Riding the Roller Coaster

by James Cavuoto, editor

In the 24 years that we’ve been covering the neurotechnology industry, we’ve witnessed a wide range of both positive and negative developments. As is the case with most fields, startups, investors, and investigators can expect to experience their share of ups and downs as the industry develops.

But rarely have we witnessed the yo-yo series of wins and losses that have been visited upon one company, Cala Health, in such a short timeframe. As we report in our vendor profile on page 14 of this issue, within just a few years, the company bounced between favorable and unfavorable reimbursement decisions from CMS for its wearable therapy for treating movement disorders. We’re pleased that the most recent coverage decision from the agency has returned that firm to solid ground, though no one could blame us for wondering when the next shoe might drop.

On a longer time horizon, such has been the experience of more than one firm pursuing the neuromodulation market for treatment-resistant depression. Cyberonics, now LivaNova, became the first neurotech company to gain FDA approval for this indication in 2005 with its vagus nerve stimulation therapy. But the company’s joy from this news was short-lived as the firm struggled to get reimbursement for the therapy.

After many years and many failed attempts, the company was finally able to get at least temporary coverage from CMS while it pursued additional studies to convince the agency of its medical necessity. But that decision now seems to be at risk given the news that the company’s RECOVER trial failed to meet its primary endpoint [see News Briefs, p10]. The most frustrating aspect of this development is the fact that the therapy did indeed demonstrate statistically significant improvement in patients with refractory depression. Unfortunately, so did the patients in the control arm of the study, who received “sham” stimulation. Once again, we are forced to raise the question, what is the impact of placebo effect on clinical trials such as this, and why on earth would we want to remove its therapeutic effect if it truly helps patients get better?

LivaNova is not the only firm to have to deal with the yo-yo of emotions surrounding depression trials. Such was the experience of St. Jude Medical (now Abbott) with its “failed” BROADEN trial of DBS for treatment resistant depression, which of course now has breakthrough device designation from the FDA. Along these lines, we were heartened to see positive data from Neurolief in its trial for treatment-resistant depression [see p6 of this issue]. But we can’t help wondering what tribulations await that firm as it moves forward with this indication.

While any startup in this industry needs to be prepared to deal with setbacks that may come their way, much of the uncertainty that afflicts neurotech ventures could be addressed if there was a more predictable path from regulatory approval to reimbursement. Such was the promise the FDA first put forward with its breakthrough device program, which offered CMS coverage for four years once a product was approved through the MCIT pathway. But that prospect turned out to be just a cruel ruse, leaving dozens of firms who achieved breakthrough device designation to wonder whether it was worth the effort.

Many of us were encouraged by the recent news that house bill 1691, which would codify into law many of the original provisions of MCIT, recently cleared the powerful ways and means committee with a bipartisan vote of 36 to 5. But please pardon our cynicism if we don’t hold our breath waiting for that to get passed, particularly in an election year.

All in all, the news from this industry this year has been more positive than negative. But we caution our readers to buckle up—we’re not quite sure what comes next.