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Articles from 2017 In March


Did a Broken Promise Cost Roche Millions of Dollars?

Updated on April 3, 2017, with comments from J&B Medical Supply.


 

A broken promise over retail sales of Roche diabetes test strips may be at the heart of a federal lawsuit against a handful of pharmacies and medical suppliers. And if Roche is right, that broken promise may have cost the company millions of dollars.

Learn about critical areas within the medtech industry at BIOMEDevice Boston, May 3-4, 2017.

Two Indianapolis-based Roche units have accused several pharmacies and medical supply companies of exploiting the price differences of blood glucose test strips sold to people covered by durable medical equipment (DME) plans and those covered by pharmacy benefits plans.

Test strips paid for by pharmacy plans have a much higher list price and a higher insurance reimbursement rate than those paid for by DME plans, but pharmacy plans get significant rebates from Roche that DME plans do not receive.

The complaint, filed by Roche Diagnostics Corp. and Roche Diabetes Care in U.S. District Court in Indianapolis, accuses the defendants of buying Roche test strips at the lower DME list price and diverting them to sale in channels where they would be reimbursed at the much higher pharmacy plan rate. In doing so, Roche claims the defendants and their "co-conspirators" made millions of dollars in illicit profits, costing Roche as much as $89 million in wrongful rebates and legitimate sales.

According to the lawsuit, some of the defendants, including Centerline, MI-based Binson's Hospital Supplies, and Wixom, MI-based J&B Medical Supply, had promised to sell the DME test strips only through DME channels but broke that promise.

John Truscott, of Truscott Rossman, a public relations firm representing J&B Medical Supply, told Qmed that J&B has not purchased any of the test strips in question since 2009 because Roche had some issues with FDA at that time and "numerous insurance companies asked J&B to stop purchasing from them, and they stopped immediately."

Truscott said J&B plans to respond to the lawsuit with emails and letters that will show Roche has continued to try to win J&B's business back. He said the company is confident that it will be removed from the lawsuit after J&B presents this evidence. "They simply didn't have anything to do with the situation in question," he said.

Other defendants named in the lawsuit include Centerline, MI-based Northwood Inc.; East Lansing, MI-based Olympus Global; Flint, MI-based Delta Global; and Cheyenne, WY-based Alpha XE.

The lawsuit also notes that Roche has certain security measures in place, such as using separate packing and product codes for pharmacy and DME strips, so that there is "no legitimate way to engage in a profitable diversion scheme," therefore the defendants and their business associates would have had to have conspired against Roche in order to profit from the scheme.

"Importantly, defendants' profits did not result from offering lower prices to customers, the vast majority of whom pay a fixed out-of-pocket amount set by their insurance plans," Roche said in the lawsuit. "Rather, the profits resulted from causing Roche to pay substantial rebates to pharmacy plans for products that were intended for sale through DME plans."

The company also claims that Binson's Hospital Supplies "covered up their wrongdoing by giving Roche fabricated quarterly sales reports that indicated Northwood was fulfilling a certain number of patient prescriptions with its sale of Roche test strips. But in fact, Roche said in the lawsuit, Binson's "simply made up these numbers," and Northwood did not deliver any test strips to patients. Instead, Roche said, Northwood sold all of the test strips to J&B, and J&B diverted all of them to pharmacies.

Truscott said Binson's is a competitor to J&B, and that during the time in question, the two companies were involved in costly litigation against each other. "It's not the situation where they would have been cooperating with each other," he said.

Roche is suing the defendants for fraud, criminal deception, negligent misrepresentation, breach of contract, unjust enrichment, and conspiracy.

Amanda Pedersen is Qmed's news editor. Contact her at amanda.pedersen@ubm.com

[Image courtesy of Peter67/Pixabay]

How Nanoparticles Could Help Destroy Tumor Cells

Updated on April 3, 2017, to include interview comments from the researcher leading this study.

Researchers devise a new strategy that involves tethering hundreds of nanoparticles to individual tumor cells to make them more vulnerable to drug treatments.

Kristopher Sturgis

A new study out of MIT shows a new approach to cancer treatment that involves coating tumor cells in nanoparticles that can then weaken the cell, making it more susceptible to an attack by drug treatments.

The new study indicates that when tumor cells have been coated in nanoparticles, they can increase the forces exerted on the cells by flowing blood, making the tumor cells more likely to die when exposed to drug treatments. Michael Mitchell, a postdoc at MIT and leader of the study, said that leveraging the forces of the body against the cells is what can make these treatments more effective.

As a bioengineer, Mitchell told Qmed he has long been interested in how mechanical forces affect cells within the body, particularly tumor cells. Mechanical forces play a key role in tumor cell migration out of the initial tumor to form metastases, he said, and his team was interested in seeing if such forces affect how tumor cells respond to therapeutics, such as immune cytokines.

