[House Hearing, 112 Congress]
[From the U.S. Government Printing Office]




                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION


                           FEBRUARY 17, 2011


                            Serial No. 112-9

      Printed for the use of the Committee on Energy and Commerce

  66-467 PDF             WASHINGTON : 2011
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                           FRED UPTON, Michigan
JOE BARTON, Texas                     HENRY A. WAXMAN, California
  Chairman Emeritus                     Ranking Member
CLIFF STEARNS, Florida                JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky                EDWARD J. MARKEY, Massachusetts
JOHN SHIMKUS, Illinois                EDOLPHUS TOWNS, New York
JOSEPH R. PITTS, Pennsylvania         FRANK PALLONE, Jr., New Jersey
MARY BONO MACK, California            BOBBY L. RUSH, Illinois
GREG WALDEN, Oregon                   ANNA G. ESHOO, California
LEE TERRY, Nebraska                   ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan                 GENE GREEN, Texas
SUE WILKINS MYRICK, North Carolina    DIANA DeGETTE, Colorado
  Vice Chairman                       LOIS CAPPS, California
JOHN SULLIVAN, Oklahoma               MICHAEL F. DOYLE, Pennsylvania
TIM MURPHY, Pennsylvania              JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee           JAY INSLEE, Washington
BRIAN P. BILBRAY, California          TAMMY BALDWIN, Wisconsin
CHARLES F. BASS, New Hampshire        MIKE ROSS, Arkansas
PHIL GINGREY, Georgia                 ANTHONY D. WEINER, New York
STEVE SCALISE, Louisiana              JIM MATHESON, Utah
ROBERT E. LATTA, Ohio                 G.K. BUTTERFIELD, North Carolina
GREGG HARPER, Mississippi             DORIS O. MATSUI, California
LEONARD LANCE, New Jersey             
BILL CASSIDY, Louisiana               
BRETT GUTHRIE, Kentucky               
PETE OLSON, Texas                     
DAVID B. McKINLEY, West Virginia      
CORY GARDNER, Colorado                
MIKE POMPEO, Kansas                   
ADAM KINZINGER, Illinois              
H. MORGAN GRIFFITH, Virginia          


                         Subcommittee on Health

                     JOSEPH R. PITTS, Pennsylvania
MICHAEL C. BURGESS, Texas            FRANK PALLONE, Jr., New Jersey
  Vice Chairman                        Ranking Member
ED WHITFIELD, Kentucky               JOHN D. DINGELL, Michigan
JOHN SHIMKUS, Illinois               EDOLPHUS TOWNS, New York
MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina   LOIS CAPPS, California
TIM MURPHY, Pennsylvania             JANICE D. SCHAKOWSKY, Illinois
PHIL GINGREY, Georgia                TAMMY BALDWIN, Wisconsin
ROBERT E. LATTA, Ohio                MIKE ROSS, Arkansas
LEONARD LANCE, New Jersey            HENRY A. WAXMAN, California (ex 
BILL CASSIDY, Louisiana                  officio)
FRED UPTON, Michigan (ex officio)

                             C O N T E N T S

Hon. Joseph R. Pitts, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................     1
    Prepared statement...........................................     2
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     4
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     5
    Prepared statement...........................................     6
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     7
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, prepared statement................................     9
Hon. Edolphus Towns, a Representative in Congress from the State 
  of New York, prepared statement................................     9


Jeffrey E. Shuren, M.D., J.D., Director, Center for Devices and 
  Radiological Health, Food and Drug Administration..............    10
    Prepared statement...........................................    13
    Answers to submitted questions...............................   149
Joshua Makower, M.D., Exploramed Development, LLC................    28
    Prepared statement...........................................    30
    Answers to submitted questions...............................   175
Mark Deem, Managing Partner and Chief Technology Partner, The 
  Foundry........................................................    81
    Prepared statement...........................................    83
    Answers to submitted questions...............................   184
Rita Redberg, M.D., MSC., Director, Women's Cardiovascular 
  Services, UCSF Medical Center Division of Cardiology...........    87
    Prepared statement...........................................    89
Steven E. Nissen, M.D., Professor of Medicine, Cleveland Clinic 
  Lerner School of Medicine at Case Western Reserve University, 
  and Chairman, Department of Cardiovascular Medicine, Cleveland 
  Clinic Foundation..............................................    97
    Prepared statement...........................................    99
Ralph Hall, Distinguished Professor and Practitioner, University 
  of Minnesota Law School........................................   107
    Prepared statement...........................................   109
    Answers to submitted questions...............................   191



                      THURSDAY, FEBRUARY 17, 2011

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:30 a.m., in 
room 2123, Rayburn House Office Building, Hon. Joseph R. Pitts, 
(chairman of the subcommittee) presiding.
    Present: Representatives Pitts, Burgess, Whitfield, 
Shimkus, Murphy, Blackburn, Gingrey, Latta, Lance, Cassidy, 
Guthrie, Barton, Upton (ex officio), Pallone, Dingell, Towns, 
Capps, and Waxman (ex officio).
    Staff Present: Debbee Keller, Press Secretary; Clay 
Alspach, Counsel; Cary McWilliams, Legislative Clerk; Jeff 
Mortier, Professional Staff; Peter Kielty, Senior Legislative 
Clerk; Chris Sarley, Policy Coordinator; Ryan Long, Chief 
Counsel, Health; Alan Slobodin, Counsel; Andy Duberstien, 
Special Assistant to Chairman Upton; Rachel Sher, Minority 
Counsel; Allison Corr, Minority Policy Analyst; Karen 
Lightfoot, Minority Communications Director and Senior Policy 
Advisor; Stephen Cha, Minority Professional Staff Member; and 
Eric Flamm, Minority Detailee.


    Mr. Pitts. The subcommittee will come to order.
    The chair will recognize himself for an opening statement.
    The United States is the world leader in medical device 
innovation. According to a recent report, 32 of the 46 medical 
technology companies with annual sales exceeding $1 billion are 
based in the United States; and yet the United States is in 
danger of losing its preeminent status in this field.
    Multiple studies have shown that regulatory uncertainty is 
damaging this critical industry and hurting American patients. 
For example, the November, 2010, study ``FDA Impact on U.S. 
Medical Technology Innovation'' surveyed over 200 medical 
technology companies; and they described the FDA process as 
``unpredictable and characterized by disruptions and delays.'' 
They also noted that companies are able to make their products 
available to patients faster and at a significantly lower cost 
in markets such as Europe.
    It already is tough for medical device companies. Only one 
out of four med tech startups succeed. Half of all reported 
exits are less than $100 million, and the total pool of 
available investment capital is shrinking.
    Quite simply, shorter, more predictable, and more 
transparent approval processes in Europe have led many device 
companies to seek a market for their products in Europe before 
submitting them to the FDA; and they are taking good-paying 
American jobs overseas with them.
    In 2008, according to the Lewin Group, the medical device 
industry employed 422,778 workers nationwide, paid $24.6 
billion in earnings, and shipped $135.9 billion worth of 
products. In 2008, in my home State of Pennsylvania, the 
medical device industry employed 22,223 people and paid 
Pennsylvania workers over $1.1 billion in earnings. These are 
good jobs. Nationally, jobs in medical technology pay almost 40 
percent higher compared to the national earnings average.
    But this trend does not just hurt our economy. It hurts 
American patients. American patients on average have access to 
innovative medical devices 2 years later than patients in 
European countries and, in some cases, never have access to 
these devices.
    None of us would be concerned about longer, more arduous 
approval processes for medical devices in the U.S. versus 
Europe if we thought that those processes kept American 
patients safer than their European counterparts. But according 
to recent studies, medical devices marketed through the shorter 
and more transparent EU processes are statistically as safe as 
FDA-cleared or approved devices and have comparable patient 
    According to a January, 2011, Boston Consulting Group 
report, EU Medical Device Approval Safety Assessment, a 
Comparative Analysis of Medical Device Recalls 2005 2009, ``The 
results of this study suggest little difference between 
absolute number of serious recalls between the U.S. and EU 
regulatory systems. The distribution of the serious recalls are 
similar across therapeutic areas, and reasons for recalls 
suggesting that differences between the two systems do not 
ultimately affect performance. In addition, given the 
expectation that the EU approves more devices than the U.S., it 
is likely that the EU recall rate may actually be slightly 
lower than the U.S. rate.''
    We need to ensure that our regulatory system is consistent 
and transparent so American patients have timely access to 
life-saving and life-improving drugs and devices and American 
workers have access to these goods.
    [The prepared statement of Mr. Pitts follows:]

               Prepared Statement of Hon. Joseph R. Pitts

    The subcommittee will come to order.
    The chair will recognize himself for an opening statement.
    The United States is the world leader in medical device 
innovation. According to a recent report from Pricewaterhouse 
Coopers, 32 of the 46 medical technology companies with annual 
sales exceeding $1 billion are based in the United States.
    And, yet, the U.S. is in danger of losing its preeminent 
status in this field.
    Multiple studies have shown that regulatory uncertainty is 
damaging this critical industry and hurting American patients.
    For example, the November 2010 study ``FDA Impact on U.S. 
Medical Technology Innovation'' surveyed over 200 medical 
technology companies.
    They described the FDA process as ``unpredictable and 
characterized by disruptions and delays."
    They also noted that companies are able to make their 
products available to patients faster and at a significantly 
lower cost in markets such as Europe.
    It's already tough for medical device companies. Only one 
out of four med-tech startups succeed. Half of all reported 
exits are less than $100 million, and the total pool of 
available investment capital is shrinking.
    Quite simply, shorter, more predictable, and more 
transparent approval processes in Europe have led many device 
companies to seek a market for their products in Europe before 
submitting them to FDA.
    And they are taking good-paying American jobs overseas with 
    In 2008, according to the Lewin Group, the medical device 
industry employed 422,778 workers nationwide, paid $24.6 
billion in earnings, and shipped $135.9 billion worth of 
    In 2008, in my home state of Pennsylvania, the medical 
device industry employed 22,233 people and paid Pennsylvania 
workers over $1.1 billion in earnings.
    These are good jobs. Nationally, jobs in medical technology 
pay almost 40% higher compared to the national earnings 
    But this trend does not just hurt our economy, it hurts 
American patients.
    American patients, on average, have access to innovative 
medical devices two years later than patients in European 
countries, and, in some cases, never have access to these 
    None of us would be concerned about longer, more arduous 
approval processes for medical devices in the U.S. versus 
Europe if we thought that those processes kept American 
patients safer than their European counterparts.
    But, according to recent studies, medical devices marketed 
through the shorter and more transparent EU processes are 
statistically as safe as FDA-cleared or approved devices and 
have comparable patient outcomes.
    According to a January 2011 Boston Consulting Group report 
``EU Medical Device Approval Safety Assessment: A comparative 
analysis of medical device recalls 2005-2009:"
    "The results of this study suggest little difference 
between absolute number of serious recalls between the US and 
EU regulatory systems. The distribution of the serious recalls 
is similar across therapeutic areas and reasons for recall, 
suggesting that differences between the two systems do not 
ultimately affect performance. In addition, given the 
expectation that the EU approves more devices than the US it is 
likely that the EU recall rate may actually be slightly lower 
than the US rate."
    We need to ensure that our regulatory system is consistent 
and transparent so American patients have timely access to 
life-saving and life-improving drugs and devices and American 
workers have access to these good jobs.
    I yield the remainder of my time to the chairman emeritus, 
Mr. Barton.

    Mr. Pitts. I yield the remainder of my time to Chairman 
Emeritus Mr. Barton.
    Mr. Barton. Thank you, Mr. Chairman. You surprised me, but 
I do appreciate it. Thank you for holding this hearing.
    Back in 1997, as the chairman of the Oversight and 
Investigation Subcommittee, I had the great privilege to work 
with Congresswoman Eshoo on the Medical Device Regulatory 
Modernization Act of 1997. That became part of the Food and 
Drug Modernization Act called FDAMA. We worked to ensure that 
the FDA operates in the best interest of patients by ensuring 
that they have access to new life-enhancing and life-saving 
technologies. We and others realized that the regulatory 
process for medical devices needed to be reformed in order to 
get medical devices to patients in a timelier fashion, to spur 
medical innovation, and to help draft small business job 
    Today, it appears to me these reforms have been successful. 
It doesn't mean that we can't improve on it. We do not want to 
backtrack on this success, and we do not want to make it harder 
on the small businesses and manufacturers to get new and vital 
medical devices into production and into the market.
    Texas is the leader in medical device innovation. There are 
over 4,000 medical equipment and device companies in my State. 
Most of them are relatively small. Texas and America depend on 
job creation in this sector with a market that is open and has 
reasonable regulations.
    Lack of transparency within the FDA and drawn-out approval 
process appear to be hurting these businesses and resulting in 
job losses. I am sure our witnesses today are going to comment 
on that.
    This is a very good hearing, Mr. Chairman. I appreciate you 
and Chairman Upton for holding it. I look forward to hearing 
from our witnesses.
    With that, I would yield to whoever I should yield to.
    I yield back to the Chair.
    Mr. Pitts. Thank you.
    The Chair recognizes the ranking member, Mr. Pallone, for 
an opening statement.


