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Does Medtech Have an Appetite for M&A?—Stryker

Does Medtech Have an Appetite for M&A?—Stryker

"We still have significant capacity to do extra deals. So we had a one-notch downgrade from both S&P and Moody's and if you look at S&P, we went from an A plus to A rating. We're committed to maintaining investment grade, but there's obviously a large gap between A rating and the low end of investment grade. Keep in mind that the vast majority of the deals we do are small tuck-in deals. That will continue to be the case for Stryker. That is where we drive the most value and we find great technologies that we can give to our fabulous sales forces to drive.

So you will continue to see--those will be the majority of deals, but we still have significant capacity to do more M&A and I would say all of our businesses have embedded BD [business development] people. We have not told them to slow down at all, so they are continuing to scour the market to look for opportunities that will add value. And we won't hesitate to pull the trigger on new deals if we believe they will be value-creating for Stryker."

Kevin Lobo, Stryker chairman and CEO, according to a Seeking Alpha transcript of the company's first quarter of fiscal year 2016 earnings call.


Continue on to "How Are Medtech's Emerging Markets Faring?"

Get inspired to innovate in medtech at the MD&M East Conference, June 14-16, in New York City. 


Does Medtech Have an Appetite for M&A?—Baxter

Does Medtech Have an Appetite for M&A?—Baxter

Baxter's Commentary on M&A

"We talk about M&A, and obviously M&A is opportunistic, but transformative M&A is not in the cards as we speak right now. So we're looking at strengthening our current core businesses, and by doing it, we're going to go into adjacencies . . .

As currency weakens in some countries in Latin America, offers an opportunity for potential acquisitions there at a reasonable price, with a good return on investment. . . 

We also will be very diligently looking for partnerships and acquisitions to supplement [the Integrated Pharmacy Solutions] business, because we think there's a great deal of opportunity for the company there as an adjacency."

José Almeida, Baxter chairman, president, and CEO, according to a Seeking Alpha transcript of the company's first quarter earnings call


Get inspired to innovate in medtech at the MD&M East Conference, June 14-16, in New York City. 


Does Medtech Have an Appetite for M&A?

Does Medtech Have an Appetite for M&A?

2016 has already been a busy year for mergers and acquisitions. Will the robust M&A activity in the medtech industry continue?

M&A in recent years has dramatically transformed the medtech industry, and executives have continued to sign deals, with several transactions worth hundreds of millions and the Abbott-St. Jude Medical megamerger already announced this year.

Will medtech keep up this brisk purchasing pace? Do fewer potential targets mean fewer future deals? With large medical device companies snapping up other companies, will the need for integration and time to digest those acquisitions delay or prevent other transactions?

Read on for more recent commentary from several medtech executives on their M&A outlook.


Get inspired to innovate in medtech at the MD&M East Conference, June 14-16, in New York City. 


How to Design Patient-Centric Medical Devices

How to Design Patient-Centric Medical Devices

A design expert identifies the major consumer trends that are influencing medical device design and how device makers can embrace patient-centric design.

Yuhgo Yamaguchi, principal design strategist at Continuum, thinks deeply about how patients and caregivers use a health product and how design choices can improve those devices.

MD+DI spoke with Yamaguchi to learn more about the process he uses to design a human-centered medical device. Read on to find out why he believes the context of use matters so much and what he thinks is the best way for a medical device maker to get in the patient-centric design mindset.

This Q&A has been edited slightly for clarity and brevity.

Hear Yamaguchi present the Express Workshop, "Now Trending--Leapfrog Your Competition by Applying Consumer Trends to Device Design" at the MD&M East Conference in New York City, June 14-16. 

MD+DI: Why does a human-centered approach to designing medical products matter?

