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Articles from 2012 In September


What Does It Take to Be a Medtech CEO?

CEO is usually the most high-profile job at any business, and medtech companies are no different. But what do they actually do, and how has the role changed over the years? John McLean, managing director for the central region and coleader of the life science practice at executive search firm Witt/Kieffer, explains what it takes to hold the top spot at a medtech company and how to choose the right person for the position.

 

What does a typical medtech CEO actually do?

Typical medtech CEOs, unfortunately, run typically average medtech companies. Great medtech CEOs are building dynamic technology companies that have the potential to enhance the quality of life.

Today’s leading medtech CEOs have to be strategic, visionary leaders who not only inspire their teams to excellence but have the power to introduce life-changing medical devices and diagnostics to an ever-demanding, increasingly expanding marketplace.

These CEOs listen well to their customers and their teams, recognize opportunities in the marketplace, capitalize on those opportunities, set direction, and build great teams to execute.

Great medtech CEOs also know how to identify and assess great talent who can fully commit to the vision and strategy, and they take personal responsibility for outcomes of their decisions.


How has the role of CEO at medtech companies changed?

Strong leadership traits are a necessity in any marketplace, but CEOs in this complex, constantly fluctuating industry have to be more creative and nimble navigators than ever before.

Last year, there was so much uncertainty in the marketplace that we saw medtech CEOs talking about the need for increased innovation and global reach but instead being forced to focus on expanding their current share of existing markets.

In 2012, we are seeing CEOs shifting back to reclaim the lead driver role in new products and service innovation while still pushing for a stronger presence in emerging markets.

Spearheading new technologies and creating alliances with a range of organizations are front and center again along with addressing the challenges of comparative effectiveness, pricing pressures from bundled payments, decreased reimbursements and the financial implications of new excise taxes in 2013.

Increased consumerism from patients who are looking for greater quality of life outcomes is requiring top CEOs to be able to not only interface successfully with their internal constituents but also with a demanding external community including consumers, government agencies, and, of course, shareholders.


What should medtech companies look for when hiring a CEO?

To determine the “right” set of skills and experience required for the CEO role, we believe you first have to analyze their culture, their current team and what stage in the lifecycle the company is in.

The role of a CEO at a medtech company changes dramatically as the company grows. The skills and experience needed at the preclinical and developmental stages, translating vision into strategy and finding capital are vastly different to those required during the newly and fully commercial stages of scaling a company and building a brand.

Because each search is different, we always start with a blank sheet of paper and based on early discussions with the hiring team, develop a tight list of Key Selection Criteria (KSC). Weighted in order of importance, the Key Selection Criteria helps drive efficient vetting and decision making towards the best candidate selection.

Besides a strong leadership profile, medtech CEOs need to demonstrate verifiable success in leading comparable organizations though several business cycles.


What mistakes do medtech firms make when hiring executives?


All firms have room to improve their hiring strategies but medtech firms are especially vulnerable now with an increasingly tight talent pool.

A high level search requires the time and focus of all top management. If firms don’t devote adequate time defining the Key Selection Criteria at the front end of a search, valuable time can be lost throughout the selection process and the final hire will most likely not be the best fit.

Unrealistic deadlines can also push firms into not taking the time to see a large enough pool of qualified candidates and create a willingness to settle on “available” candidates” versus “best” candidates.

Time and focus are also required when top candidates are identified because the best candidates usually have a short shelf life. If firms are too slow in establishing a robust interviewing and vetting process, top candidates will see that as a reflection on the company’s inability to make effective decisions and many times choose another offer instead.

Finally, every firm must take the time to do deep reference checks and “back door” inquiries on finalists. Shortchanging this step is like playing roulette with the future success of your organization.


What trends do you see in executive compensation in the medtech industry?


We are seeing executive compensation programs in medtech continuing to reflect and support a business model that is vastly different from those of many other industries. The package changes alongside the company’s growth and acceptance into the marketplace.
 

During the preclinical stage, base salary and equity is the norm. Small cash bonuses tied to achieving key milestones are added in the developmental stage. At the newly commercial stage, compensation become more balanced across salary, bonus, and equity components.
 

During the fully commercial stage, companies turn off the equity component and focus on driving behavior through salary and significant cash bonus opportunities. Over the past few years, we have been seeing the salary component of executive compensation growing at 3% per year with a continuing focus on increasing the performance based bonus compensation percentage in the pay mix.
 

