Who’s On First? The Who and the What You Need to Know to Champion Success When Introducing a New Technology in the Vein Space

Baseball Diamond

New technologies are innovated and brought to market by anyone with the right idea and road map. The mission can be daunting, making would-be new pioneers in medicine feel like, in the classic comedy sketch, Lou Costello fielding a baseball team, asking all the wrong questions. The iconic 1938 sketch features Lou Costello, considering becoming a ballplayer, and Bud Abbott trying to make sure he knows what he’s getting into. Misunderstanding, confusion and frustration erupt and communications ultimately fail. For developers of novel technologies, there is a better way, with the right team, and the right plan in place.

Some of the most impactful technologies on patient care are grown from the lab bench and operating room. Physicians, surgical technologists, nurses and others with the determination to navigate their innovation through the paradoxical path can achieve FDA approval and commercial success for their ideas. The market for venous technologies is increasingly less invasive, and focused on improving the quality of life for the aging global population. That market is experiencing rapid growth and is primed for new assets. The US market for peripheral vascular devices is growing at a rate of 6.3 percent. It is expected to grow from $4.5 billion in 2015 to $7 billion by 2022. There are a large number of segments represented in the calculation including: stents, percutaneous transluminal angioplasty (PTA) balloon catheters, atherectomy devices, chronic total occlusion (CTO) devices, embolic protection devices (EPDs), stent grafts, surgical grafts, thrombectomy devices, inferior vena cava filters (IVCFs), catheters, guidewires, introducer sheaths, vascular closure devices (VCDs) and transcatheter embolization devices.1 Globally, the varicose vein market alone is expected to reach $475 million by 2024,2 and vascular access devices are projected to expand at a compound annual growth rate (CAGR) of 6 percent from 2016 to 2024, to $8.6 billion by 2024.3 A development plan should be shared by the whole project team. It must be designed in advance for a team that will be moving in multiple directions, often quickly, and simultaneously. Successful plans should begin with a well-defined concept of customer need and a value proposition that speaks to it.

Preparing for the Business of Medicine

Medical schools in the United States are under increasing pressure to change with the times, preparing new physicians for the challenges and opportunities that will present themselves outside of the clinical setting. More often, physicians are adding an MBA to their list of credentials for the business skills to lead multi-disciplinary teams, manage the operations of a private practice and thrive in the cost driven pressure of a managed care environment. A large percentage of schools now offer joint MD/MBA programs that incorporate a series of business-focused courses, including leadership and data analytics, into their core curriculum. Robert Pearl, MD, of the Stanford University School of Medicine and Graduate School of Business, recommends medical schools work closely with affiliated business schools Baseballto create a project-based, interdisciplinary rotation for four weeks that challenges students to solve problems of the health-care system and engage their entrepreneurial leadership skills.4 If rote repetition is the medical school method, creative big-picture thinking is the work of business students. Where memorization of precise successful techniques reigns in medicine, stories of venture failure are embraced and are the basis for learning in business programs.5 Combined coursework can unlock a physician’s ingenuity to navigate the road to market. Begin with the Need in Mind Fewer than 12 percent of new ideas make it through the development cycle, and not even 1 percent actually become a reasonably profitable business.6 A well-defined customer need is the foundation for the market a product will serve. Where there is customer pain, there is opportunity for a successful venture. The focus must remain on whom the device will serve; not what it does.7

Consider the history of the first vein-illumination devices designed to minimize multiple needle sticks for patients with difficult-to-detect veins. Patients welcomed the advancement in care, but the physician customer market that first generation devices served wanted more. Physician customers had a new need for small, hand-held options that could replace the large, free-standing equipment in their facilities.8 Revenues in the global vein illuminator market are projected to reach $227.2 million at a CAGR of 32.41 percent between 2016 and 2022.9 The physician customer need is clear, and the market has been established. There may appear to be tremendous opportunity for novel technologies in the space to meet the needs of both the physician customers and patients. Success, however, will depend on both opportunity and a well-defined strategy to meet the challenges of the healthcare system.

To the innovator, the need may seem obvious. At some point, they have felt the pain: a lack of efficiency, a long wait or a less than desired result. Though it may appear to be simple, defining the customer need and gaining clarity within a team is essential. The decisions made early on in the planning process that may seem trivial in the early stages can be critical to the venture down the road. In the eyes of the FDA, the intended use, or general purpose of a technology, and the indications for use, the description of the medical conditions for which the technology will serve, treat or prevent, become an unbreakable vow between the originator and the FDA. From these two statements, design verification for the build will follow and validation testing will begin. Should the technology reach the market, any declaration made verbally, in print or by actions made, will be irrevocably bound to these statements. Gaining alignment within your team on exactly what will be built, for whom and for what purpose will provide assurance that everyone is working toward the same goal. Be specific and deliberate about the words chosen. They will delineate the work that lies ahead.

