Medical Product Outsourcing Breaking News

NuVasive Names Executive VP, CFO

Editor — Fri, 06 Nov 2009 13:24:00 -0500

NuVasive Inc. has appointed Michael Lambert as executive vice president and chief financial officer, effective Monday.

The company, based in San Diego, Calif., which develops products for minimally disruptive surgical treatments for the spine, also has made some other promotions.

Most recently, Lambert served as chief financial officer of Advanced Medical Optics (purchased by Abbott Park, Ill.-based Abbott Laboratories in February), a medical device company focused on technologies used by eye-care professionals.

Lambert will succeed Kevin O’Boyle, who has served as the chief financial officer of NuVasive since the company went public in 2004.

“He [Lambert] has proven himself to be a strong financial leader, including experience as the chief financial officer of a medical device company with over $1 billion in revenue. Michael’s background has afforded him a wealth of experience in information technology and operations, which will be extremely valuable as we evolve into a much larger, yet still dynamic growth company,” said Alex Lukianov, chairman and CEO of NuVasive.

NuVasive also has announced the following promotions, effective Jan. 1:

• Patrick Miles will be promoted to president of the Americas. Miles will oversee NuVasive’s global creative product portfolio. Since 2001, Mr. Miles has devoted considerable energy and vision to leading development and marketing efforts.

• Jeffrey Rydin will be promoted to executive vice president of sales, Americas. Rydin will assume direct sales responsibility for the entire Americas’ sales force. Rydin joined NuVasive from New Brunswick, N.J.-based Johnson & Johnson four years ago.

• Jason Hannon will be promoted to executive vice president and general counsel. Hannon will continue to be responsible for strategic planning, business development and legal. His role will expand to include government affairs and broader administrative influence.

• Takaaki Tanaka has been appointed executive vice president of Asia Pacific. Tanaka will drive sales and strategic business initiatives in the Asia Pacific region, working from Tokyo, Japan. Tanaka previously led the Medtronic Spinal, Biologics and Navigation Divisions, based in Minneapolis, Minn., to the No. 1 market share spot for the Asia Pacific region.

• Stephan Siemers has been appointed executive vice president of Europe. Siemers will spearhead NuVasive’s European sales and operations effort from Bremen, Germany. Stephan joins NuVasive following more than 15 years with Johnson & Johnson, where he most recently served as president of their international spine division.

“As we increase focus on becoming the No. 4 global spine company and growing to a $1 billion spine franchise, we need a strong management team with the ambition and experience to drive the growth of operations and exemplify NuVasive’s culture of absolute responsiveness and product innovation. I am excited to announce these additions to the depth and strategic composition of our senior management team. I look forward to working with this well-qualified leadership team to achieve our goals at Cheetah Speed," said Alex Lukianov, chairman and CEO.

Boston Scientific to Pay $296M Settlement

Editor — Fri, 06 Nov 2009 11:34:00 -0500

Boston Scientific Corp. will pay $296 million to settle a federal probe into the company’s Guidant unit, according to the Natick, Mass., firm. The alleged action took place before the firm’s 2006 purchase of Guidance.

The investigation involved product advisories issued by Guidant in 2005. In 2007, Boston Scientific agreed to various settlements over heart patients’ legal claims that Guidant knowingly sold defibrillators with potentially life-threatening defects over a three-year period.

Under the terms of the agreement, Guidant will plead to two misdemeanor charges related to failure to include information in reports to the U.S. Food and Drug Administration.

“We are pleased this investigation has been resolved,” said Ray Elliott, president and CEO of Boston Scientific. “Guidant and its employees acted in good faith and believed they complied with applicable laws and regulations. We elected to resolve this matter so we could put it behind us and devote our full energies and resources to developing our innovative technologies."

Products involved in the investigation were the VENTAK PRIZM 2, the CONTAK RENEWAL and the CONTAK RENEWAL 2 devices.

Boston Scientific Receives CE Mark for Stent System

Editor — Mon, 02 Nov 2009 12:14:00 -0500

Boston Scientific Corp. has received a CE Mark for its PROMUS Element Everolimus-Eluting Coronary Stent System, according to the firm.

The PROMUS Element system incorporates a platinum chromium alloy with an advanced catheter delivery system, the firm said.

