By MARK McCARTY
Medical Device Daily Washington Editor
BOSTON The Advanced Medical Technology Association (AdvaMed; Washington) kicked off its annual meeting with a policy briefing, highlighting some of its imperatives for 2012, with issues of taxation dominating the agenda. Repeal of the device tax is obviously still high on the association's agenda, and Steve Ubl, president/CEO of AdvaMed, said the association's preference is that a repeal be packaged with legislation dealing with the oncoming fiscal cliff composed of other tax issues.
"We'll be seeking inclusion of a device tax repeal in [the fiscal cliff legislative] vehicle," Ubl said during a question-and-answer session with reporters. Ubl also noted that the continuing resolution "limits FDA's ability to spend user fee dollars to levels" permitted in the now-expired MDUFA II user fee agreement. Despite the limitations on the agency's ability to spend user fees, the agency will nonetheless be able to collect fees at levels spelled out in MDUFA III, which Ubl said creates an "Alice-in-Wonderland circumstance." He also remarked that the device known as budget sequestration would trim "more than 8%" from the budget at the Center for Devices and Radiological Health, a reduction he said would be "applied to both FDA budget and user fee amounts."
Ubl also addressed what he described as an innovation cliff imposed by the device tax and some of the constituent matter from the fiscal cliff, a list that includes the corporate tax code. When asked whether AdvaMed has a list of give-and-take items where corporate tax rates and loopholes are concerned, he said "we're preparing to engage [policymakers] on a granular level," but that AdvaMed is "not prepared to talk about trade-offs at this point." He said the association's imperatives in this context apply principally to med-tech and other technologically advanced industries, and claimed the association's positions are not so far down in the weeds as to have no chance of garnering support of other organizations. "If you look at the broad principals, they're supported by a number of others," Ubl said, including the U.S. Chamber of Commerce (New York).
David Dvorak, the new AdvaMed board chairman and the president/CEO of Zimmer Holdings (Warsaw, Indiana), said that among the issues are a "lack of efficiency and predictability in the FDA review process," adding that the passage of the user fee agreement "could dramatically improve patient access to devices and diagnostics." He said the terms of the agreement represent "real progress . . . but is only the first step," vowing that AdvaMed will "make sure FDA is held accountable for all its commitments."
Dvorak sought to throw water on claims that the device tax is an inconsequential blip on an otherwise busy radar screen for industry. He said for Zimmer, the tax comes to "something on the order of 20% of what we reinvest every year" into new device research, adding that the amount comes to "close to $15,000 per employee in our case."
When asked whether the device tax would simply be passed along in the healthcare cost pipeline, Dvorak acknowledged "there is a thought that the cost is going to get passed through," but that such a proposition wasn't likely even before the 2% cuts to Medicare under budget sequestration. "The reality of the marketplace is that we're operating in a negative environment," he remarked, adding that proposals to modify the tax in order to make it more palatable to industry are "all around the edges [of the debate] in my view."
Ubl chimed in, arguing that the device tax is part of a "confluence of regulatory and tax policy that has led to many venture capitalists to decide to either rotate out of this space" or play a wait-and-see game with their investments, assuming they don't opt out of the U.S. market altogether.
Ubl also attempted to clarify the matter of AdvaMed's purported assent to the device tax, stating, "industry made significant contributions in the context of the Affordable Care Act," such as the Physician Payment Sunshine Act. He said "the [device] tax was layered on top of this," asserting, "the real question is should industry pay twice."
FDA yanks 2004 DTC device guidance
Fridays are good days for slipping things under the media radar screen, and FDA's Center for Devices and Radiological Health saw fit to use Sept. 28 to remove a 2004 guidance addressing direct-to-consumer ads for restricted devices, obviously with little fanfare. At press time, the agency had not responded to requests for comment on the matter, so FDA's motive for pulling the guidance is not apparent.
The agency had drafted a guidance addressing risk information in 2009 (Medical Device Daily, May 28, 2009), which presumably is still in force, but also of interest in this context may be the discussion of social media, a channel of communication for which CDRH has yet to indicate an interest sufficient to generate a guidance. The Advanced Medical Technology Association (AdvaMed; Washington) had produced a voluntary guideline for device ads three years ago, although that document addressed television ads and omitted ads on the Internet (MDD, March 6, 2009).
In one of his last appearances as CDRH director, Dan Schultz, MD, told the Senate Special Committee on Aging that there is "no statutory requirement that restricted device advertisements be submitted to FDA for review prior to dissemination or broadcast."
Schultz had appeared before the committee in September 2008, explaining that the now-withdrawn guidance from 2004 was "meant to assist companies to achieve compliance with these statutory requirements."
Schultz told the committee that while CDRH regulates product-claim and promotional reminder ads, the agency did not exercise jurisdiction over "help-seeking" responses.
FDA had previously made available untitled letters to device makers regarding promotional activities only via FOI requests, but since Oct. 1, 2011, the center has posted such letters online. However, the agency's webpage for these letters indicates CDRH has not seen fit to draft any such letters since that date.
Mark McCarty, 703-268-5690
Published October 2, 2012