As recently as 20 to 30 years ago, manufacturers of medical equipment had one of the best marketing strategies to have been developed since the dawn of the Industrial Revolution:
- Sell a piece of equipment
- Wait 3 or 4 years
- Convince original customer that the equipment is now outdated
- Sell replacement
- Repeat steps 1 – 4
Priority on Medical Device Maintenance
In today’s healthcare equipment market, budgets are not based upon what you will purchase next but on how to keep what you have up and running. In response to this shift in priority, the market for routine medical device maintenance services has been steadily growing.
Exclusive (and lucrative) original equipment manufacturer (OEM) industry giants such as General Electric Medical, Toshiba, Phillips, and Siemens are watching their profits from service contracts being eroded by independent service organizations and even “in-house” departments.
In an effort to limit the attractiveness of their competition, OEMs have been lobbying to have the Food and Drug Administration regulate the competitors to insure that the “high quality and patient safety standards” will be maintained. The “standards” to be met sound suspiciously like any other regulatory incursion into the private sector: a government mandate to maintain the status quo disguised as an innovation.
To be sure, there can be a need for some form of regulatory oversight because there have been too many instances where some equipment refurbishers have cut corners in order to meet delivery and installation deadlines. The fact that many such deliveries were to emerging market nations and that some deadlines were partially politically motivated is not an excuse for turning out a substandard product, even if it is a “refurb.”
But neither is it an excuse for the OEMs to send a regulatory agency such as the FDA to do their dirty work for them.
It can also be argued that a non-OEM services provider may not always have access to a reliable source of replacement parts. This may be true, but it also must be true of the OEM as well. If the OEM controls the source of materials that a competitor might make use of, doesn’t this start to sound suspiciously like a monopoly that starves its competition out of existence rather than meet it head-on in the open market?
The final argument that can be raised in favor of FDA regulation of non-OEM medical device maintenance is probably the best: it would help protect proprietary advances in both hardware and operating software from piracy by those nations that would use it to gain a competitive advantage over American OEM operations. The reality is that foreign competition has already made enough inroads into the American capital medical equipment market that any protection of “trade secrets” will be window dressing at best.
If the OEMs want to stay competitive in the free market economy, then it is their responsibility to deliver a product or service that is competitive. It is not the responsibility of the FDA to assist the stifling of competition by imposing regulations on a still-emerging industry.
To recap, original equipment manufacturers would like to preserve their share of the lucrative medical device maintenance and service contract market where it appears that they will continue to see that share decrease in the coming years. Since there is little evidence to support OEM contentions that in-house or independent service organizations could compromise patient and/or healthcare worker safety, further intrusion of the FDA into such operations is unwarranted.
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