The company will begin marketing the PROMUS Element system immediately in the European Union and other CE Mark countries.

The platinum chromium alloy used in the PROMUS Element stent is engineered specifically for coronary stenting, according to the Natick, Mass.-basec company.

In addition to the PROMUS Element Everolimus-Eluting Coronary Stent System, the company plans to offer the TAXUS Element Paclitaxel-Eluting Coronary Stent System. Both Element systems incorporate the platinum chromium alloy with the innovative stent design and advanced catheter delivery system.

“The PROMUS Element system is the latest example of Boston Scientific’s commitment to DES market leadership and continued innovation. We also plan to launch the TAXUS Element system in CE Mark countries next year, giving physicians the choice of two proven drug and polymer combinations —used in millions of patients worldwide—on an entirely new stent platform. We are confident our Element series will further extend our global DES leadership,” said David McFaul, Boston Scientific senior vice president, International.

The company anticipates FDA approval for the PROMUS Element system in 2012. The TAXUS Element system was launched in select international markets in May. CE Mark approval for the TAXUS Element system is expected in the second quarter of 2010, and FDA approval is expected in 2011.

St. Jude Medical Board OKs Share Repurchase

Editor — Fri, 30 Oct 2009 10:08:00 -0500

St. Jude Medical’s board of directors has authorized a share repurchase of up to $500 million of its outstanding common stock.

According to the St. Paul, Minn.-based firm, the repurchases will take place when management determines it is appropriate, and may be affected “by transactions in the open market, in privately negotiated transactions or otherwise,” according to a statement.

“St. Jude Medical has a robust internal research and development pipeline. We intend to continue our commitment to funding these growth drivers in 2010 and beyond by reinvesting any earnings per share benefit from the share repurchase program back into our business,” said Chairman, President and CEO Daniel Starks.

Outsourcing Your Way Out of Recession

Michael Barbella — Fri, 30 Oct 2009 07:06:00 -0500

Maybe the “Great Recession” isn’t so bad for business after all.

Economic downturns are notorious for driving up unemployment, slowing consumer spending and draining business budgets. In some instances though, they can be a catalyst for growth by forcing companies to consider alternative ways of reducing costs.

In the medical device sector, such forced cost-cutting can be beneficial to contract manufacturers and suppliers that provide outsourcing services to large OEMs. “Recessions cause OEMs to rethink their business models and supply chains and force them to look for ways to reduce cost,” said Benjamin Dunn, managing director at Covington Associates LLC, a Boston, Mass.-based investment bank.“Outsourcing provides a unique way to do that. OEMs are under pressure—they want to get their [profit] margins up and they have to find ways to reduce costs.”

Dunn’s assessment of outsourcing opportunities during the “Great Recession” was part of a 45-minute presentation he gave on Oct. 28 to medical device industry representatives at the Medical Product Outsourcing Symposium in Waltham, Mass. Dunn’s presentation focused on the device sector’s overall health during the recession, and the impact of market variances on manufacturers.

Overall, the medical device market has fared well in the last year, Dunn said, but there are pockets of the industry that have severely been impacted by the economic downturn. Revenue in the dental and aesthetic segments, for example, fell significantly in the first half of 2009, as patients became more selective about the medical procedures they felt were necessary. Women’s health revenues, on the other hand, skyrocketed 114 percent, due mostly to mushrooming profits at Hologic Inc., a Bedford, Mass.-based manufacturer of diagnostic, surgical and medical imaging equipment.

Besides making outsourcing more attractive to OEMs, the recession has helped reduce production costs, Dunn said. Lower prices of certain kinds of materials and flat wage rates have helped manufacturing firms keep production costs down, though the savings in certain instances has been offset by volatility in foreign and domestic currency and huge fluctuations in commodity fees.

“We are in an age of volatility,” Dunn noted. “Unemployment will remain high for some time, commodity prices will continue to swing, the value of the dollar may remain low, and tax and user fees will increase. The era we are moving into will have a lot of these external forces buffeting the industry and putting a lot of pressure on the manufacturing process. This means that there will be an increased focus on manufacturing costs. Product margins will be under pressure. You have to be flexible. Changes are going to occur more rapidly and you have to be able to respond just as quickly.”

