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Discounted Registration for Medical Design Excellence Awards Ends Friday

Discounted Registration for Medical Design Excellence Awards Ends Friday

Time is running out to take advantage of the reduced entry fee for the 2013 Medical Design Excellence Awards (MDEAs), the medtech industry's premier awards program honoring commercially available medical products.

Those who register by this Friday, November 9, 2012, will get $200 off the standard entry fee of $600. The standard deadline is December 7, 2012, and late registration is available through January 1, 2013 for an additional fee.  

To be eligible for the competition, products must be able to be ordered or purchased by December 31, 2012. Products can be entered in 10 different categories, including critical care and emergency medicine, dental, medical packaging, and over-the-counter products. 

Click here to register for the 2013 Medical Design Excellence Awards.

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FDA Grants Conditional Approval to Artificial Cervical Disc

FDA Grants Conditional Approval to Artificial Cervical Disc

Privately held LDR Medical (Austin, TX) hopes to help drive this trend. The company has recently announced that it has received an approvable letter from FDA for its two-level Mobi-C cervical disc, making it the first cervical disc to receive an approvable letter for two-level use in the United States. The development was the result of a 600-patient concurrent IDE clinical study for one and two-level cervical disc replacement. To learn more about the news, we spoke with Joe Ross, vice president of U.S. marketing at the company.

MD+DI: Could you briefly summarize the clinical trial results?

Ross: LDR is the only company to initiate and completely enroll a concurrent one- and two-level cervical disc replacement trial. There were two arms of the trial running concurrently—one to treat a single spinal disc in the cervical disc in the spine and the other one two treat two disease levels in the cervical spine—to replace one or two discs depending on the patient’s pathology and how they presented. We completed enrollment and submitted both of those data sets to the FDA and they were under review by different teams. Due to the timing of the reviews, the FDA approval for the two-level cohort has preceded the letter for the single level cohort.

I can’t make any claims based on the data because we are not yet approved. I can really only say that our investigators are extremely pleased with their review of the data to date. We are obviously very enthusiastic about what we are able to see. We are really looking forward to the publication of the data in the peer reviewed literature and ultimately the final review and approval of claims by the FDA.

MD+DI: It may be a bit early to tell conclusively but how does cervical disc replacement compare in terms of clinical efficacy perspective to fusion?

Ross: The control treatment for our trial and all of the cervical disc trials to date is to compare cervical disc replacement to anterior cervical discectomy and fusion or fusion procedure. Most of the conclusions for the other trials to date have been that artificial disc replacement at two years for single level is at least non inferior to cervical fusion. The community has been very interested in looking at longer term results. Interestingly, much of the literature hints at favorable trends for artificial disc replacement but those are not part of available claims. I will point to the recent approval of the Secure-C by Globus, which actually has a superiority claim over fusion at two years. The clinical results overall appear very promising. LDR and the other companies [involved in this space] are interested in continuing to gather long-term results.

The investigators in our trial are very happy with the results that they have seen. We are, however, not at the point yet where we can make claims based on the data because we don’t yet have full approval.

MD+DI: How big is the potential market for artificial cervical discs?

Ross: The estimate I have heard from analysts and leading physicians point to roughly 250,000–275,000 anterior surgical procedures performed in the United States annually. This is a very broad range but in terms of the percentage of those patients who may be appropriate for cervical disc replacement, it could be anywhere from 25 to 40 percent of those patients long-term. It’s nowhere close to that now of course; it is still very early.

MD+DI: How would you describe the interest in orthopedic surgeons in the device?

Ross: Again, we are not on the market in the U.S. We have been selling the Mobi-C surgical disc outside of the U.S. since 2004. LDR is present in close to 30 countries across the world. Outside of the United States, Mobi-C is our number-one-selling product. We receive a very enthusiastic response to cervical disc replacement outside of the U.S. Domestically, I think that there is significant enthusiasm for the potential of the technology. However, it has been tempered to date by the availability of both broad coverage by the payor community and also limited availability variety of newer technologies over what has to date been available.

MD+DI: For those who may not be familiar with the company, could you provide a brief summary?

Ross: LDR, the name of the company is the first letter of the three founder’s last names: Christophe Lavigne, Hervé Dinville, and Patrick Richard. The three men founded the company in Troyes, France in 2000 and began developing products and initially went to market in Europe in 2002.

They had a focus on some pretty unique technologies including the Mobi platform of artificial disc replacements. They began with Mobi-C in 2004. The U.S. office was opened in Austin, TX in 2005 primarily to support the IDE trials of the Mobi-C. More recently, we have been able to grow the company and increase our presence in the U.S. market with a strong focus on our VerteBridge plating technology platform of interbody cages including ROIC and ROIA standalone anterior cervical and lumbar cages and more recently the introduction of the Avenue L lateral lumbar cage.

Brian Buntz is the editor-at-large at UBM Canon's medical group. Follow him on Twitter at @brian_buntz.

Sotera Wireless Seeks Continuous Vital Sign Monitoring

When Jim Moon, chief technical officer of Sotera Wireless, walks into the conference room, he brings several business cards. Not because he wants me to call him later, but because the key to Sotera’s technology is its one-to-one comparison with this daily, manageable object. “One of the early discussions was, ‘boy, if you could just put this device on your arm like a watch’ and one of the quick objects at hand was a business card. At that point, someone said, ‘it can’t be any bigger than a business card, otherwise it will be too big.’ That’s why the ViSi Mobile is the same size as a business card,” he says.
But the technology is more than a business card. And honestly, Sotera’s own CEO, Tom Watlington admits that the size of Sotera’s wrist-worn monitor should get smaller as technology allows.

