Deaf and Blind Medical Device Giant J&J: Harmed Patients Demand REAL Consumer Warranties!

How J&J’s Walmart relationship is inspiring its device business

By ARUNDHATI PARMAR  FiDA highlight

 Oct 31, 2016 at 6:02 PM

The Affordable Care Act has laid the groundwork for a seismic shift in the way the medical device industry operates.

Traditionally, large companies like Johnson & Johnson built up an army of sales reps who would have relationships with the same hospital customer but touting the New Jersey’s companies individual products — be it cardio, ortho or general surgery. As value-based care gains a footing, health systems are focusing on how they can lower costs and improve outcomes through services and solutions as opposed to buying more and more hardware and implants that device firms are known for.

J&J’s medical device business has been ill-equipped to adjust to this shift and its financial performance has been poor. Last year it garnered $25.1 billion, down 8.7% from 2014. The division has also restructured and announced it would be eliminating thousands of jobs earlier this year. In a phone interview, Gary Pruden, J&J’s executive vice president and worldwide chairman for medical devices, explained how the unit is undergoing a wholesale metamorphosis to take advantage of the opportunities afforded by value-based care. One inspiration has been to take a page out of the consumer business book and see how it manages a really large customer:Walmart.

Gary Pruden, worldwide chairman,                                               J&J Medical Devices

“I have more than a dozen companies in the U.S. for example and in the past, they would all go to the hospital system provider separately. They all have separate P&Ls, they all operate independently, they all go separately,” Pruden recalled. “We made a conscious decision and actually this year we integrated all the different business into one single P&L and I have one single strategic account management group in the U.S.”

This model is unlike how other large device firms are fulfilling their go-to-market strategy. For them, the product business and solutions business sit separately, Pruden declared referring to the likes of Zimmer Biomet and Stryker.

“They are trying to bring together a compilation of [offerings] and those solutions providers operate separately from those individual businesses,” Pruden claimed. “And when you talk to [hospital] customers, that’s a little challenging. They want to talk to one person.”

At J&J, that single account management group now has the power to speak on behalf of the product and service offerings of J&J Medical Devices with a single voice as well as to strike deals with hospital customers, partner with them and write contracts. The goal is not only to lower their costs but also share in the risk for clinical outcomes, Pruden said. If J&J  is able to achieve both, it wins with greater volume of products sold.

Pruden wouldn’t provide specifics about the value-based care offerings but said that there are certain demonstration projects with certain hospital customers, both U.S and globally. Through them, J&J’s medical device business can offer its expertise in providing end-to-end supply chain solutions for hospitals, perioperative efficiency, clinical standardization programs as well as in help in figuring out bundled payment programs.

In trying to create a model by which the devices team at J&J would be able to provide savings by managing a customer’s supply chain end-to-end, the inspiration came from the conglomerate’s consumer business.

“With Walmart, we have a very unique partnership where we have a large number of people working in Bentonville, on behalf of Walmart that help manage the end-to-end supply chain,” Pruden said.

This model is already being put to use in the U.S., but Pruden declined to identify the customer or customers with whom this program has rolled out. [In May, Pruden’s presentation to analysts showed the Medical Devices business had at least had eight such customers – or strategic partners. They include New England Baptist Hospital, OSF Healthcare, Saint Luke’s Health System, Grupo Angeles Servicios De Salud and Schulthess Klinic among others]

He was similarly elusive when asked about the types of products for which the corporation has taken on some risk. This is in direct contrast to other device companies that are not only providing full-throated support for alternative payment models that mean bearing more risk with hospitals but actually identifying the product at the heart of the matter.

Take Stryker for instance.

Earlier this year, the Kalamazoo, Michigan orthopedic company announced that it is providing no less than a “money-back guarantee” for customers who use its SurgiCount system to keep track of the surgical sponges that in some cases may inadvertently get misplaced, ending up inside surgical patients. Stryke said that it would offer up to $5 million in product liability indemnification to hospitals and an additional guarantee to refund the incremental cost hospitals bear to invest in its SurgiCount program compared with the hospital’s previous sponge spending for up to three years.

Medtronic, the largest pure-play device company, has also gone at-risk with its Tyrx absorbable antibacterial envelope. The mesh device is meant to encapsulate a pacemaker and ICD  and release antimicrobial agents over a period of seven days to prevent surgical site infections of such cardiac devices.

While Pruden didn’t provide any specific example of products that J&J Medical Devices, he was very emphatic about the need for device makers to assume some risk with their products as they become more of a strategic partner to hospitals than a supplier. And that can mean the difference between a supplier relationship always on the verge of being cut and a long-term strategic partner.

