During a meeting with U.S. Food and Drug Administration Commissioner Scott Gottlieb earlier this week, government and healthcare officials in New Jersey highlighted the need to hasten the approval of new drugs and permanently eliminate the tax on medical devices.
Little is known about what occurred behind the closed-door meeting, but an unnamed person in attendance told NJBiz that U.S. Rep. Josh Gottheimer, a New Jersey Democrat, is focused on eliminated the medical device tax. In January Congress approved a two-year delay of the 2.3 percent excise tax on medical devices as part of an agreement to keep the government from shutting down. The tax, which was initially planned to go into effect at the end of January, was initially approved as part of the Affordable Care Act. The tax was designed to support health insurance subsidies.
The two-year delay is expected to cost the government about $3.7 billion in potential revenue, according to a STAT News analysis. New Jersey is home to a number of medical device manufacturers, including Stryker Corporation, Johnson & Johnson and Medtronic.
Gottheimer has long been a foe of the medical device tax. Following the two-year suspension of the tax, Gottheimer called it a tax that hurts one of New Jersey’s most important industries. He said the tax holds the companies back from innovations in research and development and also costs patients thousands of dollars for life-saving devices like pacemakers.
Gottheimer said when the medical device tax was in effect from 2011 to 2014 it "cost America 33,000 medical technology industry jobs, and cost the American economy 165,000 total jobs." Gottheimer added that one-third of MedTech companies reduced their research and development during that time period as a result of the tax.
In addition to a proposed elimination of the excise tax on medical devices, the insiders addressed the necessity of hastening FDA approval of pharmaceutical products. Not only were some inside the meeting sharing the need to speed up the approval process, some allegedly pointed to the use of "real world data" as opposed to data gathered in clinical trials to spur on approval. NJBiz did not elaborate what the unnamed individual who shared information about the meeting meant by "real world data." It is possible it could mean noted off-label uses of prescription medicines to gain approval of a drug for a new indication.
Clearly, the meeting with Gottlieb was intended to show the strength of New Jersey as a home for the biotech community. New Jersey is home to more than 3,000 pharma, MedTech and life sciences companies. The life science companies combine to employ about 900,000 people in New Jersey.
One day after meeting with New Jersey officials Gottlieb was in Washington D.C. to pitch Congress with the president’s budget proposal for the FDA. Under President Trump’s proposal, the FDA will receive $5.8 billion, a 13 percent increases, about $663 million more than this year’s budget. During his remarks, he told lawmakers that last year was a record at the FDA with the most ever approvals for generics drugs, novel drugs and medical devices.
During his address to the Congressional subcommittee, Gottlieb pointed to work his agency is conducting to streamline the drug review process through the implementation of a knowledge management platform. The program would allow the FDA to "store and manage the collected experience" of its review staff, Gottlieb said.
"This sort of knowledge management system is essential to how we’re modernizing medical product review programs and establish scientific precedents established every day," Gottlieb said in his remarks.
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