    Mr. Pallone. Thank you, Chairman Pitts.
    I am pleased that you scheduled hearing today's hearing on 
medical devices because I believe we are at an important 
crossroads. As we continue to work our way out of the recession 
toward a thriving economy that offers economic opportunities to 
all Americans, we must out-innovate the rest of the world. 
America's competitiveness depends on our ability to innovate 
and keep America number one. However, to do that we must 
properly fund key agencies like the FDA that are essential to 
assisting in the development of new drugs and devices; and I am 
disappointed in the cuts proposed by the House Republicans.
    Research and development has an impact on all sectors of 
our workforce. I will use my home State of New Jersey as an 
example. A new report by Research America noted that New Jersey 
is the third-largest R&D employer in the U.S., with more than 
211,000 jobs supported by health R&D, including 50,000 direct 
jobs in health R&D. The same report shows the economic impact 
in New Jersey is $60 billion.
    That said, the government must be responsible for 
facilitating an environment where Americans can continue to 
innovate. That is the key to creating new, thriving industries 
that will produce millions of good jobs here at home and a 
better future for the next generation.
    If government abandons its role, we run the real risk of 
squandering too many opportunities that lead to innovative 
discoveries and great economic benefits.
    Now, I have been interested in today's topic of FDA 
regulation for a long time, and that includes examining where 
the current system works well and where shortfalls might be. 
During this time, I have heard from patients, from physicians, 
and from companies about problems with the 501(k) process. 
Physicians and patients are concerned that products aren't 
fully evaluated before they are allowed on the market, and 
companies are frustrated of the lack of predictability and 
transparency in the process.
    In fact, as chairman of the subcommittee, we held a hearing 
on these issues in 2009; and, during that hearing, we 
specifically heard about a GAO report on the 501(k) process and 
in particular on the pre-amendment devices that have never been 
through the FDA approval process. The FDA is here today, and I 
hope we can hear about their progress with reviewing the high-
risk Class III devices that have yet to ever be approved 
    I am also interested to hear about FDA's recently released 
innovation initiative, because I strongly believe the FDA has 
two very important parts to its mission--first, to make sure 
that products are safe for U.S. consumers and, second, to 
facilitate innovation. It is good to see FDA's renewed focus on 
the latter, and I look forward to the Institute of Medicine, or 
IOM, analysis of some of their recommendations.
    Let me close by saying that today we will likely hear about 
two very different studies that have come to two very different 
conclusions, each with merit and limitations. In my view, this 
showcases one more reason why the upcoming IOM report due out 
in June is so critical to this dialogue.
    I look forward to our witnesses' testimony. I hope that our 
discussion will inform both Congress and the FDA how to 
approach these issues in a balanced way, protecting the 
American consumer while maintaining a strong R&D basis in this 
    Thank you, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman and yields to the 
chairman of the full committee, Mr. Upton, for an opening 


    Mr. Upton. Thank you, Mr. Chairman, for holding today's 
hearing on the impact of medical device regulations on jobs and 
patients. We do need to get America back to work; and, as we 
talked about on the House floor last week, part of this 
involves fixing regulatory problems caused by the Federal 
    Our Nation has been the world leader on medical devices, 
using American innovation to bring life-saving, life-improving 
devices to American patients and create high-paying, rewarding 
jobs here at home. In 2008, the medical device industry 
directory employed over 420,000 Americans. In my home State of 
Michigan, over 9,000.
    Unfortunately, our world leadership is being threatened. As 
Chairman Pitts outlined so well last week on the House floor, 
it does appear that a major reason for this is a lack of 
predictability, certainty, and transparency at FDA. These 
problems at the FDA are hurting American innovation, costing 
American jobs, and hurting American patients.
    According to recent reports and firsthand accounts from our 
Nation's small businesses, device companies are being forced to 
market their devices first in Europe because the EU countries 
have predictable and consistent regulatory processes. Because 
of that, medical devices are available there 2 years ahead of 
folks here. That is not right. This hearing aims to try and fix 
    I yield back my time.
    [The prepared statement of Mr. Upton follows:]

                 Prepared Statement of Hon. Fred Upton

    Thank you for holding today's hearing on the impact of 
medical device regulation on jobs and patients. I also would 
like to thank the witnesses for testifying today on this 
important subject.
    We need to get Americans back to work. As we talked about 
on the House floor last week, part of that involves fixing 
regulatory problems caused by the federal government.
    Our Nation has been the world leader on medical devices, 
using American innovation to bring life-saving, life-improving 
devices to American patients and create high-paying, rewarding 
jobs here at home.
    Unfortunately, our world leadership is being threatened due 
in part to the lack of predictability, certainty and 
transparency at the Food and Drug Administration. These 
problems at FDA are hurting American innovation, costing 
American jobs and hurting American patients.
    The Medical Device User Fee Act expires in September of 
2012, and this Committee will be charged with leading its 
reauthorization. I commit here today that this Committee will 
work hard to accomplish this reauthorization, but in doing so, 
we will demand that certainty, predictability and transparency 
be built into our process so our nation can stay as the global 
leader in medical device innovation, so we can create good-
paying jobs here at home, and so we can improve the lives of 
    It is time to get Americans back to work, and I thank the 
Chairman for holding this hearing so we can identify ways to do 
just that. I yield back.

    Mr. Pitts. The chair yields to Dr. Burgess to continue your 
    Dr. Burgess. Thank you, Mr. Chairman.
    I certainly hear from device manufacturers all across the 
country about the lack of transparency and an ambiguous and 
constantly changing approval process that discourages 
innovation and ultimately does yield to the loss of American 
jobs. The inability to facilitate a predictable process is 
causing device manufacturers to move overseas and, most 
importantly, not allowing patients access to treatments here in 
the United States that have been found elsewhere.
    The difficulty by the FDA to ensure reliable and consistent 
approval process not only creates a disadvantage for current 
devices, but it is an inhibitory environment on advances in 
technology in the future.
    Earlier this week, Dr. Francis Collins, Director of the 
NIH, came and addressed a few of us at the Health Caucus. He 
talked about the changes that are occurring with genetic 
mapping and the new information that is coming online very 
rapidly. And this whole era of rapid learning can in fact lead 
to a multiplier effect in the development of many interventions 
that were never before imagined.
    Investment, yes. Congress does need to make an investment. 
But also the integration of information is going to be critical 
in the development of new interventions, and the FDA is the 
lynchpin in all of that.
    Certainly the National Institute of Health and the Center 
for Medicare and Medicaid Services need to be discussing with 
each other about future treatments that are going to be 
necessary and how to integrate those into the payment system. 
But if the pipeline is not unclogged at the FDA, then many of 
these new promises are never going to be kept.
    Now, President Obama talked in the State of the Union 
address and advocated for America to lead the way in technology 
and innovation. Unfortunately, his signature health care 
legislation passed less than a year ago, coupled with the Food 
and Drug Administration's confusing and sometimes disjointed 
approval process, has instead encouraged the offshoring of 
business that has brought medical discoveries to a halt.
    And let me yield the remaining time to the gentleman from 
New Jersey, Mr. Lance.
    Mr. Lance. Thank you very much for yielding; and thank you, 
Mr. Chairman.
    The medical device industry produces $135 billion in 
products and employs at least 422,000 residents of this 
country. In New Jersey, over 20,000 employees in the medical 
device industry produce nearly $6 billion in products. Many are 
employed at incubator companies that develop new devices.
    While the United States remains the leader in innovation in 
the medical device industry, that place is not set in stone. As 
the chairman has indicated, a recent study found that the U.S. 
is slipping as other nations are gaining. Unpredictable, 
inefficient, and expensive regulatory processes are 
jeopardizing America's leadership position in medical 
technology innovation.
    I look forward to hearing from the panel on ways we can 
improve the regulatory environment to strengthen our position 
as the global leader in medical technology.
    Thank you very much, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman and yields to the 
ranking member of the full committee, Mr. Waxman, for 5 


    Mr. Waxman. Thank you, Chairman Pitts, for holding this 
important hearing today.
    Let me start off with a couple of statements on which I 
think we all can agree. We all want to ensure that innovation 
in the medical device industry is vibrant and healthy so that 
we have access to the best and newest technological advances. 
We also want the medical devices we use to be as safe as 
possible and to have every confidence that they are effective. 
If there are factors that are preventing or inhibiting these 
things from occurring, we should all be united in doing 
whatever it takes to reverse these influences.
    But we cannot have a conversation about innovation and 
speeding new devices to the market without talking about the 
importance of ensuring the safety and effectiveness of those 
devices. So this hearing should be about how we can work 
together to meet these goals.
    We will hear today from witnesses invited by the 
Republicans who will express their concern that the FDA's 
device regulatory system is inhibiting innovation, depriving 
patients of new and potentially life-saving devices, and 
costing American's jobs.
    To focus on the other end of the equation, we have also 
invited two witnesses who will focus on FDA's responsibility to 
ensure the safety and effectiveness of devices; and we are also 
fortunate to have the FDA itself here to respond to concerns on 
both issues.
    We shouldn't be Democrats on one side of this issue and 
Republicans on the other. We should all be together and 
carefully exploring the concerns about the state of innovation 
of the device industry. It is important we ask some hard 
questions about the facts and data underlying these decisions.
    Although Dr. Makower's study, for instance, raises some 
important questions, it is also clear there are some 
significant limitations. So what it tells us about what is 
actually going on according to the study itself, it includes a 
very small portion of the device industry--only 204 out of some 
16,000 companies registered with the FDA. It also includes a 
majority of responses from companies that appear to have had 
very little previous experience with the FDA's regulatory 
    The study asserts that it takes much longer for devices to 
reach the market as compared to the EU. Obviously, we would all 
be concerned if that was the case. But we need to make our 
judgements based on good data. I think there are some real 
questions about whether Dr. Makower's study demonstrates that 
these EU versus U.S. time differentials even exist and whether 
Dr. Makower's study was comparing equivalent measures for times 
to market. I look forward to hearing from our witnesses on 
these points.
    I will also look forward to hearing from our witnesses 
about the need to assure that devices are safe and effective 
when they reach the market. There are countless and often 
tragic stories of patients injured, even killed, by unsafe 
devices. The study that Dr. Nissen will describe today shows 
that many devices that were recalled for serious safety reasons 
were not reviewed by FDA under the more stringent premarket 
approval, or PMA, process. That has got to be a concern. We 
need to ask why so many unsafe devices ultimately harm patients 
and explore what can be done to prevent injuries in the future.
    In order to have a flourishing and innovative American 
device industry that puts safe and effective devices on the 
market, we need to have a strong and well-resourced FDA that is 
in the best interest of American patients but it is also in the 
interest of the device industry itself. If patients lose 
confidence in the FDA, they will lose confidence in industry as 
    This is an issue that can and should be bipartisan. I look 
forward to hearing from our witnesses today and to working with 
my colleagues on this matter.
    Let me point out, Mr. Chairman, I wasn't aware of the fact 
that FDA was put in as just one of the members of this panel. I 
think if anybody is coming to testify from the administration, 
we have a long tradition of giving them a separate panel. And I 
know FDA agreed to testify here today. Had I been aware of it, 
I would have objected, because I think this is a very bad 
precedent. But we will go along with what has been agreed to 
for today, but I want it understood that this should be an 
exception, not the rule.
    FDA particularly should be the focus of a lot of our 
inquiry. Is there a culture at FDA where they are slowing 
things down? Or is it a fact that they don't have enough 
resources? It is ironic that on the House floor today we are 
voting on a budget that will cut FDA--cut a lot of other 
things--but cut FDA.
    So it is a little bit insincere when members talk about 
wanting to get more drugs and devices approved so that the 
consumers can get the benefits of the innovation, but, at the 
same time, we cut FDA to make it more difficult for them to 
accomplish that goal.
    Thank you, Mr. Chairman. Yield back my time.
    Mr. Pitts. The chair thanks the gentleman.
    There is a vote on the floor, so we will recess until as 
soon as possible after the last votes, about 10 minutes after 
the last votes, and we will reconvene at that time.
    The committee stands in recess.
    [Additional statements for the record follow:]

               Prepared Statement of Hon. John D. Dingell

    Thank you Mr. Chairman.
    Today's hearing focuses on a very important topic--the 
impact regulation has on the development and approval of 
medical devices in the U.S., as well as the impact these 
regulations have on job creation and patient access.
    In his State of the Union President Obama called on the 
need for government and business to work together ``to out-
educate, out-innovate, and out-build the rest of the world.'' 
This is a lofty goal, and a needed goal. Our peers in China, 
Japan, and India are hungry and motivated to be the leaders in 
the fields of education, science, and technological 
development--such as in the medical device field.
    Yet I would ask my colleagues this very important question, 
how can we out-innovate our neighbors when the proposed CR we 
are voting on this week cuts the FDA's funding by roughly 10 
percent--or $220 million. Our major research institutions will 
also see massive cuts--the NIH will see a cut of over $1 
billion, the NSF will see a cut of $359 million and the 
Department of Energy Office of Science will see a cut of $893 
million. How can our country out-innovate our competitors when 
we are blindly slashing the budgets of our country's research 
    As my colleagues know, I have been raising concerns for 
years about the state of funding at the FDA. I find it curious 
that some of my colleagues who express concern about the speed 
with which medical products are approved in this country are 
prepared to vote to cut funding for the agency responsible for 
approving drugs and devices--an agency that has been 
systematically starved of resources over decades.
    Many of my colleagues have also voiced strong opposition to 
user fees, and increasing these user fees. I would ask these 
colleagues, if you will not increase funding for FDA to hire 
the necessary personnel to improve the medical device process, 
and you will not support a user fee to improve the process, how 
do you expect our country to compete with China and Brazil and 
    I hope today will be an opportunity for all Members of the 
Committee to learn how very important resources are--financial 
and personnel--to the FDA's ability to fulfill its mission. 
More importantly, this hearing will allow us to begin to 
consider how best we can help our businesses work with FDA to 
accomplish both of their needs--the development of successful, 
safe and effective devices.
    I look forward to hearing from our witnesses and I thank 
you for your time.

               Prepared Statement of Hon. Edolphus Towns

    Mr. Chairman, Ranking Member Pallone, thank you for holding 
this important hearing on the impact of medical device 
regulations on jobs and on patients.
    Let me start out by saying that I am glad to see that we 
are holding a hearing on job creation. This is what the 
American people want to see, and it is what people in my 
district really want to see.
    I think it is important that while we consider regulations 
that impact companies, we should take a balanced approach and 
consider the impact these regulations have on patients. We need 
to do what we can to speed innovative products to the market, 
while ensuring that these products are safe. These devices 
range in risk--from low-risk products like tongue-depressors to 
high-risk products like aortic stints. It would be devastating 
to patients and their families for a defective or unsafe high-
risk product to be sped to market.
    I understand the criticism surrounding the regulatory 
process, but certain safeguards simply must be maintained in 
order to protect the public. Around 98% of medical devices each 
year are approved through the 501(k) process by the FDA, yet 
these devices rarely undergo any testing in patients, and 
manufacturing facilities are not subject to FDA inspections. 
Partially because of this, we have seen recent examples of 
withdrawals of medical devices such as implantable 
defibrillators that have frequently failed and resulted in 
inappropriate shocks or failure to function during cardiac 
arrest. Similarly, automated external defibrillators (AEDs) 
were approved
    under the 501(k) process, which have resulted in over 
28,000 reports to the FDA of AED failures, and hundreds of 
    A serious review of the safety of these devices may have 
prevented patients and their families from undergoing 
unnecessary suffering.
    It is clear that the review process by which FDA approves 
medical devices is in need of updated; however, let us not 
forget the serious public safety implications involved as we 
examine what needs to be done.
    Thank you, Mr. Chairman. I yield the balance of my time.

