5 Keys To Revitalizing The Medtech Innovation Ecosystem

America’s medical technology industry creates life-saving and life-enhancing treatments and cures that drive efficiencies and cost savings in the health care system, improve the quality of patient care, and generate high-quality jobs that contribute to economic growth. But today, the innovation ecosystem that supports medical technology development is severely stressed. The U.S. has historically been the world leader in medical technology, but our leadership is eroding. To respond to these challenges, AdvaMed has proposed a new Innovation Agenda.


By Stephen J. Ubl, president and CEO, AdvaMed

Enactment of AdvaMed’s Innovation Agenda — including a streamlined, seamless pathway at FDA and the Centers for Medicare and Medicaid Services (CMS) for significant breakthrough products — will unleash the potential of medical technology to extend and improve lives, reduce the cost and burden of disease, and maintain and enhance U.S. scientific and economic leadership.

AdvaMed’s Innovation Agenda consists of five pillars, each addressing a specific threat to the American innovation ecosystem. The pillars are:

  1. Improving FDA’s regulatory processes
  2. Restructuring CMS’s coverage and payment processes
  3. Reforming the U.S. tax system
  4. Improving access to international markets
  5. Supporting the maintenance and growth of America’s R&D infrastructure

First, while there have been recent operational improvements at the FDA for which agency leadership and staff should be commended, the regulatory process is still unnecessarily time-consuming and inconsistent. To build on progress in reducing review times under the groundbreaking 2012 FDA user fee agreement, we seek greater use of valid scientific evidence in the review process, including a broader range of data sources, such as registries, experience in foreign markets, and peer-reviewed journal articles. Currently, reviewers are often not considering legitimate sources of data and evidence, and are not consistently applying the least burdensome approach to assuring safety and effectiveness that was mandated in legislation as far back as 1997. We also seek the use of central institutional review boards (IRBs) to facilitate multicenter trials, among other changes. Currently, the need to obtain consent from multiple, local IRBs extends the time and cost of multicenter trials and is unnecessary to assure patient safety.

Second, the payment environment is far less hospitable to new technology today than ever before, with the result that investment in new treatments is discouraged and patient access is slower and more difficult. Therefore, our agenda calls for reforming CMS coverage and payment processes, including establishment of automatic Medicare coverage for FDA-approved clinical trials. This would be instead of the current process of requiring a separate, duplicative, and potentially time-consuming Medicare approval process, when virtually all trials are eventually approved anyway. Process reforms are also needed to increase transparency into local coverage decisions and to ensure opportunities for useful stakeholder feedback to Medicare Administrative Contractors. We also seek expanded coverage of telehealth services and remote monitoring. Currently, even though Medicare’s fee-for-service program includes some telehealth services, coverage is restricted by the site of service. Now is the time to allow more seniors to take advantage of information-age technology for telehealth services at home, particularly as many private payers already do this.

Third, the U.S. tax system is increasingly uncompetitive, discouraging U.S. manufacturing and technology development, and it’s made worse by a medical device tax that is costing us jobs, R&D resources, and global competitiveness. Therefore, we seek repeal of the device tax and reform of the U.S. tax system — to include a lower overall corporate tax rate, tax incentives to invest in start-ups, and incentives such as “innovation boxes” to lower the overall corporate tax rate for profits based on intellectual property from domestic R&D and manufacturing — to help level the playing field with competitor nations.

Fourth, overseas we often see policies that limit patients’ access to needed technologies. These include a lack of regulatory harmonization that raises costs and delays product availability, and increasing tendering and other reimbursement processes focused on price and not quality. To counter these trends, we seek congressional passage of Trade Promotion Authority legislation to help ensure key free trade agreements — including the Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership — come to fruition. Through these pacts we seek to improve patient access to medical technology and reduce tariff and non-tariff barriers, while helping to maintain our industry’s status as one of the few U.S. manufacturing sectors with a favorable balance of trade. These agreements can also help encourage foreign governments to establish regulatory and payment systems that are fair, transparent, nondiscriminatory, and based on international best practices.

Fifth, America’s investment in medical research has slowed greatly over the past decade, with public research investments shrinking even as the opportunities have grown, and venture capital investment in medtech that has plummeted in recent years. Our agenda calls for an R&D infrastructure second to none, including steady growth in funding for the National Institutes of Health (NIH) and the National Science Foundation (NSF).

AdvaMed is working with policymakers and other industry stakeholders, and with lawmakers in Congress, to advance our proposals in 2015. Given the challenges that the innovation ecosystem faces today, only bold policy changes like those mentioned above — and others in our overall Innovation Agenda — can help ensure the continued promise of breathtaking medical progress in this century of the life sciences, and that the U.S. will continue to be the word leader in medical technology. The American people deserve no less.

About The Author
Steve Ubl is president and CEO of AdvaMed, the world’s largest medical technology association. He is recognized as a top healthcare advocate and policy expert with considerable experience across multiple health policy sectors. His accomplishments include landmark reforms related to the U.S. Food and Drug Administration’s product review process and Medicare’s coverage and reimbursement of medical technologies

Posted in AZBio News, Government Affairs Blog, Inside the Belt Way.