Payback Time
According to an article in today’s Wall Street Journal; “The Food and Drug Administration may tighten or eliminate several pathways for getting a medical device approved quickly amid concerns they have been overused by industry, according to an internal agency memo reviewed by the Wall Street Journal.”
Yesterday the AP reported; “Manufacturers of pacemakers, drug pumps and other implants could be the latest industry due for a safety overhaul, as the Food and Drug Administration takes a second look at how certain devices are approved.”
And as Diabetic Investor has previously reported the FDA will be conducting a panel meeting on March 5th, to take a closer look at insulin pumps. A meeting which will be followed up by another meeting, March 16th and 17th that will take a closer look at blood glucose monitors. Oh the joys of being a medical device company.
It seems as if the medical device industry is paying a heavy price for not coming to the table when healthcare reform was alive in Washington. Unlike the pharmaceutical industry who decided to play ball with the administration on healthcare reform offering billions in concessions, the medical device industry played hard ball. While healthcare reform may be dead in the water, the administration is not beyond a little payback and from the looks of things the medical device industry will bear the brunt of their retribution. (President Obama is from Chicago, a city that made political retribution a contact sport.)
Considering the FDA’s track record on reform Diabetic Investor doubts anything constructive will come of any so-called reforms. As we mentioned earlier today no one is quite sure what’s behind anything the FDA does. All we can say is that this latest move towards “reform” is not good news to the many companies in the diabetes device sector. And it’s even worse news for the many smaller companies who are trying to enter the market.
On the flip side, companies like Insulet (NASDAQ:PODD), Dexcom (NASDAQ:DXCM), Medtronic (NYSE:MDT), Johnson and Johnson (NYSE:JNJ), Bayer, Abbott (NYSE:ABT) and even Roche should be jumping up and down with excitement. If for no other reason than any reform will likely make the path for competition more difficult and further delay new products from coming to market. This “reform” should also put a damper on the folks working on the artificial pancreases project. As Diabetic Investor has stated before we can only imagine the nightmarish path the FDA would set for an artificial pancreases to make it to market.
Given the FDA’s fondness for looking like they actually are doing something of value, Diabetic Investor sees the upcoming insulin pump meeting as a watershed event. Or perhaps we should rephrase that and say woodshed event. Based on all the available information it looks like Medtronic will be the company taken to the woodshed and be given a good trashing. To date Diabetic Investor has learned that no other insulin pump company besides Medtronic has been asked for information from the FDA.
Not that Diabetic Investor believes Medtronic is not deserving of a good thrashing especially when it comes their insulin pump unit. As Diabetic Investor has been reporting there are just too many adverse event reports that can be directly linked to poor patient training and far too many of these reports are linked to patients using a Medtronic insulin pump. Granted Medtronic controls nearly 70% of the insulin pump market and it’s only logical they would see a greater aggregate number of adverse event reports. But this still does not excuse the company from not properly training patients on insulin pump therapy. Quite the contrary, Diabetic Investor believes as the market leader Medtronic has a responsibility to set an example for the industry.
Looking at this set of circumstances it appears Medtronic is about to become the poster child for a medical device gone astray. Their insulin pump unit is just the tip of the iceberg as the company has also come under scrutiny with their cardiovascular products. As Lydia Child once said; “But men never violate the laws of God without suffering the consequences, sooner or later.” Or put in today’s verbiage, the FDA is getting set to ripe Medtronic a new one.
