Trilogy Tidings
April 2010
in this issue

     Everyone is talking, blogging, editorializing, revolutioneering and tweeting about U.S. healthcare - and I mean everyone.  So why not me?   I'm especially fond of the first piece below because it helped me to get calibrated on healthcare and the American system of government generally.

     It's so challenging to distill the truth these days; one has to interpolate between bomb-throwers on the political right and left.  But there's another alternative: Find good, informed, rational stuff to read.  My mission -- in addition to making a living -- is to find that stuff and share it with you. 

Change Ahead
Gary Becker, Optimistic Economist 

Gary BeckerBecker, the Nobel-winning co-founder of the Chicago school of economics, was recently interviewed for an opinion piece in the Wall Street Journal.  I read the piece last weekend and found it very enlightening.  You might have the same experience.

     The interview leads off, as required, with healthcare economics but goes on from there to address the American economic and political future.  If you know Mr. Becker, you know he leans to the right (well not literally, just politically).  But that's almost irrelevant.  The guy is truly incisive.  I'll share with you the following two quotes from the article, which serve as bookends for his views and that helped me understand what's going on:

Capitalism has produced the highest standard of living in history, and yet markets are hard to appreciate? Mr. Becker explains: "People tend to impute good motives to government. And if you assume that government officials are well meaning, then you also tend to assume that government officials always act on behalf of the greater good. People understand that entrepreneurs and investors by contrast just try to make money, not act on behalf of the greater good. And they have trouble seeing how this pursuit of profits can lift the general standard of living. The idea is too counterintuitive. So we're always up against a kind of in-built suspicion of markets. There's always a temptation to believe that markets succeed by looting the unfortunate."

 "[The pessimists about our future] are very eloquent," Mr. Becker replies, his equanimity undisturbed. "And maybe they're right. But I'm not that pessimistic." The temptation to view markets with suspicion, he explains, is just that: a temptation. Although voters might succumb to the temptation temporarily, over time they know better.

     Don't take my word for it.  Read the article.

How About that Medical Device Tax? 

TaxesThe folks at MassDevice conducted a poll on the recently enacted medical device excise tax on revenues, which is slated for future implementation if not repealed or modified in the interim.  They also conducted a preliminary and admittedly imperfect retrospective analysis of the tax's fiscal impact on 58 medical device (but not diagnostics) companies if this provision had been in force in 2009.  The results are summarized in a March 24 blog post.  The findings are mildly interesting.  Look up your company in their table.

One Reaction to Planned 510(k) Overhaul 

FDAI certainly think the Agency's emerging plans and actions dealing with the clearance of medical devices are important and worth monitoring closely.  But our colleagues in Minnesota's Medical Alley are really concerned and upset (i.e. scared), if their February meeting is any indication.  Example: "Let's not fool ourselves.  We could be regulated away."

Actually, much of the reported venting at that meeting had more to do with FDA behaviors generally than with their tinkering with 510(k) in particular.  (Not surprising, since the actual review of 510(k) is being conducted by the Institute of Medicine largely out of public view.)  One thing's for sure: VCs are holding back owing to the current uncertainty.

My advice today is the same as it was in February: "Watch this closely, and consider accelerating commercialization of that new product to beat the changes".

Resources from our Archives 
     Check out our Reading Room to view my published articles, presentations and white papers on a variety of topics.
     And, you can examine an archive of my prior newsletters (since February 2007).
What does Trilogy do? 
     Trilogy Associates facilitates business growth and renewal through commercialization of new products, providing the following services:
  • Opportunity assessment
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Contact Information
ContactInfoJoseph J. Kalinowski, Principal
LinkedIn Profile: www.linkedin.com/in/trilogy