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Exclusive: IAMERS chief and former senior FDA staffer talk reseller market challenges

by Brendon Nafziger, DOTmed News Associate Editor | July 26, 2012

Uldriks: Another thing to keep in mind: when they implement a rule, they use two dates. One is the date the rule becomes effective, or the effective date. The other is the enforcement date. From what I've read, the rule is going to become effective two years from now, but it'll be enforced three years from now, or one year after the effective date. Sometimes...they'll delay the enforcement date. There are two factors in that - the FDA just doesn't have the resources to do it, or there are too many latent problems that suddenly surface. In my mind, the implementation date, the effective date can be very regular, but it's the enforcement date that can create the biggest problems.

I think by now everyone knows that medical device manufacturers are very worried about the 2.3 percent medical device excise tax included in the Affordable Care Act that takes effect next year. But we've been hearing from some secondhand and refurbished dealers who are also worried it will affect them. My understanding is this just applies to manufacturers. Is that the case?

Upton: It's something that our attorney has not completely digested. But based on talking to people in Congress who are involved with this stuff, while it may not apply to pre-owned equipment in the U.S., it'll probably hit European equipment coming in [as the law also applies to those who import equipment]. When you take into consideration that the euro is worth more than the dollar, you're just adding layers of regulation. At some point in time, a European (dealer) is just going to say, it's easier to sell this in the Middle East or someplace rather than in the U.S.

Speaking of imports, India apparently has recently proposed banning the import of capital equipment five years old and older. For now, it would only apply to textile and manufacturing equipment - like shuttleless looms - but people are worried it could spread to CT scanners and the like. Are countries getting tougher on importing used equipment?

Upton: My personal opinion is a lot of these bans are a function of the OEMs working with the countries and setting themselves up as sole source.

Uldriks: Which they've done very well. It's ingrained. I know in one country I was able to find some inroads for conversations at first, but it became very clear very quickly that the brick wall was very solid.

Upton: I've watched this happen in Central America. There were people doing a lot of business down there, but the market is just shrinking and shrinking, and it's all due to OEM influence.

Have any countries tried relaxing their import bans or restrictions?
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Don Bogutski

In summary of the UDI discussion

July 26, 2012 11:58

This interview should serve as a wake up call to IAMERS Members and non-members alike. We face a growing number of interested, well funded entities that see the vibrancy of our market for pre-owned systems, parts and iOS service. Their number and level of interest expands as the new healthcare market place shrinks. These parties understand that regulations are the most effective way to gain control over this valuable market segment. They are prepared to legislate and regulate us out of existence. If you participate within the frame work of used items, don't allow your company to be lulled to a certain death because the glacial pace of enactment and enforcement puts you to sleep. Individually we are too poor, too weak and too distracted to counter the OEM's momentum. There is no better way to engage this threat, then to become an ACTIVE IAMERS Member.

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Michael Wray

More commentary on the UDI discussion

July 27, 2012 02:54

When you realize what is happening globally and how these global changes are dramatically affecting small business players in all avenues of the economy here in the US You realize what is at stake. The very existence of our way of life. Our ability to make a living and what will happen when 3rd party service and sales go away. What you have here in the United States and around the world is Large Global Multi-National corporations who have billions of dollars to influence National governments throughout the world. They shut off used and refurbished markets through back door secret deals and shut off these markets through the National Health departments except for those large multi-national corporations equipment. In the US for years are industry pointed to 21CFR as some type of a way to provide a least a basic set of schematics access to calibration and some basic troubleshooting and repair information allowing manfacturer, end user, and 3rd party the ability to work on and repair equipment. In the early years of these regulations Manufacturers pretty much went along with these requirements. Today you will find most manufacturers give practically no information on the equipment. They limit access to everything but the most mundane and basic information. Many today do not even provide schematics of the equipment. They are not worried, they know that the FDA will not do anything. And on Capital Hill they have an army of lobbiest working to make it easier on themselves and harder on everyone else. From my perspective the only way foward is for legislation to mandate and reinforce the basics laid out in 21 CFR covering more in depth due to the nature of every thing being software driven.To provide a more level playing field for the end users and for 3rd party providers. Short of this and due to the way the FDA interprets 21CFR today. I do not see a long term way foward for this industry. And when the OEM's get rid of us. Watch equipment costs and repair costs skyrocket. We will go back to the days of $250,000.00 dollar CT contracts. And supposed saving in healthcare will be just a mirage. At the turn of the last century are forefathers saw monopolies as a bad thing something that needed to be broken up for the good of society. Today in healthcare you have a small handful of large multi-national global corporations that control a huge percentage of the medical equipment sold in this country and around the world. In most other parts of the world their is no other way to get service or sales except through the OEM. The United States is one of the final area's in the world that has a truly free exchange of medical equipment of all types and has many different people selling and servicing this equipment.
Free enterprise with a truly neutral and balanced umpire. That umpire in our field is the FDA. From my perspective the FDA seems very tilted towards the OEM's.I think the point that Ms. Upton made in this interview reinforced that. These are my thoughts I would like to hear others.

Thank you
Michael Wray

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