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The Medtech Holy Grail: Devices that Improve Medicine While Cutting Costs

The Medtech Holy Grail: Devices that Improve Medicine While Cutting Costs

A $1.5 billion medical device firm, Teleflex was once a diversified industrial company with a long history of involvement in the medical device sector. In the first week of December 2011, the company divested its last non-medical business and became a pure-play device company. Last year, the company’s constant currency revenues increased by approximately 4% and the firm introduced more than 20 products. The firm was able to achieve this increase, in part, by raising prices in a number of areas, which is not insignificant, considering the price pressures in the healthcare sector as a whole.

In this interview, Benson Smith, chairman of the board, president and CEO of the firm provides insight into the company’s success and its strategies for acquisition and expanding its business in emerging markets. Smith also shares his analysis of how healthcare reform will affect the device industry at large.

Q: I’ve heard a lot about cost pressures in the device market lately. How has Teleflex been able to raise or maintain prices in this tough pricing environment?

A: First of all, I would say that the price pressures are absolutely real and they are global. On the one hand, there is an escalating demand for healthcare services. That is true in all of the former industrialized countries as we think about them where it is principally driven by the Baby Boomer phenomenon. There is also a tremendous increase in demand for healthcare services in the developing countries. China, India and Brazil are probably the best examples. All of that increased demand is putting pressure on systems in terms of how they are going to be able to afford to pay for this increased demand. In turn, that is putting pressure on the systems—everything from what doctors get reimbursed for to how hospitals get paid. That is translating down to healthcare device companies, for sure. The large picture is that device companies have generally not been a factor having much to do with healthcare inflation. The healthcare inflation related to devices has averaged about 1% per year over the last 20 years. If you compare that to the general inflation rate for healthcare, it barely is a significant factor. Nevertheless, like any industry, suppliers stand out there as a potential target for reduced costs, and suppliers are feeling it.

"We have taken a systematic approach to pricing over the last year." 

Teleflex is in somewhat of a unique position, I think, in the sense that some of the products and categories in which we supply products have more immunity than others. Compared to a knee replacement, for example, where the cost of an implant itself is a very substantial part of the procedure, in most cases, our products are much less visible as part of the overall procedure. So, if there is a $10,000 procedure and our product costs $200, even if the hospital got it for free, it is not going to make much of a difference in terms of the profitability of the procedure to the hospital.

Secondly, we have taken a systematic approach to pricing over the last year and have identified some areas where we haven’t been as disciplined in the past so that we can, in fact, price our products more appropriately in the marketplace.

The third area is that we continually need to look forward to find the right value proposition for to the hospital. Some products that we manufacture, for example, although they might be more expensive than some competitive alternatives, have a much greater impact on reducing costs in the hospital setting. So, a peripherally inserted central catheter (PICC) with an antimicrobial coating might cost more than a PICC catheter without one. But, the advantage to the hospitals is that it reduces the likelihood of a patient having an infection. And now hospitals have to pay the cost of treating infection themselves. So we need to make sure that we are pricing the right value proposition for the hospital and just being alert to those situations where they exist.

The other issue is that not all geographies are equal. There are significant pricing pressures in Europe right now. Certainly, there is pricing pressure in the United States. But many of the developing countries in Asia don’t have that same pressure, which provides some pricing improvement opportunities for us.

Q: How has Teleflex been able to meet the needs of hospitals, which have been facing a fair amount of turmoil lately? Also, can you tell me about the company’s expanded interaction with group purchasing organizations (GPOs)?

"We have really ramped up our efforts in the last several years to understand the particular needs and requirements of GPOs."

A: GPOs in the United States have been an increasingly important mechanism since the implementation of diagnosis-related groups. They have increased their presence and their importance in the whole supply chain and product decision-making process. Generally, the premise is that if a number of hospitals band together and negotiate with the manufacturers through a GPO, they are will get more favorable pricing than if they try to do these negotiations individually. It also, in many cases, eliminates some costs, because their purchasing people don’t need to be involved in every negotiation as part of their daily regimen. From a manufacturing standpoint, there are also some savings because the process of negotiating single-hospital contracts over and over again every year consumes a lot of sales time. So there are some definite savings that are introduced into the equation as a result of the involvement of GPOs.