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

Global Helium Shortage Threatens Medical Devices

Helium is a mainstay in the medical industry, where it is used for a variety of applications. MRI machines are notable using helium to cool the large superconducting magnet at the core of the device. A helium shortage could increase costs of patient care or even force hospitals to deny certain treatments to patients altogether. 

The Federal Helium Reserve

Now, experts are estimating that the world’s helium supply will be depleted in 25-30 years. “We manage it on a daily basis,” says Ellen Joyner, MR Services Product Manager for Siemens, a global producer of medical imaging and MRI devices. She says since news of the shortage hit, Siemens has been performing a delicate balancing act for its customers. In order to keep up with customer demand Siemens has placed helium on allocation for the past two years. “Knowing we have a restricted amount of helium we do short sells. Instead of filling a magnet to 90% we might fill to 75% or 80%,” Joyner says. What’s more there are technical challenges presented in the machines themselves. “Older magnets have a boil off, meaning that even when they’re idle they are still consuming helium.” As a large buyer Siemens has been able to continue supplying to its customers, however Joyner says smaller companies have been unable to obtain helium altogether. 

As an element, helium is created naturally, but through a very slow process. And its light weight and tendency to leak into the atmosphere makes it difficult to refine. The U.S. is the world’s largest producer of helium and has been stockpiling it since 1925, when the Federal Helium Program was established to store helium for defense applications. The Helium Act of 1960 responded to increased demand across industries by giving private natural gas producers incentives to sell their helium to the government. 
 
However, the government overestimated its need for helium, to the tune of a debt to the U.S Treasury of over $1 billion. In 1996 Helium Privatization Act was created in response to increasing private demand for helium and allowed the federal government to set prices and sell helium to private refiners in order to cover the debt, with a goal of having all of the helium sold off by 2015. The act created a formula for selling helium that still determines pricing today (as opposed to market forces). In April the federal government announced a price spike in helium that is threatening to create a shortage that threatens the global medical industry.  
 
Technological advancements have helped reduce demand (newer MRI magnets have zero boil off) and a new major processing facility, Qatar II is expected to go live in May 2013 to help alleviate some of the helium supply issues. However, there are those with even longer-term concerns. Legislators believe that new policies must be made in order to stave off a future shortage.
 
Senator Jeff Bingaman (D-NM) has drafted the Helium Stewardship Act (S. 2374) in response. In a statement, Bingaman’s office has criticized the current sales structure for “distorting the private helium market and creating uncertainty for commercial, Federal, medical, and scientific users of helium.” The Helium Stewardship Act draws on recommendations from private refiners, retailers, end users, the National Academies of Science, and the Bureau of Land Management (BLM), which oversees the Federal Helium Reserve, to propose a system that will sell helium at market-based prices and extend the January 1, 2015 “sell by” date under which the current law mandates that the Federal Helium Reserve be sold off. A spokesperson from Bingaman’s office says that the bill has gained a good deal of bipartisan support though no word was available on if it is expected to continue through Congress. —Chris Wiltz
 

This Week In Devices [9/28/12]: Medtronic Enters the Chinese Market; Oversight for Hackable Devices; European Breast Implant Scandal; A 16th Century Prosthetic

This Week In Devices [9/28/12]: Medtronic Enters the Chinese Market; Oversight for Hackable Devices; European Breast Implant Scandal; A 16th Century Prosthetic

Medtronic to Buy Chinese Medical Device Maker for $755 Million

  • Medtronic taking steps into the Chinese medical device market and has said it will buy orthopedic device maker China Kangui Holdings.
    Source: Reuters

Report Says Hackable Medical Devices Need Oversight

  • A report by the Government Accountability Office says that wireless medical devices need to be monitored more closely to protect them from vulnerability from hackers.
    Source: Bloomberg

Breast Implant Scandal Leads to Tighter European Controls

  • A breast implant scandal in France affecting thousands of women this year damaged confidence and highlighted the need to tighten controls in Europe on everyday medical devices, the European Commission says.
    Source: NY Daily News

A Prosthetic Hand from the 16th Century

  • A look at the history of articifial limbs.
    Source: i09
 

Digging into the Numbers behind the Synthes Norian Debacle

Last week, Fortune posted online an exposé titled "Bad to the bone: A medical horror story." The story centers around Norian XR, a calcium compound bone void filler linked to the deaths of at least five patients who had the projected injected into their spines. The product was made by Synthes (West Chester, Pa), a maker or orthopedic products that was acquired last year by Johnson and Johnson for a whopping $19.7 billion.

