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Joe Hage
🔥 Find me at MedicalDevicesGroup.net 🔥
March 2015
Death of the Device Salesman
12 min reading time

A Bank of America analyst called it the “Death of the Device Salesman.”

He was talking about a 2013 Wright Medical Group strategy to dramatically reduce hip and knee prices with a “no-frills” option that excluded logistical support or onsite technicians.

Fast forward to the August 2014 headline, “Smith & Nephew Goes Rep-Less With Some Hips and Knees.” See for the full article.

Here Smith & Nephew (SNN) was doing the same thing: Cutting orthopedic implant prices in half on some older systems and offering support only through an iPad app. A MassDevice article last week at cast doubt on this “disruptive model.”

From the MassDevice article, Stryker CEO Kevin Lobo was skeptical of the rep-less model for orthopedics. “Until these procedures are de-skilled, it’s very hard to imagine [not having] the sales force and the services we provide in the hospitals. We are not seeing [the rep-less concept] in any meaningful way in the market.”

The commenters at the “Smith & Nephew Goes Rep-Less” article at were angry.

“Chris” wrote: Sophisticated buyers will use the information provided to them by Syncera to reverse engineer the rock bottom price and then hit the full service supplier with that price.

“Paul” wrote: Have you been a rep in an OR? I spent 3 hours last night in a hemiarthroplasty for which my fat paycheck was about $60.

“Louden” wrote: Everyone who has ever stepped foot in the OR knows without the rep it will be a disaster. An iPad is not going to be their salvation.

Piper Jaffray analyst Matt Miksic said the Syncera model would have unintended consequences, with these questions:

• If hospitals can already negotiate aggressively with manufacturers for their current and prior implant lines, with full service, instruments sets and inventories included, why would they want to subject themselves, their surgeons and their patients to the risks associated with ‘leaner’ technology based service in the OR?

• If surgeons can already match the demand of a patient with various implant designs, why would they want limit themselves to older generation implant systems?

• How will patients know when they are getting access to the most recent innovations available from a range of competing manufacturers, and when they are likely to receive ‘older’ (albeit ‘proven’) technology, based on a cost control strategy put in place by the hospital in which they are being cared for?

Do you believe there is a future in rep-less devices?

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LINKS TO THE LAST FIVE WEBINARS (FREE)

If any of these topics interest you, visit http://MedicalDevicesGroup.net/webinar for videos, slides, and transcripts presented by your fellow Medical Devices Group members:

• Medical Device Design & Development
• Unique Device Identification (UDI / GUDID)
• Contemporary Medical Device Websites
• Changes in Australian Regulations
• Medical Device Selling in this Difficult Environment (very popular)

Thanks to our presenters for making this generous resource available to our members.

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DISCUSSIONS

When FDA Refuses Your 510(k)

Any medical device courses for a product manager new to industry?

Medical Device Start-Up: Quality Issues Case Studies

What do you do when your supplier refuses to sign a contract containing unannounced audits?

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Make it a great week.

Joe Hage
Medical Devices Group Leader


Robyn Barnes
Business & Real Estate Writer, Regulated Industry Business Development, GxP Lifeline Media Professional
Thanks! I’ll ask the ortho doc I’m seeing next week!

Edsel Fickey
Commercial Realtor l Marketer I Adjunct University Faculty
Robyn, get a good doctor to inject some good quality amnion based product in those knees and skip the surgery altogether! Not a doc, just an observer!

Robyn Barnes
Business & Real Estate Writer, Regulated Industry Business Development, GxP Lifeline Media Professional
Thanks for all this input. When I need a knee replacement, I now know to be sure a well-trained rep is in the OR along with my completely-vetted surgeon who will install a device that I have thoroughly researched.