Fortunately, Teleflex is of a size and a scope that we are important vendor for GPOs. We have several of number-one or number-two share positions in the markets we serve, and that makes us an ideal partner for GPOs. We have really ramped up our efforts in the last several years to understand the particular needs and requirements of GPOs, and we have experienced a fair amount of success in that area. For example, in 2011, we won 37 awards—27 of those were essentially renewals for product categories that we had. But 10 were brand new categories for us. So it is an important part of the hospital decision-making process and has been favorable for us.

Q: One of the main drivers of your revenue growth was new product introductions. I understand that the company’s R&D spending increased by 14% in 2011. Could you share your vision for how your firm approaches R&D and new product development? In particular, how does the Idea Generator Procedure fit into that and what role do acquisitions play?

A: In terms of R&D on a broad-based level, if we think about any segment of the marketplace, it is driven by technical advancement. We have seen enormous advances in the past 20 years: whether it is the size of the mobile phone that you are carrying or even the fact that you have a phone you can carry around with you, or the fact that we can get 150 channels broadcast into our home versus three black-and-white channels that we had when I was a kid. Another example is the delivery of music moving from LP to tape to CD to being downloaded online. There have been tremendous technology advancements in our world, specifically in the waymedicine is delivered, how diagnoses are made, how treatments are determined and the therapies that are available to people.

That is a little less visible to people in the common marketplace because we are not exposed to it every day. But, by the same token, the degree to which innovation is important if you are a mobile phone company or a TV manufacturer, it is absolutely critically important for a medical device manufacturer.

"The Holy Grail has shifted from simply better medicine to better medicine that takes cost out of the system." 

The challenges right now in healthcare relate to not only the way we treat more people, but the way we treat them more effectively, and the way we pay for it. And so in the environment that we are in now, the Holy Grail has shifted from simply better medicine to better medicine that takes cost out of the system. That is kind of the sweet spot for us as we evaluate different kinds of technological opportunities. We ask: Will this in fact result in a better clinical outcome; does it have the potential to make the procedure more efficient; can it reduce the time that the patient is in the hospital; and can it reduce the likelihood of an infection? A positive response to any of those questions can be important cost reducers for the hospital.

The second area really relates to the acquisition strategy. And I would say that one of the things that Teleflex has done well over its 75-year history is to acquire companies on a primarily financial basis. They understood what the revenue stream is, understood what the earnings were, and understood how we to create synergies....Teleflex did generally financially driven acquisitions of standing companies that had been in business for some period of time.

Now that we have shifted gears into a pure-play medical device company, the nature of acquisitions and what we look at has changed significantly. Yes, there are some larger bolt-on acquisitions that will remain part of any company’s growth. But more and more of our business development effort is focused on what I am going to describe as technology acquisitions. These are companies that probably haven’t gotten to the market yet. Or they are companies that have just recently gotten to the market. What we are really buying is not an existing revenue stream but an opportunity to bring out something that is much better than what the marketplace is exposed to now.

VasoNova is a really good example of that kind of acquisition strategy. They had just received a 510(k) clearance but really had no sales when we acquired them. We think that is a very exciting technology. It is disruptive to the status quo; it changes the way hospitals can do a procedure. It eliminates the need for an x-ray. It has some really good clinical benefits. With those kinds of acquisitions, you don’t rely so much on a financial analysis. You really have to rely on your closeness to the marketplace, your understanding of what advances are being made in that particular area and make your best guess in terms of the marketability of that idea. 

The Vasonova technology facilitates venous catheter navigation and confirmation of placement of peripherally inserted central catheters and central venous catheters in the lower one third of the superior vena cava. 

In response to your question about why we have an idea generator on our website, many of these ideas emerge from physicians. Some ideas come to us as improvements to a device that they see could be made when they are in a procedure. Some of them are modest; some of them are breakthroughs. Many of these physicians don’t have a good idea ofhow to go about the process of talking to a manufacturer to commercialize an idea. This is one way to create an outreach program to get people to communicate with us about an idea that they have.

Q: How important are emerging markets for Teleflex both now and going forward?

A: They are important for everyone in the medical device arena. We have emerging middle classes in China, India, Brazil and throughout the Asia Pacific Rim. The growth rates in those markets are as much as ten times what the growth rates are in the very developed countries. They are an important part of any medical device company’s product portfolio.

Q: What kind of influence do you think healthcare reform will have on Teleflex and the U.S. device industry in general?

