MassDevice Q&A: MassMEDIC president Tom Sommer

Tom Sommer’s been a major player on the Massachusetts medical device scene for more than a dozen years. As president of the Massachusetts Medical Device Industry Council (MassMEDIC), Sommer runs the nations largest regional medical device council, addressing the needs of more than 400 member companies.

With the council’s May 5 annual conference on the horizon, MassDevice visited Sommer at MassMEDIC’s offices at the Boston Medical Center (PDF) campus to find out what’s on the minds of the device company executives he visits each week, how they’re coping with a down economy and the challenges imposed by the Bay State’s stringent gift ban.

MassDevice: How did you come to MassMEDIC and what was your background before joining the council?

Tom Sommer: I was at the Massachusetts Technology Collaborative for about two years before taking over as the first employee of MassMEDIC. I was assigned a project early on in my tenure there to work with the medical device industry in establishing a new trade association. That was back in 1996.

{IMAGELEFT:http://www.massdevice.com/sites/default/wp-content/uploads/headshots/Porter_Michael_100x100.jpg}There was a study that came out of then-Gov. Weld’s council on technology and economic development by Michael Porter, a professor at Harvard Business School. They studied the medical device industry in Massachusetts and came to the conclusion that this was a very under-acknowledged industry sector, but had many positive contributions to the state’s economy. The study included a recommendation that there be a trade association established for the medical device industry. That recommendation went out to the Massachusetts Technology Collaborative and they asked me to get involved in developing plans for such a council. We had our kickoff meeting May 5, 1996.

We’re now the largest regional medical device organization in the United States. We closed last year with 400 dues-paying members. We’ve had great retention; our members have been loyal and helped us grow. We’ve provided a meeting place for medical device companies, suppliers, researchers and investors to come together and network.

MassDevice: There’s a perception that the medical device sector gets short shrift when it comes to public awareness. Why does the industry toil in the shadows of pharma and biotech?

TS: Pharmaceutical, biotech and medical devices are all regulated by the same federal agency, but then the similarities begin to fade. We see different investors, different workers, different timelines for product development and market introduction. It’s really a different outlook.

There definitely is a need by biotech companies and pharmaceutical companies to generate more news stories and coverage of their products as they seek additional investment. Because of the different timeline for product development, manufacturing and market introduction in the medical device sector, we don’t have that same need. We have to attract investment up front, we have to prove our product concepts very early on in order to attract investment. There are different mindsets about PR and media coverage in the three industries. A biotech company has to create buzz about the potential of their product in order to attract investment and continued interest in their product, whereas a medical device startup is focused on the investment first and then product development and manufacturing.

The medical device industry is far more focused on that shorter timeframe and bringing products to market very, very quickly. We don’t have the luxury of time that the pharma and biotech industries have. It’s just the way these products are developed and brought to market.

I don’t think medical device companies have time to worry about their profile. This industry is focused on product approval, product introduction, marketing and sales. It’s the nature of the market, where devices have a shelf life of anywhere from 18 months to two years. They have to be constantly focused on product innovation and enhancement.

MassDevice: What’s your personal favorite among the events MassMEDIC hosts each year?

TS: Our annual investors conference in November is a showcase for early-stage companies, many of which are presenting very novel, very unique technologies.

{IMAGERIGHT:http://www.massdevice.com/sites/default/wp-content/uploads/headshots/Sommer_Thomas_200.jpg}What’s fun about it is that these are new companies, people with a lot of enthusiasm and a strong commitment to develop and market their products and grow their companies. They bring that enthusiasm to the conference. There are some terrific success stories. The class of 1999, the group that first presented at the conference, has gone on and raised capital, sold themselves to major companies or done IPOs. For example MicroCHIPS, Confluent Surgical [which was sold to Covidien] and Solx.

And then usually two-and-a-half weeks later, we hold our annual FDA update program, where we bring in some top policy makers from the agency.

That’s an important conference because it gives our members an opportunity to question and challenge and be informed by the people who are making very important decisions affecting their operations. Part of what MassMEDIC was established to do was to give the local medical device community access to the individuals and institutions that are affecting their operations and their companies’ competitive profiles.

MassDevice: What is MedTech Ignite?

TS: MedTech Ignite is a special MassMEDIC project that focuses on supporting select, early-stage companies. We have a screening process in which business plans are reviewed by members of the Ignite advisory board and the director of Ignite, Amy Fredrick. These select companies receive business plan coaching from seasoned and specialized executives in the area the startup is focusing on. For example, we’ll match up an orthopedics entrepreneur with someone who’s been involved in two or three startups in that area.

We have input from venture capital, product development specialists and “serial entrepreneurs” in this space. And Amy has a strong background in technology assessment, having worked for a startup and an established medical device company. We’re looking for companies that have a sound business plan that has apparent challenges; we’re looking for companies that are coachable and we’re also looking for companies that have a proven concept, so that we can take them to the next level by sharpening their business plan and sharpening their presentation to potential investors. We’ve supported about 17 companies since the program was started in February 2007.

MassDevice: What’s the biggest challenge facing the Commonwealth’s medical device industry?

