Is The Medical Device Repless Model Viable?

In the OR, everyone wears a mask. Can you spot the sales rep?

Today, there’s a real chance that a rep isn’t even scrubbed in. The repless medical device sales model has been generating a lot of noise lately. What are the risks, benefits, and fallout?

It Still Costs Too Much

Medical Device SalesDespite recent advances, the cost of medical care is still high. With the era of bundled care upon us, hospitals are cutting costs – and reps – out of the picture. For example, Loma Linda cites a 50% markdown in its joint implant prices thanks to a repless sales model. This program began in the spring of 2013 and shows no signs of slowing. These are the kinds of cost savings that can profoundly transform a system looking for new solutions.

The potential savings are 2-fold. First, is the immediate price drop that comes with a direct purchase; second, since no rep is in the OR, there’s no added sales pressure.

Manufacturers are also taking notice since this model can lead to coveted exclusive contracts with medical centers and their affiliates.

Is It Safe?

The primary concern among all stakeholders should be patient safety. If a qualified rep isn’t in the OR, could a device be used improperly? What if a critical situation or question arises?

Those that point to price savings say technicians trained in-house can field questions and lend a hand just like an industry rep. Those against the change, including some doctors, state that patient safety could be compromised.

Reasons For The Trend

Besides the immediate price advantage, several other factors give the repless movement momentum. These are:

  • Mature hospital supply chain/procurement practices
  • Hospital based clinical support models edging out device industry influence
  • Generic device market growth
  • New technologies and software
  • More hospital employed physicians
  • Increase in outpatient procedures

Tech Vs. Rep

Nobody is arguing that technical expertise isn’t necessary in the OR. In fact, some hospitals are hiring ex-sales reps to be OR techs. We can even imagine device companies renting out technicians who have no sales agenda – at least not explicitly.

Training Is Essential

In the midst of this discussion lies the importance of adequate training for the technician, whoever that might be. This must be done diligently and with periodic updates when necessary, for example in human cadaver & bioskills labs.

Both the manufacturer and the hospital have a vested interest in training, and there are ways the cost could be shared. For example, a lead tech at a hospital could be trained by the manufacturer for a one-time fee or as part of a purchase package. This training could then be handed down to OR staff with hospital absorbing the costs.

Still A Niche

Currently, the repless model fills a relatively small niche in the medical device world. However, as price pressures continue to mount, the device without a rep is likely to become more common.

Develop training sessions in a bioskills lab with state-of-the-art human cadaver resources. Contact MedtoMarket at (512) 900-9633 or request a free consultation today.

Internet of Things & Cyber Risk

The Internet of Things (IoT) creates many opportunities for medical device makers.

But if it’s connected, it can be hacked. Forward thinkers in the industry are examining the growing threat of cyber security and how it impacts product safety and viability. Let’s see why.

Improved Efficiency & Care

Online interconnectivity provides enhanced efficiency and communication. For instance, wireless capabilities allow for data to be downloaded from pacemaker and defibrillators (ICDs) to the doctor’s office. This makes life easier for patients and practitioners, and it improves quality of care.

Home monitoring can alert physicians, in real-time, about any significant events even in the absence of symptoms. Furthermore, automatic adjustments can be made without direct intervention. We can even envision doctors tweaking device parameters at a distance.

What’s The Risk?

Today, hackers can control automobiles from a laptop. Steering, braking, even acceleration can be taken over. Imagine the implications if someone hacked your patient’s pacemaker or ICD?

Early in February 2014, Medtronic, the world’s largest medical device maker, Boston Scientific and St. Jude Medical experienced a high level cyber security breach. The attacks were “very thorough” and may have come from China. The exact motives of the attacks continue to remain hidden.

Motives

We can invent all kinds of conspiracy theories behind why these things take place. But motives such as financial gain or a competitor’s dirty tricks don’t require much imagination. Cybercrime is big business generating costs of $455 billion per year worldwide.

