News Column

FDA too restrictive on medical devices, Sysmex CEO says

June 6, 2014

The U.S. Food and Drug Administration needs to change if it wants America's patient care to be on par with the rest of the world.

That's according to John Kershaw, CEO and president of Sysmex America, a world leader in clinical lab systems and solutions.

"If we want to be extremely safe ... if we want to be sure that everything is 99.9999 percent safe ... then I think you are going to stay with the same system," he said. "But innovation and treatment are not going to be on the same level as the rest of the world."

Kershaw was joined by U.S. Rep. Brad Schneider, D-Deerfield, and three other medical technology industry leaders at Sysmex America'sLincolnshire headquarters on Wednesday for a roundtable discussion about policies that help and hinder the country's $110 billion medical device market, which is expected to reach about $133 billion by 2016.

The FDA's too-tight safety regulations are holding back the market and Sysmex America, Kershaw said.

Sysmex's products include laboratory equipment, computer systems for medical institutions and software used for clinical examination information systems. Because it has branches in other parts of the world -- including Europe, Asia, Canada, Australia and New Zealand -- many of these products are monitored outside of the United States.

That's a problem for the FDA, Kershaw said.

"Even if I've got a product that's been in Europe and Asia for five years with no adverse reports and nothing being found other than praise, when I take it to the FDA, I am told that America has such a homogenous population of people that I am not allowed to use my European data," Kershaw said.

"I'd love (for them to answer) why they think America is so homogenous, that we were not made up of people from Europe or from Asia or the rest of the world," Kershaw said. "I thought that was the American tradition."

Other participants in Wednesday's roundtable -- Andrew Cittadine, president and CEO of Diagnostics Photonics, John Conrad, vice president of operations at iBIO, and Andrew Fish, executive director of AdvaMedDx -- said a lack of adequate reimbursement for medical technologies and the Affordable Care Act's medical device tax have set the industry back.

Chicago-based iBIO, an association whose work centers around protecting the interests of the life sciences industry, has seen medical device companies struggle in the early stages of investment because of the medical device tax, Conrad said.

"It only makes it harder for them to raise money, because their investors want to know what the return is going to be, and when you put this extra tax on them, that makes it a little bit more murky," he said.

As a result, Conrad said, those companies have to go overseas.

The competition doesn't stop there: Parts of the developing world have become bigger markets for medical technologies over the past 20 years, Cittadine said. The emergence of China's middle class has resulted in more money being spent on medical devices in there, he said.

Schneider said he is fighting for changes the largely Republican-leaning medical technology companies have been hoping to make.

He's been a leader in their effort to repeal the $30 billion medical device tax, a tax built into the Affordable Care Act to help pay for its reforms, Schneider said.

"There are things in the Affordable Care Act that need to be addressed and need to be fixed," he said. "For many of the companies innovating, those early stage profits are scarce, if they exist at all, and every single penny is necessary to try to get where you need to be, to grow to the point of profitability."

Fish said he believes that Schneider can get the job done. He pointed to Schneider's victory with a piece of legislation passed in the spring to improve Medicare's Clinical Lab Fee Schedule, which moves away from a payment system based on nearly 30-year-old data and towards a market-based payment system that provides more transparent and accurate rate-setting data for laboratory services.

Schneider said the bipartisan bill he helped introduce to repeal the Medical Device Tax is one on which Democrats and Republicans can agree.

"The last thing we should be doing, as a country, is taxing innovation," he said.

Schneider is running for re-election to the U.S. House this November. He'll be up against GOP Rep. Bob Dold, who narrowly lost his seat to Schneider in 2012.

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Source: Congressional Documents & Publications

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