California’s Vibrant Medtech Industry Leads the Nation
President & CEO
CLSA – California Life Sciences Association
September 9, 2015
Thank you to all those who reached out to me following last month’s CLSA Bulletin. Please continue to be in touch!
Because the medtech community will be converging on San Diego next month for the AdvaMed Annual Conference, let’s take a moment and look at the current state of the medtech industry in California.
California leads the nation in number of medical device jobs at 75,000, and also for the volume of venture capital investment at $1.13 billion. The medtech industry has significantly reduced cost in the healthcare system while maintaining or exceeding standard levels of care and improving patient outcomes and quality of life. Insulin pumps, for example, have saved an average of $5,886 per patient. Heart failure devices have reduced hospitalizations by 37%.
CLSA’s medtech members have had a number of important products approved this year. In June, for example, CLSA member Edwards Lifesciences received FDA approval for the Edwards SAPIEN 3 valve, an advanced transcatheter aortic heart valve that helps high-risk patients suffering from severe aortic stenosis improve their quality of life. In July, CLSA member Organogenesis launched its PuraPlyTM wound management products.
Yet despite these extraordinary innovations, investment in early-stage medtech has decreased by 73%, with investors often citing FDA review and CMS reimbursement processes as key deterrents to investment in the space. Our report Taking the Pulse of Medical Device Regulation & Innovation does show that FDA review performance has improved since 2011 for pre-market approval (PMA) products, however a gap remains between approval times in the European Union and the United States. Clearance times for 510(k) products remain longer than historic averages, and unpredictable, and this is an area that CLSA will work with FDA to improve.
In addition to these challenges, the medical device excise tax continues to hamper medical device sector investment and innovation, and CLSA continues to take every opportunity to voice our strong concerns regarding this tax. The good news is that on June 18, the House of Representatives passed a bill to repeal the medical device tax (H.R. 160, the Protect Medical Innovation Act of 2015), by a veto-proof majority vote of 280 to 140. We are pleased to report that a bipartisan group of 27 Members of the California congressional delegation supported the legislation. The Senate must now take action to repeal this tax, and we have seen positive signs that a repeal could be a possible candidate for inclusion in a larger package of legislation later this year. One possible vehicle for the medical device repeal bill is the tax extender package, must-pass legislation that would extend a number of essential tax credits and incentives. CLSA, along with other stakeholders including AdvaMed and MDMA, continue to work with Senate champions to find a pathway for the repeal of this harmful excise tax.
I encourage you to get in touch with me or any member of the CLSA team to discuss how we can continue to improve the environment for the medtech industry as it continues to make advances that improve the lives of patients worldwide.
I look forward to seeing many of you at the AdvaMed conference next month!
President & CEO
California Life Sciences Association