Industry to fund FDA—at a price

When makers of medical devices learn that one of their products has malfunctioned in a way that could kill or seriously injure people, they are required to file a report with the Food and Drug Administration (FDA). The reports are meant to alert regulators that patients may be in danger.

However, in the future, under a deal the FDA has negotiated with industry lobbyists, manufacturers could generally wait three months before reporting malfunctions, and they could report malfunctions in “summary” form, according to an FDA document.

The deal apparently means that the government and the public could receive less detailed and less timely warnings.

The FDA declined to explain the deal for this article. Instead, it referred questions about its own policy commitments to an industry lobby, which provided no answers.

The loosening of the reporting requirement is one of many policy changes to emerge from highly unusual negotiations the FDA is required by law to conduct with industry every five years in return for the industry funding on which the consumer protection agency depends.

As POGO has reported, the FDA receives much of its funding from so-called “user fees” paid by makers of drugs and medical devices, and the money comes with conditions. To keep the fees coming, the FDA engages in wide-ranging negotiations that give industry lobbyists extraordinary sway over how the agency does its job.

The agreements negotiated during the latest cycle are now in Congress’s hands, and the House and Senate appear poised to enact them—along with some provisions of their own. On June 7, the House Energy and Commerce Committee sent the “FDA Reauthorization Act of 2017” to the full House by a vote of 54 to zero. Earlier, the Senate health committee advanced its version of the legislation by a vote of 21 to 2.

In various ways, the legislation would benefit manufacturers of medical products. They could bring their wares to market faster, thereby generating greater profits. If the products are safe and effective, that could be a boon for patients. But if the products aren’t safe or effective, patients could be put at greater risk, and everyone who pays for medical products—from individual consumers, to health insurance companies, to taxpayers on the hook for government programs such as Medicare—could end up wasting money.

The dangers are far from hypothetical. The FDA has a long history of greenlighting the sale of drugs and devices that later proved to have deadly flaws.

Having industry foot much of the bill for FDA oversight might seem like a bargain for the general public, but the savings could be illusory if the makers of medical products pass the cost to their customers.

Loosening FDA Oversight

The medical devices the FDA oversees include products such as artificial joints, cardiac pacemakers, diagnostic imaging machines, and surgical instruments.

The agency’s latest agreement with the medical device industry over user fees would loosen FDA oversight and expand the role of industry in regulatory affairs.

For example, the agreement would:

Increase FDA reliance on private reviews arranged by device manufacturers, known as “third party reviews.” The agreement calls for the FDA to “establish a plan for eliminating routine re-review by FDA of Third Party reviews.” That “represents a potential lowering of medical device safety standards,” Jack Mitchell of National Center for Health Research said at a public FDA meeting last year, according to a transcript. The FDA has expressed dissatisfaction with third party reviews, including concern about “incompetent third parties,” and the agreement calls for the agency to take steps to improve them.

Under certain circumstances, stop the FDA practice of requiring manufacturers to conduct “post-market surveillance studies”—analyses of how safely and effectively devices are performing once the FDA has allowed them to be sold. The agreement says the FDA won’t require such studies if it has access to sufficient “real world data.”

Guarantee the medical device industry “at least” a quarter of the seats on the governing board of the National Evaluation System for health Technology (NEST). That organization is tasked with developing alternatives to the traditional scientific data used in FDA decision-making. The board seats would give the device industry another inside track to influence FDA policy.

In addition, the agreement would speed up FDA reviews of devices. For many devices, the time frame for the FDA to reach a decision on the products—the “average Total Time to Decision goal”—would decline from 124 days in fiscal year 2018 to 108 days in fiscal 2022. In fiscal 2010, it took an average of 150 days, according to FDA testimony. Shorter reviews could mean hastier reviews.

Other accommodations for industry have been tacked on in Congress.

For example, when the House Energy and Commerce Committee drafted its bill to ratify the FDA’s agreements with industry, lawmakers added a set of “IMPROVEMENTS TO INSPECTIONS PROCESS” governing FDA inspections of plants where medical devices are made. Among the listed “improvements”: The FDA would tell the manufacturer in advance when the inspectors are coming. Also, at least to some extent, the agency would give the manufacturer advance notice of what records the inspectors will want to see.

An FDA inspection is “an ‘all hands on deck’ situation” for a medical device company, Patricia Shrader, an executive at device maker Medtronic, said last month in written testimony on behalf of industry lobby AdvaMed, the Advanced Medical Technology Association.

“The communication prior to an inspection enables the investigator to gather background information and give the company an opportunity to assemble the records and personnel that will be needed for the inspection,” Shrader said.

Advance warning would also give any medical device company that isn’t operating properly an opportunity to clean up its problems—and its records—before FDA inspectors arrive.

