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Rare Diseases and Orphan Products: Accelerating Research and Development
is shorter for HDEs (including the time for the HUD designation step) than for regular premarket approval applications.
Like developers of orphan drugs, developers of devices are also eligible for orphan products grants. Seven devices for which grants were awarded have subsequently been approved, five through the HDE process and two through the PMA process (Linda C. Ulrich, M.D., Medical Officer, FDA Office of Orphan Product Development, April 26, 2010, personal communication).
At the same time that the HDE route to approval has some advantages compared to the PMA process, it also comes with a critical restriction in addition to the 4,000-unit limit per year. Specifically, sponsors are not permitted to make a profit on the sale of the HUD if the device is sold for more than $250. They can recover certain costs, for example, those related to research and development, manufacturing, and distribution.12 The sponsor must provide supporting financial documentation to FDA about the price it proposes to charge. Another complication is that even though the sponsor can charge for the device, the HDE device might not be purchased for use in clinical practice—usually within a hospital—if adequate third-party reimbursement is not available to cover an institution’s cost to purchase, as discussed in a later section of this chapter.
One unique feature of the HDE policy is the requirement that use of an HDE device requires approval by an institutional review board (IRB) at the institution where the device is to be used. A clinician can usually request IRB approval in advance for several patients so that emergency procedures do not need to be invoked.
The primary responsibility of IRBs is to protect human research participants through review of proposed research. Their role in approving the use of an HDE device is an anomaly and a potential source of confusion because the purpose in question is not research on the device but use of the device in clinical care. The task of securing IRB approval is often a difficult, costly, and sequential (institution-by-institution) task for the HDE sponsor. In addition, marketing of the device to individual centers (which must seek IRB approval) may be more difficult in the absence of the usual FDA premarket approval. The requirement for IRB approval thus is potentially another factor that may discourage companies from developing products for small markets under HDE procedures.
This can make an HDE device costly to a purchaser, even if it does not lead to profits for the company. For example, the CEO of Abiomed indicated that the company expected to charge $250,000 for each unit of its HDE-approved AbioCor implantable replacement heart for end-stage heart disease. He also is quoted as indicating that the price for the unit did not cover additional charges associated with training, associated technologies, and diagnostic and clinical support (Zacks, 2008).