"To our surprise, we found the opposite to be true, that such forces can be exploited to sensitize tumor cells to these immune cytokines," Mitchell said. "We found this response to be fundamentally interesting, but the challenge was 'can we potentially exploit this response for a therapeutic purpose?"

The researchers tried many different experiments that didn't work, Mitchell said.

"Eventually, we came up with the idea that if we tether micro and nanoparticles to the surface of the cells, which can push and tug on the cell surface under physical force exposure, we can potentially sensitize these cells further to these therapeutics," he said. "And we saw that this was the case."

The nanoparticles are made from biodegradable polymers known as PLGA, and can be injected directly into the bloodstream. The particles are also coated with another polymer known as PEG that is laced with an antibody specific to proteins found on tumor cell surfaces, which is what allows them to tether to individual tumor cell surfaces. This is also what enables the treatment to specifically target tumor cells without affecting any surrounding healthy cells.

The technique of using nanoparticles as a means for more targeted drug delivery continues to be explored as researchers look to treat areas of the body without affecting any surrounding healthy cells or tissue. In 2015 researchers from UC San Diego devised a method that involved disguising nanoparticles as human platelets to deliver drug treatments to specific areas of the body. The method was designed to help treat bacterial infections and certain cardiovascular issues, but couldn't be used against tumor cells -- something this new technique aims to achieve.

In recent studies using mice, the group from MIT worked with an experimental drug known as TRAIL -- a protein that contains tumor necrosis factors that can bind to death receptors on cell membranes. TRAIL works to essentially send cell membranes a signal that can stimulate apoptosis, or programmed cell death.

In their most recent study, the group found that tumor cells become more susceptible to this drug once they were exposed to forces from physiological fluids. This discovery led to the theory that increasing the forces on individual tumor cells would make them even more susceptible to drug treatment. This led the group to coat the surface of the tumor cells with nanoparticles, so that once blood flows by, each tethered particle would tug and pull the cell surface of the tumor -- making them more susceptible to the cell death signal from the TRAIL drug.

As the group moves forward with their research they plan to continue to explore the technique in combination with other drugs that can stimulate different responses from the immune system. Next they plan to study the effects of drugs that can induce a "cytokine storm" -- a technique that will trigger a large release of signaling chemicals that can attract a crowd of immune cells to the site of the tumor to destroy it.

Mitchel said this new method could open up a bevy of different immune-based therapies that aim to exploit the physical forces that cells are exposed to, all as a means of killing off tumor cells. In time, the study could serve as a platform for a whole new generation of targeted drug delivery treatments.

"It is very early to predict the potential impact of such an approach," Mitchell said. "Ideally, we envision in the long term that cancer cells can sensitized both chemically and mechanically to open up new therapeutic approaches."

Bioengineers are making incredible progress in understanding how physical forces in the body affect cancer therapy, he added. "Our approah could have impact in this area, and we anticipate that researchers in the future will come up with a variety of ways to leverage mechanics to improve cancer therapy."

Kristopher Sturgis is a contributor to Qmed. 

 

[Image courtesy of Pixabay]

Breath Biopsy Company Lands Major Insurer’s Investment

Owlstone Medical will use new funding to commercialize its early-detection technology.

Nancy Crotti

Owlstone Medical's FAIMS platform is designed to detect disease biomarkers in breath.

A British company developing "breath biopsy" technology to detect early-stage cancer has landed an investment from a major insurer.

The undisclosed investment from Aviva Ventures brings total funding for Owlstone Medical to $23.5 million. Aviva Ventures is the venture capital arm of London-based Aviva plc, the largest general insurer in the United Kingdom.

The money will help Cambridge, England-based Owlstone to accelerate the commercialization of its technology and support its clinical trials. Owlstone recently launched a 1,400-patient breath-based study using its microchip Field Asymmetric Ion Mobility Spectrometer (FAIMS) technology to detect bowel cancer.

The InTERCEPT trial is designed to evaluate the accuracy of Owlstone's test in the detection of early-stage colorectal cancer when patient survival rates are at their highest. The company is also involved in the LuCID 3,000 patient trial for early detection of lung cancer. These trials are the largest clinical trials ever undertaken for early detection of cancer in breath.

A pilot study using the technology showed a sensitivity of 88% in detecting volatile organic compound biomarkers for colorectal cancer. The pilot study also showed a sensitivity of 62% for detection of advanced adenomas, a precancerous stage of colorectal cancer, representing a substantial increase in the rate of detection compared with the fecal occult blood tests based on detecting blood in feces that are used currently within the NHS bowel cancer screening program.

The company's breath collection device, the ReCIVA Breath Sampler, has the CE mark and is in use in more than 60 academic research groups and clinical labs around the world. Its quality assurance and regulatory affairs managers have been in touch with FDA regarding U.S. approval.

