An Old Salt's View of the Medtech Industry - April 11, 2012

From the 2012 U of MN Design of Medical Devices Conference:
"Origins of the Medical Device Industry and Its Future"

Norm Dann, Adjunct Assistant Professor, Innovation Fellows Program, Medical Device Center, University of Minnesota; Recipient of the 2012 Design of Medical Devices Conference Award.

Keynote Bio:

Norman Dann, board member for several medical device companies. Adjunct Asst. Professor Innovation Fellowship, Medical Device Center, University of Minnesota. Formerly: general partner, co-founder Pathfiner Venture Capital Funds. VP Sales and Marketing, Sr. VP Development Medtronic Inc. Founder The Dann Company a sales and service organization representing medical device and laboratory instrument manufacturers. Project manager Designers for Industry. BSIE Pennsylvania State University.

Abstract:



Norm will spend time telling his story of observations made of the birth and evolution of the modern Medical Device industry. The current status and some thoughts about changes needed to improve growth and maintain the US in a leadership role.

Keynote:


The medtech industry has slowed down, and may perhaps actually be in a slump.  After many years of incredible success, you in audience are probably wondering “how do we get this mother going again?”


Norm's story starts when he was young, growing up on the east coast.  His father, an immigrant from Lithuania near Vilnius, with less than HS education, was the handyman for a medical research lab and he developed all of the experimental equipment for the lab.  It was in the day before there was an industry to supply it, so Universities had to develop their own experimental apparatus.  Norm recalls Saturdays and some evenings with his father at the lab, running the lathe, making experimental equipment. 

Medical researchers, before the time of the FDA, could take innovations right from dog lab to the OR.  Heart therapies were what started medtech, when physicians saw they could immeasurably improve human life with procedures like repairing septal defects in infants and pacemakers for post-op and other indications.


After insurance came on the scene, and those making the buying decisions didn't have to pay out of their pockets, the industry wasn't accountable for cost.  If a manufacturer had a profitability problem, they simply raised the price.  A good type of problem to have.


The world has changed - we can no longer ignore cost.  "I don't care if you're Democrat, Republican, or Hindu, spending 17% of our GDP on healthcare isn't sustainable."


Norm's advice for the future:


1. Develop products for the GLOBAL marketplace, with value that can be appreciated and consumed on a global scale, or we will end up like the U.S. auto industry. (i.e. develop the next Honda Accord / Toyota Camry, not a $35k defib where you’ll only get 10% of the market b/c of economic considerations).



2. Separate PRODUCT from SERVICE - companies have historically been able to introduce products that are hard to use because their own field people (salespeople, technical service reps, field engineers) ran them; the customers didn't need to learn how.  The sales & service cost was built into the product price.  To compete with lower prices, companies need to make easy-to-use products (if Apple can make an iPad for a 3 year old, why can't we make medtech simple?), and charge more if the customer wants service included.



3. Accept the fact that the FDA can’t regulate the entire design & development process and provide 100% safety.  (Karin says - enough said.  The public and industry needs to take responsibility - and the FDA has to let them.)

Thank you Norm for your wisdom and insight.  It was a great message for the engineers and entrepreneurs of today's generation.