But we’re getting ahead of the story. Sotera Wireless has developed the ViSi Mobile System, a patient-worn platform device for comprehensive vital signs monitoring, designed to keep clinicians connected to their patients, in and out of bed. The system measures and displays core vital signs including blood pressure, heart rate and pulse rate, ECG, SpO2, respiration rate, and skin temperature. The company claims that the monitoring accuracy and resolution is comparable to that typically found in ICUs.

The ViSi Mobile wirelessly transmits this vital sign data through hospital Wi-Fi. Components of the system consist of the wrist-worn touch screen device, several leads that attach to the body and other tools, and collected data that can be viewed on any computer or smartphone screen.


A New Standard of Care

Sotera’s platform represents a new standard of care in patient monitoring, according to Gunnar Trommer, Sotera’s vice president of marketing and customer service. “Today the standard of care in hospitals is that a nurse will wheel a large cart around and spot-check patients for blood pressure and other vital signs,” he says. The problem is that such a method doesn’t give nurses and other caregivers a good look at what is actually happening to patients in between spot-checks, which are taken only every 4 hours on average. “Over the past 10 years or so there have been numerous studies that show that the current standard of care for monitoring the majority of patients cannot be considered safe,” says Trommer. Sotera’s vision is that by providing continuous monitoring, caregivers can react more quickly to patient deterioration, thereby improving the health and safety of patients.

Sotera’s Visi Mobile fits in nicely with ongoing healthcare reform efforts, which depend on an increase in valuable and actionable patient data to lower costs and improve clinical outcomes. “There are several studies out that show that hospitals with the best patient safety are also the most profitable,” says Trommer. “We try to provide technology that enables caregivers to provide better care and better outcomes while also improving economics.”

A Continuous Blood Pressure Monitor

Key to Sotera’s device is a patented cuffless noninvasive blood pressure monitoring system. Trommer refers to the technology as something of a holy grail and several experts agree.

“I’m most interested in the continuous blood pressure monitoring,” notes Bill Betten, medical technology director at UBM TechInsights and a member of MD+DI’s editorial board. Betten explains that “continuous cuffless blood pressure” is a notable technology with enormous potential.

Eric Topol, who sits on Sotera’s board, says that a lot of people need to have a better understanding of blood pressure. According to Topol, the CDC recently said that there are 67 million Americans with high blood pressure, but only 30 million who have it controlled. “That means we have 37 million people walking around, some of whom are sitting ducks for heart attack or stroke. They not only don’t have it controlled—they don’t even have it measured.”

The story of Sotera’s continuous blood pressure monitoring can’t be told without Devin McCombie, Sotera’s director of science and research. McCombie came from MIT with a continuous noninvasive blood pressure monitoring algorithm. After graduating in 2008, he expected to become an entrepreneur. However, through the course of McCombie’s research, he found Sotera Wireless, which was working on a similar technology. “I decided to join and fuse some of the ideas that Sotera had developed independently.” McCombie’s research could also hold Sotera’s future. Once the ViSi Mobile has gained traction in the hospital and in emergency response vehicles, it can move into to the home, an infinitely more complex environment.

But before Sotera can invade the home of every patient who needs vital sign management, it has to convince hospitals that continuous vital sign monitoring is worth the upfront costs. It’s not a difficult conversation to have, says Trommer. “We’ve been welcomed by C-level folks in hospitals. They understand the importance of the technology.” In fact, Sotera received its first purchase order in August. The Palomar Medical Center, part of San Diego, CA County’s experiment in the future of healthcare, has the distinction of being the ViSi Mobile’s first customer. The facility is designed to bring the highest level of care to patients using a variety of technologies, including connected health.

Initially, Palomar will be using ViSi Mobile for a one care unit of post op patients, explains Trommer. His hope is that once the facility can realize the benefits of ViSi Mobile, it will roll it out to other hospital segments and then into the emergency services. “To ramp up sales, we know that we’ll need to find the innovators and early adopters,” Trommer explains.

An Integrated Environment

Test engineer, Rey Orara analyzes ViSi Mobile's upper accelerometer boards.

One of the first questions asked by hospital administrators is how well the system works within the hospital setting. “Hospitals often struggle because they have legacy IT—we have to be able to work in their network, with their existing IT systems and hardware, and on a nonproprietary open system,” Trommer says.

In the absence of interoperability standards, Watlington notes the difficulty hospitals face in adopting wireless technology. “Our job is to make sure there is enough quality of service on our end to work within hospitals and meet their expectations,” he says.

Moon explains that such a challenge requires a lot of attention to detail. “It has to work 24/7, error free, bug free. And it also has to have long battery life,” he says.

The complexity of the hospital environment is a challenge eagerly met by Sotera’s team of engineers, run by Moon. The team includes hardware design engineers, both in electronics and manufacturing, as well as a team of embedded software engineers.

Moon confides that the secret behind his strong team is that many of his engineers come from a single university that places high emphasis on real, not theoretical engineering. He won’t say which university it is (“I don’t want anyone else poaching our talent pool,”) but he mentions that it is a very prestigious California engineering institution, known for its practical engineering focus.

To house this talent, Sotera turned its boardroom into a war room. The war room is a collective space for the company’s system engineers and embedded engineers to work out problems and share knowledge. Right next store is the hardware department. “One of the advantages of being a small company is that you can have flexibility and design your office however it works best,” says Watlington.

In addition to building a team of communicative and, dare I say, combative engineers, Sotera also understands that it doesn’t, and can’t possibly have all the knowledge necessary to create a system that works seamlessly in a hospital. “We’ve built a sophisticated system to monitor physiological signals, and we are good on an engineering level, but we need a coalition of players who can contribute their piece of the solution.”