    Mr. Pitts. The hearing will reconvene with apologies to our 
    We have a panel of six. Let me introduce the witnesses.
    Dr. Jeff Shuren is the Director of the Food and Drug 
Administration's Center for Devices and Radiological Health. 
Dr. Joshua Makower is a Consulting Professor of Medicine at 
Stanford University. He is also the CEO of ExploraMed 
Development and a venture partnership at New Enterprise 
Associates. Mark Deem is the Managing Partner and Chief 
Technology Partner of The Foundry. Dr. Rita Redberg is the 
Director of Women's Cardiovascular Services and Professor of 
Medicine at the University of California, San Francisco Medical 
Center. Dr. Steve Nissen is a Professor of Medicine at the 
Cleveland Clinic Lerner School of Medicine and Chairman of the 
Department of Cardiovascular Medicine of the Cleveland Clinic 
Foundation. And Mr. Ralph Hall is a Distinguished Professor and 
Practitioner of Law at the University of Minnesota Law School. 
Without objection, your written statements will be inserted 
into the record. We will ask the witnesses to summarize their 
testimony into 5 minutes.
    At this time, we will recognize Dr. Shuren for 5 minutes.

                      MINNESOTA LAW SCHOOL


    Dr. Shuren. Mr. Chairman and members of the subcommittee, I 
am Dr. Jeff Shuren, Director of the Center for Devices and 
Radiological Health at the Food and Drug Administration. Thank 
you for the opportunity to testify today.
    Over the past decade, most indicators in medical device 
industry success have gone steadily upwards. From 2005 to 2009, 
the industry has added over 45,000 jobs, according to U.S. 
census data. It is one of the few U.S. manufacturing segments 
with a positive trade balance. An especially crucial indicator 
is the attractiveness of an industry to capital investors and 
entrepreneurs. In 2010, the medical device industry was fourth 
in attracting venture capital investment, up from 13th place 10 
years ago.
    Although the medical device industry has weathered the 
recession far better than most of our industries, the economic 
climate has had an impact, with some companies choosing to move 
overseas. And as recent reports note, the recession has also 
caused companies to change their business models to be more 
risk averse and therefore more sensitive to FDA regulatory 
    We recognize that smart FDA regulation is critical to 
maintain U.S. competitiveness. Some would say that, despite the 
record of growth and prosperity in the U.S. device industry, 
the European regulatory system is better for industry and 
patients. It is difficult to make direct comparisons between 
the U.S. and European systems, given their fundamental 
differences, including, at the most basic level, differing 
approval standards.
    The EU lacks the requirement in U.S. law that devices be 
shown effective. Device manufacturers in Europe select from a 
list of private companies for safety reviews and pay the chosen 
company for that review. The result is a European review 
process that does not have adequate public accountability, 
consistency, and transparency and is thus almost impossible to 
compare directly with FDA's.
    This is in part why the European Commission has proposed 
that the EU regulatory framework be strengthened to better meet 
European public health expectations and to make European 
industry more competitive globally.
    Our data reported to this committee just last week shows 
that, in fact, FDA's device review performance has been 
consistently strong; and even an industry funded study released 
just today shows we are beating the Europeans in the review 
time for lower risk and are in a tie for higher risk 501(k) 
    Perhaps the more important consideration vis-a-vis Europe, 
however, is our comparative safety records. As a recent 
industry funded study pointed out, the absence of a centralized 
public database that captures all EU recalls and approvals 
makes it impossible to accurately compare recall rates in the 
EU and the U.S., and yet that study shows that 85 percent of 
safety reports come from only 5 out of the 24 European 
countries examined, suggesting there is a significant 
underreporting of safety problems by some EU countries.
    In addition, that same study claims that both devices come 
on the market earlier in the EU and that recalls of specific 
devices in the EU and U.S. tend to occur within a few weeks of 
each other. If that were true, it would suggest that the EU 
takes longer to identify problems, exposing patients there to 
unsafe devices for a longer period of time.
    In just the past few months, a surgical sealant and a form 
of breast implants were determined to be dangerous and pulled 
from the market after being approved under the EU system and 
used in thousands of patients. The result was surgical removal 
and patient suffering. Neither of these products were sold in 
the U.S.
    Previously, other devices approved in Europe and not in the 
U.S. were pulled from the European market due to safety 
problems, in some cases, problems first identified in studies 
required by the FDA to support approval for U.S. patients. If 
those products had been approved here, I have no doubt we would 
be having a different hearing today.
    FDA has a responsibility to facilitate device innovation 
while assuring that devices are safe and effective. The 
comprehensive reports we released in August of last year showed 
that we have not done as good a job managing our premarket 
programs as we should. We have new reviewers who need better 
    We need to improve management oversight and standard 
operating procedures. We need to provide greater clarity for 
our staff and for industry about key parts of the 501(k) 
program. We need to provide greater clarity for industry about 
what we need from them to facilitate more efficient, 
predictable reviews. We need to find the means to handle the 
ever-increasing workload and reduce staff and manager turnover, 
which is almost double that in the drug and biologic centers.
    We need to meet all of these challenges to improve 
predictability, consistency, and transparency in premarket 
review programs.
    In January of this year, after extensive public input, we 
announced 25 specific actions we are taking this year to ensure 
that our premarket review programs both foster innovation and 
assure the safety and efficacy of medical devices for American 
patients. And just last week Commissioner Hamburg and I 
proposed the Innovation Initiative to accelerate the 
development and evaluation of innovative medical devices and 
strengthen the Nation's research infrastructure for developing 
breakthrough technologies in advancing regulatory science.
    Mr. Chairman, I commend the subcommittee's efforts; and I 
am pleased to answer any questions the committee may have.
    [The prepared statement of Dr. Shuren follows:]

    Mr. Pitts. The chair thanks the gentleman and recognizes 
Dr. Makower for 5 minutes.


    Dr. Makower. Thank you, Chairman Pitts, Ranking Member 
Pallone, members of the subcommittee. Thank you for the 
opportunity to testify today.
    My name is Josh Makower, and I have dedicated the past 22 
years of my life to developing therapies and technologies to 
improve patient care. Over this time I have founded six 
independent medical device companies which have created several 
hundred jobs and touched the lives of hundreds of thousands of 
patients worldwide.
    In addition to being a physician, inventor and 
entrepreneur, I co-founded the Stanford Biodesign Innovation 
Program to teach the process of medical innovation to the next 
generation of innovators.
    I am here today because I am deeply concerned that we are 
in jeopardy of losing U.S. leadership position in medical 
technology innovation as a result of the current regulatory 
environment at FDA. Over the past few years, it has been 
increasingly more difficult, more time consuming, more costly, 
and less predictable to navigate the FDA. As a result, 
investment is drying up, companies are moving overseas or 
closing their doors, and U.S. patients are being denied timely 
access to safe and effective new medical products. If this 
situation does not improve immediately, a generation of 
innovation businesses will be lost, along with the jobs they 
would have created and the lives they would have saved or 
    These are not my concerns alone. Numerous studies and 
reports over the past year document the difficulty innovators 
are having navigating the FDA.
    In response to questions from Members of Congress and FDA 
officials regarding the scope of the problems, I, along with 
several colleagues from Stanford, conducted a survey of over 
200 medical technology companies to generate data on their 
specific experiences. So much of what has become policy over 
the past few years has been based on anecdote and singular 
examples, and I felt compelled to bring data to this 
discussion. It is essential we use data to drive our decision 
making. Recognizing that all studies have limitation, mine is 
no different. However, the results of my study are compelling 
and justifiably cannot be ignored or dismissed.
    I have submitted the results of the full survey as part of 
my testimony but want to briefly point out some of the most 
significant findings.
    Most notably, the survey found that, on average, innovative 
new medical devices are available to U.S. Citizens 2 full years 
later than patients in other countries. In some cases, American 
patients wait as long as 6 years, longer than patients 
elsewhere for American-made technology. This hurts patients' 
health and U.S. competitiveness.
    There is no other way to say this. Today, American 
innovation, investment, and manufacturing in medical 
technologies are leaving this country and landing in Europe, 
Asia, and elsewhere first. These findings don't only have 
negative repercussions for patients. They hurt job creation in 
this country.
    The most innovative products being designed today are 
really made by small and mid-sized companies. These are the 
very innovators that the President and Congress have called 
upon to lead us out of our economic challenges, but they are 
starving for funding, and they are running out of time. They 
are being crushed with overly burdensome regulation; and now, 
with the medical device tax, they are being taxed before they 
ever become profitable. This is wrong, and we cannot let it 
    We all know we need an FDA. Their mission to protect and 
promote the public health is a good one. We all want products 
that have a reasonable assurance of safety and efficacy, but we 
cannot make the process so difficult or so costly that we kill 
the very innovation we depend upon to advance the public 
health, the very innovation we depend upon to advance our 
    Today, unfortunately, this industry is at a crossroads. 
Driven by high-profile anecdotes and a fear of making a 
mistake, our FDA has become more risk averse, while becoming 
less predictable, less reasonable than in any time in our 
    My colleagues and I who have spent our careers focused on 
patient care are now seeing foreign patients reaping the 
benefits of American ingenuity first before Americans ever get 
a chance to. We are seeing jobs move overseas; and, worse, we 
are seeing yet another one of America's great industries 
brought to its knees, struggling to survive under a system we 
    Let's work together to make sure that American patients and 
workers reap the benefits of these amazing medical advancements 
first. Let's work together to provide a predictable and 
reasonable regulatory environment for our Nation's med-tech 
entrepreneurs, and let's make sure that the generation of 
innovation is not lost forever. We owe this to the pioneering 
medical innovators who came before us, to our students, and the 
innovators of the future, to the men and women whose jobs rely 
upon us, and, most importantly, to the patients who depend upon 
us for their survival and their quality of life.
    Thank you.
    [The prepared statement of Dr. Makower follows:]

    Mr. Pitts. The chair thanks the gentleman; recognizes Mr. 
Deem for 5 minutes.

                     STATEMENT OF MARK DEEM

    Mr. Deem. Chairman Pitts, Ranking Member Pallone, and 
members of the subcommittee, thank you for having me here 
    My name is Mark Deem. A biomedical engineer by training, I 
spent 23 in medical device research and development. Today, I 
am a partner in a medical device incubator called the Foundry. 
Our job is to partner with physicians to investigate unmet 
clinical needs and to invent and develop technologies to create 
superior patient outcomes.
    Over the past 12 years, we have founded, funded, staffed, 
and run 14 startups. We have raised over $700 million in 
venture capital. We are inventors on over 250 issued and 
pending U.S. Patents, and we have employed over 500 people.
    Because of these startups, patients who 10 years ago would 
have had major open heart surgery for cardiac valve disease can 
now undergo a 1-hour catheter based procedure to have their 
valve repaired.
    Patients who would have been sent to a rehab facility after 
suffering a stroke to simply hope for the best can now have the 
blood clot responsible for that stroke removed using a tiny 
device threaded through their arteries.
    Patients with drug-resistant hypertension can undergo a 30-
minute procedure that lowers their blood pressure by 3 to 5 
times by what drugs can achieve.
    Startups are responsible for a huge percentage of the 
paradigm-shifting breakthroughs in medical care. We are the 
most fragile end of the medical device ecosystem, and we are 
struggling. Over the last 2 years, funding for new startups has 
dropped by almost 50 percent, down from 118 new companies in 
2008 to 60 in 2010.
    Delays and unpredictability at the FDA are one of the 
primary risk factors impacting this investment. Over a similar 
time period, the average time to PMA approval increased by 75 
percent; and many of those companies never get there at all.
    In 2000, we--emphasis medical to convert an extremely 
morbid open chest surgery to treat emphysema to a noninvasive 
scope-based procedure. Eight years and over $75 million of 
investment having met the clinical trial endpoints, the FDA 
denied approval for the therapy and recommended continuing on 
to new studies.
    In the face of these moving targets, the board voted to 
shut the company down in 2009. Forty employees lost their jobs, 
and the assets were sold at auction. The technology continues 
to treat patients overseas safely and effectively today.
    Also in 2000, we started a company named Satiety to develop 
a non-invasive, scope-based technology to reduce stomach volume 
and to treat morbid obesity and diabetes. Ten years and over 
$80 million of investment later, having met the trial endpoint 
but while still collecting long-term follow-up, we learned that 
the FDA was holding companies to a different standard than the 
ongoing study was constructed to demonstrate. Given past 
experience, the writing was on the wall for a request for new 
studies. Just before Christmas of 2010, 37 entrepreneurs lost 
their jobs as we shut that company down as well.
    Today, it is also harder than ever to even get a trial 
started in the U.S. In 2002, we started Exstent to develop a 
next-generation, drug-eluding stent. Starting in 2004, we 
worked with the agency to plan a trial, finally submitting an 
I.D. in 2007. For 2 years, the agency requested more and more 
data, ultimately requiring an animal study in pigs with a 2-
year follow-up. At the time, Exstent had data from European 
studies with 1-year follow-up on 220 patients, 2-year follow-up 
on 100 patients, and 3-year follow-up on 30 patients.
    While certainly nobody would consider U.S. patients as 
guinea pigs, there is no justification for ignoring that kind 
of data. Could 20 pigs in Michigan really provide more 
significant data than hundreds of patients in Europe?
    Finally in May of 2009, conditional I.D. Approval was 
granted to Exstent. But by then the company was out of money 
and was being sold at auction. Over 200 people lost their jobs. 
Today, development of that technology continues in China and 
    Experiences like these have led us to fundamentally rethink 
how we operate. Given the relative stability and predictability 
of the CE system, we are no longer structuring our companies 
for first commercial release in the U.S. We develop our 
products here and then run the same large, multi-center, 
randomized trial overseas that we would have conducted in the 
U.S. We then commercialize in the EU while we decide when and 
if to approach the FDA. As a result, as you have heard, the 
available of new therapies in the U.S. Can lag the EU by up to 
4 years.
    We recognize the challenges facing the FDA, and we do value 
its mission to protect and preserve public health. But we need 
consistency and clarity to help the FDA achieve its other 
mission of fostering innovation. A recent study by the Boston 
Consulting Group shows the EU's safety record is essentially 
identical to that of the U.S.
    So if we are not increasing safety, why should we be 
satisfied with a system that is driving investment, innovation, 
and jobs overseas? Why should we be satisfied with a system 
where U.S. patients wait 4 years longer for access to care that 
was pioneered in the U.S.? Because the sad fact is many of 
those patients simply will not live that long.
    [The prepared statement of Mr. Deem follows:]

    Mr. Pitts. The chair thanks the gentleman and recognizes 
Dr. Redberg for 5 minutes.


