The Implications of a Changing Healthcare Environment

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James_DonnellyAn Interview with Siemens Healthcare Diagnostics’ Dr. James Donnelly.

The medical device industry has achieved significant growth over recent years, with the industry expected to generate $365 billion in sales by the end of 2015, and $460 billion by 2018 (information sourced from TÜV SÜD). The initial and continued success of a medical device is dependent on the value it brings to the delivery of healthcare, where there is a need to reduce waste in an evolving regulatory and reimbursement climate.

Prior to his speaking engagement at the upcoming American Medical Device Summit 2015 in Chicago next week, we had the opportunity to sit down with James Donnelly ,Ph.D., Chief Scientific Officer, Global VP, Medical, Scientific & Statistical Affairs, Siemens Healthcare Diagnostics to gather his perspective on the medical device industry in the U.S., and understand how changes to the healthcare system will influence the industry moving forward. Donnelly has been with Siemens for more than eight years, beginning as Global Vice President of Medical, Clinical and Statistical Affairs. He is passionate about integrating customer input, quality, and innovation into the design of products. He also believes the customer must be an active partner in product lifecycle management and that innovation without purpose will not consistently add value to the healthcare system.

Jim, how would you describe the current healthcare environment in the U.S. for medical devices?

The current healthcare spend is not sustainable. We spend too much on healthcare delivery without the expected return in value. The healthcare system and its stakeholders are all experiencing significant cost pressures right now and certainly need to bring more value into the system as opposed to simply contributing on a transactional basis.

If you look at our per capita spend and the benefit we are gaining from this outlay for healthcare right now, there is much room for improvement. In 2012, the Institute of Medicine estimated that 30% of healthcare spending in the U.S. is waste. A way to look at it would be for every dollar you spend, you should see some tangible improvement in the quality of life for the individual, or at least a greater reduction in costs downstream. Optimizing preventative care is one aspect of this. Considering we are one of the greatest spenders in healthcare, the U.S. is not exactly sitting at the global forefront.

So what are the implications of this evolving healthcare need for medical device manufacturers?

State of the art changes; and products need to adapt or become obsolete. From that perspective we need to anticipate what is needed as far into the future as possible. We also need to act fast to understand whether or not, in the changing environment, we will still have viable products. If you don’t have a viable product then your alternative is to change your business plan to sustain your business in other ways; whether it’s through new product investments or changing business models.

Only certain manufacturers will be able to move beyond their core product and this will depend on how a medical device is positioned. For example, if it’s a stent or joint replacement, then it will have its clearly defined intended use. Manufacturers of these types of products should always strive to ensure that the device is easily implemented, has user acceptance, leads to minimal complications, and has a longer life than other current available devices.

Medical devices cover a wide spectrum of products. On the diagnostics side we deliver information that is actionable for a physician or other caregiver so that they can make informed treatment decisions. Device manufacturers that generate data need to get to a point where we deliver more value not only by providing information that’s actionable but also by helping to reduce healthcare costs. The way to do it of course is to look at new applications such as wellness and prevention. Can healthcare providers anticipate when someone is going to become chronically ill and take action to avoid it happening?

With respect to personalized medicine it comes down to being able to determine whether or not the treatment options are correct and working. In other words: the right drug or treatment for the right patient at the right time. Further, can we improve a patient’s quality of life by using diagnostics that help us understand whether or not there is further progression of a disease or a need for a change in therapy? Does the test indicate that the prognosis is positive with that particular therapy and if not what other options are available?

From an international perspective, other countries are going to catch up with some of the changes underway in reimbursement in the U.S. and with that cost pressures may be similar or in some circumstances, approached differently. It all comes down to the same thing there will be shrinking revenue available for care.

In your opinion what will the future hold for the medical device industry over the coming years?

It is the best of times and worst of times.

I always try to look at the up side when pressure like this comes. If you are capable of responding to it and getting ahead of it you end up benefiting from the changes. This is not limited to the U.S., although the U.S. is certainly going to be one of the markets where diagnostic manufacturers will see less growth organically. More of the revenue and benefits will come from providing solutions that don’t just produce a result, they bring clinical value.

I think right now the drive to reduce costs and the need for shared risk (payer and provider), really make for an interesting time. We are going to see either reallocation or contraction of spending in certain areas and much more value coming into the system. In any way that we can smartly begin shaving down the healthcare spend in the U.S. there will certainly be the added benefit of helping the economy in other ways.

Point of Care Testing and the Need for Interoperability

In healthcare technology, manufacturing, medical device, medtech, mfg by GenerisLeave a Comment

Point of Care Testing (POCT) enables rapid diagnostic tests to be performed at or near the site of patient care. This allows for the immediate generation of test results which can then be instantly acted upon, improve decision-making at the time of care and shared with all members of the medical team.