The ability to diagnose disease by taking a breath biopsy will save lives and cut treatment costs, according to Owlstone founder and CEO, Billy Boyle. Boyle lost his wife to late-diagnosed colorectal cancer.

"Early detection is the greatest opportunity that we have to improve outcomes for patients," Boyle told Qmed in an email. "The added benefit of detecting disease earlier is that it becomes easier to treat, and the cost of treatment for healthcare providers is reduced, potentially leading also toreduced insurance premiums."

Aviva will get an undisclosed ownership state in Owlstone and will seek to actively promote

Owlstone Medical and its breath biopsy technology, according to Boyle. Other investors include international entrepreneur network Medtekwiz, and a number of U.S. based VCs.

"We expect that association of Owlstone Medical with the Aviva brand will raise awareness of breath as a new diagnostic modality within the healthcare space," he said. "This will be extremely helpful to drive adoption of the breath biopsy technology as we move forward."

Nancy Crotti is a contributor to Qmed.

[Image credit: Owlstone Medical]

Is It Time for a Chief Access Officer?

Is It Time for a Chief Access Officer?

Access is everything when it comes to achieving success in emerging market economies. Here are the challenges and ways to overcome hurdles in emerging markets, and why it may be time for medical device companies to employ a Chief Access Officer.

Robert Hall

It's been three years since the emerging markets overtook the EU5 economies (Germany, France, Italy, the United Kingdom, and Spain) in healthcare spending. In pharma alone, the emerging markets boast a total market size of $281 billion compared with the EU5's $196 billion in 2014. As developed economies continue to squeeze healthcare funding, governments in many emerging markets are making healthcare a priority. They are investing in infrastructure, funding services, encouraging the development of a domestic industry, and expanding health insurance to a broader population. Access, awareness, availability, and affordability are priorities.

As a result, emerging markets will be a significant contributor to sales growth for medical devices and pharma over the next few years. Much of this growth is likely to be driven by China, India, Brazil, Russia, Mexico, and Turkey (the BRIC-MT countries).

It's not only the sheer size but also the nature of the healthcare market that is changing in emerging economies. As more people gain access to healthcare and populations shift to urban areas, noncommunicable diseases such as diabetes, cancer, and cardiovascular diseases are becoming more commonplace. This increases opportunities for global medical device and pharma companies with portfolios covering these disease areas.

Hey Big Spender

While emerging-market governments grow their healthcare platform, they are also examining how to contain the accompanying spending. A lack of experience in performing sophistical cost-benefit equations might lead to simplistic price comparisons. This, in turn, can lead to poorly applied budget limits that restrict patient access to innovative therapies. Political pressures can also impact market access decision making. When access is finally achieved, price controls are often used to manage spending and encourage the development of domestic providers.

Hear AdvaMed's Scott Whittaker discuss "How Will Medtech Fare in Our New Public Policy Environment?" at the BIOMEDevice Boston Conference and Expo, May 3-4.

In China, as an example, the different provinces have their own governments and each have different tendering measures aimed at reducing the price gap between local providers and the international brands. Hospital reimbursement control policies have limited physicians' ability to prescribe higher-priced international brands at a time when local value products are still perceived to be of lower quality. These policies were once limited to tier one cities in China but have now been replicated widely across the country.

The increasing effort to contain cost is not the only difficulty global healthcare companies face in securing access in emerging markets. Other factors include intellectual property protections that favor generics and biosimilars, policies that support local manufacturers, and frequent policy changes. The hurdles can come along thick and fast, feeling slightly higher each time.

It comes as no surprise that some healthcare executives are starting to look at ways to improve their market access capabilities to capture the best growth opportunities in emerging markets, especially when it comes to new innovations.

New Thinking on Market Access

In the advanced economies, market access is mainly concerned with pricing, satisfying the local regulators, and obtaining the necessary ratings. In emerging markets, it is not as straightforward. Medical device and pharma companies seeking market access for their products are competing not just against similar rival companies or other disease areas. They are also competing against other government departments, such as transportation, education, and defense. On top of this, healthcare spending as a percentage of GDP is lower than in most developed economies.

This means that multinational medical device and pharma companies need, in a more integrated way, to cover three key areas. First, regulatory and working to gain authorization in a timely fashion through engaged initiatives, such as involving local medical thought leaders in local late-stage trials. The voice of key local support can't be underestimated in a new market. Second is pricing and reimbursement; securing the right price levels and being included on reimbursement lists by displaying compelling evidence, successful interventions, and good negotiations. The third area of focus is infrastructure. Offer added value, addressing problems in healthcare infrastructure and resources by implementing initiatives such as education in a therapy area that is insufficiently represented in that particular country.

One Size Fits All?