Yuhgo Yamaguchi: It matters from a couple of perspectives. I'll talk about the functional and emotional connection that people have to devices. With the functional, you have to understand how people use things, in terms of the jobs that they need to get done. When we think about medical devices--the safety, the consistency, the accuracy, making sure that the device works in the manner in which it's supposed to to deliver the results that are expected--these are clear and obvious parts of why you should design in a human-centered way. If people can't achieve those results due to some barrier or due to some design issue or flaw, then that's obviously going to have a clinical impact. From a functional standpoint, understanding how people use things really does matter. This is where engineering and design need to work hand in hand to understand both of those components. When they don't work together, you can run into problems.

It's important to consider human emotions as well when designing medical products, or any product for that matter. If you're a surgeon and the pressure is high--your stress levels are elevated, perhaps you're working in a confined space, maybe you're working in a place that is not your hospital--maybe you're working with Doctors Without Borders in Sub-Saharan Africa. The context of use matters and how that impacts what I'm trying to do as a surgeon, as a nurse, as anyone who is providing care really matters as well. Products and the associated services need to deliver on that in order to be successful. Often it's not necessarily just the clinical outcomes that drive use, but it's the emotional connections that people have in terms of the design language, the form, the weight and how it feels . . . that make people gravitate toward certain devices versus others.

MD+DI: Can you tell me about two or three key consumer trends that are applicable to medical devices?

YY: A trend like quantified self--the idea that people want to track their own health for preventive reasons and just out of curiosity--is a consumer trend in health that we see being applicable to medical devices in the future.

The point of care is changing as well. Things are moving out of centralized locations like hospitals to places where we live and work. That really changes the context of use, and when you change that context of use, you can't necessarily just use the same devices and have the same services. It may even just be the places in between, if we're talking about mobile.

One more [trend] I'll throw out there is the idea that having global views and perspectives matters. I think about companies like Mint that give someone a more comprehensive view of his financial situation by aggregating information from a lot of different sources. Healthcare needs to have those same types of services in order to give people a comprehensive view of their health and wellness. That's a trend that we see as a consumer trend that will impact medical devices in the future.

MD+DI: So, it's just a matter of time until we expect the same things from our healthcare, right?

YY: Yes, there are EHRs and EMRs out there that are providing that level of visibility for hospital systems and we are starting to see some interconnectivity between systems, but could improve and it isn't consumer-facing. That is all content that's really for clinicians to control and share with patients as they permit.

Will that change? People want to own their financial information today, but didn't 30 or 40 years ago. That was something handled by a broker. But now, people own their own financial information and want to know what's going on and make decisions based on it, or at least understand what's going on. I think that same idea will happen in healthcare, where we start to be more curious and we want to have a better, clearer view of our total picture when it comes to health.

MD+DI: Can you offer any real-life examples/observations of the benefits connected medical devices offer? Have you observed any drawbacks?

YY: Jana Care is a company that comes to mind. They do blood glucose and diabetes monitoring, making sure that people in India can monitor their blood glucose. The idea of continuous blood glucose monitoring is not new, but making it digital by having a device that connects to smart phones through the audio plug jack and enables people to more consistently measure their blood sugar and monitor it--that's where we see the connection between clinical benefit as well as, how you make that action a habit for people. It's something that we see as very beneficial, particularly when those devices were not necessarily readily available in certain parts of the world. 

I think the positive side of this movement is that you have that trend line of your own blood glucose measurements. Point measurements can be helpful, but patterns matter. When we have more of that information, we can monitor not only people who have diabetes, but also populations who are pre-diabetic. We can start to see whether or not they should be receiving some treatment or education around diabetes, so that they can avoid being sick in the future. So, having this information at hand and easily accessible and usable is something where we see a benefit from connected medical devices.

You also asked about drawbacks. I think a drawback when you're collecting more data is if you can't turn that data into actionable information, then you've just proliferated data. That's not necessarily beneficial and it actually just worsens the signal-to-noise ratio. That's not helpful to any clinician who is trying to make decisions about care. That's one negative about connected devices.

