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Use Data Analytics to Maximize ROI

Use Data Analytics to Maximize ROI

In fiscal year 2011, the top 10 medical device companies invested a combined $20 billion in R&D, a billion-dollar boost from 2010.1 As evidenced by this impressive spend, innovation is increasingly being made a priority, despite a sluggish economy and more limited resources. Although their investments are taking many forms—via improving existing products, developing powerful new technologies, and acquiring companies—a cornerstone of each R&D program is the careful gathering and analysis of extraordinary amounts of data to ensure that commercial strategies are sound and will provide the desired return on investment.

Analytic techniques map the patient journey through the care continuum – from internal medicine to cardiologist to interventional cardiologist to cardiac surgeon.
Similarly, physicians have long relied on gathering and analyzing data to inform their diagnostic and treatment approaches, from clinical trial results, to CT and MRI technologies, and more recently, data analytics geared toward overall practice improvement.
 
Advanced analytics also empower device sales and marketing teams to make more strategic, targeted, and data-driven decisions. In a do-more-with-less era, medical device brand teams should ask themselves this question: Can applying the same scientific rigor to sales and marketing that we do to R&D point us toward the most valuable and receptive customers and unlock the potential of our innovations?”The answer is yes.

Leveraging Data in the Device World

Compared to pharmaceutical manufacturers, medical device companies face unique data opportunities and challenges. To their advantage, medical device sales representatives are often in the trenches with physicians as they are using the company’s technologies. These face-to-face interactions, combined with in-depth field knowledge gleaned from these experiences, are valuable. Further, regulations require most device makers to keep databases on the physicians who are using their products. The interactions, field knowledge, and database are fertile ground from a data analytics perspective. Analytical tools compare physician behavior and outcomes to the behavior of a larger customer universe to reveal untapped opportunities that are otherwise invisible to the field.
 
More challenging to the device industry can be the process of obtaining accurate product usage data. Unless it’s the only one of its kind on the market, your product may be anonymously lumped among several or even hundreds of competitive products without unique procedure codes. Also, there are often limitations to the level of market intelligence that even the most seasoned and savvy sales representative can gather. For example, many product managers may lack a holistic understanding of the interconnected decisions and referral pathways of their customers. They may have a great deal of account-level knowledge but not physician-level knowledge, whether that physician is a surgeon or another provider who influences or refers patients to a surgeon. For example, in your particular device space, who are the primary care physicians who refer patients to specialists such as neurologists or cardiologists? Identifying all the relationship interactions is proving to be strategically significant,
 
As such, a growing number of organizations are enhancing their sales representative knowledge with tools providing analytic insights that can shed new light on old challenges. The delivery of data-driven metrics may reduce the risk of over-reliance on field knowledge alone by illuminating new strategies and supporting more informed decision making

Delve Into the Data: Gain an Edge and Grow Sales

Healthcare data analytics offer increasingly more valuable tools focused on gaining new customer insights and driving greater sales growth. The following are four key areas where data insights can help device marketers uncover, measure, and better understand complex physician- and institution-level behaviors, and identify opportunities for customer education.
 
Identifying Patients for Medically Appropriate Implantation. Some patients on drug therapies may benefit from alternative treatments. For example, hyaluronan injections or viscosupplementation is sometimes used for pain in patients with osteoarthritis of the knee, delaying surgery. This unintentional “warehousing” of patients presents an opportunity to educate physicians on medically appropriate alternatives. New techniques leverage data to identify these patient populations and the associated physician or institutions that may benefit most from educational initiatives, particularly those treating patients who may have a narrow window for device implantation.
 
For example, a manufacturer of transcatheter heart valves can use analytic techniques to receive a map of the complete patient journey through the care continuum—from internal medicine to cardiologist to interventional cardiologist to cardiac surgeon. This map reveals important yet unknown relationships that play a role in procedure- and product-related decisions along the way. Actionable insights can then be leveraged to develop highly targeted educational programs, dinner meetings, and expert advisory boards with both speakers and participants who have established and influential relationships.
 