Stryker Biotech, Executives Indicted for Illegal Promotion of Medical Devices

Editor — Thu, 29 Oct 2009 09:56:00 -0500

Stryker Biotech LLC, its former president and three current sales managers have been indicted for allegedly participating in the illegal promotion of medical devices used for invasive spinal and long bone surgeries and could face jail time and fines, according to the U.S. Attorney’s Office.

The names of those charged are: Mark Philip of Lexington, Mass., former president of the Hopkinton, Mass.-based Stryker Biotech; and sales managers William Heppner of Illinois, David Ard of California, and Jeff Whitaker of North Carolina.

Stryker Biotech and Mark Philip also were charged with making false statements to the U.S. Food and Drug Administration (FDA), according to the U.S. Attorney, and Stryker Biotech, Ard and Whitaker were charged with misbranding.

The indictment alleges that the defendants participated in an illegal marketing scheme to promote medical devices used during invasive surgeries, and in doing so have defrauded medical professionals and the FDA.

In particular, the defendants are alleged to have promoted devices known as OP-1 Implant and OP-1 Putty. These devices were used to stimulate bone growth in long bones and the spine. These devices were approved by the FDA only pursuant to a highly restrictive Humanitarian Device Exemption ("HDE"). One of the restrictions was that the device could only treat a condition that affected fewer than 4,000 patients in the United States, and could not be sold for a profit. The indictment charges that the defendants promoted the use of these devices in a manner that was different from its FDA approved use; namely they promoted a combination of the devices with a bone void filler, called Calstrux, and in furtherance of that promotion provided "recipes" to surgeons, medical technicians and others as to how to mix the OP-1 products with Calstrux.

The indictment also charges Stryker Biotech and Philip made false statements to the FDA about the number of patients that the firm was treating on an annual basis with OP-1 Putty.

If convicted of wire fraud, conspiracy, misbranding or false statements charges, Stryker Biotech faces fines of more than $500,000 or twice the gross gain or loss from the offense, on each count, according to the U.S. Attorney.

If convicted on wire fraud charges, Philip, Heppner, Ard and Whitaker each face up to 20 years imprisonment, followed by three years of supervised released and a fine of more than $250,000 or twice the gross gain or loss from the offense, on each count.

If convicted on the conspiracy charges, Philip, Heppner, Ard and Whitaker each face up to five years imprisonment, to be followed by three years of supervised release and fine of the greater of $250,000 or twice the gross gain or loss from the offense, on each count.

If convicted on misbranding charges, Ard and Whitaker each face up to three years imprisonment, to be followed by one year of supervised release and fine of the greater of $250,000 or twice the gross gain or loss from the offense on each charge. If convicted on the false statement charge, Philip faces up to five years imprisonment, to be followed by three years supervised release and fine of the greater of $250,000 or twice the gross gain or loss from the offense.

The case was investigated by the FDA-Office of Criminal Investigations, the Department of Health and Human Services, Office of Inspector General and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Jeremy Sternberg of Loucks' Health Care Fraud Unit.

Stryker Biotech in a statement said a conviction could have harsh results for the company monetarily, and in terms of participation in healthcare programs. “The company is disappointed with this action and still hopes to be able to reach a fair and just resolution of this matter. Conviction of these charges could result in significant monetary fines and Stryker Biotech's exclusion from participating in federal and state healthcare programs, which could have a material affect on Stryker Biotech's business. As a matter of company policy, Stryker will not have any further comment on these allegations."

FDA Hopes ‘Transition’ Results in More Responsive Agency

Editor — Thu, 29 Oct 2009 09:25:00 -0500

The U.S. Food and Drug Administration is an agency in transition.

With a change in leadership, the multi-faceted organization charged with protecting public health is undergoing a transformation that officials hope will restore credibility and confidence to the embattled agency.

The transformation began six months ago with the appointment of Margaret Hamburg, M.D., as FDA commissioner. Her appointment is considered by many in the healthcare industry as a turning point for the agency because of the importance she has placed on regulatory compliance, device safety and open communication.

Hamburg reinforced her commitment to device safety in September with the appointment of Jeff Shuren, M.D., a physician and attorney, as acting director of the Center for Devices and Radiological Health (CDRH). Shuren replaced Daniel Schultz, M.D., who resigned as CDRH director in August amid a firestorm of controversy over the Center’s device approval process.

