Framingham Firm Poised For FDA Approval | Device could help sick hearts keep beating
The political and the social often affect business, but as the country’s broken healthcare system struggles to sustain itself, Framingham-based HeartWare International Inc. finds itself straddling a line between great business opportunity and political and ethical complexity.
The situation puts HeartWare International in a tough spot.
The news frequently includes horror stories of healthcare excess. Elderly patients dying of cancer are also treated for heart disease as family discussions of so-called “end-of-life issues” are protracted.
HeartWare’s product, a left ventricular assist device, is intended for people diagnosed with advanced heart failure, and there are indications that it could become a “destination therapy” rather than a bridge to an eventual heart transplant.
That puts HeartWare on the cusp of great opportunity. It is entering a market in which heart transplants are playing a diminishing role.
The survival rate of patients with an LVA device is about the same as it is for heart transplant patients. That is, patients in both categories have about a 50 percent chance of surviving another five years after the procedure.
And the number of available donor hearts for transplant patients has fallen off dramatically since the advent of strict public safety regulations like seatbelt laws. The number of patients suffering from heart failure is increasing along with the number of patients who survive heart attacks.
But as the cost of care and insurance coverage increases and reimbursement rates fall, doctors find themselves chasing revenue as much as they are treating patients.
This could make HeartWare’s LVA device especially attractive because of its relative low cost.
If approved by the U.S. Food and Drug Administration, the company’s left ventricular assist device would cost about $150,000 to purchase and implant.
Douglas Godshall, president and CEO of HeartWare, noted that as more patients survive heart attacks, “five and 10 years later, they’re still alive, but they’re not getting adequate blood flow, they can’t get around, their organs are starting to fail.”
And even though patients “do well on devices,” the HeartWare LVA was originally conceived as a bridge to a transplant. As “bridge-to-transplant” patients become “bridge-to-decision” patients, the pool of potential LVA device recipients grows.
Today, “we may be able to put pumps in an end-stage patient and they’ll keep it for the rest of their life,” Godshall said.
Potential
For Spencer Nam, an analyst who follows HeartWare for Summer Street Research Partners in Boston, this is good news for the company.
“People think HeartWare could be a huge success if and when (the LVA device) is approved,” Nam said. If all goes smoothly, the device could be approved as a destination therapy by the FDA by the end of 2011. It is already approved for use in the European Union. Godshall said the company hopes to make the device available in the United States in 2012.
“In the U.S. now, there are 50,000 to 100,000 patients who are going to expire within a year because of heart failure. It’s a big problem,” Nam said. “Now that the technology is advancing, this could be a huge option, a legitimate option, to extend life for another three to five years, minimum.”
But deciding who gets an LVA device could be tricky morally. And HeartWare, a public company, must balance its desire to make a profit for shareholders with what’s best for its customers.
The company seems to be on the right track, at least in terms of revenues, which have grown from $332,000 in 2008 to $24.2 million in 2009. However, the company is not losing money: it reported $20.9 million in profits last year.
“Are there very tough ethical questions about who gets it and who doesn’t? Yes, I can see that,” Nam said. “That’s a very difficult topic for anybody, and patient selection is going to be a big factor.”
Michael Grodin, director of medical ethics at Boston University, agreed. He said frank discussions about the goals of the company, patients and physicians were essential. While it is important for those discussions to happen, Grodin said patients and doctors frequently fail to have the kind of dispassionate, reasonable debate necessary to make good decisions about their respective goals and what can or cannot be achieved through technology.
And that can lead to even more difficult situations down the road.
“Technologies don’t have lives; people have lives, and people feel uncomfortable turning off a pacemaker and ending a life. But really, they’re turning off the technology and the patient has a right to decide when to turn it off.”
“Over time, physicians will find the sweet spot,” Godshall said. “The physicians can understand how well (patients) do.”
The company is undertaking expanded trials to evaluate the LVA device’s safety. The results should allow HeartWare “to provide a clear set of data to patients and payers,” Godshall said. He acknowledged that patient selection will be a very important part of HeartWare’s success, especially with the country’s healthcare system in its current state.
“The reimbursement rate goes up every year. Medicare sees something here. To some extent, they’re trying to encourage technology development in this area,” he said.
Heart failure is also one of the most expensive conditions for Medicare to treat. Heart failure patients lead miserable lives in and out of the hospital, Godshall said.
He said what’s lost in a lot of healthcare reform debate is the fact that “everyone’s system is broken, and it’s just a degree of brokenness depending upon where you live.”
“I’d still rather get sick here than anywhere else, but there’s a problem with the (system’s) threshold. You don’t want to call it rationing, but I’ve seen procedures done on 85- and 90-year-olds that had no business being done. An 85-year-old doesn’t get one of our devices. At some point, it’s been a good life and you can’t consume such a large proportion of money to wind down a life.”
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