In3 on the State of the Medical Device Industry
BY LAUREN UZDIENSKI, JUNE 24, 2008
China was a hot topic at the In3 Medical Device Summit, but one event focused on the device industry more broadly: where devices have been and where they're heading. The presentation, led by David Cassak of Windhover Information, described the device industry as typically divided into two parts: small, innovative companies and the handful of large companies who acquire them. The question of the talk was whether this model is sustainable.
Cassak identified a number of changes emerging in the industry:
EBM
Across the device industry, new startups outnumber exits by 3-4:1. EBM has made acquisitions more data-based, which could making finding exit opportunities more challening. The traditional 510(k) approach, where a product can quickly come to market and be reimbursed, is less of a guarantee now than it has been in the past, and conducting trials can be extremely costly and burdensome for a startup. To accommodate these increasing data obligations, Cassak recommended that small companies be prepared to fund clinical operations for a longer period of time.
Physician Relationships
Scrutiny of physician/industry relationships can harm product development if surgeons don't feel comfortable working with companies. Cassak said that many device whistleblower cases originated with surgeons reporting on other surgeons, leaving them wary of how their industry relationships will be perceived. Ongoing investigations and payment disclosure websites exacerbate those concerns.
Innovation
In many medical device sectors, the pace of innovation and time-to-market is decelerating. Technology is departing from traditional metal into new materials and forms. Cassak says the industry is moving toward a drug-device convergence: products that have their own inherent therapeutic effect but still require engineering and a surgeon's expertise (e.g., orthobiologics.) These types of products introduce more demanding collaborations as well as additional data needs.
In some cases, companies may be outpacing customers in their ability to embrace new technology. Advances in computerization, miniturization, biotech and biomaterials represent significant technical advances, but surgeons could also wrestle with these new techniques or products.
The device industry, then, is in a period of flux: how to use the new data, how to further innovation, how to get the message to surgeons. Cassak concludes that these questions aren't crippling, but instead represent the beginning of a new, innovative era for devices. Collaborative product development processes will bring together different sectors of medicine, introducing new skillsets and treatment options, with the aim of better meeting patients' needs.