A: From a strictly competitive stance, in terms of how we stand against our peers, it is not going to have a big effect. We are all going to have to operate in whatever environment unfolds. I think it is fair to say that there is complexity in the healthcare legislation right now and rulemaking needs to take place.. Most healthcare companies are trying to be as alert as they possibly can to what those actual rules are. We are trying to have as much of a voice as we can in pointing out what the unintended consequences might be.

At this point, our strategy is to be as prepared as we can for what we think is likely to happen and as responsive as we can be to make adjustments as it moves further down the path.

Q: Is there anything else you would like to highlight that I might not have asked about?

"In a very difficult macro environment where most healthcare device companies have seen slower revenues, particularly in the United States, [Teleflex has] been able to accelerate [its] revenue growth."

A: The unique aspects of Teleflex and some of the things that distinguish us from some of our peers right now are that, in a very difficult macro environment where most healthcare device companies have seen slower revenues, particularly in the United States, we have been able to accelerate our revenue growth. So we are quite optimistic that there are some characteristics that have enabled us to grow revenue in some of these markets that have been much more challenging for some of our competitors. We have emerged from this transition from an industrial conglomerate to a medical device company with a strong balance sheet, and that gives us the flexibility to add to our product pipeline through potential technology acquisitions. I think it is very important to keep your product line current and to participate in that whole new wave of technology.

Most medical device companies don’t actually do their own primary research. Most of it comes from acquisitions. So we are in, I think, a unique position.

Lastly, our general diversity, the mix of our products, the way our products are used in a hospital and our global footprint provide some immunity to the pressures that other healthcare companies are feeling now..

While other companies are talking about being able to hold operating margins steady, we actually see several years of operating margin expansion ahead of us and potential to expand our operating income line faster than our revenue growth.

From my perspective, that is an exciting part of the Teleflex story and one of the big reasons I wanted to take this job in the first place.

—Brian Buntz

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

Weekly Vitals: Tawdry Details About Stryker CEO's Resignation, Hip Implants Showed Early Warning Signs, and More

While medical device industry leaders' love lives aren't usually a part of our coverage on Medtech Pulse, we admit we (and everyone else) were intrigued by the Wall Street Journal's article this week positing that Stryker CEO Stephen MacMillan's abrupt resignation last month was tied to some titillating gossip. The WSJ reported that MacMillan's resignation--which was attributed publicly to "family reasons"-- came on the heels of board members learning of MacMillan's affair with an ex-employee while he was involved in divorce proceedings. In other news, an e-mail has surfaced indicating that J&J was aware early on of high revision rates and problems with the DePuy ASR all-metal hip implant. The implant was later recalled and subsequent controversy ensued. Read about these and more of the week's top medtech stories in our weekly roundup below.

Healthcare Reform Needs Clear Priorities

Healthcare Reform Needs Clear Priorities

Josh Makower, MD, MBA, is CEO and founder of ExploraMed Development, a medical device incubator based on the West Coast, and also is a Venture Partner with New Enterprise Associates, where he supports investing activity in the medical device arena. He also serves as a Consulting Professor of Medicine at Stanford University Medical School and co-founded Stanford’s Biodesign Innovation Program. Among the companies he has founded through the ExploraMed incubator are Acclarent, the company that created Balloon Sinuplasty as a therapy for chronic sinusitis and was acquired by Johnson & Johnson in 2010; TransVascular, the company that developed the Pioneer Catheter for vascular intervention and was acquired by Medtronic in 2003, and EndoMatrix, a company focused on the development of a novel therapy for incontinence and GI reflux, acquired by C.R. Bard in 1997. Josh holds more than six dozen patents for various medical devices in the fields of orthopedics, ENT, cardiology, general surgery, drug delivery and urology.

Josh also comments with some regularity on issues facing the device industry. In an exclusive interview with MD+DI, he shares his views on the device tax, the Sunshine Act, and healthcare reform in general. 

Q: How good of a shot do you think the device tax has of being repealed?

A: I think that momentum is building on this issue, and most importantly in a bipartisan manner. The other piece of good news is that the President has focused on innovation and manufacturing exports, which are central components of the med tech industry.   I am optimistic that the case has been well made why it should be repealed, why it would harm innovation and entrepreneurship in the medtech industry, and why the tax would be a negative for the U.S. economy and for the advancement of patient care.  Unfortunately politics can get in the way of what should be policy decisions, but I am hopeful that this issue can rise above that.  In the end, patients are the ones who will be hurt the most by this tax.