The subject matter isn't exactly new: In 2010, Synthes agreed to a $23 million settlement related to the use of Norian. In 2011, a federal judge sentenced four executives at the company to jail time for their role in the illegal testing and promotion of the bone cement for the use of vertebroplasty, a procedures in which bone cement is injected into the spine.

The
Fortune piece does, however, provides a glimpse into the culture of Synthes at the time, providing an enigmatic portrayal of the company's enigmatic CEO, Swiss billionaire Hansjörg Wyss, and a backstory about the backstage wrangling over the company's push to test Norian for off-label uses amounting to "human experimentation."

To look at the story from a different angle, we reached out to Nora Iluri, PhD, founder of Qmed partner Clarimed/DeviceMatters, a platform that tracks adverse event patient outcomes and other postmarket data. The research revealed that, for makers of calcium compound bone void fillers in general, compliance is subpar. 94.17% of adverse reports for the products were filed by manufacturers compared to 97% across the broader category of bone cements and fillers. The low number could indicate potential underreporting among manufacturers of this device category. Also, in the category, almost none of the adverse events were investigated to determine their root cause.

In 2011, for makers of calcium compound bone void fillers, Synthes was responsible for the most reported adverse events, having increased from 0 in 2008 to 22 in 2011. To provide a bit of background: the proposed merger with Johnson & Johnson had been discussed and reviewed by the Federal Trade Commission beginning in April 2011.

"Looking at Synthes' reporting overall, their adverse event reports more than doubled from 2010 to 2011 and 2012 partial year is already higher than 2011 was," says Iluri. "Although deaths are rare and therefore any death should have come up for investigation by Synthes, calcium compound bone void fillers are not a big portion of the adverse events reported by [the company] and could have easily gotten forgotten in the noise."

--Brian Buntz

Weekly Vitals: Stryker Expands Recall, EU to Revamp Medical Device Rules

In this week's medical device manufacturing news, Stryker announced that it has expanded the recall of waste management systems because FDA has not given it 510(k) clearance. On the legal front, Revolutions Medical said that is has filed suit against former consultants, alleging that the defendants misled and misrepresented capabilities and progress related to the development and manufacture of the company's autoretractable vacuum safety syringe. Meanwhile, after weak European Union regulations were partly blamed for a scandal over French-made breast implants, the EU says that it wants to establish tougher rules governing the safety and monitoring of medical devices.

Practical Advice for the Unemployed in Medtech

The U.S. medical device sector has fallen on tough times. The industry has slashed 2000 jobs in the past two months. In 2011, Medtronic itself announced plans to eventually cut up to 2000 positions, while Boston Scientific, Stryker, Abbott Laboratories, and Johnson & Johnson have also announced job cuts. More layoffs are likely to follow as device companies prepare for healthcare reform and adjust to the shifting needs of the global market.

To get some advice for those looking for work, or for those who simply worried about their long-term job prospects, we reached out to three individuals: medical device sales rep and Medsider founder Scott Nelson; Bill Betten, medical technology director at UBM TechInsights; and executive coach Olivia Fox Cabane, the author of "The Charisma Myth."

Image credits to Flickr users semuthutan and Images_of_Money. 

"First of all, don't panic," advises Bill Betten. "Instead, avail yourself of all the support you can get from your network." Getting a new job often takes considerable diligence and time, so be persistent.

Those looking to stay in the device space will need to consider adapting to the changing landscape. On a practical level, it is a good idea to study the field to find out where the real needs are, recommends Nelson. "When companies are looking to commercialize medical devices in the United States, the two biggest hurdles are often regulatory approval and reimbursement."

"Certainly regulatory affairs is one of the hotter fields right now in the medical space," agrees Betten, adding that there is also a lot of interest in medtech in intellectual property. "For a product manager, moving out of sales and going into regulatory affairs might be a possibility. For a quality assurance engineer on the medical side moving into regulatory could be a great choice." For those with a background in design engineering or process engineering, transitioning into regulatory affairs would be more difficult. The bottom line is: try to find something that is both in demand that is also a good fit for your psychology and your long-term employment prospects, Betten says. "I am a firm believing in finding the things that ignite your passion."