Merging Disparate Data. Merging disparate data, including hospital data and anonymous patient claims data often reveals key insights that can affect sales efforts and resources by providing a more complete picture of the practice activity for physicians who practice both in the office and hospital. For example, a device company may have procedure information that isn’t tied to specific physicians or patients. Advanced analytics can identify this data and marry it with internal files and raw claims-level data to paint a more rich mosaic of the practice activity universe.
 
Leveraging Diagnosis and Procedure Data. Analyzing diagnosis and procedure data can reveal market-expansion opportunities or overlooked customers who were previously hidden when using field analysis or internal systems alone. Often companies may know a great deal about who is providing treatment, but have much less visibility in terms of who is diagnosing a condition but not treating with their device.

The New ROI: Return on Innovation

Across the life sciences industry today, innovation is considered to be the most crucial factor to remaining competitive and achieving long-term success. The significant spend many device companies are devoting to R&D, despite a precarious economic and political climate, highlights the importance being placed on transforming the marketplace and providing patients with the most cutting-edge, effective, and medically appropriate technologies available.
 
It may not make sense to significantly invest in a breakthrough product and not make the same effort to determine the right physicians and patients to be offered this innovative device. It does make sense to expect sales and marketing strategies aimed at maximizing the potential of unique device breakthroughs to adopt the same game-changing approach to analytics—go beyond field knowledge and internal system data alone, and evolve to include sophisticated data-driven insights. In an ever-changing healthcare environment where fewer resources must be stretched further, data analytics can uncover areas for greater efficiency, opportunity and a new kind of ROI: return on innovation.

Reference

1. “Top 10 Medical Device R&D Budgets,” Fierce Medical Devices, April 19, 2012.
 
Alan G. Reicheg is chief commercial officer at Qforma (Princeton, NJ). He is a 21-year life sciences industry veteran and has held leadership positions in marketing and managed care. At Qforma, he oversees all aspects of commercial operations including partnership alliances. Al received his BA from Rutgers University and is a member of the Coalition for Healthcare Communication. He recently wrote "Transforming Business: The Silver Lining of the Sunshine Act" for MD+DI. Reach him at [email protected]
 

Why Total Cost of Ownership Matters When Working with Offshore CMOs

At the MedTech Supplier Partnerships Conference held August 22-23 in Boston, Bonifacio plans on speaking on the subject of using contract manufacturing organizations (CMOs) to gain market entry in new territories and recent trends related to the offshore production in the medical device arena.

One of the most important of those trends is the redefinition of China for medtech companies. Not long ago, the country represented a low-cost manufacturing destination. “But that ship has mostly sailed,” Bonifacio says. “What many organizations are doing today is they are setting up shop in China so they can design, market, and sell their product right there.” As a result of this shift, the dynamic has become considerably different from the export relationships medtech OEMs previously had with their contract manufacturers in China.

For one thing, Chinese labor is not as inexpensive as it once was. “When you look at it in relative terms, despite the fact that they have had annual 10% wage increases, it is still at a fraction of what we would pay in North America,” Bonifacio says. “China may still be widely referred to as a 'LCC,' a low-cost country, but that advantage is evaporating.”

Device companies should look at the total-cost of ownership of their offshoring activities to a country like China. “When you start to do those calculations and you factor in things like: the travel, the freight, the 8 p.m. or 11 p.m. conference calls, the possibility of setting up a small quality office in that country, the extra inventory you are going to carry, whether it be here or there—and the time your products may be on the water of four to five weeks,” Bonifacio says. “When you start to put all of those pieces together, it doesn’t really make a whole lot of sense anymore from a strictly cost standpoint.”

There are, of course, exceptions. “Two instances where it would make sense for medtech companies are; in situations where the labor costs of their device are extremely high (60% or higher), or the product has been commoditized to a point that you have to squeeze every penny out of it,” he adds. Even in this last case the total cost of ownership needs to examined. 

