Will Masimo's Million-Dollar Gamble Pay Off? Covidien Doesn't Think So.Will Masimo's Million-Dollar Gamble Pay Off? Covidien Doesn't Think So.

Masimo has raised the stakes in its escalating pulse oximetry-focused feud with competitor Covidien. And the game is beginning to get interesting.

June 4, 2013

4 Min Read
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Masimo has raised the stakes in its escalating pulse oximetry-focused feud with competitor Covidien. And the game is beginning to get interesting. 

As part of a campaign to "help clinicians separate fact from fiction," Masimo has renewed and expanded its performance guarantee and, in the process, has put $1 million and its reputation on the line. "If Masimo SET is proven not to be more accurate than all Nellcor pulse oximeters, including the three that Covidien recently announced have received FDA 510(k) clearance with motion claims, we will pay up to $1,000,000 to help your hospital acquire that pulse oximetry," according to the company's Web site

This bold bet was placed as a show of confidence and one-upmanship following several announcements last month from Covidien regarding the 510(k) clearance of three Nellcor pulse oximeters for motion claims. Covidien claims that it is the "first company to receive FDA clearance for a motion-tolerant bedside pulse oximeter portfolio that is also compliant with ISO 80601-2-61," and that it has obtained 510(k) clearance with labeling for use in newborn screening.

Masimo disagrees. The language in Covidien's press releases clearly ruffled Masimo's feathers, prompting the refutation of Covidien's claims and a renewed emphasis on a fact vs. fiction page on its site. "Masimo has always stood for the truth," Joe Kiani, founder and CEO of Masimo, noted in a press release. "Covidien's recent announcements appear to be an attempt to create an impression that Nellcor products are clinically equivalent, or even superior, to Masimo's products. In fact, the performance of Nellcor pulse oximeters has not changed since 2006 when they introduced the version of their technology that is still the same today, after the U.S. Court of Appeals for the Federal Circuit directed the Federal District Court in Los Angeles to enjoin the Nellcor pulse oximeter that infringed Masimo's breakthrough measure-through motion patents. All studies we are aware of show that the current Nellcor technology does not match the performance of Masimo SET technology during challenging motion conditions."

Ouch.

And while the likelihood of a $1-million payout seems pretty slim—the rules and eligibility requirements, after all, include a clause allowing Masimo the right to change or withdraw the offer at any time without notice—the fact remains that the company has made a pretty daring public move against its rival.

So, now the question remains: Who will fold first? Because Covidien appears to be going all in as well.

In a statement issued to MD+DI, Covidien spokesperson Ruth Kane stands by the company's initial claims. "Recently, Covidien became the first company to receive FDA clearance for a motion-tolerant bedside pulse oximeter portfolio that is also compliant with ISO 80601-2-61 standards for pulse oximetry. Nellcor pulse oximetry monitors are designed to support the intended users’ needs as a tool in screening newborns for critical congenital heart disease."

She adds, "In the CCHD recommendations paper that was submitted to HHS, 'Strategies for Implementing Screening for Critical Congenital Heart Disease,' no specific pulse oximetry technology was recommended over another. The paper calls for the following technology attributes: 'Screening should be performed with pulse oximeters that are motion tolerant, report functional oxygen saturation, have been validated in low-perfusion conditions, have been cleared by the FDA for use in newborns, and have a 2% root-mean-square accuracy.' Covidien is the only pulse oximetry provider that meets all of these recommendations. Additionally, Nellcor technology features monitoring systems that have unsurpassed LoSat expanded accuracy claims and report functional oxygen saturation with a specified accuracy of 2% (3% during patient motion), exceeding ISO 80601-2-61 standard requirements of, less than, or equal to 4.0 %."

It's not clear who will emerge the victor in this high-stakes squabble. But don't hold your breath waiting for a rebuttal from Covidien in the form of a similar big-money bet. Kane concludes: "Covidien does not offer performance guarantee programs, unlike the competition, due to potential legal risks pursuant to existing federal and state fraud and abuse laws in the United States."

Shana Leonard is the executive editor of the UBM Canon MedTech Group.

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