Will the United States maintain its position as a world leader in medical technology?

DISCUSSION

Question from audience: Is it possible that changing some laws could allow us to increase innovation and enable more clinical research?

Dr. Fogarty: I think it is possible, but laws cannot be changed unless people become aware of the issues. I want to spend the rest of my life making people aware of issues that deter innovation. That is the reason I started the Institute for Innovation: to create an environment in which innovation can take place efficiently, honestly, effectively, and with proper oversight to ensure consistency with the relevant rules and regulations. Many of the rules and regulations are self-imposed. Most of them are misunderstood by the people to whom they apply.

The rapidity of technologic change clearly outpaces the ability of the Food and Drug Administration (FDA) to keep up. The FDA has a difficult time attracting people who have the background and experience to assess the value of clinical investigation. My approach to the FDA is to be as collaborative as possible. I will approach the FDA and simply ask what they want me to do to support a submission for product approval and then assure them that I will do it if it is possible. That is a good way to make clear that your intent is to be collaborative for the benefit of the patient.

Another problem is that regulatory and reimbursement approvals should be simultaneous and take parallel paths, but that is not the case. While the FDA covers the regulatory piece, the Centers for Medicare and Medicaid Services (CMS) covers the reimbursement piece, and it has a different charter and operates on a separate timetable. What happens is that old technologies are being rewarded by being reimbursed but new technologies are not being rewarded because they are not being cleared for reimbursement quickly enough. Ultimately CMS will pay for these new technologies, but if a product is a 510(k) submission (a premarket submission to the FDA to demonstrate that a new device is at least as safe and effective as an existing device),³ the interval from the time of concept to implementation is usually 7 years. This delay cannot be tolerated, since it means that many patients are being deprived of the potential of effective technology as a result of regulation.

Question from audience: I agree with many of your criticisms and your concern about bureaucracy getting in the way of innovation. However, I really object to your use of the term “the American way,” which implies that there is an “un-American way,” which I guess is the way that is different from your way. Also, you seem to imply that the medical-industrial complex has as its primary purpose good patient care. But this complex does not have any fiduciary responsibility to patients, so what do you base your implication on?

Dr. Fogarty: Industry does not want a bad outcome, just as a physician does not want a bad outcome. If you have related to industry throughout your career, you will come to see that this is absolutely the case. Now, are there bad occurrences within the framework of industry? You bet there are, but they are not common and they are not intended.

Question from audience: Let me reframe the previous questioner’s question. Companies have a fiduciary duty to stockholders to make a profit. The best way to do that is to develop good products that benefit patients. But when you have a product that is just as good as someone else’s but you can find a way to sell more of it, you have a fiduciary duty to do that as well. Your duty is to make money, and if there are times when your product does not really benefit patients or is to the detriment of patients, your duty is still to make money. So to say, by definition, that all that people care about is maximizing patient care just doesn’t make sense.

Dr. Fogarty: Let me ask you: how often have you related to and worked with industry?

Questioner: I don’t think that is relevant.

Dr. Fogarty: It is very relevant. You have to know how other parties think and why they think that way. When responsible people in industry can identify a consistent occurrence of adverse events related to their technology, they do something about it. Now, some don’t, and may hide it…

Questioner: And there have been multiple cases of that.

Dr. Fogarty: I am not denying that, because it is certainly true, and they have done so for bad reasons. But that does not mean all of industry functions that way, because it doesn’t. It is the frequency that you have to look at. I would suggest that it is relatively infrequent, although sometimes it is very egregious. It is the same way with physicians.

Question from audience: Perhaps regulation is actually beneficial to industry, in that it creates a barrier  to entry. For example, when Johnson & Johnson has to spend a billion dollars to develop a drug-eluting stent, it can be highly confident that there are very few other entities capable of reproducing that feat. As a result, it will have a lot of market presence for many years to allow it to recoup its investment. How would you respond to that?

Dr. Fogarty: You are right—I have seen companies take products that obviously warrant a 510(k) submission and try to submit them as PMA (premarket approval) candidates for precisely the reason you suggest. That type of thinking does go on, but those who really understand economics recognize that that is not a good way to go. From my perspective, competition is good, and to eliminate it by any mechanism is not good. If you are going to have competition, you want to have good competition because you can learn from it. Overregulation that creates barriers to entry is not in the interest of patient care and it encumbers competitive companies, certainly from a time standpoint.

Comment from audience: I enjoyed Dr. Fogarty’s talk, but I would like to add one comment: we should not confuse duty with ethics. One’s duty is to make money, but one’s ethics are to be honest, and we each have to decide what we are going to follow. That is true in industry, and it is true in medicine. I have worked with a lot of companies, and most of them are ethical and have the patient’s best interest at heart. I have seen companies spend millions of dollars on products that never came into clinical use because clinical trials showed them not to have value. Most companies cannot sustain that because they will disappear. The bottom line is that I have seen very high ethics within industry, as I have in medicine. The problem is that when ethics are violated, it hits the news and then unfortunately gets generalized to the entire profession or industry.