SAN FRANCISCO -- The chief executive of Medtronic called for the U.S. Food and Drug Administration to lower regulatory hurdles for medical devices to boost innovation. The call comes at a time when the FDA is weeks if not days away from rolling out changes to its 510(K) program, the approval path for most medical devices.
Many big medtech companies are in favor of higher regulatory hurdles, in part because they could better compete in such an environment. William Hawkins, chief executive of Medtronic, one of the largest U.S. medical electronics companies, said he takes a different view.
"There's an ecosystem in our industry that requires different levels of players, and in our whole country overall less barriers [to innovation are] needed," he said in a Q&A session at a J.P. Morgan investment conference here. "I'd rather have [regulatory] barriers lower and have more innovation occurring that could help [smaller] companies we could integrate," he said.
Hawkins heads a working group in the AdvaMed trade association, lobbying the FDA on its proposed 510(K) changes. "I am reassured there's a good dialog, and hopefully we will not see dramatic changes," he said.
Like many companies, Medtronic has felt the impact of an FDA that has stepped up its regulatory efforts in recent years. Medtronic received FDA warning letters about unreleased cardiac and neural devices that required inspections of some facilities, turning up other issues.
"I don’t know how they will factor that all in," Hawkins said, declining to answer a question about when the products will go on sale. "No one can predict what will happen with the FDA," he said.
Several companies including Medtronic also have experienced delays getting approvals for a new class of so-called patch pumps for diabetes.
"All companies in this arena had set backs or discussions with the FDA," he said. "More and more is being required to get products to the market place," he added.
The medical electronics industry had a rough year in 2010. Although executives are optimistic about at least ending the decline in 2011, Hawkins said he believes the 510(K) changes expected by the end of the month "will be neutral to slightly negative" on business results.
Hawkins called 2010 a perfect storm of factors including a sluggish recovery and talk of health care reform that caused many individuals and hospitals to pull back on procedures and purchases.
"It was a tough year," Hawkins said. "I am optimistic about this year because people can't wait forever to get their back repaired or deal with heart failure and we expect gradual positive changes at the FDA which is really getting the feedback they need to get the balance right here," he added.
Meanwhile, Medtronic is pledging to slash a billion dollars or more from the costs of bringing medical products to market, starting with some $200 million in reductions in 2011. In a separate interview, Medtronic's chief financial officer said total employment for the company will continue to rise, but the cost cuts may require changes in processes and layoffs.
The Medtronic comments came a week after Joshua Sharfstein, appointed by President Obama as the FDA's principal deputy commissioner, left his post to lead health care operations for the state of Maryland. Some observers saw the departure as a sign the pendulum at the FDA might swing back to a less stringent regulatory environment as a new wave of Republicans come to Congress.
Sharfstein "spent the last two years over-reaching to expand FDA authority and recognized he would be left to defend those actions for the next two years, so he moved on," said one FDA observer who asked to remain anonymous.
"He's been pushing hard in many areas may have gone beyond statutory authority, and I know others who felt he was someone who had an anti-industry slant," he said.