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

Azco Releases VIP-100 Pouch Dispenser

A company that develops machines for feeding and cutting applications has released its next-generation pouch dispenser. The VIP-100 can process continuous strips of pouches at up to 300 cycles per minute. It can dispense both desiccant and oxygen absorbers into bottles with capsules as well as into medical bags with moisture sensitive components such as surgical tools and medical devices. The unit features a color, touch screen display and can self thread material and automatically adjust the height of the discharge. The fiber optic register system can run a new pouch simply with the touch of a button.The unique cantilever design of the SUR-PAK VIP-100 allows for easy cleaning and servicing. The dual tracker drive section automatically opens for easy access. Changing pouch sizes can be accomplished within 90 seconds and without tools. Changeover of the knife cartridge can be accomplished in one minute.

Fairfield, NJ
 

Interface Catheter Solutions Offers Upgraded Balloon Inspection System

A provider of outsourced solutions for balloon and catheter manufacturing for the medical industry has upgrade its automated visual/dimensional balloon inspection system product to significantly reduce cycle times. Results of Gage R&R (repeatability and reproducibility) analysis show that the system is accurate, consistent and reliable for balloon inspection processes. The Auto-i 360 significantly reduces inspector-to-inspector balloon inspection variability and is the only system that provides both visual/flaw and dimensional measurements of medical balloons in a single operation. Gage R&R data shows significant increases in consistency, accountability, and quality in the inspection process. Inspection includes classification and size of defects with pass/fail analysis based on user-selected criteria. The balloon inspection system operates with a sophisticated vision system and analysis program with an intuitive user interface. The Interface inspection system provides immediate detailed visual and data reporting used in both quality manufacturing inspection and research and development.

Laguna Nigel, CA
 

TRUMPower Offers New Line of Medical Grade PC Power Supplies

A provider of medical grade ac/dc switching power supplies and dc/dc converters to medical OEMs offers a new line of 300-700 W medical grade ATX PC power supplies. The power supplies are approved to the latest 3rd edition of UL 60601-1, IEC 60601-1, and EN 60601-1 medical standards, including ANSI/AAMI ES 60601-1: 2005, CAN/CSA-C22.2 No. 60601-1:08, EN 60601-1:2006, IEC 60601-1:2005 standards and risk management. The lineup includes the 300W, 400W, 500W, 600W, and 700W models.

Santa Clara, CA
 

This Week in Devices [8/10/2012] – Hospitals Should be More Like The Cheesecake Factory; Cyber Therapy; DIY Cyborgs; Implantable Defibrillators; Jon Stewart Takes on Former Vante CFO

This Week in Devices [8/10/2012] – Hospitals Should be More Like The Cheesecake Factory; Cyber Therapy; DIY Cyborgs; Implantable Defibrillators; Jon Stewart Takes on Former Vante CFO

The Cheesecake Factory of Hospitals?

  • Atul Gawande of The New Yorker takes a look at the workings of successful restaurant chain The Cheesecake Factory and wonders if a similar structure couldn't be applied to hospitals to improve healthcare.
    Source: The New Yorker

The Rise of Cyber Therapy

  • An examination of the growing prevalence of therapeutic apps and games that many say is making healthcare more accessible and is transforming the nature of medical therapy.
    Source: io9

DIY Cyborgs

  • Would you give yourself your own medical implant? A fringe group of “biohackers” is already doing it – taking on the pain all in the name of science, human enhancement, and fun!
    Source: MD+DI (via The Verge)

Implantable Defibrillators Reduce Cardiac Arrests

  • According to research in Circulation, an American Heart Association journal, implantable cardioverter defibrillators account for one-third of the decrease in cardiac arrests caused by ventricular fibrillation in North-Holland.
    Source: Medical News Today

Daily Show Takes on Former Vante CFO

Former Vante CFO Adam Smith just can't catch a break. His infamous Chik-fil-a video has made him fodder for Jon Stewart and The Daily Show.
 