I read an article a while ago with a provocative title, "Guess what? Doctors don't care about your Fitbit data."  A doctor's perspective might be, "Okay, that's interesting, but what is it doing to your blood sugar levels, what is it doing to your blood panel that I need to understand? If it impacts that, then I want to know about it, but simply giving me the data feed isn't really helping me as a clinician." I think that is one downside to connected medical devices.

MD+DI: What is the best way for medical device designers to adopt a patient-centric approach to design?

YY: This sounds like too simple an answer, but you have to spend time with patients in context. That is something that, in design thinking and innovation, it's one of the foundations of the work that we do. If we don't know what's happening on the ground, then how can we possibly design for it? Again, sounds obvious, but that's really important because if you're simply using responses from people and not understanding the context of use, you'll see a disconnect there. That will be obvious from the very first time you spend time patients, physicians, nurses or any care provider.

People are not necessarily good at articulating what's difficult for them; they're so used to their workflow that it's difficult to imagine how it could change. Looking at the problem through the eyes of someone who thinks about human-centered design for a living really does start to highlight opportunities much faster, and that can be much more effective than simply relying on the responses to surveys and focus group questions. Spending time with people in the context of use is a really important step in the design process.

See where the device is used today and then, the other part that I think is really important is, patient centricity is not just about designing for today, but designing for tomorrow. You have to imagine the ways in which the device might be used in the future. That's why at Continuum we think a lot about not just the work that we do in healthcare, but we think about the work we do in financial services, in hospitality, in retail, and other industries. These are all areas where we can pull design elements to create a better experience that isn't necessarily just healthcare-focused. Sometimes innovation can just be about applying existing tools or frameworks to new contexts of use.

Once we understand the context and we start to think about where the future is headed, then it's also about understanding what the value of those spaces are to people. When someone gets care in a hospital versus a home--those are two places where there are beds that you can lie down in and perhaps get treatment--but I don't think anyone would argue that those two places feel the same. You need to understand that from the patient's perspective in order to design the right experience for each of those places.

It's not just patients. Patient centricity really needs to take into account caregivers as well. These are the people that support patients as they go through chemotherapy or whatever illness they're going through, be it a spouse, a daughter, a son, or a neighbor. They are the unsung heroes of our healthcare system, and understanding how to support them is also something that we should think about as device designers. They're the ones that live with the disease and with the patient every day. 

MD+DI: Some health-related companies with tools or devices attempt to target a consumer audience instead of medical audience in order to avoid stringent regulatory requirements. What advice, if any, do you have for companies unsure if their device is best suited for a consumer audience or medical audience?

YY: Our first bias there is to get concepts in the hands of people first. Period. A company likely will work squarely toward launching a regulated device or a consumer product--but those lines are blurring. Some wearable-makers may start in the consumer space, where they can gather a large dataset from a consumer user base, then make a play for the regulated market.

But ultimately, any medical device manufacturer is going to have to work through FDA requirements in order to get their device exposed to clinical settings. That obviously takes time and effort, but it's critical to get devices in the field as quickly as possible because there is a lot of learning that happens when you put the device in the hands of people that are just things you would not expect. New contexts of use, there are so many things that are out there that were created for one market but ended up being more valuable to a different market. When we think about that potential, getting it in the hands of people is really where you can learn a lot.

Once you see how people use a device, you can start to iterate it or develop it for the particular users that you are thinking about in a clinical setting. Is this for a surgeon who works in a large university hospital and has all of the support needed to do their work, or for EMTs out in the field, or people that work in remote areas? All very different contexts of use even though they're providing healthcare. When you get it into the hands of different types of people, you start to see what design opportunities exist when designing something new.

MD+DI: We've observed on the consumer side that people get tired of wearing some fitness trackers after three to six months. Is there a way medical device designers can increase adherence and make patients stick around?

YY: Gamification is one of the first things that comes to mind when I think about how to keep people engaged with something. The gamification may be for competition with yourself or competition with others, but when you start to connect socially with what you're doing, adherence can go up. It started in consumer, but even in the healthcare space we can see that as beneficial.