Access in emerging markets is complicated and is definitely not a one-size-fits-all affair. Many senior medical device and pharma executives have reported that countries with similar disease profiles, levels of wealth, demographics, and healthcare spending can differ wildly in the consumption of the same device or drug. This could be down to a number of factors, but one that jumps out is that some country teams are more successful than others in engaging with local stakeholders and devising access solutions to meet local needs.

Common Barriers to Overcome

There is no single skeleton key to unlock all the emerging market doors. Nor is there a sledgehammer available that will knock it down. Rather, the first thing is to look at common barriers. The most common obstacles are scarcity of funding, dependence on local parties, policy gaps, lack of local data, infrastructure problems, and a lack of trained healthcare professionals.

To get over these barriers, medical device and pharma companies need to switch their commercial models from sales and marketing to access, and from individual brand access to integrated cross brand planning.

Interesting examples of this successful approach include:

Baxter's "Flying Angel" program in China in partnership with the Ministry of Health to address challenges in access to, awareness of, and affordability of peritoneal dialysis (PD) among rural patients. Baxter directly invested in logistics expansion and training doctors and nurses. The government introduced treatment guidelines in rural areas, certified hospitals for PD treatment and improved subsidies for rural patients.

Novo Nordisk devised an innovative multi-party public, private, partnership (PPP) to overcome significant barriers in awareness, affordability, and infrastructure to reach 40,000 diabetes patients in Kenya.

Roche came up with an innovative pricing scheme in the Philippines that considers what the patient can actually afford to pay. Patients prescribed the drug Herceptin undergo a means test carried out by an independent third party and receive a discount if they can't afford to pay the full amount.

Each of these are innovative responses to unique access cases. They are also too few in number. What it does demonstrate is that companies that take a creative approach and invest more in access increase their likelihood of success.

Changing into an Access-Driven Organization

Hall

Companies that are more successful at gaining market access in emerging countries have intelligent leaders who commit to the access-driven approach. The company sets out a distinctive access approach and methodology, sharing knowledge and devising a common global access language. General managers and teams at country level are challenged in their methods and thinking. They are shown examples of what real access looks like in other countries and even other industries. Access brainstorming sessions are held and high-visibility projects, designed to grab attention, are launched and can later be rolled out across other countries. A commitment to the access approach is laid out through years-long timelines with resources in place to achieve long-term goals.

The General Manager Should Take the Lead

At country level, the general manager (GM) rightly takes the lead in building relationships with stakeholders like policy makers and other medical and non-medical influencers. The GM will lead engagement and place access at the very heart of the country strategy.

Companies that best achieve this have their key access staff based in the country, speaking the local language, building strong connections, and embedding themselves within the community. They also tend to hire more seasoned local executives who can bring those connections to the firm. The more seasoned, experienced in-country managers are able to engage with local government on discussions around higher-level topics that prevent access, such as infrastructure, education, and awareness.

The GM needs to coordinate the access approach across different business units on an ongoing basis. The GM needs to be on top of access and pipeline talent for succession planning in key areas like government affairs.

Is It Time for a Chief Access Officer?

Well, it's certainly a discussion worth having. So far, we have examined why good access is essential, the challenges to access in emerging markets, what successful companies have done to overcome these challenges, and what in-country teams need to do.

The question now is, how many medical device or pharmaceutical companies have a senior individual responsible for and focused on access? Yes, there are leaders across government affairs, policy, pricing, and reimbursement, all of which have a huge bearing on access. However, I rarely see a senior individual who is responsible for pulling these elements together and leading access across the company.

It makes sense to me to have this type of 'Chief Access Officer' role as part of the leadership team, if a company is serious about emerging markets and becoming access driven. That person would enable the company to pool experiences more effectively, share what works globally, brainstorm, and build access excellence. The Chief Access Officer would support teams and guide the in-country management, helping them understand what real access looks like, how it works, how to achieve it, and align all business functions to pull together with the same shared goals.

A significant delay in access can cost a company millions of dollars in lost revenue when a product is not on the market at the right time. If this is a possible scenario, then why not have a leader in the organization that pulls together the different stakeholders focused on government affairs, commercial marketing, and pricing. Somebody that captures all the company's access experience and knowledge, sets best practice, and supports the GM and in-country teams to achieve their goals.

Becoming an access-driven organization is essential to succeed in emerging markets. Companies that don't have a senior focal point to take the lead on access really need to ask themselves if they are doing all they can.

Robert Hall is the managing director of Ardent Search, an executive search firm specialized in hiring senior talent for medical devices, diagnostics, and biotechnology throughout Asia. Hall is based in Hong Kong and can be reached at rh@ardent-search.com

[Images courtesy of WINNOND/FREEDIGITALPHOTOS.NET and ROBERT HALL]

Bos Sci Strikes $435M Deal for Swiss TAVR Player

Boston Scientific's plan to buy Symetis is seen as complementary to the company's embattled structural heart line.

