U.S. companies have led the world in the development of medical devices. According to an analysis by the consulting firm PricewaterhouseCoopers, 32 of the 46 medical technology companies with annual sales exceeding $1 billion are based in the United States. Domestic medical device firms employ 357,000 people directly and another 1.6 million indirectly. But as a prototypic example of the impacts of wrongheaded public policy, the medical device sector is being ravaged by unwise and excessive federal regulation, says Henry I. Miller, a research fellow at the Hoover Institution.
For decades, many devices have been approved via a fast-track pathway called "510(k)" designed for products that are similar to earlier products, known as predicate devices. The Federal Drug Administration (FDA) has made it clear that qualifying for the 510(k) pathway will soon become more difficult and that more data will need to be obtained and submitted to regulators for the standard pathway. These new requirements will further threaten innovation in the industry, which has been finding it increasingly difficult to obtain financing for product development. Unlike the drug sector, many device manufacturers are small and financially fragile; more than 80 per cent employ fewer than 50 people.
Even without a further tightening of regulation, a comparison to European companies in a survey of more than 200 companies revealed that European regulators approved medical technologies significantly faster than their FDA counterparts did. For lower-risk products, Europe's approval times were two years shorter than in the United States, while for higher risk or more experimental devices, the disparity was more than 3 1/2 years, says Miller.
Source: Henry Miller, The Ravages of Regulators Left to Their Own Devices, Investor's Business Daily, April 4, 2011.
For text: http://www.investors.com/NewsAndAnalysis/Article.aspx?id=568082
For more on Health Issues: http://www.ncpa.org/sub/dpd/index.php?Article_Category=16
First published by the National Center for Policy Analysis, United States
HPU Policy Bulletin/ 26 April 2011