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Report: U.S. Demand for Implantable Medical Devices to Reach $52B in 2015

U.S. Implantable Medical Devices to 2015 (table)
U.S. implantable medical device demand percent annual growth, in millions of dollars. Image: The Freedonia Group Inc. (Cleveland).

U.S. demand for implantable medical devices is forecast to increase 7.7% annually to $52 billion in 2015, according to a new study from The Freedonia Group Inc., a Cleveland-based market research firm. The study, "Implantable Medical Devices to 2015," credits both technological advances and the development of next-generation devices that should increase patient and provider confidence in implant products. Demand will also benefit from the lack of alternative treatments for many chronic disorders and injuries, Freedonia asserts; although, over the long term, sales for medical implants will be challenged as insurance providers tighten control over implantation costs. However, the ability of medical implants to reduce overall treatment cost for many conditions, including osteoarthritis and chronic heart failure, will work in favor of growth for these products.

According to the report, orthopedic implants will remain the largest implantable device segment in market value. U.S. demand for orthopedic implants is forecast to increase 8.8% annually to $29.4 billion in 2015, spurred by technological improvements and safety enhancements. Advances will also reflect the growing prevalence of degenerative musculoskeletal disorders and lifestyle changes that place people at risk for sports and exercise injuries. At the same time, as products become more durable and long-lived, demand will increasingly come from an enlarged patient base for new surgeries rather than for replacements.

Also challenging this segment over the long term will be advances in pharmaceutical alternatives to treat arthritic conditions. However, the segment will benefit from a strong base of insurance approvals for orthopedic implants, Freedonia states, as well as a stable and well-funded medical delivery system and product designs that allow for less-invasive surgeries.

Cardiovascular implants have good potential to reduce the overall treatment cost for heart disease and contribute significantly to improved quality of life. Demand for these devices is expected to grow 5.1 percent annually to $14.6 billion in 2015. Pacing devices will realize the greatest sales gains, largely due to growth in cardiac resynchronization therapy. A focus on developing new
generations of pacing devices that reduce mortality and improve patient outcomes has resulted in greater pricing flexibility in an increasingly cost-conscious health care environment. Demand for cardiovascular stents and related devices will be similar to that of demand for pacing devices. The fastest growth will be in structural implants, as technological advances in heart valves, ventricular-assist devices, and implantable monitors will encourage greater use.

(For information on purchasing the report, visit www.freedoniagroup.com.)
 

Hospital Delivery Robots: Solving a Problem or Pushing a New Market Opportunity?

 
Mark Graban

A recent story in the Wall Street Journal promises (or threatens) that robots are taking over our hospitals, replacing certain minimum wage “blue collar” positions. The article paints a picture of robots rolling through hospital hallways, efficiently delivering medications and supplies without needing to take breaks or stopping to chat about last night’s game or the latest reality show. Even if robots deliver their promised cost savings, there’s one critical thing even the smartest robots can’t do—generate and implement ideas for making the hospital better.

Companies that sell robots may see healthcare as a new market opportunity, especially in the case of one manufacturer that expects its military sales to shrink dramatically, given government budget cuts. Instead of asking “where else can we sell what we make?,” the makers and buyers of technology need to first ask what problem is being solved with a given technology.
 
In the case of delivery robots, the hospital should ask if it is unable to fill relatively low-skilled positions? That seems unlikely, given high unemployment rates. Hospital leaders should ask whether there are there safety or ergonomic risks involved in rolling a cart of linens from central supply to inpatient units. Robots might reduce that risk of employee injury, but there might be other ways to address that problem, such as carts with better handles and wheels that roll more smoothly.
 

Human workers have the more impressive brains, because all people, even those making the minimum wage, have the ability to make improvements in the workplace.

Robots like these can be an expensive upfront cost and they require ongoing spending for maintenance and reprogramming. In a hospital setting, a robotic “tugger” might be able to pull boxes to an inpatient unit’s supply room, but a human is still required to to actually place individual boxes and linens onto shelves. The robots arguably automate a relatively small piece of the delivery process—it’s hard to see what problem is being solved for the hospital, its staff, and its patients.
 
There is a certain “gee whiz” factor with robotics and technology that often captivates the executives who control the purse strings (or the engineers that create them). Healthcare buyers may be easily wowed, but in the coming years, when reimbursements to hospitals are expected to fall dramatically, hospitals are likely to take a much harder look at any new equipment.
 
Both buyers and makers would be well served by following the 8th principle of The Toyota Way: “Use only reliable, thoroughly tested technology that serves your people and processes.” The automaker is not Luddite in its approach—it certainly uses robots, software, and other technologies, but only when they produce better quality, protect employees, or have a clearly proven long-term return on investment. Borrowing from the “Lean Startup” methodology popularized by Eric Ries, engineers need to not only ask “can I build this?” but they should also ask “should I build it?” from a market perspective.
 
In the video below, which accompanies the Journal story, the reporter comments that “the robots have highly sophisticated brains,” referring to the sensors that prevent them from running into people. But there are so many things that robots can’t do.

Human workers have the more impressive brains, because all people, even those making the minimum wage, have the ability to make improvements in the workplace. A human delivering linens can offer a friendly smile to patients who are rehabilitating in the hallway. Humans can notice a visitor who looks lost, pointing them in the right direction. But instead of pointing lost visitors in the right direction every single day, a human can initiate improvements to the hospital signage that prevents others from getting lost in the future. This improvement would be a perfect example of a small improvement in the “kaizen” model that is part of the broader lean management philosophy that’s increasingly popular in healthcare.
 
Franciscan St. Francis Health System, in Indianapolis, is five years into its “quick and easy kaizen” program. In 2011, 46% of  approximately 2,500 employees initiated and completed at least one improvement. Many of these ideas did not have a specific return on investment, as they were small changes that made work more productive or improved care and service for patients. Examples include moving a noisy paper towel dispenser in the NICU or finding a better way to provide privacy for nursing mothers. Conservative estimates place the annual savings from this program at about $3 million per year.
 
Traditional organizations (in manufacturing or healthcare) view employees as a cost to be reduced, often through technology, while organizations that embrace kaizen realize that the brain of each employee is the greatest asset. One of the ways healthcare can address the crisis of high costs and poor quality is to ask all employees and clinicians to share and implement their ideas. Leaders then need to help provide a structured process and the right management support to allow changes to happen. The front-line staff members are in the best position to understand and solve many of the problems that hospitals face.
 
In the video, the reporter praises the robots for consistently doing what they are told. That’s actually a huge problem. They can only do what they’re programmed to do, but people can do so much more. Technology has its place, but that place must be selected judiciously.
 
