MD+DI Online is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Wide Variations Seen in Cost of Angioplasty Procedures

Wide Variations Seen in Cost of Angioplasty Procedures

A new report confirms wide variations in cost of a widely used medical device procedure not only throughout the nation but in local markets as well.

Arundhati Parmar

A recent report on cost of angioplasties nationwide is enough to understand why payers are so keen to rein in costs of expensive procedures. 

A study by Blue Cross Blue Shield Association and Blue Health Intelligence released last week shows that there are wide variations in how much a percutaneous coronary intervention or angioplasty costs in different areas of the country. Significant differences in cost can be seen even in the same market.

The report entitled "A Study of Cost Variation for Percutaneous Coronary Interventions (Angioplasties) in the U.S.” shows the median cost for an angioplasty was $27,144 in 86 of the 100 largest markets in the U.S. where BCBS claims data was  available.

The procedure can cost as little as $15,494 in Birmingham, Alabama, and as much as $61,231 in Sacramento, California. Even within the same market, variations are noteworthy, the report found. For example, in the Los Angeles-to-Long Beach areaCalifornia, patients could pay any where between $10,749 and $67,937. That represents an eye-popping 532% cost variation.

The analysis is based on medical claims for nonMedicare BCBS members incurred for a period of three years ending March 2014 and paid through June 2014. The report doesn't delve too deeply into the the causes that are driving such variations, but did find that in markets with a high cost of variation a large volume of the procedures are taking place in facilities that are high-cost overall. However lower cost institutions are delivering quality outcomes at a lower price, the report found.

The chart below shows 12 metropolitan statistical areas (MSAs) where cost of percutaneous coronary interventions differs by more than 200%.

"Although some cardiac patients are not in a condition to shop for their procedure, the data show that many whose condition is less urgent have the ability to consider both quality and cost as they choose the best facility for their care," said Dr. Trent Haywood, chief medical officer for BCBSA, in a statement.

Arundhati Parmar is senior editor at MD+DI. Reach her at arundhati.parmar@ubm.com and on Twitter @aparmarbb

To learn more about medical devices and trends in the marketplace, attend the two-day MEDevice San Diego conference, September 1-2 

How to Get that Medtech "Lightbulb Moment"

How to Get that Medtech "Lightbulb Moment"

Medical device inventors, engineers, and executives know the importance of inspiration. Design and innovation experts weigh in on how to encourage ingenuity.

Marie Thibault

How do some medical device companies churn out hit products consistently? Perhaps they've perfected the art (and science!) of cultivating flashes of genius or "lightbulb moments" among their employees. 

At the June 2015 MD&M East Conference in New York City, a panel of experts talked about how to achieve such moments within a medical device organization. Panelists included Tom KraMer, president of Kablooe Design; Jeffrey Reynolds, director of Technology Innovation at Bayer Healthcare; Craig Scherer, senior partner and cofounder at Insight Product Development; and Joseph Gulfo, MD, executive director of the Rothman Institute. 

The speakers agreed that getting the right mix of people together is important. But misunderstanding is a key component too. KraMer explains, 

"The one thing that's the most powerful tool is misunderstanding. . . somebody misunderstands the idea that someone else tried to articulate, and it leads to a thought that nobody else had. Because it's a kernel of an idea on top of a kernel of an idea on top of a kernel of an idea that made somebody think of something that they wouldn't have otherwise thought of. That's really where I've seen most of the innovative ideas occur."

Hear more below. . . you might be surprised who these experts say should not be part of the magic.

Creating Lightbulb Moments at Medical Device Companies 

Enhance your medtech knowledge by attending MEDevice San Diego, September 1–2, 2015, in San Diego.

Marie Thibault is the associate editor at MD+DI. Reach her at marie.thibault@ubm.com and on Twitter @medtechmarie

[Image courtesy of JESADAPHORN/FREEDIGITALPHOTOS.NET]

Intuitive Surgical Makes the Case for Robotic Surgery

Intuitive Surgical Makes the Case for Robotic Surgery

Jamie Hartford

Intuitive Surgical's da Vinci Xi surgical robot received FDA approval in April 2014.
 