 
 
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Exactly What Medical Device Innovation Are You Talking About?

Exactly What Medical Device Innovation Are You Talking About?

In the debate on medical device regulation, there has been a great deal written and said—on all sides—about whether the current 510(k) program stifles medical device innovation. It isn’t clear to me, however, what exactly is being discussed. The administrative premarket notification [510(k)] program is not used to regulate what the public generally considers to be innovative medical devices; that is the purpose of the premarket approval (PMA) program. So why is the 510(k) program so often mentioned in this context?

Let us first define “innovation.” It is not a loosely-defined term and its meaning is not discretionary; it is quite specific and has been so in science, technology, and business for over the past half century (see E. Rogers, 1962-20031; E. Mansfield, 19682; and many others). A rational public debate on policy requires precise language. Innovation is not synonymous with invention! Innovation is the dissemination (often by commercialization) of an invention after it has been developed into a viable product, process, or service. Innovation presupposes invention, but is not invention.

The U.S. regulatory process for innovative medical devices can be depicted, in a simplified form, by modifying the Henderson-Clark model of product innovation from 1990 (see Figure 1). In the case of U.S. regulation of medical device marketing, regulation is strongly dependent on two dimensions of innovation: technology and intended use. 

Figure 1: Medical device innovation and U.S. regulation. Image copyright G.M. Samaras.
  • Medical devices that use essentially existing medical technology for a new intended use, such as ophthalmic surgical lasers, are therapeutic innovations. They have a high level of uncertainty regarding establishing reasonable safety and effectiveness. They are regulated by the PMA program.
  • Medical devices that are clones of existing, legally marketed medical devices are marginal innovations. An example of such a product would be a new transcutaneous electrical nerve stimulator that is substantially equivalent to another product available on the U.S. market. Such products have been dubbed “me, too” devices and offer very little that is new. If they have essentially the same technological characteristics as their claimed predicate3, they have a very low level of uncertainty regarding how to establish reasonable safety and effectiveness. They are regulated by the 510(k) program.
  • Medical devices that use new technology (for instance, a change in materials, energy source, hardware, software, and/or human factors design, etc.4) to accomplish the same medical purpose are technological innovations. When they have low uncertainty regarding establishing reasonable safety and effectiveness, they also are regulated by the 510(k) program. Otherwise, they are automatically reclassified and regulated by the PMA program.

So, what about the argument that the 510(k) program stifles innovation? We are excluding from this discussion innovative business models (such as medical devices that are part product and part service), innovative marketing (such as direct sales to patients), and innovative manufacturing (such as molding rather than machining) of medical devices. Also, we are not talking about the PMA program, which requires FDA-supervised clinical trials, extensive data analyses by FDA biostatisticians, and detailed audits of design and manufacturing processes. That process takes considerable time, but we are obliged to balance that against practitioners and patients getting devices that are reasonably safe and effective. In return, federal preemption shields the manufacturer. I have been involved on both sides and, yes, it can be ponderous, but that is not the 510(k) program.

When you discuss innovation in the context of the 510(k) program, you really are referring to technological innovations. Marginal innovations are technically considered “innovations” in academic circles, but not by the public. Technological innovation is like going from the old clunky portable phones to today’s sleek new cell phones (you can call and talk on both); it is typically an incremental process, which may decrease cost, increase reliability, and so forth. Marginal innovation is making a clone; it is not a significant improvement in any real sense.

For the 510(k) program, the issue boils down to figuring out how to do the testing necessary to support your claim that there is low or very low uncertainty about establishing reasonable safety and effectiveness for the already established intended use. This often means recognizing what consensus standards and engineering best practices apply to your particular device. Some are “horizontal” (such as electrical safety, biocompatibility, software development, and human factors issues) and some are “vertical” (they only apply to a specific type of device). In other cases, it means recognizing that there exist particular special controls (“guidance documents”); all special controls are vertical standards. In rare cases, it also means doing a pivotal clinical trial5, because bench testing and animal testing are insufficient.