When he assumed control of the CDRH, Shuren announced six immediate priorities for the center. First, he promised to focus on ways the FDA can adapt to changes in technology while still providing the industry with avenues that foster innovation. “A key question that we are considering is how gradual improvements in product design and safety will affect decisions about first-generation devices that are currently on the market,” Dr. Joshua M. Sharfstein said. “The Task Force on Science in Decision-Making has been convened and has begun meeting. The group will seek input from others both within and outside the FDA.”

Another priority for the CDRH is the much-publicized review of the 510(k) process, a device review system that has been under fire on Capitol Hill for several years. A report released in January from the Government Accountability Office determined that the program was inappropriately used to clear hundreds of complicated medical devices, and suggested the agency strengthen its approval standards and make them more consistent. The CDRH has convened an internal working group to explore steps the Center can take to improve the 510(k) process. “It’s bee a number of years since the device review process was set up, and questions have come up on all sides,” Sharfstein noted.

In addition to the 510(k) process review, the CDRH is working to develop a comprehensive compliance strategy, and it is considering ways to improve the integration of premarket and postmarket information. FDA officials hope the integration of data will help trigger the implementation of a total product life cycle approach to product safety. The Total Product Life Cycle (TPLC) management approach involves sharing information among various product life cycle stages and between different departments within a company. It also encourages the use of preventive actions over corrective actions, encouraging firms to develop solutions that prevent problems before they occur.

Perhaps one of the more challenging priorities for the CDRH includes the development of procedures to better communicate the rationale for decisions made by the Center and the FDA. Improved communication and more visibility into the thought process at the FDA might help restore some of the confidence consumers have lost in the agency in the wake of recent food and product recalls.

“There are times when the FDA has credibility and times it doesn’t,” Sharfstein said. “When there is confidence in the FDA, the medical device industry does well. When people question why a device was approved, for instance, that has an effect on the industry. More transparency will help people understand where we are coming from so we are not like a black box that people don’t understand.”

Another short-term priority for Shuren is the establishment of procedures for resolving differences of opinion within the CDRH. Last month, Shuren announced a new Standard Operating Procedure for resolving internal differences of opinion in regulatory decision-making. The Center also is updating its guidance on the processes for outside parties to resolve disagreements with the agency.

“At the end of this period of transition, I hope [people] see a responsive FDA, an FDA that can adapt to changing technology while setting clear standards, a credible FDA, an FDA that fosters innovation by companies to meet critical public health needs,” Sharfstein said.

EnteroMedics Inc. to Cut 40% of Employees

Editor — Wed, 28 Oct 2009 09:11:00 -0500

EnteroMedics Inc. will slash its work force by 40 percent by Nov. 15, according to the St. Paul, Minn., firm.

The news comes after results from a study completed by the firm on Oct. 2, which shows the company needs to reduce the work force and operating costs to streamline its operations.

“This initiative, while difficult, is necessary to ensure that we have the resources in place to support our ongoing clinical trials and that the company remains well-equipped to provide support for these studies as we continue our evaluation of the one year data from the EMPOWER trial and formulate our plan for VBLOC Therapy," said President and CEO Mark B. Knudson, Ph.D. "We thank all of our employees for their hard work on behalf of EnteroMedics and wish those leaving the company all the best."

The reduction in force is expected to result in approximately $3.2 million in reduced operating expenses in 2010. The company expects to incur a charge of approximately $0.5 million related to the workforce reduction in the fourth quarter of 2009.

EnteroMedics is a development-stage medical device company focused on the design and development of devices that use neuroblocking technology to treat obesity and other gastrointestinal disorders.

Study: Few Companies Have Adopted Total Product Life Cycle Management Program

Editor — Wed, 28 Oct 2009 07:57:00 -0500

Most medical device firms have not fully adopted a Total Product Life Cycle management program, despite its ability to improve quality and safety, and reduce product costs, according to a recent study.

A majority of the “industry insiders” who participated in the study still use serial design models such as stage gate and waterfall, concluded the analysis by life science advisory firm Axendia Inc., research analyst Cambashi Limited, and FDAnews. “While the vast majority of organizations participating in this study report having key initiatives aimed at supporting Total Product Life Cycle, most have not taken all of the steps required to achieve a true TPLC environment,” the study’s executive summary stated.