One of the downsides of robotic surgery is the high price tag for the equipment. According to a recent article in the Financial Times, Intuitive Surgical’s da Vinci systems range from $1.25 million to $2.3 million—and that doesn’t even include the instruments, which can only be reused up to 10 times.

For hospitals concerned with cutting costs, the price of surgical robots may sound steep when compared with that of tools used for laparoscopic and open surgical procedures. But Intuitive Surgical is building up a stockpile of data to prove otherwise.

On its Web site, the company boasts that more than 8500 peer-reviewed publications covering da Vinci surgery have appeared in clinical journals since 1998, with 1600 last year alone. And this year Intuitive has added a few more. During the company’s Q2 2015 earnings call July 21, Calvin Darling, senior director of finance, shared the results of clinical and economic validation studies that speak to the cost-effectiveness of Intuitive’s products.

In a 1400 patient study conducted by a team at Germany's Saarland University that was “partially supported” by the company, researchers determined that prostatectomies performed with da Vinci systems resulted in fewer positive surgical margins, required fewer intraoperative transfusions, and reduced hospital stays by around six days when compared with open procedures. Improved clinical outcomes achieved through the robotic surgeries also saved around €3000 per patient in the two years following the procedure.

Darling also provided details about study that analyzed 2700 minimally invasive colorectal surgeries. The authors found conversion rates to be lower for rectal resections performed robotically compared with laparoscopic procedures. Hospital stays were also shorter for patients that underwent robotic colon procedures than for those who underwent conventional and laparoscopic procedures.

An analysis of 170,000 minimally invasive general surgeries found that robotic-assisted procedures resulted in lower complication rates for colectomies and shorter hospital stays for patients compared with laparoscopic procedures.

“They concluded “robotic approaches may facilitate safer adoption of minimally invasive approaches in areas where penetrance of conventional laparoscopy is low such as in colorectal surgery,” Darling said, according to a Seeking Alpha transcript.

In May, the company also reported initial outcomes from its Robotic Versus Laparoscopic Resection for Rectal Cancer (ROLARR) study at the American Society of Colon and Rectal Surgeons conference, although those results weren't quite as favorable. 

Richard Newitter of Leerink Partners summarized the findings as follows:

At a high level, the data failed to meet stat[istical] significance (SS) vs. lap[roscopy] in its primary endpoints, but it did show improved lower conversion rates as well as improved outcomes in certain subgroups (males, high BMI)—albeit not SS—that were supportive of robotics. Overall our initial discussion with docs at the conference suggest the data is 'not bad' and still supportive of robotics in rectal resections. There is still much debate over robotics, and the trial did little to address cost-benefit." 

Don't miss the MEDevice San Diego conference and expo, September 1–2, 2015.

Jamie Hartford is MD+DI's editor-in-chief. Reach her at jamie.hartford@ubm.com or on Twitter @MedTechJamie. 

Politicians Want to Fix Combination Product Regs

Politicians Want to Fix Combination Product Regs

Senators have introduced a bill to streamline current FDA regulations for combination products. What does it entail?

Marie Thibault

Legislators this Congressional session have had no shortage of proposals intended to improve medical device innovation. See—among others—the "21st Century Cures Act," the "FDA Device Accountability Act,"  the "Protect Medical Innovation Act," and the "Innovation Act." 

Now, a few senators want to reform the regulation of combination products.  

As the name suggests, combination products consist of a combination of a device, drug, or biological product. In the past, there has been some confusion about how best to shepherd a combination product through the regulatory process. One main issue is the lack of expertise in other product classes. For instance, a company that primarily makes medical devices may not have an expert in drug regulation, which may make a drug-device combination product a daunting challenge. 

The "Combination Product Regulatory Fairness Act of 2015," sponsored by Senators Johnny Isakson (R–GA), Robert Casey (D–PA), and Pat Roberts (R-KS), is intended to allow FDA to use previous safety and effectiveness data for the parts of the product. According to a press release from Isakson's office, "this legislation emphasizes the ability of manufacturers and the FDA to rely on existing safety and efficacy data to prevent a duplicative regulatory process from stalling products’ accessibility to patients."  