Edsel Fickey
Commercial Realtor l Marketer I Adjunct University Faculty
Once I had a surgeon say, “Sure, blame the surgeon,” after the surgeon didn’t follow protocol or properly use the equipment even at the urging of the rep. Well, news flash, sometimes they need blamed. I have become more frank in all of my discussions with doctors and surgeons for two reasons. First, unless you can defend your position openly and honestly – you have no position to defend – which may be a new device or product or diagnostic instrument or use of one already in play. But you better be able to defend it correctly and honestly. Second, the biggest hurdle to overcome with ANY surgeon is prior success. You can’t blame them – it worked, it is working, why would I attempt anything different until I die? Unless you can provide proof beyond a shadow of a doubt that change will be good NOT only for the patient, but for the hospital time in the OR, the surgeons time in the OR, the inventory keeper, AND the bottom line in most cases, forget it. New toys for the sake of new toys don’t matter how many reps come along with them. A WELL trained and informed rep with a SOLID new device/product/process that improves outcomes for all in the circle has a chance with doctors capable of thinking beyond yesterday. Not all want to, not all will. That part is human nature.

David Webb
Senior Specialist, Laparoscopy – Advanced Energy and Laparoscopic Instruments at AESCULAP MEDICAL SERVICES LIMITED
Well said Kenny Visterin!

Kenny Wyckmans
Generating high-quality leads for your competitor ⚡️
Being a provider of sales applications to empower sales reps to communicate better with their doctors, I don’t see this trend evolve in the near future. I can imagine that they are discussing multiple ways to decrease costs but let’s hope they don’t forget to calculate the importance of a well trained sales rep at the table. The sales apps can help reps to learn more on their own time, make orders faster and error-less but only giving out tablets and apps won’t do the trick.

Shamus Smith
Finalist, Territory/Rep Of The Year
I believe the future will go where math and profits send it.

Joe Hage
🔥 Find me at MedicalDevicesGroup.net 🔥
More on the topic from MassDevice: Repless sales not a magic bullet http://ow.ly/Lcseu

Christian S.
Managing Director at Approach Medical Ltd
Here’s the link…

[http://www.forbes.com/sites/danmunro/2015/03/22/why-uber-wont-be-coming-to-healthcare/|leo://plh/http%3A*3*3www%2Eforbes%2Ecom*3sites*3danmunro*32015*303*322*3why-uber-wont-be-coming-to-healthcare*3/Orsv?_t=tracking_disc]

Christian S.
Managing Director at Approach Medical Ltd
And here is another perspective, biased towards the USA, but the metrics are roughly the same.

If the Americans think their healthcare system is difficult to effect change, they should look at the NHS!

It’s taken me 5 months to get agreement for a Trust just to start a trial (FOC of course after I inveigled my way in with lies…), the product will reduce patient harm by around 50% (Falls, proven with evidence) and reduce 1:1 nursing (or specializing as it’s called here in the UK) by up to 59% (again proven with evidence to be published shortly).

In that 5 months of protracted decision making, how many patients have fallen and been injured (human costs?) and that Trust will have spent around £250k on agency nursing!

During the last 3 weeks, we have had trained personnel on site for approx. 73 hours covering all shift patterns (not including traveling time) and all at no cost to the Trust.

Many individuals within the NHS do not see or understand the value healthcare companies deliver pre, during & post the protracted sales cycle within can last for up to 18 months.

Both sides need to be realistic and not let their personal views whether politically motivated or otherwise cloud the real picture emerging, yes the supply industry does need to change (and soon!), but so does the healthcare industry and in our case here in the UK work out how to manage the cost always remembering it is tax payer driven and therefore accountable…

Paul Schultz
Head of Partnerships at BrightInsight, a Flex Company
This article by Chris Provines, Healthcare value and pricing expert, provides a good perspective on this topic. [http://chrisprovines.com/2014/12/04/7-reasons-why-the-rep-less-medical-device-sales-model-will-likely-stick/|leo://plh/http%3A*3*3chrisprovines%2Ecom*32014*312*304*37-reasons-why-the-rep-less-medical-device-sales-model-will-likely-stick*3/AsoR?_t=tracking_disc]

Christian S.
Managing Director at Approach Medical Ltd
Funny that when our people leave the NHS hospital after we ‘inveigled our way in with lies’, the staff stop using the equipment because;
1. They forgot their training
2. They weren’t listening to the training
3. They are too busy to use the new equipment
4. They don’t have enough staff to use the equipment
5. My favourite – “the rep wasn’t here to show us how it works”

Etc etc etc

Yes, there are companies that use ‘methods’ to sell products & devices, unfortunately, the small number spoil it for the rest.

