This year medtech companies began to dip their toes in risk-based purchasing contracts through which they are on the hook for demonstrating the effectiveness of their products.
Medtronic, St. Jude Medical and Johnson & Johnson have publicly acknowledged signing such contracts although details for all are not available. Medtronic has disclosed that it has signed such contracts for its Tyrx antibacterial mesh product that are used to encase implantable cardiac devices. There is a big risk of infection in patients who are undergoing procedures involving devices like pacemakers and ICDs and the Tyrx envelope is designed to reduce that risk immediately following the procedure.
In an interview, Medtronic CEO Omar Ishrak talked about how taking calculated risks is something that medtech companies do as the natural course of their business. Now, under accountable care, signing risk-based contracts is simply taking that everyday risk taking to the next level. The interview was part of a wide-ranging interview in August, in which he talked about his approach to the hospital services business, his hopes for the diabetes group and how Medtronic views innovation.
Arundhati Parmar is senior editor at MD+DI. Reach her at [email protected] and on Twitter @aparmarbb
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