Nancy Crotti

Boston Scientific plans to buy a Swiss transcatheter aortic valve replacement (TAVR) company for $435 million in cash. The purchase of Symetis will complement its structural heart offerings with existing products and a promising pipeline, according to Boston Scientific executives.

Keep track of who's buying, selling, and spinning off with our free report, Medtech Mergers & Acquisitions of 2016.

Symetis makes the Acurate TA and Acurate neo/TF TAVR, which are sold in Europe and other countries outside the United States. The Acurate TA offers physicians a top-down delivery method for ease of implantation and a self-expanding design. Symetis made inroads into Germany and northern European countries in the past two years, growing revenue by 59% to $25 million in 2015 and by 51% to $38 million in 2016.

"We believe it's an excellent strategic fit with very good financial returns," said Boston Scientific CEO Mike Mahoney. "Boston Scientific continues to strengthen our overall portfolio while diversifying into faster, and more attractive, growth markets."

Boston Scientific's TAVR business has been weighed down in recent years by a protracted intellectual property fight with Edwards Lifesciences, and the August 2016 recall of its Lotus Edge TAVR device due to mechanical problems. The company is on track with solving manufacturing issues with Lotus Edge, according to Mahoney. It expects to bring the device back to the European market and apply for premarket approval from FDA in the fourth quarter of 2017, in hopes of a U.S. deployment in the second half of 2018, he added.

Far from a response to the Lotus situation, Mahoney said the purchase of Symetis, of Ecublens, Switzerland, has been in discussions for two years. He said the smaller company's portfolio is complementary to Boston Scientific's offerings, and that its product pipeline is promising. Symetis is developing the Acurate neo/AS advanced-seal next-generation valve, and expects it to win a CE mark for the device in the first half of 2019.

Boston Scientific expects the deal to close in the second quarter of this year, and to be accretive to earnings in 2018, with a 10% return on investment in three years.

Analyst Mike Matson of Needham & Company termed the purchase an offensive, rather than a defensive, move by Boston Scientific.

"We do not believe that this deal is a 'stop-gap' to address the Lotus recall, shortcomings with Lotus, or IP  issues," Matson wrote in an email. "Instead, we view this as a way for [the company] to broaden its TAVR range to include additional designs and delivery methods that cover more physicians and patients. More specifically, the deal adds self-expanding, supra-annular, and transapical designs that complement its Lotus mechanical-expanding, intra-annular, transfemoral designs."

Boston Scientific continues to expect structural heart sales of $250 million in 2017. It also anticipates data from three Lotus trials (REPRISE III, RESPOND, and RESPOND Extension) and two Acurate trials (Acurate SAVI TF and Acurate neo/TF Low PPM) to be presented at the EuroPCR cardiology conference in May.

Nancy Crotti is a contributor to Qmed.

[Image courtesy of Pixabay]

5 Ways VR Is Changing Illness Today

Virtual reality is transforming the way we approach healthcare and treat illnesses. Here are just five examples of virtual reality's place in medicine.Marie ThibaultNo, virtual reality isn’t new. But recent advances in technology and more accessible price points have made its fantastical future seem realizable. Today, the possible applications of virtual reality within healthcare seem boundless. According to a Goldman Sachs research report, healthcare applications for virtual and augmented reality are expected to be worth more than $5 billion by 2025, the second largest segment of the market.Here are just five of the ways virtual reality and augmented reality are being used to transform illness today. There are myriad applications being used today or expected to be within reach soon. Read on to find out more.[Image courtesy of HYENA REALITY/FREEDIGITALPHOTOS.NET]

Virtual reality is transforming the way we approach healthcare and treat illnesses. Here are just five examples of virtual reality's place in medicine.

No, virtual reality isn’t new. But recent advances in technology and more accessible price points have made its fantastical future seem realizable. Today, the possible applications of virtual reality within healthcare seem boundless. According to a Goldman Sachs research report, healthcare applications for virtual and augmented reality are expected to be worth more than $5 billion by 2025, the second largest segment of the market.

Here are just five of the ways virtual reality and augmented reality are being used to transform illness today. There are myriad applications being used today or expected to be within reach soon. Read on to find out more.

[Image courtesy of HYENA REALITY/FREEDIGITALPHOTOS.NET]

How to Get Cleveland Clinic Behind Your Medical Device

Representatives from the venerable Ohio medical center explain what medical device developers need to do to get their products backed by Cleveland Clinic.

Jamie Hartford

As business development director for Cleveland Clinic, Tom Sudow speaks at a lot of events, and he says can often read the minds of audiences he addresses. They're thinking, "If I could just get my idea in front of the Cleveland Clinic, I'd be set for life," he explained March 29 at the Advanced Design & Manufacturing Cleveland Conference.