Also, sticking with something that really matters when it comes to, "Am I seeing a benefit to me?" I wore a Nike FuelBand for a couple of years and one of the first things that I noticed is that my curiosity kept me going in the beginning. That's the first wave of it. I just had no idea that I was taking this few steps or this many steps or earned that many Fuel points when I ran 3 miles. Once you start to build that trend line, it really helps you see, "Oh, I'm less active in the winter, more active in the spring and summer." You start to see that seasonal pattern. What are the activities that are driving my behavior? That's the first wave.

Once you start to understand that . . . then it's really about competition with yourself. Is this driving me in terms of weight loss, the number of workouts I do a week, motivating me to go out for a 20-minute walk instead of going home and watching television? Will I reach my goals? Those are the things that I think these health and wellness companies are hoping for, that it's actually going to drive some behavior. If you can use it to do that, you can start to see some benefit. However, many people don't, and their curiosity after that first wave fades and they don't really see that device motivating them to do more.

I think you can combine the idea of gamification with, "Is this improving my life or can this improve my life, and can I see those results?" Those are two ways to get people to stick with it. 


Respected Medical Device Tester Is Facing Questions

B. Braun Medical officials are unhappy over what they say is a lack of protocol at the ECRI Institute, which has thousands of members and clients around the world.

Nancy Crotti

Medical device review organization ECRI Institute found a lot to like about the Infusomat Space pump, which it recently compared with a handful of others.

The institute gave the large-volume infusion pump made by B. Braun Medical Inc. good marks for performance, safety, interoperability, and maintenance. For ease of use, or workability, it gave the updated pump two out of five stars, a "fair" rating. In the same document, ECRI gave B. Braun's Outlook 400ES a two-star rating, saying "it can be  frustrating and confusing to use."

B. Braun is unhappy with both ratings, but is more upset with what it considers the 50-year-old ratings organization's testing standards.

"We  have had meetings with ECRI before about their lack of protocol" and how they reach their conclusions, said B. Braun spokesperson Constance Walker. "They do not have experience with workflow; they do not do human factor testing; they do not do usability testing."

Those are tough accusations against a nonprofit medical device tester that boasts more than 5000 members and clients around the world, including hospitals, health systems, public and private payers, U.S. federal and state government agencies, health clinics, patients, policymakers, ministries of health, associations, and accrediting agencies.

For the Infusomat evaluation, ECRI's "experienced team of clinical engineers performed hands-on testing in our onsite testing laboratory with additional input from our problem reporting system, our user experience network, and our accident investigation program, as well as input from clinical reviewers," Michael Argentieri, vice president of market development at the institute, said in an email.

The head of another independent testing organization, Health Human Factors (HHF) in Toronto, questioned whether ECRI was using FDA's latest safety guidance, issued in February. HHF worked with B. Braun on Infusomat for two years, "further refining their product through iterative testing of versions of their pump and leading to the submission to the FDA and eventually onto the market," said Joseph Cafazzo, executive director of HHF.

"We're kind of past the point where safety and things like workflow can be tested at the bench," Cafazzo said. "I think that's sort of reflected (in) the FDA requirements as well. The level of rigor is significantly more than it was even a decade ago."

FDA tells whether a particular device meets design requirements, but does not compare devices' performance, Argentieri said.

"ECRI Institute's testing compares product performance, which is beyond what the FDA does," Argentieri added. "The FDA requires testing that validates if the user interface meets its design objectives."

HHF is part of University Health Network, which Cafazzo said is a subscriber to ECFI. He said that the hospital network values ECRI's alerting systems and has purchased its products for decades.

"I think they need to evolve their testing methods as well if they're going to make claims of user safety in particular, and workflow," Cafazzo added. "From my knowledge of what ECRI does, they don't do field or simulation testing or testing with real users. Really, that's the only way of determining user safety and work safety, or efficiency, for that matter."

In ECRI's defense, Cafazzo said the organization may not be able to do the rigorous kinds of testing expected today. He believes FDA's new human factor testing guidelines set a very high standard.

