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3. The Development of Medical Devices
Over the past quarter century there has been an acceleration in the
development of new medical devices, in part because of rapidly expanding
scientific and engineering knowledge (37~. In view of the reciprocal
relationship between research and development, we will briefly consider the
interactions between the reseach and invention phase of medical devices and
the development phase.
In addition to basic biomedical and clinical research, bioengineering research,
which builds on advances in the physical sciences, mathematics, and engineering
in other sectors, provides an important contribution~to the knowledge base
. . . .. . . . . ~ . 2, .
. : arc ~~oeng~neer~ng research
predominantly takes place in universilv and government laboratories. In
underlying meolca1 Device development
O —
contrast to some European countries and Japan, funding for fur~damenta1
research in biomedical engineering is relatively small in the United States (e.g.,
I% of the NIH budget) and is dispersed through a number of agencies (135~.
Compared with the U.S., the Federal Republic of Germany has nearly double
the amount of space and equipment for bioengineering research (106~. Some
recent efforts, however, may ameliorate this situation. The National Science
Foundation, for instance, has established a program to fund high-risk
fundamental bioengineering research. On the applied research side, the Small
Business Innovation Research (SBTR) program was established in the early
19SOs by NIH to provide R&D grants or contracts to small businesses.
According to an OTA analysis, 40% of grant applications in 1983 concerned
medical devices and 23% of these applications were funded (~13~.
Federal support is complemented by private investment, especially in applied
research. In 1986, the medical device industry invested on average 7.5% of
sales in R&D (~17~. In 1979, medical device firms in the five medical device
Standard Industrial Classification (SIC) codes (X-ray and electromedica]
equipment, surgical and medical instruments, surgical appliances and supplies,
dental equipment and supplies, ophthalmic goods) reported that 3.7% of their
3] Bioengineering research will be defined as the application of engineering
knowledge and concepts to the understanding of the human body, its
interactions with machines, and to the development of new and improved
medical devices. This definition is very similar to a definition provided in a
recent National Research Council report (106), except that the scaling-up and
production of new products derived from advances in biology (i.e. the
engineering aspects of biotechnology) are excluded. Those aspects of
engineering are discussed in the previous Chapter.
23
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company-sponsored R&D budget was basic research and 23% was applied
research (~13,137~.
The investment in research depends on the type of device as weld as the kind
of firm involved. As Spilker observes, medical devices are a much more
heterogenous group of products than drugs in terms of design, use and
purpose; many devices never come in contact with patients, some do briefly,
and others do permanently (129~. There are roughly 1,700 different types of
medical devices and 50,000 separate products (~13~. Clearly, the research
required for the invention of disposable needles is very different from that for
the invention of a C1~ scanned. Equally, there is much more variety in the
kinds of firms that invent and develop medical devices than is the case with
drugs. The industry is characterized by a large number of small firms;
approximately 50% of U.S. medical device manufacturers have fewer than 20
employees. Large companies, however, dominate the industry in terms of sales
(120~. According to Roberts, small firms and even individuals produce most of
the innovations in the early stages of developing a new class of medical
devices, whereas larger firms play an especially important role later on in the
development process (sometimes through the acquisition of small firms). As
Roberts put it, the invention of "medical devices is usually based on
engineering problem solving by individuals or small firms, is often incremental
rather than radical, seldom depends on the results of long-term research in the
basic sciences, and generally does not reflect the recent generation of
fundamental new knowledge. It is a very different endeavor from drug
innovation, indeed" (120~. This observation, however, is not as easily applicable
to radical innovations, such as those in modern imaging devices, which require
large-scale investments in research and development. Such resource-intensive
innovations usually take place in large firms.
After a product is invented, a patent application may be filed. While patent
protection is extremely important to the pharmaceutical research and
development process -- partially because of the long duration of the R&D
process and the relative ease with which drugs can be copied -- the value of
patent protection in medical device development is much less evident. In the
device area, it probably is easier to invent around a patent, and the research
and development time is generally much shorter. Furthermore, with devices
that require large capital costs, the need for large-scale investments may
prevent competitors from entering the market. and small firms mav depend
, ~_~ -be ~ -r
32 In view of the heterogeneity of medical devices, the type of device
determines if animal research will be undertaken before a device prototype is
evaluated in humans.