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It's easy to understand the sentiment. Cleveland Clinic is the No. 2 hospital in the United States and No. 1 for heart surgery and cardiology, according to U.S. News and World Report. The medical center sees 6.6 million patient visits annually at its nine regional hospitals, 18 family health centers in northeast Ohio, and facilities in Florida, Nevada, Toronto, and Abu Dhabi.

Through its commercialization arm, Cleveland Clinic also serves as a springboard for medtech innovation. Established in 2000, Cleveland Clinic Innovations has so far been granted more than 1200 patents, negotiated more than 500 technology licensing agreements, and spun off 77 companies.

So what does it take to get that kind of heft behind your idea? Sudow said it boils down to three simple criteria: The technology must be scientifically proven, commercially viable, and, most importantly, clinically relevant.

"I was abroad last week, and in four days I saw 45 companies who came and pitched us, and the bottom line was that we're going ahead with two of them," Sudow said. "Thirty of them had no clinical relevance. They could not fit into the process. So that's what you've got to think about."

He shared a cautionary tale about two entrepreneurs, one who invented an elegantly designed technology and another who was the CEO of a startup. The latter sold his company's technology to Medtronic three years ago, whereas the former has struggled to gain traction.

"That's the elegant one," Sudow said. "It's still sitting on the shelf because it hasn't been able to find the market."

Another challenge for medtech entrepreneurs today, he said, is the rapidly shifting healthcare climate.

"We don't know where healthcare payments are going," Sudow said. "You just turn on the news at night, is there a healthcare act, is there not a healthcare act? We don't know, so everyone in the healthcare world, in places like the Cleveland Clinic, are in a state of uncertainty."

In this environment, he said, any medtech innovation has to be not only substantially better than what came before it, but substantially cheaper, too.

"If you come to us and say, 'I've got this great new device, it's only going to cost you $5 more per surgery, but, boy, are you going to get some results out of it,' it's not going to go anywhere because it's $5 more per surgery times 200,000 surgeries per year," Sudow said. "That's real money."

Before backing a product, Cleveland Clinic Innovations considers the regulatory, patent, and reimbursement landscape, as well as how long it will take to bring the technology to market, said Marwane Berrada, senior director of product development. The group also looks for opportunities that can scale.

"We definitely play in large markets," Berrada said. "What I mean by that is the market size needs to be at least $250 million--at least."

For example, he said the structural heart market, which is estimated to be worth billions of dollars, is an attractive target. On the other hand, he said Cleveland Clinic Innovations tends to shy away from capital equipment products.

But that's not to say it won't pursue technologies that target smaller markets, such as pediatrics or orphan diseases.

"We're not just looking at how much money we can make," Sudow explained. "We're looking at impact, too."   

Jamie Hartford is director of content for medtech brands in UBM's Advanced Manufacturing Group. Reach her at jamie.hartford@ubm.com.

[Image courtesy of CLEVELAND CLINIC]

Robotics and Social Media Move into the Mainstream at SAGES

Robotics and Social Media Move into the Mainstream at SAGES

As with many surgical meetings over the past couple years, robotic surgery took center stage at The Society of American Gastrointestinal and Endoscopic Surgeons (SAGES) annual meeting.

Over four days, March 22-25, in Houston, the talk at SAGES centered on robotic foregut and hernia repair procedures, telementoring, and the impact of social media on surgical techniques and education.

Although cost remains a "moderate" barrier, robotic surgery has the potential to expand the patient pool for minimally invasive hernia procedures. This, coupled with a lower learning curve, "should drive an increasing shift in procedure volume toward robotics," Canaccord Genuity medical device analyst Jason Mills wrote in a March 24 research note. Mills added that there is a compelling opportunity in hernia procedures, especially ventral hernias, with more than 300,000 ventral hernia procedures performed in the United States each year.

Learn about "Getting Your Product into the Hands of Clinicians, Caregivers, and Patients" at the BIOMEDevice Boston Conference and Expo, May 3-4.

SAGES meetings have highlighted robotic hernia procedures since 2014, noted Brandon Henry, CFA, of RBC Capital Markets, in a March 23 research note. With rapid growth in the market, it's clear robotic surgery is no longer on the fringe. "An informal poll taken during the hernia panel confirmed that the vast majority of surgeons in the room believe that robotics is here to stay for hernia repair," Henry wrote.

SAGES Board of Governors member Brian Jacob, MD, FACS, a robotic and minimally invasive general and bariatric surgeon at Mount Sinai Health System in New York, presented data to support the rising trend in robotics. According to Henry's note, Jacob reported 75,000 robotic hernia procedures in 2016, up from 43,000 in 2015. Jacob said he expects that number to reach 109,000 this year.

