1. What is your “big picture” perspective when it comes to the current state of innovation in the US medtech industry?

Michael Drues: Good question. On one hand, we have loads of ‘new’ devices with fancier bells and whistles.  On the other hand, how many are truly new or innovative? Like many industries, medical device development tends to be iterative, or what I call evolutionary. That is, a device is made, then tweaked a bit to make a “new” device, then it’s tweaked again and the process repeats itself.  The problem with this approach is this: the car did not evolve from the horse.  Simply put, you can tweak a horse as many times as you want, but you will never end up with a car.

This is what Harvard Business School Professor Clayton Christensen calls a “disruptive technology”— a new technology that unexpectedly displaces an established technology. For example, coronary stents are useful devices, but when we can grow a new artery in a patient’s own heart (called angiogenesis), how many stents will we need? This may sound “Star-Trekie,” but it’s not nearly as far off as many think.

Unfortunately, there are few incentives for companies to pursue revolutionary ideas.  In fact, we have actually created disincentives for manufactures to take this approach.  Consider the regulatory path: given a choice, a company would prefer to develop a 510k device as opposed to a PMA.  So in essence, we have created incentives for companies to bring to market products we already have, i.e., me-too’s, while we have created disincentives for companies to do anything really new, let alone revolutionary.  On the reimbursement side, we have similar challenges in the formof fitting ‘new’ devices within existing reimbursement categories vs. creating new one.s

2.  To what extent are economic drivers prompting medtech companies to outsource their R&D efforts, and how is this impacting our industry? 

MD: To some, this may sound like a new idea but in fact we’ve been doing it for a long time.  How? When a large company invests in or acquires a small company or startup, is that not a form of R&D outsourcing? When a company funds academic or government research, is that not also a form of R&D outsourcing?

Most people probably don’t have a problem with domestic outsourcing of manufacturing, regulatory, R&D, etc.  When it comes to international outsourcing, however, that’s a different ballgame because materials, dollars, and jobs may be moving off-shore. 

But we in the US must realize we live in a global economy. In order to survive, we must compete with the rest of the world.  The US can compete globally on what we do best – R&D.  This is why a lifelong strong educational system is vital to our survival and should be as important as our national security.  If our industry and our country don’t stopping paying lip service to having a strong educational system at all levels and actually do it, we risk losing our competive advantage.

3.  Is the current regulatory environment and processes hurting or hindering innovation in the US?

MD: It’s a matter of balance.  We want enough regulation to ensure our medical products are safe, whatever that means.  At the same, we don’t want so much regulation that it impedes innovation.  Determining where to place the fulcrum under that teeter-totter is not easy.  I am of the opinion that regulation and innovation do not have to be diametrically opposed.  It is possible to have great innovation and at the same time decent regulation but the solution is not more regulation; rather, it is to get people to think. 

For example, most agree that having a lot of regulation can stifle innovation.  But having to little or no regulation can also stifle innovation.  How?  Biomedical nanotechnology is a perfect example.  Recently, after one of my presentations on the future of biomaterials, an audience member shared that his company has a really “cool” nanotech product, but in the absence of any real regulation, they weren’t sure how to pursue it. 

My response? ‘Do it anyway!’ Why should we wait for FDA or anyone else to tell us what to do?  Being the contrarian I am, I love being the first through the door with something new and different because if I’m the second or third through the door I have to make the case of why what the person did before me was inappropriate or wrong, and why what I want to do is better.  I’ve been successful both ways, but I’d much rather be first through the door.

Most people and most companies don’t feel this way.  This is where completive regulatory strategy comes in. Anyone can design a regulatory strategy to get their product through the FDA and on to the market.  However, the best strategies also serve as barriers to entries by competitors. There are subtle and not so subtle ways this can be done, and good regulatory consultants can play a major role in making this happen.

When evaluating consultants, look for someone who knows when to follow and more importantly, when to lead! Bestselling author Max Lucado said, “A man who wants to lead the orchestra must turn his back on the crowd.” This is something I’m not afraid to do, when it’s to my advantage of course.

4. Major league baseball has a “farm system” to develop big-league talent.  Medtech seems to have a similar system, with startups employing exit strategies to ensure their innovations make it to “the big.” What are the pros and cons of such scenarios?

MD: The pros for the startups are obvious – a lucrative exit strategy if your successful.  As for the cons, we’re incentivizing people to take a short-term view and do today only what is necessary, leaving future problems for someone else.  Simply put, this is “pennywise and pound foolish” and runs counter to developing disruptive technologies, which almost by definition take longer, making them less attractive to investors and others looking for a “quick exit.”

5. What are the cutting-edge technologies and trends that excite you most and that you believe are having the greatest impact on healthcare?

MD: Combination products, but then I’m biased; I’ve been working in combination products for more than 20 years. Drug-eluting stents represents the lowest of the low hanging fruit and is only the beginning.  Pharmacogenomics (companion diagnostics), biomedical nanotechnology, and tissue engineering (regenerative medicine),  are all examples of combination products, emerging trends, and potentially very disruptive technologies

Why is this so exciting? Consider tissue engineering. While these products are not devices, they offer the opportunity to completely erase an illness, not simply slow its progress. I don’t want to simply prevent a problem, such as dead heart tissue resulting from a heart attack,  from getting worse.  I want to erase the damage in the heart caused by the heart attack as if the patient never knew they had the heart attack to begin with.  We have the capability to change the ethos of how we approach medical problems.  And this is why everyone should be excited about these technologies. 

It is important for our industry to understand that these are truly disruptive technologies for many traditional medical device companies. That is, if through angiogenesis we can grow new arteries, how many stents will we be using? 

Such developments, however, don’t mean that we will be using fewer medical devices. On the contrary, we will be using  more devices and we’ll be using them to deliver biotherapeutics.

That’s not only something to think about, it’s something for the industry to act upon.