“Tourists aside, one out of every eight people you walk past in Galway is involved in the medical device industry,” says Prof Abhay Pandit, a biomedical engineer based in Galway university.
The importance of the medical devices sector to the Irish economy is not as well publicised as that of the major technology corporations such as Apple or Google, or the big pharma companies such as Pfizer, but is of a similar scale.
Medical devices make up almost 10 per cent of all Irish exports and Ireland comes second only after Germany as the largest European exporter of medical devices. Total employment, in indigenous and multinational businesses, is 38,000.
Four out of five of stents used worldwide are produced in Ireland. Half of the ventilators used in acute hospitals worldwide are produced here, as are a third of the world’s contact lenses. More than 30 million people with diabetes use injectable devices made in Ireland.
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Europe’s premier cluster of medical devices companies is based in the Galway region, according to Enterprise Ireland.
Abbott, Stryker, Johnson & Johnson, GE Healthcare, Medtronic, Shire and Boston Scientific are among the top global medical device corporations that have substantial operations here employing large numbers of skilled staff.
Settlements
The industry and its regulatory framework have come in for scrutiny after several companies – including some with significant Irish operations – made multimillion-dollar settlements in the United States arising from investigations into bribery and scandals linked to the promotion of their products.
Last year Shire, a biopharmaceutical corporation that has its headquarters on Baggot Street in Dublin, but has its main operational base in the US, made a $350 million false claims settlement with the US authorities arising from an investigation into the payment of kickbacks.
The kickback payments were linked to sales of Dermagraft, a human skin substitute approved by the US Food and Drug Administration for the treatment of diabetic foot ulcers. It was the largest ever kickback settlement involving a medical device and involved allegations that “Dermagraft salespersons unlawfully induced clinics and physicians with lavish dinners, drinks, entertainment and travel, medical equipment and supplies, unwarranted payments for purported speaking engagements and bogus case studies, and cash, credits and rebates, to induce the use of Dermagraft.” The settlement did not involve Shire admitting to any wrongdoing.
Also last year Medtronic, the world’s largest manufacturer of medical devices, which has had its headquarters in Dublin since the formerly US corporation moved here in 2015, agreed to pay $12 million in the US in settlement of claims that it paid millions of dollars in consulting fees to doctors who published studies in peer-reviewed journals that downplayed the adverse effects of a Medtronic product.
Medtronic said in a statement at the time that nothing in the settlement could be taken as a concession that it admitted to wrongdoing.
The controversial articles concerned a bone-growth protein, Infuse, which had been approved for use in surgery for lower back pain but was used extensively for upper spine and neck repairs, sometimes leading to death and serious injury. Such off-label use is legal but cannot be promoted by the manufacturer.
An investigation in 2012 by the US Senate finance committee found Medtronic had been “heavily involved” in shaping the content of published studies on Infuse.
The committee said Medtronic had been “involved in drafting, editing and shaping the content of medical journal articles authored by its physician consultants who received significant amounts of money through royalties and consulting fees from Medtronic”.
In Europe Infuse was marketed under the name InductOS. Its use in the European Union was suspended in 2015 because of concerns with the manufacturing process involved.
Johnson & Johnson (J&J), which operates a number of major plants in Ireland, entered into a deferred prosecution agreement with the US authorities in 2011 and paid a $21.4 million fine arising from the bribery of doctors in Greece.
The bribery involved payments to Greek hospital doctors to encourage them to use orthopaedic products produced by the J&J subsidiary DePuy, which has operations in Ireland. Documents published by the US department of justice (DoJ) show the bribery operation was discussed by DePuy executives who met at a conference in Dublin in 2000.
DePuy orthopaedic products were sold at significant discounts to an Isle of Man intermediary in order to produce profits that could then be used for bribing the Greek doctors for implanting the devices into their patients.
A DoJ statement on the scheme noted that in February 2005 lawyers and executives in DePuy, during a discussion of the code of practice produced by EUCOMED, which represents the interests of medical device manufacturers in Europe, noted that that everyone in the industry knew improper incentives were being supplied to Greek health officials and that if DePuy did not do so, “we’d lose 95 per cent of our business [in Greece] by the end of the year”.