"It's very time consuming, resource intensive and expensive to do this type of testing," he said. "The way they've been doing their testing for decades, they may not have the resources to do it... I knew that this was going to catch up with the industry. It's catching up with the entire industry, manufacturers, and ECRI, which evaluate safety and workflow."

FDA defines the focus of human factors and usability engineering as "understanding how people interact with technology and studying how user interface design affects the interactions people have with technology."

"Our testing covers pump capabilities, performance, ease of use, and service," the ECRI website says. "But the primary focus is on safety features, and primarily the dose error reduction system (DERS). Smart pumps should have features that support hospitals' existing clinical practice while also encouraging safe practices where possible."

Troubled Theranos' President Is Stepping Down

Sunny Balwani will retire amidst federal probes of the blood-testing Silicon Valley startup's fundraising and operations.

Nancy Crotti

A top executive at Theranos is departing as part of a reorganization of the embattled blood-testing company.

Company president and COO Sunny Balwani, who is in charge of Theranos' Newark, CA, laboratory, is going to retire, according to a company statement. Theranos will also add three members to its board of directors.

CMS has threatened to ban Balwani and Theranos founder and CEO Elizabeth Holmes from the laboratory business if operations at the Newark lab don't improve. The SEC and the U.S. Attorney's Officefor the Northern District of California are working on separate investigations into Theranos, seeking to clarify whether the company deceived investors and regulators, according to the Wall Street Journal. Theranos has said it is cooperating with the investigations.

Balwani worked in the software and technology industries before joining Theranos as an advisor to Holmes in 2009. He will soon turn 51 and plans to officially retire, according to Theranos spokesperson Brooke Buchanan.

"I am deeply grateful for the opportunity to contribute to Theranos' mission to make healthcare accessible through its technology and products," Balwani said in the statement. "I will continue to be the company's biggest advocate and look forward to seeing Theranos' innovations reach the world."

"This was actually planned on the books for over a year now," Buchanan said of the reorganization and Balwani's departure. "He was doing the job of many and now we're separating those positions out."

Theranos is seeking a new chief medical officer to oversee its laboratory operations, most of which are located in Arizona. It also wants to hire a chief operating officer to manage the business end, Buchanan said.

The company has also added three board members whom it said "bring a wealth of scientific, medical and executive leadership" to Theranos.  They include Fabrizio Bonanni, who had senior operating roles at Amgen Inc. and at Baxter International Inc.; William H. Foege, MD, epidemiologist and former director of the U.S. Centers for Disease Control and Prevention; and Richard M. Kovacevich, former chief executive officer of Wells Fargo & Co. Foege and Kovacevich previously served on Theranos' board of directors before joining its board of counselors, an advisory group. Foege also belongs to the company's scientific and medical advisory board.

"We're essentially growing our bench, getting folks with a lot of experience to take the company to another level as we grow in scale," Buchanan said.

The Silicon Valley startup became well-known for its blood-testing technology, which promised to perform multiple diagnostic tests with a single drop of blood. Following previously released CMS reports stating that the company may be putting patients in danger and that its test results are erratic, the company has been on the defensive publicly.

The Challenges of Bringing Big Data to Medtech

Medical devices are producing all this data. So what are we going to do with it? Stephanie Kute at the nonprofit Battelle research institute has some thoughts.

Chris Newmarker

Stephanie Kute Battelle
Stephanie Kute

A medical device engineering veteran of more than 12 years, Stephanie Kute presently sees huge potential when it comes to bringing big data tools to medtech. She's seeking to turn her vision into reality through her present job: manager of advanced analytics and health research at the nonprofit Battelle research institute in Columbus, OH.

(Visit MD&M East, June 14-16 in New York City, and see Kute discuss harnessing data analytics in the design and development of medical devices.)

Kute recently answered some questions from Qmed about where big data is going in healthcare, especially when it comes to medical devices:

Qmed: Where are medical device designers presently when it comes to utilizing big data?