Q: One of the things that you have said before is that the device tax is especially onerous given that it is a tax on revenue and instead of profits. That would make it especially harmful for startup companies that have to make a bunch of cash even to break even.

A: Exactly. The tax is horrible for small companies.  Larger companies are already making moves that include cuts to R&D, shifting components of the business overseas, etc.  The impact on small companies relates to the future of medical device innovation because many simply won’t  survive, and venture capitalists are already cutting back funding.  It takes years before a small company earns its first profit, and with such large investments being made in regulatory and reimbursement processes along the way, adding this burden on innovation is just driving investors away.

Q: What will that do to innovation? Thomas Fogarty, MD has said that issues like this will result in a dearth of innovative medical device products coming out a few years from now. Companies that don’t get funded obviously won’t be around to bring their products to market.  

A: That’s already happening. Sadly this is the current state of our industry, as innovators need to plan years in advance, and an excise tax harms innovation. I absolutely agree with Dr. Fogarty and I think it will continue to get worse. It is just not a good time for this tax to be structured in this way. Whether it is about global jobs or allowing technologies that could really have an impact on reducing healthcare costs and improving the quality of life for millions of Americans, either way you look at it, the timing couldn’t be worse for applying this tax in a way that penalizes innovation.

Q: How do you think the  Sunshine Act will fit  into all of this?

A: I think that the Sunshine Act, as it is currently structured, is overly punitive.  As a physician-inventor, it is clear that the drafters of the regulation don’t fully appreciate the role that cooperation between innovators and providers of care play.  This will be a huge burden for companies to be able to successfully report, especially for device companies. Unfortunately, again we are seeing how efforts to address the unacceptable actions of the few are impacting the many. I believe similar to the device tax, the long-term implications will be more expensive and complicated than some fully appreciate today.  As a physician innovator, I’ve spent my entire career addressing patient needs and trying to ease suffering.  To think that I or any of my colleagues would lose focus on our life’s passion because of a free lunch loses the focus of what the problem is.  Patients and providers should be made aware of real and significant conflicts that would affect judgment and it is those relationships that very importantly need to be brought into the open – not who received a lunch, a dinner or a pen.  When the bar is set as low as it is now, it creates a burden to companies and becomes undecipherable by the public.

Q: Moving beyond the device tax and the Sunshine Act, how do you think healthcare reform will affect the device industry in general? What do you think it will mean for the industry that there will be  greater number of patients who are insured?

A: As we have already discussed, the device tax and the Sunshine Act provisions impact bigger and smaller companies in different ways.  The fact that there may be more patients in the pool will mean different things for different businesses.  Established technologies may see some increase in utilization, but because many new technologies still have significant challenges ahead of them simply obtaining reimbursement, I think that this effect will not necessarily impact earlier technologies in the same way.

When we look at the residual healthcare reform proposals that worry me, it is not as much the benefits and advantages of the new patients in the pool. One could make the argument on either side with regard to the pool increasing and the impact on how insurers behave in that environment. The one that I think looms out there but hasn’t had a lot of definition yet is the comparative effectiveness provision.  Comparative effectiveness sounds good if implemented in a logical way, but could it be also be used to substantially impact new, as-yet-not-mainstream technologies, which obviously could hurt smaller companies. Again, many of the details are still being developed and there isn’t much clarity as to what this will look like, but if I were to worry about something, I would worry more about how this provision will impact the development of new novel technologies that have not fully evolved in current practice and how they are evaluated versus the mainstream technologies.  In the end, it’s about providing better care and reducing costs, medical devices play a huge role in achieving these goals, so we must be careful about the impact of new rules and regulations.  

Josh Makower, MD, along with Stefanos Zenios, PhD, and Paul Yock wrote Biodesign, a textbook on medical device development. 
Q: Clayton Christensen explains that disruptive technologies start out below the existing market needs. He draws examples from computing: For instance, when personal computer debuted, it had much less horsepower than, say, a mainframe or a minicomputer. But the technology obviously improves over time. Obviously that is true to some extent with medical technologies, where devices might become increasingly effective in years to come, as physicians, for instance, get more skilled at working with them and as future iterations of the technology are introduced.