“That’s the essence of what I am doing – aggregating our businesses at scale, offering some willingness to take some risk and leveraging the enterprise and some of the things we can do to create some value,” he said. “Partnerships that only go one way don’t last very long.”

http://medcitynews.com/2016/10/jjs-medical-device-chief-taking-inspiration-consumer-business/

Forbes: FDA Approval MEANINGLESS!

The FDA Is Basically Approving Everything. Here's The Data To Prove It

Matthew Herper  AUG 20, 2015 @ 5:53 AM 

Remember when the FDA rejected drugs?

We just got treated to a whole lot of drama this week as to whether Addyi, a drug to boost women’s libidos, would be approved. But based on the data, that approval was probably a foregone conclusion.

As recently as 2008, companies filing applications to sell never-before-marketed drugs, which are referred to by the FDA as “new molecular entities,” faced rejection 66% of the time. Yet so far this year the FDA has rejected only three uses for new chemical entities, and approved 25, an approval rate of 89%.

Those numbers come from a new analysis commissioned by Forbes from BioMedTracker, a division of publishing giant Informa that helps investors track events in the pharmaceutical industry. And if you dig into them, the drop is even sharper.

The way BioMedTracker follows new molecular entities is slightly different from the FDA does. BioMedTracker users want to know about every use of a new medicine. That means that the 2015 rejection count includes rejections of Avycaz, a new antibiotic from Allergan ngIf: ticker AGN -1.27% ngIf: show_card end ngIf: ticker , for hospital-acquired pneumonia, and selling Jardiance, a diabetes drug from Eli Lilly ngIf: ticker and Boehringer Ingelheim ngIf: ticker , in combination of metformin. But Avycaz was approved for two other uses and Jardiance is on the market by itself.

So in reality, the FDA approval rate is more like 96%. Eliminating BioMedTrackers counting of multiple uses for the same drug means FDA approved 23 drugs and rejected 1, Merck ngIf: ticker ’s anesthesia antidote, Bridion. Again, that means 19 of 20 new drug applications were approved.

But it’s worth sticking to BioMedTracker’s definitions, because it allows us to compare this incredibly high approval rate with the past. And that tells a story of an agency that has been giving the green light more and more often.

In 2008, BioMedTracker says the FDA approved 20 new molecular entities (NMEs) and rejected 20, for an approval rate of 50%. In 2009, the NME approval rate fell to 44%, as 28 uses were rejected and 22 were approved. That rate rose to 86% in 2011, partly as some of those rejected drugs reached the market, fell again to 60% in 2013, and in last year rose to 88%. The evidence is that we’re living in a golden age of drug approvals, at least from a drug company’s perspective.

And there’s even more data to back up the contention that the FDA is basically providing a rubber stamp. BioMedTracker doesn’t just track what happens to NMEs, or new drugs. It follows closely every time a company asks the FDA for an approval. (One flaw in the data: while drug approvals are a matter of public record, we only know about rejections, known by the euphemism of “complete response letters,” if drugmakers feel the need to share them publicly.

For this analysis, BioMedTracker also looked at every time that a company asked the FDA to either approve a new drug or approve a new marketing claim for an existing medicine. The numbers parallel what was seen with brand new medicines.

In 2008, companies asked for 134 approvals and got 75 of them, a 56% approval rate. That rate hovered steady in 2009 and 2010, and then rose to about 70% in 2011, 2012, and 2013. Last year it jumped to 77%, with 97 out of 126 requests for approval coming back positive. This year’s approval rate? It was 88%.

Again, nine out of ten times, when a pharmaceutical company asks the FDA for a new marketing claim, it gets it. That’s why all of the arguments about Addyi, whose maker, Sprout Pharmaceuticals, is now being bought by specialty pharma giant Valeant Pharmaceuticals ngIf: ticker for $1 billion, were a little silly. The odds of a rejection were low at best.

The FDA points out that one reason that drug approval rates are going up is because it is doing its job, as defined by Congress. The agency has deadlines for when it is supposed to approve new drugs, and it is meeting them. More than that, it has instituted new procedures to make sure it communicates well with drug companies before they file new drug applications. And the FDA has had a program to ask patient advocates what they want. Many sick patients would prefer that the FDA approve a drug with a marginal benefit than reject it.

Right now, it only looks like this trend will continue. A new bill called the 21^st Century Cures Act attempts to further speed up approvals and remove red tape.

