Why do Peyton, Kobe, A-Rod and Tiger have to go to Europe for stem cell treatments?

Peyton got a stem cell injection in his neck in Germany because the US does not have the best treatment available. Stem cell injections are just one example of a cutting edge technology not available in the US. Thanks to a mix of politics, bureaucratic foot-dragging and scientific caution at the FDA, the US prevents orthopedists from culturing stem cells, let alone culturing them into stages as advanced as their foreign counterparts.

The US has lead innovation in Orthopedics as far back as I can remember. US innovation leadership has improved millions of lives worldwide. Americans have always been the first to access new advancements. Now, this is no longer the case.

There is now a technology drain in the United States. Innovative orthopedic clinical studies rarely start in the US because of the FDA’s ongoing assault on novel and innovative devices. The CE-marking process of manufacturer self-registration is much more predictable, a more reasonable and shorter process. The CE marking is the manufacturer declaring that the product meets the requirements of the applicable EC directives. Third party notified bodies audit the declaration over a central regulatory body. This takes much less time than navigating through the FDA’s whims. Through the CE mark, Europe is now the first market to gain clinical experience with a new technology. European patients get the new stuff first.

 

 

Let’s look more closely at the FDA problem.

The FDA’s review times are becoming longer and longer. This is well-documented. Research groups such as Boston Consulting concluded that today’s FDA doesn’t keep pace with US orthopedic technology innovations. Recent debacles, like the Metal-on-Metal hip recalls, spooked the FDA into even more conservative bureaucracies.

But perhaps the biggest issue of all is the lack of predictable review cycles. Under this administration, the FDA has become very unpredictable. Innovators find that clearance is uncertain, often vague, and FDA guidance changes throughout the process. Often, the FDA contact changes during the regulatory process. If the FDA could tell the manufacturer that the process would take five years, then the manufacturer could plan accordingly. The FDA cannot even do this.

The FDA appears to be driven by politics, not science.

Orthopedic IDE/PMA devices are now on a drug timeline from start to clearance. The average PMA clearance takes 8-10 years and $100M in funding. Most small innovators don’t have the financial stamina for this marathon; VCs and other funding vehicles don’t have the risk tolerance for these durations. Furthermore, the FDA has required more devices to take the PMA route over the last two decades.

Part of the FDA irrational conservatism comes from an increase in recalls over the last few years. But, when analyzing these, the FDA found that 96% of the recalls involve little or no risk to patients. Only 131 recalls from 2005 to 2009 were considered “high risk.” Also very telling is that the 510(k) process cleared 87% of these “high risk” recalls. The FDA cleared almost 20,000 devices from 2005 to 2009. It’s not so much that the 510(k) process is broken. The FDA instead let some devices through the 510(k) process that should have gone through the clinical scrutiny of the PMA process. Looking toward the future, the 510(k) pathway for many new devices will require clinical data.

Startups with Class III devices (PMA) under development are bailing out to Europe where the regulatory pathway is reasonable and predictable. Unfortunately, US patients will receive stifled innovation as a result. All the new technology clinical testing has moved to Europe. This will contribute to the Medical Tourism trend.

Is orthopedic innovation in danger of never coming back to the US? Yes, unless the US takes steps to reduce barriers and open up processes. The FDA must streamline product-testing and control processes. The FDA could potentially approve medical devices for safety, and then the market could determine efficacy, at least to a greater extent than at present. Europe practices this method.

On top of all this, the US government has thrown a 2.3% gross excise tax on  Orthopedic companies for US revenues. Most companies are small and unprofitable, but have to send 2.3% to the feds while losing money each year. This gives patients another incentive to go abroad.

 

What is your company doing to weather the US innovation hurdles?