FDA-CMS Parallel Review – a failed attempt at spurring innovation
| Published date | 02 December 2019 |
| Date | 02 December 2019 |
| Pages | 433-441 |
| DOI | https://doi.org/10.1108/JEPP-D-18-00059 |
| Author | Marta Podemska-Mikluch |
| Subject Matter | Strategy,Entrepreneurship,Business climate/policy |
FDA-CMS Parallel Review –a
failed attempt at
spurring innovation
Marta Podemska-Mikluch
Gustavus Adolphus College, St Peter, Minnesota, USA
Abstract
Purpose –The purpose of this paper is to analyze the Parallel Review program that offers simultaneous
review of the Food and Drug Administration premarket approval submissions and the Centers for Medicare
and Medicaid Services (CMS) national coverage determinations (NCDs) of medical devices.
Design/methodology/approach –The paper analyzes the impact of Parallel Review on medical device
innovation, focusing in particular on the causes for low popularity of the program among medical device
manufacturers. Program outcomes are evaluated in the light of its intended goals.
Findings –The paper identifies four reasons for the program’s limited impact. First, few devices are eligible
to participate. Second, most manufacturers prefer to seek Medicare reimbursement at the local level as less
risky than the CMS NCDs. Third, participation in the Parallel Review might actually delay the marketing of
the device. Fourth, the program does not address numerous obstacles that device sponsors currently
encounter. While giving the appearance of support for the medical device innovation, the policy falls short on
its intended goals.
Originality/value –This paper elucidates the challenges to internal reform and serves as a reminder to
political economists and health care researchers that to make disruptive innovation possible, we must
continue to illuminate the otherwise unseen cost of marketing delays and document the ability of emergent
market mechanisms to protect consumer safety.
Keywords Pilot program for Parallel Review of medical products, Food and Drug Administration,
Centers for Medicare and Medicaid Services, Medical devices, Premarket approval,
National coverage determinations, Local coverage determinations, Innovation
Paper type Research paper
1. Introduction
Economists have longed argued that centralized, regulatory approach to ensuring safety of
drugs and medical devices rewards increased assurance of safety but also causes costly
delays. Greater focus on safety, usually in the form of more careful and longer testing,
reduces the risk of deaths being caused by a harmful drug or by a faulty medical device.
However, greater assurance comes at the cost of delays in access to potentially beneficial
innovations –people die while waiting for the drug to receive regulatory approval. The
centralized regulatory approach favors greater assurance of safety because deaths caused
by harmful drugs are easily identified and the Food and Drug Administration (FDA)
employees end up being personally blamed for them. On the other hand, deaths caused by
delays are not attributed to the FDA because they often go unnoticed by the public.
In the light of this argument, the FDA-Centers for Medicare and Medicaid Services (CMS)
Parallel Review pilot program, adopted in 2011 and aimed at allowing patients quicker
access to innovative medical technologies, seemed like a welcome exception. The program
was supposed to speed up access to the most innovative, highest risk medical devices such
as pacemakers and stents –devices that require FDA’s premarket approval (PMA). This
goal was to be accomplished by decreasing the time between the FDA’s PMA and a national
coverage determination (NCDs) by the CMS. In addition to speeding access to new medical Journal of Entrepreneurship and
Public Policy
Vol. 8 No. 4, 2019
pp. 433-441
© Emerald PublishingLimited
2045-2101
DOI 10.1108/JEPP-D-18-00059
Received 24 October 2018
Revised 24 December 2018
Accepted 30 December 2018
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/2045-2101.htm
JEL Classification —H75, I18
433
FDA-CMS
parallel review
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