On a related point, Betten says that "most people you meet in the medical device industry are there because they feel that they are helping people and they feel motivated by that. But trying to translate that skill set of getting products built and through the FDA does not necessarily translate well into other arenas," he adds. Some individuals may have no other choice but to branch out and consider work in industries other than medtech. People looking to do that should "look for ways to emphasize your skill sets that are relevant to the field you are going into," Betten says. The consumer and the medtech worlds are very different so it is important "to emphasize to potential employers the pieces of your background that show that you can be adaptable. Ideally, you should adapt ahead of time, if possible."

In terms of polishing off your résumé, there are a couple of things to keep in mind. "For one thing, making a statement without quantifying it is basically wasted space," Nelson says. "This will be a little different for an engineer. But instead of a sales rep writing, for instance, that 'I sell a mechanical thrombectomy device," try to use data to back up your work in that area. "It's better if you said: 'I sold 103% of my quota for thrombectomy devices for 2011,'" The other thing to keep in mind is that everything on your résumé should have a story behind it. "You shouldn't put something on there that you can't dive deeper into. And going into the interview, you should have those stories prepared," he says.

One question that is often asked in a job interview is along the lines of: "Could you walk me through your résumé?" "When some people hear that, they fall into a trap and chronologically explain what they have already written down," Nelson says. "You have to use that question as a way to further promote yourself," he says. "If I am an engineer and I led a certain project, I want to pinpoint and tell a story how good it was and how the project made the company x amount of money or how the company was able to take a product idea to launch in x amount of months and set a company record."

Becoming social media savvy, or savvier, can also prove helpful, Nelson says. "Although most companies in the device space still recruit using résumés, it is a good idea to have a professional presence on the major social media platforms--especially LinkedIn," Nelson says. "If you get laid off, is LinkedIn going to help you get a job? Probably not although it certainly doesn't hurt. But at some point in the interview process, your name is going to be Googled and if you have a nice LinkedIn profile page, that certainly helps your cause."

The Power of Charisma

In terms of the dynamics of a job interview, a candidate must quickly broadcast to the interviewer that he or she could be a powerful ally, says executive coach Olivia Fox Cabane. That is, they must demonstrate warmth as well as power. When meeting someone for the first time, a person generally makes a snap judgement about that individual in about two seconds to assess their intelligence, trustworthiness, and social success, she says.

To make such an impression takes charisma, she says. Recommending that job interviewers become good at broadcasting confident body language. "Assuming a strong, confident physical posture will make you feel more confident and more powerful. People who assume expansive poses experience a measurable physiological shift. In one experiment, assertiveness- and energy-promoting hormones rose by 19%, while anxiety hormones fell by 25%."

Although it sounds obvious, it is vital to breathe slowly and deeply to remain calm throughout the interview. "One of the first things I question my clients when we work on projecting charismatic body language is: 'What's your breathing like right now?' Anytime your breathing is shallow, you activate the stress response," she says. "It's hard to feel calm, relaxed, and confident when you're not getting enough oxygen and your body thinks it's in fight- or-flight mode. Make sure you can breathe, so avoid constrictive clothing. Taking even just one deep, slow, full breath can instantly lower your stress level, increase your feeling of confidence well-being, and even boost your immune system."

In general, one of the biggest hurdles to charisma is lack of confidence. Cabane points to a condition known as the "impostor syndrome," which convinces competent people to believe they will be exposed as a fraud. The condition affects more than 70% of the population to some degree or another, according to research done at Georgia State University. Understanding how common this feeling is can help destigmatize the it, she says.

It's worth undertaking a study of charisma, which is a topic that has been studied by everyone from sociologists and psychologists to neuroscientists. Cabane points to laboratory experiments that confirmed that people's level of charisma could be altered by asking them to assume specific behaviors.  

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

Drug-Delivery Micropump Relies on Body Heat

Researchers at Purdue University have developed a new type of micropump that is activated by body heat. Eventually, the researchers foresee that their technology could be used in fermentation-powered drug-delivery patches using microneedle arrays to deliver a wider range of medications than is currently possible using conventional patches.