    Dr. Redberg. Thank you, Chairman Pitts, Chairman Upton, 
Ranking Member Pallone, Ranking Member Waxman, and others of 
the subcommittee for this invitation to present some of our 
work on medical devices.
    I am Rita Redberg. I am a professor of medicine and full-
time faculty member at the University of California, San 
Francisco Medical Center in the Division of Cardiology. I am 
also the chief editor of the Archives of Internal Medicine, a 
well-respected peer-reviewed medical journal which publishes 
much research in the area of internal medicine as well as in 
medical devices. I was a Robert Wood Johnson Health Policy 
Fellow in the office of Senator Orrin Hatch, and I am currently 
a member of the FDA Cardiovascular Device Expert Panel as well 
as the California Technology Assessment Forum.
    As a practicing cardiologist, I am very grateful for the 
advances in medical technology that have allowed me to take 
better care of my patients every day. However, I have great 
concerns that many high-risk devices that are reaching the 
market today are doing so without the benefits of clinical 
trials which are essential to assure safety and effectiveness 
for my patients.
    Although the 501(k) process was logical and well-
intentioned when introduced in 1976, it has in no way kept up 
with the increased number and complexity of medical devices now 
available today, particularly in my own field of cardiology as 
well as in orthopedics.
    Unfortunately, although a new device sounds very exciting 
and glamorous, it cannot be said to be innovated unless it has 
been shown in a well-done clinical trial to have actual benefit 
for patients. No matter how innovative a device is, if it is 
not showing benefit for patients, it is not--I will consider it 
innovative, and it can't be considered to be beneficial.
    Unfortunately, we now have a process where more high-risk 
devices are going through a 501(k) clearance than are going 
through the original PMA process. The GAO report in 2009 
entitled ``FDA Should Take Steps to Ensure That High-Risk 
Device Types Are Approved Through the Most Stringent Premarket 
Review Process'' found that less than 1 percent of all new 
devices go through the PMA process. That was not the intent of 
Congress; and, at the time, FDA resolved to either reclassify 
these high-risk devices to a lower-risk class or to go through 
an original premarket approval process. Unfortunately, that has 
not yet happened.
    I want to give you one example of the inferior vena cava 
filter. This was published in the Archives of Internal 
Medicine. The Bard Recovery and inferior vena cava filter and 
G2 device were approved by the FDA pursuant to the 501(k) 
process. The filter is an umbrella-like device that is put in 
the main vein in the heart in order to trap clots. This device 
was investigated by surgeons, including Dr. William Nicholson 
and colleagues in Pennsylvania, because they noted that several 
patients of theirs who had this device were coming back in with 
severe chest pain and shortness of breath.
    Upon investigation, they discovered that this device was 
fracturing and moving to other parts of the body, including the 
heart, causing puncture of the heart and severe complications. 
These doctors took it upon themselves to investigate all of the 
patients at their hospital that had received this device over 
the last 5 years and found that fully one in four of one type 
and one in eight of the other type of this filter had 
fractures. They published these findings as well as notified 
the FDA.
    In my own research on this device, I was shocked to 
discover that this clearly high-risk implanted device had gone 
through FDA 501(k) clearance without the benefit of any 
clinical trial data; and, in fact, there is no randomized data 
to show that inferior vena cava filters are superior to other 
methods for treatments of blood clots and prevention of 
recurrent of pulmonary emboli.
    The FDA on the day we published these studies on August 9 
last year issued a warning reminding physicians to retrieve 
these filters because they were meant to be put in and then 
removed. However, less than 7 percent of all of these filters 
are currently retrieved.
    When I investigated on why the FDA waited 5 years and 921 
adverse events to release this morning, I learned that the FDA 
did not know there were so many serious adverse events because, 
unfortunately, the computer systems available are arcane and 
don't allow for real-time monitoring; and so I think that, in 
order for the FDA to fulfill its mission of protecting the 
public safety, the FDA needs increased resources and staffing.
    We heard that the medical device industry is $135 billion a 
year in products that are currently covered by Medicare as well 
as private insurance. In contrast, the Center for Devices and 
CDRH receives a small budget of $272 million to do all of the 
premarketing as well as post-marketing surveillance of this 
huge device industry.
    So I think to allow the FDA to fulfill its mission to 
ensure safety and effectiveness, and that includes adequate 
premarketing and post-marketing data, we need to give the FDA 
adequate resources to do so.
    Thank you so much.
    [The prepared statement of Dr. Redberg follows:]

    Mr. Pitts. The chair thanks the gentlelady and recognizes 
Dr. Nissen for 5 minutes.


    Dr. Nissen. Thank you for the opportunity to testify today.
    My name is Steven E. Nissen, M.D. I am chairman of the 
Department of Cardiovascular Medicine at the Cleveland Clinic. 
My testimony does not reflect the views of the Cleveland 
    I agree with the underlying premise of these hearings. For 
decades, the American medical products industry has been 
responsible for innovations that have saved lives, reduced 
suffering, and sometimes even lowered medical costs. I also 
agree that this industry creates high-quality jobs that 
contribute to the Nation's economic health.
    The dilemma proposed by today's hearings is how to best 
promote innovation, while protecting the health of the American 
people. Medical devices are regulated via an antiquated 
regulatory system originally devised in 1976 that employs two 
very different pathways to market.
    Premarket approval is a rigorous standard similar to the 
approach used to regulate pharmaceutical products. The 501(k) 
provision allows products to be cleared for market if they are 
deemed substantially equivalent to devices already marketed, 
many before 1976. Surprisingly, 35 years later, the 501(k) 
pathway is now used for 98 percent of all medical devices. 
501(k) cleared devices rarely undergo any testing in patients, 
and manufacturing facilities are not subject to FDA 
inspections. Often, new devices are very dissimilar to 
previously marketed medical products, use different materials 
and manufacturing processes, and have different intended uses.
    The abbreviated 501(k) process was never intended for Class 
III medical devices, products used for life-supporting or life-
sustaining indications. However, FDA has sometimes cleared such 
devices for market using the 501(k) provision, a policy that 
was sharply criticized by the GAO in a 2009 report.
    In recent years, several high-profile withdrawals of 
medical devices have resulted in serious injuries or death. In 
a particularly poignant example, a faulty lead used in an 
implantable defibrillator frequently failed, resulting in 
inappropriate shocks or, worse, a failure to function during a 
cardiac arrest, resulting in death.
    When this problem was identified, patients were presented 
with an agonizing choice: to undergo an operation to remove the 
defective device or take their chances that it wouldn't fail 
when needed to save their life.
    An artificial hip joint used in 13,000 patients failed 
rapidly, often releasing toxic metal debris which sickened 
thousands of patients. Again, patients faced the choice of a 
painful and risky operation or accepting the possibility of 
serious health consequences.
    We recently analyzed all 113 high-risk medical device 
recalls from 2005 to 2009 of products FDA deemed could cause 
serious injury or death. Surprisingly, 71 percent of these 
high-risk recalls involved devices initially cleared using the 
501(k) process. Only 19 percent had undergone full PMA 
    This finding represents a paradox. If by Federal 
regulations high-risk devices should not be cleared using the 
501(k) provision, there should almost never be recalls of such 
devices for life-threatening defects.
    The total number of devices recalled in this interval 
exceeded 112 million. According to FDA data, more than 2,000 
deaths are reported each year from failure of medical devices, 
rising to nearly 5,000 in 2009. These statistics illustrate the 
need for a balanced approach to medical device regulation.
    Although we all want to stimulate innovation and job 
creation, we cannot allow deregulation to place the American 
public at risk for serious health consequences from defective 
products. A more nuanced approach to device regulation would 
appropriately balance the need for timely approval with patient 
    Components of reform should include: a more accurate 
definition of a high-risk device which takes into account the 
likely risks if the device is defective; an intermediate 
regulatory category more rigorous than 501(k) but short of a 
full PMA process for moderate risk devices; and, very 
importantly, better funding for the FDA Center for Devices to 
enable timely but thorough evaluation of the risks and benefits 
of medical devices.
    Thank you again for the opportunity to appear here today.
    [The prepared statement of Dr. Nissen follows:]

    Mr. Pitts. The chair thanks the gentleman and recognizes 
Mr. Hall for 5 minutes.

                    STATEMENT OF RALPH HALL

    Mr. Hall. Chairman Pitts, Ranking Member Pallone, members 
of the committee, I appreciate the opportunity to appear today 
and to discuss with you the 501(k) system in general and 
specifically some research I have done into the safety profile 
of devices cleared via that process.
    I serve on the faculty at the University of Minnesota Law 
School where I teach in the food and drug law area and 
concentrate my writing and my research in that area. In 
addition, I work part time with the law firm of Baker & 
Daniels, counseling firms in FDA matters; and with three other 
individuals we have formed a startup medical device company 
called MR3 Medical.
    Going back several years when the debate over the 501(k) 
system began, I observed that the debate was taking place with 
little data. There was a lot of anecdote, a lot of individual 
events that people were discussing; and at a public meeting 
about a year ago I commented we were involved in a ready, fire, 
aim situation.
    And, therefore, I conducted a study--the first of its kind 
I believe--to try do assess the safety profile of 501(k) 
products. This was funded by the Kauffmann Foundation out of 
Kansas City. I was given total academic freedom.
    It should be clear that I am speaking in my individual 
capacity, not on behalf of any entity, particularly the 
University of Minnesota. In this study, we analyzed Class I or 
high-risk recalls for over a 5-year time period. We coded these 
for a number of factors, including the reason for the recall. 
We think that is critical, because you need to identify events, 
recalls, then the cause of that, in order to identify what can 
be done to address it.
    The results of this is we had 118 Class I recalls, 112 of 
which were relevant. The other 6 involved counterfeit products, 
things like that. Of these, 89 involved 501(k) products. This 
has to take into account the number of 501(k) submissions 
during the time frame. You can't simply look at the numerator. 
During this same time frame, the best estimates are, there were 
over 19,000 501(k) submissions. What that means is, from a 
safety perspective, greater than 99.5 percent of all 501(k) 
submissions did not result in a Class I recall during the study 
    We then further delved into the data and identified which 
reasons for the recall related to post-market issues, as 
compared to pre-market issues. Obviously, an issue that happens 
5 years after the product is approved or cleared, because of a 
labeling mistake or whatever, is not accountable to the 
approval process. And it turns out that less than half of all 
recalls relate to issues that could have involved pre-market 
activities. We further analyzed the data, looking at the 
reasons for the recall, and less than 9 percent of all recalls 
involved issues other than quality system issues.
    What this indicates to us is the system, as a whole, from a 
safety perspective, is operating very well. Can we do better? 
Of course. Do we need to do better? Of course.
    To help with that effort, then, we did a subanalysis even 
further by type of device, and we identified the concentration 
of recalls in automatic external defibrillators and infusion 
pumps--28 percent of all recalls. Interestingly, the agency has 
now commenced two initiatives on those products. From our 
perspective, that is the right way to approach this: identify 
the issue and address the specific issues. The information I am 
talking about has been presented to the IOM, reviewed with FDA 
and other stakeholders.
    So what does our study then conclude? FDA has an excellent 
safety record in the 501(k) program. Improvements can be made. 
We need to strive for improvements. We need to always 
concentrate on the risk-benefit analysis. And the most 
effective way to improve the safety profile of products is to 
increase and further emphasis on quality systems, as compared 
to pre-market products.
    Stated differently, change in the pre-market clearance 
process, based upon our data, will have a minimal effect on 
reducing the number of recalls. Therefore, our conclusion is 
that the focus should be on quality systems as a primary way to 
improve the safety of products for the U.S. public.
    Thank you very much. I would be happy to answer any 
    [The prepared statement of Mr. Hall follows:]

