Medical device companies are working to make sure their products aren’t targeted by campaign promises to lower healthcare spending in the two weeks or so before the election.
Analysts are tempering their expectations for the $180 billion yearly medical device industry because of challenges from an increasingly cost-conscious federal government, according to a recent Associated Press article.
Presidential candidates John McCain and Barack Obama both have said they want the government to play a larger role in determining which treatments are most effective in order to cut unnecessary cost.
The U.S. spends more than $2 trillion on healthcare annually.
Medical device lobbyists are arguing that any government evaluations of healthcare cost effectiveness should serve as suggestions to doctors instead of enforceable standards.
“When you dictate a course of action that suggests there is such a thing as an average patient and that everyone should be treated the same,we know that’s not the case,” Michael Mussallem, chief executive of Edwards Lifesciences Corp., an Irvine heart device maker, told the AP.
Mussallem also chairs AdvaMed, a Washington, D.C.-based trade group. AdvaMed spent nearly $1.6 million lobbying the federal government in the first half of 2008, including bills to create a domestic system for comparing medical treatments.
Washingtons cost cutting already has hit some corners of the medical device industry. The article noted that sales of scanners made by General Electric Co., Siemens AG and Toshiba Corp., which has its North American medical unit headquarters in Tustin, fell 20% in the first half of 2007 after Medicare cut payments to doctors for running scans.
Part of the industry’s pitch is that companies are developing technologies to catch problems before they become catastrophic and drive costs up.
In one case, Medtronic Inc., which makes heart valves in Santa Ana, Boston Scientific Corp. and St. Jude Medical Inc. have outfitted their heart devices with electronic transmitters that send patients’ progress updates to their doctors’ computers, allowing physicians to spot dangerous heart rhythms before they become life threatening.
Report Downplays Catheter
In other Edwards-related news, a report issued by the federal government contended that pulmonary artery catheters, which are frequently used in emergency rooms, provided little benefit to the vast majority of patients.
Researchers at Tufts University assessed the catheters, which are flexible tubes inserted into the pulmonary artery to monitor the heart condition of critically ill patients. The federal Centers for Medicare and Medicaid Services requested the study.
The researchers cited more than a dozen studies in the report and noted that there was no difference in death rate or length of hospital stay between when a catheter was used or was not used.
Edwards and BL Lifesciences Pvt., an Indian company, are among the makers of pulmonary artery catheters.
Analyst Larry Biegelsen of Wachovia Capital Markets estimated that pulmonary artery catheters account for 10% to 12% of Edwards’ yearly sales of $1.3 billion.
In a note, Biegelsen said Medicare could decide not to act on the findings or could consider restricting coverage.
Medicare is the country’s largest healthcare provider, covering 44 million senior and disabled Americans.
Grubb & Ellis’ Buys
Santa Ana-based Grubb & Ellis Co.’s healthcare real estate investment unit bought a pair of medical buildings in Oklahoma City.
Grubb & Ellis bought the buildings from Deaconess Portland Mob LP. The two buildings are on the Deaconess Hospital campus in Oklahoma City.
The buildings have a total of 187,000 square feet of space.
The Oklahoma City buy fits into Grubb & Ellis’ strategy of investing in a geographically diversified portfolio of healthcare real estate, said Daniel Prosky, the unit’s executive vice president of acquisitions, in a release.
Bits and Pieces:
Advanced Medical Optics Inc., a Santa Ana-based eye device maker, got Food and Drug Administration clearance for Healon D, a viscoelastic used in eye surgery. Healon D coats a patient’s cornea and remains in place during procedures such as cataract extraction, intraocular lens implantation, corneal transplants and glaucoma filtration surgery LifeMasters Supported SelfCare Inc., an Irvine provider of disease management services, signed a deal with the Health Insurance Risk Management Agency of Madison, Wis. LifeMasters is going to provide diabetes management services for the agency’s members, who are either unable to get employer-provided health insurance or can’t get private coverage because of the severity of their conditions Irvine-based drug maker Cortex Pharmaceuticals Inc. said its Ampakine CX717 drug candidate achieved its primary endpoint in a second-phase clinical study of preventing drug-induced respiratory depression while maintaining pain reflief.