In an interview shortly after the conference, Jacob said he attributes this growth to surgeons' use of social media to disseminate their work and educate each other, as well as to Intuitive Surgical's dedication to invest in ongoing postgraduate education.

New Products

Considering its presence and investment in robotic surgery, all eyes were on Intuitive Surgical at SAGES 2017. In a March 24 note, Barclays Capital analyst Matthew Taylor reported continued evidence of Intuitive Surgical momentum in general and hernia surgery. Interest remains high in the launch of da Vinci's single-port Sp Surgical System later this year.

According to a March 26 research note from Stifel analyst Rick Wise, Intuitive Surgical anticipates a 510(k) filing for a specific set of urology-related procedures. It also initiated an IDE study for clinically evaluating trans-oral robotic procedures, which will serve as the basis for a future 510(k) filing. "There is a lot of enthusiasm around Intuitive," said Jacob. "It's a volatile company but it will continue to grow."

Cannacord Genuity's Mills said Medtronic will represent Intuitive Surgical's first major competitor in the robotic field. Medtronic reported during an analyst meeting its robotic surgical system remains on schedule to arrive to the United States and Europe by the beginning of fiscal year 2019.

Teleflex held two events to train surgeons on the latest version of its Percuvance Percutaneous Surgical System, launched in August 2016. The percutaneous laparoscopy system is reportedly more versatile and allows for less invasive procedures.

Surgeons Get Social

Although robotic surgery weaved its way into many SAGES discussions, attendees also got a primer in how to leverage social media to enhance their practice and ultimately improve patient care.

During his keynote presentation, "Social Media and Health Care," Jacob discussed his use of closed Facebook groups for surgeons, particularly the International Hernia Collaboration (IHC). The private network facilitates instant global collaboration, real-time discussion, shared learning, and global mentoring.

Jacob started IHC five years ago with nine members. The group now has 3400 vetted members worldwide. He said that due to the volume of posts and cumulative experience of the group, he and IHC will not only know where the future of hernia repair and its devices are headed, they will likely help determine it.

"Next, we need to figure out how to deliver valuable information back to the various stakeholders in each disease state, with the primary focus being to optimize patient outcomes," he said. Jacob is now building a startup company based on the trends learned from IHC and other groups like it.

During its second meeting, in March 2017, IHC recorded a surgical congress using Facebook Live. Members could watch the event live or later. The surgical congress had about 900 live views and more than 2000 total views. "Gone are the days of measuring a lecture by how packed the room is," Jacob said. "What's in is measuring by view counts."

Heather R. Johnson is a freelance writer based in Oakland, California.

[Image courtesy of IMAGERYMAJESTIC/FREEDIGITALPHOTOS.NET]

How to Think Outside the Checkboxes of Risk Management

How to Think Outside the Checkboxes of Risk Management

All medical device companies have some form of risk management plan, but not all risk management plans are created equal.

"In my opinion, most all of them do a pretty horrific job at it," said Mike Drues, president of Vascular Sciences.

Drues, a regulatory consultant, shared some of his views on current risk management strategy in the industry, and his advice for companies developing a risk management plan, during an interview with Qmed

Mike Drues, president of Vascular Sciences, will discuss "Bridging Users Needs and Design Requirements," at MD&M Minneapolis, November 8-9, 2017. 

"Unfortunately, when it comes to a lot of regulatory and related topics, to a lot of people it's a series of checkboxes on a form," Drues said. "And anybody who takes that approach in this business should absolutely not be in this business."

Grafton, MA-based Vascular Sciences offers consulting and educational services to medical device, pharmaceutical, and biotech companies on a range of topics, including regulatory strategy, and FDA presentation preparation and defense.

Risk management is a constant source of problems in the device industry, Drues said. Of course, the industry has standards in place that are supposed to help companies navigate risk management issues, but Drues said most of these standards come up short.

"After playing this game now myself for 25 years, I've come up with what I think is a better approach," Drues said. That's not to say it's a perfect approach, he added, but it does seem to be catching on.

He advocates doing what makes sense from an engineering and biology perspective - not from a regulatory and quality perspective.

There are aspects of risk that go into a regulatory submission for a de novo, a 510(k) clearance, or even a pre-market approval application, Drues said, that are not even hinted at in the quality or design control.

During his presentation at BIOMEDevice Boston, Drues will talk about the differences between design control risk and regulatory risk.

"Some companies fear the FDA, but they should not fear FDA, they should have a healthy respect for FDA," Drues said. "Who they should fear is the product liability attorneys."

And while President Donald Trump and his nominee for FDA commissioner, Scott Gottlieb, have talked about cutting FDA's regulation by 70% to 80%, Drues said that's the wrong thing to be focusing on.

