In the United States today, we have a vibrant medical device industry. More than 420,000 Americans work in this industry. In my home state of Pennsylvania, there are 22,000 workers.
These are good, high-paying jobs with average compensation in the industry 40 percent above the national earnings average. The field employs doctors and engineers, but also Americans with undergraduate and high school degrees. These companies compete on a global level and their products are shipped around the world.
When most Americans think of foreign competition, Chinese factories and Indian call centers are what come to mind. But in the medical device field, most of the foreign competitors are based in the European Union.
U.S. companies must have their devices approved by the Food and Drug Administration. The FDA has two responsibilities: protecting public health by ensuring safety and helping to speed innovations that make medicines more effective, safer, and more affordable.
Unfortunately, the FDA has become risk-averse in recent years. Approval times have crept up, nearly doubling the time required in some cases. This means that European patients are receiving access to devices two years before American patients. In some cases, devices approved in Europe have never been legal in the U.S.
Certainly, there may be disagreement between governments about the safety of devices. We don’t want our regulatory process to be a race to the bottom where we must beat the Europeans to the market regardless of safety. But according to recent studies, medical devices marketed through the shorter and more transparent European regulatory processes are statistically as safe as FDA- approved devices and have comparable patient outcomes.
The experience of NuVasive, a San Diego-based company, demonstrates how American companies are being hurt by FDA inefficiency. In the last two years, NuVasive estimates that FDA approval times have led to revenue losses of $70 million, increased operating expenses, and the loss of hundreds of new jobs.
In a letter to the Energy and Commerce Committee NuVasive describes their difficultires: “It is becoming far more efficient and faster to innovate outside the USA in such places as Europe. Non-USA systems have more timely, predictable and transparent processes. We have seen USA delays of three to 70 months which has forced NuVasive to rethink longer term strategies around where to place research & development jobs and even whether or not to invest in innovation of new products.”
Recently, venture capitalists have stated that they are far more likely to put money into European medical device companies. With capital flowing out of the U.S., it’s only a matter of time before we see a corresponding “brain drain.”
This week, the House of Representatives issued direction to the various committees to investigate federal government rules affect on jobs and the economy. The Energy and Commerce Health Subcommittee has oversight over the FDA and, as Chairman, I want us to explore why Europe has gained such a significant advantage over American companies.
Medical device industry jobs are great jobs. With unemployment already high, we need this industry to grow and flourish, not be shipped overseas. We cannot let our lead in medical innovation be destroyed by poorly constructed bureaucracy. It’s not just jobs that are at stake. There are suffering Americans waiting for cures.
Bill Walton, the great college and professional basketball player, suffered such incredible back pain that at one point he even contemplated ending his life. This pain — so great that it prevented him from doing everyday tasks like tying his own shoes — was radically reduced by a NuVasive device.
Life-saving cures are possible. The question is whether these discoveries will be made here in the U.S. or on foreign shores.