The Total Product Life Cycle (TPLC) management approach involves sharing information among various product life cycle stages and between different departments within a company. It also encourages the use of preventive actions over corrective actions, encouraging firms to develop solutions that prevent problems before they occur.

The study, titled “Total Product Lifecycle Management: Lowering Costs while Increasing Quality,” found that most medical device companies do not use software applications to help them migrate to a TPLC program. Of the 212 study participants, less than half said they use software applications such as product life cycle management, manufacturing execution systems, or quality management systems. Larger companies were more likely to use software, but a significant portion of firms still do not use software systems in a collaborative manner.

“How many of you still have typewriters on your desks?” Dan Matlis, Axendia founder and president, asked a room of OEMs and suppliers who attended the Medical Product Outsourcing Symposium in Waltham, Mass., on Oct. 27. “Most of you do because most companies still use the very expensive multi-million-dollar typewriter. You’re used to printing everything out for your records. The thinking is if it’s on paper, it’s good; if it’s electronic, it might get lost. Let’s throw out the typewriter and implement true electronic [business] systems to gain visibility.”

Such sage advice is not likely to send an avalanche of typewriters to landfills any time soon, though. According to the TPLC study, less than 10 percent of companies use and keep a fully electronic database of records to be reviewed by regulatory agencies. More than 60 percent use a hybrid paper/electronic system, and about 20 percent of the companies surveyed are die-hard fans of paper records.

Internal documents are stored in much the same way, with more than 60 percent of companies using paper records, spreadsheets or an unspecified database. Corrective and preventive action paperwork also is filed mostly on paper.

The hodge-podge of paper and home-grown information systems for official regulatory records and internal documents has contributed to the inability of medical device companies to perform product recalls in just one stage. Those who can complete a product recall in one stage are significantly more likely to use packaged software applications, the study said.

David Fitzgerald Named President and CEO of ArthroCare

Editor — Mon, 26 Oct 2009 09:14:00 -0500

ArthroCare Corp. has appointed David Fitzgerald as president and CEO. He has been serving in the position in an interim capacity since February, and has been a member of the firm’s board of directors since 2003.

Fitzgerald was a member of the compensation and audit committeesof the board of directors and will remain a member of the board, according to the Austin, Texas-based surgical instrument manufacturer.

Prior to becoming a member of ArthroCare’s board, Fitzgerald spent25 years in executive management positions at Pfizer Inc., a pharmaceutical company based in New York, N.Y., serving aspresident and CEO of its Howmedica Orthopedics divisionduring his last 15 years with the company. He also had served as seniorvice president of Pfizer’s medical device group and a vice president ofPfizer Corp. before retiring in 1996.

Fitzgerald serves on the board of advisers of Sandvik MedTech, a Swedish contract manufacturer. He served as director and board chairman of Malvern, Pa.-based implant manufacturer Orthovita Inc., from 2001 to 2009. He also was on the board of directors of LifeCell Corp., from 2001 until the company was acquired by Kinetic Concepts Inc. in 2008. LifeCell Corp., based in Branchburg, N.J., develops and sells tissue grafts and blood cell preservation products.

"I am delighted to continue leading ArthroCare. My experiences as acting president and chief executive officer over the last eight months reinforce my confidence in the company and our future prospects. Our Coblationtechnology will enable us to capitalize on opportunities in themulti-billion dollar industry in which we operate, and I am confident ArthroCare is positioned for long-term success,” Fitzgerald said.

Coblation technology is a controlled, non-heat driven process that uses radiofrequency energy to excite the electrolytes in a conductive medium, such as saline solution, creating focused plama. The result is volumetric removal of target tissue with minimal damage to surrounding tissue. Many Coblation devices also are designed to stop hemostasis and coagulate or seal bleeding vessels.

Becton, Dickinson and Company to Acquire HandyLab Inc.

Editor — Mon, 26 Oct 2009 08:44:00 -0500

Becton, Dickinson and Company (BD) has agreed to purchase HandyLab Inc., a manufacturer of molecular diagnostic assays and automation platforms, for an undisclosed amount, according to the Franklin Lakes, N.J., firm.