    Mr. Pitts. The chair thanks the gentleman, thanks all the 
witnesses for your testimony.
    And we will go to questions at this time. The chair 
recognizes himself for 5 minutes for questioning.
    We have heard a lot of discussion today on the medical 
device approval process used by the FDA. Mr. Hall, your study 
focused on recalls of medical devices approved through the 
501(k) and the PMA process. Based on your research into the 
recalls, is FDA clearing unsafe products?
    Mr. Hall. In my study, FDA has an excellent record in 
approval of products, with greater than 99.5 percent of 
products not experiencing a recall.
    Mr. Pitts. Could you comment, please, on the study 
published this week in the Archives of Internal Medicine? How 
did those study authors end up with recall results that are 
much higher than what your study found? And can you comment on 
the methodology used in the Archives of Internal Medicine 
    Mr. Hall. Yes, Mr. Chairman. The data that was used by both 
studies ended up with very similar numbers for what I call the 
numerator. I had 118 Class I recalls. I believe they had 112 or 
113, something like that.
    Where the differences are is that we also went beyond just 
looking at the number of absolute recalls, but looked at the 
percentage of that compared to the number of submissions. If my 
daughter comes home and got, you know, 80 wrong out of 150, 
which is the number of PMAs, that is a problem. But in the 
501(k) world, there are over 19,000. So we are talking about in 
their study 80, in my study 89 recalls out of over 19,000.
    We also looked at the reason for the recall. That is 
critical to understand what to focus on.
    Next, there is a confusion about comparing high-risk 
devices for approval process to high-risk devices for recall. 
Those are very different things, and it is important that the 
committee understand that. The classification for an approval 
is the risk for the intended use. The recall is the risk to the 
patient for the malfunction.
    And let me give you a very simple example, a tongue 
depressor. No one would consider a tongue depressor to be high-
risk or needs a clinical study. But if the tongue depressor 
gets contaminated with a deadly bacteria, the recall for that 
tongue depressor should be a high-risk recall. And so, you 
cannot link the approval classification with the recall.
    A final comment on the lawyer--I am a law school professor. 
At a different environment, we should talk about--there are a 
number of statements about the law in the article, which I 
think need to be corrected.
    Mr. Pitts. Thank you.
    Dr. Makower, in your work, you find that companies spend 
$31 million to bring low-risk devices to market. And, of that 
amount, $24 million is spent navigating the FDA approval 
process. Your findings for bringing higher-risk devices to 
market are even more staggering. Companies must spend $94 
million, spending $75 million navigating the FDA approval 
    Can you break down the investments that a typical company 
might make to help them navigate the FDA? How feasible is it 
for a small company to come up with appropriate funding to 
navigate the process at the FDA?
    Dr. Makower. Quite honestly, these are figures that are 
exceeding venture capital's ability to fund startups to these 
levels. And, thus, that is why we are seeing a decrease in the 
number of startups, because people don't want to take that big 
financial risk for getting these products all the way to 
market. And with those costs increasing, that capital just is 
not available.
    Mr. Pitts. Mr. Deem, would you care to comment on that, 
too? Have any of your companies closed because of the expense 
involved in navigating the FDA process?
    Mr. Deem. Each of the three examples that I gave today, at 
the end of the day, ended up shutting the doors because it was 
the judgment of the board of directors that further investment 
to continue through the regulatory process, given the barriers 
that they had already hit and the moving milestones that they 
were being asked to hit, the further investment was just not 
    So it wasn't that we didn't think that ultimately we could 
get through the process. We thought perhaps eventually we could 
get through. But given the moving goalposts involved, the extra 
investment was not justified, and the companies were shut down.
    Mr. Pitts. Just one final question, Dr. Makower. According 
to your work, device approval times in the U.S. are much longer 
in the U.S., compared in Europe. And you find that those 
companies who spoke with the FDA about conducting a clinical 
study for their low- to moderate-risk device before making a 
regulatory submission, the pre-market process took an average 
of 31 months from first communication to being cleared to 
market the device. In contrast, the equivalent process in 
Europe took an average of 7 months.
    And the higher-risk devices seeking pre-market approval, 
companies indicated, took an average of 54 months to work with 
FDA from first communications to being approved to market the 
device. In Europe, it was 11 months.
    Did your study identify any reasons as to why there is such 
a discrepancy in approval times?
    Dr. Makower. The major difference is that, in Europe, a 
study run by high-quality investigators that makes clinical 
sense to a specialist in the field are generally accepted as 
data for approval, and there isn't a lengthy negotiation over 
end points or study design that usually happens in the United 
    Whereas, in the United States, that process, even just the 
process of obtaining an IDE, which is the approval necessary to 
do a study in the United States, that can take years. And so 
that, alone, is a reason why the two systems are different.
    Mr. Pitts. Thank you.
    The chair recognizes the ranking member for 5 minutes for 
    Mr. Pallone. Thank you, Mr. Chairman.
    I am going to ask Dr. Shuren a question. But before I do, I 
just wanted to say, I think it is important that when we talk 
about innovation, which is what I talked about in my opening, 
and, of course, the President talks about it constantly, that 
when we talk about innovation, we talk about safety and 
effectiveness of devices at the same time. Because innovation 
in devices can generate positive changes in the health of all 
Americans but only if we can properly ensure the safety of 
those devices.
    But navigating the FDA process, you know, shouldn't be 
unpredictable and it shouldn't be unreasonably long. So I was a 
little stunned to hear Dr. Makower's finding that it is 2 years 
longer for approval in the U.S. As compared to Europe for low- 
or moderate-risk devices and 3\1/2\ years longer for higher-
risk devices.
    I wanted to ask Dr. Shuren, you run the center responsible 
for these approval times. And I find these numbers outrageous, 
this difference between the U.S. and Europe. How is that 
possible? What is the situation?
    Dr. Shuren. I don't think, with all due respect to Josh, I 
don't think the study is an accurate reflection of what is 
going on now. And putting aside the very low reporting in this 
survey, which means it is going to be biased to the most 
dissatisfied, if you actually look at the data on PMAs and this 
long time between us for approval and the EU, the time frame is 
at 54 months versus 11 months.
    In the U.S., you can come talk to us before you have 
designed a clinical trial. You can talk to us about what the 
data needs are, then develop the clinical trial. Regardless, 
you are going to come in at the time you are going to do a 
clinical trial.
    If you applied that here for the EU, look at the 11 months. 
It means you would come in to talk, you would develop a 
clinical protocol, you would set up your study, you would 
enroll your patients, you conduct the study, you collect your 
data, you analyze it, you put together a submission, you send 
it to the private company who reviews it, and they make a 
decision. In 11 months? That means a clinical study of 4 weeks?
    This is comparing apples and oranges. This is comparing 
when you come in to talk to us as opposed to review times. If 
you actually go ahead----
    Mr. Pallone. I am going to have to interrupt because I have 
to get my other questions in here.
    I was heartened to hear President Obama's comments at the 
State of the Union Address about how the U.S. needs to win the 
future and promote innovation. I keep talking about it. In my 
own State, you know, we have a serious life science industry. 
And I know that FDA also places a high importance on promoting 
    But you mentioned something in your testimony about the 
steps you have implemented to promote innovation. Can you tell 
us about that, what you are exactly doing to promote 
    Dr. Shuren. Certainly. Well, starting with even the actions 
we are talking under our 501(k) improvement plan, it is about 
increasing predictability, consistency, and transparency 
through guidance, through training, through administrative 
changes to make sure there is greater management oversight in 
decision-making, even leveraging experts outside of the agency 
to better inform us on tough scientific questions.
    But we are also announcing an innovation initiative, 
creating what we call an Innovation Pathway. It is a paradigm 
shift in how we approach breakthrough technologies, in which we 
forward-push our resources. We frontload them so we are 
involved early on, and we can address some of these tough 
scientific questions early on. And we think, under that 
program, we can cut our review time in half.
    Mr. Pallone. Thank you.
    Let me just ask you one more thing. I want to ask about 
resources, Dr. Shuren. As I am sure you are aware, the House 
Republicans have put forward a continuing resolution that would 
slash the FDA's budget by 10 percent. And these are cuts on top 
of what is already an underfunded agency, in my opinion.
    If these drafted cuts were to be passed into law, will you 
have the resources to support new initiatives like this 
Innovation Pathway? And how would these cuts affect your 
ability to make clearances and approvals more timely and 
    Dr. Shuren. Well, the Innovation Pathway would be a non-
option. And for the rest of what we do, this would result in 
increased delays in decisions. It would deny patients truly 
safe and effective innovative technologies. And it will result 
in jobs being lost.
    Mr. Pallone. Well, I am just going to go down the panel. 
Let me just ask--and I have a minute left--does anyone on this 
panel think that drastic cuts to FDA make much sense right now?
    We will start--obviously, Dr. Shuren doesn't.
    Dr. Makower?
    Dr. Makower. Drastic cuts to--sorry?
    Mr. Pallone. Well, you could say ``yes'' or ``no'' if you 
want. Do you think that drastic cuts, the cuts we are talking 
about, make sense now?
    Dr. Makower. I am not sure.
    Mr. Pallone. All right.
    Mr. Deem?
    Mr. Deem. I haven't looked closely at the situation. 
Obviously, I would need to look at the efficiencies that are 
involved in the process, as well as the overall number.
    Mr. Pallone. Okay.
    Dr. Redberg?
    Dr. Redberg. I think substantial investment is required for 
the FDA for resources and staffing, as well as the entire 
electronic infrastructure so that it can actually do pre-
marketing and post-marketing surveillance, as it would like to.
    Mr. Pallone. Thank you.
    Dr. Nissen, yes or no?
    Dr. Nissen. No.
    Mr. Pallone. Mr. Hall?
    Mr. Hall. My thinking, if that is what the Congress 
decides, the agency is capable of meeting its statutory and 
public health requirements.
    Mr. Pallone. Okay. Thank you, gentlemen.
    Thank you, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman and yields to Dr. 
Burgess for 5 minutes for questions.
    Dr. Burgess. Thank you, Mr. Chairman.
    And, of course, funding for the FDA, just to pick up on Mr. 
Pallone's point, has been an issue that this committee has 
looked at. For the 6 years that I have been on the committee 
prior to this term, we have increased the authorization for FDA 
spending on multiple occasions, but with both Republican and 
Democratic appropriators, those funding levels have not been 
    So it is all well and good to criticize a process that is 
going on today. It is a process that was left over from last 
year. It is unfortunate it looks the way it does, but I really 
appreciate Mr. Hall's comments. It is up to us to provide the 
funding. It is up to the administrator at the FDA to get the 
job done with the tools at hand.
    Why would you pay more for what you are getting? We want 
more of this? How far away from desirable do we care to be? And 
this was really what is driving a lot of this discussion today.
    It appears that the average 501(k) decision has risen 
almost 20 percent from 2002 to 2008: 97 days in 2002, 116 days 
in 2008. The director recently released a letter emphasizing, 
just as you reiterated this morning, the FDA's dedication to 
increasing predictability, reliability, efficiency, and 
transparency of the regulatory pathways--all good things.
    Last year, when I was on another subcommittee, I wrote to 
you with my concerns that you were, in fact, altering the 
processes, but doing so independently, without consulting 
Congress. So I will reiterate the question I asked you in a 
letter last summer. How, specifically, does the FDA plan to do 
this? And why did you undertake those efforts with the IOM 
study still not completed?
    Dr. Shuren. So what we plan to do is a series of actions 
that we announced. And when we put together these reports--and 
we undertook these reports in part because of concerns that 
were raised by industry and also concerns that were raised by 
consumer and patient groups. And we went out and we conducted 
comprehensive outreach. We had two public meetings, three 
public dockets, three town hall meetings. We put out two 
reports, 55 recommendations in the summer, and we asked for 
public comment on that. We came and we briefed staff on the 
Hill, both before and after we went out with our actions just a 
few weeks ago.
    Those 25 actions are based around greater clarity through 
guidance about the 501(k) program, about when to submit 
clinical data, about fixing what is called the de novo 
process--it is a process for the lower-risk innovative 
devices--because it has been broken for years, and it needs to 
be fixed; better training for my staff. I rolled in--we did not 
have core competencies. We are now putting in place core 
competency training----
    Dr. Burgess. Let me stop you there. And perhaps we can get 
some of this accomplished in a written exchange that I had 
asked for last summer.
    Dr. Redberg emphasized the lack of effective electronic 
capability of handling the data, the infrastructure, the 
architecture for the information technology. How are you doing 
with that? You have been given additional funds over the last 3 
years. Are you there yet? Are you getting there? Have you been 
able to digitize your data, not just in the new drug 
application, not just the device application, but throughout 
the agency?
    Dr. Shuren. I can't speak for throughout the agency, but we 
are moving forward. We have made progress for setting up the 
new database for adverse event report reporting----
    Dr. Burgess. But we kind of hear that every year. And are 
you there yet?
    Dr. Shuren. We are not there yet.
    Dr. Burgess. And give us a reasonable expectation of when 
that might happen.
    Dr. Shuren. We are expecting to have the first prototype up 
this year.
    We will also be coming out this year with the unique device 
identification regulation, too. And that is going to be 
critical for linking a device with the clinical experience with 
that device we don't have right now.
    Dr. Burgess. An excellent idea and, I think, one we have 
heard before. It is just that we are all anxious for that to 
happen. Because, as I indicated in my opening statement, there 
are going to be real challenges for the researchers at NIH, Don 
Berwick and his crew at CMS being able to implement those new 
tools that they are given by NIH, and you guys stand in the 
middle. So you are either going to be the facilitator or the 
bottleneck. And I just pray that you are going to take that 
facilitator role very, very seriously.
    Let me just ask you one other question that came up about--
I think it was Mr. Deem, or perhaps it was Dr. Makower that 
brought it up--the Newsweek article on the race to grow new 
organs, and organs being grown on scaffolding with the 
patient's own cells.
    There was a doctor, Anthony Atala, at North Carolina 
growing new body parts for a particular type of difficulty that 
children could be born with. And, as a consequence, he 
received, I guess, an emergency designation to do this in 
seven, eight, or nine patients from the FDA. Showed some great 
results. Of course, no rejection because it was the patient's 
own cells. Vascularization occurred after these devices were 
implanted. And when you got back to him, you said, ``Well, we 
will have to show it works in animals.'' I mean, this is kind 
of crazy stuff that just drives people nuts.
    You have a small series of 7 to 10 patients where it is 
working, and you tell this guy, ``Go back to square one, spend 
another $5 million, and let's prove this will work in dogs 
before we do it in any more people.'' That is why it goes to 
Europe. That is why it goes to Europe.
    Dr. Shuren. We will look at it, but this may actually 
involve the other center, the Center for Biologics.
    But we do take it very seriously. And I will tell you--I am 
new at the helm, a little bit over a year. And I will tell you, 
during that time, we have been making some important changes. 
And our performance--and you did ask before--our performance 
actually has been improving. And that 501(k) time actually, for 
us, we have been doing very well.
    What we have found, though, is that the times are going up 
because industry isn't pulling its fair share. It has been 
sending us poor-quality submissions. We have been seeing poor 
clinical studies. And we meet with companies, and they like to 