And so, Sotera engages freely in partnerships with companies that have complimentary technologies.

Sotera CEO, Tom Watlington

The Power of Partners

In the medtech space, Sotera stands out in its willingness to publically name its partners. Watlington says Sotera can afford to share its partners because of its extensive IP portfolio. But he also says that more companies should be willing to share and celebrate the accomplishments of its partners, because the healthcare market will require a higher level of cooperation.

Some of Sotera’s strategic partners are suppliers, such as Eastman Chemical, DD Studio, PolyOne, and Philips Medisize. Others are partners on investment side as well as on the commercial side. Trommer notes that Cerner and Qualcomm, for example, act as both investors and technology partners.

Commercial partners include Welch Allyn and fellow Manufacturer of the Year, AirStrip Technologies. (MD+DI editors had no idea the companies were announcing a partnership when they were initially selected.) AirStrip makes innovative platforms to remotely monitor and visualize patient data for clinical decision-making. “This is a good example for a rich partnership, we provide the vital sign acquisition front end, and AirStrip provides the user interface—it's synergistic,” Trommer says.

Sotera’s commitment to collaboration has taken tangible form. In October, the company announced the launch of the of ViSi Mobile on the Wireless-Life Sciences Alliance, an online portal dedicated to sharing and obtaining information about the wireless health ecosystem. Connected Health World includes a community-sourced database of products, services, applications, organizations, funding opportunities and research abstracts in the connected health arena. Site listings enable users to connect with each other to discuss and collaborate on opportunities.

Translating FDA Wins into Funding

All told, 2012 was a successful year in Sotera’s development. In April, the company received a 510(k) for the first generation of the ViSi Mobile Monitor, the stand-alone device portion of the system. In August, the company was awarded another 510(k) for the full system using WiFi (802.11). Up next, the company expects to gain clearance for its patented continuous blood pressure monitoring system. “We just started the 510(k) process for the continuous noninvasive blood pressure monitor,” Watlington says. He expects to gain FDA clearance for the blood pressure application in early 2013.
Along the process, Sotera has enjoyed (and worked very hard to get) the all-important financing required to build a medical device.

Sotera’s list of investing partners is long, illustrious, and unique in the medtech industry. “Sanderling Ventures remains our largest investor, but all of the other investment partners are strategic—they are leaders in their own industries with a vested interest in our technology,” says Watlington.

In 2008, the company raised $20.3 million in Series B financing led by Qualcomm Ventures along with Intel Capital. In 2010 the firm completed a $10.75 million strategic Series C investment round led by West Family Holdings, LLC (now West Health Investment Fund). Finally in 2011, Sotera finalized a Series D financing of $12.2 million led by Singapore’s Biomedical Sciences Investment Fund. Another new investor in that round was Cerner, a healthcare IT company. In addition, Sotera has a number of clinical partners.

Still, Watlington admits the struggle Sotera is facing to find it’s final round of financing even for a late stage device with the potential of Visi Mobile. “We’re in a difficult marketplace; raising the last round of financing is tough,” he says. The hope is that with FDA clearances in the bag and on the horizon, as well as the company’s first purchase order on the books, financing will follow. Watlington predicts that the company will make its first profits by 2014.

Next Steps and Home Health 

In the meantime, Sotera isn’t resting. The company is continuing to improve its product by adding applications of other types of monitoring that will further enhance its usefulness and usability. “Its actually incredibly easy for us to add algorithms or sensors for other biometrics,” Watlington notes. He and Trommer can rattle off half a dozen additional physiological parameters they expect to add to the platform over the next few years. One big near-term project is to use the accelerometer to help measure how patients are moving in the hospital. Trommer says such data will help hospitals understand whether patients are recovering properly, if they are prone to bedsores, if they fall out of bed, etc.

Sotera’s next step is obvious: home health. But as obvious as the application might be, getting to the home is a grand experiment.

Watlington’s ideal scenario is that ViSi Mobile will be facility agnostic. “I want it to be suitable for the patient in the hospital, accompany them when they are in transit, and protect them once they are discharged—my goal is to provide protection to a person if their health is deteriorating, wherever they happen to be.”

Sotera’s aim for home health is rather complex—exponentially more so than hospital monitoring. “Its hard enough in the hospital,” says Watlington.

First, the engineers will have to develop even smaller electronics. “It is pretty big on the wrist. It is not like a watch,” says Topol. “It isn’t something that you would walk around with all of the time. But, like everything else, it will get miniaturized.”
Watlington agrees, noting that the home system would have to look more like a bracelet or an actual wristwatch. Further, the sensors that attached to the body must be much thinner and more discrete—no more than the thickness of a Band-Aid, he says. Overall, Watlington is sensitive to the users comfort level. He says the really big challenge in the home will be battery power. “No one has the solution [we need] for energy yet,” he says.

Another challenge in the future will be the system’s ability to roam between networks and cell phone towers, potentially putting medical data transmissions on a higher priority than other types of data. “Network carriers will be an important player in the future for mobile wireless medical technology,” says Watlington. He notes that the device should ultimately accompany the patient beyond the home, for example, into the mall, grocery shopping, and perhaps even to work. “There are many challenges to continuously monitoring patients who are mobile and going about their normal daily routine,” he says. Inevitably this will require technology from a variety of companies and even industries that collaborate together.

Disruptive Healthcare

The scope of Sotera’s technology doesn’t end in the hospital, or even once it goes into patients’ homes. Continuous vital sign monitoring in a mobile and wireless environment is new and unexplored territory. No one can fully comprehend the opportunity that such information could bring to provide real understanding of the human body and how it reacts in the process of sleep, stress, and physical exertion, to name a few. The data collected through the ViSi Mobile has the potential to disrupt the process of healthcare in a profound way.

