Trilogy Tidings
March 2008
in this issue
     Three different topics this month.  The first is the big news in medical devices that Medtronic won a victory in the U.S. Supreme Court that results in more liability protection for manufacturers of medical products approved by the FDA on the PMA track.  I share some opinions about that and what it may, and may not, mean for industry.
     The second topic is rapid prototyping in medical product development and commercialization.  This isn't new, but I share a broader definition than the one normally recognized, a definition having more to with meeting market needs than speeding development.
     And, the third has to do with the (current or impending) economic recession.  Time to hunker down -- not. 
     As you read this I hope Spring has sprung where you are.  In Boston we'll have to wait a while longer.
Lead User Dialog
Are medical device makers now relieved of liability? 

     The Supreme Court gave Medtronic, and by extension many other medical-product makers, a very nice gift on February 20.  In an 8-1 decision it ruled that the Medical Device Amendments of 1976 overrides most state-law claims seeking damages for injuries caused by medical devices approved by FDA under the PMA process.  I suspect you've heard about this, since the business press has been all over it.  The best coverage I've seen so far is by Canon's MX magazine.  My first reaction: Great news for medtech manufacturers (drastically reduced liability insurance premiums); very bad news for injured patients (forget about suing said manufacturers).  My second reaction: Not so fast!

     There's no question that, at least for now, FDA will shoulder more of the burden and manufacturers of PMA-track products less.  But I would advise against reducing your QA budget, firing your legal staff and discharging your litigation advisors just yet.  Curb your giddiness.  Here's why:
  • The great majority of medical devices are 510(k)-track products, so most medical products are not affected by this decision.  And, by the way, those products -- or the clinicians using them -- cause most of the injuries.
  • Do you really believe that today's FDA can handle the entire liability burden created by this court decision?  And, if the agency is reconfigured to do so and takes this responsibility seriously, will another PMA-track device ever be approved?  I think fear of litigation is a better motivator than over-regulation and its attendant higher costs.
  • It's my understanding that the U.S. Congress can turn this decision on its head with some new, clarifying legislation.  Do you think that might happen?  Who will be in control of Congress in 2009?
  • Along the same lines, do you think that trial lawyers exert some influence in the Congress?
  • As the MX article nicely points out, you can still be successfully sued for failing to meet FDA's specifications and labeling rules or for delivering any product with manufacturing defects.  You will definitely not be off the hook.

     Finally, if you're thinking of jumping on the PMA track just to gain some liability protections, you're nuts!  The added regulatory costs and extended time-to-market are certainly not worth it.      

Thoughts to share?  Contact me.
How can we better exploit prototyping tools? 
     Experienced medtech product developers are taking great advantage of modern prototyping tools.  Various computerized packages available today enable extensive design iteration and optimization before any real materials are involved.  As a result, the first physical prototype can be nearly perfect and fully manufacturing-engineered.  That's great; it can save time and money.  But is it the the best way to exploit these fine "rapid prototyping" or "smart prototyping" tools?  Maybe not.
     Some interesting work by Stefan Thomke (Harvard Business School) and Preston Smith (New Product Dynamics) suggests there is often a way to gain even greater advantage from the use of these tools.  They suggest that "it is actually faster, and more accurate, to do it wrong the first time".  Their recommendation is to "get something -- almost anything -- out there and let others react to it and tell you what is wrong with it before you go down a path that won't delight them".  (In my view the most important "them"  is prospective customers.)  In this approach you use a prototyping tool to rapidly produce a series of cheap physical prototypes that allows you to expose your ignorance early and often until you get the product "right" -- not so much in an engineering sense but in a "meeting-the-market-need" sense.  Ideally, each iteration is aimed at answering only one question, and each prototype is just good enough to answer that question.  Clearly, taking this tack requires sublimating your ego for a while and redefining failure.  But you're actually likely to minimize the time to commercial success if not the time to first market launch.
     It seems to me you need to modify the rules a bit in the medtech arena.  You cannot afford too much iteration in FDA-cleared products that are actually sold to customers; rather, you would opt for a series of prototype exposures to prospective users before offering the first cleared product for sale.  You might call this incremental market research.
     Smith cautions that doing it wrong initially cannot work in every instance, notably if the cost of making each prototype is very high, e.g. LSI semiconductors.  I think it also might not work well for mechanically complex equipment with intimate user involvement.  With these caveats in mind, getting it wrong the first time sounds like an intriguing concept.   
Thoughts to share?  Contact me .
Here comes the recession ... Better (not) cut back 
     A recent article by Robert Croston and Patrick Cahill of the Wellesley Hills Group reminded me -- and I'd like to remind you -- of the importance of sustained marketing activity during economic downturns.
     Here we go.  The signs aren't good.  If we're not in a U.S. recession already, we're heading in that direction.  Time to panic!  Batten down the hatches!  Cut back now, and be ready to gear up when the economy turns around.  Reduce the marketing budget and headcount; it's an easy target and there's really no downside.  How shall I put this delicately?  Baloney!
     Consider the following facts to set yourself straight:
  • PIMS Associates found that firms that increase their marketing spend during a recession actually grow significantly faster than firms that maintain or decrease their marketing spend.
  • McGraw Hill found that business-to-business companies that maintained or increased their marketing during the 1981-1982 recession grew during and after the recession at a far greater rate than those that didn't maintain or increase marketing spending.
  • American Business Media found that maintaining share of mind during an economic downturn directly related to current and future sales and that maintaining share of mind costs much less than rebuilding it after a period of marketing inactivity.
  • According to Coopers & Lybrand, marketing during a time of economic difficulty solidifies your client base, portrays you as stable, takes business away from less-aggressive competitors, and positions your firm well for post-recession growth.

     The obvious bottom line: Smartly maintain or even pump up your marketing activities now; if you wait for an economic renaissance it will then be too late

Thoughts to share?  Contact me .     
What does Trilogy do? 
     Trilogy Associates facilitates business growth and renewal through commercialization of new products, providing the following services:
  • Opportunity assessment
  • Business planning and enterprise growth strategies
  • New-product conceptualization, commercialization and marketing
  • Market research and competitive assessment
  • Business development and partnering
  • Market and technological due diligence
  • Assessment of the therapeutic and diagnostic potential of novel technologies
  • Design of efficient and effective development strategies for early-stage biomedical products
  • Business and technical writing/publishing

     Inquiries to establish whether and how we might support your business initiatives are always welcome.  Contact us.

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Joseph J. Kalinowski, Principal