To avoid wasting both your time and the regulator’s time, you must fully understand both the applicable consensus standards and any special controls and then do the required testing correctly and completely. You do not need to figure this out on your own; you can have a third party testing laboratory do the testing for you or you can have an expert consultant help you do the testing. If you do that completely and correctly from the outset, and present it clearly in your submission, it has been my personal experience that you rarely encounter delays. If you can’t or won’t, there is a very good chance you actually will get “stifled.” Some may say something like: “well, that is not my experience.” But before making that judgment, make sure you are not comparing apples and oranges. If it is complete and correct and it is clearly presented, there is no justification for additional information (AI); if not, expect an AI letter. 

References

  1. Rogers E.M. Diffusion of Innovation. 5th ed., Free Press. NY. 2003
  2. Mansfield E. Industrial Research and Technological Innovation: An Econometric Analysis. Norton. NY. 1968
  3. 21 CFR 807.100(b)(2)(i)
  4. 21 CFR 807.100(b)(2)(ii)(A)
  5. Draft Guidance for Industry, Clinical Investigators, and Food and Drug Administration Staff - Design Considerations for Pivotal Clinical Investigations for Medical Devices. August 15, 2011.

G.M. Samaras is a biomedical scientist and engineer in private practice (Pueblo, CO). Trained as an electrical engineer, he has doctorates in physiology and industrial engineering; he is a licensed professional engineer, board-certified human factors engineer, and an ASQ-certified quality engineer. He has a number of biomedical patents and publications in physiology and engineering (hardware, software, human factors, and quality). He has worked at the FDA/CDRH as a reviewer and manager, he was a medical school and engineering graduate school professor, and founded an engineering firm that he ran for a decade.

How Össur Made the Most of Its Olympic Opportunity

How Össur Made the Most of Its Olympic Opportunity

Publicity-wise, 2012 has been a stellar year for Össur. This spring, the orthopedics maker’s bionic Rheo Knee made its Hollywood debut along with Greg Gadson, a wounded veteran who starred in the Universal Studios movie Battleship. This month, the world watched as South African sprinter Oscar Pistorius made history as the first double amputee to compete in the Olympics, running the 400 m and 400 m relay races on a pair of Össur’s Flex-Foot Cheetah prosthetic legs.

Using a pair of Össur's Flex-Foot Cheetah prosthetics, Pistorius competed in the 400 m and 400 m relay races at this year's Olympic games in London. Image courtesy of ÖSSUR.

These aren’t examples of savvy product placement. “Nobody buys our products unless they have to,” CEO Jon Sigurdsson points out. But Össur has managed to leverage these and other opportunities by maintaining relationships with high-profile users of its products.

One way the company does that is through Team Össur, a group of elite international athletes who use Össur prosthetics. Team members include Pistorius; a swimmer, a cyclist, and track and field athletes that have competed in the Paralympics; and the first amputee to complete the grueling Hawaii Ironman triathlon.

“In the beginning, we found them, but they basically find us now,” Sigurdsson says. “If they are very good and dedicated, we’re very happy to add them to the team.”

“We cannot use this
to sell more products
in the short term,
but it is very good
for the company
in the long term.”

Össur CEO Jon Sigurdsson

Some Team Össur athletes are paid a “nominal” amount, he says, but Össur mostly provides them with custom-made products. The company’s marketers ensure team members are well-versed on the products they use, so they can speak as experts about them.

“We don’t get too commercial because it’s a very slippery slope,” Sigurdsson says. “We tend to keep it very clinical, very technical.”

For its part, the company gets to share in the publicity heaped on its athletes and other prominent users of its products, though that hasn’t translated into a spike in sales.

“It’s a medical device; it’s very far away from consumers,” Sigurdsson says. “It’s more or less a reimbursed product that is distributed by healthcare professionals and doctors.”