Kute: In this environment these days, there's been a lot of focus to get the data. I think we're getting to the point where our devices are generating data. Electronic health records are collecting data. CMS ... government agencies are collecting a lot of data. We're excited we're getting all the data, but now we're frustrated. ... What do we do with all this data? How do we make sense of it? That's really the crux of all of this: figuring out how to apply the collection of data and really focus on the visualization of the data, the filtering of the data in order to determine what is actionable. And how is the clinician going to act on this? How is the patient or the caregiver going to act on this information that you are now collating and analyzing and distilling so that there can be an effective outcome ... increase the health or their day-to-day lives, decrease costs, and also decrease the amount of brain power that goes into managing your own health.

Qmed: What would be a good example of untapped data?

Kute: The electronic health record--it's a great example of an area where there's a lot of information, but it's all in pockets. ... From the patient standpoint, they may go to a certain physician, they may go to the hospital, they may go to the ER, they may be on a vacation and have to go to the acute care section. There are all these interaction points for the patients. The records for each of those are now electronic, but they're not all talking to each other. And the patient doesn't have the view of all those records integrated.  Even if the patient has a portal on each of those, it's not pulled together in a way that they can make sense out of it it.  And it's not clear for the caregivers and clinicians to immediately see. What is the history, what is the progression of this patient? What all has happened to them? ...

All of this information is digital and could be collated into one place. That's the version of the Blue Button [on], where you have one place where you go to find out everything about yourself or your patient. That's a vision, and that's certainly somewhere we're heading. It's difficult, though, otherwise it would have already been done.

Qmed: Where are you seeing medical devices and data analytics working well together?

Kute: An excellent example of medical devices and data analytics working well together to enhance patient outcomes is our NeuroLife program. We're developing technology to allow a paralyzed person to move their fingers based on the power of their own thoughts. There is an implant that's in the brain which collects signals from the neurons. All this data is being pulled out. It's a huge amount of data. In a tenth of a second we have to translate 30,000 signals into a group of electrical signals that will stimulate muscles in the forearm in order to move the fingers. This is a very tight integration of the analytics algorithm development. ... It's not connected to the electronic health record type of big data, but it's using the same techniques of signal filtering, and analyzing it quickly to make it actionable. ...

Qmed: What other areas have you excited?

Kute: On the wearables side, there are a lot of factors or variables that go into how you manage your diseases or overall health--things like your calendar. Who are you interacting with today? When I go out with my best friend in college, we eat something different than when I'm eating with my kids. ... When I'm traveling, what I eat and how often I exercise is drastically different from when I'm doing my regular day-to-day routine at home. The weather makes a difference. Being able to track and collate this information in a way that from a medical device standpoint may offer input on, 'What are your triggers?'  ... I think there is a lot of opportunity there. It goes from general health to managing chronic conditions as well. A change in routine could have catastrophic effects for a diabetic person. If their blood sugar drops too low, they could die from that. ...

Some of the most exciting work going on involves the behavioral aspects, and designing based on how a person interacts. From a health standpoint, what is their attitude on health? Being able to incorporate that as well as the multiple data streams in order to influence a change there--tying in that behavioral aspect along with the classic engineering disciplines when you're designing a medical device.

Qmed: How important is it for medical device designers to incorporate data collection and an ability for users and caregivers to draw conclusions from it?

Kute: It's a differentiator going forward, really. ... If you're not thinking about the bigger picture of how your device could be connected, how it could be pulling in information, understanding the context of the users, then you're missing out on an opportunity for your device to be a differentiator and a success.

Qmed: What should a medical device creator avoid when going down the big data route?

Kute: One of the most common pitfalls I'm coming across is the fear of failure. In the world of innovation, it's fail fast. But I think there's still some hesitation on, 'How are we going to do this? I'm not sure how this is going to work.' My recommendation is just start getting it out there, getting it in front of your users, understanding how it could be a benefit to them. Let's just just start moving down this mHealth path than just talking about it. We've been talking a long time about the challenges of being connected, and we need to start doing it and overcoming the actual challenges--versus the fear of what might be challenging.