“We don’t even know what is normal. We are going to have people with continuous blood pressure monitoring for a week or a month through every night of their sleep and every stressful circumstance. We’ll learn some things about people that we have never learned before,” says Topol.

Heather Thompson is editor-in-chief of MD+DI. She currently enjoys low blood pressure, based on a demonstration of Sotera's vital signs monitor. 

Guidance on Mobile Medical Apps Near

CDRH intends to finalize its draft guidance on mobile medical applications by the end of the year, according to Center senior policy advisor Bakul Patel. During a radio interview on The Federal Drive in October, Patel noted that the agency’s intention is to regulate those apps with “very high-risk interventions” that could lead to unintended consequences.
So far, the Center has focused on apps that connect to medical devices. For example, one app that it cleared was for an ultrasound wand that connects to a smartphone to make it a portable ultrasound machine. Another app allows doctors to view X-rays on tablets or smartphones.

Patel said it is "unfeasible" for FDA to test every single medical-related app. A risk-based model is being employed so low-risk apps would not be regulated (e.g., calorie- counting apps or apps that promote healthy lifestyles).

CDRH’s draft guidance released in July 2011 says that although FDA has not issued an overarching software policy, it has formally classified certain types of software applications that meet the definition of a device and, through classification, has identified specific regulatory requirements that apply to these devices and manufacturers.

The draft defines a small subset of mobile medical apps that affect or may affect the performance or functionality of currently regulated medical devices. The subset includes apps that (1) are used as an accessory to medical devices already regulated by FDA and (2) transform a mobile communications device into a regulated medical device by using attachments, sensors, or other devices.

Commenting on the draft, members of the mHealth Regulatory Coalition said more work needs to be done. In a letter to agency, the coalition says that unlike some who have recommended that the guidance be pulled pending further evaluation of its impact on the industry, it believes that clear, predictable, and narrowly-tailored regulation is necessary to ensure patient safety and promote innovation.

The group says FDA should strive to create a framework that promotes innovation and discovery of new ways to improve care delivery, reduces healthcare costs, facilitates private investment in the mHealth industry by large and small businesses, and stimulates job creation in the U.S. Areas that the coalition believes need the greatest attention as FDA finalizes the guidance include clarity of intended use with a focus on regulating moderate- to high-risk devices; application of the accessory rule; roles and responsibilities of entities involved in mHealth systems; and regulation of software in mHealth.

Meanwhile, Rep. Mike Honda (D-CA) says he will soon introduce legislation to create an FDA Office of Mobile Health to provide recommendations on mobile health app issues. Honda says the office also would create a mobile health developer support program at HHS to help app developers be sure they are operating within privacy regulations.

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Four Marketing Tactics Medtech Companies Should Avoid (Plus a Few to Bank On)

How well a medical device company markets its product can have a huge effect on its success in the marketplace and its bottom line. If hospitals, surgeons, and physicians have never heard of your product, then it is impossible for them to know that your device is the perfect solution for their patients. Marketing is a key component that should be considered early in the business lifecycle and when building your budget and planning for the future.

According to a survey on marketing trends in the medical device industry released in May 2012 by market research firm Industry Review, the average marketing budget of a global medical device industry supplier is expected to increase 7% over the next 12 months. In 2012 the average size of a global medical device company’s annual marketing budget is around $1.7 million, down slightly from $1.9 million in 2011. However, it is also important to note that 76% of companies had a marketing budget of less than $250,000. The amount of spend that’s right for you can be determined with the assistance of a trusted business advisor.

Medical device companies are seeing the benefits of marketing to their target markets and are jumping on board. According to the Industry Review survey, e-mail, newsletters, social media, networking sites, and online content sites are expected to generate the most traction for medical device companies throughout 2013. Marketing tactics to avoid in the space, according to survey respondents, include radio, newspaper, television, and video. These tactics are expected to show the “least investment gains.” 

None of these marketing tactics are beneficial or directly impact the bottom line without follow-up, reporting, and analysis. Before putting any marketing plan into action make sure it has measureable results, so you can quickly and easily see which tactics are working for your company and which need to be re-worked to ensure your success and create the biggest benefit to your bottom line.

What marketing tactics is your medical device company using? Let us know in the comments, we want to hear from you.

Mitchell Kopelman is the partner in charge of the technology and life sciences practice at Habif, Arogeti, & Wynn(Atlanta). He focuses on helping medical device companies with R&D tax credit studies, mergers and acquisitions, and proactive tax and accounting planning. He also works with companies as they expand globally or enter the United States. Kopelman graduated from Georgia State University with a bachelor’s degree in accounting. He can be reached at

Ori Epstein is a tax manager in Habif, Arogeti, & Wynne’s technology and life sciences practice. He regularly speaks at medical device industry conferences on topics such as the excise tax, business trends within the medical device industry, and tax planning and preparation for medical device companies. Epstein graduated from the University of Georgia with a bachelor’s degree in accounting and a master’s of accounting with a concentration in tax. E-mail him at

GAO Faults FDA on Device Hacking Risks

A new GAO report finds that FDA has not considered intentional information security risks or device hacking of implantable wireless medical devices as a realistic possibility until recently. 

Although it acknowledges that the agency intends to reassess its approach to reviewing software used in medical devices, the report says FDA does not plan to specifically address information security as part of this effort. Lawmakers requested the report after computer security experts demonstrated that certain devices could be intentionally compromised by hackers.

Device manufacturers have also been slow to publicly acknowledge potential computer security risks, according to the report. It found that the manufacturers of the two devices that were intentionally manipulated in the laboratory, a cardiac defibrillator and insulin pump, both failed to include information about known security vulnerabilities in their corporate annual reports and other publications.