When the Senate Health, Education, Labor and Pensions (HELP) Committee drafted its version of the new FDA Reauthorization Act, it included a reprieve for manufacturers whose factories are inspected and, as documented on a form completed by the FDA inspectors, found to have problems. The potential violations inspectors note on Form 483 can involve such sensitive issues as contamination, calibration of equipment, and the disposition of products that don’t meet specifications. As long as the government and the manufacturer “have agreed to a plan of correction,” according to the bill, the FDA will not hold up exports of the devices over the issuance of a Form 483.

The bill doesn’t require the manufacturer to carry out the corrective plan first.

Those provisions involve medical devices. As POGO reported last year in its investigative series “Drug Money,” the user fee agreement the FDA negotiated with drug makers would advance parts of the pharmaceutical industry’s agenda, potentially at the expense of patient safety.

The FDA is counting on user fees to meet its current expenses and to hire additional staff.

By ratifying the agreements and reauthorizing the FDA’s ability to collect user fees for another five years, Congress will be perpetuating a system that leaves the regulators beholden to the regulated.

The system is deeply entrenched. To end the user fee regime, Congress would have to fund the FDA’s budget on its own. And, far from ending it, President Donald Trump has proposed increasing the FDA’s reliance on user fees while cutting the agency’s federal appropriation.

In the realm of medical devices, Trump’s budget calls for nearly tripling the amount of money the FDA gets from user fees, from the current annualized rate of $118.4 million to $349.6 million, while cutting regular federal funding by more than half, from $322.6 million to $140.1 million.

“The Budget proposes to increase medical product user fees to finance the full cost of FDA pre-market review and replace the need for new appropriated budget authority,” according to a White House budget document . “Industries that directly benefit from FDA's medical product premarket approval and administrative actions can and should pay more to support FDA's continued capacity,” the document says.

Congress has essentially ignored Trump’s plan on the grounds that it’s too late to renegotiate the user fee agreements for the next five-year cycle.

If the legislation is not on the president’s desk by Congress’s August recess, “FDA will be forced to begin sending layoff notices to more than 5,000 employees to notify them that they may lose their job in 60 days,” Sen. Lamar Alexander (R-TN), chairman of the Senate health committee, said in a statement last month. “In addition to harming patients and families that rely on medical innovation, a delay in reauthorizing the user fees would threaten biomedical industry jobs and America’s global leadership in biomedical innovation,” Alexander said.

Deadly Defects

Members of Congress have touted the legislation as promoting medical advances. They have said less about potential hazards.

But many dangerous products have made it past the FDA and have remained on the market for years.

For instance, so-called “INRatio” devices used to test the clotting rates of patients on blood-thinning medication were found to deliver false results, which could lead to incorrect dosing and “major or fatal bleeding,” according to a recall notice posted on the FDA website. In December 2016, the maker of the INRatio devices, a company called Alere, announced that it was withdrawing them from the market. The recall involved hundreds of thousands of items sold as far back as 2008.

Metal-on-metal hip implants were found to release tiny metal particles, which could cause a host of problems such as pain, loosening of the implant, and failure of the joint, necessitating additional surgery to replace the implant. “Some of the metal ions released will enter the bloodstream and travel to other parts of the body, where they may cause symptoms or illnesses elsewhere in the body (systemic reactions),” the FDA explained.

Cardiac pacemakers implanted in patients’ chests have been recalled because they were susceptible to sudden power failures. As one recall notice put it, rapid, unexpected battery drain “could lead to patient death.”

And laparoscopic power morcellators, used to remove uterine fibroids, were found to spread cancerous tissue inside the body, “significantly worsening the patient’s likelihood of long-term survival,” the FDA stated.

A study recently published by JAMA, a journal of the American Medical Association, found that, among all 222 “novel therapeutics”—original drugs and biologic therapies—approved by the FDA from the beginning of 2001 to the end of 2010, almost a third were involved in “postmarket safety events,” meaning problems surfaced once they were on the market. In 61 cases, the FDA revised the product labeling to include prominent “boxed warnings.” In 59 cases, the FDA issued public notices called “safety communications.” In three cases, the products were withdrawn. Those actions typically occurred more than four years after the products were approved. According to the study, they were “significantly more frequent” among products granted “accelerated approval” or approved near the regulatory deadlines.

Many medical devices are cleared for sale based on minimal FDA scrutiny. Through a process known as 510(k), manufacturers need not submit extensive scientific data establishing that a product is safe and effective if they can show that the product is “substantially equivalent” to one already on the market.

In a statement for this report, a spokeswoman for the House Energy and Commerce Committee said the FDA Reauthorization Act (FDARA) will lead to greater investment in the FDA, which will strengthen the review process. “Maintaining FDA’s gold standard for approval is critically important, and nothing in FDARA would alter that standard,” spokeswoman Jennifer Sherman said.

One of the main ways the FDA learns about potential safety problems is through so-called “adverse event” reports, also known as medical device reports or MDRs, submitted to the agency.

