A new industry that recycles medical devices is rankling the manufacturers of those devices.
By Stacie Kress Booker
Cost-cutting measures born of managed health care have created a new industry in reprocessing medical devices -- and a controversy that has as much to do with market share as patient health.
Looking to save on purchases of medical supplies, hospitals now seek to reuse many items they once threw away after a single use. One company, Vanguard Medical Concepts, now makes about $16 million a year recycling devices that manufacturers call "disposable" -- forceps, for example -- and selling them back to hospitals at a fraction of their original cost.
The reprocessing industry is still tiny. Vanguard, based in Lakeland, accounts for about half the $30-million total for reprocessors nationwide, while medical manufacturers in the region's 13-county High-Tech Corridor, including 190 companies in Pinellas County alone, account for some $900 million in sales.
But every sale of a reprocessed device is one fewer for manufacturers, who are not about to sit idly by. Claiming the devices are unsafe, manufacturers have persuaded the Food and Drug Administration to begin regulating the reprocessors. "Don't allow products to go to market that compromise a patient's good fortune," says Dick Isel, president of Sterile Recoveries in Clearwater.
The reprocessors respond that the manufacturers' labeling of devices as disposable is self-serving -- intended to boost sales rather than protect patients. They point to numerous hospital studies as well as findings from the Centers for Disease Control that show many "disposable" devices can be safely reused. "Manufacturers are unhappy with us because we're taking money out of their pockets," says Charles A. Masek, CEO of Vanguard. For example, Vanguard sells reprocessed biopsy forceps for $15 apiece and angioplasty balloon catheters for $175. Manufacturers sell those products for $30 and $350, respectively.
Bowing to political pressure from manufacturers, the FDA has developed new regulations covering the reprocessing industry. As of August, companies that recycle disposable medical devices must register with the FDA and apply for what's called a 510(k) certification on each product they reprocess.
The requirement is expected to cost Vanguard $1 million. Masek has already had to hire consultants specializing in 510(k) certification, computer software and equipment sterilization. As the largest reprocessor nationwide, and the only one in the Tampa Bay region, Vanguard can foot the bill. Many smaller companies can't afford to.
Lakeland Regional, which pays Vanguard to reprocess most of its disposable devices, estimates it saves about $100,000 a year recycling. Medical Director Edwin Sammer sees one potential benefit from the FDA scrutiny: "We hope the new regulations will increase public acceptance of reprocessing."
Masek says the FDA regulations add legitimacy to the industry and is claiming victory: "The manufacturers thought it would hurt us. Instead it's going to make the market." His company recently inked a deal with U.S. Endoscopy Group to offer its services to U.S. Endoscopy customers. Masek predicts this is only the beginning of partnerships between reprocessors and manufacturers.
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