The legislation also aims to fix the confusion over which FDA center will review the combination product. According to the release, the bill would designate a lead center to decide which product center (CDER, CBER, or CDRH) the combination product should fit into. Companies would also construct a "Combination Product Review Plan" with FDA, outlining the product's regulatory process, required studies, and risks. 

"The Combination Product Regulatory Fairness Act of 2015 will eliminate the high level of uncertainty in approval standards that currently exists for innovative companies, both small and large, when deciding to invest in a new product," Sen. Isakson said in the release.

Medtech industry group AdvaMed likes the legislation. Stephen Ubl, president and CEO of AdvaMed, said in a press release, “Combination products—whether device/drug, device/biologic or drug/biologic—represent some of the most innovative treatment options for American patients. Unfortunately, FDA’s process for determining which of its centers has primary responsibility for reviewing these products, as well as the actual review itself, often lacks predictability and efficiency, delaying patient access to these cutting-edge advancements."

The bill comes at a time when it seems industry is already getting more clarity on combination products from FDA. Earlier this year, FDA published draft guidance for its final rule on current good manufacturing practice (CGMP) requirements for combination products. Experts were impressed with the level of detail in the draft guidance. In a February 2015 article, Jim Johnson, partner at Hogan Lovells, told MD+DI that the draft is a "step in the right direction as far as prescriptive guidance . . . that I hope to see more and more from the agency."

Enhance your medtech knowledge by attending MEDevice San Diego, September 1–2, 2015, in San Diego.

Marie Thibault is the associate editor at MD+DI. Reach her at marie.thibault@ubm.com and on Twitter @medtechmarie

[Image courtesy of ATIBODYPHOTO/FREEDIGITALPHOTOS.NET]

St. Jude Medical to Pay $3.4 Billion for Thoratec

The deal helps round out St. Jude's menu of heart failure devices and services.

HeartMate II
HeartMate II, as shown on Thoratec's website

Chris Newmarker

St. Jude Medical will spend $3.4 billion to acquire Thoratec, a major LVAS player on the U.S. market.

The deal, which St. Jude and Thoratec announced on Wednesday, is expected to close near the end of the year. Under the agreement, Thoratec's executives get until August 20 to shop around for a better deal.

The merger presents a further boost to St. Jude Medical's "innovation-based growth strategy" to expand and enhance its established presence in heart failure therapies, St. Jude CEO Daniel J. Starks said in a news release.

The company already has its quadripolar cardiac resynchronization therapy and remote monitoring capabilities. The CardioMEMS device, which St. Jude spent $375 million to acquire amid its FDA approval last year, is about the size of a paper clip and uses MEMS technology originally designed to monitor jet engines to remotely monitor a heart failure patient's pulmonary artery pressure.

Thoratec's HeartMate II is touted as the most widely used and extensively studied left ventricular assist device. Earlier this year, the Pleasanton, CA-based company company received FDA approval to enlarge its pivotal trial for its much-anticipated, next-generation HeartMate III.

Also on Wednesday, St. Jude announced it earned $290 million off $1.41 billion in sales for the quarter ended July 4, versus profits of $270 million off $1.45 billion in sales for the same period a year before. Take out the effects of currency fluctuations, and St. Jude's sales would have been up 6%. On the same day, Thoratec announced preliminary unaudited revenue around $128 million to $129 million for the second quarter.

The deal will allow St. Jude to enter new markets worth more than $1 billion, and expected to grow 10% a year, according to the companies. Both companies say they have strong relationships with heart failure physicians and cardiac surgeons, relationships they should be able to leverage for each other's products.

Not everything has been rosy for Thoratec, however. The company had one of the scariest recalls of 2014 when it came to the HeartMate II. The issue actually has nothing to do with the LVAD itself, but rather is related to patients and caregivers who were unable to understand instructions and lacked the training needed to hook up a back-up system controller in cases of device alarm or malfunction. Besides resulting in four deaths, such difficulties also caused lost consciousness or reduced blood flow for five other patients.