GAO recommends that FDA develop a comprehensive plan to enhance its security risk review and oversight for wireless devices. It listed four minimum actions that the agency should include in the plan:

  1. Increase its focus on manufacturers’ identification of potential unintentional and intentional computer security threats and vulnerabilities and strategies to mitigate these risks during its pre-market approval review process.
  2. Utilize available resources, including those from other entities, such as other federal agencies, particularly the National Institute of Standards and Technology (NIST).
  3. Leverage its post-market efforts to identify information security problems.
  4. Establish a specific schedule for completing this review and implementing these changes.

“It is unacceptable that the Food and Drug Administration is ignoring the resources of other government agencies in evaluating life-saving medical devices,” commented Representative Donna Edwards (D-MD). “In the future, I expect the agency to utilize the computer security expertise offered by NIST and other federal agencies to assess the security risks posed by these devices. The FDA must address potential threats and close security gaps in order to have the full confidence of Congress and the American people.”

“Wireless medical devices are susceptible to increasingly advanced hacking techniques that could threaten patient health,” said Representative Edward Markey (D-MA). “Patients need to be informed about whether the medical devices implanted in their bodies contain security vulnerabilities that could harm them so they can take appropriate precautions whenever possible. This report underscores the need to require manufacturers to acknowledge these threats and for FDA to address the risks before the devices are sold to the public.”

Changes Urged to 510(k) ‘Refuse to Accept’ Policy

Medical device trade associations and companies are telling CDRH that while its draft guidance on a Refuse to Accept Policy for 510(k)s makes a good start at meeting the mandates in MDUFA III, some changes should be made to it.
In recent comments filed with FDA on the draft guidance, the Medical Imaging and Technology Alliance (MITA) noted that a key part of the MDUFA III agreement was FDA’s commitment to streamline the device review process to improve agency timeliness. The intent was to reform the Refuse to Accept process to focus reviewer time and energy on only those submissions that are complete, it says.

MITA said the Center should ensure that all criteria included in Refuse to Accept checklists are objective and clearly defined. Despite several draft guidance statements reinforcing the principle of using objective criteria to make Refuse to Accept decisions, MITA said it several checklist criteria appeared to entail subjective judgments by review staff.

The comment letter said CDRH should also clarify the date at which the review clock starts and how it will communicate that date to submitters. And it said that the process of notifying submitters of a positive or negative acceptance decision should be further clarified and structured to expedite the review process. 

In other comments, Novo Nordisk said it found some inconsistencies between the Refuse to Accept policy and other CDRH 510(k) guidances. 

AdvaMed wrote that although the draft guidance clearly stated that the purpose of 510(k) acceptance review was to assess whether a submission is administratively complete, there are some items in the acceptance checklists that require responses that could only be provided if a substantive review has been conducted. 

AdvaMed criticized CDRH for limiting its acceptance review to prescreening of 510(k) submissions and determining whether an element is present rather than determining whether it is substantively acceptable.

Zimmer, Inc. asked whether a reviewer’s Refuse to Accept checklist will be posted on the agency Web site. It asked that the checklists not be posted and not be made available in response to a Freedom of Information request because it may give competitors proprietary information. 

Finally, the Orthopedic Surgical Manufacturers Association said that the guidance provides a clear and organized checklist outlining information to be included in a 510(k) application. It suggested additional agency clarification on several specified items that were not included in the checklist and are required for some device applications to receive clearance.

Standardized Date Format for Unique Device Identifiers Proves Unpopular

Those with long-enough memories to recall how metrication in device packaging and labeling roiled the regulatory waters for years may get a sense of déjà vu now that CDRH is adding a requirement for a standardized date format to its Unique Device Identifier (UDI) proposed rule.

Industry comments on the date format requirement have been pushing back, CDRH senior advisor for patient safety Jay Crowley told a Loftware-hosted Webcast in October. The bone of contention is that CDRH’s determination to require the U.S. date format which puts the month first (MM/DD/YYYY) when the rest of the world tends to put the day first.

Just as it did four decades ago with metrication, the issue pivots on the size and power of the domestic market, and the government’s tendency to opt for whatever is more comfortable for U.S. consumers, even if that adds cost and inconvenience to foreign suppliers.

In the case of metrication, U.S. consumers vigorously resisted the federal government’s duly enacted decision to “go metric” on a date certain, the law lapsed, and the country is still using miles, feet, gallons, pounds, and ounces while the healthcare professions with the collaboration of the domestic drug and device industries have of their volition and on a non-legislated timetable largely gone metric. 

The same result could follow the standardized date format for UDI, although that wasn’t made clear during the Webcast.

Crowley said the standardized date format must be met one year after the agency publishes the final rule, which is expected in May, and he encouraged industry to comment on “an appropriate date format that can be used globally,” adding vaguely that “I’m sure we can come to resolution on this issue.”

It seems feasible that the barcode readers could be trained to instantly convert non-standardized date formats into standardized ones and the other way round as well, depending on country of end-use. And old-fashioned hard-copy labeling could bear both formats. 

The UDI rule is one of the key components in the CDRH’s postmarket surveillance system. It will be tailored to interact with electronic health records, clinical information systems, and claims data sources, according to the agency.

UDIs will allow FDA, the healthcare community and industry to more accurately report and analyze device-related adverse events by ensuring that critical device information is included in the reports. The identifiers may also help reduce medical errors by enabling healthcare professionals and others to rapidly identify a device, obtain important information concerning the device’s characteristics (whether it, for instance, contains latex or is compatible with magnetic resonance imaging) and improve the clinicians ability to trace the device through the supply chain to the point of patient use.