POCT devices are used in both a clinical and non-clinical settings.  Complex clinical tests such as cardiac or coagulation testing are often conducted within a clinical setting, however, a number of devices are used within mobile units, ambulances etc.  POCT devices must therefore plan for device use outside of a clinical setting and must consequently take into account the need for connectivity, portability, longer shelf life of reagents and kits and ensure the device usability.

The digitization of medical health records has resulted in a greater need for connectivity among devices and the ability to aggregate data from multiple devices into a single, central system.  The aggregation of this data in itself can become a major challenge as providers attempt to aggregate information from multiple devices with proprietary interfaces.

Wipro Ltd. advises that POCT1-A2 is the approved standard for point of care device interoperability and recommends that providers adopt a framework-based approach that can help address the challenges of integrating POCT devices by standardizing implementation across devices, leading to ease of maintenance and better ROI for medical device vendors. POCT1-A2 addresses the problems of Point of Care Testing device connectivity and message formats for information exchange between the POC data manager and the device for patient results, operator list, patient list, calibration and QC results, and other scenarios.

Wipro coverInteroperability for Point of Care Testing Devices_Whitepaper_web

Join Wipro and Generis Group at the American Medical Device Summit 2015 taking place next week in Chicago!

Balancing Competing Priorities in Medical Device Manufacturing

In healthcare technology, industrial markets, logistics, manufacturing, medical device, medtech, mfg, Quality System Management by GenerisLeave a Comment

Medical device manufacturers must consistently work to balance competing priorities; everything from product development, regulatory compliance and quality to marketing.  Managing these priorities in disparate individual silos leads to a lack of efficiency, communication and productivity.  As a result, many manufacturers are turning to holistic enterprise operation solutions to streamline their processes from innovation through to the product end of life.

Dassault Systèmes Industry Solution Experiences for Life Sciences powered by the 3DEXPERIENCE® platform provide a major leap forward with a Single Source of Truth (SSOT) environment that spans the entire product lifecycle from conceptual design to end of life. These solutions for Life Sciences enhance global collaborative sharing, making compliance and innovation complementary processes that contribute to each other’s and the company’s success.

The Dassault Systèmes whitepaper “TRANSFORMING MEDICAL DEVICES WITH SUSTAINABLE INNOVATION”outlines some of the key benefits of this integrated technology for medical device manufacturers:

  • Manage and facilitate innovation without compromising quality and safety through one cohesive platform that allows collaboration of design information and visibility across the product lifecycle from ideation to end of life.
  • Increase patient safety by reducing the number and severity of recalls and field actions
  • Increase business agility by streamlining design collaboration and managing team activities to align project goals and user requirements.
  • Speed compliance processes by integrating regulations into product development (design for compliance) and e-submission.
  • Accelerate time-to-market by streamlining the complete regulatory submission and approval process (dossier assembly, review, submission, tracking, and renewals through end of life) by geo-global regions.
  • Reduce engineering re-design time and cost through simulation testing that can help expedite clinical trials and reduce product failure recalls.
  • Expedite product design transfer with current released documentation to facilitate the manufacturing process while maintaining end-to-end traceability throughout the product lifecycle.
  • Develop strategic suppliers and partners by bringing supplier quality history into the sourcing process.
  • Balance speed versus control by improving common enterprise processes, then tracking and measuring them as a basis for improvement.
  • Maintain complete product requirement traceability from ideation through development, design verification and validation, to commercialization and product obsolescence.
  • Drive part costs down by publishing part specifications across product lines, brands, and regions to create efficient procurement processes.
  • Achieve cost savings through lean and efficient re-use of Intellectual Property (IP).
  • Enable design and manufacturing outsourcing by creating centrally-managed global work teams and using a single repository to store all product information throughout the product lifecycle.

Dessault Systemes

Join Dassault Systèmes and Generis Group as we explore the challenges and opportunities in product development, quality management, speed to commercialization and manufacturing at the American Medical Device Summit 2015 taking place Next Week in Chicago!


Analyzing Potential Manufacturing Plant Locations

In business, facilities, facility, industrial, industrial markets, manufacturing by GenerisLeave a Comment

Establishing a new facility is a complex process that requires a large investment and detailed analysis of internal production needs, facility features and location requirements.  The first step in this process is to select the country and region that best satisfies manufacturing needs.  

Mexico has rapidly become a top destination for medical device manufacturing.  Executives and trade organizations cite major cost savings and ease of business processes as some of the main reasons for selecting Mexico.