meet with us, and they are ignoring our recommendations in 
terms of what to do.
    If we are going to fix this, FDA needs to make changes. And 
we made a commitment to do that, and we are moving forward on 
them. But we also need industry to be held responsible, too, 
for its failures, for the things that we cannot control.
    Dr. Burgess. Mr. Chairman, could I just ask unanimous 
consent that industry be allowed to respond? Dr. Makower and 
Mr. Deem are sitting right there.
    Mr. Pitts. Without objection, so ordered.
    Dr. Makower. I think the issue is, what is reasonable? And 
that is what this comes down to. And I think you pointed out an 
example of exactly the type of thing that frustrates industry.
    We are trying to help patients and we are trying to bring 
therapy forward, and sometimes the requests and the 
requirements--the reason why we can't get agreement on a 
clinical trial protocol is because what is being asked may 
sometimes be extraordinary, beyond what is a reasonable 
requirement, and sometimes what is impossible, where you know 
you have an early-stage technology, it must evolve.
    And so, we are depriving physicians, patients the 
opportunity to get access to these things earlier. And that is 
the net impact, is that disagreement, that time frame is what 
is really delaying innovation reaching patients.
    Mr. Pitts. The chair thanks the gentleman, and recognizes 
the gentleman from Illinois, Mr. Shimkus, for 5 minutes for 
    Mr. Shimkus. Thank you, Mr. Chairman.
    Mr. Chairman, if you don't keep a hold on Burgess, he will 
just consume the whole time. I learned that as ranking member 
last Congress. He is very impassioned, and we appreciate his 
    Let's just talk. The Nation sent a new Congress here to 
deal with the national debt, the deficit, and job creation. The 
hearings that we have had here in the committee are really 
focusing on, how do we create jobs without spending money? And 
the answer is, we have to ease the regulatory burdens.
    The agency is not going to get any more money. So you can 
ask all you want; there is no more money. So if you have 
demands of which you have to do, you have to talk to us and 
say, ``You know, you put this demand on us''--which we have. 
Part of it is our problem. Say, ``This is really a stupid thing 
we shouldn't be doing.'' And if we jettison this, that will 
free up money to do what we really need to do.
    So, you know, I reject this argument that you all need more 
money. Just like people at home, just like businesses who are 
in lean times, they have to make difficult decisions to get 
back to core competencies. And I think there is an argument, 
especially in this, that we are slowing the process down so 
much in some of these devices it is nonsensical, and it hurts 
job creation.
    Now, I have a couple of questions that I want to talk 
about. In October, at that time, I was ranking member of this 
subcommittee. I joined 11 of my colleagues in sending a letter 
to FDA on the 501(k) reform changes. In that letter, we asked 
FDA for an economic analysis of those changes so we could know 
if it would hurt American job creation.
    Dr. Shuren, if you can give me a ``yes'' or ``no'' answer, 
did you provide that economic analysis?
    Dr. Shuren. No.
    Mr. Shimkus. Thank you. That is typical of Federal agencies 
that I have been dealing with for the last couple of weeks.
    Mr. Makower and Mr. Deem, since the FDA didn't provide it, 
let me ask you, what could be the economic impact of these 
changes on American device companies?
    Dr. Makower. These changes being?
    Mr. Shimkus. The 501(k)----
    Dr. Makower. Many of them are things that make sense and, 
actually, I don't really think even need much approval. 
However, there are several changes that are being proposed that 
could have a devastating impact on our ability to bring----
    Mr. Shimkus. Quickly, give me a couple examples.
    Dr. Makower. One example is, kind of, the definition of 
what is an intended use. And depending on how that is 
characterized, if that is characterized in one way versus 
another, it may require companies to study not only the 
intended use that they are actually pursuing to get a label on, 
but all other possible indications that doctors might use it 
on, which would delay access and would probably prevent many 
technologies from reaching the market.
    Mr. Shimkus. Mr. Deem, can I ask you? Did you follow the 
question, and do you have a response?
    Mr. Deem. Sure. I think we are also concerned and watching 
closely what is going to happen with the designation of a Class 
II-b and the requirements and guidances for clinical study that 
will come out of that. And that is still yet to be determined, 
but we are watching it very closely.
    And the reason we are watching it very closely is that the 
FDA right now has the latitude to require clinical data from a 
501(k). In fact, the only two 501(k)s that we have done out of 
our 14 companies, we have provided clinical data. We have 
provided randomized, controlled, blinded clinical data for 
    So it is a misnomer that that doesn't happen. It certainly 
does, and it can, under the current system. What we worry about 
is how rigorously and how rigidly these other designations 
might codify that.
    Mr. Shimkus. Thank you.
    And I am going to try to get this done in my last minute.
    Dr. Shuren, I understand that you are sending seven of the 
most important 501(k) changes to a panel of the Institute of 
Medicine. I understand, also, there are serious questions as to 
the composition of this panel and the role you gave this panel. 
So I have the following questions.
    Does this panel have any innovators or inventors?
    Dr. Shuren. I do not believe so.
    Mr. Shimkus. Does this panel have any biomedical engineers 
or technical experts?
    Dr. Shuren. It does.
    Mr. Shimkus. Could you provide those names to us? Not now.
    Does this panel have any entrepreneurs and investment and 
venture capital experts?
    Dr. Shuren. Not specifically.
    Mr. Shimkus. Does this panel have any patient or patient 
groups who are in need of products currently under the 501(k) 
    Dr. Shuren. They do have people with connections with the 
patient community.
    Mr. Shimkus. And I would like their names, too, because I 
don't believe you do.
    How much taxpayer money did you give this IOM panel?
    Dr. Shuren. I will get back to you on the exact figure.
    Mr. Shimkus. Mr. Hall, do you believe the IOM panel is 
qualified to make decisions on the 501(k)?
    Mr. Hall. I think the current members are each individually 
very talented. I am concerned that the committee does not have 
patient representation, does not have representation from 
entrepreneurs, the people that fund this, industry groups, et 
cetera. And if you look at other IOM committees, such 
representation is often there.
    Mr. Shimkus. Thank you, Mr. Chairman. I yield back my time.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the gentleman from Pennsylvania, Dr. Murphy, for 5 minutes.
    Mr. Murphy. Thank you, Mr. Chairman.
    Dr. Shuren, a couple of questions for you, and this relates 
to some areas of jurisdiction for FDA and given the limitations 
of funding and trying to stretch yourself in many ways.
    I am looking here on the Web site, the FDA states it will 
regulate devices used in the, quote, ``cure, mitigation, 
treatment, or prevention of disease,'' unquote.
    I am curious, if a kit is used by an employer to test or 
screen for the presence of drugs, would that be a ``mitigate, 
treat, or prevent'' disease category?
    Dr. Shuren. Yes. And we have been regulating those devices 
for about 20 years.
    Mr. Murphy. What kind of tests?
    Dr. Shuren. These are both laboratory-based tests and 
point-of-care tests, so tests that are actually used in the 
    Mr. Murphy. And are they used to treat or diagnose?
    Dr. Shuren. Yes, if they are not used right, then people 
actually who should get treatment get missed. People who may 
have an addiction get missed, and they pose a risk then to the 
employees. Or they get false results, and they wind up losing 
their employment.
    Mr. Murphy. Do those tests--are they used in such a way 
that a single test can cause them to lose employment, or are 
they followed up? And if there is a follow-up, is that one that 
really deals more with the employment issue or the treatment 
    Dr. Shuren. Well, I was talking about consequences. But 
what follow-up is done is actually up to the place that is 
conducting the test, whether or not they do a follow-up or not.
    Mr. Murphy. You also have situations, however, that--are 
they used to promote, on the other hand, an orderly workplace 
environment or to deter drug use?
    Dr. Shuren. How it may be used by individual companies, I 
don't know. But we have regulated it because of the safety 
concerns that occur when those tests are inaccurate.
    Mr. Murphy. When they are inaccurate. What would be an 
inaccuracy level that you would consider to be acceptable?
    Dr. Shuren. What it comes down to is, is it actually 
measuring the drug of abuse or not? And that gets set depending 
upon the kind of tests we have. One of the biggest issues now 
is with the saliva test. We have one that is point of care for 
saliva that is actually pretty good. The rest that have come 
through are actually very poor. They have a very hard time 
detecting drug.
    Mr. Murphy. What is the point-of-care test that is pretty 
good? Which one is that?
    Dr. Shuren. I will get back to you with the actual name.
    Mr. Murphy. Okay. Of course, we also know that if one is 
limited from using these tests--there are differences--
collecting different types of bodily fluid--saliva, urine, 
blood, et cetera--and some more invasive in the workplace than 
others and require more staff time, et cetera. There is a 
difference between those or just a first-level screen and those 
that--some that are sent on to the next level.
    You would agree with that, wouldn't you?
    Dr. Shuren. Yes, there is a difference between the 
different tests.
    Mr. Murphy. Now, I know that the FDA has threatened to shut 
down operations for several American manufacturers making this 
saliva equipment but not foreign ones. Are you familiar with 
    Dr. Shuren. We have actually been sending warning letters 
to a variety of different companies. I will tell you, for the 
companies now that we have looked at, one of them we had been--
or, actually, two of them we were working with very closely. 
They had committed to actually get us the data. We held off 
taking an action for many months to let them get the data that 
they committed and said, ``We have it, we will get it to you,'' 
and then they didn't get it. And some said, ``Oh, yes, we had 
data, but it is gone.''
    Mr. Murphy. Well, my understanding is some of these 
companies are asking for sufficient time, because you are 
asking for a lot of data. Will you work with them and find out 
if they need additional time, if they are indeed moving forward 
on that process, or is the door closed?
    Dr. Shuren. We actually had been working with them. We gave 
them lots of time. In fact, we are past the time when--well 
past the time they were supposed to get back to us. We have had 
frequent conversations.
    But for one of them, they actually did make progress, and 
they sent us the data. For another one, we have actually seen 
absolutely no meaningful progress.
    Mr. Murphy. I understand that part of what the guidelines 
that were sent to these companies were the guidelines for 
urine-based tests and not saliva-based tests. Now, we are 
getting into weeds in this a lot here, too, but part of the 
understanding that I have of these companies is they are--
recognized there are really different procedures involved with 
both of those. I am sure you understand that, as well. And I 
would hope that there would be some--I mean, from what I 
understand, they requested fresh guidance in September of last 
year and wonder when you are going to get them the proper 
guidance on this saliva-based test.
    Dr. Shuren. Well, we did one better. We have actually been 
talking with them and walking them through exactly what they 
need to do, because we have experience with these kinds of 
tests. But they have opted not to follow what we asked them to 
    Mr. Murphy. That is not my understanding. And I hope that 
we can somehow bridge a communication gap here, that you will 
work with them. Because, look, none of us want to have drug 
abuse in the workplace. We are familiar with it--the drug 
problems, workers' comp problems, injuries, deaths, et cetera, 
at the workplace, the high risk on all sorts of levels when 
people operating heavy equipment or dangerous equipment are 
involved in other things.
    And along those guidelines, what I understand is there are 
a number of snags that are perhaps not reaching your level, 
some of those communication issues. So I would hope that we 
could talk offline more directly and see if these problems can 
be mitigated themselves, along those lines.
    Dr. Shuren. We would be happy to come and brief you on what 
we are doing further.
    Mr. Murphy. Thank you. I would appreciate that. That you 
very much.
    I yield back. Thank you, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the ranking member emeritus, the gentleman from Michigan, Mr. 
Dingell, for 5 minutes for questions.
    Mr. Dingell. Thank you, Mr. Chairman.
    This question is to Dr. Shuren for a ``yes'' or ``no.''
    You are familiar with the cuts being proposed by the 
majority in the FDA budget, are you not?
    Dr. Shuren. Yes, I am.
    Mr. Dingell. You are also familiar with the cuts proposed 
for the device center, are you not?
    Dr. Shuren. Yes.
    Mr. Dingell. All right. Will the cuts in the case of FDA 
have an impact on the way the Food and Drug can review devices 
and oversee device safety, yes or no?
    Dr. Shuren. Yes.
    Mr. Dingell. Will these affect the amount of time it takes 
you to review a device application, yes or no?
    Dr. Shuren. Yes.
    Mr. Dingell. As you know, this committee will be 
authorizing the Medical Device User Fee Act next year. Does FDA 
have the staff it needs to approve the devices in an efficient 
time frame, yes or no?
    Dr. Shuren. No.
    Mr. Dingell. How many does it have?
    Dr. Shuren. In the program right now, we have about 1,250 
full-time employees, and then we have additional contract 
support. That is for the entire----
    Mr. Dingell. How many of those are actually involved in the 
review and approval of the devices and in overseeing of device 
    Dr. Shuren. About 72 percent are involved in what we call 
the device review process.
    Mr. Dingell. How many do you need?
    Dr. Shuren. We need a lot more. And much of it will depend 
on the kind of program----
    Mr. Dingell. I am asking for a specific number.
    Dr. Shuren. It will depend on the program we put together. 
And one of the things we will talk about----
    Mr. Dingell. All right. I will submit a letter and I assume 
that you will respond, giving me an answer to the questions 
    Does FDA have the user fees it needs now to approve devices 
in an efficient time frame, yes or no?
    Dr. Shuren. No.
    Mr. Dingell. Are there any diversions in any of the 
proposals of the budget to divert money from user fees either 
in prescription pharmaceuticals, over-the-counter 
pharmaceuticals, or in the case of devices?
    You can submit that for the record.
    Dr. Shuren. We will submit it.
    Mr. Dingell. Would increased user fees help FDA to assure 
the safety and effectiveness of devices?
    Dr. Shuren. Yes.
    Mr. Dingell. Would they assist Food and Drug in providing 
more expeditious service to the people in the industry who have 
these devices up for approval?
    Dr. Shuren. Yes.
    Mr. Dingell. Do you believe increased fees are needed to 
expedite the review process to benefit the industry?
    Dr. Shuren. Yes.
    Mr. Dingell. Mr. Chairman, I note I have 2 minutes and 10 
seconds, and I yield back.
    I will look forward to working with you some later time.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the gentleman from Kentucky, Mr. Guthrie, for 5 minutes.
    Mr. Guthrie. Thank you very much.
    Thank you for being here. And I was at a second committee 
of this subcommittee of this committee, so I apologize, I 
missed some of it. But I get the gist of what we are talking 
    And I am from a manufacturing background, automotive parts, 
not medical devices, but I understand getting products to 
market and being competitive is important. And I want to go 
just a little different, because I have heard the testimony, 
and some questions I was going to ask have been answered. And 
it is appropriate in this subcommittee, because just the other 
day we were debating a bill about doctors' conscience, and the 
minority side brought up an objection to the bill, saying, if 
we pass the bill, it was going to raise taxes and put people 
out of business.
    And so my question--I think it is appropriate in this 
committee, even though it is not our jurisdiction, to look at 
what happened during the health-care law. I think those of you 
who manufacture devices are aware there was a 2.3 percent tax 
on revenue, not on income, on revenue, which as an effective 
tax rate, I don't know, you would have to recalculate, but far 
higher than 2.3 percent. And it goes into effect--and it is $20 
billion coming out of the medical device over the next 10 
years--it goes in effect in 2013. And even if you are growing 
your business and trying to put seed money back in your 
business, you are not making a profit, you still pay this tax. 
It comes off the top. It comes off the top.
    And I would like just particularly Dr. Makower or Mr. Deem 
or anybody else that is manufacturing, would you describe how 
this tax affects large and small device companies and how it 
affects innovation and job creation? Because there was some 
concern about our bill last week about what it is going to do 
to job creation. I would just like to hear what you think this 
tax is going to do to job creation.