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Mark Graban is a consultant and keynote speaker, in the world of lean healthcare. He is the chief improvement officer at KaiNexus, which serves healthcare organizations. He is the author of the book Lean Hospitals: Improving Quality, Patient Safety, and Employee Engagement, which was selected for a 2009 Shingo Research and Professional Publication Award and is being translated into seven languages. Graban also cowrote a new book, Healthcare Kaizen: Engaging Front-Line Staff in Sustainable Continuous Improvements due in June 2012. He is the founder and lead blogger and podcaster at LeanBlog.org

Researcher Looks to Venus Flytraps to Develop Artificial Muscles

A scientist at the University of Maine is studying the movement of Venus Flytraps in an effort to develop bionic enhancements or replacements. (Photo by Noah Elhardt)

Not for the first time, researchers are turning to Mother Nature to develop new technologies to solve age-old health problems. As reported in Nanowerk, a scientist in the mechanical engineering department at the University of Maine is investigating the Venus flytrap (Dionaea muscipula) in an effort to develop artificial muscles for bionic enhancements or replacements.

A carnivorous plant that catches and digests small insects, the Venus flytrap consists of a trapping mechanism with a series of tiny hairs at the opening where the plant's two leaves meet. When an insect contacts two or more of these hairs in succession, the leaves close within hundreds of milliseconds, preventing the insect's escape. Inspired by this plant, Mohsen Shahinpoor has created a robotic replica that contains nanosensors, nanoactuators, and a thin, pliable ionic polymeric metal composite (IPMC) material he uses in his artificial-muscle research.

To design his biomimetic Venus flytrap, Shahinpoor attached IPMCs onto larger leaves of IPMC material. The two leaves forming the trap are attached to a central spine consisting of a conductive copper electrode. This configuration enables the signals from the trigger-hair IPMCs to activate a solid-state relay that then activates a small dynamic voltage generator, actuating the lobes to close.

After testing his device, Shahinpoor proclaimed the experiment successful.

The New Prescription: Focus on Patient Experience

The New Prescription: Focus on Patient Experience

The design of a great medical product often requires that the focus be on safety. Design of a great consumer product requires a focus on aesthetics and loyalty—people have to love it. The medical experience and the consumer experience are generally seen to be very different from one another. A medical device is something that is imposed on you and a consumer device is one that is sought out. Medical is something to be tolerated while consumer is something to be enjoyed. And these conceptions are reflected in the design of each type of product. Medical products generally look serious and functional and—let's face it—dull. Meanwhile, consumer products are designed to evoke a delightful feeling from users.

Historically, the target user groups for medical products and consumer products have also been considered to be very different from each other. But the reality is, these two groups are the same—they are people. So how do we approach the patient/consumer (i.e., person) to incorporate his or her needs into medical device design?

There is an increasing overlap between the medical space and the consumer world. And there is a shift in people’s attitudes about healthcare, from management of sickness toward maintenance of wellness. This change is happening in emerging areas such as connected health and consumer wellness, but also in more traditional areas, including drug delivery.
Connected health and health monitoring products, such as telemedicine and other connected devices, need to become a constant in people’s lives because adoption is the key to market success. Adoption hinges on ensuring seamless integration into people’s everyday lives.

The lines between consumer wellness products (such as a pedometer) and medical devices (such as a heart rate monitor) are blurring. Some of these categories of products are tangential to medical products in that they may be regulated but are not prescribed. As such, the devices are typically not covered or reimbursed by insurance. Therefore, consumers must feel compelled to spend their own money to purchase the products. Target markets for such devices include the worried well and caregivers concerned about aging parents, for example.

Even in the traditional space of drug delivery, there is a significant a shift toward a consumer-first approach. For the management of conditions such as diabetes where there is choice in therapies, companies have worked to establish brand differentiation and provide a consumer feel for items such as injection pens. Also, with the proliferation of biologics, the advent of new drug-delivery technologies, and a shift from inpatient hospital care to outpatient care, acute recovery and chronic conditions are increasingly being managed at home. Many of these patients require the delivery of complex drug regimens. Such regimens are driving the need for easy-to-use self-administration delivery systems that can be used in either the home or clinical setting.

Patients and Caregivers Survey

FDA classifies drug-delivery devices intended to be used by patients or lay caregivers as combination products. A combination product is composed of any combination of a drug, a device, or a biological product (i.e., two or more regulated components), such as prefilled syringes, insulin injector pens, metered dose inhalers, transdermal patches, drug-eluting stents, and catheters with antimicrobial coating. Cambridge Consultants, in conjunction with MassMEDIC, recently conducted qualitative research on the patient-related drivers around these types of drug-delivery combination products. Patients were asked about their experiences and priorities in selecting drug-delivery devices. Healthcare providers were also interviewed about the role of the drug-delivery devices in treatment decisions and in patient medication compliance.

More than 240 diabetes patients were surveyed. All of them use a combination product (such as a vial and syringe, prefilled syringe, injection pen, or insulin pump) to administer their medication. The research showed that patients are aware of their options and are driven to a certain extent by lifestyle factors such as discretion, portability, and feature sets. The study also demonstrated that there is some willingness for patients to pay more in order to get the features and convenience that they feel are important.

Patients were asked if they were ever given a choice of devices to use when they were prescribed their medication, and 75% said yes. Of those patients, the largest percentage said they usually take their doctor’s recommendation. At a close second, however, a substantial number of patients said they do their own research and even try out different devices before making a selection.

We also polled patients about whether they have ever asked their doctors if they could change the drug-delivery device they were using. More than one-third indicated that they had. The primary reasons cited for such requests were lifestyle factors such as discretion or portability of the device, as well as factors such as better features and updated technologies.

When asked, most people said they prefer newer technology or better features. However, there is typically skepticism about people’s willingness to pay an extra cost for those things, particularly around medical devices. To address this discrepancy, patients were asked: “If a device was available that was easier to use than your current device but it cost slightly more (~$5) than your current device, how likely would you be to pay more out of pocket for the easier device?” Even with the increased out-of-pocket cost, more than three-quarters of patients indicated that they would be either ‘somewhat’ or ‘very’ likely to change devices.

These overall findings indicate that patients are aware of options, that they are driven to a certain extent by lifestyle factors, and that there is some willingness to pay slightly more to get the features and convenience they think are important. In other words, patients are behaving more like consumers in their approach to their drug-delivery systems.

As part of this same survey physicians and nurse educators who either prescribe these types of devices or train patients to use combination products were interviewed. Professionals came from several specialties, including pediatrics, orthopedics, internal medicine, gastroenterology, and diabetes education. The feedback received from healthcare providers provided further validation to the idea that there is a patient-driven component to the selection and success of drug-delivery devices.
All of the healthcare providers questioned stated that they believe the usability of the delivery device affects patient compliance with the medication therapy. They indicated that efficacy of the medication is a primary concern in making treatment decisions, but that they may not prescribe a medication if they don’t believe the patient can be successful with the dosing requirements. One diabetes educator expressed the idea of matching the drug to the patient and that in doing so, the delivery device “is a piece of the puzzle—a piece that you can’t ignore.”

This research underscores the fact that the least effective treatment is one that is not taken. And the efficacy of any particular therapy is determined by a combination of both efficacy and compliance with the dosing regimen.

So how can we maximize this potential and produce drug-delivery devices that best support compliance and ultimately health outcomes? 