Picture a criminal, holding your company hostage. If you don’t pay, they’ll start shutting down your devices. Is your cyber security plan prepared for such a scenario? Do you even have a strategy in place? If anything, the tech world expects an increase in ransomware cases, and the medical industry is notoriously vulnerable and unprepared.

The Reality

Since medical devices can be hacked, the onus of prevention lies upon the manufacturer. This must be an integral part of design and development. Criminals look for easy prey, and the less prepared enterprises could be setting themselves up for disaster.

For years, experts like Dr. Kevin Fu, Associate Professor in Computer Sciences, Electrical and Computer Engineering at the University of Massachusetts Amherst, have been warning about the risks of malware and viruses (cyber, that is) to patient health. The FDA offers some guidance on the topic, but it is far from comprehensive.

Future Challenges

Just like in every other industry, a tsunami of interconnected software is entering the medical device market. The implications, both good and bad, are enormous.

As products increase in number and complexity, cyber risk grows. For the manufacturer, this means another layer of planning, development, testing, and validation that must be considered. For the FDA, the situation calls for the formation of a task force, calling in leading technology experts, to tackle this issue head on.

We shouldn’t fear the leverage technology provides us, but we must never forget our primary responsibility is to “do no harm.”

Learn about in-depth medical consultation to improve your product’s position and safety. Contact MedtoMarket at (512) 900-9633 or request a free consultation today.

Medical Device Risk Management – Part 2

In our last post,  we covered medical device risk management and how it relates to users, reimbursement, the FDA, and sub-components. In this article, we continue the discussion based on assembly, funding, patent, and supply chain factors. We’ll also touch upon missed opportunity risk. For every manufacturer, risk mitigation is critical to get your device to market as quickly as possible and ensure product longevity.

Assembly Risk

Many companies misguidedly delay this aspect of medical device risk management. Notions about assembly should be evaluated early as time, cost, and quality are intimately linked to assembly processes.

Even if a device meets user needs and clears the FDA, high labor costs or slow production times can nullify viability. Furthermore, if a device’s assembly leads to a shoddy presentation, this could damage sales acceptance. For these reasons, it pays to consider assembly early and throughout the device development process.

Stakeholder Expectations

Stakeholders expect results, not excuses. When unrealistic promises are made, the manufacturer only sets itself up for failure. Funders, however, cannot be expected to set milestones either. In a way similar to user acceptance, objectivity cannot be understated here. It’s hard to accept near term losses, but if anticipated in the development timeline, you can avoid complete failure. When you fall short, shareholders become wary, but when you beat the benchmark, you foster trust.

Patent & Intellectual Property Risk

You’ve labored for years on your product. And just when you are about to launch, another company fills your niche with a nearly identical device. This nightmare scenario can and should be avoided. Patent attorneys can not only help protect your intellectual property, but they can also scan the landscape for competing claims. Even nascent projects can implement provisional patents to secure your position along the development pathway.

Supply Chain Factors

The most incredibly designed train never moves if a good rail system isn’t in place. Every entity involved in manufacture, assembly, delivery, and sales will either help – or hinder – your chances for success. A comprehensive supply chain strategy should be in place well before product launch.

Missed Opportunity Risk

A thorough validation and risk assessment should not be considered as a drain on resources. Not only do you help ensure the smoothest and safest path to market, but you can also identify new opportunities. For example, in the human factors assessment, real user feedback might show you where your product will fail miserably, or it may reveal new market applications you never envisioned.

Medical Consulting

A third party medical consultant can be a great asset in medical device risk management. Besides objectivity, industry experts can provide insight missing from a start-up organization. This remains true for scientific as well as business risk assessment. Viability threats are deflected more readily with a group-think approach that includes representatives from multiple disciplines.

 

Consult with device industry experts about your medical device risk management. Contact MedtoMarket at (512) 900-9633 or request a free consultation today.