I sat down with our friends at Co-Production International to gain a clearer understanding of how manufacturers analyze the opportunities available for site location and learned that some of the main factors influencing site assessment are:

  • Ease of trade: free trade zones & intellectual property rights (such as NAFTA)
  • Proximity to major markets (in Mexico’s case this is the US and Canada)
  • Social infrastructure: investor friendly attitude of the community
  • Established commercial infrastructure (land, facilities, transportation)
  • Labor supply: low-cost, highly skilled workforce
  • Supply chain access and exposure / proximity to potential new clients and suppliers
  • Economic stability, safety and security

Co-Production International explained that the reason for Mexico’s growing popularity is that it has strengths in all of the above categories.  From temporary imports for final assembly to full production operations, Mexico’s medical device sector is equipped to handle a broad range of medical device manufacturing activities.

Contact Co-Production International for a labor cost analysis that will demonstrate the overall cost of manufacturing in Mexico and how this expansion will impact your bottom-line profits. Or schedule a Baja Manufacturing Tour.

Co-Production infographic for blog post - edits round 1

Connect with both Co-Production International and Generis Group at the upcoming American Medical Device Summit 2015.  It’s only 17 days away!

How Information Technology is Driving Patient Centricity

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Phani_Bidarahalli“The role of IT is vital in driving People/Patient centric solutions. The need for interoperability for home health devices and hospital based information systems will drive the next generation of healthcare IT.”

– Phani Bidarahalli, GM & Global Head, Healthcare, WIPRO

The current health system spend is not sustainable and as a result there is a growing need for more effective, value adding healthcare services.  In recent years healthcare providers have shifted their focus to become more patient and outcome centric in an attempt to achieve the required value for sustainability. Wipro is a multinational Engineering, IT and System integration services company that has been a key partner to some of the largest healthcare organizations and medical device manufacturers in the world. To understand the role that information technology plays in this push for patient-centricity, I sat down with Phani Bidarahalli, GM & Head, Global Practice, WIPRO, to gather some of his opinions and insights.

Phani predicts that “the next wave of innovation in healthcare will center around precision diagnosis and measurable clinical outcomes.” Clinicians are already striving to incorporate information produced by medical devices into their decision-making processes, and with the growth of big data  we will see more and more “researchers collect and harvest data to identify patterns and develop algorithms to narrow down on disease signatures and develop better clinical pathways.”

Cloud based infrastructure is also providing the unique opportunity for healthcare organizations and medical device manufacturers to provide seamless access to data and information regardless of physical location. Emerging markets have been taking advantage of mobile technologies and cloud based infrastructures to provide remote health services to under-served areas that “are extremely challenged in terms of  physical proximity to clinicians and hospital infrastructure.” explains Phani. As such cloud based infrastructure “will play [and is already playing] a very important role in providing access to healthcare technology to promote healthier living.”

Another factor driving patient-centric care is the rise of at-home health monitoring and management systems.  Phani informed me that, through these at-home technologies, “people are experiencing ‘connected-ness’ in their everyday lives more than ever before,” and “home will form a natural extension of hospitals for patients.”  This increased “connected-ness” and proliferation of at-home devices will result in the creation of mass amounts of data outside of the clinical setting that can be used to inform population health and future investments in the health system. Phani notes that “with the increased proliferation of such systems, medical device manufacturers will need re-invent themselves to develop simple, reliable and  nimble devices which are easy to use and have high connectivity.”

As big data analytics becomes more widely utilized, the medical device industry will need to adjust and introduce more products “whose competencies are based on big data.” Which will mean that “the traditional device manufacturing firms will have to develop rich data schemes to not only collect data but also aid in decision making.” Phani advises that, in order to survive in this shifting environment, “device manufacturers will need to foster strong strategic partnerships to enhance productivity and invest better in their core competencies.”

Despite the exciting possibilities that these new technologies present,  Phani predicts that healthcare providers and device manufacturers will prioritize “security and patient privacy as extremely important.”

To hear more about the integrating patient centricity into device manufacturing, attend the American Medical Device Summit 2015, taking place in Chicago on September 21st -22nd, 2015.

The Emerging Challenges for Medical Device Manufacturers: An Interview with Maetrics

In healthcare technology, manufacturing, medical device, mfg by GenerisLeave a Comment

Edward_TomlinsonMaetrics is a global, full service life sciences consultancy firm that has worked with 4 of the top 5 medical device companies, 8 of the 10 top pharmaceutical companies and 6 of the top 10 biomanufacturing companies.

Given Maetrics’ breadth of experience and expertise, I wanted to sit down with Edward Tomlinson, Managing Director of Maetrics, to hear his opinions on the challenges that medical device manufacturers and the industry as a whole will face in the years ahead.

So Edward, how would you say the medical device industry is progressing as a whole? 

By any financial method of analysis the industry is doing very well. It is growing faster than pharmaceuticals, there continues to be a robust series of mergers/acquisitions and as the global population both grows and ages there is an ongoing upturn in the addressable market for their products. Adoption of technologies such as mobile or e-Health and 3, or 4-D printing promises many new avenues of treatment.