24
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more on trade secrets.
Whereas the potential users of new medical devices, i.e. the physician-
researchers, may play an important role during the development process, they
also may be crucial to the invention of medical device prototypes. Not only do
they identify the clinical need for a new device or for improvements in existing
devices, but they may also be the innovators and builders of the original
prototype. Von Hippe! first described the importance of users in the invention
of such scientific instruments as gas chromatography, nuclear magnetic
resonance, ultraviolet spectrophotometry, and transmission electron microscopy
(68~. He concluded that 80% to 100% of the key innovations in these four
fields were originated by users and not the ultimate manufacturers. Von
Hippe] and Finkelstein underlined the importance of users with regard to the
automated clinical chemical analyzer (69~. For example, the initial prototype of
an auto analyzer was developed by Skeggs in the pathology department of Case
Western Reserve University; Technicon then made a licensing agreement with
Skeggs to patent the auto analyzer and further developed and marketed the
machine (147~. Shaw, who analyzed 34 medical equipment innovations in
Great Britain presented similar results33 (126~. It follows that close interactions
between clinicians and industry are important to the development of medical
dev~ces34. Roberts and Peters, however, found that academicians in MIT
physics, mechanical engineering and chemical engineering departments and two
large research laboratories did not readily transfer their ideas for commercial
development (121~. This finding was repeated in an analysis by Roberts (120)
of two major medical centers in the Boston area, although this may change
somewhat in the present-day climate, where universities and their medical
centers are becoming more market-oriented (100~.
These considerations affect industrial decision making. In the pharmaceutical
industry, the decision to invest in particular research areas involves "potential
demand" for a pharmaceutical as an important criterion. If the user-dominance
paradigm of Van Hippe] plays an important role in some parts of the medical
device industry, manufacturers decisions will be made later in the R&D
continuum. The decision whether to pursue development of a prototype
involves both technical and market factors35.
33 Shaw found that half of the initial prototypes were produced by users.
34 Allen (2) established the importance of intra-organizational (e.g.,
between R&D and manufacturing divisions) and inter-organizational
communication for R&D performance.
35 With regard to the latter, a recent analysis of the development of
devices demonstrated that half of the device firms considered used a formal
25
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In most industrialized countries, the development of new medical devices is
governed by regulatory schemes, either in the form of standards or extended
pharmaceutical laws, which focus mainly on safety. In contrast, the U.S. has
passed a specific law governing the development of medical devices. Prior to
the passage of these Amendments to the FD&C Act in 1976, the FDA asked
Arthur D. Little consultants to provide insight into the safety and efficacy
testing practices of medical device firms (5~. This analysis revealed that most
devices were tested during their development, but that the extent and nature of
clinical evaluation varied considerably among products. In addition, there was
considerable variety within product categories. For example, one developer of
an artificial knee undertook clinical trials in 200 patients, another performed
informal trials with 75, and the third used only 50 patients with no set protocol.
Furthermore, in comparison to drug evaluations, the criteria of clinical
evaluation may differ with new clinical devices. Criteria more often include
user acceptability, either of the design or the reliability and ease of use in the
clinical setting, and the competitive advantages of a new device versus
alternative devices. Finally, in most cases evaluations did not include the
classical randomized clinical trial, review by Institutional Review Boards (IRBs)
and conducted with patients who signed consent forms.
Because medical devices are a much more heterogenous group of products
than drugs, it is understandable that some variation in clinical evaluations exist.
The ex~s-tence of considerable variation within device categories, and the fact
that half of the clinical investigations had no formal protocol, indicate room for
improvement. In addition, the risks associated with some devices, such as
certain cardiovascular implants or JUD's, became evident in the 1970s. The
Cooper Committee was established to recommend device legislation. It
proposed different levels of regulatory control based on the likelihood of risk
inherent in specific classes of devices, with more rigorous regulation for devices
with higher risk potential. In 1976 the Medical Device Amendments (Public
Law 94-295) were passed to ensure that new devices were "safe and effective"
before they were marketed (49~. These Amendments divide medical dev~ces36
financial] analysis of the expected returns on investment or at least some form
of market survey. Many firms, however, relied on informal decision making
processes, usually based on a firm's experience in the market for the product
(114).
