13 min reading time

We discussed the 21st Century Cures Act last week at and linked to a US Energy and Commerce Committee (ECC) paper which included this passage:

“In a perfect world, R&D dollars would flow toward the areas of highest need where the severity or burden of disease was most pronounced. However, the current system in many ways discourages investment in therapies for scientifically complex diseases with longer development times.

Dr. Collins has encouraged Congress to tackle this problem since today’s patent framework often makes it economically unviable to bring such therapies to market, even when they have shown early promise. Title I contains a series of legislative proposals intended to address this imbalance, including the Dormant Therapies Act.”

Detractor Joseph Gulfo, author of “Innovation Breakdown: How the FDA and Wall Street Cripples Medical Advances” at http://medgroup.biz/cripples, takes issue with this approach.

In his http://medgroup.biz/against-cures-act opinion, Joseph writes,

“[The 21st Century Cures Act] wastes political capital that could be spent on effective solutions. Instead of incentivizing niche uses of devices and biopharma products, what if the development of novel multi-drug/device approaches to our most vexing health crises (like diabetes, obesity, and Alzheimer’s disease) were encouraged?”

What do you think?

Should legislation encourage development of cures for otherwise economically unviable diseases?

Should it instead concentrate on the world’s biggest killers?

Or is a place for legislation at all?

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Here’s an otherwise economically unviable disease… Arthrogryposis Multiplex Congenita

Is setting up a not-for-profit the way to go?

See http://medgroup.biz/Magic-Arms to learn about this 3D orthotic and how one company is approaching it.

Can you help make their vision a reality?

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Save $500 on the MedCity CONVERGE event (Sept 1-2) Philadelphia

If you read MedCity News, you know this is going to be a quality event. See http://medgroup.biz/2015-CONVERGE for the speakers and agenda.

On tap: Talks, breakouts, demos on human-centered design, precision medicine, trends in healthcare investing, the future of Apple, collaboration across sectors, superbugs, health data and more.

You’ll meet innovators from Independence Blue Cross, Children’s Hospital of Philadelphia, UnitedHealthcare, Blueprint Health, Mayo Clinic Ventures, Boston Heart Diagnostics, and Mount Sinai Department of Medicine.

Use code DIGITALMED for a $399 ticket (full price $899 day of event) at http://medgroup.biz/2015-Converge

Thanks to my friend Chris Seper for the discount for Medical Devices Group members!

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Make it a great week.

Joe Hage
Medical Devices Group Leader

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Julie Omohundro
Principal Consultant at Class Three, LLC
Paul, I can’t speak for everyone who is hooked on startups, but I know I am not the only one for whom no bravery is involved. Bravery is to act in the face of fear. It’s not just that I don’t fear the risks associated with startups, but that I am crazy about them.

When it comes to looking good versus feeling good, I must say that I think a lot of people today might phrase that somewhat differently, which is that, if you can’t feel good, you may as well look good.

What the aesthetics crowd gets that the therapeutic crowd has a very hard time with is that is it all about what the patient wants. I don’t see what the patient wants as being anywhere on the healthcare agenda, nor do I find it in my own healthcare providers. Today whenever I hear the healthcare community talk about “patient-centered care,” this is the sort of image that comes to mind:

http://itcolossal.com/wp-content/uploads/2014/01/ngJanuary2014/17.jpg
Very centered indeed.

Paul M. Stein
Chief Scientist, Inventor, and Entrepreneur – Dedicated to the Treatment of Critical Unmet Medical Needs
Willi presents an even more insidious issue for start-ups, those brave folks who put aside the risk factor. Even if people work hard towards the biggest killers, and even when a cure is developed, funding in this day and age is close to impossible, even for relatively small sums. Who the hell knows what people will get enthusiastic about?! It really comes down to a truly nebulous “sexiness” factor that ensures success.

Note the $600M paid for this “killer”:

http://www.fiercemedicaldevices.com/press-releases/ulthera-announces-two-year-fda-clearance-cellfina-system

As “Fernando” said on Saturday Night Live, “It’s better to look good than to feel good.”

