Medical Device Dailys

WASHINGTON – A new report from the Government Accountability Office (GAO) found that venture capital-backed biotech firms received an increasing share of Small Business Innovation Research (SBIR) awards between 2002 and 2004, contrary to arguments that those types of companies have been missing out.

But the conclusions from the GAO report were drawn from inconclusive findings, some feel. The analysis examined the distribution of SBIR grants before and after the Small Business Administration (SBA) reinterpreted eligibility requirements to preclude companies that are majority owned by venture firms from receiving the awards.

“Suffice it to say, this report has a lot of problems,“ said Lauren Choi, the director of capital formation policy for the Biotechnology Industry Organization (Washington). “They studied apples, but they drew conclusions about oranges.“

That's partly because the reinterpretation of eligibility requirements that has led to a restriction in those grants wasn't put into practice until 2004, even though the clarification was made in 2002; the GAO looked at grants for two years before and after 2002. Also, the findings are difficult to quantify because the GAO did not distinguish between companies that had majority or minority venture backing.

“The data presented in the report has no bearing on program eligibility,“ concluded the SBA's Karen Hontz in a letter to the GAO, adding that as a result, the analysis of SBIR eligibility is “unclear and potentially misleading.“

Choi told Medical Device Daily's sister publication BioWorld Today that the GAO should have looked at numbers from 2005 to capture data sought by those who requested the report: Senators John Kerry (D-Massachusetts), Edward Kennedy (D-Massachusetts), Mike Enzi (R-Wyoming), Olympia Snowe (R-Maine) and Representative Don Manzullo (R-Illinois).

The GAO analysis showed that firms backed by venture investments received an increasing share of total dollars awarded by both the National Institutes of Health and the Department of Defense. Among NIH awards, in the two years prior to the 2002 clarification, firms that received any amount of venture backing were awarded about 14% of total SBIR program funds, and in the two years following the clarification, their share had increased to about 22%.

Of note, a response letterfrom the NIH was not included in the GAO's report, although the DoD and SBA responses were attached to the final copy.

Two bills seeking to restore SBIR eligibility to biotech companies with majority venture backing remain under consideration, S. 1263 and H.R. 2943. The former was introduced last year by Sen. Kit Bond (R-Missouri), and the latter was introduced by Rep. Sam Graves (R-Missouri).

Choi said BIO is hoping they “would see some daylight“ as part of a bill to reauthorize the SBA, a measure to be considered in the coming months.

AdvaMed: ICD reliability improving

Reliability rates for implantable cardioverter defibrillators (ICDs) have improved significantly from 2001 to 2005, according to an analysis performed by the Advanced Medical Technology Association (AdvaMed; Washington) and its ICD member companies.

The analysis, based on data from annual reports ICD manufacturers are required to submit to FDA, show improved reliability rates and that the total malfunction rate fell to about 1% in 2005 from 3.1% in 2001.

More significantly, the analysis demonstrates that when a well-characterized malfunction which does not compromise patient therapy, known as “long time charge,“ is removed from consideration, the malfunction rate drops even further. Long charge time is a known phenomenon associated with the battery technology, primarily in older ICDs, which affects the time it takes to charge the capacitors for therapy delivery.

The AdvaMed analysis builds on a study of ICD and pacemaker malfunction rates from 1990 to 2002 conducted by William Maisel, MD, Beth Israel Deaconess Medical Center and Harvard Medical School (both Boston), and presented in September 2005 at a joint Heart Rhythm Society /FDA meeting in Washington. That study showed an increase in ICD malfunction rates from 1999 to 2001 before reliability improved and malfunctions dropped in 2002. Both the AdvaMed analysis and the Maisel study relied on the same data source (FDA annual reports) and reported similar data trends for the time (1999-2002) when analysis overlapped.

“These results reflect the medical technology industry's commitment to patient safety and quality,“ said Stephen Ubl, president and CEO of AdvaMed. “Manufacturers take aggressive action whenever an issue arises that may affect the performance of their devices. ICDs have a high level of safety and reliability and are responsible for saving hundreds of thousands of lives. Given that only about 20% of the 1.6 million Americans who are at risk of death from sudden cardiac arrest actually have an ICD, we need to take steps to promote patient access to these lifesaving devices.“

AdvaMed presented the results of its ICD analysis to officials from FDA's device center on April 11 and plans to conduct further industry-wide malfunction rate studies in conjunction with its members. The association will work with both FDA and the Heart Rhythm Society to design the most appropriate and useful malfunction rate studies.

Final SOX Reforms Proposed

The SEC's Advisory Committee on Smaller Public Companies voted 18-3 in favor of scaled reform recommendations for Section 404 (internal controls) of the Sarbanes-Oxley Act of 2002, agreeing to final suggestions to be submitted to the SEC.

In particular, the recommendations include relief from management and external auditor attestation requirements for companies defined as small cap or having market caps of $787 million with less than $10 million in product revenues; microcap or the bottom 1% in market cap (which usually fluctuates between $125 million and $128 million), and companies with less than $125 million in revenues, and the committee recommended relief for small caps with a market cap no higher than $787 million with less than $250 million in revenues.

Bedsore cases ballooning

The number of hospital patients with pressure sores, also called decubitus ulcers or bed sores, rose from 280,000 cases in 1993 to 455,000 cases in 2003 – a 63% increase – according to the Agency for Healthcare Research and Quality (AHRQ; Washington).

Pressure sores typically result from prolonged periods of uninterrupted pressure on the skin, soft tissue, muscle and bone. Vulnerable patients include the elderly, stroke victims, patients with diabetes, those with dementia, and people who use wheelchairs or are bedridden – any patient with impaired mobility or sensation.

Patients age 65 and older accounted for 72% of all hospitalizations during which pressure sores were noted. About 19% of such stays were for patients 45 to 64 years of age. On average, patients admitted to hospitals primarily for treatment of pressure sores stayed nearly 13 days. But length of stay varied by age – patients age 18 to 44 accounted for the longest average stay (14 days) and those age 85 and older had the shortest stays (10 days).

Nearly nine of every 10 hospital stays involving pressure ulcers were covered by government health programs – 66% by Medicare and 23% by state Medicaid programs. Hospital charges for stays principally for treatment of pressure ulcers averaged $37,800, but average charges varied by payer, for example, the average charge to Medicaid was $39,100 while the average bill to the uninsured was $25,600. The 10 most common principal reasons for hospitalizations during which it was noted that patients also had pressure sores included septicemia, pneumonia, urinary tract infections, congestive heart failure, respiratory failure and diabetes mellitus with complications.

The Nationwide Inpatient Sample is a database of hospital inpatient stays that is nationally representative of all short-term, non-federal hospitals. The data are drawn from hospitals that comprise 90% of all discharges in the United States and include all patients, regardless of insurance type as well as the uninsured.