36 According to Kennedy (78), the term medical devices includes al] of the
Items readily identified as devices as weld as in vitro diagnostic devices used in
clinical laboratories and some products previously regulated by the FDA
Bureau of Drugs, such as lUDs, or by the Bureau of Bio~ogics, such as arterial
grafts.
26
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into three classes (40,79~.
Approximately 30% of all types of medical devices are in Class I. Class ~
devices include such instruments as tongue depressors, which do not support or
sustain human life and do not present a potentially unreasonable risk of illness
or injury. They are subject to the general controls used before passage of the
Medical Device Amendments, such as regulations regarding registration, pre-
marketing notification, record keeping, labelling, and GMP regulations.
About 60 percent of devices are in Class Il. They may involve some degree of
risk and are subject to federal~v defined nerfc~rmance standards couch ns X-rav
devices). To date, however, no performance standards have been issued by the
FDA, and existing national or international product standards apply.
Finally, all devices that are life supporting or sustaining, that are of substantial
importance in preventing impairment of health, or that have a potential for
causing risk of injury or illness are in Class IlI. For these, the sponsor needs
to demonstrate safety and efficacy before the FDA grants marketing approval.
Approximately 10% of medical devices are in Class Ill, such as the artificial
heart, DNA probes or laser angioplasty devices.
According to the law, devices introduced since 1976 are automatically placed in
Class Ill, unless the sponsor successfully petitions the FDA to reciassi~ it as
"substantially equivalent" to a device that was on the market before the
amendments took effect. The substantial equivalence provision has provoked
uncertainty, as the law did not specify if this equivalence referred to safety and
efficacy, or to equivalence of the physical characteristics of a device. FDA
regulations issued in 1986 state that devices with new intended uses require
pre-marketing approval. Post-amendment devices with intended uses similar to
those of pre-amendment devices may be found to be substantially equivalent
only if the new technological features of a -device can be shown not to decrease
its safety and efficacy (79~. This may be demonstrated through descriptive,
performance and even clinical data. This is called a 510(k) submission. If a
device is found to be substantially equivalent, the manufacturer may rely on
pre-marketing notification. This route to the market is much more expeditious
than the pre-market approval route, Hand the impression is that sponsors wild
attempt to change the design of devices accordingly. Indeed, a recent GAO
report found that roughly 90% of medical devices reviewed by FDA were
marketed through SiO(k) review, while 10% underwent the full pre-marketing
approval process (55~.
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To support a marketing approval decision, or in some instances a 510(k)
submission, a sponsor is required to conduct clinical studies. Clinical
investigations of devices are subject to the two basic elements governing clinical
research in general: informed consent and institutional review. In comparison
with drugs, however, Institutional Review Boards (IRBs) play a more important
role in device evaluations. They review all clinical device studies, decide if the
device poses a "significant risk" and approve clinical studies for their
institutional. The IRB determines if a device poses a significant risk on the
· · ~ e . ~
Cal
basis ot an ~nvest~gat~ona~ plan. line plan Includes a description of the device,
the objectives and duration of the investigation, the investigational protocol, a
risk analysis, monitoring procedures, informed consent materials, and also
identifies all involved IRBs. if a device poses a significant risk a request for an
Investigational Device Exemption (IDE) is submitted to the FDA (73~. Such
an IDE application contains the investigational plan, information on prior
investigations, the manufacturing process, and the amount to be charged for
the investigational device. In comparison to the 1,250 pages of an average
IND, the average size of an IDE is 150 pages.
After an IDE has been approved clinical investigations can be initiated38. Data
from a random ten percent sample of IDEs submitted between 1980-1986
indicate that most clinical evaluative studies are concentrated in a few product
categories; ophthalmic, cardiovascular and obstetrics/gynecology products
account for nearly 60% of all TDE investigations. The range of products
requiring an IDE, however, is increasing (17~.