A: Exactly. There are a number of countries that have a mechanism to support the payment for new technologies shortly after they are introduced, but require them to demonstrate during the time period that they are initially covered, that they provide true cost benefits.  The amount of utilization will always be lower in the first couple of years after a new technology is introduced, so, if during that time it is possible for to allow physicians and patients to gain access and coverage for the technologies, but require the company to also study their cost effectiveness, it seems like a fair trade. Coverage with evidence development is a good way to go as long as the private insurers follow suit and they don’t label it as investigational and refuse to cover it. To the extent that we can get coverage for early technologies that are still evolving, it could greatly benefit the healthcare system financially as well as clinically.

Q: Care to speculate what the effect of A) an Obama reelection or B) a GOP presidential win might have on the medtech industry?  

A: I would hope that it doesn’t matter whether there is a Democrat or a Republican in the White House on these issues that relate to innovation, entrepreneurship, the American dream, and bringing better medical technologies to patients.  This is something that should not cut across party lines.

We need regulation to protect the public to make sure that claims that are made by manufacturers are accurate and that their technologies are reasonably safe. But we need this process to be balanced, fair, reasonable, and transparent to allow innovation and the advancement of medical progress.

Q: Do you have any advice for the industry regarding all of these issues? In other words, how can the industry be more effective at getting the word out to the public and politicians that the device industry is a source of many valuable jobs and lifesaving and life-enhancing technologies.

A: Honestly, this is where you are playing an important role. The media is where people get access to information. To the extent that you tell that story, is the extent to which people get access to this perspective. Unfortunately, there are organizations that have a larger subscriber base that have different points of view on this.

Q: Meaning the mainstream media?

A: My regret is that some of the amazing, cutting-edge improvements to patient care don’t get discussed as much as they should.  Unfortunately, even in the safe and appropriate practice of medicine, suboptimal outcomes exist.  We strive for perfection, knowing that  there is no such thing as a 100% guarantee of any outcome.  But that fact seems to be ignored when the spotlight is all too often placed on the very small percent of patients who unfortunately did not benefit from a technology or a procedure.

From the perspective of industry, I think we have done a good job of sharing the story of how important medical technology innovation is to patient care.  So I think we just need to keep up that work and I hope that when we are talking about this issue next year, that legislation like Medical Device User Fee and Modernization Act and Prescription Drug User Fee Act will have positively influenced our regulatory systems such that they are more balanced, fair, reasonable, transparent, predictable, and allow innovation to proceed so that we can all protect and serve patients in need in the most appropriate way. 

—Brian Buntz

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

FDA Releases New Guidances for Medical Device Companies

FDA recently released two guidances for medical device companies. The first guidance discusses a new FDA rule on informing human subjects in certain clinical trials that their clinical trial data will be made available in a public database. The FDA guidance is intended to help medical device companies meet the informed consent requirement. This guidance can be accessed on FDA's website.

The second guidance discusses the electronic submission of standardized trial data for medical devices. The document includes guidelines on planning and providing standardized information, using the proper terminology, handling data that cannot be standardized, validating data, and meeting with FDA. This guidance can also be accessed on FDA's website.

-Richard Park

5 Questions: How Much Value is in Your Quality Manual?

For this feature, Bill White, Senior Consultant, Quality System Strategies LLC discusses how to go beyond compliance to achieve real value from quality manuals.

1. How can we get maximum value from our quality manual?

The quality manual should aim beyond just documentation of compliance.  Success in a quality management system can happen only if "quality is everyone's business."  If the quality manual is just a document pulled out by the quality staff for discussions with auditors, it cannot provide maximum value for the organization.  It needs to be a document for everyone.

2. How do we make our quality manual a document for everyone?

There are a few key actions:

  • Make it understandable. Use everyday language and not "qualityspeak."
  • Make it short enough to read in an hour or less. Don't try to include all quality management system details.  Save details for the next level of documentation.
  • Include figures and pictures (products, facilities, employees) so it is not all text.
  • Translate it if you have operations where English is not the primary language.
  • Give it the "look and feel" of other printed company documents so it is clear that Quality is not a side issue.
  • Give each employee a copy.

3. Doesn't providing hard copies cause challenges in case of changes?

Nothing that cannot be overcome with planning:

  • Avoid inclusion of material most likely to change, such as organizational details.
  • Plan for an electronic addendum easily accessed by all when changes are needed.
  • Ensure that each employee can tell at a glance from the cover that a new edition is different from the one before. 

4. What about expense?

Although the expense of hard copies is a reality, it should be balanced against the consideration that employee inattention to quality concerns can cost millions.  Much less spent on quality manuals to give employees a personal connection to the quality management system is money well spent.  And the newest printing options can make the cost manageable.

