Creating Good Connections

Thursday, September 30, 2010

"Experts and standards groups have advocated since 1996 that tubes for different functions be made incompatible — just as different nozzles at gas stations prevent drivers from using the wrong fuel. But action has been delayed by resistance from the medical-device industry and an approval process at the Food and Drug Administration that can discourage safety-related changes."
 — U.S. Inaction Lets Look-Alike Tubes Kill Patients (NY Times, 8/20/10)

It's tempting to view this recent story as just a part of the perpetual seesaw of public opinion. FDA is in the pocket of industry! FDA is crushing innovation! Sometimes it seems not to matter what they do, they're just not going to catch a break.

If this story were just a part of that pendulum, it might not be worth remarking on. I think that it illustrates something more interesting, however: it's a great example of the risks posed by the "substantial equivalence" standard and an excellent case study for why FDA wants to update the 510(k) process.

When FDA implemented the Medical Device Amendments in 1976, they faced a wary industry. Many industry players were concerned that new regulation would harm innovation and global competitiveness. Device regulation was a pretty new thing and its value was, as yet, unproven.

To allay fears that FDA would bring industry to a grinding halt, they basically grandfathered existing products, the so-called "pre-amendment" devices. These devices were considered safe and effective until proven otherwise. In addition, a system of substantial equivalence for lower risk devices (Class I and Class II) was created for new devices on the market (those commercialized after 1976).

This approach makes sense and probably reflects what FDA needed to do to sell this large a change to industry and legislators. But the idea of substantial equivlance is tricky and can create a system where actually comparing to the worst possible cleared device is strategically advantageous.

By putting "me too" products on a faster regulatory track than novel products, we've created a system with perverse incentives. Over the course of 30 years, we've addressed early concerns that regulation would harm innovation by creating a system that—quite literally—rewards lack of innovation.

Regulation isn't destiny, of course. Many market leaders have pursued novel, innovative technology despite having to hike a steeper hill. But a large number have also chosen the easier path, avoiding more intense regulatory scrutiny for specific products or entire lines of business.

All of which brings us back to the present. Everyone wants there to be a standard whereby feeding tubs and IV tubes can't be mixed up. There's a certain amount of challenge involved in promulgating an industry-wide standard, but that's surmountable. What will be difficult to fix are the regulatory hurdles.

That's because many of the medical devices involved are cleared based on their similarity to other devices. Many manufacturers would love to improve their products, but can only do so at the expense of having to pursue a more intense regulatory path. They are, after all, cleared because they are they are highly similar to a predicate. Improving their products runs the risk of making them not similar enough.

There have been instances, such as with microarrays, where a company does pursue a creative path and creates an improved product. Then, everyone else can piggyback on their work… but this situation creates a huge first-mover disadvantage. The player who fixes the problem will end up facing costs not borne by any of their competitors.

FDA, for its part, would probably love to just sweep in a new standard. Their hands are tied, however, as the substantial equivalence approach is part of the FD&C Act. There may be risks associated with how feeding tubes are designed, but you can't just pull them all off the market until the problem is addressed. Even if that were a good idea, it's not clear whether they would even have the authority.

Instead, FDA has been expressing their concerns by compelling those who have new products to account for the risks faced by the whole industry. We've not only privileged lack of innovation in theory, but have additionally held new products accountable for the problems lack of innovation has created. This is, quite possibly, the worst possible outcome we could imagine.

Hearing this story, it might occur to you that FDA needs to make some serious changes to its clearance process. Sure enough, that's exactly what they are currently doing.

FDA is knee-deep in proposing significant changes. We've made a bit of fun about the announcements, but the process itself is very important and well-worth understanding.

Among the changes FDA has proposed is the creation of a new category for products that are not equivalent to existing products but which are determined to pose a lower level of risk. Having a system like this may be what it takes to fix the feeding tube situation and prevent similar ones from arising in the future.

As we move forward in this process, let's remain aware that not all regulation is created equal. Despite what cable news might have you believe, there is not a clear, direct link between new rules and lack of innovation. Some regulation can harm innovation, to be sure… but sometimes a lack of regulation can do just as much harm.

Let's try to keep that in mind as FDA makes an earnest effort to expand the flexibility and usefulness of the clearance process. It's not them against us. We all want a system that encourages innovation and advances the state of medicine.

Tags: 510(k), CDRH, FDA, IVD, Industry, Policy

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Glossary Terms

Class I Device
Substantial Equivalence (SE)