Willi Glettig
Owner of LCC Engineering & Trading GmbH and co-owner of Koldsteril

As explained above here my own personal example: By approx. year 2000 we knew that nosocomial infections (Hospital infections) are a larger killer, much larger than death by car accidents. (50 000 death/a in the USA alone. 6 Million are affected worldwide ) Nosocomial infection are caused by pathogens but spread by humans. (Dirty hands, use of unsterile equipment, procrastination etc.) Consequently we decided to create a technology that reduces incidence of nosocomial infections. Together with a University we created a new sterilisation technology, a number of PhDs, IPR, a fast well tested process that eliminates every type of pathogens at room temperature and converts it in into small harmless molecules such as Methane CO2 etc. We formed a company, invested 11 Mio USD into R & D, participated in many VC pitches, got praise after praise, won various awards but….we were unable to raise the required USD 2.5 Mio to commercialize the new technology. None of the praiser, project evaluator, money distributor, VC, was responsible for an outcome! We approached many well paid surgeons and people that are potential spreaders of nosocomial infections to invest in our venture. What we got are “rational reasons” why this is not their problem. This is the picture of reality.
Wealth growth for many is achieve only through improvement in productivity (and not through gambling with money). With 6000 to 7000 unresolved diseases, ailments and health problems the growth potential in life sciences and technology is huge including the potential to create real wealth for many. But who can stand up to claim that he will be fully committed to solve just one of the many problems. In India and China they are still families that drive the new technologies. In the west we first have to evolve new business models that are able to increase productivity in medtech sector and after that we can think about what problem to tackle and how to find the required know how.

Willi Glettig
Owner of LCC Engineering & Trading GmbH and co-owner of Koldsteril
Ladies and gentlemen
Intersting talk
As Science to Market Entrepreneur I fully agree with “addressing the biggest killers”. Indeed as entrepreneur one looks always for big market potentials because we know that researching for problem solution costs money and developing robust, effective and marketable products cost even more money. People that have or distribute this kind of money are either wealthy individuals, representatives of wealthy individuals or government administrators. The latter invests primary into Research. The wealthy individual wants to see a high return on money invested. The rest of fund distributors don’t own the funds they distribute. They do it as a job and don’t worry about a return. Their priority is to be seen to do the right thing, to reinforce their job security.
We all know the science to market product life cycles. This is a virtual model which tells us that on the path from a scientific discovery to a commercially successful product we meet many different skills, interests and powers that shape the life cycle path. It is a statistical fact that only entrepreneurs invest their own money and take risk. Because they risk their money they undertake anything to make the project a success
In our industry it takes large sums to succeed and thus only about 0.1 to 3% of working population are entrepreneurs that have the financial power to decide which way the path is going.
If we analyze real world life cycles we understand the real products/industry evolution. If we then put chronologically names of people and their contribution beside the life cycle path we realize that very few can claim responsibility for progress but very many try to grab a junk from the project (equity, know how, patent trolls etc). with-out adding value to it. Before 1980 mainly families created new industries without much noise. They were driven by market knowledge and passion for new technologies. They had the necessary funds, investors they knew and a clear determination to succeed in creating and commercializing a new technology.
Today we have a bunch of anonymous peoples demanding what has to be achieved in term of funds to be invested. The same people demand a salary for deliberating, debating and fighting with each other…and nobody carries any responsibility for the output value. (2/3 of pharma investment is wasted. Everybody does a job but nobody is responsible for bio activity, reproducibility and productivity gains in their output results.)
In the next response I will explain a real world case

Burrell (Bo) Clawson
I research patents & design products to get a patented competitive position: Over 30 patents.
Paul has ably recounted reality in Medtronic’s executive statements.

Arguably most real “research” (into the unknown) is done on college campuses where PHDs and students can afford to take a year or two to investigate an “idea” to see if it might have some positive result, with no idea whether it could be quickly applied or not.

Paul M. Stein
Chief Scientist, Inventor, and Entrepreneur – Dedicated to the Treatment of Critical Unmet Medical Needs
I don’t see where I contradicted myself. Funding patents but not projects? Yes, it is strange, but totally true. It’s mainly a way to ward off competition yet have a toehold if and when the science catches up. These are paper patents with no prototypes ever built. Again, simple biological fix, even with a lot of intensive engineering? Fine. But, little science, too much time, too costly? No effort.

I remember coming to Medtronic back in 1988, a physiologist with enthusiasm and high ideals. I was told bluntly, “We don’t do research here.” But, they were already developing or later working on the development of dozens of blockbuster medical devices that revolutionized health care. That person way back when was correct to this day, about Medtronic and almost every other medical device company, they don’t do research. They do development with the knowledge and tools at hand.

This discussion was all about medical device companies devoting its supreme efforts to work on the biggest killers. For the most part, it’s not going to happen right now; not with research at least. Later on? With development? We’ll see.

Alan Barta
Documentation Specialist at AppleOne Employment Services
I worked at global giants. Paul completely supports my view by contradicting himself. Industry lobbies government and pursues whatever it wants, which mainly involves “safe havens” of treating symptoms. Some “conspiracy” critics go as far to impugn pharma for creating the maladies it wishes to treat, but I didn’t witness any such criminality, more D than R, that is, developing better ways to do the same thing than researching “Big Killers”, which, when you think about it, almost never have single, simply identifiable causes, but a whole interplay of behavior and environment. You can tell people to avoid animal fats in the diet, but they are not obligated to avoid hamburger stands on every street corner. Doctors blow smoke in your face while telling you to quit smoking. Better health doesn’t only mean living longer either, since genes play a part, but quality of life, too.