“Manufacturers are required to report to the FDA when they learn that any of their devices may have caused or contributed to a death or serious injury,” the FDA website says. “Manufacturers must also report to the FDA when they become aware that their device has malfunctioned and would be likely to cause or contribute to a death or serious injury if the malfunction were to recur.”

The inspector general’s office at the Department of Health and Human Services has written that adverse event reporting “represents a critical component of FDA’s information-gathering process.”

“Adverse event reporting enables FDA to take corrective action on problem devices and to prevent injury and death by alerting the public when potentially hazardous devices are discovered,” a 2009 inspector general report said.

Manufacturers must file reports with the FDA within 30 days of becoming aware of an event and, under circumstances where there is a heightened risk to the public, within five work days, the FDA site says.

The latest user fee agreement the FDA negotiated with manufacturers would change the requirements.

“The Agency will establish criteria for streamlining MDR requirements,” the agreement says. “For most, if not all, device procodes, FDA will permit manufacturers of such devices in those procodes to report malfunctions on a quarterly basis and in a summary MDR format.”

(FDA “product codes,” also known as procodes, are used to identify categories of devices. For example, “artificial heart” is a category with a code of its own.)

The agreement does not spell out what information the summary report would include. A notice the FDA published in the Federal Register in 2015 might provide a preview. It described a “pilot program” for quarterly, summary reporting and explained how manufacturers eligible to participate in that program could describe batches of similar malfunctions, including such information as, “if available, a range of patient age and weight and a breakdown of patient gender.”

The pilot program did not extend to devices that are “permanently implantable, life supporting, or life sustaining,” and it excluded the most serious events – those that result in serious injury or death and those that require remedial action “to prevent an unreasonable risk of substantial harm to the public.”

In contrast, under the plan Congress is poised to enact, devices eligible for quarterly, summary malfunction reporting would include products implanted in patients’ bodies and others classified as being of highest risk.

If a procode or category of device has existed for less than two years, the FDA may decide to exclude devices in that category, the agreement says. “If a new type of malfunction occurs that the manufacturer has not previously reported to the FDA, the manufacturer must submit an individual report,” the agreement adds. However, it is sometimes the accumulation of incidents over time that calls attention to a problem and prompts action.

The FDA is required by law to release minutes of its negotiating sessions with industry, but the minutes the agency posted do not explain the substance or genesis of the proposed change in MDR requirements. In what may be a related reference, minutes of a July 26, 2016 meeting say industry proposed devoting $10 million of funding to a system that would, among other things, enable the FDA to explore “expanding the use of alternatives to MDR requirements.”

There are gaps in the minutes. The minutes of the final negotiating session, held on August 15, 2016, begin by saying the FDA and industry representatives held “a series of working discussions in early August,” but the agency web page aggregating the minutes does not include any for those meetings.

POGO asked an FDA spokeswoman to arrange an interview with an FDA official who could explain the MDR change and other elements of the agreement. The FDA declined and referred questions about its own policy commitments to AdvaMed, the industry lobby.

“We are not commenting on MDUFA [Medical Device User Fee Amendments] while it is under Congressional review. You can try reaching out to folks at Advamed. They may be able to provide more details on these provisions,” FDA spokeswoman Deborah Kotz said by email.

AdvaMed did not respond to written questions or grant an interview for this report.

One of the points POGO asked the FDA and AdvaMed to clarify was how quickly manufacturers can be required to report malfunctions under the current rules—more specifically, whether the accelerated five-day deadline can apply to them. Though the FDA and AdvaMed didn’t answer, the U.S. Code of Federal Regulations (Title 21, Chapter I, Subchapter H, Part 803) says manufacturers must submit a report to the FDA “no later than 5 work days” after they become aware that an “MDR reportable event necessitates remedial action to prevent an unreasonable risk of substantial harm to the public health.” The regulation defines “MDR reportable event” to include malfunctions.

In a news release, AdvaMed President Scott Whitaker cheered the agreement the device industry negotiated with the FDA and called on Congress to ratify it.

“The negotiated agreement between FDA and industry to reauthorize MDUFA will improve the efficiency, predictability and transparency of the agency’s review processes while providing significant additional resources to FDA,” Whitaker said.

“This agreement is beneficial to patients, FDA and American innovation, and we urge the full House and Senate to vote on the FDA Reauthorization Act of 2017 as soon as possible,” he said. “A failure to act would have a negative impact on our industry’s ability to bring new, innovative treatments, diagnostics and cures to patients.”

Short of substituting taxpayer dollars for user fees, there’s a simple step Congress could take to render the FDA more independent: It could eliminate the requirement that the FDA negotiate the terms of its funding with industry.

In the meantime, the reauthorization of FDA user fees serves as a reminder that much of the FDA’s money comes with strings attached, and industry gets to pull on the strings.