Design Strategies

Human Factors (HF) engineering is the discipline tasked with incorporating user considerations into medical development. It is the study of how people use technology. It involves the interaction of human abilities, expectations, and limitations with work environments and system design. HF is integrated into the development process in an iterative manner, typically focused on user research into the safe interaction between people and the medical device under development. User experience design is the approach used to incorporate user considerations into commercial product development. User experience design considers all aspects of the end-user’s interaction, not just the product itself, but also with the company, its services, and all of its products. User experience starts with the intended user and builds the product and all of the components surrounding it to support the intended experience. Ideally it creates a seamless merging of multiple disciplines, including engineering, marketing, graphical and industrial design, and user interface design.

If we consider HF for medical devices, user experience for consumer products, take the best of both of those approaches, and leverage the commonality of tools and methods, what we have is a new approach to medical device design: patient experience (Px) design. Px includes the safety and rigor of HF engineering combined with the broader lens of a user experience approach to create products that patients both use safely and accept willingly.

In practical terms, Px borrows from the evolution in the consumer space and encourages pharmaceutical companies to switch from a drug- or molecule-driven design perspective to a system or service design perspective. Just like iPhones and iPads are merely portals to the broader app store and iTunes services, and the Kindle is merely the device tip of the Amazon iceberg, medical devices can become, through a Px approach, the physical embodiments of a broader compliance- and outcome-based service.

Positioning Patient Experience

The process of defining Px starts at the strategic marketing level by characterizing what the long-term relationship should be between the company, the patient, the caregiver, the community, and the care center (e.g., the hospital). This gives the offering its character, which can flow through all of the product and service requirements.  IKEA is exemplary in this respect. Its “Affordable Design for All” motto has shaped not only the products and instruction materials, but also store layout, packaging, shipping policies, and just about every aspect of the business. In short, IKEA’s user experience is complete and consistent.

In the same way, a medical company can define its own overarching Px. At the device level, safety, simplicity, and ease of use are all of paramount importance. But Px would take a step beyond those necessities to consider acquisition, storage, and transport of the device. Does the device allow people to keep, store, and use it where they want to in their homes? Does the device allow for travel? Does it provide privacy and discretion? What are the social circumstances in which the device will be used? Instead of forcing patients to adjust their lives to accommodate the management of their disease, design a delivery device that supports people in leading the mobile and active lifestyles they want to lead.

Moving beyond the device itself, Px expands the scope to include how the device is packaged, (which is often people’s first interaction with a product) and whether the training materials (starter kits, instructions for use, etc.) are effective and continue to support the Px experience. These items are typically designed as afterthoughts to a drug-delivery device and are not always considered part of the device system or experience.

Broadening the lens even further, Px also shapes the device community, which includes the online presence of the therapy. Providing services such as online troubleshooting, instructions, user interaction groups, tracking applications, and online patient diaries can support proper use and compliance with the system and reinforce the overall patient experience.

The Px Approach

The team that executes an effective Px development must be highly multidisciplinary. HF engineers bring the tools to discover what the Px must be and how to navigate usability and safety. Industrial designers and graphic designers bring the Px to life, embodying its principles into well-rounded concepts and interfaces. Engineers and developers anchor all elements in reality and feasibility. The marketing team ensures that the Px is consistent with the overall corporate message and that the value proposition is strong. The key to a successful Px development lies in a shared common understanding of the core values of the desired experience as well as a fierce protection of this vision by the team throughout the entire development cycle.

The key steps toward implementing a Px approach for a drug-delivery or other home-use medical device are as follows:

  •  Commit.  Px won’t work with a half-way approach.
  •  Define the overarching vision for the experience of the therapy in a concise and powerful manner.
  •  Generate buy-in for that vision at a high level.
  •  Identify a single person or entity that holds the responsibility for delivering that experience across all elements of the therapy (e.g., the device, the instructions, the packaging, the training materials, the web portal, etc.).
  •  Ensure that each of the teams responsible for developing the different elements maintain the end-user experience as an overall guideline throughout the development, from concept generation through product and service specifications.
  •  Make trade-off decisions throughout the development life cycle that do not compromise the Px goal.

Conclusion

The Px approach may appear daunting at first because of its holistic nature and the large number of moving parts. However, once applied, Px offers a straightforward set of rules for prioritizing and streamlining the development process. It also unlocks synergies between components that will benefit users’ daily lives and in return, gain their loyalty.
Companies that take a broader view of their device development, beyond safety, to address the overall patient experience will be able to realize the potential for much better patient outcomes and improved adoption of their products in the long run. With changes in the healthcare landscape and the dwindling security of patented molecules, ensuring improved health outcomes and maintaining brand loyalty by building a  relationship with patients is becoming increasingly critical to the financial success of companies providing the treatment therapies.
 

Image by iSTOCKPHOTO, GEORGE HOEYLAERTS; digital composition by CAMBRIDGE CONSULTANTS, SERGE ROUX.

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Melanie Turieo is a group leader and principal human factors engineer in Cambridge Consultants’ medical technology division. She has more than 15 years’ experience providing human factors expertise and earned a bachelor’s degree in human factors engineering from Tufts University. Reach her at [email protected].

Serge Roux is a principal industrial designer in the medical devices group at Cambridge Consultants (Cambridge, MA). He holds a bachelor’s degree in mechanical engineering from the National Institute of Applied Science and a master’s degree from the Technological University of Compiegne. E-mail him at [email protected].

MX: Challenging Patents After The AIA

Patents can have a huge impact on the fortunes of device manufacturers. A manufacturer found infringing a patent may be subject to sizeable monetary penalties. For example, in 2011 a jury awarded Medtronic more than $100 million in its suit against NuVasive for infringing Medtronic patents through the sale of surgical implants, retractors, and anterior cervical plates. In addition, after losing a patent fight, an order barring further sales of the infringing product is likely, and this can exact an even greater cost than a one-time monetary judgment.

Given the potential cost from a finding of infringement, manufacturers frequently respond to such allegations by mounting a vigorous and multifaceted legal defense to ensure that they are free from these huge liabilities as they pursue their business. Among the available options a challenge to the validity of an asserted patent can often provide the most viable defense.

The United States Patent and Trademark Office takes seriously its responsibility to grant patents only for products that represent an inventive advance over the state of the art. However, it is often forced to decide what is inventive with incomplete information. Moreover, many patent-seekers take a short-term view, pressing to obtain a low-cost patent without paying much attention to whether that patent will withstand a later challenge. As a result, many patents that are issued contain invalid claims, and attacking an invalid patent is often the best way for a medical device manufacturer to achieve freedom to operate.

A challenge of a patent’s validity may be made either in court or before the Patent Office through a reexamination proceeding. With reexaminations, someone challenging a patent presents a case of invalidity to the Patent Office. After review, the Patent Office may ultimately confirm that patent claims represent a real invention or reject the claims as unpatentable, a ruling that will cancel the patent claims and make them no longer available to assert in litigation.

During the proceedings, the patent holder may also end up having to amend the claims in such a way that the claims no longer cover products of interest. As a result, reexamination is an attractive tool as an alternative to, or in combination with, litigation in working around a patent, particularly for a manufacturer faced with a high-stakes accusation of infringement. Under the America Invents Act (AIA), recently enacted by Congress, challenging a patent within the Patent Office may prove to be an even more attractive option.

