WashingtonThere's no shortage of new ideas and talent devoted to the development and improvement of medical devices for tackling clinical problems. But getting them to patients can be a tedious, highly risky business.

There are uncertainties over financial support. There are difficulties in mounting clinical trials. While the US Food and Drug Administration's (FDA) device regulations have been streamlined recently, there is still room for improvement. And the device industry is plagued by a reimbursement system that is fractionated, unpredictable, and inconsistent.

Speakers from industry and academic device developers voiced these conclusions during a workshop on "Innovation and Invention in Medical Devices," held late last month by the Institute of Medicine.

INNOVATION STILL FLOURISHES

Despite the problems, it was clear from the reports that innovation and invention are alive and well. Some examples of new solutions to old problems follow:

• A device for delivering powdered insulin directly into the lungs by means of an inhaler avoids the need for injection. Studies have shown that the more frequently insulin is injected, the better diabetes is controlled and the fewer the long-term complications. Patients find repeated injections unacceptable, so taking their insulin through an inhaler might encourage better compliance.

• An implantable diagnostic monitor that continuously records a patient's electrocardiogram has been shown to be useful for determining the causes and developing treatment strategies for patients with infrequent episodes of syncope when other diagnostic methods have been inconclusive.

• Telemetric methods of sending physicians data from implantable devices that collect information continuously about a patient's status are in development. They will enable physicians to monitor the effectiveness of treatment around the clock, not just during office visits.

• Noninvasive means for identifying coronary and carotid arterial plaques that are most likely to rupture and cause a myocardial infarction or stroke have been developed. Previously, there was no way to identify these plaques.

• An ocular implant device that reshapes the cornea has been used successfully to treat keratoconus.

• A noninvasive method of imaging microcirculation using polarized light is being tested. Currently, only blood vessels close to the surface, such as eye grounds, can be visualized. The new technique will enable microvascular monitoring in conditions such as shock, hypertension, and diabetes.

• A powered wheelchair in which the seat can be raised and lowered and that can climb stairs and negotiate rough terrain is in the works.

NEED "FRIENDLY" PROCESS

Promising as these new products may be, workshop participants were mainly interested in examining the system by which they are developed, how funds are raised to finance the testing and marketing of a device, and how devices reach the marketplace and, ultimately, the patient. The participants found that the process needs to be "a bit more friendly," as one speaker put it.

The medical device industry is relatively small6000 companies cover 50 clinical specialties. Only 100 companies mount revenues over $100 million; 72% of the medical device manufacturers employ fewer than 50 people each. "There are big players, but this is really a cottage industry," said Thomas M. Loarie, chair of Keravision Inc in Fremont, Calif, the firm that developed the device for treating keratoconus.

However, the manufacturers' impact is large. The National Institutes of Health has estimated that about 25 million Americans benefit from such devices as heart valves, implantable pumps, pacemakers, defibrillators, and stents. Such devices have changed the practice of medicine. Society in the United States promotes innovation and a health care system that by and large is willing to pay for it, said Harry M. Jansen Kraemer, Jr, chair of Baxter International Inc, Round Lake, Ill.

But there are significant constraints on innovation, of which the workshop participants cited two in particularregulations and payment. "The hurdles of regulation and payment not only affect whether a device gets on the market but whether it becomes accessible to patients," said Kraemer. Access to capital depends on an estimate of the time it will take to bring a device to market and whether its use will be adequately reimbursed by third-party payers.

The FDA is often cited as a barrier to innovation, but recent administrative and legislative steps "have produced a demonstrable improvement in the regulatory process for new devices," said Glen D. Nelson, MD, vice chair of Medtronic Inc, a Minneapolis manufacturer. For example, the 1997 FDA Modernization Act calls for the agency to use the "least burdensome" methods when evaluating new medical technologies. There is general agreement by all parties involved that regulations are necessary to ensure that new devices are safe and effective.

HCFA CALLS THE SHOTS

Some view technology as the culprit behind increasing health care costs. In this respect, the onus is on the medical device industry to develop cost-effective therapies, said Kraemer. But it is equally important to evaluate the health benefits of technological innovation, he said.

Reimbursement problems confront the device industry like a multiheaded hydra, speakers agreed. There are multiple carriers and a variety of health insurers, all with different ideas about payment that can figure significantly in the development risk equation, said Kraemer. The most influential payer is Medicare. Whatever the Health Care Financing Agency (HCFA) decides about reimbursement for a device influences all the other payers, and the chance that payment may be denied affects innovation by shutting off funds for development.

In addition, the system Medicare uses for evaluating payment for new devices is flawed, said Pamela G. Bailey, president of the Health Industry Manufacturers Association, Washington, DC. It's slow and unpredictable, she said. Whereas the FDA has been urged by Congress to reduce its approval times to a few months, HCFA's decision on whether to reimburse for the use of a particular device can take 4½ years. During this time, the manufacturer cannot put the device on the market. Congress is considering legislation that could cut this time in half. However, said Bailey, the real solution would mean a complete restructuring of the Medicare program.

She cited a number of examples. The FDA approved coronary stents, for instance, in 1994, but HCFA decided on the reimbursement only in 1999. And an ultrasonographic bone-healing device is still in limbo. "It cleared the FDA in 1994, supported by two randomized clinical trials that reported an over 91% healing rate. It is still awaiting Medicare coverage," she said.

Speaking from the floor, Perry Bridger, a policy analyst at HCFA, said the agency is well aware of the problems Bailey outlined. "We are making a concerted effort to make the path a little clearer," he said. "We work under a system that was enacted in 1965 and this is the year 2000. Technology has evolved."