Medical device entrepreneurs and startup companies feeling left out of the health care reform debate have established a new advocacy group. The goal is to educate policy makers about the possibly far-reaching impacts of pending reform on their life-saving and health-improving products.
The nonprofit organization Entrepreneurs for the Advancement of Medical Innovation (EAMI) was established last fall by leaders of early-stage medical device companies concerned about their lack of voice in both the financial services and health care reform discussions. It is currently being housed out of the San Diego office of law firm McKenna Long & Aldridge LLP (MLA) and is supported by high-profile partners such as Sanderling Ventures and CONNECT.
And, with the recent elections in Massachusetts, the dynamic of the health care debate has dramatically changed. It's likely that all of the issues including the proposed $2 billion medical device tax will be reopened. EAMI and other entrepreneurs in San Diego's medical technology community believe the time is optimum to reintroduce the issues.
Doug Farry, managing director of MLA and executive director of EAMI, was approached about launching the group by the EAMI founders and now is helping oversee efforts to raise awareness in Washington about the short- and long-term impacts of health care reform -- and other policy decisions -- on medical care and quality of life for patients in the United States and around the globe.
"We have excellent medical products in this country, which are being developed by engineers, medical doctors and many others searching for better solutions to our health needs," Farry said. "To remain the world's innovator of medical technologies, we need to find ways to stimulate and support -- not stifle and suppress -- startups and entrepreneurs who are making medical miracles happen."
The proposed health care reforms could compound what has already been an agonizing year for medical device companies, both locally and nationally, with the passage of tougher tax policies and stricter regulatory standards.
The FDA has been gradually becoming more demanding that device companies do larger and more expensive clinical trials. This means that it is taking longer and costing more to get medical devices approved in the United States, said Tim Wollaeger, chair of EAMI and managing director of Sanderling Ventures, a San Diego-based investment firm dedicated to building new biomedical companies.
"It's also causing venture capitalists to be more uncertain about making new investments in the medical device sector," Wollaeger added.
In California alone, venture-started companies now account for 3.8 million jobs and $997 billion in revenue.
During these hard economic times, Wollaeger said the Obama administration should be looking for ways to reward, not punish, medical device companies that are not only providing needed jobs and revenues but, more importantly, developing technologies that are saving lives as well as health care dollars.
"Our health care system is dependent on new product innovation and development, and our country is stronger as a result of the activities of many of these medical device companies," he said.
In the upcoming months, Wollaeger said EAMI hopes to raise its voice to policy makers in Washington who are engaged in both financial and health care reform debates about the importance of promoting and protecting medical innovation, entrepreneurialism and educated risk taking.
In particular, the group wants to spotlight topics ranging from the excise tax on medical devices and CMS reimbursement rates to FDA rules and financial services reform.
Another local nonprofit committed to entrepreneurship in technology and life sciences plans to join forces with EAMI to help further the cause.
"There is a missing voice in Washington, D.C., in describing the needs of innovative startup companies," said Duane Roth, CEO of CONNECT. "The entrepreneurs that build these companies cannot afford the recourses necessary to educate politicians on the impact of their polices on innovation. Organizations like EAMI can serve as a key resource to carry the message to Washington on the polices that will support investment in creation of high-paying jobs and those that will stifle job creation. CONNECT will be partnering with EAMI on issues of common interest."