A More Favorable Forum

With the America Invents Act, most of which will go into effect in September 2012, Congress has taken steps to make the Patent Office a more favorable forum for challenging patents. Under the AIA, Congress has adopted procedures to speed up the process, expanded the ability of a challenger to participate in a challenge, and expanded what would be considered a question to the validity of an issued patent that can be reconsidered by the Patent Office.

In fact, if a serious challenge to the validity of a patent is presented to the Patent Office, the changes under the AIA are intended to almost guarantee that the Patent Office will provide a definitive answer before litigation works its way through the courts. For manufacturers worried that a lingering dispute about a patent is damaging their business, this faster resolution can be critical.

Other procedural changes will also make it more enticing to resolve questions of a patent’s validity through the Patent Office. For example, it will now be possible to end proceedings in the Patent Office through a settlement. In addition, a limited ability to obtain evidence—which is currently an advantage of challenging a patent through litigation—will also be afforded litigants.

To achieve these benefits under the AIA, what is now called inter partes reexamination will be replaced by “inter partes review” and “post-grant review” procedures. These procedures are similar to each other in that both are initiated by a third party challenging the validity of an issued patent. However, post-grant review must be requested within nine months of issuance and allows almost any type of defect in a patent to be the basis for a challenge. Possible defects include confusing claims or claims that seek to block competitors from using concepts that extend beyond the scope of what was legitimately disclosed in the patented invention.

Inter partes review, on the other hand, will be limited to challenges based on prior art documents as in current reexamination practice. This review will focus on determining whether a patent claims something that can truly be regarded as an invention in light of these prior art documents.

A procedure called ex parte reexamination will substantially remain the same. In this proceeding, a challenger presents to the Patent Office a question about the validity of a patent and then relies on the Patent Office to resolve that question without further input from the challenger. For challengers ex parte reexamination, though it will move at a slower pace than the new post-grant review proceedings, will still have characteristics that will be desirable in some circumstances. Because the challenger does not fully participate throughout the proceeding, an oft-cited advantage is that the challenger is not bound by the result if the Patent Office finds that the claims are valid. As a result, the challenger can raise questions of validity again in court. In addition, ex parte reexamination likely entails a lower procedural cost than the other options.

Is Reexamination The Right Choice?

Choosing how to challenge the validity of a patent in a high stakes dispute can be central to resolving the dispute on favorable terms. While reexamination at the Patent Office can yield good results, not all challenges can be heard within the Patent Office. As mentioned, during a nine-month window following grant of a patent, almost any grounds of invalidity can be raised in a Patent Office proceeding. After that, challenges may be based only on patents and printed publications that demonstrate that what is claimed in a patent was not inventive when the patent was filed.

Moreover, even when validity of a patent can be challenged in the Patent Office, it does not follow that the Patent Office is the more favorable venue for that challenge. Some cases of invalidity are best presented in court. For example, if the challenge to a patent is based on a “story” that is best told by live witnesses, a court is likely the better choice.

In contrast, when the challenge requires an understanding of multiple technical concepts, the Patent Office may be the better venue. Information about the validity of a patent might better be presented to the Patent Office rather than to a random selection of average citizens in order to allow the experts there to reevaluate whether what is sought to be patented is truly an invention.

Challenging a patent’s validity through the Patent Office does hold one important advantage, because the Patent Office applies a more lenient standard than is used in court. In court, a patent issued by the Patent Office is presumed valid, and clear and convincing evidence of invalidity must be presented for a court to accept invalidity of the patent as a defense to a charge of infringement. In contrast, the Patent Office in reexamination is not bound by its prior decision to grant the patent and will find claims in a patent invalid if that appears to be the most likely scenario.

Furthermore, the Patent Office will invalidate claims if there is any reasonable interpretation that the claims can be considered invalid. In contrast, a court will attempt to divine the true meaning of the claims and should only invalidate them based on this interpretation.

There are numerous other factors that can sway a decision about where to proceed. These include the likely somewhat lower cost of proceeding before the Patent Office, the likelihood that a patent might be strengthened if the patent is amended during a proceeding in the Patent Office, the number of claims in the patent, the remaining life of the patent, and the length of time since a suit alleging infringement was filed. For those challenging the validity of a patent, the overriding concern is likely to be which forum provides the best chance of success.

Strategic Considerations

There are several important issues to consider before moving forward with a patent challenge:

Effectively draft the request. When the factors point toward a challenge within the Patent Office, one of the most important pieces of the puzzle is ensuring that the request for reexamination be effectively drafted. Though there are many licensed patent attorneys, few have the extensive experience necessary to prevail in a reexamination. Ironically, patent examiners seem to apply a different standard when evaluating a request to reexamine a patent than an examiner might apply in making a rejection of a patent application during routine prosecution. Practitioners used to the rules of normal examination frequently get tripped up.

For a request to be granted under the new regime, it must establish a prima facie case that at least one claim is invalid by a preponderance of the evidence. The long-term goal is not to have the request granted but to have the patent invalidated.

Carefully consider what evidence is needed. To streamline the process, a requester will be expected to submit a complete case, including evidence such as declarations, with the request. While all the details for challenging a patent under AIA are not yet known, it is likely that there will be limited opportunities for a challenger to submit evidence or new grounds for invalidity once the process is under way. Further streamlining the process, there will be no possibility of appeal within the Patent Office or to a district court (which generally affords an opportunity to further develop evidence.) Any appeal will go directly to the U.S. Court of Appeals for the Federal Circuit.

Additionally, discovery will be allowed, but limited and consistent with the nature of the proceedings, to the factual assertions made by either party. In inter partes review that means discovery is largely limited to depositions of declarants, if declarations are submitted. However, in a post-grant review challenges are permitted on a wide range of grounds and discovery may be broader.

In short, it is important for a legal practitioner preparing a challenge to envision where the proceeding will end up before it even starts. The request must reflect this long-term vision.

Consider strategies that may give rise to intervening rights. Once the proceeding is underway, a critical element is likely to be whether amendments to the claims will be made by the patent owner. Amendments can strengthen a patent. On the other hand, amendments can give rise to “intervening rights.” This means that enforcement of the patent is limited to activities initiated before the amendments were made. When there is already an infringer, making amendments that give rise to intervening rights can sink litigation. An effective strategy for a challenger is to attempt to use this to its advantage.

Be careful of estoppel. For inter partes review and post-grant review of a patent, estoppel still applies if the proceeding goes to a final decision on a challenged claim. Estoppel is a complex legal theory, but it essentially means that the price of challenging a patent through the Patent Office is that any issues decided or that could have been decided in the proceeding cannot be presented later in court.

The obvious point is that pursuing such a proceeding should be undertaken only by those willing to vigorously press for invalidity. Though, a more subtle point is to build a fallback position that is not barred by estoppel. This can be done by drawing a clear line around issues that could not have been raised in the Patent Office so that they can still be used as a defense in litigation. In addition, use the Patent Office challenge to build a record that the challenged patent does not cover a product of interest, which is also an important defense in litigation.

