Competitive Industry Needs & Research Infrastructure: Is Partnering Possible?

1. Partnering is Needed!!! Competitive Industry Needs & Research Infrastructure: Is Partnering Possible? CHIP HANCE Trans-Radial Education and Therapeutics (TREAT) IV FDA Headquarters White Oak, MD July 29, 2013

2. 2012-13 CDRH FDA Entrepreneur-in-Residence • No access or involvement with individual company submissions • Views expressed are my own • Retired employee of Abbott Laboratories • Most recently President of Abbott Vascular • Beginning new position (9/2013) as CEO for a global supplier to the medical device industry Disclosures

3. THE IMPACTS • Widespread industry discouragement with conducting trials in the U.S. • Rising U.S./Int’l gap in new product approvals • Declining Clinician interest in conducting research • Growing concern with FDA and other stakeholders with the clinical trial ecosystem • THE CHALLENGES • Difficult to define studies with FDA • Difficult to set up U.S. sites • Difficult to enroll patients Increasing Challenges in Clinical Research The mission to provide innovative therapies is increasingly constrained

4. 1ST ERA, < 1 YEAR GAP • Multi-Link Vision BMS • CE Mark 2/03 • PMA Apprv.7/03 • Bx Velocity BMS • CE Mark 6/00 • PMA Apprv. 7/00 • Single arm study • < 200 patients 2ND ERA, 1-2 YEAR GAP • Heartmate II LVAD • CE Mark 11/05 • PMA Apprv. 4/08 • Cypher DES • CE Mark 4/02 • PMA Apprv. 4/03 • Randomized • >1,000 patients • Xience DES • CE Mark 1/06 • PMA Apprv. 7/08 • Randomized • >1,000 patients 3RD ERA, 3-5 YEAR GAP • Symplicity Renal Denervation • CE Mark 4/10 • PMA Approval TBD • Sapien TAVI • CE Mark 9/07 • PMA Approval 11/11 • MitraClip Mitral Valve Repair • CE Mark 3/08 • PMA Approval TBD • Xience Nano • CE Mark 3/08 • PMA Approval 5/11 A Growing Gap Between CE & PMA Approvalsfor Cardiovascular Devices Timing differences driven mostly by clinical trials

5. 1st to 2nd Eras, 2000 – Mid-decade 2nd to 3rd Eras, Mid-decade to Present • Greater rigor in studies • Randomized, well controlled studies • Improved statistical plans • Narrower patient inclusion/exclusion criteria • Longer follow-up (6 months to 1 year, or longer) • Slowing of all processes for initiating and completing studies • Increasing FDA preclinical requirements prior to initiating clinical studies • Longer deliberations with FDA on Study Design • Lengthier contract negotiations and IRB reviews with sites • Reduced CMS support for studies • Challenging consent forms for patients • Reduced site dedication to clinical research • Slower enrollment What’s Driving The Gap?

6. If company has more employees or higher expense rate, costs can be significantly greater Source: Versant Ventures Estimated Cost of FDA Decisions on a 30 Employee Company Delays Have Real Costs

7. Overview: The Entrepreneurs-in-Residence (EIR) program at CDRH is a time-limited recruitment of world-class entrepreneurs and innovators to join highly-qualified internal government employees in the development of solutions in areas that impact innovation. • Goal: The EIR goal is to deliver transformational change by combining the best internal and external talent applying the principles of lean engineering in rapidly testing, validating and scaling new approaches. • Focus: This year’s EIR team is confronting three challenging areas that have the potential to better support a more robust environment for medical device innovation: • Streamlining clinical trials • Streamlining FDA approval to reimbursement • Striking the right balance between pre- and post-market requirements Entrepreneurs-in-ResidenceProgram Two (Oct 2012 - April 2013) Source: http://www.fda.gov/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CDRH/CDRHInnovation/InnovationPathway/ucm286138.htm