5. What if we want to try it, but just do not have any money available?

Consider how much informtion can be printed on a sheet of heavy stock 11 x 17 in.  Folded over this provides 8 columns on 4 pages that can contain a surprising quantity of information.  This can be a very cost-effective means for providing a hardcopy manual for each employee.  If translation into multiple languages is a consideration, this approach, which forces brevity, can ensure that the manual focuses only on the key messages for all employees.

Bill White started Quality System Strategies LLC in 2006, when he retired after 30 years at Bayer HealthCare LLC. At Bayer, after 20 years in R&D he worked with colleagues in the mid 1990s to establish the design control system for the diagnostics division. He then became Manager, Quality Systems Strategy, and in that role served as principal architect for the worldwide quality system of the division. As consultant for five years, he has advised medical device companies ranging in size from a few persons to several thousand persons on how best to fulfill requirements of 21 CFR 820 and ISO 13485 while creating quality systems that serve the needs of the companies and their employees.

James Joye, DO: New Fellowship Program Will Advance Endovascular Training and Technology

James Joye, DO: New Fellowship Program Will Advance Endovascular Training and Technology

James Joye, DOTo learn more about the program, MD+DI's editor-at-large Brian Buntz spoke with James Joye, DO, an interventional cardiologist who developed cryoplasty and the MDEA-winning MitraClip catheter-based mitral valve repair system. He is the director of the Fellowship Program and chief medical officer of the Fogarty Institute. 

Q: What is the vision behind this fellowship? How will it help expose endovascular proceduralists to the wide range of interventional and surgical techniques and new imaging modalities?

A: In the cardiovascular field, for people who work in the interventional side of the business in catheter-based repair for arteries and valves and aneurysms and things of that nature, there are very siloed training programs that produce docs that do that type of work. For instance, you can go through a track where you are trained as a vascular surgeon or an interventional cardiologist or an interventional radiologist to learn those types of procedures. But no one discipline really does justice to it in a complete and collaborative fashion. Take interventional cardiology as an example: it is a three- or four-year program. By the time you start with cardiology, and do those first three years and then do your interventional work on top of it, it is another year or two that are dedicated to it. But cardiologists are so busy learning how to do cardiac work that they don’t really have adequate time or immersion in the endovascular and non-cardiac side of the business during their formal training. Likewise, an interventional radiologist has 1400 different procedures that they might be asked to do. And because of the breadth of those procedures, involvement in the endovascular side is oftentimes marginalized. And certainly for the surgical group, many of the people who are the so-called professors that are teaching these vascular surgical residents are still learning themselves how to do the endovascular procedures. So they are a lot less likely to pass on some of the hands-on opportunities to their trainees. Plus they are still trying to learn how to do more high-risk open surgical procedures themselves.

Fogarty InstituteBy the time that most physicians who dedicate themselves to an interventional type of practice, they are done with their formal training. They really haven’t scratched the surface if it is their true intent and desire to be able to manage the entire cardiovascular field—especially in the backdrop of devices coming at a rapid pace and approaches to the disease process is changing on a regular basis.

Q: Could you give me a thumbnail sketch of the history of the fellowship? Where did the inspiration come from?

A: I started to train post-doctoral physicians—those who had already finished their training about 15 years ago now. And that was at a time when the knowledge gap was pretty profound. I was offering courses that were reasonable for physicians to step out of their practice and get a little information and then go back and try to provide for their patients. But these were of a relatively short duration. They would come in for a couple of days, spend a couple of intense days doing a significant procedures side by side, getting a number of didactic lectures and then they would go back. I found over a period of time that there were kind of three camps of doctors that came into these types of programs:

  1. There were those who got a little taste of it and figured out pretty quickly that that was not for them or that they could not go back to their home environment and have that type of an experience.
  2. There were some on the other end of the spectrum that really got turned on by it and wanted a lot more.
  3. And there were some in the middle who just picked up what they reasonably could and applied it the practice setting where they were.

But the group that really looked at this as a complete game-changer in their professional life wanted more and they came back to six or eight courses in a year. They kept getting a little bit, and then going back, getting a little bit more and going back, and continued to up their game. And that worked out well for really motivated individuals but we were typically getting cardiologists that were already well into their careers.

"The intent then became: we are going to make a fellowship that people are going to dedicate a year of their life to and we are going to force the immersion of people who come from different approaches to this."

