Cautious optimism about the medtech business and goings on at FDA peppered panel discussions at AdvaMed2010 in Washington DC. The fourth annual event attracted a record-setting 1,700 medical device and diagnostics executives from more than 360 companies representing 24 countries.

FDA Commissioner Margaret Hamburg praised the medtech industry during a breakfast speech for being “the No. 1 exporter of new technologies” and for “managing to expand and increase output during uncertain times.”

According to the Ernst & Young “Pulse of the Industry” report released during AdvaMed, revenues for publicly traded medtech companies in the U.S. and Europe grew slightly (0.3%) in 2009 to $294.1 billion, well below the 11% growth in 2008, while net income increased by 10.8% in 2009 to $13.2 billion, driven by a 29% jump in Europe vs. a 4.5% increase in the U.S.

She went on to address industrywide concerns at FDA, especially those involving 510k reform, which many fear will lengthen the approval process and limit innovation.

“All of us want safe, effective, and innovative products,” Hamburg said. “The strength of your industry and my agency depends on it.” She went on to say that with regards to the recommendations under review, “Our ultimate goal is to provide clear, predictable pathways that will foster new ideas and innovative products.”

During press briefings held later, industry leaders shared their opinions.

AdvaMed President and CEO Stephen Ubl cautioned the industry not to lose sight of other important issues while it tracks 510k reform, using value-based purchasing as an example. “We have to make sure the quality standards of care are flexible and keep up with the pace of innovation. If I have a heart attack today, the hospital needs to provide me with percutaneous coronary intervention (angioplasty) within 30 minutes. The hospital gets paid on how well it does when measured against the standard. But what happens if there’s a new technology or a new drug that isn’t a part of the standard?”

During a briefing on “The Golden Age of Innovation,” Josh Makower, chairman and CEO, ExploraMed Development LLC (exploramed.com), a medical technology incubation company in Mountain View, CA, warned that while regulating for safety and efficacy is important, “right now the direction we’re headed isn’t right. We need to find ways for innovators at both large and small companies to be successful in delivering the therapies of tomorrow.”

Meanwhile, Medtronic (medtronic.com) Senior Vice President of Medicine and Technology Stephen Oesterle said while medtech struggles with important questions, “there’s no crisis in innovation in America. The ability to source from the microelectronics, IT, or biotech companies has never been better.”

Adding credibility to Oesterle’s statement was James Mazzo, president of Abbott Medical Optics (abbottmedicaloptics.org). Mazzo touted the organization for attracting 111 new members, with more than 40 from the diagnostics sector, leading to the recent formation of AdvaMed DX, and advocacy organization for such companies.

Also among AdvaMed’s new members is Microsoft. “We’re thrilled to be branching out,” Mazzo said. “By aligning with members such as Microsoft, we’ll be able to put together a position for our members on areas such as EMRs (electronic medical records).”

DSM, DuPont team up
A joint venture for the development of advanced surgical biomedical materials involves Wilmington, DE-based DuPont and Netherlands-based DSM.

Under the agreement, both companies will share a 50% interest in the joint venture dubbed Actamax Surgical Materials (actamax.com). Actamax will address market needs for surgical sealants, adhesion barriers, and tissue adhesives, based on several patent-protected biodegradable hydrogel technologies.

IBM helps researchers detect brain-injury complications
IBM announced a project in which researchers at Columbia University Medical Center will utilize IBM's streaming analytics technology to potentially detect severe complications in brain injured patients up to 48 hours earlier than traditional methods. For bleeding stroke victims with ruptured brain aneurysms, recovery can involve serious complications. Detectable symptoms often only appear once blood flood has been significantly reduced, forcing medical professionals to be reactive instead of preventative in their treatment. Developed at IBM Research Labs (research.ibm.com), IBM streaming analytics analyzes large volumes of data in motion. Using this technology, medical researchers may be able to uncover the patterns in symptom progression. Detection of early warning signs would give doctors the ability to plan and begin treatments sooner or stop the condition altogether (ibm.com/smarterhealthcare).

Company kudos
• Command Medical Products Inc, Ormond Beach, FL, was recognized by Medtronic Inc, Minneapolis, as a Top 10 supplier with a “Medtronic Supplier Excellence Award.” The award is for technology and quality, as well as delivery and cost.
• Donatelle, New Brighton, MN, received the Web Marketing Association’s Manufacturing Standard of Excellence WebAward for its website, www.donatellemedical.com. The competition had more than 2,000 entries in 96 industry categories.

Report shows medtech weathering economic downturn, but . . .
While the medtech industry has fared better than many industries during the current economic downturn, new challenges will put increasing strain on the industry’s long-standing business model, according to an Ernst & Young’s report released during last month’s AdvaMed 2010 (see page 6).

Though net income for the industry rose 10.8% in 2009, Ernst & Young’s Medtech Leader for the Americas John Babitt, says the industry will need ways to fund innovation. “As hospitals consolidate purchasing decisions and payors look to comparative effectiveness research, companies will need to demonstrate value as never before, and with revenues plateauing—particularly in mature markets—they will have to find new sources of growth.”

The report finds that companies will need to emphasize diversification in all aspects of their businesses: new product lines better aligned with delivering improved health outcomes, expansion into non-product offerings such as consulting services and solutions, and geographic expansion into emerging markets. Meanwhile, 510(k) reforms are may result in lengthier approval processes making it more difficult to sustain innovation while emerging companies will face “a continued constrained funding environment.”

Emerging markets, however, are expected to provide the industry with new opportunities, says Heinrich Christen, E&Y’s medtech leader for Europe, Middle East, India and Africa. “Seizing the opportunity will require fundamental changes to business models, partnering with non-traditional players, creative pricing, and product development approaches to capture growth opportunities in emerging markets—and, above all, demonstrating the value of their products before someone else establishes their value for them.”