AdvaMed, a Washington, D.C.-based trade group, again has tapped an Orange County medical device executive as its leader.
James Mazzo, president of Abbott Medical Optics, a Santa Ana-based unit of Abbott Laboratories, is the group’s new chairman. Mazzo succeeds Michael Mussallem, chief executive of Irvine heart valve maker Edwards Lifesciences Corp.
Mussallem, who led AdvaMed since 2008, moves to a new role as immediate past chairman and chairman of AdvaMed’s nominating committee.
Mazzo’s been active at AdvaMed. His other roles have included serving as chair of its international board committee, where he was involved in an effort to streamline medical device regulation in Japan.
He also chaired the group’s political action committee and its value of technology program, which has sought to differentiate devices from drugs.
AdvaMed lobbies the government on behalf of medical device makers. It includes a variety of companies, big and small. Some 70% of its members have less than $30 million in yearly revenue, according to the group.
It has stressed working with both parties in Washington.
“We work with the people who work with us,” Mazzo said in 2007. “We can’t jeopardize the future of our industry because we’re seen to represent only one side of the coin.”
Other local executives also are involved with AdvaMed.
Scott Garrett, chief executive of Brea-based medical diagnostics maker Beckman Coulter Inc., is chairing AdvaMed DX, the group’s recently formed division that focuses on priority policies for diagnostic companies.
AdvaMed DX’s goals include establishing a modernized, risk-based approach to regulating in vitro diagnostics in order to help patients get timely access to testing, as well as reforming Medicare payments for new types of tests.
Change of Heart
One of the things that device makers working through AdvaMed have tried to do is kill a proposed $20 billion, 10-year tax on their revenue that was in the former Senate health reform bill and has been revived in President Obama’s newest proposal.
That effort looks like it has a convert.
Sheryl Skolnick, a healthcare services analyst with Stamford, Conn.-based CRT Capital Group LLC, said she changed her view on the proposed tax after attending a February presentation at the annual Health Care Forecast Conference presented by the University of California, Irvine’s Paul Merage School of Business.
“We no longer accept the (proposed) tax on medical device makers as a ‘necessary evil,’” Skolnick said in a research note.
A presentation by Mussallem that featured a video of Edwards’ less-invasive Sapien heart valve “gave us back our sense of wonder and delight at the innovation of which we were capable,” Skolnick said.
She said the presentation was an “eye opener” to “a services analyst who mostly sees the alleged bad behavior of device companies as a source of upward pressure on supply costs and an impediment to an efficient, competitive health system.”
In particular, Skolnick said that Sapien could save at least $200,000 in hospital costs per patient as well as improve the quality of life for patients.
“Our health policy should pay rewards for that innovative effort, not tax it to death,” she said.
Overall, Skolnick described the conference as “a far more interesting and productive group of people with real stakes in the health reform debate (debacle?).”
She wrote about several issues besides the proposed device tax.
Skolnick doesn’t believe that Medicare cuts to hospitals as a way to fund deficit reduction are likely to happen in 2010, and, “we view that as strongly positive for hospital stocks.”
Skolnick said that she had a sense of deja vu as she listened to some health system operators’ efforts to align doctors and hospitals into integrated delivery systems, in which changes in how doctors work bring down costs and quality and outcomes up.
European Approval
In other Edwards news, the device maker said its Sapien XT, a new version of its Sapien less-invasive heart valve, received European clearance.
Wall Street was pleased: Edwards “has once again delivered as promised by garnering a (Conformité Européenne) mark for Sapien XT. We believe that this approval paves the way for meaningful market share gains in the transfemoral segment of the European transcatheter valve market,” said Sean Lavin, an analyst with Lazard Capital Markets LLC.
Sapien XT “must perform as well as Sapien” for Edwards to maintain its less-invasive valve leadership, Lavin wrote.
He also said he thought that Edwards’ stock may be “volatile” around a patent lawsuit with Medtronic Inc. and its Irvine-based CoreValve unit that’s scheduled to start this month.
“We do not expect (Edwards) to garner an injunction in the trial, but the stock may swing up or down based on investor reaction to sentiment from the courtroom,” Lavin said.
Edwards has alleged that CoreValve’s device uses technology that infringes upon its Andersen valve’s patent, which is scheduled to expire in 2011. Besides the U.S. case, a British lawsuit that Edwards filed against CoreValve is scheduled to resume in an appeals court in May, following a lower court ruling in 2009 that determined CoreValve’s devices don’t infringe upon Edwards’ patent.
