AdvaMed, Medtech Leaders, Commerce Secretary Raimondo Discuss Impact of Semiconductor Chip Shortage on Patient Care
“Participants Thank Raimondo for Commerce Focus on Chips Shortage, Urge Administration to Take Specific Steps to Address Challenges Facing Medtech, Patients”
WASHINGTON, D.C. – This week, Scott Whitaker, President and CEO of the Advanced Medical Technology Association (AdvaMed), led a meeting of medtech CEOs and leaders with Secretary of Commerce Gina Raimondo to discuss semiconductor chip supply chain issues impacting the industry. Whitaker was joined by top medtech leaders from Hologic, BD, ResMed, Royal Philips, GE Healthcare, Boston Scientific, Stryker, and Varian, a Siemens Healthineers company.
“We thank Secretary Raimondo for her leadership on the chips shortage, and for the opportunity we had to discuss this potential crisis on behalf of the patients our industry serves. Semiconductor chips are crucial to our industry and to the countless patients who depend on the medical technologies we produce,” Whitaker said during the meeting. “In this challenging environment, we simply cannot compete with larger players to gain access to chips, particularly given the fact that we’re only 1 percent of the total market—and it’s precisely because we’re only 1 percent of the total market that we believe the prioritization of the medical technology industry can be done with minimal disturbance to the rest of the economy.”
Whitaker went on to urge the Biden Administration to take two concrete steps to address the semiconductor chip challenges facing medtech companies: “First, we urge the Administration to use any and all tools at its disposal to ensure the continuity of patient care in this country. And second, we urge the Administration to send a clear and unambiguous message to chips manufacturers and distributors that our health care system must be prioritized, and ensure full transparency for future allocations to our industry.”
“Screenings for breast cancer have decreased significantly during the COVID-19 pandemic. At a time when women are being urged to return to their preventive health screenings, ensuring a sufficient supply of semiconductor chips to manufacture and maintain the thousands of mammography systems throughout our country is critical to preventing delays in diagnosis and treatment,” said Stephen P. MacMillan, Chairman, President and Chief Executive Officer of Hologic.
“The work we are doing on Secretary Raimondo’s Advisory Committee for Supply Chain Competitiveness is advancing solutions to address the unprecedented raw material shortages, transportation bottlenecks and labor challenges we are all experiencing,” said Tom Polen Chairman, CEO and President of BD. “BD is committed to delivering on the promise of smart devices and connected care for patients but that requires ensuring semiconductor chips are available for medical technology. Now more than ever, we must continue to work together, across industry and government, to deliver long-term solutions that protect the continuity of health care in the US and around the world.”
“What we are seeing now is a humanitarian emergency in medtech, and especially in respiratory medicine. Patients are suffering because medical device manufacturers are struggling to get the parts they need to help serve patients and support their healthcare providers. Semiconductor chips are ResMed’s number-one bottleneck for sleep apnea devices and ventilators, and we’re pleading that chip manufacturers and distributors do the right thing and increase the priority for our medical technology, so that together we can help save lives,” said Mick Farrell, CEO of ResMed.
“We have to fight every day to obtain even a fraction of the computer chips we need to produce life-saving medical systems and devices such as the imaging systems we manufacture to enable minimally-invasive heart treatment, or the patient monitors we produce for intensive care units and emergency departments. This is resulting in significant production delays at a time when high-tech medical equipment, which millions of men and women in the U.S. depend on for the delivery of quality care, is in high demand. Given the current severe shortage of chips we therefore need to act now and prioritize chip allocation to vital medical systems and devices,” said Frans van Houten, CEO of Royal Philips.
AdvaMed members’ top priority is ensuring the continuity of patient care. To that end, the organization created a Supply Chain Task Force, which has highlighted several best practices that have emerged during the pandemic amidst supply shortages, such as activating dual sources, building redundancy into their operations (i.e., qualifying alternative parts), redesigning and requalifying product configurations and expanding inventory and factory capacity. In addition, member companies have gone to extreme lengths to communicate deep into their supply chain, often reaching out to their suppliers’ suppliers about the nature and criticality of the technologies for which the chips are destined.
In April, AdvaMed submitted comments to the Department of Commerce’s request for information on ways to support a strong domestic semiconductor industry.
From the comments submitted by AdvaMed: “We recommend that the [Department of Commerce and National Institute of Standards and Technology] assess the healthcare industry’s requirements for mature and advanced semiconductor chips. Currently, the medical devices industry is largely reliant on mature chips to operate their technologies. While that may change over time, it is critical that the U.S. government supports R&D and growth in this sector, and, most importantly, that it has a clear picture of our nation’s health technology needs, with particular focus on essential semiconductor chips and their market allocations.
“In addition to the proposed programs outlined in the RFI, AdvaMed recommends that Commerce establish a program or office in partnership with key agencies including FDA and HHS/ASPR that evaluates financial assistance, R&D, supply chain transparency, workforce, and other needs as it relates to the evolving infrastructure requirements of the U.S. healthcare system. This program or office could provide input into the overall process from the perspective of addressing our nation’s public health and the well-being of patients. As a key part of this effort and for the reasons outlined above, we also strongly recommend a formal mechanism for regular high-level industry consultations to ensure the U.S. government receives timely information on the semiconductor needs of the medical device industry and can act appropriately to stave off future, unnecessary shortages that could impact patient care.”
Despite being less than 1% of the overall semiconductor chip market, manufacturers of medical devices and diagnostics rely on semiconductor chips for a vast array of technologies. These include but are not limited to capital equipment such as imaging systems, diagnostic assay systems, instrument sterilization equipment, and robotic surgical systems, patient monitoring systems (glucose, oxygen levels, blood pressure, etc.), cardiovascular care such as EKG, pacemakers and defibrillators, respiratory care such as ventilators and CPAP, orthopedic implants and a broad spectrum of technology enabled systems and applications in the healthcare delivery system.
Over the past year, the chips shortage has become an acute industry-wide issue for the hundreds of diagnostics, therapeutics, and capital equipment companies that produce essential medical technologies that support patient health. As the semiconductor supply chain challenges continue, shortages stemming from allocations and decommits by chips manufactures, suppliers and brokers have disrupted medical technology manufacturing and the delivery of patient care.
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AdvaMed member companies produce the medical devices, diagnostic products and health information systems that are transforming health care through earlier disease detection, less invasive procedures and more effective treatments. AdvaMed members range from the largest to the smallest medical technology innovators and companies. For more information, visit www.advamed.org.