However, if we are to introduce the rep-less model, can we invoice the hospital for ‘service’ calls such as;

The system isn’t working? – okay, let me have a look at it (after driving for 1 hour to get there, pay for parking etc), oh, can you remember how to turn it on?

Well over 50% of panic calls from hospital staff telling us the new system isn’t working is down to user error, who pays for that? certainly NOT the hospital!

Happy to look at rep-less if I can invoice the hospital for the visits we have to make which are due to user error…

Anthony Belli
Founder at The Street-Smart Salesman
Companies may experiment with such scenarios with low growth / cash cow products. However, the high performance sales person is alive and well and can not be replaced! Street Smart Salesman

Brian Dense
President & Owner of CiNQ systems, LLC
Marcello, Tiziana, et al,
How would you solve the problem?

Tiziana Guidotto
Business Developer Italy – Venous presso Boston Scientific
I completely agree with you, Marcello!

MARCELLO MESTRINER
CEO Arcamedica srl
M

MARCELLO MESTRINER
CEO Arcamedica srl
Amazing……really amazing….!! I think that 100 % of the problems of mondial economy is related to the consultancy companies……I really Belive that the best strategy to cut the cost is to eliminate this expence……this suggestion is valid for the medical device business but in particular to the world of finance……!!!! Only a stupid man can receive a suggestion from a group of people that never worked in a real World!!!!!

Brian Dense
President & Owner of CiNQ systems, LLC
Clare,
First, let me say that the remainder of my comment to the discussion today, is not “politically motivated,” despite any suggestion of politics in my previous post. This discussion points out a new problem that is real, and must be addressed going forward. The new direction resulting from the Affordable Care Act has generated a cost based buying environment through large hospital groups. (I am not making a political statement here, I am stating a fact.) This new direction has been set and cannot be reversed. Device manufacturers and orthopedic/spinal surgeons must adjust to this new direction, or patient hazards and economic fall out will result. Therefore, we must solve the problem using the new rep-less model.

Specifically to your point, I don’t disagree with the case you make about the rep you know who spent his time selling lies and acting unprofessionally. That type of rep, in that area of the industry can be more of an annoyance than help. The “reps” that are the subject of this discussion are a completely different type of rep. These reps are clinicians themselves, nurses and physicians assistants who have been very carefully trained on the use of a particular set of instruments and implants. They are not selling “machines.” Yes, they do their fair share of selling the products they represent, but the reps Joe Hage has started this discussion about are relied upon by surgeons to be there for every surgery. The reps don’t request to be in the surgery, the surgeons request that the reps be there. They are often in the OR by 5:00 or 6:00 AM and often don’t go home until 10:00 PM. They are committed assistants in orthopedic and spinal operating rooms.

I have spent my career in many different mini-industries of the medical device industry, including eyeglass frames, dental, urological, interventional cardiology, pharmaceuticals, contact lenses, spinal and orthopedics. Spinal and orthopedics have a very different operational model than any of the other “mini-industries” in which I have worked, both in manufacturing the devices and in how the hospitals and surgeons operate. Please re-read the third and fourth paragraphs of my previous post. Those two paragraphs describe this different mode of operation. This problem needs to be solved. Just kicking these “reps” out of the OR for this part of the industry will create a risk to patients and could potentially raise the cost of healthcare due to the demand for a different kind of buying. The risk cannot be understood unless you have been in a hip, knee, or spinal surgery case. I am not a rep myself, but I have been in surgeries observing how this is done. The function they serve must be replaced with something, and I don’t think iPads are the answer.

The different kind of buying I am talking about is due to the fact the these “reps” also frequently coordinate where kits and instrument set are shipped. If this person goes away, then hospitals may be forced to buy them for themselves, creating the need for more product to be in distribution at the same time. Great for the manufacturers, in this case, but this would ultimately cost more for the hospitals. The immediate reaction in the industry is short sighted. The questions about how much product that will be needed in the field under this new model have not been answered. The hospitals do not understand how the supply works. Because they don’t know how the supply works, the manufacturers don’t know how to determine the demand over the long haul. Mark my words, this will be an issue over the next few years, as it gets sorted out.

