Medical products makers irked by approvals delays.

Several companies echo Sunrise Medical's complaints

Torrance-based Sunrise Medical Inc. felt it had a major breakthrough product - a motorized wheelchair that could quickly be converted to manual operation.

Since it was based on previous Sunrise designs, the wheelchair would not require a full approval from the U.S. Food and Drug Administration. However, a so-called 510(k) application to prove similar product components were already on the market was in order.

Pat Spink, vice president of quality control for Sunrise subsidiary Quickie Designs Inc., thought he was being cautious when he budgeted 120 days for the process.

"The time for the last few applications I had made increased, from 37 days to 114 days, so I believed the time I allowed was in order," Spink said.

The 510(k) application was sent to the FDA in August 1992.

Sunrise finally received its 510(k) approval last March - 19 months later.

"It was utter frustration," said Spink.

On 10 separate occasions during the approval process, the FDA asked for additional information, Spink recalled. And at least once the agency lost supplemental material. The FDA waited a year, however, before requesting a sample wheelchair.

Sunrise had plenty of chairs to offer, given it had $1 million worth of inventory sitting in a warehouse, waiting to be shipped off to customers.

Sunrise's research and development budget on the project was completely blown by the delays, Spink said. The company also had less time to make it up on the sales side: a competitor had seen the design for the wheelchair at an Atlanta trade show and had applied for FDA approval on the concept, he recalled. The delay gave the competitor time to gear up on the manufacturing side, Spink said.

"It would have made more sense for the FDA people to have sat down with us and say: 'These are the requirements for the product.' Instead, we were being picked on one point at a time, and the process would completely stop until we answered their request," Spink said.

Spink is not alone. The navigation process required to obtain 510(k) approval has become so byzantine that company executives prepare for it in the way a nation might plan an invasion. Some executives even make radical changes to their businesses so as to avoid the process altogether.

For example, Rhodes Medical Instruments Inc. of Woodland Hills gave up manufacturing in favor of doing research for other companies.

"The whole process of dealing with the FDA became too much," said Peter Rhodes, the company's president.

Charles Adams, CEO and president of Chad Therapeutics, a Chatsworth-based respiratory device manufacturer, has not made a 510(k) application in recent years. But he follows the situation closely, and said he is concerned.

"It used to be that 510(k) applications took 60 days and (then) you were ready for market," Adams said. "Now, it's bogged down to a terrible morass, and it takes at least six months to a year to get approvals."

FDA statistics that were provided by the Health Care Technology Institute, a Virginia-based research and trade group, suggest Adams is not exaggerating. In fiscal 1993, the FDA's 510(k) average review time per submission was 162 days, up 60 percent from the 1992 average of 102 days. Altogether, review times have more than doubled since 1990. when a decision required 78 days.

Meanwhile, 510(k) submissions increased 12.8 percent between 1990 and 1992, but clearances issued by the FDA dropped 12.1 percent. Last year, submissions dipped 3.4 percent, suggesting that many potential applicants may be getting so frustrated that they are deciding not to even pursue approvals.

Indeed, venture capital funding figures provided by the institute tend to support this trend. In 1988, medical device venture capital funding totaled $7.8 billion. In 1992, it had dipped to $5.6 billion.

"Sooner or later this sector and the quality of health care in this country are going to suffer, because this is an innovation-driven industry, and what spurs those innovations is slowing up," Adams said.

As for the slowdowns themselves, they appear to be caused by a shift of management policies at an agency that is already overtaxed, observers said.

"The FDA review processes are much longer than before, and it suggests that, as an agency, they are not dealing with them well," said Steve Lawrence, a former FDA inspector who's now a health care, attorney at the Newport Beach firm of Hogan & Hartson.

Lawrence pointed to changes in FDA management as being responsible for the approval delays. More specifically, he blamed the delays on the appointment of David Kessler to the post of FDA director during the Bush administration. Kessler was reappointed by Bill Clinton shortly after his election.

Kessler - with his trademark beard, New York accent and tough talk - has brought a new era of caution and skepticism to the FDA. He was instrumental in banning silicon-based breast implants due to the health problems they allegedly cause. He has also been at the forefront of the heavy criticism aimed at tobacco companies, leveling accusations that they have spiked the nicotine content of cigarettes in order to permanently hook smokers.

But it was another Kessler project - passage of the federal Safe Medical Devices Act in 1990 - that has had the most impact on 510(k) reviews.

"When Kessler came into office, there was more of an emphasis of being careful with submissions (of 501 (k) applications)," Lawrence said.

He noted, however, that the review processes have shown signs of improvement in the past few months, but that an imposition of new user fees - which start at about $3,200 per application and can run well into the five figures - may scare away future applicants.

According to Susan Alpert, acting head of the FDA's Office of Device Evaluation, the user fees would be used in part to help pay for additional staff, which would speed up the review process.

In fact, Alpert noted, there have already been some improvements made in her office. The backlog of 510(k) applications stood at 2,000 as of last December. It had been cut to 900 by the beginning of this summer.

"There was a long period of time when there were delays," Alpert conceded. "But in the past year, we've been turning it around."

Spink's complaint about repeated requests for additional information is being addressed. As opposed to the old approach, when applications were considered on a first-come, first-served basis, applications are now given a once-over upon receipt to make sure no components are missing. If the application is incomplete, a letter is sent describing exactly what is missing, Alpert said.

Additionally, extra funding authorized by the Safe Medical Devices Act came through in fiscal 1994, allowing Alpert to add 65 members to her staff - a boost of 20 percent. Staff members have also been shifted to ensure that the most experienced reviewers are assigned the most complex applications.

Still, manufacturers planning to submit 501(k) applications said they are cautious. Spink noted that contingencies for Sunrise's product development were drastically overhauled to accommodate long delays. Adams said he expects to wait 18 months or so when he does have to submit an application.

And Robert Stuckleman, president of Manhattan Beach-based CompuMed Inc., a manufacturer of electrocardiogram equipment, has rewritten his company's business plan to accommodate the lengthy 510(k) process.

"It's extra time and money, and we have to account for it," he said.