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Dr. Margaret Hamburg
Dr. Margaret Hamburg fields questions about the multistate fungal meningitis outbreak.
Photo credit: AP PHOTO

Congress backs user-fee law for device industries

By Modern Healthcare
Posted: December 22, 2012 - 12:01 am ET

In one of the few pieces of significant legislation to win bipartisan support in 2012, Congress reauthorizes the Food and Drug Administration's user-fee acts for the drug and medical device industries and establishes first-time user-fee programs for the biosimilars and generic drug sectors.

The device industry will pay more than double what it paid in the past. But new components of the industry's user-fee program will require the FDA meet new performance goals, including higher numbers of device reviewers. The law brings in an external organization to audit the pre-market approval process.

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Also included in the user-fee law is a provision targeting drug shortages. The legislation requires manufacturers to provide notification six months in advance of an anticipated disruption in the manufacturing of certain drugs. The number of new drug shortages declines in 2012; however, the total number of drugs in short supply continues to rise. According to the University of Utah Drug Information Service, there are 282 unresolved drug shortages recorded as of the end of September, up from 256 during the same time last year.

The user-fee legislation also requires the FDA to issue long-awaited regulations on the unique device identification system. The proposed rule is finally released in July, prompting providers and GPOs to push for a shorter rollout of the UDI system when the FDA proposed a seven-year phased rollout. Device manufacturers have called for extra time for high-risk devices to comply with the requirements.

The Federal Communications Commission, meanwhile, approves a proposal to allocate spectrum for medicine-related area networks, which could spur the development of an emerging class of medical devices. Boosters for the new wireless patient monitoring technology say it will lower costs and improve quality by reducing hospital-acquired infections, preventing unplanned emergency transfers and keeping elderly and chronically ill patients out of the hospital. It's also expected to create a lucrative new market for manufacturers, including GE Healthcare and Philips Healthcare, two proponents of the FCC's proposal.

In the fall, an outbreak of fungal meningitis turns attention to a class of drugs produced by compounding pharmacies with minimal FDA oversight and raises questions as to whether state agencies are up to that job. The infections, traced to a compounding pharmacy in Massachusetts that was producing drugs in large volumes for pharmacies in multiple states, prompt states to look for ways to tighten their grip on the companies. Federal lawmakers and officials struggle to understand and enhance the FDA's authority to more forcefully control the activities of compounders that behave more like drug manufacturers than traditional compounders.

Steroid implicated in fungal meningitis outbreak
A steroid implicated in the outbreak was shipped to 23 states from the New England Compounding Center.
Photo credit: AP PHOTO
The meningitis outbreak also renews interest in the persistent drug shortages because many hospitals have reported purchasing drugs in short supply from compounders.

Providers and insurers looking to control supply costs and take a more strategic role in purchasing medical supplies, equipment and services move forward with initiatives to launch their own group purchasing organizations. Ascension Health and Dignity Health, both large Catholic health systems operating in multiple states, and Highmark, a Pittsburgh-based insurer in talks to buy a struggling hospital system, say they're forming purchasing arms that will compete with traditional GPOs for members.

Ascension Health and Highmark both say they will require stricter levels of compliance than traditional GPOs require from their membership. By boosting compliance levels, they say they can achieve savings worth limiting the choices of physicians and clinicians who use the products.

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