(Visit MD&M East, June 14-16 in New York City, and see Kute discuss harnessing data analytics in the design and development of medical devices.)

Chris Newmarker is senior editor of Qmed and MPMN. Follow him on Twitter at @newmarker.

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Siemens Healthineers: Here's What You Thought of the Name

Let's just say that Qmed readers were, um, less than enthusiastic.

Qmed Staff

Siemens Healthineers Survey
Survey conducted over SurveyMonkey

Bernd Montag, CEO of Siemens's healthcare business, thought the new name reflected engineering and scientific excellence. But for the more than 1200 Qmed readers that answered a recent survey, the new Siemen Healthineers brand can be summed up in one word: "dumb."

More than three-fourths of respondents to the recent survey chose "dumb" as the best adjective. Less than a fourth thought it was "meh" or "brilliant." 

Let's just say that Montag might want to hold off composing a song for a company Healthineer Club. 

Questionable name aside, it's been a good year so far for Siemens' healthcare business, which has been operating as a separately managed company within a company at Siemens. Revenue growth is being fueled by strong sales in the diagnostic imaging business. For the second quarter ended March 31, the healthcare business earned 555 million euros off 3.25 billion euros in sales, up from 536 million euros in profit off 3.23 billion euros in sales during the same quarter a year ago.

Don't miss the MD&M Minneapolis conference and expo, September 21-22, 2016.

Chris Newmarker is senior editor of Qmed and MPMN. Follow him on Twitter at @newmarker.

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How Minnesota Plans to Dominate the Medtech Universe

Access to a $1 billion U.S. economic development fund helps.

Nancy Crotti

Minneapolis (Image by Bobak Ha'Eri - Own work, CC BY 3.0)

A Minnesota business-booster group has launched a federally supported initiative to bolster the state's medtech industry.

The U.S. Economic Development Administration in 2015 designated the Minnesota Medical Manufacturing Partnership as one of 12 groups nationwide to receive a chunk of $1 billion in economic development funds from 11 federal agencies. The initial 12 groups were designated in 2014.

"The federal designation affirmed our leadership in medical technology," said Michael Langley, CEO of Greater MSP. "The Minnesota Medical Manufacturing Partnership will further distinguish our region as the global leader in this sector."

The partnership, sponsored by the Twin Cities business group Greater MSP, is apparently concerned about Minnesota's medtech leadership status. It cited a growing global market as one reason for the U.S. and Minnesota losing "the clear competitive edge in the medical device industry."

California ranks first in medtech employment with 63,782 workers, according to the Minnesota Department of Employment and Economic Development. Minnesota ranks second with 28,731 workers and Massachusetts comes in seventh with 14,870.The Twin Cities are arguably not as "sexy" as the other two major U.S. medical device hubs in California or Massachusetts. But what Minneapolis-St. Paul lacks in pizzazz, it makes up for in a dense cluster of medtech companies, and all of the talent and supply manufacturers that go with it.

The amount of federal money Minnesota will receive will vary by project, according to Gita Sitaramiah, a GSP spokesperson.

Before it won the federal funding boost, Minnesota relied on its own resources to compete with the medtech industries in California and Massachusetts. DEED has a matching grant program, the Minnesota Job Skills Partnership, which enables companies to engage four-year and two-year state colleges to train workers for specific needs.

The group said it will use the money to to diversify and cultivate its future workforce, broaden its in-state supplier network, and establish education and mentoring programs. It also wants to increase interaction, collaboration, and investment among the public, private and academic sectors.

Among its other goals to remedy the situation:

  • Increase affordable housing near the existing medtech operations;
  • Create quality jobs in low-income neighborhoods;
  • Redevelop brownfields for medical innovation and manufacturing;
  • More state and industry money to promote medtech trade;
  • A study to identify financing issues, plus investment tax credits and guaranteed loan programs.