That kind of evolved into a minifellowship where we took physicians for three months at a time. And what we discovered in that experience was that we could give them a little bit of a more intense approach to this than intermittent shorter-term courses, but three months didn’t really do it justice. So the people that were leaving after three months were left thinking, ‘well, I feel like I really need to come back and do refreshers and get more experience and so on.’

And all of this led to the need to kind of do this as a formal year-long program. It took a while for us to understand that the appetite was out there; that there were physicians who were interested in taking yet another year on top of their many years of training to get this specific type of training. In making that transition and in being involved with Vascular InterVentional Advances (VIVA), which is a national educational course in this field, the opportunity was presented to do this in a truly collaborative, multi-disciplinary fashion.

So the intent then became: we are going to make a fellowship that people are going to dedicate a year of their life to and we are going to force the immersion of people who come from different approaches to this: surgeons are going to work with cardiologists who are going to work with radiologists. And they are going to not only going to learn from people like me who are working on the fellowship, but they are going to cross-pollinate the things that they have already learned for the betterment of the program.

Q: Who is an ideal candidate?

A: We are really looking for progressive open-minded collaborative future leaders of the field. We are trying to identify the next-generation of docs that will take care of cardiovascular patients in a comprehensive fashion. That requires them to live in a combined environment where they are going to work in the surgical OR, they are going to work in the interventional suites, and they are going to learn imaging. They are going to put all of the pieces together that are going to help them to practice the field the way that it really requires.

In other words, we are looking for the cream of the crop.

Because you specialize in treating cardiovascular disease, and have made pioneering contributions to endovascular care, how do you personally relate to the mission of this fellowship? There must be a connection there.

A: Absolutely. The challenges that I have had to live through in my own career was in many ways the impetus for this type of fellowship. The turf wars that exist between the different disciplines in most institutions really prevent people from working together to the full benefit of the patient. And I certainly experienced that in my earlier professional career. I saw that physicians that had an interest in the same area would try to put up barriers to allowing physicians like myself to practice freely and to practice to the best of their abilities and to actually agree to come to the table to work in that kind of a collaborative spirit. And so the fellowship is designed to create a home for that collaborative approach to training. It is an outreach certainly of the collaboration that we are trying to engender through Vascular InterVentional Advances, who brings together equal partners in a national venue.

"The turf wars that exist between the different disciplines in most institutions really prevent people from working together to the full benefit of the patient."

It has certainly been very enjoyable for me being involved in device development for a number of years. When you are involved in that process, you naturally are going to touch each of those disciplines because they are all potentially users—people that are going to want to have their hands on technology and it has just been very educational and gratifying to me to work alongside surgeons and radiologists as well as the cardiologists that I came from and understand how they just have incredible talents. We are really trying to find ways to break those barriers and get people to the table together.

Q: What advice would you have for physicians looking to enter the medical device industry? Is it difficult to juggle clinical practice with device development?

A: It is a challenge, no question about it. The day job is usually a more than a full-time job for what most people recognize. So a lot of this work is being done at the expense of the rest of one’s life. For me, that is typically comes at the expense of sleep. But it also eats into the evenings and weekends and time with the family and all of those kinds of things. If you are going to innovate and go down that path, you have to be very passionate about it and you have to understand the sacrifices that go with it. It is also something that you cannot do alone. And I think that the challenge is that people run into is that they may come up with a good idea and they don’t know where to go from there. They have questions like:

  • How do I patent it?
  • Who should I be talking to—industry, venture capital people, or someone else?
  • How do I get a prototype built?
  • How do find an engineer?
  • What is the regulatory process?

There are a million and one things...

And unless you have either done it or know the right people to get in touch with, that is usually where a lot of these ideas end. I can certainly look back 20 years ago and recognize time I saw that same problem. Two or three ideas came to mind that ended up in a notebook somewhere and didn’t go anywhere because I just didn’t know how to go forward. And thankfully I have had some great partnerships and I have learned from a lot of great people on how to get there. One of the exciting things for me right now in my role with the Fogarty Institute is the ability to participate in that process with young innovators. And Thomas Fogarty has created a safe haven so that people who have those early ideas can get the guidance they need without the risk of having their ideas stolen or having their equity or intellectual property taken by some other entity, in which case it would make the exercise not even worth doing. It is a good way to go now. Entities that are like the Fogarty Institute are few and far between.

Q: Anything else you would like to add?

