Government Clogging Up the Medical-Device Industry, Again

by Patrick Brennan

In yesterday’s Wall Street Journal, former FDA commissioner Andrew von Eschenbach and law professor Ralph Hall have a compelling piece about the existing strictures on the U.S. medical-device industry — which, one might assume, makes the excise tax which health-care reform will impose on the industry an even worse idea.

As Ramesh has pointed out here and in a Bloomberg View column, and as I argued on NRO, the tax is a poor way to raise revenue and would hamper the industry in terms of employment and exports. On June 7, the House voted 270–146 to repeal the tax, but the Senate doesn’t appear likely to consider it anytime soon. Von Eschenbach and Hall’s piece explains other factors, mostly regulatory, that are holding back the industry, and how we might fix it:

American patients used to be the first to benefit from their country’s enormous investments in basic medical research. Today, Americans wait as much as 60% longer than they did in 2005 for new lifesaving and life-enhancing medical devices . . .

One significant cause of this delay is the FDA and a decades-old regulatory process that is outmoded and needlessly long. Advances in science and new technologies offer opportunities to update FDA regulations in need of reform. If the agency modernized its premarket approval process, for instance, it could grant health-care professionals faster access to many medical devices with proven benefits and acceptable safety profiles, and then monitor the performance of those devices once they are in use.

This process could start with a better determination of which benefit-and-risk questions can be answered best by faster and lower-cost nonhuman studies—and which require human testing. The FDA can also provide faster reviews of clinical-trial protocols that focus on ensuring patient choice. There is a compelling argument for letting patients and their doctors decide what risks to take. Given the tremendous gains in quality of life and life expectancy associated with medical innovation, it’s easy to predict what many patients would choose.

Today the medical-device industry flourishes overseas, even as it struggles under unnecessary regulatory burdens in the U.S. A 2010 study found that European patients gain access to “new U.S.-created medical technologies” more than two years earlier, on average, than American patients. Not surprisingly, the device industry is leaving. According to a summer 2011 survey by the National Venture Capital Association, in the next three years, 85% of venture-backed health-care companies expect to seek regulatory approval for their new products outside the U.S. first.

With assets like the National Institutes of Health, cutting-edge academic medical centers, vibrant venture-capital networks, and a vast industrial infrastructure, the U.S. has no excuse not to lead the world in providing new medical devices. 

The Corner

The one and only.