Expect complicated procedural rules. Those contemplating a post-grant challenge should be warned not to cavalierly assume that these proceedings are just like litigation—or just like normal patent prosecution.  The Patent Office is likely to enact rules that put its distinctly patent-like spin on these proceedings, and the rules of practice before the Patent Trial and Appeal Board are expected to be modeled after rules currently in place for interference proceedings, which are known to require special skills to navigate.

Expect quick proceedings. Both of the new proceedings will be streamlined, with a mandate that they be completed within one year from the Patent Office’s decision granting a request for review. Although the process could be extended for 6 months for good cause, the full proceeding is likely to be over in 15 to 24 months from the date when a proper request for review is submitted. That time is faster than most district courts take to resolve issues of patent validity. This time scale will place a premium on foresight and preparation.

Understand the interplay with litigation. The new Patent Office challenges will be more of an either/or choice with litigation, placing a premium on evaluating a case and picking the better forum. A challenge must be requested within one year of a suit enforcing the patent. In addition, a requester is not allowed to maintain a declaratory judgment action in court while making a post-grant challenge but can pursue a counter-claim for invalidity if sued.

However, the existence of a post-grant review shall not be a basis for denying a preliminary injunction if an infringement action is filed within three months of patent grant. Furthermore, by utilizing—or opposing—stays in a litigation it can sometimes be possible to adjust the relative timing of the proceedings in court and in the Patent Office to ensure that the decision of the Patent Office controls. A decision on validity in litigation does not automatically end a reexamination proceeding.

Understand the interplay with a settlement. A new strategic consideration now permitted under the AIA is settlement of post-grant challenges. Any settlement agreement must be in writing and recorded with the Patent Office, but it can remain confidential. The possibility that a reexamination can be privately settled after being declared by the Patent Office may make reexamination a more attractive option for disputes when a business resolution, rather than complete victory, is the goal.

In addition to expanding the role of reexamination, this new settlement dynamic will place a premium on a patent practitioner’s ability to surmise how the Patent Office will decide a reexamination in order to guide clients in strategizing settlement scenarios. This skill may be particularly important if there should be a judgment in a parallel proceeding in district court, which doubtlessly will leave one party dissatisfied but does not automatically terminate the reexamination under the new regime.

An Attractive Option

Patent challenges in the Patent Office will continue to provide an important tool for challenging the validity of a patent to obtain freedom of operation. These challenges will likely prove to be an even more attractive tool under the new regime. However, to use it effectively, it will be important to understand how it may be used instead of—or in addition to—litigation. Such an understanding will be important for both patent challengers and patent holders alike.

Janice A. Vatland is a shareholder in the Boston intellectual property firm of Wolf, Greenfield & Sacks and a member of the firm’s reexamination practice group. She can be reached at [email protected]

Edmund J. Walsh is a shareholder in the Boston intellectual property firm of Wolf, Greenfield & Sacks and cochairman of the firm’s reexamination practice group. He can be reached at [email protected]

MX: Keeping New Ideas In Sight

Why did UnitedHealth Group, a leading American healthcare insurance company, feature itself in a prominent booth at the 2012 Consumer Electronics Show in Las Vegas? Was the decision sensible? Ridiculous?

Try strategically innovative.

UnitedHealth Group (UHG) “recognizes that the healthcare industry is changing rapidly, its boundaries shifting." Brandon Rowberry, vice president of innovation development, says of the decision to exhibit at CES. "If we want to be a leader at the intersection of consumer technology and health, we must be where the important conversations, ideas, and insights happen. Many times those insights are found well outside our traditional industry walls."

UHG understands that to find new sources of growth in embattled markets it must make sense of changes already unfolding both inside and outside of its industry. Like Big Pharma, the medical device industry recognizes that its legacy business model is under assault. Shifting regulations, an aging population, longer R&D cycles, and shorter intervals of exclusivity make it apparent that success will not flow solely from past practices.

A recent IBM survey of global chief marketing officers reveals intense concerns about the increased complexity and pace of change.1 By their count, more than half of the CMOs IBM interviewed believe they are not prepared to cope, noting that “ironically, the escalating amounts of data that could give us a window on change have overwhelmed our ability to process it…. We’re drowning in data. What we lack are true insights.”

It’s clear then that device manufacturers need to adapt to evolving circumstances. One question remains: How will they make sense of the complex changes in their environment? The answer is found in the type of insight-driven innovation that companies such as UHG, Procter & Gamble, GE, and Praxair are using to their advantage. Similarly, device companies can discover new sources of value by using insight-based innovation to extend their business well beyond their direct customers.

Making Sense Of Change

What are insights? Here are some useful pointers.2 Insights:

•    Allow company leaders to see past the horizon and appreciate new opportunities that clarify the strategic implications of disrupting or changing the rules of the game.
•    Overturn accepted wisdom to reveal underappreciated and underexploited opportunities.
•    Build upon organizational competence.
•    Include the fringes by representing the organization’s collective imagination and not just the received wisdom of courtiers to the C Suite.
•    Provide clear and compelling reasons to “just do it” without conflicting interpretations.
•    Identify the company’s uniqueness and core competencies.
•    Identify discontinuities by looking to the world at large in a different way.
•    Differentiate by looking beyond the immediate customer, changing the rules of the game in the process and creating stakeholder insights.

Recent innovations by Procter & Gamble illustrate the benefits of identifying core competencies and discontinuities. Increasingly, the global consumer products giant is exploring avenues to leverage core business strengths through new and different business models. P&G is a global leader in fabric and laundry care, with over $82 billion in revenues. The Tide to Go stick for stain removal and the manufacturer’s highly concentrated detergent that greatly reduces water usage are two examples of P&G innovations. Through its FutureWorks business incubator, P&G now is exploring the use of Tide and another iconic brand, Mr. Clean, to determine whether the company can bring value to the dry cleaning and car wash industries, which total nearly $30 billion in U.S. revenue.

Why does P&G pursue these endeavors? After all, the company’s share of the dry cleaning and car wash industries is essentially zero. The answer is that, as an industry outsider, P&G can more easily break with business orthodoxies. For example, in retail dry cleaning and clothes washing, P&G can transform the customer experience from an environment of dark and tired strip malls to one of large, bright venues with the trusted Tide brand front and center. Certainly, its deep knowledge of the science of cleaning is critical to the venture.

In this context, P&G’s efforts are far from random. Rather, they build from rich insights in order to break from industry traditions and change the rules of retail cleaning. Most important, these efforts build from company strengths: P&G’s popular brands and unrivaled knowledge of fabric care. Beyond these new markets, P&G is also entering the health space with ventures such as MDVIP for personal healthcare management and Navigenics for genetic testing.

Identify Core Competence

In a similar fashion, Medtronic CEO Omar Ishrak recently announced a three-point plan to take the company to the next level. He plans to accomplish this task partly by cost-cutting and partly by building from existing competencies. For potential new businesses or acquisitions, Ishrak asks: “‘Are we in a growth market? Can we win? Is Medtronic adding enough value, or is the business better off on its own?’ We ask those questions internally on a regular basis, and we ask those questions externally on a regular basis.”

