Too Many Rules for Med Devices?

New rules for medical device makers, both in the U.S. and abroad, may make it more difficult for medical device companies to succeed, some say.

Both Sides of the Aisle Oppose Medical Device Tax

On Capitol Hill, GOP senators are trying to attach a repeal of a medical device tax to a government spending measure.  The repeal is part of an ongoing effort to defund the ACA.  The healthcare law imposes a 2.3% excise tax to help pay for the healthcare overhaul.

Lawmakers on both sides of the aisle express dislike for the tax.  However, it is most unpopular among Republicans in both houses, marked by Sen. Orrin Hatch's (Utah) lively description of the tax a "stupid dumb-ass thing."  Sen. Hatch and other opponents of the tax say it would put tens of thousands of jobs at risk, and hinder the health IT industry that creates pacemakers and artificial hearts. Among the democrats who oppose the tax are Sens. Amy Klobuchar (Minn.), Al Franken (Minn.), Kay Hagan (N.C.) and possibly Whip Dick Durbin - though Durbin would only support a repeal of the tax if it didn't negatively affect the overall funding for the healthcare law.

Supporters of the 2.3% medical device tax argue the healthcare law could eventually offset at least some of the cost of the tax.  As the number of insured grows, supporters say, so would the demand for medical devices and health tech innovation.

EU Rules May Slow U.S. Approvals

The European Parliament will soon vote on new regulations to close loopholes in their medical device laws. Currently, the EU has a much easier process for medical device companies to test their products and accumulate patient data.  It is precisely this simpler process that facilitates faster device approval in the U.S. - health tech companies can more easily gather the data they require in Europe to then get approval in the U.S., the world's most profitable health care market with the most stringent approval process.

The different between the system in the EU and U.S. stems from the government agency that oversees device approvals. In the U.S., the approval process is handled by the Food and Drug Administration.  In the EU, private reviewers known as "notified bodies" are hired by manufacturers to vet products and grant so-called CE marks that allow devices to be sold in the EU.

"If the rest of the world begins to raise the bar of approval to the U.S. level , it will surely damage investment in innovation and patient progress will plateau," said Kevin Sidow, CEO of Moximed of Hayward, CA, whose knee-implant system was approved in Europe.