A: We are openly accepting applications at present. There is an online application process that is on the website. That along with some frequently asked questions and other basic information surrounding the fellowship. 

—Brian Buntz  

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

Former Medtronic CEO to Lead FDA Regulatory Science Partnership

LifeScience Alley announced that Bill Hawkins, former CEO of Medtronic and current CEO of Immucor Inc., will serve as inaugural chairman of a new public-private partnership among Minnesota's medical technology community, the FDA's Center for Devices and Radiological Health (CDRH) and the University of Minnesota, aimed at advancing regulatory science. According to a press release, the partnership was initiated following a LifeScience Alley-hosted visit of senior CDRH members to the Twin Cities in August 2011, and was formalized in the signing of a Memorandum of Understanding between LifeScience Alley and FDA on December 7, 2011. Additionally, Amy Peterson, senior director, clinical and regulatory affairs, men’s health division, American Medical Systems, will provide executive management of the partnership and will oversee the administration of projects.  Among other initiatives, local members of the partnership will lead efforts to establish a center for the advancement of regulatory science in Minnesota.  
Hawkins and Peterson, in collaboration with LifeScience Alley and the University of Minnesota, are in the process of securing commitments from industry and academic leaders to serve on the partnership’s Steering Committee. The full Steering Committee membership will be announced within 30 days. Dale Wahlstrom, president and CEO of LifeScience Alley, announced the agreement after several conversations with Hawkins and various stakeholders. “Bill has the experience, reputation and vision to help lead this initiative," said Wahlstrom.  "We now have an opportunity to play an important part in improving the process for evaluating medical technology for market clearance.”
Hawkins is also working with the Entrepreneurs-in-Residence program at CDRH as part of a White House and FDA initiative to improve the regulatory environment. “I am very excited about the global impact that I believe this Minnesota initiative will have,” said Hawkins. “Working closely with Dr. Shuren, the University of Minnesota and industry executives, I know we can improve our approach to ensure U.S. leadership in medical technology innovation and to save and protect lives.”

-Richard Park

Medtronic Brings Realization of Artificial Pancreas One Step Closer

Late last year, I reported that many experts would be willing to place bets on the efficacy of an artificial pancreas to treat diabetes...if only FDA would permit it. Then, FDA published draft guidance on the artificial pancreas, eliciting guarded optimism among industry experts that the FDA's move could finally represent the first step toward making this technology available in the United States.

Now, Medtronic claims that is has taken the next step in the direction of developing an artificial pancreas, publishing results of the company's in-clinic Automation to Simulate Pancreatic Insulin Response (Aspire) study online and in the March edition of Diabetes Technology & Therapeutics. The study met its efficacy endpoints, demonstrating that compared with conventional pump therapy, patients using the company's MiniMed Paradigm integrated insulin pump and continuous glucose monitor experienced a 19% reduction in the time spent below the low-glucose threshold. The pump system's low-glucose suspend (LGS) automation capability automatically suspends insulin delivery if the sensor glucose value is equal to or below the low threshold value. Interestingly, while it is commercially available outside the United States, the Paradigm system is limited to investigational use in the United States.

The study showed that diabetes patients using the Medtronic's system spent less time below 70 mg/dL, the low-glucose value at which insulin was suspended. And the study group's average drop in blood glucose values remained higher than that experienced by patients using conventional insulin pumps. In addition, the low-glucose suspension did not result in rebound hyperglycemia.

"Until now we have never had a therapy designed to automatically intervene when blood glucose becomes dangerously low, which is the greatest fear and biggest challenge in achieving better glucose control in patients with diabetes," remarks Satish K. Garg, professor of medicine and pediatrics at the Barbara Davis Center for Childhood Diabetes and lead author of the study. "Therapies that help people with diabetes stay within normal range are important and we look forward to continue advancements in this area. It makes sense to stop insulin delivery when a low glucose threshold is met and that is how LGS is designed."

Beyond the sheer newsworthiness of Medtronic's announcement, the creation of an artificial pancreas should open new avenues for designers and developers of medical devices and their components suppliers to refine and perfect the technology--both during the development phase and after such a device hits the market. Many medical device manufacturing experts will be required to develop such a device, including sensor specialists, electronics experts, pump providers, and software developers. In that light, Medtronic's announcement that its study satisfies a variety of efficacy endpoints should be greeted positively not only by diabetes patients but also by medical device manufacturing companies. --Bob Michaels