 

Medical Device Risk Management – Part 1

A robust medical device risk management strategy greatly increases the possibility of success. It’s not enough to say, “My product is safe.” What about the risks of product acceptance? How about assembly risk?  In this part 1 of 2 articles, we explore user acceptance, reimbursement, the FDA, and component associated risk factors.

Medical Device Risk Management

Like a book author, a medical device developer believes in their creation. Unfortunately, not every novel becomes a bestseller. For the device manufacturer it’s imperative to get real life user input during the design and development phases. It might turn out that the device has little appeal to users. Or maybe a different need can be met by adapting the original design.

Some questions to consider are:

  • Does a qualitative and quantitative need exist?
  • Is it easy to understand?
  • How does it improve on what’s offered now?

Many times answers can be uncovered with surveys and subject matter expert consultation. In any case, moving out of the company’s bubble with an objective assessment mitigates acceptance risk.

Clear Reimbursement Identification

How will you get paid for your device? Do you have a specific reimbursement code in mind? Are you certain your device will qualify? No physician will use your product if a clear coding plan doesn’t come with the deal. If a code doesn’t exist, you can certainly embark on a multi-year campaign to have a new code established. But this type of planning will only lead to frustration if not identified very early.

Additionally, manufacturers should adopt a broad understanding of rising reimbursement trends, such as bundled healthcare. Long term success depends on positioning a product to adapt to current and future reimbursement models.

FDA Clearance

The manner in which your product overcomes regulatory hurdles requires significant advanced planning. At the outset, you should decide which FDA process will be followed, and every effort should be made to stick to the plan. Shifting pathways midstream can cause costly delays and even damage team morale.

Carefully study the various types of FDA clearances and choose the one that best fits your project profile. During development, periodically evaluate how well your trajectory matches the FDA guidelines and make adjustments as needed.

Component Risk

Typically many technologies converge to create a new medical device. The vulnerability of any single component jeopardizes the entire enterprise. For this reason, sub-validations should be performed on every component. Evaluation may include basic science processes, lab testing, and field simulation.

Medical Consulting

In many cases, a company lacks the resources and know-how to fully analyze and establish a solid risk management strategy. Third party consultants can be brought in on an ad-hoc basis at a fraction of the cost of hiring new staff. A seasoned consultancy can provide the due diligence required for issues such as FDA clearance, reimbursement, and user acceptance evaluation.

In our next post, we will discuss risk related to assembly, supply chains, patents, and funding.

Consult with subject matter experts regarding your medical device risk management. Contact MedtoMarket at (512) 900-9633 or request a free consultation today.

Managing Medical Device Change Control

Medical device change control can be as critical to your company as when you first launched your product. Prudent manufacturers can meet all requirements without an excessive drain on resources. The key remains in proper situational and risk analysis.

Three Types Of Medical Device Change Control

Changes to medical devices can have huge repercussions or no substantial effect at all. For example, color change usually will not influence a device’s safety, efficacy, or performance. Other changes profoundly affect these parameters. Lastly, in some cases it’s not so clear. Nevertheless, every modification must be documented, and, if need be, reported to the FDA.

Letter-To-File Medical Device Change Control

Letter-to-file level changes typically are cosmetic or represent improvements without creating an entirely new product. If no impact has been made on safety, efficacy, or performance a letter-to-file can be drafted and archived in-house. If for any reason, the FDA inquires about the change, the documentation can be produced quickly.

Even for minor modifications, it pays to include subject matter experts’ written analyses about the change. Make sure the letter specifically addresses issues of safety and performance.

510(k) PMA Medical Device Change Control

In these instances, an FDA reportable change to the device has occurred. It might be that the device has been adapted for a new indication, or that performance has been altered. For example, revised mechanics of a product might require physician re-training.

After making your analysis, if you’ve determined that a significant change has occurred, or if you’re not sure, then it’s probably wise to go ahead and file a 510(k) or Premarket Approval (PMA) supplement.

