Sandeep Rao

Perhaps in response, the FDA finally announced this month its openness to considering reforms to the review process for innovative medical devices. The current premarket review process for new medical devices has been fraught with uncertainty, often requiring companies to produce further unanticipated testing and data for proven products. Regulations force device manufacturers to replicate time- and cost-consuming studies in the U.S., despite the existence of reputable equivalent scientific data gathered overseas.

In contrast to the FDA, the European Medical Devices Directive allows privatized, notified bodies to test device safety to provide the stamp of European market approval.

Last week, the House Energy and Commerce Committee's Subcommittee on Health held a hearing on medical device regulations. In his testimony, Mark Deem of San Francisco Bay area medical device incubator The Foundry blamed the unpredictability of FDA regulatory delays for driving U.S. business to Europe.

"We develop our products here and then run the same large, multicenter randomized trials we would otherwise have conducted in the U.S. overseas," he said. "We are then staying [in Europe] to commercialize the products while we decide when and if to approach the FDA."

Much of the bureaucracy inherent in the FDA approval process has been driven by calls for increased patient safety. However, despite the speed of the privatized European device approval process, there have been no sacrifices in patient safety. A report by the Boston Consulting Group released earlier this year found that the medical device recall rate was similar in the U.S. and Europe.

This is no small issue in an economy still groping to recover from recession. The U.S. is not only at risk of losing its leadership role when it comes to medical innovation but also the jobs associated with the industry.

During the House subcommittee hearing, Mr. Makower highlighted an example from his study of a U.S. firm moving its primary operations to Europe: "The company planned to shut down its U.S. production facility and move another 30 to 40 manufacturing jobs to Europe," he said. "In this particular example, all future growth was also planned overseas. Keeping in mind that every medtech job is indirectly responsible for another 4.47 jobs in the national economy, the effect on U.S. employment could be sizable."

With device approval delays costing companies more than $500,000 per month, on average, according to Mr. Makower's study, the transfer of business away from the U.S. is driven by the basic instinct for a company to survive.

Five-year delays before visualizing profits may hurt a company's bottom line. However, the consequences of a long delay for a patient who does not have the same luxury of time may be far more grim.

Sandeep Rao

Sandeep Rao MD, MBA is a fellow at Johns Hopkins Hospital specializing in vascular and interventional radiology.