Instead of asking if there is too much regulation at the agency, the question should be if the regulation that is there make sense, Drues said.

"What does it accomplish in the real world? Because every single day, I run into regulation that makes absolutely no sense," he said.

Amanda Pedersen is Qmed's news editor. Contact her at amanda.pedersen@ubm.com.

Increasing Demand and Patent Applications for Medical Technology

Increasing Demand and Patent Applications for Medical Technology

Medical technology continues to lead other fields in terms of commercialization, as medical technology innovators remained at the top of the European Patent Office's patent protection rankings last year. 

Thomas Prock

The recent publication of the European Patent Office's Annual Report shows that medical technology continues to lead other fields in terms of commercialization, as medical technology innovators remained at the top of the patent protection rankings last year. In 2016, more European patent applications were filed for medical technology than for any other type of technology, including digital communication, biotechnology, and pharmaceuticals. Medical technology has led the pack since 2007, when it first overtook computer technology as the field with most applications filed.

Although the overall number of European patent applications for medical technology declined last year by 2.1 percent to 12,263 from a record 12,531 in 2015, it is unlikely to lose its lead over other technology fields. Digital communication had the second most European patent filings at 10,915 and computer technology had the third most European patent filings at 10,657.

The difference in patent filing levels between different healthcare-related technologies has widened almost every year over the last decade, with medical technology far outpacing biotechnology and pharmaceuticals. Figure 1 shows the trend of European patent applications filed in the healthcare-related technologies from around the globe.

The figure shows an average increase of about 4 percent per year in the number of patent filings relating to medical technology over the past ten years. (The spike in 2010 and subsequent trough are likely a result of a change in the patent rules, which has since been reversed.)

Of the European patent applications filed in 2016 in the medical devices field, 41 percent originated from within Europe (5023 applications). Another 38 per cent (4606) originated in the United States. These data suggest that medical technology activity research and development activity in the United States is more intense than in Europe because applicants tend to protect their inventions in their domestic market before seeking patent protection abroad. The fact that  there were only slightly fewer applications from U.S. organizations than from European ones is telling.

While three of the top ten applicants in the medical devices field are from Europe (Philips in the top position, Sanofi in the sixth slot, and Fresenius at ninth), half of the ten top applicants have their main operations in the United States (Medtronic (second), Johnson & Johnson (third), Boston Scientific (fifth), Procter & Gamble (seventh), and Becton Dickinson (tenth)). The U.S. healthcare market is renowned for its high levels of research and development. Other countries contributing significantly to the number of medical device applications filed in Europe are Japan (responsible for nine percent of filings, with Olympus being the fourth most prolific individual filer), and South Korea (responsible for two percent of all filings with Samsung being the top filer). China has contributed one percent of all European patent filings in the medical devices field.

Although the amount of filings from each of these markets has generally grown over the last 10 years, the order of top filing countries has not shown much change,  other than the United States and Europe, which have jostled for the top spot for some time. The United States lost its top spot from last year, which was made possible by 17 percent growth in the number of filings from 2014 and 2015. In 2016, filing numbers decreased to near 2014 levels.

Within Europe, companies and other applicants from Germany have filed more applications than those from any other country consistently over the last 10 years. Companies from the Netherlands filed the second most number of patents. However, almost 90 percent of Dutch applications came from the top filer, Philips. Switzerland, France, and the United Kingdom round out the top five.

The individual technologies that contribute to the medical technology category, as defined by the EPO (and the World Intellectual Property Organisation), include compounds and dressings, physical therapy apparatus, hardware for preparation and administration of pharmaceuticals, chemical treatment, therapy with electromagnetic waves, dentistry, veterinary medicine, and general diagnosis and surgery. Although the EPO does not publish up-to-date statistics on application levels for each of these individual technology areas, a review of published applications since 2003 suggests that a significant number of filings in this area relate to implants and associated devices and methods for introducing such devices into the human body. Another significant area is methods, apparatus, and chemical treatments for sterilization or disinfection.

Although these statistics represent filings across the whole year, there has been little sign of a slow-down from U.K. applicants looking for European patent protection. It is unlikely that the United Kingdom's departure from the European Union will significantly reduce the number of European patent applications from U.K. applicants.

The European Patent Office (which examines and grants European patents) is not an E.U. institution, but is instead based on a non-E.U. multilateral agreement, known as the European Patent Convention, which includes countries such as Norway, Switzerland, Turkey, and Albania. So, post-Brexit, applicants will still be able to secure protection in the United Kingdom through the European patent system, whether they are based in the United Kingdom or elsewhere.

Thomas Prock, partner at Marks & Clerk in London, is a Chartered (UK), German, and European patent attorney.

[Charts courtesy of THOMAS PROCK. Image courtesy of STUART MILES/FREEDIGITALPHOTOS.NET]