U.S. Medical Devices Travel Overseas to the Detriment of Economy, Patients

Guest Commentary

Elizabeth Green, WLF Fellow*

The largest survey to date on the effectiveness of the “510(k)” medical device review process at the U.S. Food and Drug Administration (FDA), released this month, reported that within the past three years, 76 percent of companies surveyed chose to bring a specific device to market first outside of the United States and that their reasons for doing so included high costs, time, and general difficulties in coordinating with the FDA.  The survey, funded by the Institute for Health Technology Studies (InHealth), demonstrates the continued difficulties the FDA approval process poses for medical device manufacturers. Additionally, the findings call into question a recent report by the Institute of Medicine (IOM) which had stated that the 510(k) process was “more economical, faster and less burdensome to industry than the premarket approval application.”  Industry respondents, however, found that the two processes have effectively the same average time from submission to approval.

The 510(k) clearance process allows a medical device to be cleared for consumer distribution provided it’s considered a “moderate-risk device” and is similar to any previously cleared 510(k) product or a product that was grandfathered in under the Medical Device Amendments of 1976, 1990, and 1997. While supposedly quicker and less expensive than other approval processes, the evidence seems to suggest otherwise. Three additional recent studies by PricewaterhouseCoopers, Stanford University and the Boston Consulting Group have also concluded that medical innovation in the U.S. is suffering from over-regulation. The 2010 Stanford University survey, titled “FDA Impact on U.S. Medical Technology Innovation,” found that low- to moderate-risk device 510(k) clearances took an average of 10 months, according to respondents, while firms that asked the FDA about clinical studies for such products reported an average of 31 months to successfully obtain clearance. Processes for the same or equivalent devices, however, took only seven months on average in the European Union.

Beyond the time gap comparing FDA and Europe approval processes, the survey also showed that the average total cost for a low- to moderate-risk 510(k) product from concept to clearance was approximately $31 million, with $24 million spent on FDA dependent and/or related activities.  For a higher-risk PMA product, the average total cost from concept to approval was approximately $94 million, with $75 million spent on stages linked to the FDA.

Supporters of FDA’s device process argue that quicker approval would allow unsafe devices onto the market. What is often overlooked, however, is that slow device approvals can also negatively impact patient health.  In February of this year, The New York Times ran an article noting that U.S. patients increasingly have to go abroad in order to receive the most up-to-date medical devices.  While this delay could be justified if there was a corresponding increase in patient safety, the study by the Boston Consulting Group found that European Union regulators are not only quicker than but just as effective as their American counterparts. 

Even the IOM report, which suggested that the 510(k) process be completely scrapped, had to conclude that there was no evidence to support any real safety concern.  In addition to patient care, overregulation also negatively effects the U.S. economy; a study conducted by consulting firm PricewaterhouseCoopers found that while the United States is still the world leader in medical device innovation, that lead is slipping. The same Times article also noted the impact including the closure of several device companies within the U.S. as well as the how delays in approval have increasingly lead investors to shy away from funding projects aimed at the U.S. market.

Frustration is mounting as well on Capitol Hill with FDA’s device approach, reflected just this last week in a letter to Administrator Margaret Hamburg from a bipartisan group of Members of Congress.

Just as WLF pointed out in 1995 with the award-winning advocacy ad that appears above, patients in Europe and other parts of the world should still be grateful for America’s FDA.

*Ms. Green is a graduate of The Notre Dame Law School and chose to work at Washington Legal Foundation as part of the school’s Public Service Initiative. She is a member of the Tennessee State Bar.