{IMAGELEFT:http://www.massdevice.com/sites/default/wp-content/uploads/headshots/Sommer_Thomas_100x100.jpg}TS: One is the so-called gift ban restrictions that are the most stringent, most restrictive regulations of their kind in the United States. That is very difficult to deal with because it came at a time when the state Legislature and the governor supported a life sciences bill to grow the sector here in Massachusetts. In that same time period, we had the Legislature and the governor signing off on this very restrictive piece of legislation that will affect the way medical device companies develop products.

It will affect the way medical device companies here in Massachusetts work with the medical community. We’ll need to go elsewhere in order to effectively work with them. It will also affect the way companies train potential and current customers on using their products. And it will provide competitors with a view into the product development operations of Massachusetts medical device companies, by reviewing the payments made to healthcare practitioners and the purpose of those payments.

It puts us at a very distinct disadvantage. We’re very disappointed in the final outcome. We don’t believe that policymakers fully understand the process required of medical device companies to develop new and innovative products.

In addition to all that, the timing of these regulations was just awful. Given the current economic climate, to put additional pressures on the device and biotech industries to comply with these regulations — it’s bad public policy and it will have a negative effect on the future growth of the device industry here.

The impact is not going to be immediate, but it’s going to be long-term. We’re confounded with, on the one hand, the Massachusetts state government coming forward with this life science initiative and, on the other hand, there is this very restrictive measure passed.

{IMAGELEFT:http://www.massdevice.com/sites/default/wp-content/uploads/headshots/Patrick_Deval_100x100.jpg}The governor of Massachusetts [Deval Patrick] came to our annual conference last year and said that he hopes that in 10 years we’d look back on his administration as one that actually understood and got it, understood the problems and the challenges of the medical device industry. He walked out to a standing ovation.

Less than 90 days later he signs this bill into law.

MassDevice: What’s your membership’s take on the possibility of a national, single-payer healthcare system?

TS: Reimbursement and purchasing obviously are two factors that have not been adequately addressed for us to take a position on a universal, one-payer system. The universal system in Massachusetts is only a year-and-a-half old and I think it’s still too early to tell how things are working out. The economic downturn has skewed all the numbers, so I don’t think we can get a really good analysis of this yet. A lot’s going to depend on the blueprint the president and the Congress agree on and how that will affect medical device sales.

There’s some concern as to what the new healthcare policy will be and how that will affect our members’ operations. They’re very anxious to see how some of these new policies will impact their operations. They’re looking to see what healthcare reform brings when it’s formally introduced. There’s lots of interest and concern as to what changes the FDA will bring, with a new commissioner and a new deputy commissioner with public health backgrounds. They don’t necessarily have a record of involvement with industry.

There’s also a lot of interest in what Congress will do. There are a number of invasive devices that were approved as of 1976 which will require more device approvals to be accompanied by clinical trial data. All of this is in play.

MassDevice: Apart from the regulatory burdens, the economy is obviously a huge issue for all businesses. How is the recession affecting the local medical device sector?

TS: There are a number of factors that have come into play in the last six to eight months. Hospitals are in very bad shape. Revenues are down and they’re putting off decisions to purchase equipment and devices where they can. We’re seeing a real falloff in the purchase of capital equipment — electro-medical equipment, MRIs, CAT scans, ultrasound machines — those purchases are being put off for the time being.

And any company selling devices used in elective or non-reimbursable procedures is definitely feeling it. Patients are putting off a variety of cosmetic procedures.

The other sector that’s having some difficulty are early-stage companies in the middle rounds of financing. Investors have an easier time supporting companies that have been around for a while and are looking for that final round of venture funding, and they also don’t have a problem investing at the earlier stage, because the new technology is exciting. It’s the new companies that are in the middle that are having difficulty attracting further venture investment.

But companies are holding their own. Certainly it’s not as good as last year, but they’re operating and generally satisfied with their performance — especially when they look at other industry sectors and see what’s happening there.

MassDevice: How does a typical day for Tom Sommer shake out?

TS: I travel throughout the state frequently; I’m on the road a couple days a week, visiting members at their facilities and also meeting with folks involved in state government policy and attending informational sessions. I try to interact as much as I can with our members. When I’m not on the road, I’m usually here nice and early working on several projects.

MassDevice: What’s the most mind-blowing medical device you’ve seen come out of the Bay State?

TS: We don’t have the “wow factor” that biotech and pharma have, because we’re not necessarily curing people. These are devices usually used for treatment or diagnosis. They don’t have the spectacular “wow” that you get with a wonder drug that cures a disease. But still, there’s a lot of amazing technology.

I’m amazed at what’s happening in orthopedics, for example what ConforMIS is doing in bone repair and joint replacement is absolutely fantastic. They take an imprint of your joint structure if you will and that’s then removed and there’s basically a replacement made using that impression.

MassDevice: What else is on the council’s horizon?

TS: We’ve got a small state grant to identify the workforce training gaps in the medical device industry and develop a curriculum for worker training that would address some of those shortfalls. For instance, if you have an opportunity to hire a terrific mechanical engineer but he or she lacks experience in the industry, in order for them to develop their medical device career they need to be schooled in FDA protocol and reimbursement protocol, because those two areas affect just about every aspect of medical device development.