In contrast to pharmaceuticals, the final version of a ~nedical device is often
not created "de nova"; instead a device prototype is usually modified technically
as a result of initial clinical testing (129~. The period of learning necessary
before a device can be used properly arid efficiently may be longer than with
drugs. Therefore, according to Spilker, clinical testing usually first involves an
initial pilot stage during which the prototype's design and materials are further
37 A significant risk device is legally defined as an implant and presents a
potential for serious risk to the health and safety or welfare of a subject; is
purported or represented to be for use in supporting or sustaining human life
and presents a potential for serious risk to the health and safety or welfare of
a subject; is for use of substantial importance in diagnosing, curing, mitigating
or treating disease and presents a potential for serious risk to the health and
safety or welfare of a subject; or otherwise presents a potential for serious risk.
38 Including also those cases where an IDE application is not necessary,
but clinical trials~are conducted.
28
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developed and tested. The main questions are whether the device produces
the postulated effect in humans and whether it seems to be clinically useful.
These evaluations usually are based upon non-formal experiments (see section
4 for discussion of the argument to randomize the first patient). In addition to
clinical evaluations, this stage also involves technical testing; for example, the
electrical and mechanical components of infusion pumps are subject to
technical evaluations, and a number of bench tests are performed to determine
a pump's accuracy and reliability.
After the technical development has become more or less stabilized, a series of
safety and efficacy evaluations of the 'final' 'initial' product can be initiated.
This decision is sometimes a difficult one, as clinical evaluations usually reflect
risks and benefits at a fixed point in time. Too early assessments may not
reflect the true risks and benefits of an evolving device and the results of the
study may be obsolete before the evaluation is completed, whereas the results
of evaluations done too late in the life-cycle may be irrelevant for health care
decision makers (see Chapter 4~.
In medical device evaluations, a distinction needs to be made between
diagnostic and treatment devices. With the former, it is usually not direct
patient benefit, but benefits in terms of clinical utility (i.e. its contribution to
further diagnosis or therapy) that are to be evaluated. Fineberg has
formulated a hierarchy of criteria for diagnostic technology evaluations:
technical capacity, diagnostic accuracy, diagnostic and therapeutic impact, and
patient outcomes (48~. Generally, evaluations provide information on the
technical and diagnostic performance (not the more comprehensive clinical
utility or patient outcomes) of a diagnostic device, and possibly on its risks and
complications. The main measures of diagnostic performance are sensitivity
(ability of a test to detect disease when it is present) and specificity (ability of
a test to correctly exclude disease when it is absent)39. In clinical practice,
however, the question of interest is, if the patient has a positive test how likely
is he or she to have a specific disease? (71) Therefore two additional
measures, the predictive value of a positive test result (i.e. number of true
positives/ true positives plus false positives) and the predictive value of a
negative test result (i.e. number of true negatives/true negatives plus false
negatives) play an important role. These measures indicate the likelihood of
the presence or absence of a disease in a tested individual from a given
population with a particular prevalence of the disease. In order to compare
the sensitivity and specificity of two or more diagnostic devices, the receiver
39 Determining technical performance involves replicabili~cy and reliability as
important criteria.
29
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operating characteristic (ROC) curve analysis can sometimes be used40.
However, ROC analyses require simple models and large numbers of cases,
and Friedman observes that they are often very difficult to undertake (53~.
Thus, most diagnostic tests are evaluated only in terms of their technical and
diagnostic performance before marketing. Furthermore, according to Schwartz,
the range of Datients tested mav he inadequate as they usua1Iv invasive those
·, ~ ~ ~ ~ e ~ ~. ~ ~ ~ ~ ~ _ ~ _~ ~ ~ e -
wltn advanced disease, and a tew young healthy controls (123). A diagnostic
test, However, may not perform as well with patients with earlier disease, which
indicates the need for more comprehensive evaluations (454. As with drugs,
the question here concerns what endpoints should be evaluated in pre-approva]
and/or post-approva] trials.
