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DEVICE QUALITY ASSURANCE PROGRAMS IN PLACE IN 50% OF FIRMS SURVEYED

This article was originally published in The Gray Sheet

Executive Summary

DEVICE QUALITY ASSURANCE PROGRAMS IN PLACE IN 50% OF FIRMS SURVEYED by the General Accounting Office for its recent report "Medical Technology: Quality Assurance Systems and Global Markets." The congressional research arm surveyed 284 randomly selected U.S. device manufacturers; 62% of the firms export products, and 92% employ fewer than 500 people. GAO found that 50% of the firms have established quality assurance programs. The group with QA programs in place is comprised of 57% of the exporters in the survey and 37% of nonexporters in the survey. The GAO report was prepared at the request of House Energy and Commerce health subcommittee Chairman Henry Waxman (D-Calif.), who asked for a comparison of marketing and quality assurance procedures in the U.S., Canada, Japan and the European Economic Community. The report also evaluates the "preparedness" of U.S. device firms "to compete in a global market that is based on adherence to international standards." GAO reports that while "manufacturers recognize the importance of adopting international quality standards to compete for business abroad," many firms are deterred from doing so because "adherence can be costly and time-consuming." However, the research group adds that early results of an analysis of the cost- benefit ratios for medical device companies that have implemented a quality program" appear "promising," although it is "premature" to make a "clear determination." GAO notes that 75% of the firms with quality assurance programs in place told GAO that they are "encouraged" by the effects. Looking at the overall preparedness of device firms to participate in the global market, GAO found that "a majority of U.S. manufacturers are focused on the U.S. market," with a "significant proportion" of them "not cognizant of the nature, scope or immediacy of the potential competitive challenges to industry from the global market" or the creation of the European Economic Community single market. The agency suggests that "the present standing of the medical device industry in the U.S. economy and global markets and manufacturers' perceptions of the high quality of U.S. health care products are factors that may have led to complacency on the part of U.S. manufacturers." In evaluating their preparedness for complying with EEC marketing requirements, 10% of the firms surveyed described themselves as "well or extremely well prepared," while 63% said they are "fairly or moderately well prepared," and 27% are "poorly prepared." Thirty-six percent of the surveyed manufacturers said that they have "little interest in EEC developments," while 18% have "moderate interest, and 46% have "great interest." GAO makes several recommendations based on its study, including the suggestion that FDA increase its export education programs for small device manufacturers. FDA should "increase the internal coordination, outreach and focus on small manufacturers of its educational and guidance programs for exporting." The research group notes that 61% of respondents to the survey said that information on export markets would be of "great or very great importance" in facilitating their participation, while 58% similarly rated information on tax credits and tax incentives. Fifty-three percent said that information on foreign agents or distributors would be of "great or very great importance." Responding to GAO's recommendations for small business education, HHS points out that FDA has established efforts in this area, but is restricted by financial constraints. The agency, HHS says, "has a well-established outreach program to assist small businesses to compete in the global market of today," including the office of international relations within the device center's division of small manufacturers assistance. HHS notes that "FDA's resources available for these activities are limited," but pledges that the agency "will continue to provide leadership and services to the maximum extent possible within current budget constraints." Noting that it supports the EEC monitoring efforts of the U.S. task force on the EEC internal market and the Department of Commerce, GAO recommends that the task force and Commerce "make a targeted effort to inform U.S. medical device manufacturers on progress toward the single [European] market and changes related to harmonization [of different countries' device policies] that may affect their competitiveness." GAO also suggests that manufacturers work harder to access already available information on exporting. Manufacturers may "have to be more proactive in seeking information and assistance" because there is "no lack of information sources or information about exporting to the EEC or the global market." GAO's final recommendation is to encourage the continuation of "current efforts to revise the U.S. good marketing practices regulation and other premarketing requirements" such that they are more closely aligned with other countries' regulations, while not compromising public health.
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