Crowley said the recently enacted FDA Safety and Innovation Act (FDASIA) requires that UDI be implemented for Class 1 and 2 implant and life-sustaining/supporting devices within two years after the final rule. The rest of the Class 2 devices would be required to comply with UDI three years after the final rule, and the rest of Class 1 would be required within five years, he added. 

Asked when CDRH will begin considering UDI exception requests, Crowley told his Web audience this would not be until the final rule is published. “We are working on a SOP,’ he said, “and so we will publish a guidance on this when we publish the final rule.

In response to a question on whether CDRH plans to specify a barcode standard, Crowley said the current plan is not to issue such a standard, “but we are interested in what the comments say about this. We would like to stay out of the technology debate. There are a number of technologies that could be used and these are evolving at a rapid rate... We do need to do this intelligently and in a way that is predictable... We would like to allow multiple technologies that are reasonable and to allow the technology to evolve without getting in the way. At the same time, we are very concerned that the UDIs are readable by those who need to capture that information.” 

Q&A with Bill Murray, CEO of Envoy Medical

 It would have been surprising if Bill Murray, a device industry veteran and management expert, needed more than 60 seconds to say yes to the CEO post at Envoy Medical when it was recently offered to him. After all, the company’s unique hearing implant received unanimous FDA approval in 2010, the device itself has garnered tons of positive media coverage, and MDDI  selected Envoy as one of its 50 Companies to Watch in 2010.

Public testimonials rarely get any better than the praise poured on the company’s Esteem prosthetic device. YouTube, NBC’s Today Show, Ellen, and Anderson Cooper have all covered the story of one patient, a 29-year-old mother of two toddlers in tears as she hears her own voice for the first time. The clips and related coverage feature prominently on the news page of the company’s Web site.

"One of the major challenges of a breakthrough medical device in the healthcare system is that this is a cash-pay procedure . . . affordability for people is a major challenge" 

 —BIll Murray, CEO Envoy Medical 

“If you’ve looked at any of the stories that are on the Web you can see that this is a very compelling and life-changing therapy for people,” Murray says. “It’s a huge opportunity to change people’s lives, which creates a great business opportunity, but it’s very rewarding at a personal level as well.”

Murray must manage both the marketing bounty and public expectation. Brought on board in June 2012, the new CEO points out that Envoy’s Esteem technology is an unreimbursed, “cash-pay procedure” with a $30,000 price tag. Making the transition from a consumer-based sales approach to a traditional device company business model is one of the main reasons he was brought in as CEO to replace Patrick Spearman, who remains on the company’s board of directors.

Designed to correct sensorineural hearing loss, the Esteem is a fully implanted prosthetic with no external components. The battery lasts 4½ to 9 years, depending on use, and can be replaced by a minor outpatient surgery, according to the company. Although Envoy, which is based in St. Paul, MN, has a European presence, the bulk of its business is in the United States, where the company has13 implant centers.

After receiving a BS in electrical engineering from the University of Florida, Murray began his career as a design engineer at Motorola from 1983 to 1985. Since then, he has held engineering management and executive positions in the medical device industry, life sciences, and the nonmedical device field, most recently as interim CEO at MTS Systems, which sells mechanical testing and simulation equipment. His career includes positions as president and CEO of ReShape Medical, an executive management consulting company, Applied Biosystems, and most extensively at Medtronic, where Murray held various senior executive posts.

In this exclusive interview Murray discusses the need for “long horizon” investors, the potential drawbacks to positive Web awareness, and the overall challenges of running a cash-pay device company.

MDDI: How did your hiring come about?

Bill Murray: Just prior to Envoy Medical I had stepped in as interim CEO of MTS Systems, and that’s a $500 million public company that was going through a number of cultural change needs. I’m on the board of the company and was asked to step in as interim CEO.

When I finished that assignment I was giving a presentation to a number of business executives here in the Minneapolis area on changing cultures and values-based leadership. Out of that discussion and presentation I got a call from one of the Envoy board members, Glen Taylor, who’s a successful business executive here in the Minneapolis area [and a former Minnesota state senator]. He said [Envoy] was looking for somebody with medical device experience and experience in changing cultures and building a long-term, sustainable business. That’s how I got engaged with the company, and I talked to a number of the other board members. I was familiar with Envoy from my Medtronic days.

What intrigued me is that this was a company that already has FDA approval; PMA approval was achieved in March of 2010. As an early stage company, it’s already commercial and that was highly appealing to me. In today’s medical device world FDA approvals are a huge challenge and create a lot of uncertainty as they relate to getting finance. I saw that as a major positive for the company.

If you’ve looked at any of the stories that are on the Web you can see that this is a very compelling and life-changing therapy for people. It’s a huge opportunity to change people’s lives, which creates a great business opportunity, but it’s very rewarding at a personal level as well.

MDDI: Do you know anyone personally with hearing problems?

BM: I do know a number of people who have hearing loss but no one who has an Esteem implant.

MDDI: Why did the board of directors bring you in to replace Patrick Spearman? You mentioned culture change.

BM: First of all, I’d say the board was looking for a change, and Patrick is still on the board of directors. Honestly, I don’t have all the background and history, and I think it would just be speculation on my part.

MDDI: What issues do you address when speaking about changing corporate cultures?

BM: When I speak of changing cultures and values-based leadership my primary message is about tone at the top. The organization reflects the values of the leadership. I believe strongly in being clear about what is expected behavior and then walking the talk.

MDDI: What aspect of Envoy's culture needed changing?

BM: The cultural change at Envoy Medical was not an exact corollary to the presentation I gave. It was a change in our business model from national direct-to-consumer advertising and direct-selling to patients to a more traditional medical device business model where the device manufacturer sells to the healthcare provider.

