What you need to know about recent changes to the FDA’s premarket approval process for medical devices, and how it could affect the price you pay for some devices

In 2009, the Food and Drug Administration (FDA) kicked off its 515 Program Initiative, which deals with the reclassification of a few dozen types of medical devices that are used in hospitals every day. When the process is finished, it could change not only the way some medical devices are approved by the FDA, but also what manufacturers can reasonably charge for them. Here’s some background on the initiative.

Understanding the Classification System

In the 1970s, when the Food and Drug Administration started approving medical devices, it began using a classification system based on the level of risk associated with using the device. Class I devices, such as elastic bandages or surgical gloves, are considered the lowest risk; Class II devices, such as powered wheelchairs, infusion pumps and surgical drapes, are a higher risk; and Class III devices, such as pacemakers or implantable defibrillators, pose the highest risk. FDA defines a Class III device as “one that supports or sustains human life or is of substantial importance in preventing impairment of human health or presents a potential, unreasonable risk of illness or injury.” Class III also includes first-of-its-kind devices within any category.

Before going to market, manufacturers of new devices that fall into either Class I or Class II are required to submit a 510(k) application (or premarket notification) to demonstrate that the device to be marketed is as safe and effective and substantially equivalent to another legally marketed Class I or Class II device. Meanwhile, manufacturers of Class III devices are required to submit a premarket approval application (PMA), which, much like a new drug approval, is a lengthy, time-consuming process requiring clinical trials to demonstrate the safety and effectiveness of the Class III device. For product upgrades to a Class III device, manufacturers submit a product development protocol as a supplement to an existing PMA.

Fixing an Antiquated System

When the medical device approval process began almost 40 years ago, the FDA classified more than 100 devices into Class III. Under the less rigorous 510(k) approval process, the intention was to either reclassify the devices into Class I or Class II, or keep them in Class III and subject them to the more rigorous PMA process at a later date.

Since the late 1970s, many of the original Class III devices were reclassified, but as of 2009, 26 devices still remained in limbo. As a result, that year the FDA kicked off the 515 Program Initiative—the process of reclassification is described in Section 515 of the Federal Food, Drug and Cosmetic Act (FFDCA)—to finish reclassifying the remaining 26 devices, which include some orthopedic implants. At press time, five devices were awaiting final classification by the FDA, while the remaining devices were at various stages in the FDA’s five-step process.

5 Steps for Reclassification

FDA follows these five steps for reclassifying 26 medical device types under the 515 Program Initiative:

Step 1: Collect scientific information about risks versus benefits of medical device.

Step 2: Assess the risks versus benefits.

Step 3: Issue a proposed classification of the device type into Class I, II or III.

Step 4: Receive and review public comments.

Step 5: Issue a final classification on the device type.

Benefits of Reclassification

Submitting a 510(k) application requires fewer resources than a PMA application does. So on one hand, medical device manufacturers might prefer their devices to be classified as Class I or Class II devices. This could save them years and hundreds of thousands of dollars just getting their device to market. But going through the 510(k) versus the PMA process also takes away a manufacturer’s ability to hype a new product release as something truly new and different.

“Vendors are for-profit, so every time they come out with a product line extension they call it new technology and charge a premium for it,” says Mark Dumond, HealthTrust assistant vice president, Technology Services, who points out that each month between 250 and 300 devices are approved through the 510(k) application process, while only a handful are approved through the PMA process. “What this FDA initiative shows us is that anything that goes through the 510(k) program is not new—it’s substantially equivalent to another product, and we shouldn’t be paying a premium for devices we already use.”

According to Dumond, hospitals should see the biggest impact with orthopedic implants (hip, knee and spine implant devices that the FDA has proposed be classified as Class III). He points to a gender-specific knee replacement to illustrate why.

“A knee marketed as made specifically for women was advertised in newspapers and also on late-night TV, but all the manufacturer did was repackage a smaller-size model,” he says. “Then they put it through the 510(k) process and sold it for a premium price.

“Today the 510(k) approval only requires ‘substantial equivalence’ to items already on the market, and product testing is ‘bench testing’ by the manufacturer,” Dumond adds. “Many manufacturers tout the benefits of a new product, but there is limited clinical evidence that a product is superior to what is currently being used. With the reclassification, there will have to be clinical evidence that the product performs as claimed, as the PMA requires extensive clinical trials. Approval still can be gained through clinical trials designed to show ‘non-inferiority’ to products already on the market, but it will be difficult for the manufacturer to convince HealthTrust that we should pay a premium on a product that was not proven to be superior to current treatment methods.”

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