The acquisition will extend BD’s commitment to HandyLab’s instrumentation technology to support BD’s molecular diagnostics strategy.

“HandyLab has developed and commercialized a flexible automated platform for performing molecular diagnostics which is an ideal complement to our molecular diagnostics offerings,” said Vincent A. Forlenza, BD president. “We believe this new platform enables both our healthcare-associated infections offering and future expansion into other molecular opportunities.” BD develops, manufactures and sells medical supplies, devices, laboratory instruments, antibodies, reagents and diagnostic products through its three segments: BD Medical, BD Diagnostics and BD Biosciences.

BD plans to place its BD GeneOhm molecular assays for Methicillin-resistant Staphylococcus aureus, Clostridium difficile and Vancomycin-resistant Enterococcus onto the HandyLab platform and market them as the new BD MAX system.

BD senior management will address this announcement during the company’s fiscal fourth quarter earnings call on Nov. 4 at 10 a.m, which can be viewed on a webcast at www.bd.com/investors.

FDA Launches Lasik Study, Sends Warning Letters

Editor — Fri, 23 Oct 2009 13:16:00 -0500

The U.S. Food and Drug Administration (FDA), National Eye Institute and U.S. Department of Defense will conduct a joint study looking at a potential link between Lasik and an increase in adverse event reporting.

This news follows the issuance of warning letters to 17 LASIK ambulatory surgical centers after inspections showed inadequate adverse event reporting systems at all the centers, according to the FDA.

The agency did not say where the centers are located.

Companies Air Concerns at Medical Device Tax Hearing

Michael Barbella — Fri, 23 Oct 2009 09:19:00 -0500

Aaron Holm is counting on advances in medical technology to keep him active as he ages.

Holm, 43, lost both his legs below the knee in an accident nearly three years ago on a busy Minnesota highway. He learned to walk again with the help of prosthetic limbs called C-Legs that contain computer chips in the knees. Designed to prevent falls, C-Legs act in much the same way as a natural limb, with microprocessors controlling resistance to keep the knee mobile and stable.

Within two months of receiving his artificial limbs, Holm was walking around and playing golf. By the first anniversary of his accident, the Shakopee, Minn., resident was driving and had returned to his old job. Holm credits his quick recovery to the care and resources to which he had access after his accident. His appreciation for the support he received from the civic, medical and business communities inspired him last year to form Wiggle Your Toes, a nonprofit organization that helps amputees and their families regain mobility and independence.

“I realize every day as I age, as I get older I need the products to get better,” Holm said at a recent hearing on the proposed federal tax on medical devices. “I need them to support me more and more.”

Holm, however, fears that support could run out under a $4 billion annual tax the government is considering imposing on medical device companies to pay for healthcare reform. The tax is expected to reap $40 billion over the next decade from medical device firms and would be assessed based on a company’s U.S. sales, according to the reform bill approved Oct. 13 by the U.S. Senate Finance Committee. That bill, which includes the tax provision, is currently before the full U.S. Senate.

Though it is still technically just a proposal, the tax has become a source of contention among lawmakers in Washington, D.C., particularly with those whose home states have thriving medical device industries. On Oct. 19, one of those lawmakers—U.S. Rep. Erik Paulsen (R-Minn.)—held a field hearing in the North Star State to assess the impact of the tax on jobs, innovation and healthcare costs. Holm was among patients, medical device executives and venture capitalists who attended the hearing to discuss the tax’s impact on the device industry and their lives.

Holm’s chief concern about the tax is one that is shared by executives of medical device companies throughout the nation. He believes the tax will slow research, stifle innovation and ultimately, make devices such as his prosthetic legs (which cost more than $30,000 each) more difficult to get. (Authors of the healthcare reform bill that passed the Senate committee have said prosthetic limbs are not subject to tax).

“The federal government can’t look at the medical device industry as a bank to rob in order to pay for their healthcare reform without seriously damaging our industry’s innovation,” said Howard Root, CEO of Vascular Solutions Inc., a Minneapolis, Minn.-based firm that develops and markets hemostatic products.

Venture capitalists such as Dave Stassen fear the tax will scare away already wary investors. “Possibly for investors this could be the final nail in the coffin,” he testified at the hearing in Plymouth, Minn. “Four billion dollars a year coming out of the industry.”

