Policy Perspectives: Will Innovation Suffer Under CMS Skin Substitute Regulatory Changes?

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• CTPs (US) — regulatory impact on innovation: Current CMS and FDA pathways are “dramatically stifling” development, particularly for birth tissue–derived products, which have long safety histories and strict FDA good tissue manufacturing oversight.
• Limited viable approval routes: Developers face constraints under PHS Act §361 (non-manipulated, homologous use only) or the BLA pathway, which is largely unfeasible for skin substitutes due to product variability and cost (~$10M and 5 years).
• Sector implications: Innovation in formats such as particulated or gel-based CTPs is hindered; industry urges greater collaboration with CMS to reduce waste/fraud and inform policy, noting emerging attempts to circumvent current cost-control measures.

Please note: This content is a direct transcript, capturing the authentic conversation without edits. Some language may reflect the flow of live discussion rather than polished text. 

So if asked if the regulatory environment is supporting innovation or stifling it, I would have to answer that it’s dramatically stifling our efforts to innovate. 
 
The pathways available to us for, just take for example birth tissue–derived products. These are products that we know that the tissue is privileged, meaning that it doesn't cause an autoimmune reaction or form of body reaction. We know that these products are safe and embedded in use since really the turn of the last century, so around 1910, and haven't caused any injury or problem for patients. So the safety thing is really out of the way and also mitigated by the current good tissue manufacturing processes that's, you know, regulated by FDA very tightly. So you can't make a bad or unsafe product and stay in business. 
 
So, you know, on the efficacy side, if you want to prove a new product is good enough for marketing, you've got a couple of choices. You've got the 361, which means you can't manipulate the product and it has to be a homologous use and there's some very stringent guidelines on how that can be applied or you can go into a BLA process, or a biologics license application, which really honestly is out of reach for a skin substitute product in general because those products aren't as uniform as would be required by that process.
 
So in our environment where we know that these birth tissue products work better than hardly anything else that we can think of out there for now, the regulatory environment to bring a new one to market is very, very difficult if you want to be able to bring in something, say, innovative, like a particulated product or one that is formed into a gel that can go into a tunnel or some undermining area. Those are really, really hard to do in the current regulatory milieu. So we're kind of stuck with what we have and copying it over and over again because nobody has the extra $10 million in five years to wait around to try to do something that's really from a manufacturing standpoint, very difficult to do as well. 
 
In terms of policy in the CTP sector, I think that the government actually should listen to some of the invitations from industry to collaborate. And what I mean by that is, physician fee schedule. So I guess in summary, what I would say is more collaboration with industry. I think there are costs to be saved. And I think that industry could guide them and help them show them where the next waste or fraud and abuse is going to come from. Because believe me, there are already people who are figuring out ways to go around what they're trying to do to control costs and to regulate the industry right now.