Traditionally, most device evaluations lack randomized control groups (129~.
While this may in part be due to less sophistication in clinical research on the
part of many device manufacturers, it also may be a result of inherent
characteristics of device development that make the classical RCT more
difficult to perform. The statutory standard recognizes this and is less rigorous
than with regard to new drugs; i.e. safety and effectiveness information for
devices may be provided through "well-controlled scientific studies" or through
"valid scientific evidence". The randomized placebo-controlled, double-blind
clinical trial, optimally suited to provide pre-marketing efficacy information on
drugs and biologicals, indeed has more limitations with new devices. This holds
especially for diagnostic but to a certain extent also for treatment devices; for
example, a placebo may be unethical (as with heart valve replacements) or
certain situations may not be amenable to observing a placebo effect (as when
the patient is unconscious or the interaction between patient and device is
minimal). Another essential characteristic of RCTs as used in drug evaluations,
patient and physician blinding, may also cause more difficulties with devices.
However, creative techniques to eliminate bias are emerging. For example,
one physician may insert an implant device while another physician evaluates
its benefits and risks. Thus if RCTs are possible at this stage their use or that
of otherwise well-controlled study designs, such as parallel study designs or
crossover designs, should be stimulated. Generally the sample sizes used in
these clinical studies are considerably smaller than is the case with drugs.
Ophthalmic IDEs, for example, called for an average of 280 patients, while all
other IDEs involved about 150 patients (17~.
40 The ROC analysis allows one to compare the technical performance of
diagnostic tests over a range of different cutoff points or reference values that
denote a positive test result. This test displays the true positive ratios and the
false positive ratios for these different cutoff points. See (92~.
30
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ticket" devices. But after a decade some of the drawbacks of such planning
laws surfaced, in part because the numbers of new devices expanded beyond
the scope of regulation. At the same time, policy attention increasingly turned
towards the payment method as an important too] for influencing the adoption
and use of devices (67~.
During clinical studies, much industrial effort may be directed towards 'scaling
up' for production. The necessary production capacity may vary widely, ranging
from 10 to 100,000 devices a year. Depending on the kind of devices, specific
manufacturing requirements may exist, such as the need for sterility or for a-
certain shelf life. Good Manufacturing Practice (GMP) Regulations4~ govern
the manufacturing process in general. International and national standards may
also exert an important influence on the manufacturing process, for instance
those set by the Association for the Advancement of Medical Instrumentation
or the International Electrotechnica] Commission (~13~.
On the basis of the results of clinical investigations, a device may be approved
for marketing42. In contrast to drug regulation, the device amendments require
that advisory committees participate in the pre-marketing approval (PMA)
decision for class Ill devices (9~. In general, the PMA is an individual license
to the developer for a particular device. Other developers of similar types of
devices need to submit a separate PMA, with adequate clinical data. Data of
previously approved PMAs cannot be used, unless they are published and
generally accepted by the medical community. This policy protects each
manufacturer's investment in the development process, but it also may
stimulate the duplication of investigational efforts, including the performance of
unnecessary trials. However, the next model of a medical device often differs
in materials and/or design, and these differences may affect clinical risks and
benefits. Recently proposed Amendments to the 1976 medical device
legislation would allow the FDA to waive data requirements for PMAs
following that of the innovator. Adoption of these amendments could lessen
the incentive for innovative R&D.
An important decision point in the course of development concerns the
adoption of a new device by physicians and hospitals, which is influenced by a
complex set of medical, economic, regulatory and social factors (63,124~. In
the 1970s a number of health planning laws, such as Certificate of Need
(CON) laws and rate regulation, were enacted to control the adoption of "bip-
C7
41 One needs to distinguish between critical and non-critical devices. Most
rigorous GMP regulations apply only to critical devices.
42 On average the FDA takes a year to approve a PMA (79~.
31
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Most industrialized countries are moving away from a cost-based, essentially
open-ended reimbursement system to a prospective payment system (PPS).