Get in Line

The textbook approach to commercial success is through the FDA approval process. The reality is there are multiple lines a team must be prepared to stand in. A plan should outline a path through all of them, often at the same time. A few questions to consider as a strategy for each is devised include:

  1. Who else is waiting in line?
  2. Can you make it to the market first?
  3. If the technology is approved, can it be built at an acceptable cost?

The Line to FDA Approval

FDA has improved their device review process by reducing review times for 510(k), premarket approval (PMA) and investigational device exemption (IDE) by almost a full year. This has helped to shorten the amount of time for products to reach the market in the United States. Improvements have also been made to the FDA’s review of novel, moderate risk devices through the Automatic Class III Designation De Novo process, where general controls validate safety and effectiveness and when there is no predicate device currently on the market.10

The good news is that this line appears to be moving faster. The bad news is that understanding how to move through the line can still be confusing. Consider Device Advice, FDA’s Center for Devices and Radiological Health (CDRH), for an essential, text-based, regulatory crash course.

The Line to Medicare and Commercial Payer Approval

An FDA approval may not mean what you think it does. When a technology is approved, it can legally be sold on the market and is eligible for reimbursement coverage by government and private plans in the United States. Don’t jump to the conclusion that Medicare or any commercial medical plan will provide payment for it. The Center for Medicare & Medicaid Services (CMS) decides if a technology is reasonable and necessary to provide payment to a health-care provider when a technology is selected for a patient. Simply put, FDA and CMS have not historically worked together aligning FDA clearance and approval with CMS coverage and payment.

The reimbursement strategy is one that should be part of the development process of a new technology early on. Consideration of coding, coverage and payment should be contemplated through a full landscape review of the technology and intended procedure. It should not be left until after FDA approval or commercial launch, when the possibility of government or commercial payer resistance may stop it in its tracks. Ask yourself a series of questions before starting off on your journey toward CMS approval or product development:

  1. Is the device similar to one on the market that has an existing DRG (Diagnosis Related Group) code or CPT (Current Procedural Terminology) code?
  2. Is the device a novel, disruptive technology to the market that requires a new DRG or CPT code?
  3. Does the device serve a market with strong demand?

If a device cannot be considered substantially equivalent to a device currently on the market for which there is a published CPT or DRG code, it may require at least one clinical study for review. The expense and time required to invest in such a study can be a challenging obstacle to small companies. For some devices, a parallel review can dramatically reduce review times and result in the requirements being filled for both FDA and CMS for a national coverage determination (NCD) at the same time. The process allows one study for a device that has been both applied for by premarket approval (PMA) or an FDA de novo request, and may be covered within the scope of Medicare Part A or Part B.10

For a deep dive, read the new Innovators Guide, Version 3.0 released by CMS. If your background does not include working within the government health-care sector, the educational resources that explain the process may feel a bit like reading the tax code. A more practical approach is to consider, early in the development planning process, enlisting the guidance of a qualified consultant to help in the translation and design strategy that will result in appropriate reimbursement.

The Line to the Customer’s Door

The myth that “Great products sell themselves” will drive even the most innovative device to the proverbial forgotten shelf. The commercialization of a product begins at inception. There are technologies that launch companies, there are those that deepen a current product pipeline and those that exist to sell as an asset to an outfit that will take it from early stage to late stage development, accepting all immediate risk, and reaping the long-term rewards. Defining the commercial goal is critical before embarking on the product development journey. It’s with this goal in mind that most innovators find themselves peddling their device in-hand to investors of all types in order to secure the financial backing required to see a device through to launch.

Regardless of what future an innovator has in mind for a technology, at the heart of any strong commercialization plan is the creation of a well defined value proposition. The value is the essence of the product that drives a customer to take action to purchase or advocate and builds brand loyalty because of a valued worth to them. Value should not be confused with the “price” of the product, or the “cost” to the manufacturer, which are internal factors that should be carefully considered independent of the value proposition. An important word of caution: decision makers may not be clinicians. In today’s clinical environment, the treatment rooms have become increasingly crowded with more than just the doctor and patient. Hospital administrators, regulators, and financial directors are influencing choices available to physicians, and have unique motivating drivers that must be considered equally into the value proposition for successful uptake of a technology.13 Fixed internal costs, balanced with unique feature benefits that meet the needs of customers across the decision chain will form the foundation for the value proposition. Five fundamentals that will inevitably impact the value of the product are: (a) the complexity of the device, (b) the operational support structure needed to manufacture at an acceptable cost, (c) the sales model, (d) clinical support, and (e) brand equity.13

Writing a situation analysis will address each of the fundamentals, and is the anchor to any successful business venture. It becomes the foundation for a marketing plan, and the beacon through challenging selling environments. If you didn’t calculate in the time for the study of textbook business plans, let the wealth of access to online resources be your guide. Consider the purchase of a marketing analysis toolkit from an educational portal such as Harvard Business Review, which will take you through the critical thinking process of defining and segmenting target customers, and how to build a plan for addressing the external and internal influences that will support or challenge the venture. Most importantly, design the plan and stick to it. Deviating from a commercial plan can be tempting when headwinds get strong. By thinking critically early in the process, the value of the device will become clear.