MDDI: Envoy’s home page has links to eight global sites, including Great Britain, France, Italy, and Iran.

BM: We have international sales, yes, and we have the CE mark for the European Community. The majority of our sales are in the U.S. This is a cash-pay procedure for the most part, and so as a cash-pay procedure the U.S. marketplace is more culturally conducive to cash-pay procedures.

MDDI: I realize it’s early in your tenure, but what challenges do you face as the new CEO of the company?

BM: One of the major challenges of a breakthrough medical device in the healthcare system is that this is a cash-pay procedure that is north of $30,000 all-in, which includes the device and the procedure. Obviously, affordability for people is a major challenge. There are over 20 million people in the U.S. who have sensorineural hearing loss that would meet the indications. When you’re in a cash-pay market gaining awareness for the target population [is important]. Finding those folks who have [these indications] is fairly straightforward, but finding ones who can afford to pay for this [procedure] makes it more of a challenge. Then [there is the matter of] finding those who can afford to pay for it and can get over the fear of surgery.

In general, media and marketing expenses can be very cost-prohibitive. That is one of the business challenges we have with a new therapy like this, where the healthcare system doesn’t yet recognize the value in reimbursement in a big way right now. You have to have investors with a long horizon because gaining reimbursement often takes multiple years after FDA approval.

MDDI: Do you have a reimbursement timeline?

BM: We’re still working through that—recognizing that I’ve been here for about 3½ months. There is a good solid foundation and rationale that this procedure will ultimately be reimbursed, but with any new therapy it takes more than just the PMA clinical study to get reimbursement. Additional objective clinical evidence and publications, patient advocacy, and physician advocacy will ultimately drive that. That’s a work in progress.

MDDI: Have you considered directly approaching, say, UnitedHealthcare and Blue Cross?

BM: Certainly we can, but what our reimbursement advisors will tell you is that you’re going to have to meet a certain threshold of clinical data to get their attention. Where we are at is we have a lot of great clinical results, but we still need more with a broader set of surgeons and broader patient population to make that argument compelling.

MDDI: How many patients does Envoy have now?

BM: We have just over 900.

MDDI: The majority of them in the U.S., obviously.

BM: That’s right.

MDDI: I understand that Lou Ferrigno has an Esteem implant in one ear.

BM: I don’t comment on individual patients.

MDDI: I followed some links from the news page on the Envoy Web site.

BM: There are stories out there but because of HIPAA and what have you….

MDDI: Of course. Is it possible to lower the price of the procedure?

BM: The way I think about this is when you think about other middle ear devices that are least partially implantable—and ours is fully implantable—the cochlear is probably the closest surrogate, if you will, and that product is more costly than ours. I would never say never, but the real focus for us right now is how we make sure the value that this therapy provides is realized by the medical community and patients.

MDDI: What’s involved in finding surgeons who can perform the Esteem implant procedure?

BM: The surgeons who do this procedure do middle ear surgeries. They’re otologists and neurotologists. They’re a subspecialty of ENT. During the early days of the development of the product the company worked very closely with some of the key leaders in that field, and we essentially have used that network, because as with most medical professions there is an already established network for that specialty. We worked through the surgeon base in that network.

MDDI: I understand there’s been a change in Envoy’s post-op follow-up practice. Envoy patients received a letter this summer telling them they’re required to pay for adjustments that the company had previously taken care of.

BM: Well, it’s a cash-pay procedure, and this is an active implantable. Hearing has many subjective aspects to it, and over time with hearing for patients who have paid for this procedure as part of that cash-pay agreement there is a commitment to support activation and initial fitting, but not long-term, continual adjustments. So patients need to go back and have follow-up procedures or adjustments—they’re called “fittings” to an audiologist—just as they would with a hearing aid. That’s not something that the device manufacturer would be responsible for paying for. That’s really between the audiologist caregiver or the surgeon’s site, if they’re actually involved in the audiology care.

MDDI: Since its beginnings as St. Croix I’ve read that Envoy has received $100 million in funding.

BM: The company’s been around since 1995, so that’s 17 years, and yes that is accurate that we’ve received that level of investment.

MDDI: Envoy is privately run. What kind of backers do you have, and are you looking for VC funding?

BM: We have strong support for the company, but we’re not venture-capital backed. Our current investor shareholders are a fairly broad group of almost 500 people. So we’re different from, if you will, many traditionally financed, venture-backed device companies. We continue to enjoy their support and appreciate their confidence in getting to cash-flow positive in the future.

MDDI: Are there plans to go public?

BM: At some point the shareholders will be interested in some sort of liquidity event, so going public is one of the options. With the number of shareholders we have at some point going public or getting acquired or some sort of exit strategy will be necessary to return the investment to shareholders. The specifics of that are TBD.

MDDI: Is there any even vague timeline on when that might happen?

BM: Because we’re going through a revised business plan right now and looking at both capital needs and exit strategies going forward, I don’t want to disclose it until I’ve a chance to communicate to the board and the shareholders.

MDDI: Does Envoy expect to announce any interesting developments in the near term?

BM: Yes, there is some interesting news, one in the area that is unique for us. Hearing impairment is the third most common disease in the U.S. Of course, veterans are a significant potential market for us for obvious reasons. We’re very excited to start working with the VA on potential ways to do clinical studies and evaluate this therapy within the veteran community, both veterans and the Department of Defense, [because] the Veterans Administration is the largest purchaser of hearing aids in the country.

MDDI: That’s a good point, sadly.

BM: It is. I’m cautious when I say we’re excited to work with the VA. Obviously, it’s a sad situation, but it’s one where there needs to be alternative solutions than what’s currently available. For certain situations and patients who are veterans we believe we could be one of those [alternatives].