But the risks of speeding up approvals should be pretty clear, too. In the late 1990s and early 2000s, there was a boom of new drug approvals. In 1999, the FDA approved two drugs that became synonymous with drug safety scandals: Vioxx, which was withdrawn from the market by Merck, and Avandia, made by GlaxoSmithKline, which later had its use severely restricted. The approval boom is good only so long as it doesn’t trigger another drug safety conference.

That’s why we should tread carefully here. Already, the FDA is approving drugs almost all the time. It is doing so rapidly, with appropriately lower standards for rare diseases. How low do we want the bar to go?

And it seems appropriate to also give a warning to biotechnology investors. For any drug facing an FDA decision in the near term, this is good news. Worried about whether the muscular dystrophy drugs being developed by Sarepta and Biomarin will be approved? The odds are probably better than you think.

But we’re also living through an unprecedented biotech boom, with the iShares Nasdaq Biotechnology Index up 360% over five years in part because the regulatory environment for drug companies has improved. Well, this could be as good as it gets. If 96% of new drugs are getting approved, approval rates can only go down. If you’re looking for an indication that we’re hitting a peak, this could be it.

And I think it’s likely that the current approval rates are as much a result of the political environment as anything else. To the extent that they think about the FDA, politicians on the right generally want the FDA to get drugs to patients faster, giving them choices. Those on the left worry more about approving dangerous drugs.

But the FDA doesn’t follow the tone set by the President or the party in power, because the FDA is never the center of anybody’s agenda. Instead, its tendency, even if its unconscious, is to protect itself against attacks from the opposing party. A lame duck Democrat and a Republican Congress? You’re going to get an easy FDA. If a Republican wins the White House next year, think about selling your drug stocks.

I posted the article on my Facebook page with this comment:  

Thank you, Helen Haskell for sharing this article. I was trained 9/2010 at FDA/CDRH to be a Patient Representative. I have NEVER been contacted to serve on an AdvisoryPanel. Patient Representatives are NON-VOTING and most devices are cleared as 'substantially equivalent' 510(k)-grandfathered. I would like to see a similar report on medical devices and have a requirement that this information be a part of 'Informed Consent' for the patient.

Biomet Knee Warranty: Patient Advocates Not Buying It!

Go to the link  Biomet direct-to-consumer ad now running on TV in the U.S.   The Biomet knee warranty is here.

What the warranty should say:

1. This device is designed to last for _______ years.  

2. Normal use is defined as ____________.

3. Patients will encounter no legal/paperwork barriers to accessing the warranty.        

4. Hospital and testing costs are fully covered.The product cost is incidental to patient harm costs such as lost income, pain and suffering. 

5.  Revision is failure and prompts payment under the warranty.  Increased function and pain reduction are expected. Introduction of new patient harm such as exposure to toxic materials or need for increased medical intervention is a failure.  

6. Patients should bear no expense for testing costs for devices with sub-optimal results.

7. Immediate patient compensation in contested cases is assured. Financial responsibility is pre-defined in a default agreement between producer/hospital/surgeon.    

8. Like MSDS sheets, every source and material in the device is listed and the long term health issues related to exposure are disclosed.  Such documentation must be provided to the patient in pre-op informed consent along with history of FDA product approval(510k or PMA) and number implanted to date. 9. A comprehensive federal implanted medical device registry is fully public and free. Exercised warranties will be immediately visible.  The medical device industry functions in a transparent and ethical manner to the benefit of the nation and citizens of the United States.  Profit reflects the value of its' contributions to the health of patients.

Concerns that Prompted this Blogpost:

Direct-to-consumer ads are intended to drive sales.   "The industry's only Lifetime Knee Implant Replacement Warranty^† in the U.S." is limited to the cost of the component only--not covered are hospital and surgeon fees, related surgery living costs (travel, hotel, transportation, etc.), and loss of economic benefit while surgery is repeated.

Prior to Biomet and the implanted medical device industry reaching the conclusion that "less is more" and advertising an (anemic but much-needed) warranty thousands of patients remain harmed and uncompensated. 

Device Industry self-inflicted injury-stop whining!

http://www.stthomas.edu/mc/nihp/20120627/default.html

BI-PARTISAN SELF-INTEREST TRUMPS OBAMACARE FINANCING

The ACA, a.k.a. Obamacare, expands insurance coverage to life-saving health care and medical technology to 32 million of some 50 million uninsured Americans. Every segment of the health care industry has agreed that the benefits of expanding coverage far outweigh the costs of some financial concessions they have made to achieve it, which is usually in the form of financial reimbursement changes. The exception is the medical device industry, which has fought making any concessions, and its congressional proponents who are currently engaged in repealing the one concession forced on them, an effective 1.5% profits tax for 10 years on companies with annual sales over $5 million. Democrats in Minn. such as Senators Klobuchar and Franken, and Congressman Tim Walz, oppose repeal of the law they voted for but favor gutting it of the revenue required to make it work. The StarTribune, which regularly publishes the self-serving opinions of the industry about how the FDA is driving U.S. jobs and innovation overseas, and only rarely digs deeply into the genuine health and safety issues associated with a local industry that some time ago passed from real medical innovation to iterative invention, editorializes here clearly on this bit of congressional double-speak.

