Medtronic kept the market in suspense for quite some time regarding details of its surgical robot but as recently promised, the company pulled back the curtain on its robotics system during an investor meeting in Hartford, CT on Tuesday.
One of the clear takeaways from the meeting was the company's depth of commitment to the robotic-assisted surgery market.
“This isn’t just about launching a robot, this is about building a robotics business," said Bob White, EVP and president of Medtronic's minimally invasive therapies group.
White compared Medtronic's entrance into robotic-assisted surgery to Porche's entrance into the electric car market.
"When Porche decided to enter the electric car market, they [brought] with them tremendous experience in automotive innovation. They had never built an electric car, but they understood automotive," White said. "We understand surgery better than any other company in the world and that’s what we bring to the table.”
White and other Medtronic executives emphasized that the company has designed the surgical robot system to address both the cost and the utilization barriers that exist in the market today.
"I'm often asked the question, 'well Bob, how do you feel about competing in this 2% space?' And I'm like, 'you're missing the point.' This is about 98%," White said. "This is about 98% of the procedures that aren't being done today. That's about increasing market access and that's something we do very well."
The Current State of the Robotic Surgery Market
Before diving into the specifics of Medtronic's surgical robot, let's take a look at where the market is today, according to White.
- The robotic surgery market is about 20 years into its development. While White never specifically mentioned the incumbent in robotic surgery, Intuitive Surgical, it's well known that Intuitive pioneered this field with its da Vinci surgical robot system.
- About 39,000 surgeons have been trained in robotic-assisted surgery, but today only a fraction of those surgeons are actually performing robotic surgery.
- More than 5,000 robotic-assisted surgery systems have been installed and placed in hospitals around the globe, but those systems are only being used less than one case a day on average.
- Only 2% of procedures globally are being done robotically (about 10% in the United States).
The two main adoption barriers in robotic surgery are cost and utilization, White said.
One of the early misconceptions in the market is that it's a capital cost problem, but that's not actually true, White said.
"Hospitals are more than willing to pay a million-dollar-plus price tag for a piece of capital equipment," White said. "What they struggle with is the cost per procedure."
Medtronic touted that its surgical robot system will offer "robotics at the cost of laparoscopic plus flexibility."
As for the second major adoption barrier, White pointed out that surgical robots are big and require dedicated OR space.
Will Medtronic’s Surgical Robot Really Move the Needle?
Of course, having a clear understanding of the adoption barriers is only half the battle. So how does Medtronic plan to overcome those barriers with its surgical robot?
Megan Rosengarten, VP & GM of surgical robotics at Medtronic, walked the audience through each component and the key features of Medtronic's robotic-assisted surgery system:
- One component of the system is a universal surgical tower. Rosengarten explained that the term universal means the tower can be used not only in robotic cases but in laparoscopic cases and even in open surgery. The tower houses, among other things, a 3D visualization system, courtesy of the company's partnership with Karl Storz that was announced in June. That Storz visualization system can be used in 2D mode, which is typical for laparoscopic procedures, or 3D mode, more typical in robotic-assisted surgery. The endoscope that comes with the Stortz visualization system is also a standard length, meaning it can also be taken off the robotic system and be used as a hand-held device during laparoscopic procedures. The tower also houses Medtronic's FT10 generator, which is designed to power devices in robotic surgery that emits energy and is also designed to power laparoscopic and open surgery devices.
- The system is designed for upgradability. Rosengarten said that in talking with hospital administrators about the adoption of robotic systems (and medical technology in general) one of the common concerns that kept coming up was the fear that the hospital would invest millions of dollars on technology that would be obsolete in a year. In response, the company built a system that would allow for upgrades to be made in the field as technology advances without requiring the hospital to replace the entire system. That becomes especially important for the visualization technology that is integrated into the console. "I don't know about you all, but I don't see many categories that are moving as quickly as visualization," Rosengarten said.
- Open design console. Based on surgeon feedback, Medtronic designed the console of its robotic-assisted surgery system so that the surgeon would not be isolated from the patient and the rest of the operating room staff.
- Ergonomics. Rosengarten said the system is designed with ergonomics specific to the back and the neck for surgeons. She said the company uses the phrase "active resting" to indicate that the surgeon is in a comfortable and relaxed state sitting at this console but the surgeon is also not confined to one position throughout the entire procedure.
How Soon Will the Surgical Robot Be on the Market?
White said Medtronic anticipates submitting for CE mark in the Q1 of the company's fiscal year 2021 (Medtronic's fiscal year begins in April), and filing for a U.S. investigational device exemption to begin placing systems in U.S. hospitals, training surgeons, and gathering clinical data in the first half of its fiscal year 2021.
So if all goes as planned, the system could be available both in Europe and in the United States within the next 24 months.
But one thing that was clear from Tuesday's meeting is that this is just one of many Medtronic surgical robots the market can look forward to.
"We think about this not in terms of one or two years, we think about it in 10 years," said Medtronic CEO Omar Ishrak said. "In 10 years, not just this robot but other robots that we've got going will change the face of surgery."
What Will the Surgical Robot Cost?
Medtronic management spent a lot of time talking about addressing the cost barrier with its surgical robot, but stopped short of providing specific price points. Here's what the company did reveal, however, about the pricing strategy:
"We're not going to give the robot away," White said. "We believe that the cost of acquisition, a large upfront capital cost is bearable if it can be translated on a total cost of ownership for that institution, so on a cost per procedure."