The Greater MSP region boasts the second lowest operating costs among the top 15 life science markets in the U.S. It should continue to improve their resource efficiency as well as reduce the environmental and social footprint of manufacturing and supply chain activities, according to a statement from the Minnesota organization.

Each of the designees has a dedicated federal liaison to help it navigate available federal resources and appear on a government website for private investors looking for information on communities' competitive attributes, according to a U.S. Economic Development Administration statement about the Investing in Manufacturing Communities Partnership Program.

Learn more about cutting-edge medical devices at MD&M East, June 14-15, 2016 in New York City.

Nancy Crotti is a contributor to Qmed and MPMN.

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Why B. Braun Is in a Spat Over Infusion Pump Ratings

The nonprofit medtech research group ECRI Institute dubbed a B. Braun infusion pump "fair," prompting the company to question ECRI's testing methods.

Nancy Crotti

B Braun Infusomat Space Infusion System
B. Braun's Infusomat Space Infusion System, as shown on the company's website. 

B. Braun Medical has accused the ECRI Institute of "lax protocol test methods" after the healthcare research organization gave one of Braun's infusion pumps a "fair" rating.

ECRI gave B. Braun's second-generation Infusomat Space Pump a "good" rating in four out of five categories --safety, interoperability, performance, and maintenance --and "fair" in the workflow category, according to a statement from the company. However, the institute assigned the pump only a "fair" rating overall, igniting Braun's ire.

"ECRI is a well-respected institution and we recognize the important role it plays in shaping the opinion of medical device purchasers," said company spokesman Rob Albert in the statement. "That's why it's troubling that the institute doesn't have a scientific, protocol-driven methodology for evaluating infusion pumps."

ECRI, a not-for-profit consulting group, said in a statement that it has several safety concerns with the pump's error-reduction system, or DERS. "Some of the pump's DERS indications/alerts are unclear, and the pump's workflow is also limited by its small screen," the group said.

A Braun spokesperson said the company is a member of the institute, and that it has disagreed with previous designations.

Braun said it had used "rigorous human-factors testing" to help redesign Infusomat, a large-volume pump. Braun also said it found the rating confusing because it redesigned the pump to make its operation more intuitive. The company worked with nonprofit Canadian consulting group Healthcare Human Factors and put the device through 100 hours of usability testing with 100 practicing RNs and anesthesiologists.

"ECRI does not have adequate experience or scientific research to support its evaluation of infusion pump workflow," Albert added. "Opinion is not science." Healthcare Human Factors, the consulting group B. Braun paid to help test the pump, also piled on, calling ECRI's track record for assessing infusion pumps "concerning."

"It's difficult, if not impossible, to assess a product on these merits without a controlled usability test using actual intended clinical users," said Joseph Cafazzo, PhD, executive director of medical engineering and Healthcare Human Factors at the University of Toronto. 

Over the past six years, two competing pumps made by Baxter and Hospira received "acceptable" or "recommended" ratings from ECRI and later faced FDA-imposed import bans, recalls, discontinuation, or destruction affecting a total of more than 200,000 individual devices, B. Braun noted.

A rating of "fair" can hamper sales, added Braun spokesperson Constance Walker.

"We have competitors in the market and we're all trying to influence the purchasing decisions of healthcare organizations, and an ECRI rating can be used in sales discussions," Walker said.

Braun was recently in the news for a Class I recall of more than 1000 of its Dialog+ hemodialysis systems due to cracks in conductivity sensors. No injuries were reported.

Infusion pumps have been among the most recall-plagued medical devices in the past decade, leading to more rigorous usability testing requirements for medical devices writ large.

Infusomat was among the first infusion pumps to be cleared by FDA by applying a new human factors and usability engineering process, according to Braun. 

Learn more about cutting-edge medical devices at MD&M East, June 14-15, 2016 in New York City.

Nancy Crotti is a contributor to Qmed and MPMN.

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