The US investigation concluded that between 1996 and 2006, DePuy authorised payments of about €16.4 million to Greek agents knowing that much of the money would be used to pay cash incentives to publicly-employed Greek doctors to induce them to use DePuy products in their patients.
In a “deferred prosecution agreement” published in 2011, J&J agreed that the facts outlined were true and accurate.
‘Enormous’ contribution
The contribution to humanity of the medical device sector over recent decades has been enormous, says Pandit.
“A few decades ago, cardiac surgery for a person in their 70s would have been unthinkable. Now it can be done in minimally invasive ways. A heart valve put into a 60-year-old is likely to last for 20 years, but now it is possible to put in a new one.”
Despite the industry scandals of recent years, he has faith in the regulatory system. “I’m no expert. From what I know, the process [of getting approval for a device] is becoming more difficult. It is not that well thought out. The implication is that fewer devices will come to market, and they will be more expensive.”
He has faith in the medical and research journals and the tests and studies done on medical devices, despite the well-aired issue of financial links between manufacturers and the physicians and scientists who are reviewing their products.
“Even if the data is flawed, this will be discovered later on. We as scientists are subjected to more peer review that any other sector. And in the end, biology will fail us [if there is a problem]. There are so many checkpoints.”
Because bodies are so complex, there is a huge range of reactions across a population to a particular implanted device. This makes it difficult to fully test a product prior to its being released to the market.
“It is a risk-to-benefit ratio. We can do as much as we can to show that the thing is safe to put in the body. The way to look at it is, in the circumstances, would I put this in my mother’s body, or in my father’s eye? Would I put it in my own body?”
Pandit says Ireland’s corporation tax rate is not the sole reason for its relatively enormous medtech sector. “It is just the icing on the cake. The ecosystem is the thing, and the English language. The labour force is highly trained, and the higher-education institutes are equipped for clinical trials. It’s well-rooted. I’m not saying that tax doesn’t help, but it’s more than that.”
Galway is part of the constituency of the Fine Gael MEP and vice-president of the European Parliament Mairéad McGuinness, who played an important role in the negotiations on a new regulatory regime for the medical devices sector in the EU.
“Activists and NGOs criticise the close links between academia and industry but it is the only way the sector can produce what it does,” she says.
While it is crucial that trust is maintained in the medical device sector, the benefits to the community of successful medical devices are enormous and it is important that it is not made too difficult for companies to bring new products to market, McGuinness says.
Skilled staff
Concerns exist over the extent to which the new regime which is to be put in place by 2020 can be sufficiently resourced with skilled staff.
The system involves “notified bodies” giving CE marks to new medical device products, with certification from any notified body allowing a product on to the entire EU market.
One of the recognised problems with the old regime was the closeness between the industry and some of the private, commercial bodies that were charged with certifying new products for the market. Ireland’s notified body, the Irish National Standards Authority, is publicly owned and highly regarded. However, the number of extant medical devices that it has given approval for numbers in the low hundreds.
That close collaboration with industry is necessary is a view shared by Dr Martin O’Halloran, a senior lecturer in medical electronics in NUIG.
O’Halloran is director of the Translation Medical Device Lab, which is embedded in Galway University Hospital and is focused on Ireland’s indigenous medtech sector and the development of new products.
“What we do is evaluate the commercial potential at the outset,” says O’Halloran. “It means that for anything that is developed there will be an appetite for it.”
People at an early stage of their career are recruited from university and sent into hospital to “look for problems that need to be solved”. They then look for people with specialist knowledge. A specialist team of three members is often formed, with a clinical doctor, an engineer and a commercial person working together. Often these teams can end up creating a start-up company around their proposed medical device.
O’Halloran works on the electrical properties of human tissue and is currently working on a microwave imaging device for breast cancer screening.
A lot of contemporary work is being led by engineering, he says. “The next generation of medical devices will be electro-mechanical. It will be smart or personalised devices that don’t just treat disease but preserve the quality of life.”
