Dr. Josh Makower is Co-founder of Stanford’s Biodesign Innovation Program, and a Consulting Associate Professor of Medicine at the Stanford University Medical School. He’s also Founder and Chief Executive Officer of ExploraMed, a medical device incubator. And he’s a Venture Partner with New Enterprise Associates, where he supports the investing activity in new medical devices.
In short, Dr. Makower is a world authority on med-tech innovation. I bumped into him while beginning preparations for the 2011 DiabetesMine Design Challenge. He was kind enough to share his insights on some of the hottest issues in this arena today: FDA’s apparent quashing of medical innovation, the American healthcare mess, and how patients are really and truly being integrated into the design process, at last:
DBMine) Dr. Makower, the recent editorial Chicago Tribune editorial (“Is FDA sucking the life out of life-saving innovation?“) cited your work, noting that “the current regulatory environment is putting our nation’s fragile medical innovation infrastructure at risk.” Can you tell us in laymen’s terms what’s going on?
JM) The overwhelming majority of medical technology innovation is found in small and mid-sized companies. Their lifeblood is the angel and VC communities that help fund their work, as they have no revenue while they are in the development stages. When an environment exists where it takes longer and longer to gain market approval by regulators, more and more investors are walking away from this innovative field. In essence, the oxygen is being sucked out of the room for many of the innovators and entrepreneurs we are relying on for tomorrow’s devices and technologies. It truly is a very precarious time, but it is not too late to address these challenges.
The editorial also said “FDA and industry must work together towards a reasonable and balanced regulatory process for new innovations.” How would you define a “reasonable and balanced process” here?
In order for innovation and patient care to thrive, there needs to be reasonable, and perhaps most importantly, predictable expectations. Much of this can be addressed up front. When manufacturers and regulators begin discussions on what a 510(k) submission’s endpoints are, it is important that these milestones are well thought out, and then, adhered to. When the goal posts are moving and there isn’t certainty as to whether or not the benchmarks will be constant, this can wreak havoc on the ability of innovators to meet metrics. When this happens, everyone loses.
You’ve stated, “panels that advise the FDA are full of scientists with all sorts of conflicts of interests.” But you’ve also said, “Money is not the biggest driver of behavior.” So what do you think is driving behavior at the health policy level?
I think often we tend to address short term concerns without fully realizing the long term consequences. The practice of medicine — as well as the development of the products used in it — is constantly changing and improving. While we always strive for perfection, we simultaneously learn how deliver better care, and safer products. My concern is that an environment where there is less tolerance for risk and a greater demand for clinical data — which often provides little if any more value — is reacting to isolated stories and misconceptions in the med-tech field. We need to change some of the mindset for both innovators and regulators, and it is crucial that we work together and communicate so we can achieve our common goals: improved patient care and innovation.
Regarding the national healthcare mess – You’ve put the spotlight on WellPoint as being the quintessential health payor Bad Guy because they have “too powerful grip on what gets paid for.” Why them? And how can one organization wield so much power?
I used that company as an example, but of course they are not the only ones. The issue today is that several large organizations like them control much of which procedures and technologies are deemed to be worthy of coverage and payment. Many of these organizations have created exceptionally difficult pathways for new technologies and procedures, often only yielding when the outcry from doctors and patients reaches a crescendo. Many also have established policies making it impossible for medical technology innovators to appeal decisions or meet with key officials. Since they often have a captive set of lives they cover, it is very difficult for patients to change plans or go to other carriers that offer certain new procedures and technologies; thus, they do not truly need to be very responsive. I think this illustrates the challenges we have in this area.
How will the proposed medical device tax impact patients like us? (i.e. people living active but expensive lives with manageable chronic illnesses?)
My greatest concern is that patients miss out on advancements that would continue to improve their quality of life, and in the long run reduce health costs. Over the years, life expectancy has greatly increased, and the average hospital stays continue to drop. This is a win-win scenario for patients, and in no small part due to medical technology. The device tax, as it is currently structured, will tax any and all revenue, regardless of whether or not a business is profitable. The fact is that almost all start-ups and novel businesses are not profitable for years, so this tax could force them to shut their doors. We have time to work on this issue as it is not imposed until 2013, and it is my hope that we can at a minimum recognize that small and mid-sized companies — where the overwhelming majority of innovation takes place — can be exempted from this provision.
On His Work…
What exactly are you and your colleagues doing to lobby the FDA to change their approach to medical innovation?
The truth is that the medical technology field is a very complex profession, and elected officials and policy makers often don’t realize the myriad of steps it takes to get a product into the marketplace. There are reimbursement challenges, patent disputes, and many other issues that confront our industry. We are working to help educate the FDA and others about the real-world ramifications their decisions have on innovation and patient care. We’ve met with them in person as they visit regions throughout the country with a strong med-tech presence. it’s one thing to discuss issues in Washington, but it certainly helps to put a face on these challenges, and show them just how complicated it has become. In the end, we all want safe and innovative products in the marketplace, the question is how we can work better together to recognize our respective challenges.
At the Stanford BioDesign Innovation Program, which you co-founded, what would you say are the key principles students learn about medical innovation?
The fundamental principle behind the biodesign innovation program is that innovation is a process which can be reproducible and can be learned and taught. Given the high stakes of medical technology innovation, it’s exceptionally important to try to master the process, and perhaps avoid many of the common pitfalls.
What are some of the typical pitfalls in medical device design?
A few common pitfalls are: 1) to be so excited about solving a big problem that one leaps at the first good solution that presents itself, rather than systematically continuing to generate ideas and choosing the one that fits the need criteria the best, or 2) to not consider all the possible downstream challenges with respect to clinical or reimbursement path and if only some minor changes were made, an easier path forward might have been possible.
How are real-world patient needs being integrated into the design process?
The process starts and ends with patients – not technologies. We teach the students that one must focus on the patient and their needs first and foremost to truly understand what is required to help them before thinking about any technologies or solutions. To us, the patients teach us, not the other way around – they are everything.
Here’s what we do: With all the appropriate HIPPA training for all involved and with the consent from the patient, we go into the operating room, into the clinic, into the office, and sometimes even into patients’ homes to try to understand their problems better. I’m not much of a fan of focus groups or online surveys to get into patient’s needs, but I will do it on rare occasion when reaching the patient directly is too difficult or I am looking for confirmation of an issue more broadly.
At your innovation incubator company ExploraMed, the stated mission is “to significantly improve the quality of life for patients through fresh paradigms which create value for our customers and shareholders.” If someone comes forward with a new medtech idea, how do you determine if it constitutes a “fresh paradigm”?
I often find that too much dogma is integrated into the way we think as physicians. We accept too many things as ‘the way things are done’ or the ‘way we were trained.’ I really enjoy opportunities to take this mind-set apart and offer solutions that are unexpected and have the potential to deliver patient outcomes that were never anticipated. When this happens, it usually represents a new paradigm… a new base for thinking about how we approach treating an important disease or condition.
Specific to diabetes, what do you see as the Next Big Thing?
If we can fix the problems we’re having bringing new therapies to market, I have a feeling we will have a chance to see a complete change in the way we treat diabetes in our lifetime. I believe some of these new device solutions that target unexpected metabolic pathways are the beginning of some of this change, and every success there will bring new insights and urge innovators forward.
Finally: I’m hoping you’ve seen our innovation competition called the DiabetesMine Design Challenge. Any thoughts on this effort to encourage fresh thinking in medical innovation?
I think it’s great! Keep up the good work. Every little bit helps.