What Thomas Fogarty, MD, Thinks of the U.S. Medtech Industry

 The panel included:

The topic of conversation for the event was "Overcoming Challenges in Medical Device Development: An Honest Conversation." It was, perhaps, the most frank assessment of the U.S. device industry I've ever heard. The commentary from Fogarty, which I will begin to describe here, was the most colorful of the panelists.

Towards the beginning of the event, Fogarty was asked how medical device technology compares with what we have in the United States.

Fogarty answered that many countries in Europe, and some in Asia (like in South Korea), are significantly advanced relative to the United States in terms of medical technology. Most people here don't know what's going on offshore, he said. But they should: New technology is welcomed abroad "much more enthusiastically than we see in the United States," he explained. 

The reason for this predicament? "Most of this is related to regulation," he said. As regulation becomes stricter, costs go up. "But countries that you would never expect are much more advanced than we are in the United States and that includes countries like North Korea, in some areas." Japan and Europe were also mentioned as having more advanced technology—at least in specific domains. "Overall, however, you can get better care with improved technology offshore."

Fogarty went on to mention medical tourism, which he explained is increasing 100% year over year. "That means a lot of our patients are not getting adequate care in the United States. There are many sites offshore, if you know who’s there and what they do, you’ll get better care at reduced costs."

"The FDA has finally woken up and realized what is happening in the United States to the medical industrial complex," he added. 

He went on to say that major companies now produce more than 50% of their products offshore. "That [percent includes what could be] a specific product or some component of a product," he added.

The next comment drew the strongest reaction from the attendees: "Now, I’m sure that someone is going to come up with how many jobs that means [that are being lost] for the United States. I don’t know how many but I can tell you, it’s a sh##load." 

That last comment triggered laughter from the crowd. Someone in the audience commented: "He always does this," which I believe was a reference to the swearing.

"We do not need to be sending jobs offshore," he added. "But that's exactly what we are doing."

Fogarty said that "we are doing to the medical industrial complex the same thing we did to the auto industry," adding that companies that go offshore usually encounter a friendlier environment there and end up with a significant investment in that operation. "They are not going to abandon that investment."

He compared what happens with such companies to people that find a new restaurant they like. "If you go to a restaurant and you get a better meal at a better price and better service, you’d go back to that restaurant. That’s what happens," he says. "A company experiences a much better situation when they go offshore. They are not going to come back to America for a bad 'meal.'"

He ended his opening remarks stating:

He added a caveat that there are some bad apples in every industry, including in the medtech industry, but then went on to reiterate the point he had just made earlier: most people in the medical device sphere sincerely want to develop technology that truly helps people.

—Brian Buntz

Update from November 8, 2011: We recently had the chance to speak with Fogarty. Please see: An MD+DI Exclusive Interview with Medtech Pioneer Thomas Fogarty, MD

We've also featured Fogarty years ago in MD+DI in an article titled "Industry Pioneer"