Medical Device Daily Washington Editor

The decision by St. Jude Medical (St. Paul, Minnesota) to drop its membership in the Advanced Medical Technology Association (AdvaMed; Washington) may or may not resonate with a substantial number of the association's other members, but it serves to highlight the ability of a contentious issue to drive a wedge between an industry as a whole and any members who feel they are disproportionately affected by policy developments.

However, St. Jude's chairman and CEO, Dan Starks, argues in his Nov. 2 letter of resignation from the association that AdvaMed, long seen as the association dominated by the views of larger members of industry, is now gearing its policy perspectives to the concerns of smaller device makers at the expense of the industry's titans. Starks writes that St. Jude and other large firms "are the minority within AdvaMed and we no longer feel that the trade organization can effectively represent our interests."

The assertion is perhaps most interesting given that the prevailing view of trade associations would probably hold that AdvaMed serves as the home for large firms whereas the Medical Device Manufacturers Association (Washington) provides a megaphone for smaller firms.

The decision by St. Jude does not appear on the press statement page of the firm's web site, but Starks' letter does not specifically cite the tiered tax proposal as the reason for its withdrawal from AdvaMed despite speculation to that effect. The company's decision could be predicated in part on the tax exemption for firms making less than $100 million a year as well, although the prevailing view is that St. Jude was most upset over the tiering mechanism.

However controversial the tiered medical device tax might be, neither the firm nor the association has much to say about the controversy at this point, seemingly suggesting that both are of the view that the conflict is history.

AdvaMed's rubric for medical device taxes imposed by healthcare reform consists of several key points, including that a tax should not be imposed until 2013 so that industry can plan for the tax. AdvaMed's view is also that companies with less than $100 million in annual revenues should be exempt and that the taxes should be deductible.

Regarding the tiered tax proposal, a common understanding of the idea may be that the difference in profit margins between simple and more complex devices is the most reliable way to tailor a tax to profitability and hence spare firms with tight margins from a tax that could bankrupt the operation. At present, none of the healthcare reform legislation includes a tiered device tax.

Wire service reports indicate that Medtronic (Minneapolis), among others, is no fan of the tiered tax, but has no plan to cancel its membership. Chuck Grothaus, senior manager for corporate public relations at Medtronic, told Medical Device Daily in an e-mail that the firm "has no plans to resign our membership or our CEO's position on the board at AdvaMed given the current healthcare reform proposals and the work we have participated in with the association."

Grothaus also said that Medtronic management has declined to "address specifics about discussions that occurred with AdvaMed and its members regarding this issue." Medtronic, Grothaus said, believes that a tax on medical device manufacturers "could have untold adverse implications for innovation and jobs," but that the company "accept[s] the notion of shared responsibility in meeting the challenge of expanding access to affordable, quality health insurance for all Americans."

Attempts to contact Boston Scientific (Natick, Massachusetts) for comment were unsuccessful, and St. Jude likewise declined to comment.

In a statement e-mailed to MDD, AdvaMed spokeswoman Wanda Moebius said, "regrettably, St. Jude Medical has withdrawn its membership from AdvaMed." Moebius said the association's board of directors "voted overwhelmingly to approve a set of principles that would guide the association's efforts to address the proposed medical device tax," and that St. Jude "disagreed with one element of those principles and resigned its membership."

Mark Leahey, MDMA's president/CEO, told MDD in an e-mailed statement simply that the association's members are "unified against any medical device tax."

FDG a no-go for cervical cancer staging

The Centers for Medicare & Medicaid Services reported earlier this year that it would re-examine its national coverage decision (NCD) regarding coverage of positron-emission tomography with fluorodeoxyglucose (FDG-PET), and the agency delivered its decision earlier this week.

CMS reopened the issue in August (Medical Device Daily, Aug. 18, 2009) at the prompting of two physicians who argued that the language of the NCD – which ruled out a second use of FDG-PET to stage cervical cancer unless conventional imaging detected extrapelvic masses – would surely lead to inadequate treatments.

Despite substantial feedback on the question, CMS has opted not to cover FDG-PET for initial diagnosis and to cover the scan only once for staging.

The two physicians who wrote to CMS on the matter, Perry Grigsby, MD, and Barry Siegel, MD, both of the Washington University School of Medicine (St. Louis), penned an April 14 letter to CMS on behalf of the National Oncology PET Registry working group, stating that in their view that the exclusion of a second use of FDG-PET staging for cervical cancer when extrapelvic masses are seen in conventional imaging "was likely unintentional."

Grigsby and Siegel bolster their case for the procedure for patients who present with an extrapelvic mass by pointing out that "the existing literature and the University of Alberta (Edmonton, Alberta) technology assessment" make clear that physicians who are treating patients with the extrapelvic returns will need more information to properly stage the patient.

The agency also received a letter from a group of professional societies making a larger argument about second uses of the scanning technology for cancer treatments generally. The Oct. 14 letter, which was signed by executives of the Society for Nuclear Medicine (Reston, Virginia), the American Society for Therapeutic Radiation and Oncology (Fairfax, Virginia) and the American College of Radiology (Reston, Virginia), argues that "there is substantial evidence that in certain limited clinical circumstances, the limitation" to a single scan "is contrary to good clinical practice."

The authors assert that a second scan may be needed when an initial scan suggests radiation oncology as a course of treatment, albeit a "limited" scan done "under technically different conditions." A second scenario would be when a scan produces a false negative result, such as for lung cancer detection, in which case a second scan would be necessary to direct treatment. A third instance is one in which a substantial amount of time passes between the initial scan and the onset of treatment.

Mark McCarty, 703-268-5690
mark.mccarty@ahcmedia.com