    Dr. Makower. I am glad that you asked that question. It is 
absolutely imperative--absolutely imperative--for small 
companies that we find a way of modifying that tax proposal. 
Because, right now, companies that are bringing a new, 
innovative medical product to market need to get to about $70 
million to $100 million in sales before they see dollar 1 of 
    This means, during the entire time, which may be over 
several years, under the current proposed law, that they would 
be paying money to the government simply for the privilege of 
doing business in the United States without earning any profit 
here. And that means that they would have to raise more money 
and/or cut jobs or reduce other ways of expenditure--research 
and development, other important things for this country.
    And so this is--I am very glad that you brought it up. It 
is absolutely essential for innovation, especially for medical 
device technology, that we address this important issue.
    Mr. Guthrie. Mr. Deem?
    Mr. Deem. I would echo Dr. Makower's comments. I think it 
is absolutely going to result in slowed company growth, delayed 
hiring, and delayed expansion of the company, without a doubt. 
I mean, just taking that money right off of the top, it is 
essentially shunting it right out of the operations that that 
company needs to grow.
    Mr. Guthrie. Are you already hearing--I mean, you have to 
be, because you have to be planning for it--are you hearing 
your business, businesses in your community, associations that 
you deal with, how this is affecting them today or as they 
prepare for it in 2013?
    Mr. Deem. We are hearing a lot of discussion about it. My 
companies, actually, have been taking so long to get through 
the regulatory process. Out of the 14, we only have one that is 
actually selling product right now. But that one actually is 
planning on trying to figure out what it means to them. Are 
they going to have to raise more venture capital? Which, in 
effect, just shunts that straight over to the tax. Are they 
going to have to try to finance it out of other avenues that 
will further slow the growth?
    Nobody really has a good answer for it. The only thing that 
we are absolutely sure of is that it will slow growth and it 
will delay job hiring.
    Mr. Guthrie. My understanding, too, is some States have 
what they call business purpose taxes. A lot of States who put 
them in all of a sudden take them off because their businesses 
move elsewhere.
    There probably are other people that get off-the-top 
revenue taxes. I am not saying there are not industries that 
are treated--but I think you all are especially treated 
differently than most businesses in this country.
    And only since the other side brought up the other day that 
they wanted to work with us to make sure that we had had a 
productive Tax Code out of this health-care bill. I think this 
is something--hopefully, though, they are going to stick with 
us and get this fixed for you guys.
    I know you all answered the question, but does anybody else 
want to comment on that?
    Well, Mr. Chairman, I am about of time, so I yield back.
    Mr. Pitts. The chair thanks the chairman.
    Now, in the queue we have Lance, Cassidy, and Blackburn, in 
that order. So the chair recognizes the gentleman, Mr. Lance, 
for 5 minutes for questioning, then Cassidy.
    Mr. Lance. Thank you very much, Mr. Chairman.
    I apologize for not being at the entire hearing. There are 
two subcommittees today meeting at the same time. And since I 
have been on the full committee for a month, I try to make both 
subcommittees. But I certainly appreciate your being with us.
    To follow up on what Congressman Guthrie has said, Mr. 
Deem, I represent the district in this country that has more 
medical device and pharmaceutical employees than any other 
district anywhere in America. And the medical device excise 
tax, I think, will be extremely harmful, especially to the 
district I serve--we would like to think we are the medicine 
chest of the country and perhaps the world--and certainly, I 
think, moreover, harmful to the Nation as a whole.
    For example, C.R. Bard is one of the 10 largest 
manufacturers of medical devices. It is located in the district 
I serve. And I have been told by leadership there that the new 
2.3 excise tax will cost that company $45 million a year, which 
is 25 percent of that company's research and development 
budget. This is just one example; there are many across New 
Jersey and across the Nation.
    Could you explain in a little greater detail, following up 
on Congressman Guthrie, what you believe this will do to the 
competitiveness of the industry in this country, as it affects 
the entire world?
    Mr. Deem. Thank you for the question.
    I agree with the gentleman, ladies, from C.R. Bard. I think 
that there are only a few other places where the larger 
companies are going to be able to trim that in, trim that money 
out. And when you look at the large company balance sheets, the 
R&D line typically involves both R&D and regulatory and 
clinical. And so, if you look at the device tax coming off of 
R&D, it is hitting them both ways.
    Mr. Lance. And I, of course, believe we should not enact 
it, that it should be repealed. And I, along with others, were 
working on that issue.
    Do you think that the consequence might occur before the 
actual implementation of the tax, given the fact that companies 
will have to begin to calculate what is coming in another year 
or so?
    Mr. Deem. Absolutely. I haven't worked in the larger 
companies, but even in the smaller companies, as we look at 
sales ramps and we look at how quickly we are going to be able 
to make adjustments, you have to start planning for it now. So 
already we are delaying hires, and we are looking at how 
quickly we can grow. And I am sure that is happening to a much, 
much larger scale in the larger companies like Bard.
    Mr. Lance. Thank you.
    Last week, The New York Times reported on a patient who had 
traveled overseas to receive a medical device that was 
developed 40 miles from her residence.
    To any distinguished member of the panel, I would like to 
think this is an isolated incident, but I am wondering what the 
panel's view might be on that.
    Dr. Redberg. You know, I actually am grateful to the FDA 
for doing its job in protecting the safety and effectiveness of 
my patients and your constituents. And I think that that 
device, if it had been shown in clinical trials to be safe and 
effective, would certainly be approved by the FDA.
    Unfortunately, there are numerous records of devices like 
that--I believe it was a spinal disc--and other ones that have 
been approved in Europe and have been subsequently shown to 
have severe problems.
    And, remember, we are now talking about implantable 
devices. And so, I want to know, before the FDA approves a 
device, that--before we can even talk about safety, I think the 
number-one goal is effectiveness. Because I don't think you or 
I or anyone want to have something permanently implanted in me 
that has never been shown to be effective.
    That does cost money, to do a clinical trial to show a 
device is effective. But I think before we can even start 
talking about innovation or anything else, I have made a 
contract to take care of my patients by doing things that will 
improve their health. If I am going to be put in a position of 
having to advise them to put in devices that have never been 
shown to be effective or safe, that it is not something I can 
advise them on.
    So I would think that----
    Mr. Lance. Thank you.
    I yield back the 1 second I have left. Thank you, Mr. 
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the gentleman from Louisiana, Dr. Cassidy, for 5 minutes for 
    Dr. Cassidy. Thank you.
    And to whomever I speak to, if I interrupt you, I am not 
trying to be rude. We just have 5 minutes.
    To the two cardiologists, I am a gastroenterologist, so I 
approach with trepidation, okay? But in Dr. Shuren's testimony, 
he speaks about the necessity to establish effectiveness in the 
U.S. versus EU, using the specific example that the 
manufacturer must show that the laser incises heart tissue and 
also treats arrhythmia in the United States, whereas in the EU 
you would only have to show that it incises heart tissue only.
    But I assume he is talking about some sort of AV node 
malformation. And, frankly, that is in anatomy and physiology, 
that if you cut that baby, you are going to interrupt the flow 
of current. That is an electrical current issue.
    So I am just tossing that out, not to challenge, frankly to 
understand from two cardiologists, does it matter how you cut 
the AV node?
    Dr. Nissen. I would be happy to take that one on.
    Look, it does matter. And it is not just that it cuts; it 
is that it cuts that right tissue and doesn't cut something 
that it shouldn't cut.
    Dr. Cassidy. Now, there is a fairly defined--again, I am a 
gastroenterologist, so with trepidation I say it is my 
understanding there is a fairly defined anatomical pathway. 
Granted, there is variance. But, you know, you are going to be 
a millimeter deep, you are going to be a centimeter wide. 
Granted, maybe there is scarring with one and not with another, 
so there is an ancillary. But I assume that, as commonplace as 
this has been, particularly at the Cleveland Clinic, that you 
guys know this.
    Dr. Nissen. Yes. We probably do more of these ablations 
just about than anyplace in the country. And there is a 
complication rate, and these complications are really serious. 
And before we would----
    Dr. Cassidy. Now, I don't think you--but that is a 
different question than effectiveness, correct?
    Dr. Nissen. Well, you know, safety and effectiveness can't 
be taken apart. You know, if you have a device that ablates 
tissue but it causes tamponade if it perforates the heart----
    Dr. Cassidy. Now, but safety and effectiveness are 
different because if you--and I thought Mr. Hall's comments 
were well-taken. There is an immediate, kind of, you-do-the-
procedure-type complication that is one further down. Clearly, 
these guys are not going to approve something which caused a 
high incidence of tamponade.
    Dr. Redberg. I would say, you know, you are talking about 
ablation, which, as you know, has been approved here as well as 
in Europe.
    Dr. Cassidy. And I just used that example because he used 
it specifically.
    Dr. Redberg. The Europeans, you know, just published their 
5-year experience and shown that only 25 percent of all their 
patients who got the ablation by the guy who invented it are 
actually free of atrial fibrillation 5 years later. A lot of 
those patients have had adverse events, including death, as a 
result. There is a 1 percent incidence of death reported with 
    And so, again, it is a great example, because you would 
think, sure, that is a defined part of tissue, easy to do. 
People are not that simple, and procedures are never perfect. 
Every procedure has benefits as well as risks. And unless you 
do a clinical trial and actually follow those patients to 
something clinically meaningful, if I burn that piece of tissue 
and you are dead, you are hardly going to have considered that 
an effective procedure.
    Dr. Cassidy. No, I accept that. So what is the normal rate 
of failure of ablation, however it is done normally, whether it 
is scalpel or whatever?
    Dr. Redberg. The 75 percent failure at 5 years.
    Dr. Cassidy. That is with current technology.
    Dr. Redberg. Current technology, and that is most people 
are getting two or three ablations.
    Dr. Cassidy. By the way, several people from Baton Rouge 
have gone to Cleveland Clinic, so I am going to accept that as 
a commentary upon those guys.
    Dr. Redberg. One of the best in the country.
    Dr. Nissen. We do better than most.
    Dr. Cassidy. Okay. You are at 35 percent. But----
    Dr. Redberg. That is at UCSF.
    Dr. Cassidy. Now, frankly, Dr. Nissen, it looks like Hall's 
methodology in his paper is superior to yours.
    Dr. Nissen. Actually, it is faulty. His denominator, he 
used all submitted devices. And----
    Dr. Cassidy. But when I go back, I was actually looking at, 
okay, he did the kind of peri-approval period as a high-risk 
recall. And then he did the late high-risk, which is unrelated, 
if you will, to the approval process. The approval process is 
not going to catch the complication 5 years down the road.
    Dr. Nissen. It may or may not. It depends on what the 
mechanism, the complication is.
    Let me say that we have the same numerator. He has a 
different denominator. His denominator is all submitted 
devices, and that is not a realistic denominator. It is 
actually approved devices that is the denominator.
    Let me put it to you this way, Dr. Cassidy. If you have a 
99.5 percent success rate, that sounds very high. But tomorrow 
when you get on a plane to fly home to Louisiana, if the pilot 
gets on and says, ``There is a 99.5 percent chance that the 
plane will take off and land successfully,'' would you get off 
the plane or would you stay on the plane?
    Dr. Cassidy. I accept that. And I am almost out of time; 
that is the only reason I interrupt.
    But, Mr. Hall, could you respond to Dr. Nissen'sdiscounting 
of your findings?
    Mr. Hall. Sure. I think the key is to try to identify the 
reason for the recall so you can try to fix the problem. And if 
you just look at the numerator, how many, that doesn't tell you 
whether you have a big problem or a small problem, and, most 
importantly, it doesn't tell you how to fix it. So if you have 
problems that are not related to the pre-market process, 
changing the pre-market process is going to be useless 
    And the comments earlier about funding, et cetera, I don't 
like this comment of more or less regulation. I believe in 
appropriate regulation. And, therefore, put the dollars where 
they have the leverage, and that is what my study attempted to 
    Dr. Cassidy. I thought that was a very good point. I wish I 
had more time to ask you all. Thank you for your testimony.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the gentleman from Georgia, Dr. Gingrey, for 5 minutes for 
    Dr. Gingrey. Mr. Chairman, thank you very much.
    I will get right to the questions. I want to address them 
primarily to Dr. Makower. According to a 2009 report by Ernst & 
Young, access to venture capital by medical technology 
companies dropped 18 percent in 2008 due to the United States 
economic crisis.
    Dr. Makower, how important is venture capital to medical 
device innovation and development?
    Dr. Makower. Venture capital is the lifeblood of innovation 
in med tech, absolutely.
    Dr. Gingrey. A Pricewaterhouse Coopers study released last 
month found that, and I quote them, ``The innovation ecosystem 
for medical device technology, long centered in the United 
States, is moving offshore, and medical technology innovators 
are going outside the United States to seek first income.''
    What is first income, Dr. Makower? And why do companies 
feel they need to go offshore to get first income?
    Dr. Makower. I think what you are referring to is the 
approval-of-origin requirement that many countries are 
requiring. In other words, many countries will not allow you to 
sell a product in their country unless you have at least 
achieved approval in your own country.
    And the impact of that for a U.S. manufacturer is this, 
that if we are delayed in getting approvals here, we can't even 
sell other places in the world unless we move the manufacturing 
facilities to other countries. And that is why this is so----
    Dr. Gingrey. If you will allow me to interrupt, I think 
that what you are referring to what have been my next question. 
In fact, I will talk about it a little bit, country-of-origin--
    Dr. Makower. Country of origin, right.
    Dr. Gingrey [continuing]. Requirements. That was not this 
issue of first revenue. But, yes, you are absolutely right. I 
think, by 2020, the authors of this Pricewaterhouse Coopers 
study predict that China, India, and Brazil will gain 
significantly in key device measurement areas, while the United 
States will continue to lose ground.
    And, interestingly enough, as you said, these countries 
also--many countries, not just these--but they have that 
country-of-origin requirement, that it requires any device 
manufactured in the United States first be approved for sale in 
the United States by the FDA before it can be approved for sale 
in the home market.
    Dr. Makower. That is right.
    Dr. Gingrey. So this is what you were referring to in 
regard to the country of origin?
    Dr. Makower. That is exactly right. And that is the reason 
why manufacturing plants and high-paid jobs are leaving the 
    Dr. Gingrey. These jobs, by the way--that brings up another 
point. When a medical device company does pick up and move, for 
whatever reason--I think many of those reasons have been 
outlined by my colleagues in the questions and certainly by the 
witnesses. And when they move overseas, what type of jobs are 
we losing? Are these minimum-wage jobs? Are we losing scientist 
and other highly technical and high-paying jobs to our 
    Dr. Makower. Exactly. As you pointed out, they are high-
paid jobs. They are scientists, they are engineers. They are 
the very, very sought-after jobs that are moving.
    Dr. Gingrey. Well, how do--in fact, anybody can answer this 
question--but how do EU device regulatory systems compare to 
the United States? Are the EU regulations more predictable and 
certain? Why does that matter to a device firm?
    Dr. Makower. It is more transparent. You know what you need 
to do, and that is why it is more straightforward.
    Dr. Nissen. They are also much weaker. They don't require 
that you demonstrate efficacy. And we think that that is 
important. If you use a device, you want to know that it is 
actually going to work. And that is not required in the EU.
    Dr. Gingrey. And I think, Dr. Shuren, you wanted to 
    Dr. Shuren. Because in the EU, the public can't--there is 
