to the global leadership the FDA has displayed in establishing standards and guidelines to ensure product safety, but during the last decade the FDA has lost its ability to inspire confidence among medical technology executives.

"In a recent survey of 50 life sciences companies (including 19 companies developing medical device or diagnostic products), PwC found that respondents experienced frequent problems in gaining product approvals, even to the point of FDA changing its position during the application review process. Forty percent of survey participants agreed that FDA denied some product approvals primarily because of inadequate review resources," the report said.

Another concern is the cost of applying for 510 (k) product approvals, the report said. "The industry also has expressed concern about FDA's effort to revamp its 510 (k) process, through which 90% of devices gain U.S. approval. The cost of a 510 (k) application ranges from $1 million to $50 million, compared with $50 million to $150 million for higher-risk device applications. The industry is concerned that additional 510 (k) requirements calling for more extensive clinical or manufacturing data could drive up costs and lengthen time to market," the report concluded.

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Chris Wasden, PwC's managing director of strategy and innovation, told information it takes twice as long for the U.S. to approve the same medical devices when compared with European countries like the United Kingdom, Germany, and France.

"We need to have a regulatory system that operates more like the European system where it's transparent, reliable, and predictable," Wasden said. "Venture capital is holding back and not as focused on medical device technology innovation because they don't know how much money it's going to take or how long it's going to take to get through the FDA 510 (k) process."

A supportive regulatory system is one of five key areas that PwC analysts looked at when determining specific factors that contribute to medical technology innovation in nine countries -- Brazil, China, France, Germany, India, Israel, Japan, the United Kingdom, and the United States.

Other areas that affect the capacity to develop medical technology innovation in these nations are: powerful financial incentives, leading resources for innovation, demanding and price-insensitive patients, and a supportive investment community.

In addition to providing a current view of innovative capacity and capability in these countries, PwC's Innovation Scorecard looked at the past five years to gain a historical perspective and projected into the future to present the outlook for technology innovation leadership over the next decade to 2020.

A top-line view of current results of the Innovation Scorecard reveals:

-- On a scale of 1 to 9, with 9 as the highest score, the U.S. currently has a total score of 7.1. Because of decades of innovation dominance, the U.S. continues to show the greatest capacity for medical technology innovation.

-- The scores of the other developed nations (the U.K., Germany, Japan, and France) fall within a tight band of 4.8 to 5.4. Among the developed countries included in this study, Germany and the U.K. demonstrate the strongest support for innovation, and Japan the weakest.

-- Israel, despite its small size, ranks near the level of the European nations, which indicates its strong capacity to foster innovation.

-- Emerging markets lag behind developed ones. China, with its powerful economic growth engine, scores 3.4, ranking it higher than India and Brazil, each of which scored 2.7.

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Looking to the future, the U.S. is expected to continue to lead in medical technology innovation, but also will lose ground to other countries during the next decade. The Innovation Scorecard also projects relative declines for Japan, Israel, France, the U.K., and Germany. By contrast, China, India and Brazil are likely to see gains during the coming decade. China, which has shown the largest improvement in its medical technology innovative capacity during the past five years, is expected to continue to outpace other countries and reach near-parity with the developed nations of Europe by 2020.

The Innovation Scorecard indicated that the innovation ecosystem itself is moving offshore, as the nature of medical technology innovation evolves. Some of this transformation is being driven by changes in the United States, such as an increased focus on value and cost-effective solutions in healthcare and increasingly international investments in research and development (R&D).

Other dynamics are the result of changes abroad, including factors as diverse as investment in local academic medical centers; investment in research programs; the return of foreign-educated scientists and doctors to their homelands; advancement of mobile health technologies that expand access to care; and a focus on the lean, frugal, and reverse-innovation necessary to deliver faster, better, cheaper, and more effective healthcare solutions in these markets, PwC analysts said.

As a result of these many factors, medical technology companies increasingly are going outside the U.S. to seek clinical data, new-product registration, and first revenue. Accordingly, U.S. consumers are not always the first to benefit from advances in medical technology and could eventually be among the last to gain access to new innovation. Medical technology innovators already are going first to market in Europe and, by 2020, likely will move into emerging countries before entering the U.S.

The shift away from the U.S. to nations such as China, India, and Brazil is not necessarily preordained, PwC analysts said. Factors related to intellectual property protection, difficulty of doing business in some emerging countries, and weak local supplier networks could make these markets less attractive, despite their size, and could hinder these nations' efforts to assume innovation leadership.