Clare Walsh
Specialist Medical Electronics Technician at Leeds Teaching Hospitals NHS Trust
Brian – that rep was using the device inside the theatre, and that is why it was presenting a direct infection risk! They inveigle their way in, and then they are constantly chirping away at the surgeons, rattling off their spiel with no regulation, no cross-checking that they are not simply spouting sales rubbish rather than the truth. That does not add one iota to safety of patients, and it shows contempt for the skills and knowledge of surgeons, yet again.

I have also within the last two months had to have official words with a rep who came in ostensibly to sell his equipment. What he did was to insist that a straightforward patient monitoring device could not be used on trial without him being constantly present for a whole week, during which he spent the time not promoting his product, but telling the clinicians a whole load of lies about the competition. That is totally unprofessional. What is more, the product he was selling is obsolete.

The rep for the competition has a much better device, with better safety features, it is a current model and is far more user friendly. However the damage has been done; the clinicians now believe the lies that it is unsafe and not suitable for their purposes, so they are ignoring it out-of-hand. That is not good representation, that is a disgrace. They are now committing themselves to buy a machine that up to press is not even released to the market yet from the first rep, on the basis of the trial of the obsolete machine, even though it will cost the better part of double the amount of a perfectly good machine on the market.

When I see stuff like this, I have no trust in sales representatives at all, and I believe that most clinicians ought to demonstrate a far healthier distrust of them too.

The industry doesn’t need reps who are just salespeople who happen to be selling a medical device this week, it needs reps who are genuinely medically knowledgeable – preferably surgically trained – who respect the surgeons’ expertise and who stick to one product (or product type) and don’t move from one company to another every other year as so many do.

Brian Dense
President & Owner of CiNQ systems, LLC
Clare, et al,
First let me say that I did not agree with our government pushing legislation and forcing unreviewed, categorical changes through the Affordable Care Act. However, that said, this is a train that has already left the station and trains cannot do “U-turns.” The medical device industry must adapt to what is coming, and frankly is already here, or they will fall by the wayside.

What is a problem that needs discussion to improve, is that the entire industry does not fit in one box. (This is one reason why I say that the new regulations considered the industry to all behave the same, when it actually does not.) Clare describes situations where a medical sales person approaches hospitals with the intent to sell the next “electronic” widget. They are not there to use it while it is being used on patients. Many of these devices are used throughout the day from patient to patient or over a long period of time monitoring one patient. No one healthcare practitioner watches over the device the entire time it is used. This is one scenario that is very real both in Europe and the U.S. (and elsewhere.) These “reps” are not the reps describe in the article and they are certainly not healthcare professionals.

However, in the U.S., orthopedic and spinal surgeries are often performed using instrument sets and implant kits that are not owned by the hospital, they are owned by the medical device companies and provided on consignment to the hospitals and doctors. Hospitals are not charged for the instruments they use, because they are returned and reused. Hospitals are only charged for the implants consumed. In the kits there will be many implants from which the surgeon chooses the correct size and configuration during the surgery itself. These kits contain more implants than they will need and the unused implants go back to the medical device company with the instruments. The medical device company replenishes the consumed implants, inspects, adjusts and repairs/replaces the instruments; and the kits are sent to another surgery, typically in a completely different location.

These kits are complex and require a company representative to assist the surgeon, during surgery, to choose the correct parts and use them properly. These company representatives are the “Reps” being described in the subject article. These reps are not just salespeople off the street. They are typically RNs or Physicians Assistants, trained in orthopedic procedures; and trained specifically on the kits being used from the orthopedic medical device companies.

This does not “fit in the box” that the general public understands about the industry. Can the industry go to a “rep-less” model? Yes, but it will take time for the medical device companies and the surgeons to adapt. Will it be cheaper in the end? Only time will tell. This new model may drive the need for hospitals to buy more instrument sets, instead of borrowing them at no cost like today. That may prove to be more expensive. The new model may also lead to more malpractice cases, because a surgeon did not use the product correctly and the patient gets hurt. This again could raise the cost of healthcare.

There are other misconceptions about what the Affordable Healthcare Act will do to the cost of healthcare, globally, yes globally, but they do not fit within the scope of this discussion, so I will refrain.

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Posted by Joe Hage
Asked on March 7, 2015 12:07 am
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