no transparency. These are what is cut between the company and 
the private company. In fact, the European Commission said--and 
they are relooking at their system--experience indicates that 
the current system does not always offer a uniform level of 
protection of public health in the European Union. New and 
emerging technologies have challenged the current framework, 
highlighting gaps and pointing to a certain scarcity of 
    Dr. Gingrey. Yes, yes, but, Dr. Shuren, I guess cutting 
right to the chase on that, and I will ask you specifically, 
does the EU have more safety problems? You are, I think, 
suggesting that their system is more lax, and that frightens 
you. But, really, statistically, are they having more safety 
    Dr. Shuren. I think the data that is out there--there are 
two very different systems. They don't have enough data out 
there to actually make a firm comparison. But we do have some 
evidence to show that the U.S. system does provide great value.
    Dr. Gingrey. Well, I think that is kind of an anecdotal 
sort of response.
    Let me just say to this you, as I conclude. I want you to 
know that I appreciate the work that the FDA undertakes for 
American patients. I am a physician, too, an OB/GYN doctor. But 
I do believe that if we don't undertake an immediate and very 
critical review of the FDA regulatory process, trying to 
identify safe and effective ways to improve the transparency 
and consistency of the approval process, irreversible damage to 
the United States-based medical innovation will result.
    And, you know, we are in a situation where we need jobs, we 
need them desperately. I realize that the balance is hugely 
important, but we need to smooth and streamline this process 
and not keep changing the bar.
    Mr. Chairman, thank you for your indulgence, and I will 
yield back.
    Mr. Pitts. The gentleman's time has expired.
    The chair recognizes the gentlelady from Tennessee, Mrs. 
Blackburn, for 5 minutes for questions.
    Mrs. Blackburn. Thank you, Mr. Chairman.
    And I want to thank you all for being here.
    My district in Tennessee includes a city you all probably 
know a little bit about, Memphis. And, as you know, we are 
probably the number two when it comes to device implementation, 
creation. And with our companies that are there that are doing 
tremendous work in R&D, with patent holders, with the biotech 
R&D that is being done in the mid-part of Tennessee, the other 
end of my district, we hear a lot about the FDA and the 
problems that exist with the FDA.
    And we are focused on this, because we think that in the 
21st century, when you look at the creative economy as it 
exists and look at jobs creation and jobs retention, that we 
have to make certain we are protecting the intellectual 
property of these innovators and creating the environment that 
they can innovate here but also that they can manufacture here.
    And, Mr. Makower, I know we have talked about your study 
and everyone has focused on this in our questioning, but I 
think it is such an imperative that we create the environment 
that our companies and our innovators can handle that jobs 
growth. And I liked what you did when you analyzed the FDA's 
impact on medical technology innovation and comparing the EU 
and the U.S., the time and the cost and lack of predictability.
    But what I would like to do is--we look at jobs, 400,000 
Americans and over 2 million jobs that are created through this 
industry. Where is the FDA causing us problems and hindering on 
that? What other countries around the world, specifically 
especially in Europe, are trying to take our jobs? Who is 
trying to compete with us on this environment? How do we reach 
that standard so that we are responsible to consumers but we 
are not hampering innovation?
    So, quickly, if you will hit what you think our problems at 
the FDA are and how they get in the way of those job creation 
numbers that we want to see and the environment for jobs growth 
to take place; and then I am going to let any of the others of 
you weigh in, also.
    Dr. Makower. The fundamental themes that we have been 
talking about are predictability, reasonability, transparency. 
Those are the things that allow the process to happen. Because 
when you go to raise money as a small entrepreneur, you can set 
out a path. You know what is expected.
    Mrs. Blackburn. And you see the FDA as a hindrance.
    Dr. Makower. Right now, that is a problem. In other 
countries, it is clear. It is clear what you need to do, and it 
does not take as much time.
    Mrs. Blackburn. Compare to me if I were to take an 
implement for a hip to the FDA. In the U.S., the time to get it 
through the FDA would be what and in Europe it would be what?
    Dr. Makower. It is a specific example, and I don't want to 
misstate what the times would be for that. So I would get back 
to you on the exact numbers.
    Mrs. Blackburn. That would be great. I think it would be 
    Mrs. Blackburn. Because we are looking 10, 20 years down 
the road; and we are concerned about what would happen with the 
medical device implementation industry here in this country. It 
is a lot of jobs for us here in Tennessee.
    Anybody else want to weigh in with the problems with the 
FDA or how they see the FDA as an impediment to jobs retention 
and jobs growth?
    Mr. Deem. I think one of the things that has been touched 
on from time to time but it deserves significant thought is the 
risk benefit ratio. That has always been a concern, and that is 
clearly the most difficult job that the agency has, is 
determining where is the appropriate balance between risk and 
    I think if we look over the last several years and look at 
the delays that have increased and the inconsistency that has 
crept in, I think it has a lot to do with what is our 
expectation of risk and benefit. So I think that is an area 
that we as a people should look at as well.
    Mrs. Blackburn. Do any of you know of any specific firms 
that have chosen to move offshore for manufacturing? Could you 
provide those examples?
    Mr. Deem. It is not one of my companies, but there is a 
company named Biosensors which is a worldwide stem company. 
They had a headquarter in--it was either Irvine or San Diego. 
They were being held back from expanding into international 
markets that they wanted to go to by the country of origin 
laws, and just within the last year they ceased all U.S. 
Operations and moved their jobs overseas.
    Mrs. Blackburn. How many jobs was that and how much on 
average do they pay?
    Mr. Deem. I would have to get back to you on the specific 
number of jobs, since it wasn't my company. But the average 
pays for the types of manufacturing that we are talking about 
can be in the 40, 50,000--it is very high-paid manufacturing. 
And then when you start to look at the engineers that are 
involved, you are in the hundred, $150,000 jobs. So these are 
very, very highly sought after, high-pay jobs.
    Mrs. Blackburn. Thank you. I yield back.
    Mr. Pitts. Did any of the other witnesses wish to respond 
to that question?
    Dr. Redberg.
    Dr. Redberg. I just wanted to point out the other side of 
the money that we spend in the over $100 billion on devices is 
that when we are approving devices that haven't been shown to 
be of benefit to your constituents and our patients, that means 
we are spending billions of dollars. Technology is the number 
one driver of health care costs. And the reason that a lot of 
jobs are having issues in employment and State governments are 
because they cannot sustain the costs of health care premiums.
    So I would just consider the other side of allowing 
untested, expensive new technology of no known benefits, 
definite risks is also driving up health care premiums and 
driving businesses to close, because they cannot afford to pay 
for the health care for their workers.
    Mr. Pitts. Dr. Shuren.
    Dr. Shuren. And I think it is also important to recognize, 
and we know we have a role to play, and I have mentioned there 
are actions that we are taking, but this is far more 
complicated. Even Advenet has talked about the health of the 
medical device industry, and I don't want to put things down. 
But we went through the biggest recession since the Great 
Depression. It has affected everyone.
    But in the medical device industry, they changed their 
business models. They became more risk averse. The venture 
capitalists have decided we are not going to invest so much in 
the early stage innovative technologies. We want to see this 
more fully developed. They raised the bar on their own 
    I don't think the answer to this is that we change the 
American standard that we have had in place that has served the 
country very well. We agree that we need to have the right 
balance between facilitating innovation and assuring that 
devices are safe and effective.
    We are stepping up to the plate for things that we need to 
do. If this is really going to happen, we need industry to do 
the other part of it; and we also do need to have the people do 
the job right. Even industry has said, and Josh has said, we 
have high turnover. They find that that affects reviews, and we 
agree. But the problem is we don't have the people doing the 
work. Their workload is overloaded, and we need to address 
    If we are really going to make this right, we have to 
invest. We have got to invest in the FDA. If we want to be 
competitive to industry, we need to be competitive about the 
FDA brand.
    Mr. Pitts. Thank you.
    Any other witnesses wanted to respond to that question?
    Mr. Hall. Just one thing.
    There seems to be a belief there is a yes, no, or binary 
aspect to the 501(k) system. I want to clear up.
    The agency has the authority to obtain clinical data under 
the 501(k) system. They have the statutory authority, they have 
the regulatory authority in cases in which they think that is 
necessary or appropriate to make safety and efficacy 
determinations. So they have that authority right now, and 
probably 10 to 15 percent of submissions include clinical data 
of some sort.
    Mr. Pitts. The chair thanks the witnesses.
    Dr. Burgess. Mr. Chairman, I ask unanimous consent just to 
ask one follow-up question.
    Mr. Pitts. Without objection.
    Dr. Burgess. Dr. Shuren, I just wanted to point out that 
last summer when Dr. Sharfstein was here we had a hearing on 
bottlenecks in the pipeline, and I asked a question because I 
was concerned. We gave $10 billion to the NIH for the stimulus. 
We gave it. I voted against that. But Congress gave $10 billion 
to the NIH.
    And I asked Dr. Sharfstein, is this going to be a problem 
as all of this new stuff from NIH starts coming down the 
pipeline? Is FDA--what are you going to do? And he was 
dismissive and said that they had all of the money that they 
    This past summer, with the hearing on the DeCoster Egg 
Farms, with the salmonella that appeared in the eggs, that it 
appeared that in the food safety aspect, which I know is not 
your jurisdiction, but it appeared that some very basic 
processes were not followed, and communication between FDA and 
USDA really suffered. And he told me once again that funding 
was not the issue. It was a process.
    So I just wanted to make those points. Because I have asked 
at the highest levels of the FDA, are we giving you the tools 
that you need, given the fact of everything else that is going 
on around you? And was told twice by the second in command at 
your agency that that, in fact, was not an issue.
    I recognize he is no longer the second in command at your 
    Dr. Shuren. I don't know what was said.
    I will tell you that now, for the first time, in fiscal 
year 2010, the FDA, which is a lean agency, for the very first 
time exceeded its FTE counts, its full-time employees that we 
had on board 18 years ago in 1992. Just was coming up to speed 
then. And, in the interim, medical devices have become 
significantly more complex and challenging.
    If we honestly want to be--remain the innovators, the 
world's innovators, we have to address all of the issues. When 
FDA approves a product, other countries listen. You can get a 
CE mark--and I talked to my folks over there, and their slow 
uptake on the new technologies because they don't have full 
confidence on the CE mark. Some will use it. A lot won't.
    But when the FDA approves a device, not only is there rapid 
uptake here in the U.S., other countries take notice, and the 
physicians over there start to use it. We need to invest in the 
FDA. It is so critical that we are working well, because it 
ultimately helps them and it helps patients. And, as a 
physician, I care a lot about that.
    Dr. Burgess. As do I.
    The last thing. You have made a comment that industry just 
won't talk to the FDA. Again, you do have industry there, Mr. 
Deem, Dr. Makower. You have a chance now to talk to the FDA. 
They are right there. So maybe you guys could just visit a 
little bit and get some of these things hashed out.
    Mr. Pitts. Okay. Dr. Burgess, would you yield to Mr. 
    Dr. Burgess. Absolutely.
    Mr. Pallone. I know we haven't had a chance to ask many 
questions on this side.
    Dr. Shuren and Dr. Redberg, there was a lot of discussion 
on the study released this week about the--Dr. Nissen I said? I 
am sorry. Dr. Nissen and Dr. Redberg, there was a lot of 
discussion about the study released this week about recalled 
products under 501(k). I am not sure that you had a chance to 
respond to that, if you would. I will just give you some time 
to do that.
    Dr. Nissen. You know, what I want to say is that there is a 
serious problem here. One hundred and twelve million devices 
were withdrawn over a 5-year period of time, more than 2,000 
deaths a year due to device failures and more than 100,000 
injuries. That is serious, and it needs to be looked at very 
carefully. And so keeping that balance between safety and rapid 
and speedy approval is really critical.
    And what I am arguing for is not to make things tough on 
industry. It is to make things safe for patients. Putting 
patients first. We have a motto in medicine: primum non nocere. 
In Latin, it means above all do no harm. And a device that has 
to be withdrawn, taken out of a patient's body, whether it be a 
spinal disk or something else, is very serious.
    The final thing I wanted to say--I didn't quite get a 
chance with Dr. Cassidy's question--is this idea that there is 
a 99.5 percent success rate for 501(k). And here is what I want 
you all to think about when you go home on Friday night.
    You get on the plane and the pilot comes on and says there 
is a 99.5 percent chance that this plane will take off and land 
safely. Is that good enough or is it not good enough? I don't 
think it is good enough, and I think we can do better.
    Dr. Redberg. I would like to also point out that recalls, 
while they are important, they are not a way to gauge safety of 
medical devices. Recalls are the tip of the iceberg. Because of 
the adverse event reporting system, it is estimated that we 
only know about 1 or 2 percent of all serious adverse events 
that occur.
    So while recalls are an extreme example, because a device 
has not been recalled, it is not an assurance of device safety 
and, more importantly, it is not an assurance of effectiveness.
    So, again, the FDA's primary mission, while encouraging 
innovation is important, but not to encourage innovation at the 
price of ignoring safety and effectiveness. And the only way to 
know a device that I am going to put in your body is safe and 
effective is to study it in clinical trials in humans with 
meaningful endpoints, real outcomes, and reasonable follow-up 
and continued post-marketing surveillance so that those rare 
adverse events can be reported. We have a long way to go to get 
to that goal.
    Mr. Hall. I think it is clear that everybody is interested 
in safety. If you want safety, you need to understand the 
reasons why the problem occurred; and the majority of those 
recalls occurred because of after-approval issues, not because 
of the premarket system. And I believe in targeted or focused 
    If you go to the 99.5 would you get on an airplane, with 
that analogy you would never go to the hospital, because the 
hospital rates of problems are much greater. 2.3 percent of 
Medicare patients have a safety issue in the hospital; 15 
percent of elders get a BIS prescription. We all need to do 
    Mr. Pitts. Excellent testimony.
    I don't want to cut you off. Did you have something to say, 
Dr. Shuren?
    Dr. Shuren. All I would say is we take the safety concerns 
very seriously. And in fact, the data shows that there are 
problems that are occurring that could be addressed premarket. 
We have tried to address some of this in the actions we are 
taking. There are times when targeted manufacturing data for 
certain products can help us identify problems beforehand and 
in some cases doing the preclearance inspection.
    I will say if much of the debate is going to be on quality 
systems, I would note that in the EU you have the auditors, you 
have the third parties that go in and they look at the 
companies who are actually going to bring the product on the 
market. Here in the U.S., the law sets a very high bar for us 
to do that. If we are going to look at quality systems and put 
more of an emphasis, then we should sort of revisit that 
    And, lastly, I would say there are times when clinical data 
can actually identify safety problems. With infusion pumps it 
is exactly what we are going to impose on the manufacturers, 
and we are starting to do it.
    Mr. Pitts. All right. Thank you.
    In conclusion, I would like to thank all of the witnesses 
and the members that participated in today's hearing. I remind 
members that they have 10 business days to submit questions for 
the record, and I ask that the witnesses all agree to respond 
promptly to the questions.
    As this Monday is President's Day, members should submit 
their questions by the close of business on March 4.
    The subcommittee is adjourned.
    [Whereupon, at 1:10 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]