Med-tech looks for its RX

The Star Tribune

Updated: June 6, 2011 - 10:14 PM

Janet Moore

To hear industry leaders express it, medical technology is one of the few bright spots in the languishing U.S. economy. But there's an undercurrent of worry about the industry's future.

On Monday, the Washington-based industry group AdvaMed released a series of recommendations including trade, tax, payment, regulatory and research policies that aim to preserve med-tech's position as an engine of U.S. economic growth.

"We're one of the crown jewels of American industry, and we often get overlooked," said Stephen MacMillan, CEO of Stryker, an orthopedic device firm.

Med-tech employs about 420,000 people nationwide, an employment base that is expanding despite some recent high-profile layoffs. Its workers are paid 22 percent more than other U.S. manufacturing jobs. And, most critically, it's one of the few U.S. manufacturing industries that exports more products than it imports -- to the tune of $36 billion annually.

Despite those bona fides, med-tech leaders fret as other countries snare important new products and clinical studies first. The level of angst in Minnesota, one of the top med-tech markets in the country, has reached a fever pitch.

Several of the initiatives AdvaMed rolled out at a Stryker factory in Michigan Monday are predictable, such as reforming the way medical devices are approved by the Food and Drug Administration, and supporting payment policies through programs like Medicare that spur innovation. Others are a bit vague, such as the promotion of a "vigorous trade policy" to support the industry.

But some recommendations are new, such as creating an office of medical innovation policy in the White House. That means every time a new rule is proposed that would affect medical care or research, an "innovation impact statement" (much like an environmental impact statement) would be required.

By having an office in the White House med-tech "would attain a sort of national importance, it would become a national priority," said AdvaMed CEO Stephen Ubl.

When asked during a news conference Monday whether the idea has been floated before the Obama administration, Ubl replied, "We're just beginning discussions."

AdvaMed's policy statement also supports reforming the existing research-and-development tax credit to make it "more generous." The U.S. led the way with the tax credit, but has now been surpassed by 23 other countries with more aggressive policies, Ubl said.

In an interview, Ubl admitted that the broad policy recommendations are a bit unusual for his organization, which includes industry leaders such as Fridley-based Medtronic Inc. and Boston Scientific Corp., which employs 5,000 people in the Twin Cities, plus scores of smaller firms. Instead of addressing "traditional" issues with the FDA and Medicare, "we went beyond that," he said.

"There are a lot of flashing red lights out there," said Ubl, a Mounds View native. "Venture capital [investment in med-tech start-ups] is down, our trade surplus has been cut by two-thirds over the last 10 years, and more and more clinical trials and products are being introduced in Europe first due to lengthy delays at FDA. We really wanted to step out and talk about that."

Others in the industry applaud AdvaMed's efforts. "Our members are extremely worried; there is a very high level of concern," said Dale Wahlstrom, a former Medtronic executive who heads LifeScience Alley and the BioBusiness Alliance of Minnesota. "The U.S. [med-tech] industry is under stress."

More information can be found on the Web:www.advamed.org/MemberPortal/Issues/ CompetitivenessAgenda.