Burrell (Bo) Clawson
I research patents & design products to get a patented competitive position: Over 30 patents.
Paul is right in that $s are committed to less risky med dev projects where they can see a path to better, smaller, cheaper, more capable products so they can gain a company profits in a relatively short time period.

For a medical device reference point, Theranos’ blood testing machines have started to reach Walgreens and it has taken 12 years for Elizabeth Holmes, the founder, to get to this point.

Paul M. Stein
Chief Scientist, Inventor, and Entrepreneur – Dedicated to the Treatment of Critical Unmet Medical Needs
Alan, having worked at three large medical device companies in their R&D organizations, I found that not to be the case. Patents are their lifeblood, and the more the better, even those that they know might never turn into marketed products. I know. I have a bunch of them. Those patents, companies are perfectly willing to fund; beyond that, it all depends on the economic risk/benefit analysis.

I mentioned “the competition” above. There is this “fast follower” mentality out there, whereby if Number 1 is working on something, then we need to too. If Number 1 isn’t working on it, then we can afford to do nothing too. So, is [Insert Name Here] working on that list of Biggest Killers?

Regarding “Government” forcing anything, that’ll never happen due to the economic influence of Industry over Government. The only thing that will work are incentives, and there are plenty of those already, although more couldn’t hurt. All-in-all, right now the science is too early for anyone to risk a penny.

Alan Barta
Documentation Specialist at AppleOne Employment Services
Paul, there’s a further aspect to all this, ego. Managers often feel threatened by smart subordinates, so either don’t hire or soon fire them. Government ought to exert a huge influence on companies critical to health, force hem to bid on assignments to tackle worst scourges.

Alan Barta
Documentation Specialist at AppleOne Employment Services
Mark, any nonprofit advocacy intent on disseminating information is likely to be just a racket to make directors richer. AHA, for example, focuses only on heart advocacy, but cardiovascular health has many influences: age, apnea, asthma, brain, capillaries, cholesterol, diabetes, diet, emboli, environmental toxins, exercise, lungs, nervous system, obesity, smoking, substance abuse. Holistic approaches are preferable to addressing heart alone.

Paul M. Stein
Chief Scientist, Inventor, and Entrepreneur – Dedicated to the Treatment of Critical Unmet Medical Needs
I guess my main point is that most of the easily treatable diseases were handled already by terrific medical devices. Certainly, some amazing technologies were created to do so, but we’re talking about simple fixes. Just some examples:

Cardiac arrhythmias: pace or shock -> pacemakers and implantable cardioverter-defibrillators and their associated leads
Heart failure caused by mechanical dyssynchrony: pace -> cardiac resynchronization devices and their associated leads
Spinal disease leading to pain: spinal fusion and, later, electrical stimulation -> various hardware and neurostimulators
Incessant nerve pain: morphine infusion -> drug pump
Heart valve disease: replacement -> mechanical and tissue heart valves
Acute myocardial infarction: open and maintain arterial patency -> angioplasty balloons and stents
Worn out joints: replacement -> artificial knee and hip joints

I could go on for quite a while, but you get my point. Electrical stimulation, pumping, unclogging, attaching hardware… We fixed a lot of stuff, but these were, truly, easy pathophysiological entities to go after. Now what do we have left? Really, really tough stuff. Cancer, Alzheimer’s, ALS, dementia, kidney failure, liver failure, etc.? Where can medical devices even have a role in many of these?

They are mostly biological fixes as currently envisioned. Are there potential medical devices that anyone can think up? Maybe, but with the current state of science, it will take years and years of thorough basic and translational research, and everyone knows, that is not going to be initiated by any current medical device company CEO. Way, way, WAAAAAAY too much RISK of major expense and zero return, or being beaten by the competition. That much risk always trumps the massive payoff.

Now, are any CEO’s waiting in the wings with potential delivery systems for biological fixes that may soon come along? There isn’t too much risk there, so I would hope so, but who knows.