The main interconnected questions for device company executives are: what is our core competence? What is the company uniquely good at? And what new areas of growth does this view open up for the company? Another systematic source of useful insights is the ability of an organization to select broad, encompassing trends that it can influence or can use in uniquely helpful ways—should the company choose to leverage them.

For a long time the medical device industry has acted on the twin trends of aging populations and technologies packaged in ever smaller sizes. Still, there are underexploited opportunities. One example is “aging in place.” This preference among senior citizens in the developed world to remain in their homes presents significant new opportunities. By its very nature this is a disruptive innovation. Another opportunity is telemedicine enabled by dramatic improvements in low-cost communication technologies coupled with remote but skilled labor in India and elsewhere.

Eyeing a different disruption, GE is investing millions to develop software capabilities so that it can integrate intelligence across its product portfolio. In healthcare, the company aspires to bring greater value to its customers through information. If someone in the medical device industry doesn’t have the foresight, will an outsider be prescient enough to spot the trends industry insiders don’t see and successfully challenge device industry incumbents? Will Apple have to be the company that brings a data revolution to the patient–provider relationship through iCloud? What other trends are waiting to be exploited?

Whatever the answers, the ideal trend for any device company is the one that it can leverage better than its competitors, not only because company leaders paid attention and chose to act on it before the competition did, but also because it fits with what the company does uniquely well. In other words, the trend suits the organization’s core competencies.

‘Web’ Of Stakeholders

It’s well known that the medical device industry operates in a complex web of stakeholders—from economic buyers to users; from legislators to regulators; from competitors to alliances. It is an environment in which the manufacturer is at least two steps removed from the user of the product, making it particularly difficult to appreciate the nuanced ways in which different stakeholders shape the consideration, purchase, and use of the product.

For companies that can see and sell through this complex web, however, great rewards await. Take Praxair, the industrial gas provider. From a humble starting point, Praxair changed its medical oxygen business by reimagining the traditionally large, heavy oxygen bottle into a smaller, lighter integrated modular valve-and-gauge assembly. Praxair did so by understanding a web of different needs. Caregivers were frustrated by the complexity of sorting through different types of tanks, each with its own regulator. The cumbersome design stood in the way of doing what caregivers love: helping patients. For supply chiefs, that complexity meant higher costs that kept them locked in a mindset of focusing only on the price of a commodity product—oxygen. And CFOs faced huge frustrations over the incidences of loss charges, as caregivers either forgot to post a charge or neglected to do so while attending to an urgent patient need. Praxair’s Grab ‘n Go system changed all that, providing a simple, easy-to-use, lightweight container that is so simple the caregiver can just grab it and go help the patient.

The Cleveland Clinic, already focused on making step-change improvements to the patient experience, was the first test site for the new product. The results of this trial foreshadowed the success Praxair would enjoy. Nurses’ productivity increased. Work accidents decreased. And Praxair leveraged its new understanding of the business—from selling gas to serving the needs of those who deal with the gas—into an entire new area of opportunity in home medical devices. The company that used to sell only commodity gas to hospital purchasing departments built the capability to sell a different type of value to a different buyer mix, changing its business model over time.

Today, medical device companies face the prospect of changing their business models not because they want to but because business-as-usual is lacking enough value to make a bottom-line difference in current market conditions. Like UHG, Praxair, and P&G, medical device companies can discover new sources of value and modify their business models to deliver it.

References
1. IBM Global CMO Study, 2011.
2. Innovation to the Core, Harvard Business Press (2008), 78–80. Additionally, please refer to Chapter Three (34–84) for more detailed definitions and guides to creating the insights described in this article.

Peter Skarzynski is lead author of Innovation to the Core and a founding partner of ITC, a global strategic innovation consultancy. He can be reached at [email protected]

Jorge Latre is a founding partner of ITC. He can be reached at [email protected]

The MX Q&A: Joseph DeVivo, AngioDynamics

The “on-again, off-again” discussions about the acquisition of Navilyst Medical by AngioDynamics were off at the time Joseph DeVivo was named president and CEO of AngioDynamics in August 2011. Valuation concerns and turnover at the top had put the talks on hold, says the new chief executive. However, DeVivo had heard enough details to pique his curiosity and then flip the switch back on. The companies announced January 31 that the Albany, NY—based device manufacturer acquired Navilyst Medical for $372 million in cash and stock.

AngioDynamics bought the Marlborough, MA—based maker of vascular, radiology, and cardiology devices from Avista Capital, which itself had acquired the company in 2008 from Boston Scientific. After the deal closes by May 31 AngioDynamics says it will have $50 million in cash, $150 million in debt, and $50 million in revolving credit with J.P. Morgan, Bank of America, and KeyBank National Association.

DeVivo sees the fact that Avista agreed to accept an equity stake as a sign of trust in the company and confidence in the future success of the merger. The acquisition strengthens AngioDynamics’ line of minimally invasive vascular, surgery, and oncology devices, doubling the size of its vascular access market in particular, he says. AngioDynamics’ second quarter net sales grew 9% over the previous fiscal year to $58.1 million, the company reports. Domestic sales increased 6% to $49.7 million over the second quarter of FY11, while international sales of $8.4 million rose 27% from the same period of the previous fiscal year.

In addition to its headquarters in Albany, AngioDynamics has plants in New York, Georgia, and California as well as a manufacturing site in the UK, an international HQ in Amsterdam, and a sales office in Hong Kong. DeVivo says the proximity of AngioDynamics’ plant in Queensbury, NY, to Navilyst’s manufacturing site in Glens Falls, NY—they’re four miles apart—played a small but important role in the transaction’s success. Family members in the area work at the companies, creating a “palpable” excitement among employees of both firms, he says.

DeVivo came to AngioDynamics from Smith & Nephew in Memphis, where he had headed the orthopedics division since 2006. He left the company when it was restructured and the orthopedics business was merged with Smith & Nephew’s endoscopy unit in Andover, MA. While at Smith & Nephew DeVivo served as chairman of the Greater Memphis Chamber of Commerce. Before joining the company he was president and CEO of RITA Medical Systems, a maker of cancer therapy devices that was acquired by AngioDynamics in 2006. He has also held executive positions at several other device companies, including Computer Motion Incorporation and Tyco International Healthcare. DeVivo earned a bachelor of sciences degree in business administration from the E. Clairborne Robins School of Business at the University of Richmond.

In this MX interview, DeVivo discusses his concerns going into the merger, the two factors that sealed the deal, management lessons he carried with him from the chamber of commerce, and the squeeze that the Affordable Care Act puts on device manufacturers.

MX: How long had AngioDynamics been considering the acquisition?

Joseph DeVivo: There had been conversations between AngioDynamics and Navilyst going back four years. It was on-again, off-again for a period of time.

It was in motion at AngioDynamics before the time you came onboard after the Smith & Nephew transition?

I don’t think it was any more in motion. Once there was a CEO change occurring at the company everyone decided to put things on hold. When I came in, I had learned that there were some conversations, so I was curious and I reengaged.

What was the nature of the on-again, off-again aspect of the purchase?