Mitigate Medical Device Change Control Risk

Every device change that creates opportunity also creates risk. In each case, proper documentation with qualified analysis is critical. Any modification should be backed up with a report that clearly identifies the what, when, and why a change was made.

Beyond simple regulatory justification, answering these questions also satisfies your internal processes and resource management. Ideally, these issues should be thoroughly addressed before any design change or testing even begins.

Medical Device Change Control Subject Matter Experts

Subject matter experts can be a valuable resource in the medical device change control process. For example, prior consultation might uncover pitfalls, or enhancements, that can alter – or abort –  the change process completely. Advanced validation can save you from wasting resources on a change that ends up being counterproductive.

Third party-medical consultation also provides the necessary support for any change documentation in the eyes of the FDA. This remains the case for both letter-to-file and 510(k)/PMA processes. Consultants can also suggest which level of reporting is appropriate.

If you decide a letter-to-file is adequate, make it as complete as possible. That way it becomes easy to re-package it into a formal FDA acceptable document at a moment’s notice.

Would you like to consult with seasoned subject matter experts regarding your medical device change? Contact MedtoMarket at (512) 900-9633 or request a free consultation today.

Bundled Healthcare and Medical Devices

Bundled Healthcare Packages – Are You Ready?

One of the biggest game changers in healthcare reform is bundled care packages. This new form of medical service packaging/payment will impact every stakeholder, including the medical device manufacturer. Are you properly positioned for the bundled healthcare revolution?

New Paradigm

In the 1980’s, Medicare and Medicaid set up the Diagnosis Related Group (DRG) payment system which was the forerunner of bundled healthcare. But instead of a fixed payment for a specific condition, bundles allow patients and employers to purchase entire clinical packages directly from healthcare providers.

For example, Walmart and the Cleveland Clinic have set up a deal for cardiac surgery, and more recently orthopedic procedures. So when a Walmart employee needs a knee replacement, they pay a fixed price for the entire process, from pre-op evaluation to rehabilitation.

New Challenges & Opportunities

Any device company can imagine the implications of this trend steadily gaining acceptance across the health and business sectors. Besides the obvious (such as attractive pricing), however, grasping the deeper nuances of bundled healthcare will determine who survives this transition.

Beyond Price

The bundled care process goes much deeper than just lumping a bunch of products and services together and setting a price. An example from the manufacturing industry can help us understand.

Auto makers constantly analyze and improve their car making efficiency and quality. In a like manner, bundled healthcare will systematically turn to scientifically validated best practices to decide how to populate healthcare bundles. This will be a clinical and financially based exercise, and the hope is that the result will be improved quality of care.

Factors To Consider

Medical device manufacturers will require keen insight into every aspect of their project development, validation, and delivery to break into these bundles. The competition is certain to be fierce. Some key questions to answer surrounding any project will be:

  • How solid is my product’s quality control and validation?
  • Have I identified potential weaknesses from a variety of stakeholder viewpoints?
  • Is my supply chain management strategy clear?
  • Have I considered how IT will affect my positioning in the bundled care marketplace?
  • Can I produce well developed documentation regarding due diligence backing up my device?

Entry Barriers In The Future

In the new healthcare landscape, medical technology products will face obstacles to entry unlike ever before. Instead of only regulatory and individual client criteria, we can imagine a new layer of bundle prerequisites to be satisfied. One might even envision direct or indirect negotiations with the buyers of bundles rather than just providers. Finally, a cottage industry of protocol development and IT management tools also will have an influence on who gets tapped to be included in service packages.

All of these scenarios must be considered as we embark in this modern era of healthcare. Initiatives that have completed their homework from the outset will have a headstart over the competition.

If you would like to learn more about in-depth medical consultation that will improve your products positioning in the bundled healthcare market, then contact MedtoMarket at (512) 900-9633 or request a free consultation today.