Taxes and regulation weighed heavy at a recent field hearing of medical device makers and California law makers at Edwards Lifesciences Corp.’s Irvine headquarters.
The goal of the hearing, which was held earlier this month, was to expose policymakers to an industry that employs some 110,000 workers in California, according to Jerry Hill, a Sacramento-area Democratic assemblyman who chairs the committee.
“Please continue to lobby and educate us,” said Assemblywoman Fiona Ma, a Democrat whose Bay Area district includes device makers.
Three members of Orange County’s delegation were present: Sen. Lou Correa, Assemblywoman Diane Harkey and Assemblyman Jose Solorio.
Edwards Chief Executive Michael Mussallem, who hosted the program, opened with an overview about his company.
And although the legislators weren’t members of Congress, Mussallem did mention a sensitive subject among medical device makers: a proposed federal tax to help pay for healthcare reform.
“We understand why it’s happened, but it’s not very popular in this room,” Mussallem said.
The medical device industry—working through AdvaMed, a Washington, D.C.-based trade group that Mussallem chairs—succeeded in getting the tax cut from an originally proposed $80 billion down to $20 billion.
“I never thought I’d say I’m happy about a $20 billion tax,” Mussallem said, drawing laughter from the audience.
Walter Cuevas, chief executive of Irvine’s Interventional Spine Inc., talked about some challenges that smaller device makers face, including funding and regulation.
“If somebody’s putting cash in front of you, you’ve got to take it,” said Cuevas.
Interventional Spine, previously Triage Medical Inc., has raised $43 million in venture capital in its history.
Its backers include the MedFocus Fund LLC, an Irvine venture capital fund led by longtime device veteran Michael Henson.
When device makers get funded, the money mainly goes toward meeting regulatory goals, including product approvals, Cuevas said.
He also called for synchronization of device regulation between the U.S. and other parts of the world, saying that smaller medical device makers spend about 80% of all of their cash on achieving various regulatory milestones.
Thomas Berryman, chief executive of Aliso Viejo-based WaveTec Vision Systems Inc., asked lawmakers to nurture a supportive environment for device makers, one where they can obtain patents and talented workers without having to cut through too much red tape, among other things.
Representatives from Abbott Medical Optics Inc., a Santa Ana-based unit of Abbott Laboratories of the Chicago area that makes eye surgery devices, lasers and contact lens products, and the University of California, Irvine also were at the hearing.
Christie Buys Co.
Christie Digital Systems Inc., a Cypress maker of movie projectors, is diversifying into the medical device realm.
Earlier this month, Christie bought the assets of Luminetx Corp. of Memphis for an estimated $15 million. Christie has created a unit, Christie Medical Holdings Inc., to enter the medical imaging industry.
Luminetx makes the VeinViewer, a vessel imaging system that allows healthcare providers to clearly see accessible veins for clinical treatments and procedures such as intravenous insertions.
Christie is part of Ushio Inc., a Japanese maker of halogen lights that has its U.S. base in Cypress. Ushio, which bought Christie in 1991, makes the lamps that go into Christie’s projectors.
Before Christie’s deal was announced, a group of Luminetx shareholders and investors made a last-ditch bid for the company, according to the Memphis Business Journal.
A group led by the John H. Dayani Fund of Nashville, Tenn., offered to loan Luminetx $2 million when its cash started to dry up last summer.
But Luminetx management decided to take a $1.5 million bridge loan from Christie and sell the company to Christie, according to the article.
The Dayani fund had invested $3.5 million in Luminetx in 2007, for which it received 1.1 million shares of the company’s stock.
Bits and Pieces
Richard Chambers, chief executive of CalOptima, an Orange agency that administers health insurance programs for low-income county residents, was appointed to the federal Medicaid and Children’s Health Insurance Program Payment and Access Commission. The commission’s primary responsibility will be to advise Congress on current Medicaid and CHIP payment and access policies, as well as make recommendations on potential reforms … Irvine eye drug maker Ista Pharmaceuticals Inc. has submitted a supplemental new drug application to the Food and Drug Administration for a once-daily formulation of its Xibrom drug that’s used to treat eye inflammation and pain following cataract surgery. If regulators approve the application, Ista said it plans to market the once-daily drug under the brand name XiDay … Mirth Corp., an Irvine healthcare information technology company, said that its Meaningful Use Exchange software product was being used by Redwood MedNet, a health information exchange that serves regional healthcare providers in Mendocino and Sonoma counties.
