In This Issue...


President Obama Releases FY’13 Budget

President Barak Obama released his fiscal year (FY) 2013 budget on February 13th, outlining his spending priorities for next year. Included in the $3.8 trillion budget is a series of tax increases and budget cuts designed to reduce the overall federal deficit. On the health care front, the Administration is proposing $364 billion in new provider cuts and structural reforms. Most of the health care savings will stem from reducing Medicare’s cost of pharmaceuticals -- $155 billion. The good news is that none of the cuts appear to be directly targeted at clinical laboratories. For more detailed information, please read the next GAU. To see a copy of the President’s budget, please go to the Office of Management Budget Web site.

Another De Novo Bill Introduced

Senators John McCain (R-AZ) and Robert Casey (D-PA) recently introduced S.2607, the “Safe, Efficient, and Transparent Medical Device Approval Act,” to streamline the Food and Drug Administration (FDA) de novo medical device review process. Authorized by Congress in 1997, this process gives the agency flexibility in how it classifies low and moderate risk devices without a predicate device. Under current law, devices without a predicate are automatically classified as class III devices, the most stringent review category. Under de novo, the agency has the option of reducing that categorization to class I or II.

Unfortunately, confusion over evidentiary requirements, along with the length of time associated with FDA review, has discouraged many IVD manufacturers from pursuing this route. In each of the past few years, the Office of InVitro Diagnostics (OIVD) has received only one IVD de novo submission. Since 2005, the time for each review has averaged 311 days -- 50 days longer than the baseline year.

S.2607 seeks to reduce this timeframe by eliminating the requirement that a manufacturer first obtain a Not-Substantially-Equivalent (NSE) finding prior to submitting a de novo petition, as well as permitting the manufacturer to recommend an initial device classification, subject to FDA approval. To get a copy of the bill, please visit the congressional Web site, THOMAS.

House Democrats Seek to Close 510(k) Loophole

Leading House Democrats, Representatives Edward Markey (D-MA), Henry Waxman (D-CA), Jan Schakowsky (D-IL) and Rosa DeLauro (D-CT), recently introduced legislation, H.R.3847, the Safety of Untested and New Devices Act of 2012 (SOUND Devices Act), which would eliminate a loophole, that permits a device manufacturer to submit a 510(k) using a predicate device that previously was subject to recall.

Specifically, the SOUND Devices Act:

  • Provides the FDA with the ability to reject a device application based on a predicate that has been recalled or in the process of being recalled due to major safety problems;
  • Requires companies to inform the FDA if any products in their devices “predicate lineage” has caused serious harm and to explain how their devices avoid those previous problems; and
  • Instructs the FDA to maintain a publicly accessible database that companies can use to determine whether a device can be used as a predicate.

To get a copy of the bill, please visit the congressional Web site, THOMAS.

75 House Members Seek Vote on Bill to Repeal Device Tax

Representative Todd Rokita (R-IN) and 74 of his House colleagues recently wrote to the House Republican leadership urging them to schedule a vote on H.R.436, the “Protect Medical Innovation Act of 2011,” to repeal the medical device tax included in the 2010 health care reform law. The House legislators argue that the 2.3 percent device tax, scheduled to take effect in January 2013, will eliminate more than “10 percent of the device workforce.” Currently, H.R.436 has 228 cosponsors, enough to pass the legislation in the lower Chamber. For a copy of the letter, please visit Rep. Rokita’s Web site.