MDDI: It could be a good outcome.

BM: Absolutely.

MDDI: As we discussed, Envoy has received quite a bit of consumer press coverage, some of which is linked on the company’s site. What are some of the advantages and disadvantages of that type of publicity from a CEO’s point of view?

BM: The advantage obviously is there’s a lot of consumer awareness to hearing impairment. Getting our name out in the broader consumer world is advantageous as it relates to both raising money because people can relate to this disease. It’s not an esoteric disease that’s difficult for people to connect with. The disadvantage is because it is an invasive, Class III, active implantable device it’s not for everybody. So when you create tremendous awareness there is a strong interest, but it’s really necessarily to find the right people for all of the public awareness.

The positives far outweigh the negatives; don’t get me wrong on that. It is not a broad-based consumer product, and that creates problems with surgeons who at times—because of all the Web buzz that can be out there—talk about patients who have unrealistic expectations, but their own hearing health is different than what they maybe see on the Web.

MDDI: The Esteem implant is unique, though.

BM: It is, absolutely. There is no other product like it out there. It’s extremely beneficial for the right patient, but identifying that right patient [is the key]. In people with hearing loss it’s very emotional and for those who have had good hearing and lost it they want to return to that state. For those who have never had great hearing getting improved hearing is something they’re passionate about pursuing and if this isn’t the right answer it’s difficult at times.

Probably the biggest comment from our surgeons has been with all the media stories and Web videos out there they get patients who come in already thinking that this is the right answer, and if it’s not it’s a difficult discussion for them.

MDDI: Do you oversee or have some say in what Envoy puts up on its Web site news page?

BM: There has been stuff that is generated virally by some of the patients we’ve had no direct involvement with. There’s been some things that we have frankly been involved within the past. I’ve been here a little over three months. A lot of what’s out there was already there.

MDDI: On the Envoy Medical Web site at the bottom of the home page there’s a link that reads “newsroom,” and when you click on that some of the viral videos links and other videos are provided there. We were talking about the ups and downs of consumer coverage, and I was wondering whether you have a say or want to have a say in what goes up there, whether it comes off YouTube or whatever, that people post on their own.

BM: The stuff that’s the link to our Web site is news that the company knows, for example, that the patient is on label, things of that nature. If you go beyond that these are not company media stories where we’re crafting the message.

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Is Medical Technology Driving Skyrocketing Healthcare Costs?

A recent study finds that medical technology is responsible for little of the United States' skyrocketing healthcare costs. The study, backed by AdvaMed, reported that prices for medical technology have been relatively flat over the past two decades, increasing at one-fifth of the rate of prices for other medical goods and services.

Not all spending on technology is equal, of course. And as a paper titled "Saving Money or Just Saving Lives? Improving the Productivity of US Health Care Spending" by Harvard and Dartmouth researchers points out, there is a "large and expanding set of treatments, such as proton-beam therapy or robotic surgery, [that] contributes to rapid increases in spending despite questionable health benefits." The paper, published earlier this year, argues that, in addressing the problem, "[t]he objective should not be to reduce spending per se, but to increase the health gained for every dollar spent. Indeed, in an efficient system, more spending on health care would be a sign of prosperity and a harbinger of improved health and longevity, not a cause for concern."

Complicating matters is the fact that determining how medical technology affects total healthcare spending is "extremely difficult," as a 2008 study from the Congressional Budget Office (CBO) notes. That study, titled "Technological Change and the Growth of Health Care Spending" concluded that "the general consensus among health economists is that growth in real health care spending was principally the result of the emergence of new medical technologies and services and their adoption and widespread diffusion by the U.S. health care system." The CBO went on to conclude that "about half of all growth in healthcare spending in the past several decades was associated with changes in medical care made possible by advances in technology." Whether technology drives half of the growth of healthcare spending, or a smaller portion, it is hard to deny that the cost of healthcare technology is significant. According to a report published earlier this year from the Commonwealth Fund: "The higher prices we pay for healthcare and perhaps our greater use of expensive technology are the more likely explanations for high health spending in the U.S.," David Squires, senior research associate at The Commonwealth Fund was quoted as saying. "Unfortunately, we do not seem to get better quality for this higher spending."

That's not to say that, many times, the extra spending for cutting-edge technology isn't worth it. Many medical breakthroughs, of course, deliver tremendous value to patients. Some technologies, such as stents for cardiovascular disease, deliver a high value for some patients and a relatively low value for others. And others, such as proton-beam therapy, deliver offer most patients little value.

Determining the value of treatments is becoming a clearer focus among payers and, recently, Francis Duhay, MD, chief medical officer of Edwards Lifesciences said at the MedTech Cardio conference that evidence of value "will be the major driver of medical device innovation in the 21st century." Providing that evidence is a matter of proving clinical benefit, improved safety, quality of life, or health economics, he explained.

Incidentally, Omar Ishrak, the CEO of Medtronic seems to agree with that sentiment. In a recent Fortune interview, the CEO was quoted as saying that his company strives to be "very precise about the value we are providing and pricing our products according to the value." Ishrak recently gave a keynote address at the Cleveland Clinic Innovation Summit that touched on this theme as well.  

Ishrak is certainly not alone in his thinking. In fact, value has become one of the unifying themes of the Cleveland Clinic Innovation Summit, reports Lisa Suennen, co-founder and Managing Member of Psilos Group. The take-home message from the event, Suennen explains, is that the medtech industry must address this question: "how do we, the medical and medical device fields, refocus our innovation efforts from discovering the next new thing to taking the massive amount of medical know-how we already have and re-purposing it for a world more sensitive to cost, more conscious of consumer engagement, more worried about outcome than income." 

--Brian Buntz