It was mostly valuation. I think both sides have achieved from the beginning the [appropriate] synergy from a market and an overall standpoint. Avista Capital had acquired the business for $425 million and had invested another $45 million. [Because of their initial costs] they were looking for a premium on the transaction that we weren’t willing to get near.

So what sealed the deal then?

Two things sealed it. One was when we learned that there was a tax asset that would be valued at roughly $80 million at present value for us. That really helped us bridge the gap. And when they were willing to take all our consideration in our stock, meaning that they’d hold our stock for a medium to long period of time. That’s where they’re betting on the deal to be successful in order for them to even be able to break even again. It’s an enormous leap of faith and trust that they have in the transaction and in our management team.

It’s a mark of respect for the way you are running the company then, I would think.

We’re pleased that they believe in us enough to put their consideration in holding the paper.

Closing’s expected at the end of the fiscal year?

At the end of May. We’re a May-June [fiscal year] company. That’s in motion. We filed a proxy. We think we’ll close sometime in May.

You’ve already addressed this to an extent, but what were your concerns going into the acquisition? Were there issues that could have scuttled the deal?

Strategically, no. The biggest thing that held up the deal was, again, valuation. Strategically, it’s a very solid deal for both companies, and probably if there was a concern it was a $200 million and a $150 million company being merged, which is just a lot of moving parts and a large merger of two organizations with a lot going on.

One aspect of the merger that was mentioned in the announcement is that the AngioDynamics plant in Queensbury, NY, is just four miles from a Navilyst facility in Glens Falls. Does an element like that, as relatively minor as it may be, factor into a huge decision like this?

Yes, it does, actually. And that factors into integration risk. If the company was in Seattle, for example, or if it was in San Diego, and it was a completely different culture [and] a different location…that takes integration risk up by levels of magnitude. Our plant and a core part of our facilities are four miles apart. We have employees who have worked in both companies. We have employees with family members who work in the other company. Culturally, the businesses are very close, and upon announcement when each learned of this transaction, unlike any other deal I’ve done the amount of unanimous excitement around the transaction in the employee base of both sides was palpable.

Those conditions for such a transaction are probably rare, actually.

It would be a good thing to study. It may be.

Yes, maybe from a business school standpoint. Widening the scope here a bit, would you characterize AngioDynamics’ market segments—peripheral vascular, vascular access, oncology surgery—as very competitive?

In each of those segments AngioDynamics will have significant either number one or number two positions. That allows the company to, of course, be more competitive than it would have been.

Are they particularly rugged segments for you or for devices in general? Are there competitors nipping at your heels, as it were?

It really is specific to the segment you’re talking about.

Of course. Pick one, for example.

For example, venous ablation is our fastest growing product. We are number one in the laser category and growing well above market. The transaction will give us a pure sales force just focusing on peripheral vascular, which should help us even further accelerate our position and our competitiveness.

A big upside then. Were there any companies  under consideration for acquisition instead of, or even in addition to, Navilyst?

We went through an extensive set of opportunities and continue to evaluate the pipeline for our future.

How are investors responding to the acquisition news—and your conference presentations, by the way?

We’ve made a significant move that represents an evolution in the investment criteria of the business. Investors have smart questions, and I think we’ve been doing a good job explaining the benefits of the transaction. Some will find the company’s direction does not meet their portfolio criteria, but overall I think most we’ve spoken with understand the strategy.

Was there any response to the acquisition that surprised you? What concerns were brought up?

I think the reaction of the majority has been expected in terms of wanting to understand how execution and integration will occur and to see evidence that we will make that a success.

The U.S. market, according to company data, represents 85% of your sales and rest of world is 15%. Can you increase sales in either of those regions?

We’ve grown sales over the last eight quarters in excess of 20% of growth internationally year over year, and our sales have gone from 8% to 15% in that period. It’s a corporate objective to get our sales to 50% of revenue with the next 5 to 10 years.

You stepped down as head of Smith & Nephew orthopedics in August 2011 during a company restructuring. Is there a preferred way to handle executive turnover? Any broad guidelines that smooth the transition?

I think the healthiest transitions are when successors for business are groomed over time, are identified, [take] the opportunity to communicate to investors, and the incumbent gets to graduate in the appropriate manner. Whenever there are abrupt changes at any level it’s a surprise to investors and the organization. As much as a successor is identified, groomed, and then a timeline given for a change, I think that’s the best for the organization as well as the investor community.

Is there anything you learned as chairman of the Greater Memphis Chamber of Commerce that you bring to your position as head of AngioDynamics?

I learned a lot. Employees care about the community that they live in, and they care more about the companies they work for when the companies are involved and give back to the community they live in. It’s a cycle. The more you care about the community the more the employees get endeared to the company, and the more you can strengthen the community the more you create a better living environment for current and future employees.

Smith & Nephew was a very large player in Memphis. It’s the largest manufacturer with over 2000 people in a city that had many social needs. The company had the employee base and the position in the community to help make a difference, and I think we did.

When Smith & Nephew was redesigning its Memphis headquarters I read that you requested that at least a third of the work go to women, minorities, and local business, which ties into the ideas you were just expressing. I understand ultimately that at least 55% of the work was done by these groups. Why did you do that? For the reasons you were just stating?

Initially, the company was under a tax abatement agreement with the city, which we wished to have extended, given the initial investment we were making. One of the requirements for that tax abatement was a minority participation in the project. I believe it was around a 20% threshold we needed to get to. In learning about the needs of the community, minority-owned businesses, and small local Memphis business, we actually ended up the project at 85% participation. Where we did not get minority- and women-owned businesses, we were able to support local, Memphis-owned businesses.

A local businessman in the insurance industry did an analysis that said every dollar spent in the local Memphis business [community] would spur the economy by an additional $1.70. The more we invested at home the better it could help the community, and we felt that—for the reasons stated before—it was a worthwhile cause. The project came in under budget and on time, and we did the right thing for the people in Memphis.

You’ve also expressed a preference for communal working space. Is that correct?

It’s something I learned to appreciate. At Smith & Nephew we had a building that was a set of cubicles that was such a maze. It was impersonal and difficult to navigate as it grew over time. Given the footprint of our new facility, we chose an open work environment, which had many common workspace areas for collaboration and also private areas when they were needed. I wasn’t there long enough to see if it was a success. I can tell you in the first six months there was more grumbling than anything, because it impeded a lot of privacy. So I’d be interested to see today how they’re doing with it.

They should trying working in a newsroom. When you were with Smith & Nephew you were able to increase business in Russia, China, and India. Is that something you think you can do with AngioDynamics?

Absolutely. It’s a major part of our growth imperative. We’ve invested heavily in our direct channels and our sales and marketing teams. It’ll be a major part of our growth going forward. That said, we still believe there is growth in the U.S., while others seem to be giving up. We intend to have a balanced approach to grow globally.

Why do you think there’s growth in the U.S.?

Because it’s the best healthcare market in the world. While it may be contracting for someone with 80% market share, someone with 20% market share still has an opportunity to grow share in one of the most lucrative markets in the world, and I wouldn’t count the United States out.