Measuring 1.5 cm in length, the prototype microorganism-powered thermopneumatic pump is made out of layers of polydimethylsiloxane, a rubberlike polymer that is used commercially for pump diaphragms. Contained in a small chamber, the pump's secret ingredients are baker's yeast and sugar. When water is added and the patch is placed on the skin, the water and the body heat the yeast and sugar, causing them to ferment and produce carbon dioxide gas. When the gas pushes against a membrane, it can continually pump for several hours.

"This just needs yeast, sugar, water and your own body heat," remarks Babak Ziaie, a Purdue University professor of electrical and computer engineering and biomedical engineering. And because the yeast is robust, it has a long shelf life, making the pump suitable for mass production, comments, doctoral student Manuel Ochoa. In addition, the technology does not require batteries, unlike many micropumps under development or in commercial use.

"Many drugs, including those for treating cancer and autoimmune disorders, cannot be delivered with patches because they are large molecules that won't go through the skin," according to Ziaie. "Although transdermal drug delivery via microneedle arrays has long been identified as a viable and promising method for delivering large hydrophilic molecules across the skin, a suitable pump has been hard to develop." The Purdue researchers' technology could be used to push the drugs through the microneedle arrays.

Reducing the Cytotoxicity of Silver Nanoparticles

Commonly used in antimicrobial coatings and wound dressings, silver is a ubiquitous element in medical device applications. However, cytotoxicity concerns have accompanied the precious metal's emergence as a medical device material. Although much remains to be known about the human and environmental impact of silver ions in medical device applications, researchers at Yeditepe University (Istanbul, Turkey) have demonstrated that the potential risks of silver nanoparticles can be reduced by modifying their surface with a biological ligand.

According to an article in Nanowerk, Mustafa Culha, a professor that leads the Nanobiotechnology Group at Yeditepe University, comments that this ligand reduces the cytotoxic, genotoxic, necrotic, and apoptotic effects in healthy human dermal fibroblast (HDF) cells. In addition, the study contributes to the existing knowledge that modified silver nanoparticles play a protective role by causing different p53 gene-related cell death effects in HDF and adenocarcinomic human alveolar basal epithelial A549 cells. The researchers conclude that the modified silver nanoparticles could perhaps be used to develop novel methods for selective killing of cancerous cells.

The scientists hope that their research may contribute to the development of novel therapies utilizing modified silver nanoparticles. "However, the current level of understanding of the interaction between nanomaterials and living systems is not enough to make general statements, and we need a bigger effort by researchers around the world to clarify these," Culha remarks.

KTT30/mITX Embedded ARM-based Motherboard from Kontron

An embedded computing technology company has produced an embedded motherboard whose performance features and selection of interfaces make it suitable for many graphics- and video-oriented OEM embedded applications, including medical equipment. The KTT30/mITX embedded ARM-based motherboard in the 170 x 170-mm Mini-ITX form factor is equipped with NVIDIA’s Tegra 3 superprocessor and engineered to combine good media performance with low power consumption. With its integrated ultra-low-power graphics processing unit, the ARM 900-MHz quadcore processor board provides lifelike 3-D graphics with dynamic lighting at screen resolutions up to 2048 × 1536 pixels. Total energy consumption is just under 7 W. This customizable motherboard, whose height is 15.2 mm, enables flat systems to be built and mounted onto the back of monitor and video panels. Long-term availability is at least seven years.

Poway, CA

Festo Introduces EGSK and EGSP Ball Screw Axes

A supplier of automation technology to medical OEMs produces compact EGSK and EGSP ball screw axes with a recirculating-ball-bearing guide that are designed to provide precision, repetition accuracy, and rigidity in electronics and precision processing applications, such as pick-and-place equipment, vision inspection systems, measuring technology, and engraving machines. These modular mechatronic multiaxis systems offer hundreds of freely combinable and harmonized components for gripping, joining, rotating, and accurate 3-D positioning. Supplied ready to install, they can simplify the design process and satisfy tight budget requirements. Their steel housing forms the guide rail, and the four rows of balls are arranged to give the guide carriage the same basic load ratings in both radial coordinate directions. The axes can be used with the manufacturer’s motors and drives. The supplier supports its systems with procurement and logistics, design, documentation, assembly, and commissioning.

Hauppauge, NY