Mark Borsody
Founder, Chief Executive Officer at Faucetworks
Two factors jump to mind here:

* Big diseases create widespread fear because the enemy is everywhere. Take, for example, stroke, which has a horrible reputation as a difficult area of medical therapeutic development. An infamous publication in the peer-reviewed literature is often used to support this belief: in that publication, only 1 of about 1000 medical therapies passed from scientific concept to FDA approval. The medical community – stroke neurologists in particular – point to this publication to justify their endless ‘woe is me’ claim to a difficult disease condition. However, the aforementioned figure compares very favorably against the pharmaceutical industry average of 1 success for every 5000 to 8000 candidate therapies, depending on the specific area of development. In this example, pessimism created largely by the practitioners responsible for treating the disease is infectious, creating negativity in funding sources in particular, and it undermines new therapy development in the field – thereby justifying the original misperception. There’s no better evidence of the vicious circle than the pathetic denominator of attempted therapies that such a field of medicine suffers

2) Rare diseases often have very dedicated patient groups and very vocal advocates. This often can be attributed to the diseases affecting children, which justifiably enrages the family. While working the pharmaceutical world, I personally have seen such advocates essentially bully the FDA into approving a niche product. Compare that again to stroke, where uncoordinated patient advocacy comes limply from multiple organizations, some of which aren’t even focused on stroke (i.e., the American Heart Association).

Alan Barta
Documentation Specialist at AppleOne Employment Services
Paul, indeed, insurers and today’s doctors don’t take the Hippocratic Oath: “Do no harm, yet withhold no service.” This millennia old mantra to embraces balance has been eclipsed by market extremism, predatory darwinism, and profit cynosure, results of a lack of business oversight and multinational mergers of the 1990’s, where corporations put themselves beyond regulation becoming “too big (or far away) to fail”. UN can’t even help. The new ethic is, “Get away with whatever as long as it makes money; meanwhile repudiate it by self endowing informational charities.” So carcinogens are bad, yet living within a 20 mile radius of a petroleum refinery, which claims 90% of residents, is left to ignorance and individual choice.

One hope is that, with the Affordable Care Act and federal government entering care delivery, some regulation and socialism will nudge this issue positively. NASA explores outer space and other planets, so why can’t FDA likewise perform research toward sensible policies? However, wherever the most is spent in Medicare claims wellness declines, although Social Security Administration is aware of it and has been addressing in its own glacial way. Individual advocates have the greatest immediate effect since they raise public’s hackles: take for examples partial successes in reducing smoking and texting and turn toward obesity and traffic management, which, when you examine further, are mostly due to infrastructure inadequacies, poor choices, poverty diets, and unfortunate subsidies.

Sorry to be so specific and vocal on a general thread, but this is truly a complex, thorny issue that demands far more discussion that people would rather ignore than manage.

Julie Omohundro
Principal Consultant at Class Three, LLC
Paul, I agree about the risk aversion. I’m just not clear on how it applies to the “biggest killers.” What do they have in common that make them “tough” and what distinguishes them from other problems that are not so tough? I realize that all three would be tough to cure, but I don’t see why developing treatments for them is inherently tougher than developing treatments for other health problems.

Paul M. Stein
Chief Scientist, Inventor, and Entrepreneur – Dedicated to the Treatment of Critical Unmet Medical Needs
At issue is the difficulty, time, and expense associated with attempting to tackle really tough problems, i.e. “risk”. Everyone knows that all risk is to be avoided by the bean counter CEO’s circa 2005 onwards. Hence, nothing of much worth has been attempted in the past decade. No matter what the real upside might be, the crippling fear to risk prevents any true effort.

Julie Omohundro
Principal Consultant at Class Three, LLC
Excuse me, I should have said:

Paul, I’m not clear on why it is financially prudent to let go of the “biggest killers.” The amount of financial risk involved is not correlated with the number killed, as far as I know. On the other hand, financial reward is usually positively correlated with the size of the patient population.

Alan Barta
Documentation Specialist at AppleOne Employment Services
Julie, hospital DO cater to the biggest patient populations, but focus not on curing diseases but treating symptoms of already ill patients. That’s the profit motive, not prevention or vaccines. All this is covered better by industry insiders in the documentary “Escape Fire” (2012), by Matt Heineman and Susan Froemke.
http://www.escapefiremovie.com

Having been an regulatory consultant opened my eyes to how companies choose to address one need over another. Legal liabilities are weighed, constantly. It’s better to attack easy fixes or marginal health improvements than panaceas that both promise much but take on huge risks. Settlements against medical device makers and pharma houses have exceeded tens of billions. Take the J&J hip, for example, which leached metal ions into spinal fluid; though no patients were reportedly injured, the long range consequences were unknown and short term fix was to reoperate and replace joint, a definite harm considering how many patients die from anesthesia alone.

Robert Barber
Consultant – Medical Device and IVD Regulations and Quality Management
…unless you’re the patient of course. I’d better not mention that in the UK healthcare is free to all at the point of use, had I? 😉 Otherwise we could be here for weeks!

Julie Omohundro
Principal Consultant at Class Three, LLC
I’m not clear on why it is financially prudent to let go of the “biggest killers.” The amount of financial risk involved is not correlated with the number killed, as far as I know. On the other hand, financial reward is usually positively correlated with the size of the patient population.