This transition has probably been most prominent in the United States with the
establishment of Medicare's prospective payment system for hospitals, based on
diagnosis-related groups (DRGs). Under PPS hospitals have a strong financial
incentive to provide the least resource-intensive treatment. The system
promotes a significantly lower level of growth in service intensity than
traditionally has been the case, and the recalibration of DRGs is lagging behind
changes in medical practice (4~. Although the price system is intended to be
neutral under PPS, this is not always the case. For example, the lithotriptor
was covered as a medical treatment for kidney stones under DRG 323. But
this DRG pays only half as much as DRG 30S, for the surgical treatment of
kidney stones. Thus, although lithotriptors may improve the quality of care and
may be cost-effective for some indications, hospitals have less financial
incentive to invest in these machines (104,3~. Also, because PPS deals only
with payments for inpatient hospital care, there is an incentive for hospitals to
utilize technologies that are cost-effective over the short term of hospitalization.
There is little incentive for hospitals to use technologies which have long term
benefits, even though they may ultimately have a greater impact on the
efficiency of the system as a whole. As the existing reimbursement system
affects the market for new medical products, changes in this system may exert
strong feedback signals to the development process, e.g. it has been observed
that medical device manufacturers react to the demand for products that are
cost-effective over the short term and neglect R&D projects dealing with
products that are cost-effective over the longer run43.
With these changes in reimbursement, the coverage decision, e.g. by the
Health Care Financing Administration (HCFA1. has become a more important
factor in the rl~velnnment nrnr`~44
~ ,,
.~_,~^ a. i.,_ ---it Air . Traditionally, the coverage decision
making process was based on generally subjective evidence provided by medical
expert panels; increasingly, however, forma] evidence becomes the basis for
these decisions (105~. This evidence includes safety and efficacy considerations
43 As mentioned before, the economic environment in general and cost
analyses of devices in particular are outside the scope of this paper.
44 The statutory provision indicates that this decision should be based on
whether a device is considered "reasonable and necessary", which has been
translated to mean "accepted by the medical community as a safe and
efficacious treatment for a particular condition". Based on 13 technologies that
completed the full Medicare coverage process (including technology assessments
by OHTA) from the 1983-~8 period, it took 2.4 years from the time that
HCFA received the initial inquiry to the final disposition date.
32
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narrowly defined, but there is a tendency to consider the effect of devices on
the quality of life of patients (including their preferences for certain outcomes)
and their cost-effectiveness. As such, the change in decision-making provides
an important incentive to undertake evaluative studies after pre-marketing
notification or FDA approval.
Phase [V studies include a number of nost-marketin~ surveillance mechanisms
to rlPt~rt arts - rem - ri`~`nr" r - artery - Q45
.~ ~_.__. ~~_~`h~ ~~- A~lVllO . Me FDA maintains a Device Experience
Network (DEN) that receives reports on device hazards from health
professionals and manufacturers. Device manufacturers are required to keep
records of complaints as part of GMP regulations. On the basis of adverse
reaction reports, the FDA may require removal of designated devices from the
market or restrict their sale or use. In comparison to drugs, acute injuries are
probably more easily associated with a particular device. A major issue, which
needs to be examined, is whether the adverse reaction or event is a
consequence of the skill of the professional or inadequate maintenance of the
device, or can be attributed to a defect in the device itself (24~.
In addition to these surveillance mechanisms, a number of epidemiological
methods may be used to detect possible risks of device use. As discussed in
Chapter 2, the potential of using observational methods for risk detection is
increasing. In addition, information on effectiveness is needed; such
information can be provided by experimental or observational studies. Because
the life cycle of a device is short and next-generation versions of a particular
device may emerge relatively quickly (as with diagnostic pregnancy kits, for
instance) the applicability of RCTs may be more limited. An advantage of
using modern observational data bases is that they represent continuous
monitoring of the use of devices in practice and their outcomes. Uncertainty,
however, remains as to the strengths and weaknesses of these methods in
providing reliable evidence (62~.
45 A condition of the approval for new Class IT! devices is that information
received by manufacturers on device defects or adverse reactions should be
reported to the FDA within 10 days.
33
Representative terms from entire chapter:
medical device