Commentary from Dave Durenberger
Wednesday, June 27, 2012________________________

http://www.startribune.com/opinion/editorials/158245155.html

Jerry Holt, Star Tribune

Editorial: If device tax is lost, special interests win

•                June 9, 2012 - 6:00 PM

The Minnesota-led congressional charge to repeal a new tax on the medical-device industry that will help defray the cost of health care reform is another example of the outsized influence of special interests in Washington.

Instead of acceding to yet another demand by the device industry -- which has already had the tax halved, and recently won favorable regulatory reforms -- Congress needs to tell firms the hard truth.

Hospitals, drug companies and insurers have agreed to shoulder some health reform costs. The device industry isn't being singled out, especially when the 2010 Affordable Care Act will likely benefit its bottom line by expanding coverage to up to 33 million uninsured Americans. The proposed 2.3 percent device industry excise tax, which will raise about $2.9 billion a year when it kicks in next year, should not be repealed.

Minnesota Republican Rep. Erik Paulsen is a champion of a U.S. House bill that would repeal the tax. Minnesota's Democratic Sens. Amy Klobuchar and Al Franken also support repeal.

KLOBUCHAR'S VIEW"I congratulate Representative Paulsen on this vote. While the administration's statement that the president will veto this bill means that changes will likely need to be made, I will continue to pursue all options to get this done. I have long worked to get this tax reduced or eliminated, including a $20 billion reduction from the original proposed tax in 2010."-U.S. Sen. Amy Klobuchar

Paulsen, whose district is home to many device firms, has proposed offsetting the lost device industry tax revenue by recovering some subsidies given to individuals to help buy health insurance.

That proposal would result in needy people ponying up to cover the cost of special treatment given to a wealthy industry. Last week, the White House sensibly threatened to veto Paulsen's legislation, which passed the House on Thursday in a 270-146 vote. It's not clear when the Senate will take up the issue.

While the device industry trade organization is predictably predicting massive job losses if the tax is not repealed, independent analysts have cast serious doubt on research the industry commissioned to support its catastrophic claims.

A 2012 Bloomberg Government analysis said industry claims of up to 43,000 jobs lost are simply "not credible." The research "exaggerates the degree to which spending on health is affected by price increases" and ignores "positive effect of new demand [for devices] created by the law,'' according to Bloomberg analyst Christopher Flavelle.

There's further reason to be skeptical about the push for repeal. A Standard and Poor's industry report noted that the 2013 start date gives the industry time to adjust to the new tax. Because the tax can be used as an income tax deduction, the net increase is just 1.5 percent, the report found.

The tax is also structured so that it doesn't give companies an incentive to send jobs offshore. "The tax applies equally to imported and domestically produced devices, and devices produced in the United States for export are tax-exempt,'' wrote Paul Van de Water, an analyst with the Center on Budget and Policy Priorities.

The device industry faces many challenges -- many of them self-inflicted. High-profile recalls of flawed devices have given the industry a black eye. The Standard and Poor's report notes that the industry has produced "little in the way of new products that would be considered revolutionary.'' The tax will add to firms' challenges, but it certainly can't be blamed for all the industry's woes.

There's legitimate concern about the tax's effect on small- to medium-sized firms, which are developing products that aren't yet profitable. While some of the costs can be passed along to the device's end users -- patients, in other words -- these firms may be unduly burdened by the new tax, which is on revenue, not earnings.

Policymakers and the industry should have pushed for an exemption for these smaller firms instead of a total repeal -- this revamped option deserves consideration. It would minimize the loss of tax revenue, yet protect a vulnerable industry sector important in Minnesota and elsewhere. A trade group estimates that the 10 largest device firms will account for 86 percent of the new tax's revenue.

Unlike the new Medicare drug coverage passed under President George W. Bush, the Affordable Care Act at least attempted to provide new benefits without adding to the nation's debt. The amount of money generated by the device tax is a relatively small contribution to health reform's overall cost.

Still, it's helping to defray the cost. Given the nation's mounting long-term debt concerns, politicians need to find more ways to pay for promised benefits, not vote away one substantive way of doing so.

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