A surgical mesh should be approved soon, and seven more products are in development. Some of the MD&DI staff met with Kuntz at MD&M West to learn about GMD's business model. It sounds like it would simply consist of reverse engineering, but it's much more than that. First, the firm has to find products that could be sold as generics. They must be off patent, have reimbursement, still be the state of the art for their fields, and have no safety issues. Given the short product life cycles in the device industry, such products are difficult to find. Then, the firm sends its engineers into operating rooms to observe how the product is actually used. From there, engineering and human factors specialists design the product, with improvements if necessary -- the generic device is not necessarily an exact copy of its predicate branded device. Then it is sent for regulatory approval and priced. Manufacturing is done by contract manufacturers. Kuntz says the manufacturers of the predicate devices raise their prices each year despite the devices having been on the market for 20 years or longer in some cases. He estimates that the company's first three products will bring an immediate savings of $360 million to the healthcare system. It appears that GMD's model is in fact a mixture of the pharmaceutical generic model and the medical device 510(k) "me too product" model. But it has enormous potential, as evidenced by doctor reaction. Many of the surgeons who are approached about using GMD's devices are so impressed with the concept that they want to invest in the company.
