FDA Whistleblower Case Indicative of Larger Problems in Device Regulation

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The impact of the Robert Smith-FDA whistleblower scandal has a farther reach than the stigma of internal spying, argues a Forbes op/ed piece.

In concert with the medical device excise tax enacted earlier this year, which is already seeing its first casualties— Cook Medical, for example, scuttled plans for five new plants in light of the financial impact—the Smith case is being upheld as an example of the ways in which the existing regulatory infrastructure is not responsive enough to the needs of innovators.

On one side are Smith’s contentions that the administration is too cozy with product developers and that the system demands pushback from a safety perspective; the counterargument is that systematic or capricious denial of approvals costs lives in the interim by stifling technological advances.

“It would be bad enough if Smith had been a rogue, overzealous regulator,” wrote Paul Hsieh, MD, the physician co-founder of advocacy group Freedom and Individual Rights in Medicine (FIRM).

“But it’s even worse if Smith is correct, because that means Smith represents how the system is supposed to work,” he wrote.

According to the New York Times
, legislators contacted by Smith were so off-put by the methods of his whistleblowing approach that they found it difficult to heed his message. And several times before FDA executives authorized internally a secret e-mail snooping program to determine the nature and frequency of Smith’s leaks, the body was rebuffed by the Office of the Inspector General in its attempts to bring charges against the doctor.

Then there’s the discovery that a sealed lawsuit brought by Smith and some of his colleagues would have seen them personally benefit from any legal action enacted against the FDA, the Times reports—a tactic the paper said Smith had successfully leveraged into several hundreds of thousands of dollars in damages from previous employers.

Without even determining where the balance of moral authority rests in this case, the brinksmanship employed by both sides depicts a high-stakes environment of internal strife in which a handful of influencers hold in their palms the fates of years of development, millions of dollars, and the welfare of countless patients.

Although the 2.3% sales tax would function as an indirect check against charges of stonewalling technological development (with so much direct revenue on the line, the government would hold the hammer in such a scenario), free-market capitalists argue it simultaneously makes it impossible for manufacturers to drive domestic production of these technologies once they’re approved.

Hsieh claims that in addition to the example provided by Cook, Stryker will cut 5% of its workforce to offset the bottom-line impact of the tax, and manufacturers like Medtronic say “the tax will cut into its investments in future products.”

These rumblings may be the early signifiers of greater pass-through costs on the client side, as Hsieh says, or they may represent the immediate necessity for an overhaul in the device approval process upon which every other aspect of the manufacturing market hinges. In either case, the ultimate impact to the market from these events has yet to be felt in full.

“In medicine, as in the rest of technology, progress tends to follows a roughly exponential curve,” he wrote. “Seemingly small barriers to early innovations can deprive us of enormous future gains.”