There have also been questions about whether Thoratec can hold onto market share.

Refresh your medical device industry knowledge at MEDevice San Diego, September 1-2, 2015.

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

Like what you're reading? Subscribe to our daily e-newsletter.

St. Jude Medical's Heart-to-Heart Transaction

St. Jude Medical's Heart-to-Heart Transaction

The transaction is surely meant to warm the cockles of investors' hearts as St. Jude Medical's announcement Wednesday that it plans to acquire Thoratec is a smart strategic play, say analysts.

On Wednesday, the St. Paul, Minnesota medical device maker said that it intends to buy Pleasanton, California-based Thoratec, which makes left ventricular assist devices for patients with severely compromised heart function, for $3.4 billion, net of cash acquired. LVAD devices help the left ventricle pump blood to the aorta. 

The all-cash acquisition, if it goes through, would help St. Jude Medical broaden its portfolio of heart failure products. Thoratec makes the HeartMate family of products.

" With [Thoratec] in hand, [St. Jude Medical] will now be able to address the end stage heart failure market, providing a full solutions offering for physicians from the less sick NYHA [New York Heart Association] Class III patients addressed by CardioMEMs through pacers, ICDs, CRTDs, and now LVADs," wrote Danielle Antalffy, an analyst with healthcare investment bank Leerink Partners, in a research note.

Antalffy added that Thoratec will also bring its "PHP percutaneous VAD to its interventional cardiology product offering," which received CE Mark earlier this month to support patients who are undergoing a risky percutaneous coronary intervention.

Combining these different products, the new markets provide a more than $1 billion opportunity to St. Jude Medical. 

Thoratec has 30 days - through Aug. 20 - to shop itself to see if there are other potential buyers. However, it wil have to pay a $30 million termination fee to St. Jude Medical if a better price from another buyer emerges in that period. If Thoratec rebuffs St. Jude because of a better offer after the go-shop period concludes, then it has to pay $111 million to the company.

In conjunction with the announcement, Thoratec announced preliminary second-quarter revenue of $128 million to $129 million that beat the expectations of medtech analyst Michael Weinstein with J.P. Morgan who was expecting the LVAD maker to garner only $121 million. The result is even better than what a group of analysts had expected the heart failure treatment company to garner - just $116 million in the second quarter.

What other buyers could show up to trump St. Jude Medical's offer, which represents a 35.4% premium of Thoratec's stock price on July 17?

Antalffy with Leerink Partners believes it might well be Medtronic while other interested parties or "dark horses" could be Abbott or Johnson & Johnson. Medtronic has been on a shopping spree in the past year even after gobbling up Covidien for $50 billion. 

If another buyer gets into the fray, the purchase price may well be seven times Thoratec's estimated 2016 sales, compared with St. Jude Medical's current bid at 6.25 times that number, she estimates.

Either way, it is good news for Thoratec, a company that many feel has been long undervalued. 

[Photo credit: iStockphoto.com user skodonnell]

Bard Hit with Wide-Ranging Warning Letter

Bard has announced that it has received a warning letter citing quality system and medical device reporting violations.

Qmed Staff

Bard PV | Recovery Cone
The Bard PV Recovery Cone was mentioned in the warning letter.

The Los Angeles District office of the FDA has handed Bard a warning letter, it revealed in an SEC document. The document mentioned quality systems and medical device reporting violations that FDA had identified earlier in Form 483 documents related to audits of its facilities in Glens Falls, NY and Tempe, AZ.

FDA determined in the warning letter that the company had been distributing its Recovery Cone Removal system, models RC-15 and FBRC, for removing filter implanted vascular filters without appropriate approval.

The agency will refrain from approving any premarket submission for the company's related Class III devices until the issue is resolved.

The warning letter also states that the company's IVC Denali filter delivery system is misbranded and that the company mistakenly reported complaints.