In the months since it was first proposed, the medical device tax has turned into a tug-of-war between Democratic lawmakers who want to reform the nation’s healthcare system and a bipartisan group of politicians who want to protect an industry worth an estimated $130 billion annually. Industry advocacy groups have joined the fray as well, with both the Advanced Medical Technology Association (AdvaMed) and the Medical Device Manufacturers Association vociferously opposing the proposal. During AdvaMed’s third annual conference Oct. 12-14, President and CEO Stephen J. Ubl called the tax a “job-killer, innovation killer, a sucker punch to medical progress, and an unfair burden. He said lawmakers looking to trim fat in the nation’s healthcare system should look somewhere else.

“Why in the world would anyone want to hobble one shining American industry that leads the world?” Ubl asked.

Proponents of the tax, however, contend that healthcare reform will help rather than hobble medical device firms because an influx of new patients will increase demand for products. Besides, some legislators claim, medical device companies that earn billions of dollars in profits have a responsibility to pay their fair share of healthcare reform costs.

“This all comes down to shared responsibility,” Senate Finance Committee Chairman Max Baucus (D-Mont.) told reporters during a teleconference call on Oct. 19. “We’re all in this together as Americans—and that means hospitals, the insurance industry, the pharmaceutical industry and the medical device manufacturers. No group should be exempt, and at the same time, shared responsibility means that each contributes fairly.”

Paulsen though, called the tax a levy on “the tools of modern medicine” and said the proposal is “symptomatic of the mentality in Washington that needs to be fundamentally changed. This industry is an American success story. I want to make sure it stays that way.”

GAO: Debarment Rules Should Extend to Medical Device Sector

Editor — Fri, 23 Oct 2009 08:48:00 -0500

The U.S. Food and Drug Administration (FDA) should extend disqualification of doctors convicted of crimes from overseeing clinical trials or conducting research for the agency to the drugs, biologics and medical devices sectors, according to a report by the Government Accountability Office (GAO).

GAO reviewed laws, regulations and FDA files through Nov. 5, 2008, for investigators, study coordinators and sub-investigators for whom FDA pursued debarment since receiving debarment authority in 1992; and all clinical investigators for whom the FDA pursued disqualification since the agency adopted its current process for beginning proceedings in 1998.

The GAO found in its report that for the 52 disqualification proceedings that were reviewed, the time from the start of a proceeding to its conclusion ranged from 26 days to 11 years. In general, proceedings initiated in 1998 through 2001 generally took longer than those begun more recently.

The GAO cited a lack of deadlines for proceedings and other priorities set by the agency as causes. FDA has made or planned changes that could improve timeliness, but the effects of such actions have yet to be seen, according to the report.

For the complete report,click here.

Flextronics Boosts Medical Disposables Business, to Acquire Slomedical

Editor — Thu, 22 Oct 2009 08:20:00 -0500

Flextronics has agreed to acquire Slomedical S.R.O. to expand its medical disposables lineup, pending regulatory clearances, for an undisclosed amount.

Slomedical is a European manufacturer of disposable medical devices—ranging from tubing sets to complex devices for minimally invasive surgery. Flextronics is an electronics manufacturing services provider focused on the automotive, computing, consumer, industrial, infrastructure, medical and mobile OEMs.

The transaction is taking place through a share purchase agreement and is expected to close before the end of this year, according to the Singapore-headquartered firm.

The acquisition will expand Flextronics's capability for medical disposables through Slomedical's low-cost European location in Slovakia and allow Flextronics to significantly advance its disposables strategy throughout Europe, the firm said.

"We evaluated many companies to determine the best fit for the acquisition of our organization. Flextronics is the ideal organization based on its ability to augment our current capabilities and its significant market strength in the medical space," said Frank Sodha, managing director of Slomedical.

In related news, Flextronics recently completed a major expansion of its Tijuana, Mexico, campus, which is dedicated to disposable medical device manufacturing.

The campus includes key vertical integration capabilities of plastic injection molding and plastic extrusion as well as cleanroom assembly operations, according to the firm.

"The major expansion of our Tijuana, Mexico campus and the imminent acquisition of Slomedical will significantly expand our ability to serve theglobal disposables medical device market for European and multi-national customers," said Dan Croteau, president of Flextronics.