8. PATHWAY STEPS Device Development & Trial Ideation Study Planning & IDE Negotiation Study Startup Study Conduct Study Evaluation & Device Review Post Review Example Activities: • Pre-clinical testing • Bench testing • Animal studies • Explore study concepts with Thought Leaders • Trial protocol development • Pre-IDE meetings w/FDA • Establish study oversight (PI, DSMB, etc.) • Statistical analysis • Site selection • Contracting with Sites, CRO and Committees • Site IRB approvals • CMS reimbursement • Investigator training • Patient enrollment • Monitoring of sites and reporting events • Regular DSMB review of events • Sharing enrollment success between sites • Data analysis • Study submission together with marketing application • FDA review • FDA Panel (as needed) • Device clearance • Post-approval commitments • Annual reporting of clinical research • CMS Reimbursement • Surveillance monitoring Clinical Research within the Device Development Pathway

9. What is the average time for a site to negotiate a contract with a sponsor? DATA TRANSPARENCY What are the differences in IDE approval times by company size, study type, etc.? Metrics: “If you can’t measure it, you can’t manage it.” - Peter Drucker BEST PRACTICES BENCHMARKING Project Focus How effective are pre-IDE discussions with FDA in achieving more rapid IDE approvals? How variable are IRB approval times? What drives the differences? PROCESS IMPROVEMENT

10. Significant variability in IDE FDA approval times based on: • Sponsor type (startups vs. multinationals) • Pivotal vs. feasibility IDE’s • Consistency in reviewers • Quality of submission Interesting Findings If industry sponsors and FDA are aware of issues, both can organize appropriately for a streamlined process

11. FDA and sponsors spend significant resources on repeat submissions: • Multiple repeat cycles (3 and more reviews) consume as much as half of FDA’s IDE resource • Highlights the need for effective decisions in 1st and 2nd review cycles Interesting Findings FDA/industry sponsors need to work on clear two-way communications and effective expectation setting to drive to one- and two-cycle reviews

12. Dramatic variability in site performance across all studies: • ~45% of device studies fail to meet enrollment targets • ~15% of sites across all studies fail to enroll a single subject; more than half under enroll • Significant variability in contracting and IRB processes If sites and industry sponsors could have clear visibility to standards of performance, could a virtuous cycle of self-improvement begin? Interesting Findings

13. Clinical Trials Transformation Initiative (CTTI) • FDA/Duke initiative (2007) • Recognition increasingly longer study start-up times, slowing enrollment of patients into trials, increasing clinical trial costs, and declining investigator interest in participating in clinical trials • To identify practices that will improve the quality and efficiency of clinical trials • More than 60 Member Organizations in a Public-Private partnership • Medical Device Innovation Consortium (MDIC) • New Public-Private partnership between industry, FDA and other government bodies focused on Regulatory Science (Jan 2013) • One of first working groups targeting Clinical Research • Membership includes 21 Med Device companies, FDA, NIH, CMS, NVCA and Pew Charitable Trusts • Internal FDA Steps • Efforts taken to implement Innovation Pathway recommendations Initiatives to Drive Improvement

14. Clinical trials of new medical devices have played and will continue to play an increasing role in the advancement of medicine • The U.S. ecosystem for conducting medical device clinical trials has become increasingly cumbersome • Has efficiency been sacrificed for rigor? • What is the unintended consequence of the heavy burdens placed on clinical research? • There is a growing recognition of the need for broad-based improvement • FDA is taking an active role in trying to facilitate improvement across the clinical trials ecosystem • Collaboration between all stakeholders (sponsors, medical societies, institutions, FDA, CMS, etc.) will be necessary to make meaningful improvement • Unfortunately, process improvement is a long journey, not a short-term exercise Conclusions

15. Backup

16. THEN NOW Final validations before start of U.S. pivotal study; study starts later in product development cycle 3-9 month study negotiation with FDA Extensive discussions with sites on contracting and IRB reviews A large fraction of sites blocked from enrolling Medicare patients due to variable CMS reimbursement Complex consent forms Many sites no longer have hospital administration support Slower, variable enrollment Established product design to enter clinical studies; final product validations completed prior to PMA submission 1-3 month study negotiation with FDA Straightforward contract negotiations and IRB approvals CMS reimbursement a given Straightforward consent form Committed investigators and sites Rapid enrollment Increasingly Challenging to Initiate and Complete Studies