Who’s on First, What’s on Second and I Don’t Know Who’s on Third

Knowing the players in the process, and defining and sharing their objectives will make the road to launch slightly less perplexing. The successful launch of a technology in the vein space represents a clinical, operational, regulatory and commercial achievement. The venture must be governed by a plan and a departure from linear thinking. The achievement of milestones in FDA approval, CMS approval, positive coverage, coding and payment, manufacturing and commercial execution are the results of multiple team members moving through their pathways simultaneously, but with a clear, shared plan. Their roads are inherently connected in the timing of their successes, and while they focus on their individual goals, clear communication within the team must remain a priority.

Whether for the independent innovator or the management teams of early stage technologies in the vein space, resources from online government and academic portals can turn a novice into a savvy product developer. The global venous market is growing at a staggering pace. Know the players, field the right team, arm them with a clear, shared game plan and be prepared to make a global impact on patient lives.

References

  1. iData Research. “Peripheral Vascular Devices and Accessories Market Suite Report for US” https://www.idataresearch.com/product/us-peripheral-vascular-devices-market-2016-medsuite/. 2016-2022. November 2015. Web. June 2017.
  2. Grandview Research, Inc. “Varicose Vein Treatment Market Analysis By Treatment Mode (Sclerotherapy, Endovenous Ablation (Laser Ablation, Radiofrequency Ablation), Stripping, And Segment Forecasts To 2024.” http://www.grandviewresearch.com/industry-analysis/varicose-vein-treatment-devices-market. July 2016. Web. June 2017.
  3. Transparency Market Research. “Vascular Access Devices Market (Product Type - Peripheral Catheters (PIV and Midline), Central Catheters (PICC, CVC, Dialysis, and Implantable Ports), and Accessories; Application- Medication Administration, Administration of Fluid & Nutrition, Transfusion of Blood Products, and Diagnostic Testing; Route of Insertion- Subcutaneous and Intravenous; End-users—Hospitals, Clinics, Ambulatory Surgery Centers, and Diagnostic Centers)-Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2016 – 2024.” http://www.transparencymarketresearch.com/vascular-access-devices-market.html. September 2016. Web. June 2017.
  4. Pearl MD, Robert M and Alexander L. Fogel, MBA. “New Physicians Will Need Business School Skills.” http://catalyst.nejm.org/new-physiciansneed-business-school-skills/. November 2016. Web. June 2017.
  5. Pearl MD, Robert M. “What Doctors Can Learn From Business Leaders.” https://www.forbes.com/sites/robertpearl/2013/08/01/what-doctorscan-learn-from-business-leaders/#698d6d535f82. August 2013. Web. June 2017.
  6. Marano, JP. “Management of Information and Technology Overview.” 1995. Print.
  7. Speer, Jon. “Eight Questions That Define Your Medical Device User Needs.” Quality Digest. April 2015. https://www.qualitydigest.com/inside/fda-compliance-article/eight-questions-define-your-medical-device-userneeds.html.
  8. Leonard, Shana. “Vein-Illumination Device Helps Clinicians Stick it the First Time.” Medical Product Manufacturing News. May 2010, Volume 26, No. 4.
  9. Markets and Markets. “Vein Illuminator Market by Technology (Transillumination, Infrared Technology and Ultrasound), by End-Users (Hospitals, Rehabilitation Centers, Blood Donation Camps and Academic Institutions)- Global forecast to 2022.” http://www.marketsandmarkets.com/Market-Reports/vein-illuminator-market-84868532.l?gclid=CjwKEAjw-7J3KBRCxv93Q3KSukXQSJADzFzVSLbqc27b58P6XfGzC5pTVy2o3oveXL6zbXctdnnDIOBoC8Ebw_ wcB. March 2016. Web. June 2017.
  10. “FDA’s Role in Ensuring American Patients Have Access to Safe and Effective Medical Device Technology.” https://www.fda.gov/aboutfda/reportsmanualsforms/reports/ucm456969.htm. FDA.gov. 31 May 2015. Web. June 2017.
  11. “Payer Communication Task Force (PCTF).” https://www.fda.gov/aboutfda/ centersoffices/officeofmedicalproductsandtobacco/cdrh/cdrhinnovation/ucm456149.htm. FDA.gov. 2 March, 2017. Web. June 2017.
  12. “Device Advice: Comprehensive Regulatory Assistance.” https://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/default.htm. FDA. gov, 28 March, 2017. Web. June 2017.
  13. Llewellyn, Chris; Podpolny, Dmitry; Zerbi, Christian. “Capturing the New ‘Value’ Segment in Medical Devices.” http://www.mckinsey.com/ industries/pharmaceuticals-and-medical-products/our-insights/capturing- the-new-value-segment-in-medical-devices. McKinsey & Company. January 2015. Web. June 2017.

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