Furthermore, FDA states that the company failed to follow the proper protocols for complaints at the aforementioned NY and AZ facilities. The agency maintains that both facilities lack adequate instructions for handling complaints related to components and medical devices made by a contract manufacturer.

The agency also states the Bard incorrectly filed complaints related to its filters. One case involving its G2 filter "was filed as a malfunction Medical Device Report [MDR] and should have been filed as a death," the letter states. And a series of malfunctions related to its filters "should have been filed as serious injuries."

While Bard is working to resolve the problems outlined in the warning letter, it stopped short of assuring the agency that it would be satisfied with its response to the warning letter or the date the matters outlined in the warning letter would be resolved. Furthermore, the FDA notice explains that the "company does not at this time believe this will have a material impact on its financial statements."

Finally, the warning letter states that its Glens Falls, NY-facility failed to properly validate its VC filter cleaning protocols for its Simon nitinol, Eclipse, and Denali filters.

Refresh your medical device industry knowledge at MEDevice San Diego, September 1-2, 2015.

Brian Buntz is the editor-in-chief of MPMN and Qmed. Follow him on Twitter at @brian_buntz.

Like what you're reading? Subscribe to our daily e-newsletter.

Oxygen Tank Regulator Recall Is Serious: Here's Why

Various OxyTOTE Portable Oxygen System regulators have been recalled over a potential danger of ignition and explosion.

OxyTOTE

The OxyTOTE portable oxygen system, as shown in a Western/Scott Fetzer Co. brochure

Chris Newmarker

FDA has designated a Western/Scott Fetzer Co. recall of 162,678 various OxyTOTE portable oxygen system regulators as Class I.

The Class I designation, announced Monday, comes because Western/Scott Fetzer Co. (Westlake, OH) has become aware of the possibility of ignition and rupture (explosion) of a compressed gas oxygen cylinder, with FDA listing component design or selection as the cause. Such an event could cause serious injury or death.

Affected devices were made before October 1, 2014. Lot and model numbers are available on FDA's website.

The company mailed an Urgent Medical Device Recall Notice notification to customers on January 31.

Western/Scott Fetzer Co. has touted the portable OxyTOTE's unique design, saying it promotes a safer environment for clinical staff and patients. The design was the result of extensive market research, focus groups, and feedback from potential health professional users, and a protective shroud provides durability, according to a company brochure.

The company notes that it has been making "All-in-One" units for more than a decade, and has 55 years experience designing and manufacturing high pressure and flow regulation products.

Read on to find out 10 of the worst medical device recalls so far this year.

Refresh your medical device industry knowledge at MEDevice San Diego, September 1-2, 2015.

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

Like what you're reading? Subscribe to our daily e-newsletter.

Why Wearables Aren't Living Up to the Hype

Wearables aren't doing what they need to, but there's a way forward, says an entrepreneur in the space.

Julien Penders ECS
Penders also told ESC attendees to embrace regulation to a medtech-level stamp of approval.

Qmed Staff

Today's wearables still provide "limited information and limited accuracy," Julien Penders, co-founder and chief operating officer of pregnancy tracking startup Bloom Technologies (San Francisco), said Tuesday at the Embedded Systems Conference in San Jose.

One recent review of wearable devices found a factor of eight difference between two of them, said Penders, whose talk was covered in Qmed's fellow UBM Canon media outlet EE|Times.

Optical photoplethysmogram sensors on smart watches are highly accurate, but only under rest and moderate motion. Plus, the batteries only last a day. Meanwhile, "bio-impedance sensors use as much as two orders of magnitude less power but generate more artifacts and thus less reliability," Penders said. And good luck when it comes to accurately tracking calories burned.

"As a consequence wearables fail to engage people," Penders said. "They stop using devices in a couple months because they give you information you already know--I know how active I am."

Penders suspects the way forward is to "to address real problems...and put accurate information, medical-grade information in consumers' hands."

Read the full EE|Times story here.

Refresh your medical device industry knowledge at MEDevice San Diego, September 1-2, 2015.

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

Like what you're reading? Subscribe to our daily e-newsletter.