FDA update November 4, 2011
Capitalists Put Money on Easing Medical Device Rules
Rein in the Food and
Drug Administration’s uncertain approval process for new medical
devices; urged the Minnesota congressman, Erik Paulsen, or Minnesota and
other states stand to lose up to 400,000 jobs because of lost investment
in the device industry.
Over the following
month, Mr. Paulsen’s campaign committee took in $74,000 from people with
a stake in device regulation, much of it from executives affiliated with
venture capital funds and their spouses. Now Mr. Paulsen, a two-term
Republican, is a sponsor of a bill that would make it easier to bring
new medical products to market.
Congress considers reauthorizing laws that sets the fees for medical
device makers, venture capitalists are emerging as a rich and
influential ally of device companies eager to remove what they say
are regulatory roadblocks in the approval process.
The push has alarmed patient advocates and some doctors, who have
been calling on the F.D.A. to intensify its oversight of devices,
particularly in light of some all-metal artificial hips that are
failing prematurely at an unusually high rate.
associated with funds that underwrite companies developing new
devices and other health products have made more than $3.3 million
in political donations to Republicans, Democrats and political
action committees over the past five years, according to an analysis
of federal contributions by The New York Times.
Though such people donate for many reasons, about 20 percent of the
money from the 182 donors identified by The Times went directly to
candidates and political action committees supporting a streamlining
of F.D.A. policy or other issues of importance to medical products
total contributions from such donors could be much higher; The Times
limited its analysis to individuals affiliated with venture capital
funds that have joined two lobbying associations.
Investment funds and business groups have also increased their
lobbying in Washington and have generated a stream of reports
arguing that regulations are crippling innovation and driving away
Simply put, the industry’s champions argue that the F.D.A. suffers
from high personnel turnover, an unwieldy bureaucracy and a regimen
that forces start-up device companies to run new and costly tests
constantly, often duplicating past efforts.
Lobbying to smooth the approval process has intensified over the
last year as Congress prepares to reauthorize the law that requires
device producers to pay fees to the F.D.A., fees that are used to
pay the agency’s operating costs.
industry lobbying group, the National Venture Capital Association,
has intensified its focus on device regulation. In 2010, the
association, which lobbies on many issues, spent more than $2.5
million, according to data from the nonpartisan Center for
Responsive Politics. About $350,000 of that was related to devices,
drugs and health care, a figure that is expected to increase to
$450,000 this year.
While it is not unusual for businesses to point to regulation as a
barrier to economic and job growth, medical device investors have
found a particularly receptive audience on Capitol Hill in recent
months. In October alone, 10 bills have been introduced by
Republicans in the House to speed up the F.D.A. device approval
process; in the Senate, similar legislation has been introduced by
Amy Klobuchar, a Democrat of Minnesota
Since February, four House panels have held hearings on the impact
of F.D.A. procedures on device approval. At those sessions, 19 of
the 26 listed witnesses were investors, entrepreneurs, industry
consultants, trade group officials or patients who said that agency
delays in approving a device had harmed them or a loved one. The
list included no patients injured by a flawed device
- F.D.A. officials said they have
recently tried to address investors’ concerns by announcing programs
to encourage innovation and reduce regulatory
Investors have legitimate concerns about regulatory speed. That is
because the approval of a new device can begin a process in which a
start-up company is acquired by a larger manufacturer and early
investors profit by cashing out. But such investors may be less
interested in what happens to that device after it reaches the
market because they have already moved on, said an Institute of
Medicine panel that recently concluded the F.D.A. failed to properly
assess the safety and effectiveness of many new devices.
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and Ref: Venture Capitalists
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