However not everything is all roses. The regulatory agencies around the world are increasing their level of oversight in all areas from product development and approval through manufacturing, sales and marketing practices and post launch patient safety monitoring. Further, the revenue and margin from product sales is increasingly dependent on patient outcomes. In order to protect their market position companies need to not only improve their financial performance to avoid becoming a takeover target but must also up their game in product development, compliance and safety to avoid any quality related liabilities.

What  factors could potentially effect industry growth in this sector?

If post-merger companies fall victim to some of the same problems we have seen in the pharmaceutical and biotech sector then we will see a downturn in the productivity of the development groups and difficulty achieving the promised synergies by any means other than significant headcount reductions.

There is also the risk of disruptive technologies – for example, if someone invents a polio vaccine, there is no longer a market for iron lungs, or if bariatric surgery does, indeed, cure type II diabetes then the market for blood sugar testing, insulin pumps and all the devices that go along with cardiac and circulatory issues will also go away. As electronic technologies such as cell phones, remote monitoring etc., become more established we may see many more unexpected disruptions to traditional diagnostic and treatment models.

What do you feel are the most pressing challenges that medical device manufacturers are facing today? 

Complexity and proliferation.

What we mean by that is the complexity of the products with a wide variety of materials, sophisticated design, on board electronics etc., is extremely difficult to manage from a design and change control perspective, not to mention field service! This is compounded by the sheer number of SKU’s that large companies must manage. As more and more of this information enters the public domain, e.g. via the FDA’s UDI ruling the ability of firms to stay on top of product configuration information over the life cycle of the product is critical. Post merger companies need to be able to adopt a “standard model” approach to capturing and maintaining product related information. These companies have well defined post merger integration plans and spend a lot of effort to consolidate financial reporting systems but rarely invest in areas quality and compliance related areas such as supplier, product definition or complaints management.

What are some of the challenges that manufacturers face when it comes to managing supplier and CMO relationships?

The end to end process of determining first to outsource some (or all!) manufacturing through supplier/contractor selection and approval and forward though multiple batches of product has many competing perspectives. Procurement and SCM want low cost, on time highly flexible supplies, QA wants product that meets specs and maintains long term stability studies and Compliance wants minimal risk.

Negotiating a Supplier Agreement that embodies and addresses all of these competing priorities is a challenge, but when all is said and done the agreement is only “words”. The real test is how well the supplier complies with both the intent and spirit of the agreement. There is a great deal to be said for the “trust but verify” model. Multi-day CMO site visits are expensive and time consuming. Companies who use multiple CMO’s need to develop highly sensitive Risk Assessment methodologies to inform decisions regarding survey or desk audits vs. ion site and in person audits.

To find out more about overcoming the current and emerging challenges, and to hear more from Maetric’s Managing Director, Edward Tomlinson, check out the American Medical Device Summit taking place in Chicago on September 21st-22nd, 2015.

Speaker eBook: Q&A with the Speakers at the American Medical Device Summit 2015

In business, generis group, medical device, medtech, Q&A by GenerisLeave a Comment

There is less than one month to the American Medical Device Summit 2015! With the event on the horizon, we took a moment to gather some of our key speakers and asked them to share their insights and opinions on the current state and future outlook of medical devices in the U.S. We posed the following questions:

1. How would you describe the current landscape for medical devices in America?

2. What are some of the biggest challenges that companies are facing when bringing medical devices to market?

3. How can these challenges be overcome?

4. When it comes to medical device inception, development or commercialization, what is the one piece of advice you wish that someone had given you?

CLICK HERE to view the Speaker eBookcover screen shot

10 Reasons US Manufacturers are Choosing Mexico

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Mexico is ranked 3rd out of five high-growth markets (along with Brazil, China, India and Russia) and it is fast becoming a go-to destination for US manufacturers.  The country’s regional proximity lends it an upper hand when compared to these other high-growth regions; with both cultural ties and the NAFTA corridor connecting Mexico to major American markets.

In the past 15 years Mexico has entered over 12 free trade agreements giving preferential treatment to 49 markets on 3 continents.  The low labour and utility costs have enticed a number of manufacturers to pursue Mexico as an option that is more cost effective, while still providing the full range of necessary support services (legal consulting administrative, outsourcing, call centres etc.).

To help define why Mexico is fast becoming the destination of choice, we asked our friends at CPI Co-Production to share the top 10 reasons that they have seen manufacturers choose Mexico over other high-growth regions.


For more insights into medical device manufacturing, and to find out more from CPI-Coproduction, join us next month at the American Medical Device Summit 2015 taking place in Chicago.