He admits that the attention might influence consumers in countries where medical devices must be purchased out of pocket but says it has mostly served to boost the company’s image. “We cannot use this to sell more products in the short term, but it is very good for the company in the long term,” Sigurdsson says.

Össur reaps other benefits from its partnerships, too. Like Ferrari with Formula 1 racecar drivers, the company uses the athletes to test its products to the limit, Sigurdsson says. The partnerships also help build morale among Össur’s employees. Gadson, who does not have a commercial affiliation with Össur, has given inspirational lectures within the company, and Sigurdsson says employees reveled in watching Pistorius compete in the Olympics.

“That may be, at the end of the day, the most reward,” he says. 

Gadson stars in Battleship using Össur's Rheo Knee.



 

—Jamie Hartford is the associate editor of MD+DI. Follow her on Twitter @readMED.

How the Supply Chain Can Help the Medtech Industry Prepare for Healthcare Reform

In general terms, the new healthcare paradigm will favor the quality of healthcare delivery over the quantity of it. The United States will be forced to take costs out of the system overall. “We have a set pool of money to spend on healthcare and we have to learn to deal with it,” says Karen Conway, executive director, industry relations at GHX (Louisville, CO), who will speak on the topic in an upcoming event sponsored by MD+DI titled “Medtech Supplier Partnerships.”

Comparing healthcare spending to a balloon, Conway says that past efforts to curb costs may have squeezed certain areas, but increased them in others. But now, the balloon has no choice but to deflate. “We must take costs out of the system,” she says.

Karen Conway
  Karen Conway
“The same thing has to happen with risk,” Conway adds. “You hear a lot of talk about payers shifting risks to providers of care — the delivery systems. I would argue that we have to look at how to take risk out of the system as a whole and I think [medical device companies] can play a very big role in that as well.”

In light of these changes, Conway recommends that medical device companies reassess their supply chain. “The supply chain can play a really important role in achieving the objectives of healthcare reform,” she says. When medtech companies consider the supply chain, their thoughts typically go upstream—to their suppliers. It’s worth taking a broader view, however, which includes understanding what is happening downstream—with your customers.

Complicating matters is the vendor–customer dynamic inherent in the relationship between, say, hospitals and industries serving them; there is often a lack of trust between them. An adversarial relationship between the two parties can crop up based on price negotiations. “There will always be a natural tension between buying and selling organizations, but there are so many other opportunities to focus on problems that impact both hospitals and device companies and if the two parties worked together, they could fix them.”

In light of this, Conway recommends that the medical device professionals keep abreast of the issues hospitals across are facing. “Your customer’s world is turning on its head,” she says. “Right now, executives at a hospital make money by filling beds. In the next few years, everything is going to change. They will make money by keeping people out of the hospital. That is a dramatic shift.

It may be a truism, but vendors that best understand the needs of their customers will be the most successful. For device makers, this involves helping your customers lower costs, become more efficient, improve visibility, and so forth. Hospitals could return the favor by sharing more demand data to device companies. “If you are getting more data than you traditionally haven’t gotten from your customer, if you can get more utilization data, how can that drive down your inventory costs?” Conway asks. “How can that increase your inventory turns? What can that do to help you lower costs in the face of higher costs such as the medical device tax?” 

Offsetting the Cost of the Device Tax

“The amount of money that the medical device tax is costing you may be comparable to the amount of money that you could save if you had more of a focus on demand planning, and if you are able to reduce your SG&A costs or the cost to serve, your healthcare system customers, if you are able to better control your inventory costs. increase your inventory turns, and reduce the amount of waste from expired product in the field,” she says.

“I am not saying people shouldn’t be looking at certain aspects of healthcare reform that they might want to tweak or improve, but the bottom line is, we have to change how healthcare is delivered in this country,” she says. “I would much rather be part of the preparation process than wait for all heck to break out with my customers and then scramble to respond. Because it is the ones who are going to work with the customers to adjust, to adapt to this new world who are going to succeed.”

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