AngioDynamics has plants in three different states as well as one overseas. Regarding the overseas presence, what are some of the challenges, if any, in overseeing foreign manufacturing facilities?

We have a facility in the UK, yes. There are no significant challenges. There’s a time difference, but that is not an issue, and we hope to continue to expand our global footprint as the company grows. It’s important to invest in the markets that you intend to grow in and having a local footprint is seen very favorably, and we intend to build that out.

The U.S. economy has improved slightly, or at least it seems to have stabilized. How do macroeconomic trends affect your business?

Historically, the medical device industry has been relatively isolated from the macroeconomic effects. When the market’s hot we do well, and when the market’s soft we do okay. We don’t have the high “highs” or the low “lows.” In today’s environment with the Affordable Care Act, our world has changed.  As hospital CEOs have looked to contain their costs, they have taken very aggressive efforts to lower prices, and most medical device companies have felt that. I think we’re in a period of correction, and I think that correction will continue through 2014 and then hopefully by then the more people who are coming in who are insured through the Affordable Care Act, and more importantly the demographics of the aging population, will kick in and help the market grow again.

In the near term it is most certainly an effect of the most recent change in healthcare policy.

In one interview you indicate you’re not a fan of the legislation. You just mentioned one of the potential upsides for some of the CEOs I’ve spoken with, which is the influx of new patients. As for the 2.3% excise tax my sense is that few executives would be a fan of that despite the influx.

Personally, I think the tax is horrible. It’s shortsighted and politically well-meaning but completely misunderstood [in its effect]. The belief by Senator Baucus’s committee was to have those who were benefiting by the Affordable Care Act pay. What I don’t think they completely understood was that the medical device industry is in a free-market economy with floating prices. As hospital CEOs are compressing pricing and purchasing to help pay for the Affordable Care Act—which is represented in some significant price concessions—on top of that we have to pay an excise tax. I think the industry would have considered one or the other, but both happening to us is not only painful but is also one of many government interventions that are forcing the medical device industry offshore.

I assume that those concerns didn’t put any constraints on finalizing the acquisition, but have investors brought up the healthcare policy issue as a concern?

I think the long-term view of the medical device industry is that the value is a bit impaired, given these dynamics.

Finally, on the AngioDynamics Web site there are links to 14 organizations such as the National Cancer Institute and the American Venous Forum. How important is this type of outreach to a device company?

It’s very important. Most patients who seek therapy do much more homework today and have more access to information than they ever have. It’s a double-edged sword in as far as being partially educated can be dangerous and can become frustrating to clinicians. But information is important and to the extent we have information to share, it’s only the right thing to do.

Reducing the Costs of Medical Device Clinical Trials. Is This an Overlooked Aspect of Healthcare Reform? | Medical Device Podcast

In a world where healthcare budgets are being constantly squeezed, it is paramount to ensure that one of the most fundamental steps in medical device development—the clinical trial—is planned as effectively and efficiently as possible. We enlisted the help of Molly Blake-Michaels, Senior Director of Clinical Services for ClearTrial, to enlighten us on the challenges unique to designing medical device clinical trials. In this interview, Molly shares her expertise regarding the planning, forecasting, and tracking of medical device clinical trials and the concepts that can be employed to help overcome them.

Okay, so who is Molly Blake-Michaels? She is the Senior Director of Clinical Services for ClearTrial. And what exactly is ClearTrial? ClearTrial provides Clinical Trial Operations (CTO) software that makes the planning, forecasting, and tracking of clinical project and financial performance faster and more accurate. Before joining ClearTrial, Molly spent over 20 years in clinical trial operations with companies like Abbott, Fujisawa, Hospira, and Delta Pharma.

Listen to the "Reducing the Costs of Medical Device Clinical Trials. Is This an Overlooked Aspect of Healthcare Reform?" podcast (right click and select "Save Link As" to download the podcast).

Download the PDF action points of the "Reducing the Costs of Medical Device Clinical Trials. Is This an Overlooked Aspect of Healthcare Reform?" podcast.

Having Jet Lag? Stick It in Your Ears

          image copyright Valkee Ltd.
Frequent international travelers may finally have the answer to their jet lag woes. Valkee, a Finish company, is about to begin testing a line of mood-elevating earbuds on passengers of Finnair flights. The earbuds, which project pulses of light into the photosensitive areas of the brain, are claimed to be helpful in enhancing mood and alleviating the symptoms of seasonal affective disorder (SAD). Valkee hopes they’ll have similar positive effects on people suffering from jet lag. 
 
The earbuds, which carry a $240 price tag, have already been approved as a medical device in Europe. Though Valkee has posted scientific researchon their earbuds, critics are calling this just another high-priced placebo. And one can’t deny the strangeness of the notion of of sticking LEDs in your ear to alleviate mood problems.
 
But users may have nothing to lose except their depression. At the very least it'll make that creepy guy in the seat next to you a lot less likely to strike up a conversation.
 
 
Source: CNET news
 
 

DIY Medical Devices Aren't Toying Around

The term DIY Medical Device might conjure images of a FDA nightmare in the minds of most. But in a time when healthcare costs are increasing globally, Jose Gomez-Marquez, director of the Director of the IIH (Innovations in International Health) Lab at MIT, has embraced the idea by heading up MIT’s Little Devices group, dedicated to design, invention, and policy toward DIY health technologies.

  image copyright D-Lab Health
Created with the healthcare needs of the developing world in mind, the MEDIKit (Medical Education Design and Invention Kit) allows medical professionals to design their own medical devices using easy-to-assemble modular components. The MEDIKit allows users to customize and quickly assemble medical devices that address the challenges of work environments in many developing nations.
 
Right now the MEDIKits span six areas: drug delivery, diagnostics, microfluidics, prosthetics, vital signs, and surgical devices. Each kit contains a platform with a combination of medical device parts that can be adapted and assembled into various functions like LEGOs. In fact, many of the Little Devices group’s many still developing projects revolve around reconfiguring and finding new uses for cheap, readily available products (like toys).
 
The vast majority of medical devices in developing countries come from outside sources–usually via donation. Reports and studies by various organizations, including the World Health Organization, have shown that most, if not all, of these devices are prone to failure, and usually do fail. The end result is that a hospital or medical facility that could not have afforded the costly equipment in the first place is now left holding the bag to pay for repair of the equipment.
 
MEDIKits are designed to demonstrate that such high cost equipment may be more of a luxury than a necessity by teaching medical staff to adopt other, potentially cheaper technologies to accomplish the same purpose. LEGOs can be used as breadboards to create wet lab circuits, a bicycle pump can be adapted into a nebulizer for asthmatic patients, Gomez-Marquez and his team really believe the possibilities are limited only by users’ ingenuity.
 
In an article written for MAKE, Gomez-Marquez expresses his hope that even non-medical users will get into the idea and “hack” their own healthcare for cheaper, yet equally effective, results. “As skyrocketing healthcare costs converge with the democratization of making, many more people will hack health. Whether it’s putting RFID stickers on pill bottles to help patients take their pills on time, or hacking bike pumps and scrapbook cutters, health is filled with fantastic challenges. You can make a difference whether or not you work in healthcare.”